Integrated Device Technology
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Oct 23,2008

IDT Reports Fiscal Second Quarter 2009 Results

IDT Reports Fiscal Second Quarter 2009 ResultsStrength in Computing and Consumer End Markets Drives Over Six Percent Sequential Revenue Growth Company Generates Over $50 million in Free Cash Flow During Fiscal Q2 2009

SAN JOSE, Calif.--(BUSINESS WIRE)--

IDT® (Integrated Device Technology, Inc.) (NASDAQ: IDTI), a leading provider of essential mixed signal semiconductor solutions that enrich the digital media experience, today announced results for the fiscal second quarter of 2009 ended September 28, 2008.

"During our fiscal second quarter of 2009, we posted a greater than six percent sequential increase in revenue for the second consecutive quarter," said Ted Tewksbury, president and CEO of IDT. "Strong growth in our computing end market was driven by increased sales of PC clock and PC Audio devices, while sales of timing solutions into our gaming segment enabled our consumer end market to grow double digits. However, like many semiconductor companies, our bookings slowed in late September and have remained below normal seasonal levels so far in October. This has reduced our visibility into end customer demand and makes it difficult to predict revenue for the third quarter."

The following highlights the Company's financial performance on both a GAAP and non-GAAP basis. The GAAP results include certain costs, charges, gains and losses in accordance with GAAP which are excluded from non-GAAP results based on management's determination that they are not directly reflective of on-going operations. Non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. A complete reconciliation of GAAP to non-GAAP results is attached to this press release.

-- Revenue for the fiscal second quarter of 2009 was $200.5 million, compared with $204.1 million reported in the same period one year ago.



-- GAAP net income for the fiscal second quarter of 2009 was $11.7 million or $0.07 per diluted share, versus GAAP net income of $4.8 million or approximately $0.02 per diluted share in same period one year ago. Fiscal second quarter 2009 GAAP results include $20.6 million in amortization of intangibles and $8.6 million of stock-based compensation.

-- Non-GAAP net income for the fiscal second quarter of 2009 was $43.3 million or $0.26 per diluted share, compared with non-GAAP net income of $48.3 million or $0.25 per diluted share reported in the same period one year ago.

-- GAAP gross profit for the fiscal second quarter of 2009 was $87.2 million, versus GAAP gross profit of $88.2 million in the same period one year ago. Non-GAAP gross profit for the fiscal second quarter of 2009 was $102.9 million, compared with non-GAAP gross profit of $105.7 million reported in the same period one year ago.

-- GAAP R&D expense for the fiscal second quarter of 2009 was $41.5 million, compared with GAAP R&D expense of $41.9 million in the same period one year ago. Non-GAAP R&D expense for the fiscal second quarter of 2009 was $35.9 million, compared with non-GAAP R&D expense of $35.1 million in the same period one year ago.



-- GAAP SG&A expense for the fiscal second quarter of 2009 was $32.2 million, compared with GAAP SG&A expense of $43.6 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal second quarter of 2009 was $23.9 million, compared with non-GAAP SG&A expense of $25.3 million in the same period one year ago.

Recent Highlights

The Company recently announced it:

-- Purchased the video processing technology and related assets from Silicon Optix, which also includes the Hollywood Quality Video (HQV) brand.

-- Extended its leadership in Double Data Rate 3 (DDR3) memory interface devices by announcing the industry's first registered clock driver capable of standard and low-voltage operation for high-performance servers and workstations.



-- Expanded its DisplayPort™-compatible solutions by announcing the availability of its IDT PanelPort™ stand-alone receiver for LCD TVs, projectors and high-end monitors.

-- Introduced a low-power integrated single-chip audio solution which improves audio performance and fidelity, as well as design flexibility, while offering the smallest footprint available for an audio codec.

-- Introduced a new series of PCI Express® (PCIe®) system interconnect switches that provide higher levels of performance, availability and optimal resource utilization in demanding enterprise applications.

Webcast and Conference Call Information

Investors can listen to a live or replay webcast of the Company's quarterly financial conference call at http://www.IDT.com. The live webcast will begin at 1:30 p.m. Pacific time on October 23, 2008. The webcast replay will be available after 5:00 p.m. Pacific time on October 23, 2008.

Investors can also listen to the live call at 1:30 p.m. Pacific time on October 23, 2008 by calling (800) 230-1059 or (612) 234-9959. The conference call replay will be available after 5:00 p.m. Pacific time on October 23, 2008 through 11:59 p.m. Pacific time on October 30, 2008 at (800) 475-6701 or (320) 365-3844. The access code is 963455.



About IDT

With the goal of continuously improving the digital media experience, IDT integrates its fundamental semiconductor heritage with essential innovation, developing and delivering low-power, mixed signal solutions that solve customer problems. Headquartered in San Jose, Calif., IDT has design, manufacturing and sales facilities throughout the world. IDT stock is traded on the NASDAQ Global Select Stock Market® under the symbol "IDTI". Additional information about IDT is accessible at www.IDT.com.

Forward Looking Statements

Investors are cautioned that forward-looking statements in this release involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include, but are not limited to, global business and economic conditions, fluctuations in product demand, manufacturing capacity and costs, inventory management, competition, pricing, patent and other intellectual property rights of third parties, timely development and supply of new products and manufacturing processes, dependence on one or more customers for a significant portion of sales, successful integration of acquired businesses and technology, availability of capital, cash flow and other risk factors detailed in the Company's Securities and Exchange Commission filings. The Company urges investors to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the fiscal year ended March 30, 2008 and Quarterly Report on Form 10-Q for the period ended June 29, 2008.

Non-GAAP Reporting

The Company presents non-GAAP financial measures because the financial community uses non-GAAP results in its analysis and comparison of historical results and projections of the Company's future operating results. These non-GAAP results exclude acquisition-related charges, share-based compensation expense and certain other expenses and benefits. Management uses these non-GAAP measures to manage and assess the profitability of the business. These non-GAAP results are also consistent with another way management internally analyzes IDT's results and may be useful. The Company has reconciled such non-GAAP results to the most directly comparable GAAP financial measures in the financial tables at the end of this press release.



Reference to these non-GAAP results should be considered in addition to results that are prepared under current accounting standards, but should not be considered a substitute for results that are presented in accordance with GAAP. It should also be noted that IDT's non-GAAP information may be different from the non-GAAP information provided by other companies.

IDT and the IDT logo are trademarks of Integrated Device Technology, Inc. All other brands, product names and marks are or may be trademarks or registered trademarks used to identify products or services of their respective owners.

                  INTEGRATED DEVICE TECHNOLOGY, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)
(In thousands, except per share data)
                         Three Months Ended         Six Months Ended
----------------------------------------------------------------------
                    Sept 28,  June 29,  Sept. 30,  Sept. 28, Sept. 30,
                      2008      2008      2007       2008      2007
                    --------- --------- ---------  --------- ---------
Revenues            $200,541  $188,208  $204,127    388,749   403,143
Cost of revenues     113,388   103,749   115,937    217,137   230,065
                    --------- --------- ---------  --------- ---------
Gross profit          87,153    84,459    88,190    171,612   173,078
                    --------- --------- ---------  --------- ---------
Operating expenses:
  Research and
   development        41,532    43,619    41,876     85,151    86,575
  Selling, general
   and
   administrative     32,211    32,965    43,615     65,176    88,729
                    --------- --------- ---------  --------- ---------
Total operating
 expenses             73,743    76,584    85,491    150,327   175,304
                    --------- --------- ---------  --------- ---------
Operating income
 (loss)               13,410     7,875     2,699     21,285    (2,226)
Interest expense         (15)      (18)      (28)       (33)      (69)
Interest income and
 other, net              384     1,465     4,446      1,849    10,298
                    --------- --------- ---------  --------- ---------
Income before
 income taxes         13,779     9,322     7,117     23,101     8,003
Provision for
 income taxes          2,104       168     2,358      2,272     4,340
                    --------- --------- ---------  --------- ---------

Net income          $ 11,675  $  9,154  $  4,759     20,829     3,663
                    ========= ========= =========  ========= =========

Net income per
 share:
Basic               $   0.07  $   0.05  $   0.02   $   0.12  $   0.02

Diluted             $   0.07  $   0.05  $   0.02   $   0.12  $   0.02
Weighted average
 shares:
Basic                169,570   171,080   190,745    170,325   192,000

Diluted              169,752   171,366   195,923    170,586   196,914
                  INTEGRATED DEVICE TECHNOLOGY, INC.
                  RECONCILIATION OF GAAP TO NON-GAAP
                             (Unaudited)
(In thousands)
                         Three Months Ended         Six Months Ended
----------------------------------------------------------------------
                    Sept 28,  June 29,  Sept. 30,   Sept.    Sept. 30,
                                                      28,
                      2008      2008      2007       2008      2007
                    --------- --------- ---------  --------- ---------
GAAP Net Income     $ 11,675  $  9,154  $  4,759   $ 20,829  $  3,663
                    ========= ========= =========  ========= =========
GAAP Diluted Income
 Per Share          $   0.07  $   0.05  $   0.02   $   0.12  $   0.02
                    ========= ========= =========  ========= =========
  Acquisition
   Related:
    Amortization of
     acquisition
     related
     intangibles      20,592    20,860    29,942     41,452    61,017
    Acquisition
     related costs
     (1)                  (3)       (3)      540         (6)    1,648
   Restructuring
    Related:
    Severance and
     retention
     costs               471       834         -      1,305        (9)
    Assembly
     transition
     costs (2)             -         -       193          -       468
    Facility
     closure costs
     (3)                  19        76       183         95       334
   Other:
    Stock-based
     compensation
     expense           8,642     8,129    11,800     16,771    23,630
    Tax effects of
     Non-GAAP
     adjustments
     (4)               1,910       124       853      2,034     1,654
                    --------- --------- ---------  --------- ---------

Non-GAAP Net Income $ 43,306  $ 39,174  $ 48,270   $ 82,480  $ 92,405
                    ========= ========= =========  ========= =========
Non-GAAP Diluted
 Earnings Per Share $   0.26  $   0.23  $   0.25   $   0.48  $   0.47
                    ========= ========= =========  ========= =========
Weighted average
 shares:
Basic                169,570   171,080   190,745    170,325   192,000
Diluted              169,752   171,366   195,923    170,586   196,914

GAAP gross profit     87,153    84,459    88,190    171,612   173,078
                    --------- --------- ---------  --------- ---------
   Acquisition
    Related:
    Amortization of
     acquisition
     related
     intangibles      14,570    14,771    15,614     29,341    31,244
    Acquisition
     related costs
     (1)                   -         -       442          -       895
   Restructuring
    Related:
    Severance and
     retention
     costs                 -       656         -        656        (9)
    Assembly
     transition
     costs (2)             -         -       193          -       468
    Facility
     closure costs
     (3)                   3        25       120         28       212
   Other:
    Stock-based
     compensation
     expense           1,184       786     1,189      1,970     2,242
                    --------- --------- ---------  --------- ---------
Non-GAAP gross
 profit              102,910   100,697   105,748    203,607   208,130
                    --------- --------- ---------  --------- ---------

GAAP R&D Expenses:    41,532    43,619    41,876     85,151    86,575
                    --------- --------- ---------  --------- ---------
   Acquisition
    Related:
    Amortization of
     acquisition
     related
     intangibles         (19)      (19)      (19)       (38)      (81)
    Acquisition
     related costs
     (1)                   2         2       (77)         4      (173)
   Restructuring
    Related:
    Severance and
     retention
     costs              (453)       (7)        -       (460)        -
    Facility
     closure costs
     (3)                 (16)      (37)      (36)       (53)      (77)
   Other:
    Stock-based
     compensation
     expense          (5,149)   (5,152)   (6,615)   (10,301)  (13,346)
                    --------- --------- ---------  --------- ---------
Non-GAAP R&D
 Expenses             35,897    38,406    35,129     74,303    72,898
                    --------- --------- ---------  --------- ---------

GAAP SG&A Expenses:   32,211    32,965    43,615     65,176    88,729
                    --------- --------- ---------  --------- ---------
   Acquisition
    Related:
    Amortization of
     acquisition
     related
     intangibles      (6,003)   (6,070)  (14,309)   (12,073)  (29,692)
    Acquisition
     related costs
     (1)                   1         1       (21)         2      (580)
   Restructuring
    Related:
    Severance and
     retention
     costs               (18)     (171)        -       (189)        -
    Facility
     closure costs
     (3)                   -       (14)      (27)       (14)      (45)
   Other:
    Stock-based
     compensation
     expense          (2,309)   (2,191)   (3,996)    (4,500)   (8,042)
                    --------- --------- ---------  --------- ---------
Non-GAAP SG&A
 Expenses             23,882    24,520    25,262     48,402    50,370
                    --------- --------- ---------  --------- ---------
GAAP Interest
 income and other,
 net                     369     1,447     4,418      1,816    10,229
                    --------- --------- ---------  --------- ---------
Non-GAAP Interest
 income and other,
 net                     369     1,447     4,418      1,816    10,229
                    --------- --------- ---------  --------- ---------

GAAP Provision for
 Income Taxes          2,104       168     2,358      2,272     4,340
                    --------- --------- ---------  --------- ---------
  Tax effects of
   Non-GAAP
   adjustments (4)    (1,910)     (124)     (853)    (2,034)   (1,654)
                    --------- --------- ---------  --------- ---------
Non-GAAP Provision
 for Income Taxes        194        44     1,505        238     2,686
                    --------- --------- ---------  --------- ---------

(1)  Consists of costs incurred in connection with merger and
 acquisition-related activities, including legal and accounting fees.
 Also includes costs associated with our merger with ICS, such as
 additional depreciation resulting from purchase accounting and costs
 associated with the exit of previously leased facilities.
(2)  Consists of the costs incurred as the Company transitioned its
 assembly operations in Malaysia to a third-party.
(3)  Consists of ongoing costs associated with the exit of our leased
 facilities.
(4)  Consists of the tax effects of acquisition-related non-GAAP
 adjustments.
                  INTEGRATED DEVICE TECHNOLOGY, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Unaudited)

                                                  Sept 28,  March 30,
(In thousands)                                      2008       2008
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents                        $  186,071 $  131,986
Short-term investments                              121,443    107,205
Accounts receivable, net                             88,254     83,091
Inventories                                          76,373     79,954
Deferred Taxes                                        4,853      4,853
Prepaid and other current assets                     16,658     26,081
                                                 ---------------------
Total current assets                                493,652    433,170

Property, plant and equipment, net                   77,173     81,652
Goodwill                                          1,026,724  1,027,438
Acquisition-related intangibles                     163,038    204,489
Other assets                                         32,143     36,504
                                                 ---------------------
TOTAL ASSETS                                     $1,792,730 $1,783,253
                                                 =====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                 $   45,321 $   44,655
Accrued compensation and related expenses            27,177     26,621
Deferred income on shipments to distributors         22,377     24,312
Income taxes payable                                    755        150
Other accrued liabilities                            21,866     19,978
                                                 ---------------------
Total current liabilities                           117,496    115,716

Deferred tax liabilities                              8,152      7,678
Long term income taxes payable                       20,826     20,673
Other long term obligations                          17,763     18,364
                                                 ---------------------
Total liabilities                                   164,237    162,431

Stockholders' equity                              1,628,493  1,620,822
                                                 ---------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $1,792,730 $1,783,253
                                                 =====================

Source: Integrated Device Technology, Inc.





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