IDT Reports Strong Sequential Revenue and Profit Growth
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SAN JOSE, Calif.--(BUSINESS WIRE)-- IDT(R) (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 ended September 27, 2009.
"Revenue, gross margin and EPS for our fiscal second quarter 2010 were all above the high end of our prior projections provided on July 28, 2009," said Dr. Ted Tewksbury, president and CEO of IDT. "We achieved a 20 percent sequential increase in revenue driven by strong demand across all three of our end markets - consumer, computing, and communications. Solid revenue contributions from core businesses, like PC clocks and gaming, were augmented by significant revenue increases in new growth areas like video and serial switching. Non-GAAP gross margin increased by 4 percent sequentially to over 50 percent, driven by higher revenue, improved product mix and increased fab utilization. These improvements, combined with accelerated synergies from our recent Tundra Semiconductor acquisition, enabled us to deliver non-GAAP EPS of $0.07. Overall, this quarter demonstrated that IDT's strategy of expanding our core strengths while layering on new growth segments is producing positive results and considerable operating leverage."
Recent Highlights
Recently, IDT announced:
-- the IDT PanelPort(TM) LinkXtend(TM) solution - a DisplayPort(TM)-based
single chip device that extends cables for PCs and mobile computers to
connect to monitors and projectors
-- the newest members of the IDT PureTouchTM family of capacitive touch
devices, targeting computing, white goods and portable devices
-- a new family of Power Smart audio codecs that are designed to serve the
audio needs of today's business and consumer desktops
-- its Serial RapidIO Gen2 program consisting of a comprehensive portfolio
of IP, switches, evaluation platforms and tools
-- its new family of embedded clocks that are ideal for embedded
applications or any computing system that is hidden from view and runs a
real-time operating system
-- an agreement to transfer product fabrication processes and related
activities currently running in the IDT Hillsboro, Oregon facility to
TSMC foundries
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 2010 was $139.5 million,
compared with $200.5 million reported in the same period one year ago.
-- GAAP net income for the fiscal second quarter of 2010 was $60.5 million
or $0.36 per diluted share, versus GAAP net income of $11.7 million or
approximately $0.07 per diluted share in the same period one year ago.
Fiscal second quarter 2010 GAAP results include an $82.7 million gain
from the sale of the Company's network search engine business, $14.4
million in restructuring related charges, $14.1 million in acquisition
related charges of which $6.1 million is related to the amortization of
acquisition related intangibles, $3.9 million of stock-based
compensation and $2.0 million in tax adjustments.
-- Non-GAAP net income for the fiscal second quarter of 2010 was $12.2
million or $0.07 per diluted share, compared with non-GAAP net income of
$43.3 million or $0.25 per diluted share reported in the same period one
year ago.
-- GAAP gross profit for the fiscal second quarter of 2010 was $51.1
million, compared with GAAP gross profit of $87.2 million in the same
period one year ago. Non-GAAP gross profit for the fiscal second quarter
of 2010 was $70.2 million, compared with non-GAAP gross profit of $102.8
million reported in the same period one year ago.
-- GAAP R&D expense for the fiscal second quarter of 2010 was $41.5
million, flat from the same period one year ago. Non-GAAP R&D expense
for the fiscal second quarter of 2010 was $35.9 million, compared with
Non-GAAP R&D of $36.3 million in the same period one year ago.
-- GAAP SG&A expense for the fiscal second quarter of 2010 was $30.7
million, compared with GAAP SG&A expense of $32.2 million in the same
period one year ago. Non-GAAP SG&A expense for the fiscal second quarter
of 2010 was $21.9 million, compared with non-GAAP SG&A expense of $24.1
million in the same period one year ago.
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 27, 2009. The webcast replay will be available after 5:00 p.m. Pacific time on October 27, 2009.
Investors can also listen to the live call at 1:30 p.m. Pacific time on October 27, 2009 by calling (800) 230-1085 or (612) 234-9960. The conference call replay will be available after 5:00 p.m. Pacific time on October 27, 2009 through 11:59 p.m. Pacific time on November 3, 2009 at (800) 475-6701 or (320) 365-3844. The access code is 117387.
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(R) 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, including but not limited to statements regarding demand for Company products, customer ordering patterns, channel inventory, anticipated trends in Company sales, expenses and profits, and macroeconomic conditions 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 introduction 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 29, 2009. All forward-looking statements are made as of the date of this release and the Company disclaims any duty to update such statements.
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 impairment charges, 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, Hollywood Quality Video, HQV, PanelPort, Tundra, Vida, ViewXpand and the IDT logo are trademarks or registered 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 27, June 28, Sept 28, Sept 27, Sept. 28,
2009 2009 2008 2009 2008
Revenues $ 139,504 $ 115,954 $ 200,541 255,458 388,749
Cost of 88,373 68,789 113,388 157,162 217,137
revenues
Gross profit 51,131 47,165 87,153 98,296 171,612
Operating
expenses:
Research and 41,455 36,315 41,532 77,770 85,151
development
Selling,
general and 30,662 25,435 32,211 56,097 65,176
administrative
Total operating 72,117 61,750 73,743 133,867 150,327
expenses
Operating (20,986 ) (14,585 ) 13,410 (35,571 ) 21,285
income (loss)
Gain on 82,747 - - 82,747 -
divestiture
Interest income 1,199 1,425 384 2,624 1,849
and other, net
Interest (11 ) (19 ) (15 ) (30 ) (33 )
expense
Income (loss)
before income 62,949 (13,179 ) 13,779 49,770 23,101
taxes
Provision for 2,409 942 2,104 3,351 2,272
income taxes
Net income $ 60,540 $ (14,121 ) $ 11,675 46,419 20,829
(loss)
Net income
(loss) per
share:
Basic $ 0.37 $ (0.09 ) $ 0.07 $ 0.28 $ 0.12
Diluted $ 0.36 $ (0.09 ) $ 0.07 $ 0.28 $ 0.12
Weighted
average shares:
Basic 165,591 165,430 169,570 165,511 170,325
Diluted 166,075 165,430 169,752 165,853 170,586
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
Sept 27, June 28, Sept. 28, Sept. 27, Sept. 28,
2009 2009 2008 2009 2008
GAAP Net Income $ 60,540 $ (14,121 ) $ 11,675 $ 46,419 $ 20,829
(Loss)
GAAP Diluted Income $ 0.36 $ (0.09 ) $ 0.07 $ 0.28 $ 0.12
(Loss) Per Share
Acquisition
Related:
Amortization of
acquisition related 6,109 5,219 20,592 11,328 41,452
intangibles
Acquisition related 353 3,593 (3 ) 3,946 (6 )
costs (1)
Gain on divestiture (82,747 ) - - (82,747 ) -
of NWD assets
Assets impairment - 2,002 - 2,002 -
Inventory FMV 7,634 - - 7,634 -
amortization
Restructuring
Related:
Severance and 14,021 1,479 471 15,500 1,305
retention costs
Facility closure 13 23 19 36 95
costs (2)
Fabrication
production transfer 322 - - 322 -
costs
Other:
Compensation
expense
(benefit)--deferred 1,112 889 (751 ) 2,001 (715 )
compensation plan
(3)
Loss (gain) on
deferred (1,111 ) (876 ) 711 (1,987 ) 689
compensation plan
securities (3)
Stock-based
compensation 3,919 4,260 8,642 8,179 16,771
expense
Tax effects of
Non-GAAP 2,028 1,008 1,910 3,036 2,034
adjustments (4)
Non-GAAP Net Income $ 12,193 $ 3,476 $ 43,266 $ 15,669 $ 82,454
Non-GAAP Diluted $ 0.07 $ 0.02 $ 0.25 $ 0.09 $ 0.48
Earnings Per Share
Weighted average
shares:
Basic 165,591 165,430 169,570 165,511 170,325
Diluted 166,075 165,575 169,752 165,853 170,586
GAAP gross profit 51,131 47,165 87,153 98,296 171,612
Acquisition
Related:
Amortization of
acquisition related 4,262 3,920 14,570 8,182 29,341
intangibles
Assets impairment - 2,002 - 2,002 -
Inventory FMV 7,634 - - 7,634 -
amortization
Fabrication
production transfer 322 - - 322 -
costs
Restructuring
Related:
Severance and 5,708 55 - 5,763 656
retention costs
Facility closure 4 8 3 12 28
costs (2)
Other:
Compensation
expense 156 124 (105 ) 280 (99 )
(benefit)--deferred
compensation plan
Stock-based
compensation 995 626 1,184 1,621 1,970
expense
Non-GAAP gross 70,212 53,900 102,805 124,112 203,508
profit
GAAP R&D Expenses: 41,455 36,315 41,532 77,770 85,151
Acquisition
Related:
Amortization of
acquisition related - - (19 ) - (38 )
intangibles
Acquisition related - 2 2 2 4
costs (1)
Restructuring
Related:
Severance and (2,057 ) (930 ) (453 ) (2,987 ) (460 )
retention costs
Facility closure (5 ) (11 ) (16 ) (16 ) (53 )
costs (2)
Other:
Compensation
expense (600 ) (480 ) 406 (1,080 ) 383
(benefit)--deferred
compensation plan
Stock-based
compensation (2,930 ) (2,745 ) (5,149 ) (5,675 ) (10,301 )
expense
Non-GAAP R&D 35,863 32,151 36,303 68,014 74,686
Expenses
GAAP SG&A Expenses: 30,662 25,435 32,211 56,097 65,176
Acquisition
Related:
Amortization of
acquisition related (1,847 ) (1,299 ) (6,003 ) (3,146 ) (12,073 )
intangibles
Acquisition related (353 ) (3,595 ) 1 (3,948 ) 2
costs (1)
Restructuring
Related:
Severance and (6,256 ) (494 ) (18 ) (6,750 ) (189 )
retention costs
Facility closure (4 ) (4 ) - (8 ) (14 )
costs (2)
Other:
Compensation
expense (356 ) (285 ) 240 (641 ) 233
(benefit)--deferred
compensation plan
Stock-based
compensation 6 (889 ) (2,309 ) (883 ) (4,500 )
expense
Non-GAAP SG&A 21,852 18,869 24,122 40,721 48,635
Expenses
GAAP Interest
income and other, 1,188 1,406 369 2,594 1,816
net
Loss (gain) on
deferred (1,111 ) (876 ) 711 (1,987 ) 689
compensation plan
securities
Non-GAAP Interest
income and other, 77 530 1,080 607 2,505
net
GAAP Provision for 2,409 942 2,104 3,351 2,272
Income Taxes
Tax effects of
Non-GAAP (2,028 ) (1,008 ) (1,910 ) (3,036 ) (2,034 )
adjustments (4)
Non-GAAP Provision 381 (66 ) 194 315 238
for Income Taxes
(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 and Tundra, such as additional depreciation resulting from
purchase accounting and costs associated with the exit of previously leased
facilities.
(2) Consists of ongoing costs associated with the exit of our leased facilities.
(3) Consists of gains and losses on marketable equity securities related to our
deferred compensation arrangements and the changes in the fair value of the assets
in a separate trust that is invested in Corporate owned life insurance under our
deferred compensation plan.
(4) Consists of the tax effects of non-GAAP adjustments related to acquisitions and
stock-based compensation expense.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Sept 27, March 29,
(In thousands) 2009 2009
ASSETS
Current assets:
Cash and cash equivalents $ 176,460 $ 136,036
Short-term investments 182,401 160,037
Accounts receivable, net 59,897 54,894
Inventories 64,634 69,722
Deferred Taxes 1,696 1,696
Prepaid and other current assets 21,674 19,881
Total current assets 506,762 442,266
Property, plant and equipment, net 72,287 71,561
Goodwill 101,225 89,404
Acquisition-related intangibles 65,201 50,509
Other assets 26,495 24,627
TOTAL ASSETS $ 771,970 $ 678,367
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,988 $ 25,837
Accrued compensation and related expenses 19,251 18,820
Deferred income on shipments to distributors 17,010 16,538
Income taxes payable 3,471 457
Other accrued liabilities 30,336 21,206
Total current liabilities 106,056 82,858
Deferred tax liabilities 3,381 3,220
Long term income taxes payable 21,011 20,907
Other long term obligations 25,794 14,314
Total liabilities 156,242 121,299
Stockholders' equity 615,728 557,068
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 771,970 $ 678,367
Source: Integrated Device Technology, Inc.
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