Upgrade to SI Premium - Free Trial

IDT Reports Q1 Fiscal Year 2017 Financial Results

August 1, 2016 4:06 PM

Q1 FY17 Revenue of $192.1M; up 1.5% Q/Q and 19.4% Y/Y

Q1 FY17 GAAP Diluted EPS of $0.15; Q1 FY17 Non-GAAP Diluted EPS of $0.36

SAN JOSE, Calif.--(BUSINESS WIRE)-- Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI) today announced results for the fiscal first quarter 2017, ended July 3, 2016.

“First quarter fiscal 2017 revenue increased by over 19 percent year-over-year, driven by broad strength across our consumer, communications, automotive and industrial end markets. On a sequential basis, growth was driven by consumer timing, wireless charging and mobile sensing products,” said Greg Waters, president and chief executive officer.

“Operationally, we achieved two significant milestones in our integration of ZMDI. First, we reached an agreement on the labor-related aspects of the restructuring, and second, we completed the automotive qualification of our test facility in Penang, Malaysia. With both of these goals successfully met, we are tracking ahead of plan on the combination. Design-win traction remains strong across all of our target market segments, and we look forward to continuing to deliver exceptional operating results as the fiscal year unfolds,” concluded Mr. Waters.

Recent Business Highlights – Consumer

Recent Business Highlights – Auto and Industrial

Recent Business Highlights – Computing

Recent Business Highlights – Communications

The following highlights the Company’s financial performance on both a GAAP and supplemental non-GAAP basis. The Company provides supplemental information regarding its operating performance on a non-GAAP basis that excludes certain gains, losses and charges which occur relatively infrequently and which management considers to be outside our core operating results. 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 from continuing operations is attached to this press release.

Webcast and Conference Call Information

Investors may listen to the live call at 1:30 p.m. Pacific Time on August 1, 2016 by calling (888) 637-7746. The access code is 4949921. Investors may listen to a live or replay webcast of the Company’s quarterly financial conference call at http://ir.idt.com/. The live webcast will begin at 1:30 p.m. Pacific Time on August 1, 2016. The webcast replay will be available after 4:30 p.m. Pacific Time on August 1, 2016 for one week.

IDT’s next regularly scheduled Quiet Period will begin September 19, 2016, during which time IDT representatives will not comment on IDT’s business outlook, financial results or expectations. The Quiet Period will extend until the day when IDT’s second quarter fiscal 2017 earnings release is published.

About IDT

Integrated Device Technology, Inc. develops system-level solutions that optimize its customers’ applications. IDT’s market-leading products in RF, timing, wireless power transfer, serial switching, interfaces, automotive ASICs, battery management ICs, sensor signal conditioner ICs and environmental sensors are among the company’s broad array of complete mixed-signal solutions for the communications, computing, consumer, automotive and industrial segments. Headquartered in San Jose, Calif., IDT has design, manufacturing, sales facilities and distribution partners 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. Follow IDT on Facebook, LinkedIn, Twitter, YouTube and Google+.

Forward Looking Statements

Investors are cautioned that forward-looking statements in this release, including but not limited to statements regarding demand for Company products, anticipated trends in Company sales, expenses and profits, 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 April 3, 2016. 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

To supplement its consolidated financial results presented in accordance with GAAP, IDT uses non-GAAP financial measures which are adjusted from the most directly comparable GAAP financial measures to exclude certain items, as described in detail below. Management believes that these non-GAAP financial measures reflect an additional and useful way of viewing aspects of the Company’s operations that, when viewed in conjunction with IDT’s GAAP results, provide a more comprehensive understanding of the various factors and trends affecting the Company’s business and operations. It should also be noted that IDT's non-GAAP information may be different from the non-GAAP information provided by other companies. Non-GAAP financial measures used by IDT include:

• Cost of revenues;

• Gross profit;

• Research and development expenses;

• Selling, general and administrative expenses;

• Interest and other income (expense);

• Provision for (benefit from) income taxes, continuing operations;

• Operating income;

• Net income from continuing operations;

• Diluted net income per share, continuing operations; and

• Weighted average shares outstanding - diluted

The Company presents non-GAAP financial measures because the investor 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 expense, restructuring and divestiture related costs (gain), share-based compensation expense, results from discontinued operations, stockholder expenses 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 the way management internally analyzes IDT's financial results.

There are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measures. The non-GAAP financial measures supplement, and should be viewed in conjunction with, GAAP financial measures. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the accompanying press release.

As presented in the “Reconciliation of GAAP to Non-GAAP” tables in the accompanying press release, each of the non-GAAP financial measures excludes one or more of the following items:

Acquisition related. Acquisition-related charges are not factored into management’s evaluation of potential acquisitions or IDT’s performance after completion of acquisitions, because they are not related to the Company’s core operating performance. Adjustments of these items provide investors with a basis to compare IDT’s performance to other companies without the variability caused by purchase accounting. Acquisition-related expenses primarily include:

Restructuring related. Restructuring charges primarily relate to changes in IDT’s infrastructure in efforts to reduce costs and expenses (gains) associated with strategic divestitures and restructuring in force actions. Restructuring charges (gains) are excluded from non-GAAP financial measures because they are not considered core operating activities. Although IDT has engaged in various restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. As such, management believes that it is appropriate to exclude restructuring charges (gains) from IDT’s non-GAAP financial measures as it enhances the ability of investors to compare the Company’s period-over-period operating results from continuing operations. Restructuring-related charges (gains) primarily include:

Other adjustments. These items are excluded from non-GAAP financial measures because they are not related to the core operating activities and on-going future operating performance of IDT. Excluding this data allows investors to better compare IDT’s period-over-period performance without such expense, which IDT believes may be useful to the investor community. Other adjustments primarily include:

IDT 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
July 3 Apr. 3 June 28,
2016 2016 2015
Revenues $ 192,128 $ 189,361 $ 160,907
Cost of revenues 83,779 81,398 61,673
Gross profit 108,349 107,963 99,234
Operating expenses:
Research and development 49,648 41,023 33,754
Selling, general and administrative 38,816 40,287 28,143
Total operating expenses 88,464 81,310 61,897
Operating income 19,885 26,653 37,337
Interest and other income (expense), net (2,496 ) (3,601 ) 1,818
Income from continuing operations before income taxes 17,389 23,052 39,155
Provision for (benefit from) income taxes (3,558 ) (58,559 ) 435
Net income from continuing operations 20,947 81,611 38,720
Discontinued operations:
Loss from discontinued operations - - (547 )
Provision for income taxes - - 15
Net loss from discontinued operations - - (562 )
Net income $ 20,947 $ 81,611 $ 38,158
Basic net income per share - continuing operations $ 0.16 $ 0.61 $ 0.26
Basic net income per share - discontinued operations - - -
Basic net income per share $ 0.16 $ 0.61 $ 0.26
Diluted net income per share - continuing operations $ 0.15 $ 0.59 $ 0.25
Diluted net income per share - discontinued operations - - -
Diluted net income per share $ 0.15 $ 0.59 $ 0.25
Weighted average shares:
Basic 133,934 134,788 148,396
Diluted 138,109 139,239 153,758
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)
(Unaudited)
(In thousands, except per share data)
Three Months Ended
July 3 Apr. 3 June 28,
2016 2016 2015
GAAP net income from continuing operations $ 20,947

$ 81,611 $ 38,720
GAAP diluted net income per share continuing operations $ 0.15

$ 0.59 $ 0.25
Acquisition related:
Amortization of acquisition related intangibles 5,775

9,347 832
Acquisition related fees -

245 -
Amortization of fair market value adjustment to inventory 2,395

4,641 -
Restructuring related:
Severance and retention costs 11,918

2,587 921
Facility closure costs 19

53 -
Assets impairment and other 870

- 147
Other:
Stock-based compensation expense 10,515

8,249 7,866
Non-cash interest expense 3,268

3,191 -
Gain from divestiture - - (51 )
Assets impairment and other - - (325 )
Compensation expense - deferred compensation plan 402

157 115
Gain on deferred compensation plan securities (392 )

(151 ) (108 )
Non-GAAP tax adjustments (4,540 )

(58,388 ) 83
Non-GAAP net income from continuing operations $ 51,177

$ 51,542 $ 48,200
GAAP weighted average shares - diluted 138,109

139,239 153,758
Non-GAAP adjustment 2,287

2,100 1,836
Non-GAAP weighted average shares - diluted 140,396

141,339 155,594
Non-GAAP diluted net income per share continuing operations $ 0.36

$ 0.36 $ 0.31
GAAP gross profit $ 108,349

$ 107,963 $ 99,234
Acquisition related:
Amortization of acquisition related intangibles 3,415

3,355 617
Amortization of fair market value adjustment to inventory 2,395

4,641 -
Restructuring related:
Severance and retention costs 2,430

262 182
Assets impairment and other 336

- 147
Other:
Compensation expense - deferred compensation plan 148

58 42
Stock-based compensation expense 779

715 682
Non-GAAP gross profit $ 117,852

$ 116,994 $ 100,904
GAAP R&D expenses: $ 49,648

$ 41,023 $ 33,754
Restructuring related:
Severance and retention costs (7,334 )

(1,152 ) (347 )
Assets impairment and other (107 ) - -
Other:
Compensation expense - deferred compensation plan (157 )

(61 ) (45 )
Stock-based compensation expense (4,308 )

(3,660 ) (3,632 )
Non-GAAP R&D expenses $ 37,742

$ 36,150 $ 29,730
GAAP SG&A expenses: $ 38,816

$ 40,287 $ 28,143
Acquisition related:
Amortization of acquisition related intangibles (2,360 )

(5,992 ) (215 )
Acquisition related fees -

(245 ) -
Restructuring related:
Severance and retention costs (2,154 )

(1,173 ) (392 )
Facility closure costs (18 )

(53 ) -
Assets impairment and other (428 )

- -
Other:
Compensation expense - deferred compensation plan (98 )

(38 ) (28 )
Stock-based compensation expense (5,428 )

(3,874 ) (3,552 )
Non-GAAP SG&A expenses $ 28,330

$ 28,912 $ 23,956
GAAP interest and other income (expense), net $ (2,496 )

$ (3,601 ) $ 1,818
Non-cash interest expense 3,268 3,191 -
Gain from divestiture - - (51 )
Gain on deferred compensation plan securities (393 )

(151 ) (108 )
Assets impairment and other -

- (325 )
Non-GAAP interest and other income (expense), net $ 379

$ (561 ) $ 1,334
GAAP provision for (benefit from) income taxes - continuing operations $ (3,558 )

$ (58,559 ) $ 435
Non-GAAP tax adjustments 4,540

58,388 (83 )
Non-GAAP provision for (benefit from) income taxes - continuing operations $ 982

$ (171 ) $ 352
(a) Refer to the accompanying “Notes to Non-GAAP Financial Measures” for a detailed discussion of management’s use of non-GAAP financial measures.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 3 Apr. 3
(In thousands) 2016 2016
ASSETS
Current assets:
Cash and cash equivalents $ 150,985 $ 203,231
Short-term investments 199,661 151,233
Accounts receivable, net 80,622 74,386
Inventories 45,107 54,243
Prepaid and other current assets 14,950 15,008
Assets held for sale 4,155 -
Total current assets 495,480 498,101
Property, plant and equipment, net 74,845 73,877
Goodwill 305,572 305,733
Acquisition-related intangibles 121,479 127,761
Deferred non-current tax assets 85,726 60,929
Other assets 31,739 32,788
TOTAL ASSETS $ 1,114,841 $ 1,099,189
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,773 $ 39,858
Accrued compensation and related expenses 22,332 45,269
Deferred income on shipments to distributors 12,285 7,006
Other accrued liabilities 23,166 14,974
Liabilities held for sale 2,732 -
Total current liabilities 93,288 107,107
Deferred tax liabilities 15,090 19,712
Long-term income taxes payable 976 2,190
Convertible notes 275,489 272,221
Other long-term obligations 21,808 21,264
Total liabilities 406,651 422,494
Stockholders' equity 708,190 676,695
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,114,841 $ 1,099,189

Integrated Device Technology, Inc.

Financial Contact:

Suzanne Schmidt, 415-217-4962

IDT Investor Relations

[email protected]

or

Press Contact:

Daniel Aitken, 408-574-6480

IDT Senior Director of Corporate Marketing and Communications

[email protected]

Source: Integrated Device Technology, Inc.

Categories

Press Releases

Next Articles