Integrated Device Technology, Inc. (IDT® or the Company)
(NASDAQ: IDTI), the Analog and Digital Company™ delivering
essential mixed-signal semiconductor solutions, today announced
results for the fiscal second quarter ended September 30, 2012.
“Despite broad-based weakness in demand, we were able to deliver
sequential revenue growth in line with our prior projections,” said
Dr. Ted Tewksbury, president and CEO of IDT. “New product revenue
increased to over 17 percent of the total, up from 14 percent in
the prior quarter, driven by record revenue from Rapid IO switching
solutions, continued growth in PCI Express switching, and initial
sales from new product categories like enterprise flash
controllers, high-speed data converters and wireless power
solutions.”
“Record non-GAAP gross margins of 59.4 percent combined with an
acceleration of our cost reduction program enabled us to achieve
non-GAAP operating margins of 12 percent.”
“Customer demand slowed significantly in the month of September
for IDT as well as the overall semiconductor sector, and has
remained soft in October. Even though we’re experiencing cautious
ordering patterns from customers due to the uncertain macroeconomic
environment, we believe our new product traction and continued
focus on cost controls will enable us to reach our fiscal 2014
operating margin targets.”
Recent Highlights
IDT recently announced:
Wireless Power
- Qualcomm has selected IDT as its
silicon partner to develop an integrated receiver IC for Qualcomm’s
wireless charging solution. The chipset will be designed to meet
the requirements of Qualcomm’s WiPower™, a new near-field magnetic
resonance technology that provides spatial freedom for charging
consumer electronics, mobile phones, and other
battery-powered/low-power direct-charge devices.
- Intel has selected IDT to develop an
integrated transmitter and receiver chipset for Intel's wireless
charging technology based on resonance technology. Wireless
charging ICs by IDT will provide industry-leading size and cost
reduction, while simplifying product development and integration.
Intel, along with IDT, aims to deliver validated reference designs
that are targeted for deployment in Ultrabooks™, all-in-one (AiO)
PCs, smartphones, and standalone chargers.
- Its wireless power transmitter and
receiver solutions have been selected by Primax Electronics Ltd., a
leading global supplier of after-market wireless charging
accessories for tier one mobile phone OEMs.
- It has become a member of the Alliance
for Wireless Power (A4WP), an independently operated organization
composed of global wireless power and technology industry leaders,
including Samsung and Qualcomm.
Enterprise Computing
- The industry's first NVM Express (NVMe)
enterprise flash memory controller with native support for PCIe®
Gen 3. IDT's NVMe flash controller family provides a
standards-based solid-state drive (SSD) solution, enabling storage
and server original equipment manufacturers (OEMs) to overcome
latency and throughput bottlenecks inherent to legacy
SAS/SATA-based SSD designs.
- The industry's first NVMe enterprise
non-volatile DRAM (NV-DRAM) controller with native support for PCIe
Gen 3. The new NVMe NV-DRAM controller expands upon IDT's
previously announced NVMe flash controller family to provide
standards-based, high-density, high-performance PCIe-attached
NV-DRAM solutions built around a combination of DRAM and NAND flash
devices.
- The industry’s lowest-power DDR3 LRDIMM
memory buffer and the first capable of operating with transfer
speeds up to 1866 megatransfers per second (MT/s). The new device
affirms IDT’s leadership in memory interface solutions by advancing
the top data transfer rates of DDR3 LRDIMMs and allowing system
makers to benefit from increased memory capacity at higher
speeds.
- The world’s first DDR4 register and
temperature sensor that meet the industry's stringent performance
requirements. The new products are designed to facilitate the next
generation of DRAM modules, including both registered dual inline
memory modules (RDIMMs) and load-reduced DIMMs (LRDIMMs), to enable
advancements in server and storage sub-system performance,
scalability and power efficiency.
- The world's lowest-power PCI Express®
timing family. The new family of buffers and synthesizers offer
unprecedented power savings and integration for communications,
computing, and consumer markets.
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.
- Revenue from continuing operations for
the fiscal second quarter of 2013 was $133.4 million, compared with
$138.3 million reported in the same period one year ago.
- GAAP net loss from continuing
operations for the fiscal second quarter of 2013 was $(0.7)
million, or breakeven per diluted share, versus GAAP net income of
$8.1 million or $0.06 per diluted share in the same period one year
ago. Fiscal second quarter 2013 GAAP results include $12.7 million
in acquisition and restructuring related charges, $3.6 million in
stock-based compensation, and $3.1 million in benefits from tax
effects.
- Non-GAAP net income from continuing
operations for the fiscal second quarter of 2013 was $12.6 million
or $0.09 per diluted share, compared with non-GAAP net income from
continuing operations of $17.2 million or $0.12 per diluted share
reported in the same period one year ago.
- GAAP gross profit for the fiscal second
quarter of 2013 was $74.6 million, or 55.9 percent, compared with
GAAP gross profit of $73.6 million, or 53.2 percent, reported in
the same period one year ago. Non-GAAP gross profit for the fiscal
second quarter of 2013 was $79.2 million, or 59.4 percent, compared
with non-GAAP gross profit of $78.1 million, or 56.5 percent,
reported in the same period one year ago.
- GAAP R&D expense for the fiscal
second quarter of 2013 was $42.4 million, compared with GAAP
R&D expense of $39.2 million reported in the same period one
year ago. Non-GAAP R&D expense for the fiscal second quarter of
2013 was $39.1 million, compared with non-GAAP R&D of $37.6
million in the same period one year ago.
- GAAP SG&A expense for the fiscal
second quarter of 2013 was $32.8 million, compared with GAAP
SG&A expense of $24.9 million in the same period one year ago.
Non-GAAP SG&A expense for the fiscal second quarter of 2013 was
$23.8 million, compared with non-GAAP SG&A expense of $22.6
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 29, 2012. The webcast replay will be
available after 5 p.m. Pacific time on October 29, 2012.
Investors can also listen to the live call at 1:30 p.m. Pacific
time on October 29, 2012 by calling (800) 230-1059 or (612)
234-9960. The conference call replay will be available after 5 p.m.
Pacific time on October 29, 2012 through 11:59 p.m. Pacific time on
November 5, 2012 at (800) 475-6701 or (320) 365-3844. The access
code is 266766.
About IDT
Integrated Device Technology, Inc., the Analog and Digital
Company™, develops system-level solutions that optimize its
customers’ applications. IDT uses its market leadership in timing,
serial switching and interfaces, and adds analog and system
expertise to provide complete application-optimized, mixed-signal
solutions for the communications, computing and consumer segments.
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.
Follow IDT on Facebook, LinkedIn, Twitter, and YouTube.
Additional Information
These materials are for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. Any offer with respect to
the acquisition of PLX Technology will only be made through the
prospectus, which is part of the registration statement on Form
S-4, which contains an offer to purchase, form of letter of
transmittal and other documents relating to the exchange offer, as
well as the Tender Offer Statement on Schedule TO, (collectively,
and as amended and supplemented from time to time, the “Exchange
Offer Materials”), each initially filed with the U.S. Securities
and Exchange Commission (the “SEC”) by IDT on May 22, 2012. The
registration statement has not yet become effective. In addition,
PLX Technology filed with the SEC on May 22, 2012 a
solicitation/recommendation statement on Schedule 14D-9 (as amended
and supplemented from time to time, the “Schedule 14D-9”) with
respect to the exchange offer. Investors and security holders are
urged to carefully read these documents and the other documents
relating to the transactions because these documents contain
important information relating to the exchange offer and related
transactions. Investors and security holders may obtain a free copy
of these documents, as filed with the SEC, and other annual,
quarterly and special reports and other information filed with the
SEC by IDT or PLX Technology, at the SEC’s website at www.sec.gov.
In addition, such materials will be available from IDT or PLX
Technology, or by calling Innisfree M&A Incorporated, the
information agent for the exchange offer, toll-free at (877)
456-3463 (banks and brokers may call collect at (212)
750-5833).
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 1, 2012. 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
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
restructuring-related costs, acquisition and divestiture-related
charges, 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 another way management internally
analyzes IDT’s results and may be useful to investor community. The
Company has reconciled 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 general accepted
accounting standards in the United States (GAAP), 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 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 September 30,
July 1, October 2, September 30,
October 2, 2012 2012 2011 (1)
2012 2011 (1) Revenues $ 133,401 $ 130,161 $ 138,318
$ 263,562 $ 287,603 Cost of revenues 58,774
57,648 64,685 116,422
134,534 Gross profit 74,627 72,513 73,633 147,140
153,069 Operating expenses: Research and development 42,387 41,544
39,184 83,931 78,999 Selling, general and administrative
32,750 36,412 24,888
69,162 50,817 Total operating expenses
75,137 77,956 64,072
153,093 129,816 Operating
income (510 ) (5,443 ) 9,561
(5,953 ) 23,253 Other-than-temporary
impairment loss on investments - - - - - Gain on sale of wafer fab
facility - - - - Other income (expense), net (206 )
2,000 (1,828 ) 1,794 (1,784 )
Income (loss) from continuing operations before income taxes (716 )
(3,443 ) 7,733 (4,159 ) 21,469 Provision (benefit) for income taxes
(33 ) (3,986 ) (367 ) (4,019 )
600 Net income (loss) from continuing
operations (683 ) 543 8,100 (140 ) 20,869 Discontinued
operations: Gain from divestiture 886 - 45,939 886 45,939 Loss from
discontinued operations (273 ) (4,858 ) (7,352 ) (5,131 ) (14,996 )
Provision (benefit) for income taxes 3 -
(60 ) 3 (89 ) Net income
(loss) from discontinued operations 610 (4,858 ) 38,647 (4,248 )
31,032 Net income (loss) $ (73 ) $ (4,315 ) $ 46,747
$ (4,388 ) $ 51,901 Basic net income (loss)
per share continuing operations $ - $ - $ 0.06 $ - $ 0.14 Basic net
income (loss) per share discontinued operations -
(0.03 ) 0.26 (0.03 ) 0.21
Basic net income (loss) per share $ - $ (0.03 ) $
0.32 $ (0.03 ) $ 0.35 Diluted net
income (loss) per share continuing operations $ - $ - $ 0.06 $ - $
0.14 Diluted net income (loss) per share discontinued operations
- (0.03 ) 0.26 (0.03 )
0.21 Diluted net income (loss) per share $ -
$ (0.03 ) $ 0.32 $ (0.03 ) $ 0.35
Weighted average shares: Basic 143,519
142,595 144,682 143,005
146,249 Diluted 143,519 143,984
146,169 143,005
148,686
1)
The Company's prior period financial
results have been revised to reflect an immaterial correction.
During the third quarter of fiscal 2012 the Company identified
errors related to its accounting for certain accrued employee
retention costs and other accrued liabilities. The Company assessed
the materiality of these errors individually and in the aggregate
on prior periods’ financial statements in accordance with the SEC’s
Staff Accounting Bulletin No. 99 (“SAB 99”), and concluded that the
errors were not material to any of its prior annual or interim
financial statements. As permitted by the SEC’s Staff Accounting
Bulletin No. 108 (“SAB 108”), the Company elected to revise
previously issued consolidated financial statements the next time
they are filed.
As a result of the revisions, net income
for the three and six months ended October 2, 2011 decreased by
$0.3 million and $2.8 million, respectively.
INTEGRATED DEVICE TECHNOLOGY, INC. RECONCILIATION
OF GAAP TO NON-GAAP (Unaudited) (In thousands, except per share
data)
Three Months Ended Six
Months Ended September 30, July 1,
October 2, September 30, October 2,
2012 2012
2011 2012 2011
GAAP net income (loss) from continuing
operations $ (683 ) $ 543
$ 8,100 $ (140 )
$ 20,869 GAAP diluted net income (loss) per
share continuing operations $ - $
- $ 0.06 $ -
$ 0.14 Acquisition related:
Amortization of acquisition related intangibles 5,573 4,891 3,861
10,464 7,989 Acquisition related legal and consulting fees (1)
3,630 4,836 - 8,466 - Other acquisition related costs (2) 1,200
1,800 - 3,000 - Assets impairment (3) (59 ) (59 ) (92 ) (118 ) (182
) Fair market value adjustment to acquired inventory sold 100 358 -
458 - Restructuring related: Severance and retention costs 2,237
715 816 2,952 2,603 Facility closure costs (4) 34 13 (5 ) 47 23
Fabrication production transfer costs (5) - - 816 - 2,661 Gain on
sale of fabrication facility - - - - - Other: Other-than-temporary
impairment loss on investments - - - - - Stock-based compensation
expense 3,617 3,122 4,282 6,739 8,054 Expenses related to
stockholder activities (6) 38 2,576 - 2,614 - Compensation expense
(benefit)—deferred compensation plan (7) 480 (136 ) (1,337 ) 344
(1,281 ) Loss (gain) on deferred compensation plan securities (7)
(477 ) 314 1,359 (163 ) 1,314 Life insurance proceeds received (7)
- (2,313 ) - (2,313 ) - Tax effects of Non-GAAP adjustments
(3,076 ) (5,677 ) (594 ) (8,753 )
(1,066 )
Non-GAAP net income from continuing operations
$ 12,614 $ 10,983 $
17,206 $ 23,597 $ 40,984 GAAP
weighted average shares - diluted 143,519 143,984 146,169 143,005
148,686 Non-GAAP adjustment 2,907 1,716
1,994 2,979 1,840
Non-GAAP weighted average shares - diluted (8) 146,426
145,700 148,163 145,984
150,526
Non-GAAP diluted net income per
share continuing operations $ 0.09
$ 0.08 $ 0.12 $
0.16 $ 0.27 GAAP gross
profit 74,627 72,513
73,633 147,140
153,069 Acquisition and divestiture related:
Amortization of acquisition related intangibles 3,890 3,622 2,917
7,512 6,101 Acquisition related legal and consulting fees (1) - - -
- - Assets impairment (3) (59 ) (59 ) (92 ) (118 ) (182 ) Fair
market value adjustment to acquired inventory sold 100 358 - 458 -
Restructuring related: Severance and retention costs 306 301 670
607 1,960 Facility closure costs (4) 3 6 (4 ) 9 (2 ) Fabrication
production transfer costs (5) - - 816 - 2,661 Other: Compensation
expense (benefit)—deferred compensation plan (7) 120 (34 ) (289 )
86 (277 ) Stock-based compensation expense 252
303 453 555 880
Non-GAAP gross profit 79,239
77,010 78,104
156,249 164,210 GAAP
R&D expenses: 42,387
41,544 39,184
83,931 78,999 Restructuring
related: Severance and retention costs (1,070 ) (340 ) (126 )
(1,410 ) (603 ) Facility closure costs (4) (28 ) (4 ) 5 (32 ) (10 )
Other: Compensation expense (benefit)—deferred compensation plan
(7) (290 ) 82 867 (208 ) 830 Stock-based compensation expense
(1,873 ) (1,542 ) (2,320 ) (3,415 )
(4,319 )
Non-GAAP R&D expenses
39,126 39,740
37,610 78,866
74,897 GAAP SG&A expenses:
32,750 36,412
24,888 69,162
50,817 Acquisition and divestiture related:
Amortization of acquisition related intangibles (1,683 ) (1,269 )
(944 ) (2,952 ) (1,888 ) Acquisition related legal and consulting
fees (1) (3,630 ) (4,836 ) - (8,466 ) - Other acquisition related
costs (2) (1,200 ) (1,800 ) - (3,000 ) Restructuring related:
Severance and retention costs (861 ) (74 ) (20 ) (935 ) (40 )
Facility closure costs (4) (3 ) (3 ) (4 ) (6 ) (15 ) Other:
Compensation expense (benefit)—deferred compensation plan (7) (70 )
20 181 (50 ) 174 Stock-based compensation expense (1,492 ) (1,277 )
(1,509 ) (2,769 ) (2,855 ) Expenses related to stockholder
activities (6) (38 ) (2,576 ) -
(2,614 ) -
Non-GAAP SG&A expenses
23,773 24,597
22,592 48,370
46,193 GAAP interest income and other,
net (206 ) 2,000 (1,828 )
1,794 (1,784 ) Loss (gain) on deferred
compensation plan securities (7) (477 ) 314 1,359 (163 ) 1,314 Life
insurance proceeds received (7) - (2,313 )
- (2,313 ) -
Non-GAAP
interest income and other, net (683 )
1 (469 )
(682 ) (470 ) GAAP
provision (benefit) for income taxes continuing operations
(33 ) (3,986 ) (367 )
(4,019 ) 600 Tax effects of Non-GAAP
adjustments (7) 3,076 5,677 594
8,753 1,066
Non-GAAP
provision (benefit) for income taxes continuing operations
3,043 1,691
227 4,734 1,666
(1) Consists of costs incurred in connection with
merger and acquisition-related activities, including legal,
accounting and other consulting fees. (2) Consists of a accrued
deferred closing date fee associated with the acquisition of NXP’s
high-speed data converter assets. (3) Consists of an impairment
charge related to a note receivable and subsequent recoveries. (4)
Consists of ongoing costs associated with the exit of our leased
and owned facilities. (5) Consists of costs incurred in connection
with the transition of our wafer fabrication processes in our
Oregon facility to TSMC. (6) This adjustment reflects the expenses
in response to our activities and inquiries of Starboard Value LP.
(7) 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 and life insurance proceeds received to this
trust. (8) For purposes of calculating non-GAAP diluted net income
per share, the GAAP diluted weighted average shares outstanding is
adjusted to exclude the benefits of stock compensation expense
attributable to future services not yet recognized in the financial
statements that are treated as proceeds assumed to be used to
repurchase shares under the GAAP treasury method.
INTEGRATED DEVICE TECHNOLOGY, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited)
September 30,
April 1, (In thousands)
2012
2012 ASSETS Current assets: Cash and cash
equivalents $ 97,871 $ 134,924 Short-term investments 170,922
190,535 Accounts receivable, net 71,129 60,609 Inventories 61,483
71,780 Prepaid and other current assets 29,530 23,684
Total current assets 430,935 481,532 Property, plant and
equipment, net 76,141 69,984 Goodwill 145,129 96,092
Acquisition-related intangibles 58,681 40,548 Other assets
28,738 29,478
TOTAL ASSETS $ 739,624 $ 717,634
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 26,254 $ 25,211 Accrued compensation and related
expenses 22,955 26,156 Deferred income on shipments to distributors
14,953 14,263 Deferred taxes liabilities 470 421 Other accrued
liabilities 20,034 13,443 Total current liabilities
84,666 79,494 Deferred tax liabilities 5,897 1,552 Long term
income taxes payable 599 706 Other long term obligations
20,127 16,494 Total liabilities 111,289 98,246
Stockholders' equity 628,335 619,388
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $ 739,624 $ 717,634
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