Q4 FY15 Revenue of $158.4M; up 4.8% Q/Q and
33.5% Y/YQ4 FY15 GAAP Diluted EPS (from Continuing Operations) of
$0.26Q4 FY15 Non-GAAP Diluted EPS of $0.29
Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI) today
announced results for the fiscal fourth quarter and fiscal year
ended March 29, 2015.
“We concluded fiscal year 2015 with exceptional results across
the board. Fourth quarter fiscal 2015 revenue grew by more than 33
percent year-over-year, non-GAAP operating margin for the quarter
reached 29%, and free cash flow as a percent of revenue reached 27%
on a trailing twelve month basis. In addition, we achieved key new
design wins in each of our primary businesses,” said Greg Waters,
president and chief executive officer. “Revenues from our High
Performance Computing/Data Center business reached record levels in
the fourth quarter, driven by the increasing demands of mobile data
and real-time processing. RF and wireless charging, both relatively
new businesses, became established businesses in fiscal 2015, and
based on design win activity, look to continue growing strongly.
Additionally, our board recently increased our share repurchase
authorization to $300 million. This replaces the prior
authorization, which had a remaining balance of $27 million at the
end of fiscal Q4. These results, combined with our strong balance
sheet and the leverage in our business model, position us to
continue our momentum into the next fiscal year,” concluded Mr.
Waters.
Recent Business Highlights - Communications
- IDT Introduces Ultra-Low-Jitter Family
of LVCMOS Clock Buffers
- IDT Surpasses 10 Million RFIC
Shipments
- IDT Introduces High-Performance Crystal
Oscillators with Best-in-Class Jitter Performance, Low Cost and
Short Production Lead Times
Recent Business Highlights - Consumer
- IKEA Furniture Features IDT Wireless
Charging
- IDT’s Latest Wireless Power Receiver
Brings Faster Charging Through Higher Efficiency
- IDT Wireless Power Transmitter Adopted
for Samsung Galaxy
- IDT Introduces Wireless PowerShare
Technology, Enabling Mobile Devices to Wirelessly Charge One
Another
- New IDT Wireless Power Chipset
Untethers Tablets and Phablets
Recent Business Highlights - Computing
- IDT Surpasses Milestone of 3 Million
Low-Power PCIe Gen3 Buffers Shipped
- IDT, Orange Silicon Valley, NVIDIA
Accelerate Computing Breakthrough with RapidIO-based Clusters Ideal
for Gaming, Analytics
- IDT Launches RapidIO 40-100 Gbps
Interface Portfolio, Reducing Latency and Boosting Bandwidth for
Communications and Computing
- IDT Collaborates With CERN to Speed and
Improve Data Analytics at Large Hadron Collider and Data
Center
The following highlights the Company’s financial performance on
both a GAAP and supplemental non-GAAP basis. For financial
statement purposes, the high speed data converter business is
classified as assets held for sale and is treated as discontinued
operations for all periods presented. IDT has excluded results from
the high speed data converter business from current and historical
non-GAAP results. 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 fourth quarter of 2015 was $158.4 million, compared with
$151.2 million reported last quarter, and $118.6 million reported
in the same period one year ago.
- GAAP net income from continuing
operations for the fiscal fourth quarter of 2015 was $40.4 million,
or $0.26 per diluted share, versus GAAP net income from continuing
operations of $32.8 million or $0.21 per diluted share last
quarter, and a GAAP net income from continuing operations of $5.1
million or $0.03 per share in the same period one year ago. Fiscal
fourth quarter 2015 GAAP results include $1.0 million expense
relating to amortization of intangible assets, $5.7 million in
stock-based compensation expense, $0.3 million in other
restructuring related charges, $0.2 million in gains from
divestitures, and $1.4 million benefit in related tax effects.
- Non-GAAP net income for the fiscal
fourth quarter of 2015 was $45.8 million or $0.29 per diluted
share, compared with non-GAAP net income of $38.7 million or $0.25
per diluted share last quarter, and non-GAAP net income of $21.7
million or $0.14 per diluted share reported in the same period one
year ago.
- GAAP gross profit from continuing
operations for the fiscal fourth quarter of 2015 was $98.1 million,
or 61.9 percent, compared with GAAP gross profit of $91.4 million
or 60.4 percent last quarter, and $61.1 million, or 51.5 percent,
reported in the same period one year ago. Non-GAAP gross profit for
the fiscal fourth quarter of 2015 was $99.6 million, or 62.9
percent, compared with non-GAAP gross profit of $93.0 million, or
61.5 percent last quarter, and $72.4 million, or 61.1 percent,
reported in the same period one year ago.
- GAAP R&D expense for the fiscal
fourth quarter of 2015 was $32.1 million, compared with GAAP
R&D expense of $32.8 million last quarter, and $32.9 million
reported in the same period one year ago. Non-GAAP R&D expense
for the fiscal fourth quarter of 2015 was $29.7 million, compared
with non-GAAP R&D expense of $29.7 million last quarter, and
$28.6 million in the same period one year ago.
- GAAP SG&A expense for the fiscal
fourth quarter of 2015 was $27.1 million, compared with GAAP
SG&A expense of $27.2 million last quarter, and $23.3 million
in the same period one year ago. Non-GAAP SG&A expense for the
fiscal fourth quarter of 2015 was $23.8 million, compared with
non-GAAP SG&A expense of $23.9 million last quarter, and $21.0
million in the same period one year ago.
Webcast and Conference Call Information
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 May 4, 2015. The webcast replay will be available
after 5 p.m. Pacific time on May 4, 2015.
Investors may also listen to the live call at 1:30 p.m. Pacific
time on May 4, 2015 by calling (888) 329-8889 or (719) 325-2394.
The access code is 2932359. The conference call replay will be
available for one week after the event at (888) 203-1112 or (719)
457-0820. The access code is 2932359.
About IDT
Integrated Device Technology, Inc. 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, 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 March 30, 2014. 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 income and other;
• Provision (benefit) for 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:
- Amortization of acquisition related
intangibles, which include acquired intangibles such as purchased
technology, patents, customer relationships, trademarks, backlog
and non-compete agreements.
- Acquisition related costs such as
legal, accounting and other professional or consulting fees
directly related to an acquisition.
- Fair market value adjustment to
acquired inventory sold.
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:
- Severance and retention costs directly
related to a restructuring action.
- Facility closure costs consist of
ongoing costs associated with the exit of our leased and owned
facilities.
- Gain on divestiture consists of gains
recognized upon the strategic sale of business units.
- Assets impairments including
accelerated depreciation of certain assets no longer in use and
impairment charge related to a note receivable and subsequent
recoveries.
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:
- Stock based compensation expense.
- Compensation expense (benefit) –
deferred compensation, consists of gains and losses on marketable
equity securities related to our deferred compensation
arrangements.
- Loss (gain) on deferred compensation
plan securities represents 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.
- Life insurance proceeds received,
represents proceeds received under corporate owned life insurance
under our deferred compensation plan.
- Tax effects of non-GAAP adjustments.
Effective first quarter of fiscal 2015 the Company used a projected
long-term non-GAAP tax rate of 4%. When projecting this long-term
rate, the Company evaluated its current long-term projections,
current tax structure and other factors such as the Company’s
existing tax positions in various jurisdictions and key
legislations in major jurisdictions where the company operates. The
Company intends to re-evaluate this long-term rate only on an
annual basis. This long-term non-GAAP tax rate eliminates the
effects of non-recurring and period specific items which can vary
in size and frequency, and will provide better consistency within
the interim reporting periods. This long-term rate could be subject
to change for a variety of reasons, for example, significant
structural changes in the geographic earnings mix including
acquisition activity, or fundamental tax law changes in major
jurisdictions where the Company operates.
- Diluted weighted average shares
non-GAAP adjustment, 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.
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 Twelve Months Ended Mar. 29
Dec. 28, Mar. 30, Mar. 29 Mar. 30,
2015 2014
2014 2015 2014
Revenues $ 158,350 $ 151,160 $ 118,640 $ 572,905 $ 484,779
Cost of revenues 60,295 59,796
57,560 227,601 211,877 Gross
profit 98,055 91,364 61,080 345,304 272,902 Operating expenses:
Research and development 32,071 32,825 32,860 127,688 140,799
Selling, general and administrative 27,050
27,165 23,322 106,469
101,148 Total operating expenses 59,121
59,990 56,182 234,157
241,947 Operating income 38,934
31,374 4,898 111,147
30,955 Gain (loss) from divestiture - - (302 ) -
78,632 Other income, net 1,966 1,558
786 4,791 2,707 Income
from continuing operations before income taxes 40,900 32,932 5,382
115,938 112,294 Provision for income taxes 517
91 320 1,357 981
Net income from continuing operations 40,383 32,841 5,062
114,581 111,313 Discontinued operations: Gain from
divestiture - - - 16,840 - Loss from discontinued operations (799 )
(14,538 ) (5,016 ) (37,237 ) (22,938 ) Provision for (benefit from)
income taxes 318 (55 ) 17
275 11 Net loss from discontinued operations
(1,117 ) (14,483 ) (5,033 ) (20,672 ) (22,949 ) Net income $
39,266 $ 18,358 $ 29 $ 93,909 $ 88,364
Basic net income per share - continuing operations $
0.27 $ 0.22 $ 0.03 $ 0.77 $ 0.74 Basic net loss per share -
discontinued operations (0.01 ) (0.10 ) (0.03
) (0.14 ) (0.15 ) Basic net income per share $ 0.26
$ 0.12 $ - $ 0.63 $ 0.59
Diluted net income per share - continuing operations $ 0.26 $ 0.21
$ 0.03 $ 0.74 $ 0.73 Diluted net loss per share - discontinued
operations (0.01 ) (0.09 ) (0.03 )
(0.13 ) (0.15 ) Diluted net income per share $ 0.25 $
0.12 $ - $ 0.61 $ 0.58 Weighted
average shares: Basic 148,326 148,552
150,033 148,714 149,480
Diluted 154,111 153,973 154,390
153,983 153,369
INTEGRATED DEVICE TECHNOLOGY,
INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(a) (Unaudited) (In thousands, except per share data)
Three
Months Ended Twelve Months Ended Mar. 29 Dec.
28, Mar. 30, Mar. 29 Mar. 30,
2015 2014 2014
2015 2014
GAAP net income from continuing operations $
40,383
$ 32,841 $ 5,062 $
114,581 $ 111,313 GAAP
diluted net income per share continuing operations $
0.26
$ 0.21 $ 0.03 $
0.74 $ 0.73 Acquisition related:
Amortization of acquisition related intangibles 1,001
1,347 11,999 6,573 21,964 Impairment of in-process research and
development - - 2,433 - 2,433 Acquisition related legal and
consulting fees -
(125 ) 73 (125 ) 802 Restructuring related: Severance and retention
costs -
129 383 974 6,456 Facility closure costs -
209 107 276 134 Loss (gain) from divestiture -
- 302 - (78,632 ) Assets impairment and other 265
- 334 2,968 4,113 Other: Stock-based compensation expense 5,684
5,878 2,368 22,453 12,677 Gain from divestiture (168 ) (104 ) -
(272 ) - Compensation expense - deferred compensation plan 213
525 185 990 1,265 Gain on deferred compensation plan securities
(205 )
(500 ) (171 ) (940 ) (1,316 ) Tax effects of Non-GAAP adjustments
(1,391 )
(1,521 ) (1,331 ) (4,596 ) (4,389 )
Non-GAAP net income from continuing operations $
45,782
$ 38,679 $ 21,744 $
142,882 $ 76,820 GAAP weighted average shares
- diluted 154,111
153,973 154,390 153,983 153,369 Non-GAAP adjustment 1,558
1,463 1,492 2,014
1,981 Non-GAAP weighted average shares - diluted
155,669
155,436 155,882 155,997
155,350
Non-GAAP diluted net income per share
continuing operations $ 0.29
$ 0.25 $ 0.14 $
0.92 $ 0.49 GAAP gross
profit $ 98,055
$ 91,364 $ 61,080
$ 345,304 $ 272,902
Acquisition related: Amortization of acquisition related
intangibles 625
959 11,016 4,534 18,321 Restructuring related: Severance and
retention costs -
(96 ) 117 23
204 Facility closure costs -
- - - 8 Assets impairment and other 220
- 105 2,489 (111 ) Other: Compensation expense - deferred
compensation plan 78
156 55 311 388 Stock-based compensation expense 589
592 61 1,936 1,189
Non-GAAP gross profit $ 99,567
$ 92,975 $ 72,434
$ 354,597 $ 292,901
GAAP R&D expenses: $ 32,071
$ 32,825 $ 32,860
$ 127,688 $ 140,799
Acquisition related: Impairment of in-process research and
development -
(2,433 )
- (2,433 ) Restructuring related: Severance and retention costs -
(91 ) (264 ) (467 ) (4,193 ) Facility closure costs -
(209 ) - (209 ) (9 ) Assets impairment and other (45 ) - (63 ) (479
) (4,058 ) Other: Compensation expense - deferred compensation plan
(83 )
(255 ) (90 ) (464 ) (650 ) Stock-based compensation expense
(2,266 )
(2,562 ) (1,389 ) (9,813 ) (5,601 )
Non-GAAP R&D expenses $ 29,677
$ 29,708 $ 28,621
$ 116,256 $ 123,855
GAAP SG&A expenses: $ 27,050
$ 27,165 $ 23,322
$ 106,469 $ 101,148
Acquisition related: Amortization of acquisition related
intangibles (376 )
(388 ) (983 ) (2,039 ) (3,643 ) Acquisition related legal and
consulting fees -
125 (73 ) 125 (802 ) Restructuring related: Severance and retention
costs -
(134 ) (2 ) (484 ) (2,059 ) Facility closure costs -
- (107 ) (67 ) (117 ) Assets impairment and other -
- (166 ) - (166 ) Other: Compensation expense - deferred
compensation plan (52 )
(114 ) (40 ) (215 ) (227 ) Stock-based compensation expense
(2,829 )
(2,724 ) (918 ) (10,704 ) (5,887 )
Non-GAAP SG&A expenses $ 23,793
$ 23,930 $ 21,033
$ 93,085 $ 88,247
GAAP interest income and other, net $ 1,966
$ 1,558 $ 786 $ 4,791
$ 2,707 Gain from divestiture (168 ) (104 ) - (272 )
- Gain on deferred compensation plan securities (205 )
(500 ) (171 ) (940 ) (1,316 )
Non-GAAP interest income and other, net $
1,593
$ 954 $ 615 $
3,579 $ 1,391 GAAP
provision for income taxes - continuing operations $
517
$ 91 $ 320 $ 1,357
$ 981 Tax effects of Non-GAAP adjustments
1,391
1,521 1,331 4,596
4,389
Non-GAAP provision for income taxes - continuing
operations $ 1,908
$ 1,612 $ 1,651 $
5,953 $ 5,370 (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)
Mar. 29 March
30, (In thousands)
2015 2014
ASSETS Current assets: Cash and cash equivalents $ 116,945 $
91,211 Short-term investments 438,115 362,604 Accounts receivable,
net 63,618 68,904 Inventories 45,410 49,622 Prepaid and other
current assets 16,041 13,034 Total current assets
680,129 585,375 Property, plant and equipment, net 65,508
69,827 Goodwill 135,644 135,644 Acquisition-related intangibles
5,535 18,741 Other assets 26,843 21,373
TOTAL
ASSETS $ 913,659 $ 830,960
LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
28,006 $ 25,442 Accrued compensation and related expenses 43,649
24,343 Deferred income on shipments to distributors 15,694 14,006
Deferred taxes liabilities 1,401 1,346 Other accrued liabilities
17,582 11,525 Total current liabilities 106,332
76,662 Deferred tax liabilities 1,121 1,494 Long term income
taxes payable 347 266 Other long-term obligations 17,605
18,683 Total liabilities 125,405 97,105 Stockholders'
equity 788,254 733,855
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $ 913,659 $ 830,960
Financial Contact:IDT Investor RelationsSuzanne Schmidt,
415-217-4962suzanne@blueshirtgroup.comorPress Contact:IDT
Worldwide MarketingGraham Robertson,
408-284-2644graham.robertson@idt.com
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