Q4 FY16 Revenue of $189.4M; up 6.6% Q/Q and
19.6% Y/Y
FY16 Revenue of $697.4M; up 21.7%
Q4 FY16 GAAP Diluted EPS of $0.59; Q4 FY16
Non-GAAP Diluted EPS of $0.36
FY16 GAAP Diluted EPS of $1.32; FY16 Non-GAAP
Diluted EPS of $1.37
Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI) today
announced results for the fiscal fourth quarter ended April 3,
2016.
“We concluded fiscal year 2016 with fourth quarter revenue of
$189.4 million, our 10th consecutive quarter of year-over-year
revenue growth. This strength in the quarter was driven by sales of
communications infrastructure products, automotive and industrial
products, and wireless power products. The acquisition of ZMDI is
already yielding tremendous benefits to IDT and we remain on track
with the integration, which should be completed by December of this
year,” said Greg Waters, president and chief executive officer.
“Full year fiscal 2016 revenue grew by over 21 percent to reach
$697 million, and was driven by sales of our wireless power
products, and High Performance Computing/Data Center products. We
remain very focused on operational excellence and achieving our
target operating model which includes 30 percent operating margin
and 30 percent annual free cash flow. We are well-positioned to
continue outgrowing the semiconductor market overall, and to
deliver best-in-class profitability and earnings power,” concluded
Mr. Waters.
Recent Business Highlights – Communications
- New IDT Family of RF Devices Targets
Broadband and CATV Markets
- IDT Introduces New VersaMixer Family of
Highly Flexible RF Mixers, Delivering Superior Features for
Communications Systems
- Huawei Connects Systems with IDT
RapidIO Technology to Achieve Superior Video Quality
Recent Business Highlights – Computing
- IDT and Northeastern University
Collaborate on Research to Improve Data Analytics, Caching and
Bandwidth in Access Networks
- IDT Launches Next-Generation RapidIO
Switches for 5G Mobile Network Development and Mobile Edge
Computing
- IDT and 5G Lab Germany Collaborate on
Technology to Enable Network-Connected Autonomous Vehicles
- IDT and Prodrive Technologies Partner
to Develop 100ns Latency, Energy-Efficient RapidIO Switch Appliance
Portfolio
- IDT Expands Power Portfolio with New
Dual-Phase High-Power Digital Power Controller
- IDT Memory Interface Devices Qualified
for DDR4 Enterprise DIMMs on Intel Xeon Processor E5-2600 v4
Product Family-Based Systems
Recent Business Highlights – Consumer
- Galaxy S7 Equips IDT Technology as part
of Wireless Fast Charge
- IDT Integrating Wireless Power and
Sensor Technology for Highly Programmable, Flexible Devices
- IDT Celebrates Leadership Position in
Wireless Power with 70 Million Units Shipped
- IDT Announces Tri-Mode Receiver Family
Supporting Both Magnetic Resonance and Induction Wireless Power
Standards
- IDT Launches Industry’s Highest
Efficiency 15 W Wireless Power Transmitter and Receiver
Solution
- IDT Introduces New Sensor for Detecting
UVB and Ambient Light in Mobile Applications
Recent Business Highlights – Auto and Industrial
- IDT and 5G Lab Germany Collaborate on
Technology to Enable Network-Connected Autonomous Vehicles
- IDT Introduces Energy-Efficient Sensor
Signal Conditioner for Consumer Barometric Pressure and Thermopile
Sensors
- IDT Introduces High-Sensitivity
2-Channel UVA and UVB Light Sensor Designed to Monitor
Environmental Health Risks
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
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 2016 was $189.4 million. This compared
with $177.6 million reported last quarter, and $158.4 million
reported in the same period one year ago.
- GAAP net income from continuing
operations for the fiscal fourth quarter of 2016 was $81.6 million,
or $0.59 per diluted share, versus GAAP net income from continuing
operations of $32.5 million or $0.22 per diluted share last
quarter, and GAAP net income from continuing operations of $40.4
million or $0.26 per share in the same period one year ago. Fiscal
fourth quarter GAAP results include $8.2 million in stock-based
compensation, $16.9 million in acquisition and restructuring
charges, $3.2 million in non-cash interest expense and $58.4
million in related tax effects.
- Non-GAAP net income for the fiscal
fourth quarter of 2016 was $51.5 million or $0.36 per diluted
share, compared with non-GAAP net income of $52.2 million or $0.35
per diluted share last quarter, and non-GAAP net income of $45.8
million or $0.29 per diluted share reported in the same period one
year ago.
- GAAP gross profit from continuing
operations for the fiscal fourth quarter of 2016 was $108.0
million, or 57.0 percent, compared with GAAP gross profit of $107.9
million or 60.8 percent last quarter, and $98.1 million, or 61.9
percent, reported in the same period one year ago. Non-GAAP gross
profit for the fiscal fourth quarter of 2016 was $117.0 million, or
61.8 percent, compared with non-GAAP gross profit of $111.1
million, or 62.6 percent last quarter, and $99.6 million, or 62.9
percent, reported in the same period one year ago.
- GAAP R&D expense for the fiscal
fourth quarter of 2016 was $41.0 million, compared with GAAP
R&D expense of $38.4 million last quarter, and $32.1 million
reported in the same period one year ago. Non-GAAP R&D expense
for the fiscal fourth quarter of 2016 was $36.2 million, compared
with non-GAAP R&D expense of $33.8 million last quarter, and
$29.7 million in the same period one year ago.
- GAAP SG&A expense for the fiscal
fourth quarter of 2016 was $40.3 million, compared with GAAP
SG&A expense of $38.9 million last quarter, and $27.1 million
in the same period one year ago. Non-GAAP SG&A expense for the
fiscal fourth quarter of 2016 was $28.9 million, compared with
non-GAAP SG&A expense of $25.1 million last quarter, and $23.8
million in the same period one year ago.
Webcast and Conference Call Information
Investors may listen to the live call at 1:30 p.m. Pacific Time
on May 2, 2016 by calling (888) 204-4610. The access code is
7492840. 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 2, 2016. The webcast replay will be available
after 4:30 p.m. Pacific Time on May 2, 2016 for one week. Register
for access to the replay at https://jsp.premiereglobal.com/webrsvp
with Passcode: 7492840.
IDT’s next regularly scheduled Quiet Period will begin June 20,
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 first 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 and sensing solutions 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 March 29, 2015. 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 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 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, 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.
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.
- Non-cash interest expense, consists of
amortization of issuance cost and accretion of discount related to
the convertible notes.
- 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.
- Tax effects of non-GAAP adjustments.
Effective first quarter of fiscal 2016, the Company changed its
methodology for reporting non-GAAP taxes to be based on estimated
cash tax expense and reserves. The Company forecasts its annual
cash tax liability and allocates the tax to each quarter in
proportion to earnings for that period. This approach is designed
to enhance the ability of investors to understand the impact of the
Company's tax expense on its current operations, provide improved
modeling accuracy, and substantially reduce fluctuations caused by
GAAP to non-GAAP adjustments, which may not reflect actual cash tax
expense. Non-GAAP tax amounts for periods prior to March 30, 2015
have not been adjusted to reflect the new methodology.
- 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 Apr. 3 Jan. 3
Mar. 29, Apr. 3 Mar. 29, 2016
2016 2015
2016 2015 Revenues $ 189,361 $
177,610 $ 158,350 $ 697,376 $ 572,905 Cost of revenues
81,398 69,699 60,295
275,722 227,601 Gross profit 107,963 107,911
98,055 421,654 345,304 Operating expenses: Research and development
41,023 38,429 32,071 148,507 127,688 Selling, general and
administrative 40,287 38,851
27,050 136,508 106,469 Total
operating expenses 81,310 77,280
59,121 285,015 234,157
Operating income 26,653 30,631 38,934 136,639 111,147 Other
income (expense), net (3,601 ) (2,008 ) 1,966
(2,775 ) 4,791 Income from continuing
operations before income taxes 23,052 28,623 40,900 133,864 115,938
Provision for (benefit from) income taxes (58,559 )
(3,922 ) 517 (61,435 ) 1,357
Net income from continuing operations 81,611
32,545 40,383 195,299
114,581 Discontinued operations: Gain from
divestiture - - - - 16,840 Loss from discontinued operations - -
(799 ) (547 ) (37,237 ) Provision for income taxes -
- 318 15 275
Net loss from discontinued operations -
- (1,117 ) (562 ) (20,672 ) Net
income $ 81,611 $ 32,545 $ 39,266 $
194,737 $ 93,909 Basic net income per share -
continuing operations $ 0.61 $ 0.23 $ 0.27 $ 1.37 $ 0.77 Basic net
loss per share - discontinued operations - -
(0.01 ) - (0.14 ) Basic net
income per share $ 0.61 $ 0.23 $ 0.26 $ 1.37
$ 0.63 Diluted net income per share -
continuing operations $ 0.59 $ 0.22 $ 0.26 $ 1.32 $ 0.74 Diluted
net loss per share - discontinued operations -
- (0.01 ) - (0.13 ) Diluted net
income per share $ 0.59 $ 0.22 $ 0.25 $ 1.32
$ 0.61 Weighted average shares: Basic
134,788 140,411 148,326
142,783 148,714 Diluted 139,239
145,705 154,111 147,652
153,983
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 Apr. 3 Jan. 3 Mar. 29, Apr. 3
Mar. 29, 2016 2016
2015 2016
2015 GAAP net income from continuing
operations $ 81,611
$ 32,545 $ 40,383
$ 195,299
$ 114,581 GAAP diluted net income per share
- continuing operations $ 0.59
$ 0.22 $ 0.26 $
1.32
$ 0.74 Acquisition related: Amortization of
acquisition related intangibles 9,347
2,732 1,001 13,662
6,573 Acquisition related fees 245
2,113 - 2,591
(125 ) Acquisition related foreign exchange loss - 536 - 536 -
Amortization of fair market value adjustment to inventory 4,641 890
- 5,531 - Restructuring related: Severance and retention costs
2,587
6,091 - 11,493
974 Facility closure costs 53
- 265 207
276 Assets impairment and other -
- - 147
2,968 Other: Stock-based compensation expense 8,249
9,462 5,684 34,157
22,453 Non-cash interest expense 3,191 2,164 - 5,355 - Loan
prepayment penalty - 164 - 164 - Gain from divestiture - (22 ) (168
) (98 ) (272 ) Assets impairment and other - - - (586 ) -
Compensation expense (benefit) - deferred compensation plan 157
366 213 (179 )
990 Loss (gain) on deferred compensation plan securities (151 )
(363 ) (205 ) 205
(940 ) Non-GAAP tax adjustments (58,388 )
(4,506 ) (1,391 ) (62,629 )
(4,596 )
Non-GAAP net income from continuing
operations $ 51,542
$ 52,172 $ 45,782
$ 205,855
$ 142,882 GAAP weighted average shares -
diluted 139,239
145,705 154,111 147,652
153,983 Non-GAAP adjustment 2,100
1,920 1,558 2,206
2,014 Non-GAAP weighted average shares - diluted
141,339
147,625 155,669 149,858
155,997
Non-GAAP diluted net income per share -
continuing operations $ 0.36
$ 0.35 $ 0.29 $
1.37
$ 0.92 GAAP gross profit
$ 107,963
$ 107,911 $ 98,055
$ 421,654
$ 345,304 Acquisition related: Amortization of
acquisition related intangibles 3,355
1,521 625 6,110
4,534 Amortization of fair market value adjustment to inventory
4,641 890 - 5,531 - Restructuring related: Severance and retention
costs 262
- - 450
23 Assets impairment and other -
- 220 147
2,489 Other: Compensation expense (benefit) - deferred compensation
plan 58
134 78 (65 )
311 Stock-based compensation expense 715
666 589 2,708
1,936
Non-GAAP gross profit $
116,994
$ 111,122 $ 99,567
$ 436,535
$ 354,597 GAAP R&D expenses:
$ 41,023
$ 38,429 $ 32,071
$ 148,507
$ 127,688 Restructuring related: Severance and
retention costs (1,152 )
(66 ) - (2,246 )
(467 ) Facility closure costs -
- - (154 )
(209 ) Assets impairment and other - - (45 ) 261 (479 ) Other:
Compensation benefit (expense) - deferred compensation plan (61 )
(143 ) (83 ) 70
(464 ) Stock-based compensation expense (3,660 )
(4,433 ) (2,266 ) (15,268 )
(9,813 )
Non-GAAP R&D expenses $
36,150
$ 33,787 $ 29,677
$ 131,170
$ 116,256 GAAP SG&A
expenses: $ 40,287
$ 38,851 $ 27,050
$ 136,508
$ 106,469 Acquisition related: Amortization of
acquisition related intangibles (5,992 )
(1,211 ) (376 ) (7,552 )
(2,039 ) Acquisition related fees (245 )
(2,113 ) - (2,358 )
125 Restructuring related: Severance and retention costs (1,173 )
(6,025 ) - (8,797 )
(484 ) Facility closure costs (53 )
- - (53 )
(67 ) Other: Compensation benefit (expense) - deferred compensation
plan (38 )
(89 ) (52 ) (189 )
(215 ) Stock-based compensation expense (3,874 )
(4,363 ) (2,829 ) (16,182 )
(10,704 )
Non-GAAP SG&A expenses $
28,912
$ 25,050 $ 23,793
$ 101,377
$ 93,085 GAAP interest and other
income (expense), net $ (3,601 )
$ (2,008 ) $ 1,966 $
(2,775 )
$ 4,791 Non-cash interest expense 3,191 2,164 - 5,355
- Loan prepayment penalty - 164 - 164 - Acquisition related foreign
exchange loss - 536 - 536 - Gain from divestiture - (22 ) (168 )
(98 ) (272 ) Loss (gain) on deferred compensation plan securities
(151 )
(363 ) (205 ) 205
(940 ) Assets impairment and other -
- - (325 )
-
Non-GAAP interest and other income (expense),
net $ (561 )
$ 471 $ 1,593 $
3,062
$ 3,579 GAAP provision for (benefit
from) income taxes - continuing operations $
(58,559 )
$ (3,922 ) $ 517 $
(61,435 )
$ 1,357 Non-GAAP tax adjustments 58,388
4,506 1,391 62,629
4,596
Non-GAAP provision for (benefit from) income
taxes - continuing operations $ (171 )
$ 584 $ 1,908 $
1,194
$ 5,953 (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)
Apr. 3 Mar. 29, (In thousands)
2016
2015 ASSETS Current assets: Cash and
cash equivalents $ 203,231 $ 116,945 Short-term investments 151,233
438,115 Accounts receivable, net 74,386 63,618 Inventories 54,243
45,410 Prepaid and other current assets 15,008 16,041
Total current assets 498,101 680,129 Property, plant and
equipment, net 73,877 65,508 Goodwill 305,733 135,644
Acquisition-related intangibles 127,761 5,535 Other assets
93,717 26,843
TOTAL ASSETS $ 1,099,189 $ 913,659
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 39,858 $ 28,006 Accrued
compensation and related expenses 45,269 43,649 Deferred income on
shipments to distributors 7,006 15,694 Deferred tax liabilities -
1,401 Other accrued liabilities 14,974 17,582 Total
current liabilities 107,107 106,332 Deferred tax liabilities
19,712 1,121 Long term income taxes payable 2,190 347 Convertible
notes 272,221 - Other long-term obligations 21,264
17,605 Total liabilities 422,494 125,405 Stockholders'
equity 676,695 788,254
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $ 1,099,189 $ 913,659
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160502006110/en/
Integrated Device Technology, Inc.Financial Contact:IDT
Investor RelationsSuzanne Schmidt,
415-217-4962suzanne@blueshirtgroup.comorPress Contact:IDT
Public Relations ManagerDean Solov,
408-284-2608dean.solov@idt.com
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