IDTI Integrated Device Technology, Inc.

Q4 FY17 Revenue of $175.7M, FY17 Revenue of $728.2M

Q4 FY17 GAAP Diluted EPS of $0.22; Q4 FY17 Non-GAAP Diluted EPS of $0.35;

FY17 GAAP Diluted EPS (from Continuing Operations) of $0.79; FY17 Non-GAAP Diluted EPS of $1.40

Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI) today announced results for the fiscal fourth quarter 2017, ended April 2, 2017.

“Fourth quarter fiscal 2017 revenue totaled $175.7 million, highlighted by strength in sales of our wireless power, memory interface, and automotive sensor products,” said Greg Waters, president and chief executive officer. Total fiscal 2017 revenue grew to $728.2M, up from $697.4M in fiscal 2016.

During the first week of fiscal 2018, we closed our announced acquisition of GigPeak, a leading provider of high-performance optical interconnect solutions, which further accelerates our existing growth strategy. Entering the new fiscal year, IDT is strongly positioned and levered to multiple growth vectors that are tied to IDT’s unique analog and mixed-signal expertise. We continue to see robust demand for our expanding product and technology portfolio, and with our ongoing focus on driving operational excellence, we look forward to delivering exceptional value to our shareholders in the coming year,” concluded Mr. Waters.

Recent Business Highlights – Consumer

• Scosche selected IDT’s 15W Qi-certified wireless power transmitter for its new MagicMount™ Charge Wireless Charging Magnetic Mount for fast-charging mobile devices. The company launched the industry’s highest efficiency 15W turnkey wireless power reference kit, delivering the same ease of use and support that have become the hallmark of its two prior wireless power kits. With this latest kit, IDT now presents an off-the-shelf library of turnkey wireless power solutions covering the range of one to 15 watts.

Recent Business Highlights – Communications

• IDT and Epson, the recognized world leader in Quartz crystal technology, introduced an ultra-high performance timing solution addressing the phase noise challenges in telecommunication and data center applications. IDT's new 8V19N474 jitter attenuator and frequency synthesizer is coupled with Epson's VG-4513 high-performance voltage-controlled crystal oscillator (VCXO) to provide best-in-class phase noise performance for highly stringent applications, such as 40/100/400 Gbps Ethernet timing.
• IDT introduced its next-generation 10Gbps-class millimeter wave (mmWave) modem for wireless infrastructure carrier class deployments in both access and backhaul. The IDT(R) RWM6050 is the industry's first highly integrated mmWave dual modem (PHY + MAC + ADC/DAC + beam forming) targeting applications such as fixed wireless broadband access, WTTx (Wireless To The Edge), small cell backhaul, 5G service and other emerging applications.

Recent Business Highlights – Computing

• IDT introduced the industry’s first integrated power management IC (PMIC) developed for enterprise DDR4 NVDIMM applications. The IDT P8800 enables NVDIMM solutions to efficiently scale to greater density, reliability and performance.

Recent Business Highlights – Auto and Industrial

• IDT and LeddarTech Inc announced a partnership agreement to jointly develop and deliver next generation LiDAR systems. This partnership combines LeddarTech’s highly specialized know-how in solid-state LiDARs with IDT’s world-class expertise in the development of highly integrated automotive-grade ICs.
• At Tech Taipei in April, IDT showcased its latest sensing and wireless power solutions for the growing automotive market. IDT’s demonstrations included the recently introduced IDT(R) ZMID520x family of high-performance automotive-qualified inductive position sensors.
• IDT introduced a new family of high-performance inductive position sensors offering superior reliability, flexibility and serviceability while cutting system costs. The new sensors are ideal for the automotive, industrial and consumer markets and can be used for such end products as vehicles, robots, home appliances and smart automation.

Recent Business Highlights – Other

• IDT announced the completion of its acquisition of GigPeak, Inc. on April 4, 2017. The acquisition was originally announced on February 13, 2017.
• IDT appointed Chris Allexandre as its new senior vice president of global sales and marketing, bringing global experience in analog mixed signal products in the mobile, industrial, telecom, cloud, consumer and automotive 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 fourth quarter of 2017 was $175.7 million. This compared with $176.4 million reported last quarter, and $189.4 million reported in the same period one year ago.
• GAAP net income from continuing operations for the fiscal fourth quarter of 2017 was $30.2 million, or $0.22 per diluted share, versus GAAP net income from continuing operations of $33.4 million or $0.24 per diluted share last quarter, and GAAP net income from continuing operations of $81.6 million or $0.59 per diluted share in the same period one year ago. Fiscal fourth quarter GAAP results include $10.3 million in stock-based compensation, $7.2 million in acquisition and restructuring charges, $3.4 million in non-cash interest expense and $2.9 million benefit in related tax effects.
• Non-GAAP net income for the fiscal fourth quarter of 2017 was $48.1 million or $0.35 per diluted share, compared with non-GAAP net income of $49.0 million or $0.35 per diluted share last quarter, and non-GAAP net income of $51.5 million or $0.36 per diluted share reported in the same period one year ago.
• GAAP gross profit from continuing operations for the fiscal fourth quarter of 2017 was $101.7 million, or 57.9 percent, compared with GAAP gross profit of $104.1 million or 59.0 percent last quarter, and $108.0 million, or 57.0 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal fourth quarter of 2017 was $106.1 million, or 60.4 percent, compared with non-GAAP gross profit of $108.7 million, or 61.6 percent last quarter, and $117.0 million, or 61.8 percent, reported in the same period one year ago.
• GAAP R&D expense for the fiscal fourth quarter of 2017 was $35.5 million, compared with GAAP R&D expense of $38.2 million last quarter, and $41.0 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal fourth quarter of 2017 was $31.0 million, compared with non-GAAP R&D expense of $33.5 million last quarter, and $36.2 million in the same period one year ago.
• GAAP SG&A expense for the fiscal fourth quarter of 2017 was $36.2 million, compared with GAAP SG&A expense of $32.7 million last quarter, and $40.3 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal fourth quarter of 2017 was $27.2 million, compared with non-GAAP SG&A expense of $25.7 million last quarter, and $28.9 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 1, 2017 by calling (888) 466-4587. The access code is 9166257. 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 1, 2017. The webcast replay will be available after 4:30 p.m. Pacific Time on May 1, 2017 for one week.

IDT’s next regularly scheduled Quiet Period will begin June 19, 2017, 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 2018 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 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, 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.

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. Non-GAAP tax calculation is 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.
• 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. 2   Jan. 1   Apr. 3 Apr. 2   Apr. 3   2017     2017     2016     2017     2016   Revenues $ 175,698 $ 176,358 $ 189,361 $ 728,243 $ 697,376 Cost of revenues   74,026     72,273     81,398     307,605     275,722   Gross profit 101,672 104,085 107,963 420,638 421,654 Operating expenses: Research and development 35,533 38,173 41,023 165,104 148,507 Selling, general and administrative   36,225     32,737     40,287     145,193     136,508   Total operating expenses   71,758     70,910     81,310     310,297     285,015     Operating income 29,914 33,175 26,653 110,341 136,639   Interest and other expense, net (2,153 ) (3,810 ) (3,601 ) (11,056 ) (2,775 )           Income from continuing operations before income taxes 27,761 29,365 23,052 99,285 133,864 Benefit from income taxes   (2,448 )   (4,072 )   (58,559 )   (9,899 )   (61,435 )   Net income from continuing operations   30,209     33,437     81,611     109,184     195,299     Discontinued operations: Gain from divestiture - 1,385 - 1,385 - Loss from discontinued operations - - - - (547 ) Provision for income taxes   -     87     -     87     15   Net income (loss) from discontinued operations   -     1,298     -     1,298     (562 )   Net income $ 30,209   $ 34,735   $ 81,611   $ 110,482   $ 194,737     Basic net income per share - continuing operations $ 0.23 $ 0.25 $ 0.61 $ 0.82 $ 1.37 Basic net income per share - discontinued operations   -     0.01     -     0.01     -   Basic net income per share $ 0.23   $ 0.26   $ 0.61   $ 0.83   $ 1.37     Diluted net income per share - continuing operations $ 0.22 $ 0.24 $ 0.59 $ 0.79 $ 1.32 Diluted net income per share - discontinued operations   -     0.01     -     0.01     -   Diluted net income per share $ 0.22   $ 0.25   $ 0.59   $ 0.80   $ 1.32     Weighted average shares: Basic   133,309     133,846     134,788     133,817     142,783   Diluted   136,903     137,167     139,239     137,440     147,652     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. 2   Jan. 1   Apr. 3 Apr. 2   Apr. 3   2017     2017     2016     2017     2016     GAAP net income from continuing operations $ 30,209   $ 33,437   $ 81,611   $ 109,184   $ 195,299   GAAP diluted net income per share continuing operations $ 0.22   $ 0.24   $ 0.59   $ 0.79   $ 1.32   Acquisition related: Amortization of acquisition related intangibles 4,782 5,557 9,347 21,360 13,662 Acquisition related costs 2,223 - 245 2,295 2,591 Acquisition related foreign exchange loss - - - - 536 Amortization of fair market value adjustment to inventory 407 757 4,641 4,079 5,531 Restructuring related: Severance and retention costs (387 ) (216 ) 2,587 16,139 11,493 Facility closure costs - - 53 197 207 Assets impairment and other 156 - - 1,026 147 Other: Stock-based compensation expense 10,266 9,912 8,249 39,874 34,157 Non-cash interest expense 3,393 3,360 3,191 13,329 5,355 Loan prepayment penalty - - - - 164 Loss (gain) from divestiture - 710 - 710 (98 ) Assets impairment and other - - - (652 ) (586 ) Compensation expense (benefit) - deferred compensation plan 486 262 157 1,586 (179 ) Loss (gain) on deferred compensation plan securities (474 ) (249 ) (151 ) (1,532 ) 205 Non-GAAP tax adjustments   (2,942 )   (4,527 )   (58,388 )     (11,862 )     (62,629 ) Non-GAAP net income from continuing operations $ 48,119   $ 49,003   $ 51,542   $ 195,733   $ 205,855   GAAP weighted average shares - diluted 136,903 137,167 139,239 137,440 147,652 Non-GAAP adjustment   1,596     2,006     2,100     1,976     2,206   Non-GAAP weighted average shares - diluted   138,499     139,173     141,339     139,416     149,858   Non-GAAP diluted net income per share continuing operations $ 0.35   $ 0.35   $ 0.36   $ 1.40   $ 1.37     GAAP gross profit $ 101,672   $ 104,085   $ 107,963   $ 420,638   $ 421,654   Acquisition related: Amortization of acquisition related intangibles 3,116 3,178 3,355 12,817 6,110 Amortization of fair market value adjustment to inventory 407 757 4,641 4,079 5,531 Restructuring related: Severance and retention costs (36 ) (146 ) 262 2,505 450 Assets impairment and other 156 - - 492 147 Other: Compensation expense (benefit) - deferred compensation plan 114 96 58 517 (65 ) Stock-based compensation expense   660     695     715       2,936       2,708   Non-GAAP gross profit $ 106,089   $ 108,665   $ 116,994   $ 443,984   $ 436,535     GAAP R&D expenses: $ 35,533   $ 38,173   $ 41,023   $ 165,104   $ 148,507   Restructuring related: Severance and retention costs (44 ) (225 ) (1,152 ) (10,531 ) (2,246 ) Facility closure costs - - - (147 ) (154 ) Assets impairment and other - - - (106 ) 261 Other: Compensation benefit (expense) - deferred compensation plan (248 ) (102 ) (61 ) (677 ) 70 Stock-based compensation expense   (4,226 )   (4,342 )   (3,660 )   (16,067 )   (15,268 ) Non-GAAP R&D expenses $ 31,015   $ 33,504   $ 36,150   $ 137,576   $ 131,170     GAAP SG&A expenses: $ 36,225   $ 32,737   $ 40,287   $ 145,193   $ 136,508   Acquisition related: Amortization of acquisition related intangibles (1,666 ) (2,379 ) (5,992 ) (8,543 ) (7,552 ) Acquisition related costs (2,223 ) - (245 ) (2,295 ) (2,358 ) Restructuring related: Severance and retention costs 395 295 (1,173 ) (3,103 ) (8,797 ) Facility closure costs - - (53 ) (50 ) (53 ) Assets impairment and other - - - (428 ) - Other: Compensation benefit (expense) - deferred compensation plan (124 ) (64 ) (38 ) (392 ) (189 ) Stock-based compensation expense   (5,380 )   (4,875 )   (3,874 )   (20,871 )   (16,182 ) Non-GAAP SG&A expenses $ 27,227   $ 25,714   $ 28,912   $ 109,511   $ 101,377     GAAP interest and other expense, net $ (2,153 ) $ (3,810 ) $ (3,601 ) $ (11,056 ) $ (2,775 ) Non-cash interest expense 3,393 3,360 3,191 13,329 5,355 Loan prepayment penalty - - - - 164 Acquisition related foreign exchange loss - - - - 536 Loss (gain) from divestiture - 710 - 710 (98 ) Loss (gain) on deferred compensation plan securities (474 ) (249 ) (151 ) (1,532 ) 205 Assets impairment and other   -     -     -     (652 )   (325 ) Non-GAAP interest and other income (expense), net $ 766   $ 11   $ (561 ) $ 799   $ 3,062     GAAP benefit from income taxes - continuing operations $ (2,448 ) $ (4,072 ) $ (58,559 ) $ (9,899 ) $ (61,435 ) Non-GAAP tax adjustments   2,942     4,527     58,388     11,862     62,629   Non-GAAP provision for (benefit from) income taxes - continuing operations $ 494   $ 455   $ (171 ) $ 1,963   $ 1,194     (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. 2   Apr. 3 (In thousands) 2017 2016   ASSETS Current assets: Cash and cash equivalents $ 214,554 $ 203,231 Short-term investments 191,492 151,233 Accounts receivable, net 89,312 74,386 Inventories 52,288 54,243 Prepaid and other current assets   13,054   15,008 Total current assets 560,700 498,101   Property, plant and equipment, net 80,961 73,877 Goodwill 306,925 305,733 Other intangible assets, net 108,818 127,761 Deferred non-current tax assets 85,831 60,929 Other assets   40,399   32,788 TOTAL ASSETS $ 1,183,634 $ 1,099,189   LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 42,020 $ 39,858 Accrued compensation and related expenses 26,624 45,269 Deferred income on shipments to distributors 1,985 7,006 Other accrued liabilities   20,205   14,974 Total current liabilities 90,834 107,107   Deferred tax liabilities 13,835 19,712 Convertible notes 285,542 272,221 Other long-term obligations   19,760   23,454 Total liabilities 409,971 422,494   Stockholders' equity   773,663   676,695   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,183,634 $ 1,099,189

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Financial Contact:IDT Investor RelationsSuzanne Schmidt, 415-217-4962suzanne@blueshirtgroup.comorPress Contact:IDT Senior Director of CorporateDaniel Aitken, 408-574-6480Marketing and Communicationsdaniel.aitken@idt.com