IDT Reports Q3 Fiscal Year 2013 Financial Results Business Wire SAN JOSE, Calif. -- January 28, 2013 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 third quarter ended December 30, 2012. “We delivered Q3 results within the range of our prior projections despite continued broad-based weakness in demand,” said Dr. Ted Tewksbury, president and CEO of IDT. “Our bottom line results hit the midpoint of our prior projections due to reduced operating expenses and improved product mix. We also generated healthy cash flow from operations during the quarter, highlighting the resilience of our operating model in the face of a weak macroeconomic environment.” “Although visibility into near term demand is limited, design win activity remains strong and we expect top line growth from new product categories to accelerate in the second half of this calendar year, led by wireless power and enterprise flash controllers. In addition, we believe that improvement in our core business and continued operating expense reductions will enable us to achieve significant operating margin expansion in fiscal year 2014.” Recent Highlights IDT recently announced: *The industry’s most integrated wireless power transmitter solutions for the Wireless Power Consortium (WPC) Tx-A5, Tx-A6, and Tx-A11 configurations. The new products expand IDT's portfolio of WPC Qi-compliant magnetic induction transmitters with solutions optimized for single-coil 5V and three-coil 12V applications. *A new RF digital step attenuator that reduces glitches by up to 95 percent in cellular base station and industrial applications, enabling customers to simplify their software interface, improve reliability, and prevent damage to expensive sub-assemblies such as power amplifiers. *The industry’s first low-power dual 16-bit 1.5 GSPS digital-to-analog converter (DAC) with an advanced JESD204B serial interface for multi-carrier broadband wireless applications. The new high-speed DAC delivers best-in-class dynamic performance, eases system-level cooling requirements, and simplifies board routing. *The industry’s first high-performance quad frequency MEMS oscillators with multiple synchronous outputs. IDT’s enhanced MEMS oscillators offer configurable outputs in an industry-standard package footprint, saving board area in communication, networking, and storage applications. *The availability of the industry’s first complete chipset for DDR4 load reduced dual inline memory modules (LRDIMMs). The clear advantages afforded by LRDIMMs as a speed-scalable memory technology are expected to drive adoption across a broad array of memory intensive computing and storage applications and IDT is leading the way with DDR4 LRDIMM memory interface solutions. *It was recognized with a product of the year award from Electronic Products Magazine and a 2012 best electronic design award from Electronic Design Magazine for its NVM Express (NVMe) enterprise flash controller. The PCIe Gen3 flash controller family provides a standard solution for PCI Express based SSDs, enabling enterprise storage and server OEMs to dramatically improve latency and throughput performance. 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 third quarter of 2013 was $115.1 million, compared with $120.0 million reported in the same period one year ago. *GAAP net loss from continuing operations for the fiscal third quarter of 2013 was $5.2 million, or a loss of $0.04 per diluted share, versus GAAP net loss of $0.9 million or a loss of $0.01 per diluted share in the same period one year ago. Fiscal third quarter 2013 GAAP results include $9.1 million in acquisition and restructuring related charges, $2.8 million in stock-based compensation, and $0.6 million in benefits from tax effects. *Non-GAAP net income from continuing operations for the fiscal third quarter of 2013 was $6.2 million or $0.04 per diluted share, compared with non-GAAP net income from continuing operations of $8.5 million or $0.06 per diluted share reported in the same period one year ago. *GAAP gross profit for the fiscal third quarter of 2013 was $63.0 million, or 54.7 percent, compared with GAAP gross profit of $63.9 million, or 53.2 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2013 was $66.7 million, or 58.0 percent, compared with non-GAAP gross profit of $65.7 million, or 54.7 percent, reported in the same period one year ago. *GAAP R&D expense for the fiscal third quarter of 2013 was $40.2 million, compared with GAAP R&D expense of $38.4 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2013 was $37.7 million, compared with non-GAAP R&D of $34.9 million in the same period one year ago. *GAAP SG&A expense for the fiscal third quarter of 2013 was $27.4 million, compared with GAAP SG&A expense of $23.7 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2013 was $21.7 million, compared with non-GAAP SG&A expense of $20.6 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://ir.idt.com/. The live webcast will begin at 1:30 p.m. Pacific time on January 28, 2013. The webcast replay will be available after 5 p.m. Pacific time on January 28, 2013. Investors can also listen to the live call at 1:30 p.m. Pacific time on January 28, 2013 by calling (800) 230-1092 or (612) 288-0329. The conference call replay will be available after 5 p.m. Pacific time on January 28, 2013 through 11:59 p.m. Pacific time on February 4, 2013 at (800) 475-6701 or (320) 365-3844. The access code is 278455. 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. 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 Nine Months Ended Dec. 30, Sept. 30, Jan. 1, Dec. 30, Jan. 1, 2012 2012 2012 2012 2012 Revenues $ 115,147 $ 133,401 $ 119,977 $ 378,709 $ 407,580 Cost of revenues 52,200 58,774 56,093 168,622 190,627 Gross profit 62,947 74,627 63,884 210,087 216,953 Operating expenses: Research and 40,170 42,387 38,410 124,101 117,409 development Selling, general and 27,389 32,750 23,661 96,551 74,478 administrative Total operating 67,559 75,137 62,071 220,652 191,887 expenses Operating income (4,612 ) (510 ) 1,813 (10,565 ) 25,066 (loss) Other-than-temporary impairment loss on - - (2,130 ) - (2,130 ) investments Other income (344 ) (206 ) (10 ) 1,450 (1,794 ) (expense), net Income (loss) from continuing (4,956 ) (716 ) (327 ) (9,115 ) 21,142 operations before income taxes Provision (benefit) 201 (33 ) 576 (3,818 ) 1,176 for income taxes Net income (loss) from continuing (5,157 ) (683 ) (903 ) (5,297 ) 19,966 operations Discontinued operations: Gain from - 886 - 886 45,939 divestiture Loss from discontinued - (273 ) (5,290 ) (5,131 ) (20,286 ) operations Provision (benefit) - 3 - 3 (89 ) for income taxes Net income (loss) from discontinued - 610 (5,290 ) (4,248 ) 25,742 operations Net income (loss) $ (5,157 ) $ (73 ) $ (6,193 ) $ (9,545 ) $ 45,708 Basic net income (loss) per share $ (0.04 ) $ - $ (0.01 ) $ (0.04 ) $ 0.14 continuing operations Basic net income (loss) per share - - (0.03 ) (0.03 ) 0.18 discontinued operations Basic net income $ (0.04 ) $ - $ (0.04 ) $ (0.07 ) $ 0.32 (loss) per share Diluted net income (loss) per share $ (0.04 ) $ - $ (0.01 ) $ (0.04 ) $ 0.14 continuing operations Diluted net income (loss) per share - - (0.03 ) (0.03 ) 0.17 discontinued operations Diluted net income $ (0.04 ) $ - $ (0.04 ) $ (0.07 ) $ 0.31 (loss) per share Weighted average shares: Basic 144,321 143,519 141,839 143,477 144,792 Diluted 144,321 143,519 141,839 143,477 146,706 INTEGRATED DEVICE TECHNOLOGY, INC. RECONCILIATION OF GAAP TO NON-GAAP (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended Dec. 30, Sept. 30, Jan. 1, Dec. 30, Jan. 1, 2012 2012 2012 2012 2011 GAAP net income (loss) from $ (5,157 ) $ (683 ) $ (903 ) $ (5,297 ) $ 19,966 continuing operations GAAP diluted net income (loss) per $ (0.04 ) $ - $ (0.01 ) $ (0.04 ) $ 0.14 share continuing operations Acquisition related: Amortization of acquisition related 4,673 5,573 4,006 15,137 11,995 intangibles Acquisition related legal and consulting 2,999 3,630 109 11,465 109 fees (1) Other acquisition - 1,200 - 3,000 - related costs (2) Assets impairment 527 (59 ) (73 ) 409 (255 ) (3) Fair market value adjustment to - 100 - 458 - acquired inventory sold Restructuring related: Severance and 908 2,237 (1,978 ) 3,860 625 retention costs Facility closure 13 34 16 60 39 costs (4) Fabrication production transfer - - 1,233 - 3,894 costs (5) Other: Other-than-temporary impairment loss on - - 2,130 - 2,130 investments Stock-based 2,774 3,617 4,312 9,513 12,366 compensation expense Expenses related to stockholder - 38 - 2,614 - activities (6) Compensation expense (benefit)—deferred 87 480 649 431 (632 ) compensation plan (7) Loss (gain) on deferred (82 ) (477 ) (629 ) (245 ) 685 compensation plan securities (7) Life insurance proceeds received - - - (2,313 ) - (7) Tax effects of (588 ) (3,076 ) (347 ) (9,341 ) (1,413 ) Non-GAAP adjustments Non-GAAP net income from continuing $ 6,154 $ 12,614 $ 8,525 $ 29,751 $ 49,509 operations GAAP weighted average shares - 144,321 143,519 141,839 143,477 146,706 diluted Non-GAAP adjustment 3,362 2,907 2,676 3,030 1,835 Non-GAAP weighted average shares - 147,683 146,426 144,515 146,507 148,541 diluted (8) Non-GAAP diluted net income per share $ 0.04 $ 0.09 $ 0.06 $ 0.20 $ 0.33 continuing operations GAAP gross profit 62,947 74,627 63,884 210,087 216,953 Acquisition and divestiture related: Amortization of acquisition related 2,944 3,890 2,733 10,456 8,834 intangibles Assets impairment 527 (59 ) (73 ) 409 (255 ) (3) Fair market value adjustment to - 100 - 458 - acquired inventory sold Restructuring related: Severance and - 306 (2,784 ) 607 (824 ) retention costs Facility closure 4 3 3 13 1 costs (4) Fabrication production transfer - - 1,233 - 3,894 costs (5) Other: Compensation expense (benefit)—deferred 21 120 140 107 (137 ) compensation plan (7) Stock-based 295 252 535 850 1,415 compensation expense Non-GAAP gross 66,738 79,239 65,671 222,987 229,881 profit GAAP R&D expenses: 40,170 42,387 38,410 124,101 117,409 Restructuring related: Severance and (912 ) (1,070 ) (870 ) (2,322 ) (1,473 ) retention costs Facility closure (5 ) (28 ) (4 ) (37 ) (14 ) costs (4) Other: Compensation expense (benefit)—deferred (53 ) (290 ) (421 ) (261 ) 409 compensation plan (7) Stock-based (1,531 ) (1,873 ) (2,174 ) (4,946 ) (6,493 ) compensation expense Non-GAAP R&D 37,669 39,126 34,941 116,535 109,838 expenses GAAP SG&A expenses: 27,389 32,750 23,661 96,551 74,478 Acquisition and divestiture related: Amortization of acquisition related (1,729 ) (1,683 ) (1,273 ) (4,681 ) (3,161 ) intangibles Acquisition related legal and consulting (2,999 ) (3,630 ) (109 ) (11,465 ) (109 ) fees (1) Other acquisition - (1,200 ) - (3,000 ) - related costs (2) Restructuring related: Severance and 4 (861 ) 64 (931 ) 24 retention costs Facility closure (4 ) (3 ) (9 ) (10 ) (24 ) costs (4) Other: Compensation expense (benefit)—deferred (13 ) (70 ) (88 ) (63 ) 86 compensation plan (7) Stock-based (948 ) (1,492 ) (1,603 ) (3,717 ) (4,458 ) compensation expense Expenses related to stockholder - (38 ) - (2,614 ) - activities (6) Non-GAAP SG&A 21,700 23,773 20,643 70,070 66,836 expenses GAAP interest income (344 ) (206 ) (10 ) 1,450 (1,794 ) and other, net Loss (gain) on deferred (82 ) (477 ) (629 ) (245 ) 685 compensation plan securities (7) Life insurance proceeds received - - - (2,313 ) - (7) Non-GAAP interest income and other, (426 ) (683 ) (639 ) (1,108 ) (1,109 ) net GAAP provision (benefit) for income 201 (33 ) 576 (3,818 ) 1,176 taxes continuing operations Tax effects of 588 3,076 347 9,341 1,413 Non-GAAP adjustments Non-GAAP provision (benefit) for income 789 3,043 923 5,523 2,589 taxes continuing operations (1) Consists of costs incurred in connection with merger and acquisition-related activities, including legal, accounting and other consulting fees and adjustments related to contingent consideration. (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 tangible assets and a note receivable, net of 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 from our Oregon facility to TSMC. (6) Consists of expenses incurred in response to activities and inquiries of Starboard Value LP. (7) Consists of gains and losses incurred 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) Dec. 30, April 1, (In thousands) 2012 2012 ASSETS Current assets: Cash and cash equivalents $ 112,802 $ 134,924 Short-term investments 167,298 190,535 Accounts receivable, net 62,423 60,609 Inventories 59,982 71,780 Prepaid and other current assets 30,449 23,684 Total current assets 432,954 481,532 Property, plant and equipment, net 75,725 69,984 Goodwill 145,129 96,092 Acquisition-related intangibles 54,004 40,548 Other assets 28,199 29,478 TOTAL ASSETS $ 736,011 $ 717,634 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 23,011 $ 25,211 Accrued compensation and related expenses 23,554 26,156 Deferred income on shipments to distributors 14,122 14,263 Deferred taxes liabilities 465 421 Other accrued liabilities 15,872 13,443 Total current liabilities 77,024 79,494 Deferred tax liabilities 5,897 1,552 Long term income taxes payable 458 706 Other long term obligations 21,923 16,494 Total liabilities 105,302 98,246 Stockholders' equity 630,709 619,388 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 736,011 $ 717,634 Contact: Financial Contact: IDT Investor Relations Mike Knapp, 408-284-6515 email@example.com or Press Contact: IDT Worldwide Marketing Graham Robertson, 408-284-2644 firstname.lastname@example.org
IDT Reports Q3 Fiscal Year 2013 Financial Results
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