IDT Reports Q1 Fiscal Year 2012 Financial Results
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IDT Reports Q1 Fiscal Year 2012 Financial Results

Q1 GAAP GM of 53.7 Percent; Q1 Non-GAAP GM of 57.3 Percent

Q1 GAAP EPS of $0.05; Q1 Non-GAAP EPS of $0.12

SAN JOSE, Calif. — (BUSINESS WIRE) — August 1, 2011 — Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI), the Analog and Digital Company™ delivering essential mixed-signal semiconductor solutions, today announced results for the fiscal first quarter ended July 3, 2011.

“Our first quarter results were within our guidance range as strong demand from our computing end market was offset by weaker-than-expected demand from customers in our communications and consumer end markets,” said Dr. Ted Tewksbury, president and CEO of IDT. “Despite this weakness, we were able to deliver strong gross margins and earnings while improving cash flow and increasing the pace of our stock repurchase program.

“We remain well positioned in each of our end markets and highly levered to powerful secular growth drivers like cloud computing, 4G/LTE wireless infrastructure, and consumer mobility which we believe will drive growth for IDT over the next several years.”

Recent Highlights

IDT recently announced:

The following highlights the Company’s financial performance on both a GAAP and non-GAAP basis. The GAAP results include certain costs, charges, gains and losses, which are excluded from non-GAAP results based on management’s determination that they are not directly reflective of ongoing operations. 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 is attached to this press release.

Webcast and Conference Call Information

Investors can listen to a live or replay webcast of the Company’s quarterly financial conference call at http://www.IDT.com. The live webcast will begin at 1:30 p.m. Pacific time on August 1, 2011. The webcast replay will be available after 5 p.m. Pacific time on August 1, 2011.

Investors can also listen to the live call at 1:30 p.m. Pacific time on August 1, 2011 by calling (800) 230-1059 or (612) 234-9959. The conference call replay will be available after 5 p.m. Pacific time on August 1, 2011 through 11:59 p.m. Pacific time on August 8, 2011 at (800) 475-6701 or (320) 365-3844. The access code is 209670.

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 3, 2011. 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 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
July 3, April 3, June 27,
  2011   2011     2010
Revenues $ 151,487 $ 147,294 $ 158,273
Cost of revenues   70,095   66,919     76,107
Gross profit 81,392 80,375 82,166
Operating expenses:
Research and development 46,006 43,681 43,736
Selling, general and administrative   26,829   26,936     27,358
Total operating expenses   72,835   70,617     71,094
 
Operating income   8,557   9,758     11,072
Interest income and other, net 44 904 264
Income before income taxes 8,601 10,662 11,336
Provision (benefit) for income taxes   918   (20,731 )   923
 
Net income $ 7,683 $ 31,393   $ 10,413
 
Basic net income per share $ 0.05 $ 0.21 $ 0.06
Diluted net income per share $ 0.05 $ 0.21 $ 0.06
 
Weighted average shares:
Basic 147,828 148,181 161,659
Diluted 151,074 150,852 162,577
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(In thousands, except per share data)
  Three Months Ended
July 3,   April 3,   June 27,
  2011     2011     2010  
 
GAAP Net Income $ 7,683   $ 31,393   $ 10,413  
GAAP Diluted Net Income Per Share $ 0.05   $ 0.21   $ 0.06  
Acquisition Related:
Amortization of acquisition related intangibles 4,195 5,016 4,924
Acquisition related costs (1) - 98 708
Assets impairment (2) (90 ) (63 ) (94 )
Fair market value adjustment to acquired inventory sold - - 262
Restructuring Related:
Severance and retention costs 383 137 520
Facility closure costs (3) 29 (1,353 ) 977
Fabrication production transfer costs (4) 1,845 1,412 829
Other:
 
Compensation expense (benefit)—deferred compensation plan (5) 55 503 (126 )
Loss (gain) on deferred compensation plan securities (5) (45 ) (507 ) 132
Stock-based compensation expense 4,120 3,321 4,708
Tax effects of Non-GAAP adjustments (6)   (580 )   (19,710 )   24  
Non-GAAP Net Income $ 17,595 $ 20,247 $ 23,277
GAAP weighted average shares - diluted 151,074 150,852 162,577
Non-GAAP adjustment 1,747 1,775 2,002
Non-GAAP weighted average shares - diluted (7)   152,821     152,627     164,579  
Non-GAAP Diluted Net Income Per Share $ 0.12   $ 0.13   $ 0.14  
 
GAAP Gross Profit   81,392     80,375     82,166  
Acquisition and Divestiture Related:
Amortization of acquisition related intangibles 3,184 3,575 3,473
Acquisition related costs (1) - - 5
Assets impairment (2) (90 ) (63 ) (94 )
Fair market value adjustment to acquired inventory sold - - 262
Restructuring Related:
Severance and retention costs - 51 117
Facility closure costs (3) 3 (1,483 ) 699
Fabrication production transfer costs (4) 1,845 1,412 829
Other:
Compensation expense (benefit) - deferred compensation plan (5) 12 109 (27 )
Stock-based compensation expense   427     423     509  
Non-GAAP Gross Profit   86,773     84,399     87,939  
 
GAAP R&D Expenses:   46,006     43,681     43,736  
Acquisition and Divestiture Related:
Acquisition related costs (1) - (67 ) (394 )
Restructuring Related:
Severance and retention costs (383 ) (45 ) (433 )
Facility closure costs (3) (15 ) (82 ) (108 )
Other:
Compensation expense (benefit) - deferred compensation plan (5) (36 ) (326 ) 82
Stock-based compensation expense   (2,307 )   (1,610 )   (2,691 )
Non-GAAP R&D Expenses   43,265     41,551     40,192  
 
GAAP SG&A Expenses:   26,829     26,936     27,358  
Acquisition and Divestiture Related:
Amortization of acquisition related intangibles (1,011 ) (1,441 ) (1,451 )
Acquisition related costs (1) - (31 ) (309 )
Restructuring Related:
Severance and retention costs - (41 ) 30
Facility closure costs (3) (11 ) (48 ) (170 )
Other:
Compensation expense (benefit) - deferred compensation plan (5) (7 ) (68 ) 17
Stock-based compensation expense   (1,386 )   (1,288 )   (1,508 )
Non-GAAP SG&A Expenses   24,414     24,019     23,967  
 
GAAP Interest Income and Other, Net   44     904     264  
Loss (gain) on deferred compensation plan securities (5)   (45 )   (507 )   132  
Non-GAAP Interest Income and Other, Net   (1 )   397     396  
 
GAAP Provision (Benefit) for Income Taxes   918     (20,731 )   923  
Tax effects of Non-GAAP adjustments (6)   580     19,710     (24 )
Non-GAAP Provision (Benefit) for Income Taxes   1,498     (1,021 )   899  
 

(1) Consists of costs incurred in connection with merger and acquisition-related activities, including legal and accounting fees.

 

(2) Consists of an impairment charge related to a note receivable and subsequent recoveries.

 

(3) Consists of ongoing costs associated with the exit of our leased and owned facilities.

 

(4) Consists of costs incurred in connection with the transition of our wafer fabrication processes in Oregon facility to TSMC.

 

(5) Consists of gains and losses on marketable equity securities related to our deferred compensation arrangements and the changes in the fair value of the assets in a separate trust that is invested in Corporate owned life insurance under our deferred compensation plan.

 

(6) Consists of the tax effects of non-GAAP adjustments.

 

(7) 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)
 
July 3, April 3,
(In thousands)   2011   2011
 
ASSETS
Current assets:
Cash and cash equivalents $ 74,993 $ 104,680
Short-term investments 212,230 194,512
Accounts receivable, net 80,466 81,798
Inventories 73,628 67,041
Prepaid and other current assets   20,651     23,929
Total current assets 461,968 471,960
 
Property, plant and equipment, net 72,273 67,754
Goodwill 104,020 104,020
Acquisition-related intangibles 46,826 51,021
Other assets   32,533     32,705
TOTAL ASSETS $ 717,620   $ 727,460
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,108 $ 36,470
Accrued compensation and related expenses 25,582 28,212
Deferred income on shipments to distributors 14,735 12,853
Deferred taxes liabilities 2,264 2,224
Other accrued liabilities   32,046     30,886
Total current liabilities 106,735 110,645
 
Deferred tax liabilities 1,523 1,513
Long term income taxes payable 773 712
Other long term obligations   16,648     15,808
Total liabilities 125,679 128,678
 
Stockholders' equity   591,941     598,782
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 717,620   $ 727,460



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