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IDT Reports Fiscal Second Quarter 2009 Results

Strength in Computing and Consumer End Markets Drives Over Six Percent Sequential Revenue Growth

 

Company Generates Over $50 million in Free Cash Flow During Fiscal Q2 2009
 
 
SAN JOSE, Calif., Oct. 23, 2008IDT® (Integrated Device Technology, Inc.; NASDAQ: IDTI), a leading provider of essential mixed signal semiconductor solutions that enrich the digital media experience, today announced results for the fiscal second quarter of 2009 ended September 28, 2008.
 
“During our fiscal second quarter of 2009, we posted a greater than six percent sequential increase in revenue for the second consecutive quarter,” said Ted Tewksbury, president and CEO of IDT. “Strong growth in our computing end market was driven by increased sales of PC clock and PC Audio devices, while sales of timing solutions into our gaming segment enabled our consumer end market to grow double digits. However, like many semiconductor companies, our bookings slowed in late September and have remained below normal seasonal levels so far in October. This has reduced our visibility into end customer demand and makes it difficult to predict revenue for the third quarter.”
 
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 in accordance with GAAP which are excluded from non-GAAP results based on management’s determination that they are not directly reflective of on-going 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. 
 
·         Revenue for the fiscal second quarter of 2009 was $200.5 million, compared with $204.1 million reported in the same period one year ago.
·         GAAP net income for the fiscal second quarter of 2009 was $11.7 million or $0.07 per diluted share, versus GAAP net income of $4.8 million or approximately $0.02 per diluted share in same period one year ago. Fiscal second quarter 2009 GAAP results include $20.6 million in amortization of intangibles and $8.6 million of stock-based compensation.
·         Non-GAAP net income for the fiscal second quarter of 2009 was $43.3 million or $0.26 per diluted share, compared with non-GAAP net income of $48.3 million or $0.25 per diluted share reported in the same period one year ago.
·         GAAP gross profit for the fiscal second quarter of 2009 was $87.2 million, versus GAAP gross profit of $88.2 million in the same period one year ago. Non-GAAP gross profit for the fiscal second quarter of 2009 was $102.9 million, compared with non-GAAP gross profit of $105.7 million reported in the same period one year ago.
·         GAAP R&D expense for the fiscal second quarter of 2009 was $41.5 million, compared with GAAP R&D expense of $41.9 million in the same period one year ago. Non-GAAP R&D expense for the fiscal second quarter of 2009 was $35.9 million, compared with non-GAAP R&D expense of $35.1 million in the same period one year ago. 
·         GAAP SG&A expense for the fiscal second quarter of 2009 was $32.2 million, compared with GAAP SG&A expense of $43.6 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal second quarter of 2009 was $23.9 million, compared with non-GAAP SG&A expense of $25.3 million in the same period one year ago.
 
Recent Highlights
The Company recently announced it:
·         Purchased the video processing technology and related assets from Silicon Optix, which also includes the Hollywood Quality Video (HQV) brand.
·         Extended its leadership in Double Data Rate 3 (DDR3) memory interface devices by announcing the industry’s first registered clock driver capable of standard and low-voltage operation for high-performance servers and workstations.
·         Expanded its DisplayPortTM-compatible solutions by announcing the availability of its IDT PanelPortTM stand-alone receiver for LCD TVs, projectors and high-end monitors.
·         Introduced a low-power integrated single-chip audio solution which improves audio performance and fidelity, as well as design flexibility, while offering the smallest footprint available for an audio codec.
·         Introduced a new series of PCI Express® (PCIe®) system interconnect switches that provide higher levels of performance, availability and optimal resource utilization in demanding enterprise applications.
 
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 October 23, 2008.  The webcast replay will be available after 5:00 p.m. Pacific time on October 23, 2008.
 
Investors can also listen to the live call at 1:30 p.m. Pacific time on October 23, 2008 by calling (800) 230-1059 or (612) 234-9959.  The conference call replay will be available after 5:00 p.m. Pacific time on October 23, 2008 through 11:59 p.m. Pacific time on October 30, 2008 at (800) 475-6701 or (320) 365-3844.  The access code is 963455.
 
With the goal of continuously improving the digital media experience, IDT integrates its fundamental semiconductor heritage with essential innovation, developing and delivering low-power, mixed signal solutions that solve customer problems. 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.
 
Forward Looking Statements
Investors are cautioned that forward-looking statements in this release 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 supply 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, 2008 and Quarterly Report on Form 10-Q for the period ended June 29, 2008.
 
Non-GAAP Reporting
The Company presents non-GAAP financial measures because the financial 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 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. The Company has reconciled such 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 current accounting standards, 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.
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IDT and the IDT logo are 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.