IDT Reports Q2 Fiscal Year 2013 Financial Results
New Product Revenue Grew to 17 Percent of Total
Record Gross Margins: GAAP 55.9 Percent; Non-GAAP 59.4 Percent
GAAP EPS from Continuing Ops of $0.00; Non-GAAP EPS from Continuing Ops of $0.09
SAN JOSE, Calif., Oct. 29, 2012 — 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 second quarter ended September 30, 2012.
“Despite broad-based weakness in demand, we were able to deliver sequential revenue growth in line with our prior projections,” said Dr. Ted Tewksbury, president and CEO of IDT. “New product revenue increased to over 17 percent of the total, up from 14 percent in the prior quarter, driven by record revenue from Rapid IO switching solutions, continued growth in PCI Express switching, and initial sales from new product categories like enterprise flash controllers, high-speed data converters and wireless power solutions.”
“Record non-GAAP gross margins of 59.4 percent combined with an acceleration of our cost reduction program enabled us to achieve non-GAAP operating margins of 12 percent.”
“Customer demand slowed significantly in the month of September for IDT as well as the overall semiconductor sector, and has remained soft in October. Even though we’re experiencing cautious ordering patterns from customers due to the uncertain macroeconomic environment, we believe our new product traction and continued focus on cost controls will enable us to reach our fiscal 2014 operating margin targets.”
IDT recently announced:
- Qualcomm has selected IDT as its silicon partner to develop an integrated receiver IC for Qualcomm’s wireless charging solution. The chipset will be designed to meet the requirements of Qualcomm’s WiPower™, a new near-field magnetic resonance technology that provides spatial freedom for charging consumer electronics, mobile phones, and other battery-powered/low-power direct-charge devices.
- Intel has selected IDT to develop an integrated transmitter and receiver chipset for Intel’s wireless charging technology based on resonance technology. Wireless charging ICs by IDT will provide industry-leading size and cost reduction, while simplifying product development and integration. Intel, along with IDT, aims to deliver validated reference designs that are targeted for deployment in Ultrabooks™, all-in-one (AiO) PCs, smartphones, and standalone chargers.
- Its wireless power transmitter and receiver solutions have been selected by Primax Electronics Ltd., a leading global supplier of after-market wireless charging accessories for tier one mobile phone OEMs.
- It has become a member of the Alliance for Wireless Power (A4WP), an independently operated organization composed of global wireless power and technology industry leaders, including Samsung and Qualcomm.
- The industry’s first NVM Express (NVMe) enterprise flash memory controller with native support for PCIe® Gen 3. IDT’s NVMe flash controller family provides a standards-based solid-state drive (SSD) solution, enabling storage and server original equipment manufacturers (OEMs) to overcome latency and throughput bottlenecks inherent to legacy SAS/SATA-based SSD designs.
- The industry’s first NVMe enterprise non-volatile DRAM (NV-DRAM) controller with native support for PCIe Gen 3. The new NVMe NV-DRAM controller expands upon IDT’s previously announced NVMe flash controller family to provide standards-based, high-density, high-performance PCIe-attached NV-DRAM solutions built around a combination of DRAM and NAND flash devices.
- The industry’s lowest-power DDR3 LRDIMM memory buffer and the first capable of operating with transfer speeds up to 1866 megatransfers per second (MT/s). The new device affirms IDT’s leadership in memory interface solutions by advancing the top data transfer rates of DDR3 LRDIMMs and allowing system makers to benefit from increased memory capacity at higher speeds.
- The world’s first DDR4 register and temperature sensor that meet the industry’s stringent performance requirements. The new products are designed to facilitate the next generation of DRAM modules, including both registered dual inline memory modules (RDIMMs) and load-reduced DIMMs (LRDIMMs), to enable advancements in server and storage sub-system performance, scalability and power efficiency.
- The world’s lowest-power PCI Express® timing family. The new family of buffers and synthesizers offer unprecedented power savings and integration for communications, computing, and consumer 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 second quarter of 2013 was $133.4 million, compared with $138.3 million reported in the same period one year ago.
- GAAP net loss from continuing operations for the fiscal second quarter of 2013 was $(0.7) million, or breakeven per diluted share, versus GAAP net income of $8.1 million or $0.06 per diluted share in the same period one year ago. Fiscal second quarter 2013 GAAP results include $12.7 million in acquisition and restructuring related charges, $3.6 million in stock-based compensation, and $3.1 million in benefits from tax effects.
- Non-GAAP net income from continuing operations for the fiscal second quarter of 2013 was $12.6 million or $0.09 per diluted share, compared with non-GAAP net income from continuing operations of $17.2 million or $0.12 per diluted share reported in the same period one year ago.
- GAAP gross profit for the fiscal second quarter of 2013 was $74.6 million, or 55.9 percent, compared with GAAP gross profit of $73.6 million, or 53.2 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal second quarter of 2013 was $79.2 million, or 59.4 percent, compared with non-GAAP gross profit of $78.1 million, or 56.5 percent, reported in the same period one year ago.
- GAAP R&D expense for the fiscal second quarter of 2013 was $42.4 million, compared with GAAP R&D expense of $39.2 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal second quarter of 2013 was $39.1 million, compared with non-GAAP R&D of $37.6 million in the same period one year ago.
- GAAP SG&A expense for the fiscal second quarter of 2013 was $32.8 million, compared with GAAP SG&A expense of $24.9 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal second quarter of 2013 was $23.8 million, compared with non-GAAP SG&A expense of $22.6 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://www.IDT.com. The live webcast will begin at 1:30 p.m. Pacific time on October 29, 2012. The webcast replay will be available after 5 p.m. Pacific time on October 29, 2012.
Investors can also listen to the live call at 1:30 p.m. Pacific time on October 29, 2012 by calling (800) 230-1059 or (612) 234-9960. The conference call replay will be available after 5 p.m. Pacific time on October 29, 2012 through 11:59 p.m. Pacific time on November 5, 2012 at (800) 475-6701 or (320) 365-3844. The access code is 266766.
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.
These materials are for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offer with respect to the acquisition of PLX Technology will only be made through the prospectus, which is part of the registration statement on Form S-4, which contains an offer to purchase, form of letter of transmittal and other documents relating to the exchange offer, as well as the Tender Offer Statement on Schedule TO, (collectively, and as amended and supplemented from time to time, the “Exchange Offer Materials”), each initially filed with the U.S. Securities and Exchange Commission (the “SEC”) by IDT on May 22, 2012. The registration statement has not yet become effective. In addition, PLX Technology filed with the SEC on May 22, 2012 a solicitation/recommendation statement on Schedule 14D-9 (as amended and supplemented from time to time, the “Schedule 14D-9”) with respect to the exchange offer. Investors and security holders are urged to carefully read these documents and the other documents relating to the transactions because these documents contain important information relating to the exchange offer and related transactions. Investors and security holders may obtain a free copy of these documents, as filed with the SEC, and other annual, quarterly and special reports and other information filed with the SEC by IDT or PLX Technology, at the SEC’s website at www.sec.gov. In addition, such materials will be available from IDT or PLX Technology, or by calling Innisfree M&A Incorporated, the information agent for the exchange offer, toll-free at (877) 456-3463 (banks and brokers may call collect at (212) 750-5833).
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.
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.