Company Generates 22 Percent of Total Revenue in Free Cash Flow
January 29, 2009
SAN JOSE, Calif., January 29, 2009 — IDT® (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 third quarter of 2009 ended December 28, 2008.
“IDT’s resilient business model was highlighted during our fiscal third quarter of 2009 as we delivered strong bottom line results despite a 17 percent sequential decline in revenue. We exceeded the high end of our December 8, 2008 earnings projections, largely due to our variable expense structure,” said Dr. Ted Tewksbury, president and CEO of IDT. “Despite widespread weakness in the semiconductor sector and the broader economy, we continue to build critical skills, capabilities and new products to add value to our customers’ applications and propel revenue growth when demand improves. At the same time, we remain committed to controlling costs and delivering solid operating margins for our investors. Today, we are announcing a reduction of approximately seven percent of our global workforce which reflects a structured approach to improve our strategic focus and realign our expenses with a softer demand environment.”
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 third quarter of 2009 was $167.1 million, compared with $201.2 million reported in the same period one year ago.
· GAAP net loss for the fiscal third quarter of 2009 was $345.3 million or a loss of $2.06 per diluted share, versus GAAP net income of $13.4 million or approximately $0.07 per diluted share in same period one year ago. As a result of the current economic environment and decline in the market value of the Company, IDT has conducted an interim goodwill and intangible asset impairment analysis which will result in an estimated non-cash charge of $339.1 million. Fiscal third quarter 2009 GAAP results also include $19.7 million in amortization of intangibles, $9.0 million of stock-based compensation, $5.6 million of in-process R&D related to the Silicon Optix transaction, and a $3.0 million asset impairment charge.
· Non-GAAP net income for the fiscal third quarter of 2009 was $30.1 million or $0.18 per diluted share, compared with non-GAAP net income of $46.7 million or $0.25 per diluted share reported in the same period one year ago.
· GAAP gross profit for the fiscal third quarter of 2009 was $69.7 million, versus GAAP gross profit of $88.3 million in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2009 was $84.3 million, compared with non-GAAP gross profit of $105.2 million reported in the same period one year ago.
· GAAP R&D expense for the fiscal third quarter of 2009 was $37.2 million, compared with GAAP R&D expense of $40.6 million in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2009 was $31.6 million, compared with non-GAAP R&D expense of $35.7 million in the same period one year ago.
· GAAP SG&A expense for the fiscal third quarter of 2009 was $30.9 million, compared with GAAP SG&A expense of $38.9 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2009 was $21.8 million, compared with non-GAAP SG&A expense of $24.9 million in the same period one year ago.
The Company recently announced it(s):
· DisplayPortTM compatible receiver, PanelPortTM, was included in EDN magazine's Hot 100 Products.
· PanelPort solution, an embedded DisplayPort compliant receiver and timing controller device, has been chosen by CPT (Chunghwa Picture Tubes Ltd.) for inclusion in its 14"W flat panel display for notebooks.
· Introduced PCI Express® (PCIe) switching and timing solutions and Intel-validated Double Data Rate 3 (DDR3) registers which support Intel® Xeon® processor based on Nehalem.
· Launched two new PCIe Gen2 switching solutions that are optimized for computing and embedded applications. It also announced PCIe timing solutions, including fan-out buffers, zero-delay buffers, clocks and jitter attenuators.
· PCIe switching solution has been chosen by ASUS for use on its newest high-end Intel processor-based motherboard.
· Introduced a new series of devices in the company's industry-leading portfolio of flexible, low-power, asynchronous dual-ports for high-end handsets.
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 1:15 p.m. Pacific time on January 29, 2009. The webcast replay will be available after 5:00 p.m. Pacific time on January 29, 2009.
Investors can also listen to the live call at 1:15 p.m. Pacific time on January 29, 2009 by calling (800) 230-1074 or (612) 234-9960. The conference call replay will be available after 5:00 p.m. Pacific time on January 29, 2009 through 11:59 p.m. Pacific time on February 5, 2009 at (800) 475-6701 or (320) 365-3844. The access code is 980637.
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, including but not limited to statements regarding demand for Company products, customer ordering patterns, and anticipated trends in Company sales 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 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 September 28, 2008. 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 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 impairment charges, 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.
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.