Fiscal Q2 Revenue Increased 20 Percent Q/Q to $139.5 Million; Gross Margin and EPS Above High End of Projections
October 27, 2009
SAN JOSE, Calif., Oct. 27, 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 second quarter ended September 27, 2009.
“Revenue, gross margin and EPS for our fiscal second quarter 2010 were all above the high end of our prior projections provided on July 28, 2009,” said Dr. Ted Tewksbury, president and CEO of IDT. “We achieved a 20 percent sequential increase in revenue driven by strong demand across all three of our end markets – consumer, computing, and communications. Solid revenue contributions from core businesses, like PC clocks and gaming, were augmented by significant revenue increases in new growth areas like video and serial switching. Non-GAAP gross margin increased by 4 percent sequentially to over 50 percent, driven by higher revenue, improved product mix and increased fab utilization. These improvements, combined with accelerated synergies from our recent Tundra Semiconductor acquisition, enabled us to deliver non-GAAP EPS of $0.07. Overall, this quarter demonstrated that IDT’s strategy of expanding our core strengths while layering on new growth segments is producing positive results and considerable operating leverage.”
Recently, IDT announced:
· the IDT PanelPort™ LinkXtend™ solution – a DisplayPort™-based single chip device that extends cables for PCs and mobile computers to connect to monitors and projectors
· the newest members of the IDT PureTouchTM family of capacitive touch devices, targeting computing, white goods and portable devices
· a new family of Power Smart audio codecs that are designed to serve the audio needs of today’s business and consumer desktops
· its Serial RapidIO Gen2 program consisting of a comprehensive portfolio of IP, switches, evaluation platforms and tools
· its new family of embedded clocks that are ideal for embedded applications or any computing system that is hidden from view and runs a real-time operating system
· an agreement to transfer product fabrication processes and related activities currently running in the IDT Hillsboro, Oregon facility to TSMC foundries
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 2010 was $139.5 million, compared with $200.5 million reported in the same period one year ago.
· GAAP net income for the fiscal second quarter of 2010 was $60.5 million or $0.36 per diluted share, versus GAAP net income of $11.7 million or approximately $0.07 per diluted share in the same period one year ago. Fiscal second quarter 2010 GAAP results include an $82.7 million gain from the sale of the Company’s network search engine business, $14.4 million in restructuring related charges, $14.1 million in acquisition related charges of which $6.1 million is related to the amortization of acquisition related intangibles, $3.9 million of stock-based compensation and $2.0 million in tax adjustments.
· Non-GAAP net income for the fiscal second quarter of 2010 was $12.2 million or $0.07 per diluted share, compared with non-GAAP net income of $43.3 million or $0.25 per diluted share reported in the same period one year ago.
· GAAP gross profit for the fiscal second quarter of 2010 was $51.1 million, compared with GAAP gross profit of $87.2 million in the same period one year ago. Non-GAAP gross profit for the fiscal second quarter of 2010 was $70.2 million, compared with non-GAAP gross profit of $102.8 million reported in the same period one year ago.
· GAAP R&D expense for the fiscal second quarter of 2010 was $41.5 million, flat from the same period one year ago. Non-GAAP R&D expense for the fiscal second quarter of 2010 was $35.9 million, compared with Non-GAAP R&D of $36.3 million in the same period one year ago.
· GAAP SG&A expense for the fiscal second quarter of 2010 was $30.7 million, compared with GAAP SG&A expense of $32.2 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal second quarter of 2010 was $21.9 million, compared with non-GAAP SG&A expense of $24.1 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 27, 2009. The webcast replay will be available after 5:00 p.m. Pacific time on October 27, 2009.
Investors can also listen to the live call at 1:30 p.m. Pacific time on October 27, 2009 by calling (800) 230-1085 or (612) 234-9960. The conference call replay will be available after 5:00 p.m. Pacific time on October 27, 2009 through 11:59 p.m. Pacific time on November 3, 2009 at (800) 475-6701 or (320) 365-3844. The access code is 117387.
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, channel inventory, anticipated trends in Company sales, expenses and profits, and macroeconomic conditions 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 March 29, 2009. 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, Hollywood Quality Video, HQV, PanelPort, Tundra, Vida, ViewXpand 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.