Exhibit 99.1
IDT Announces Results for Second Quarter Fiscal Year 2004
SANTA CLARA, Calif.--(BUSINESS WIRE)--Oct. 16, 2003--
Company Reports ($0.01) Pro-Forma EPS, $0.01 GAAP EPS
IDT(TM) (Integrated Device Technology, Inc.)(Nasdaq:IDTI), a
leading communications IC company, today announced results for the
quarter ended September 28, 2003, its second quarter of fiscal 2004.
Revenues for the second fiscal quarter were $80.8 million, a
decrease of 2.7 percent compared to the first quarter of fiscal 2004
and a decrease of 12.4 percent from the quarter ended September 29,
2002. On a pro-forma basis, the net loss for the second fiscal quarter
was $1.1 million ($0.01 per diluted share), compared to a net loss of
$4.8 million ($0.05 per diluted share) in the first quarter of fiscal
2004 and net income of $1.0 million or $0.01 per diluted share for the
quarter one year ago.
Including certain costs, charges and gains in accordance with
GAAP, the Company earned net income of $1.2 million in the second
quarter of fiscal 2004 ($0.01 per diluted share), compared to a loss
of $4.8 million ($0.05 per diluted share) in the first quarter of
fiscal 2004. On a GAAP basis, the Company recorded a net loss of $4.9
million ($0.05 per diluted share) for the second quarter of fiscal
2003. Further information, including a detailed reconciliation of
pro-forma and GAAP results, is provided in the financial tables of
this release.
"For the third consecutive quarter, we experienced strong
sequential growth in the enterprise market. This growth is fueled by
the demand for high-quality packet-processing products for IP
networks," said Greg Lang, president and CEO of IDT. "We are also
seeing encouraging signs of future growth in most of our market
segments. Our customers' outlooks are more positive, inventories are
under control while supplies are tightening, and average selling
prices are stabilizing."
Q2FY04 Highlights:
-- IDT announced an agreement with IBM to purchase its
full-ternary network search engine (NSE) product designs
targeted at the enterprise switching market. With the
acquisition, IDT further extended its leadership by offering
the broadest and deepest portfolio of NSE solutions that
accelerate packet processing. Specific to the transaction, IDT
acquired 128Kx36 (4.5-Mbit) and 512Kx36 (18-Mbit) product
designs, and IBM will serve as the foundry to manufacture
these NSEs using a 0.13-micron, copper process.
-- Leveraging its expertise in providing clock-distribution and
clock-generation solutions, IDT entered the PC clock market
with a family of devices targeting desktop computing
platforms. The new devices are based on a new four
phase-locked-loop (PLL) PC clock architecture that enables
complete, independent control of key clock circuits within the
system, replacing traditional three-PLL clock architectures.
IDT plans to expand its offerings and develop a suite of PC
clock devices that serve next-generation notebook and desktop
computing platforms.
-- IDT expanded its portfolio of Interprise(TM) processors with
the introduction of the RC32336 integrated communications
processor. The RC32336 processor delivers performance up to
180 MHz and is targeted at the cost-sensitive, high-volume
small and medium enterprise (SME) and small office/home office
(SOHO) wireless gateways, and wireless access point markets.
Additionally, the RC32336 processor provides increased
functionality and integration, allowing for connectivity to a
wide range of networking devices including wireless local area
network (WLAN) chipsets, and enables system developers to
design fully featured and cost-effective solutions at a
competitive price/performance point.
-- The Company introduced a new family of inverse multiplexing
ATM (IMA) devices that offer specific features for remote
equipment such as mobile base stations and DSL multiplexers.
The IMA devices allow the remote configuration of up to eight
IMA groups at a far-end unit via the IMA group auto-detect
function. The devices offer the most advanced user interface
in the industry, simplifying software development, reducing
costs and speeding time to market. The IDT IMA devices,
coupled with the Company's SuperJET(TM) transceivers, provide
a complete solution for IMA line-card applications, with the
industry's lowest power consumption, chip count and board
space.
Webcast and Conference Call Information
Investors can listen to a live or replay Webcast of the Company's
quarterly financial conference call at www.idt.com. The live Webcast
begins at 1:30 p.m. PDT on October 16, 2003. The Webcast replay will
be available after 4 p.m. PDT on October 16 through November 6, 2003.
A taped telephone replay of the conference call will be available at
(800) 475-6701 (access code is 701493) beginning at 5 p.m. PDT on
October 16 and will be accessible until 9 p.m. PDT on October 23,
2003.
Investor Information
IDT stock is traded on the Nasdaq Stock Market(R) under the symbol
"IDTI." The Company is included in the S&P 1000, which is a
combination of the S&P MidCap 400 and S&P SmallCap 600 Indices, and is
also part of the S&P SuperComposite 1500, which combines the S&P 500,
MidCap 400, and SmallCap 600. Additional information about IDT is
accessible at www.idt.com.
About IDT
IDT is a global leader in preemptive semiconductor solutions that
accelerate packet processing for advanced network services. IDT serves
communications equipment vendors by applying its advanced hardware,
software and memory technologies to create flexible, highly integrated
products that enhance the functionality and processing of network
equipment. IDT accelerates intelligent packet processing with products
such as network search engines (NSEs), programmable content inspection
engines (CIEs), flow-control management (FCM) ICs and its family of
Interprise(TM) integrated communications processors. The portfolio
also comprises products optimized for communications applications,
including telecom products, FIFOs, multi-ports, and clock management
products. In addition, the product mix includes high-performance
digital logic and high-speed SRAMs to meet the requirements of leading
communications companies.
Headquartered in Santa Clara, Calif., the Company employs
approximately 3,100 people worldwide and has a wafer manufacturing
facility in Oregon, and test and assembly facilities in the
Philippines and Malaysia.
Forward-looking statements in this release involve a number of
risks and uncertainties including, but not limited to, global business
and economic conditions, product demand, manufacturing capacity and
costs, competition, pricing, patent and other intellectual property
rights of third parties, timely development and supply of new products
and manufacturing processes, availability of capital, cash flow and
other risk factors detailed in the Company's Securities and Exchange
Commission filings. Actual results may differ materially from the
Company's projections.
IDT, Interprise, and SuperJET are trademarks and the IDT logo is a
registered trademark of Integrated Device Technology, Inc. Other
brands, product names and marks are trademarks, registered trademarks,
or trade names of their respective owners.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per
share data) Three Months Ended Six Months Ended
------------------------- -----------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2003 2003 2002 2003 2002
------------------------- --------- --------
Revenues $80,777 $83,045 $92,252 $163,822 $184,064
Cost of revenues 42,201 48,724 49,246 90,925 106,249
-------- -------- -------- --------- ---------
Gross profit 38,576 34,321 43,006 72,897 77,815
-------- -------- -------- --------- ---------
Operating expenses:
Research and
development 25,716 25,366 29,384 51,082 59,625
Selling, general and
administrative 18,320 18,325 20,018 36,645 40,600
Acquired in-process
research and
development 264 -- -- 264 --
-------- -------- -------- --------- ---------
Total operating
expenses 44,300 43,691 49,402 87,991 100,225
-------- -------- -------- --------- ---------
Operating loss (5,724) (9,370) (6,396) (15,094) (22,410)
Interest expense (118) (92) (129) (210) (260)
Gain (Loss) on equity
investments 3,151 -- (6,557) 3,151 (6,557)
Interest income and
other, net 3,142 4,224 5,231 7,366 11,154
-------- -------- -------- --------- ---------
Income (loss) before
income taxes 451 (5,238) (7,851) (4,787) (18,073)
Benefit for income
taxes (699) (486) (2,969) (1,185) (5,601)
-------- -------- -------- --------- ---------
Net income (loss) $1,150 $(4,752) $(4,882) $(3,602) $(12,472)
======== ======== ======== ========= =========
Net income (loss)
per share:
Basic $0.01 $(0.05) $(0.05) $(0.03) $(0.12)
Diluted $0.01 $(0.05) $(0.05) $(0.03) $(0.12)
Weighted average shares:
Basic 104,210 103,872 103,091 104,041 103,662
Diluted 106,148 103,872 103,091 104,041 103,662
INTEGRATED DEVICE TECHNOLOGY, INC.
NON-GAAP ADJUSTMENTS
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
------------------------- -----------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2003 2003 2002 2003 2002
-------- -------- -------- -------- ---------
Net income (loss) $1,150 $(4,752) $(4,882) $(3,602) $(12,472)
-------- -------- -------- -------- ---------
Non-GAAP adjustments:
Cost of goods sold:
Restructuring
charges (1) -- 15 -- 15 --
Other (3) 280 282 619 562 4,256
Amortization of
acquisition-
related charges (2) 357 234 786 591 1,572
Operating expenses:
Acquired IPR&D (2) 264 -- -- 264 --
Other (3) -- 36 108 36 586
Restructuring
charges (1) 752 541 -- 1,293 --
Other acquisition-
related costs (2) 492 444 976 936 1,952
(Gain) loss on equity
investments (4) (3,151) -- 6,557 (3,151) 6,557
Other income (5) (180) (722) -- (902) --
Taxes (5) (1,081) (849) (3,208) (1,930) (4,971)
-------- -------- -------- -------- ---------
Total Non-GAAP
adjustments (2,267) (19) 5,838 (2,286) 9,952
-------- -------- -------- -------- ---------
Pro forma net income
(loss) $(1,117) $(4,771) $956 $(5,888) $(2,520)
======== ======== ======== ======== =========
(1) Represents costs, primarily severance, of restructuring
actions taken in Q2 2004. Q1 2004 includes non-recurring period costs,
primarily facility exit costs, related to final implementation of
restructuring activities originally announced in Q4 2003.
(2) Costs relate to our Q2 2004 TCAM3 acquisition from IBM and
acquisitions of Newave and Solidum in April 2001 and October 2002,
respectively. Newave-related costs include stock-based compensation,
amortization of intangible assets, and (in and six months ended Q2
2003 only) contingent compensation. TCAM3 and Solidum-related costs
include only amortization of intangible assets.
(3) Consists of costs associated with the closure of our Salinas
plant.
(4) Q2 2004 consists of the net gain realized on the sale of our
final equity holdings in PMC-Sierra Inc. Q2 2003 represents an
other-than-temporary impairment charge related the same investment.
(5) In Q2 and Q1 2004, we received non-recurring federal and state
tax refunds for tax years prior to 1996 plus interest accrued thereon.
INTEGRATED DEVICE TECHNOLOGY, INC.
PRO FORMA STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share data) Three Months Ended Six Months Ended
------------------------- ------------------
Sep. 28, Jun. 29, Sep. 29, Sep. 28, Sep. 29,
2003 2003 2002 2003 2002
-------------------------- --------- --------
Revenues $80,777 $83,045 $92,252 $163,822 $184,064
Cost of revenues 41,564 48,193 47,841 89,757 100,421
-------- -------- -------- --------- ---------
Gross profit 39,213 34,852 44,411 74,065 83,643
-------- -------- -------- --------- ---------
Operating expenses:
Research and
development 25,261 24,592 28,456 49,853 57,617
Selling, general and
administrative 17,531 18,078 19,862 35,609 40,070
-------- -------- -------- --------- ---------
Total operating
expenses 42,792 42,670 48,318 85,462 97,687
-------- -------- -------- --------- ---------
Operating loss (3,579) (7,818) (3,907) (11,397) (14,044)
Interest expense (118) (92) (129) (210) (260)
Interest income and
other, net 2,962 3,502 5,231 6,464 11,154
-------- -------- -------- --------- ---------
Income (loss) before
income taxes (735) (4,408) 1,195 (5,143) (3,150)
Provision (benefit) for
income taxes 382 363 239 745 (630)
-------- -------- -------- --------- ---------
Net income (loss) $(1,117) $(4,771) $956 $(5,888) $(2,520)
======== ======== ======== ========= =========
Net income (loss) per
share:
Diluted $(0.01) $(0.05) $0.01 $(0.06) $(0.02)
Weighted average
shares:
Diluted 104,210 103,872 104,508 104,041 103,662
Our pro forma results exclude acquisition-related charges and
unusual or infrequent expenses and benefits that management believes
are not directly related to our ongoing operations. We believe that
these pro forma results provide useful information; however, our
presentation of pro forma results is not in accordance with GAAP and
may not be comparable to pro forma information provided by other
companies. Pro forma information should be considered a supplement to,
and not a substitute for, financial statements prepared in accordance
with GAAP.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Sep. 28, Mar. 30,
(In thousands) 2003 2003
- ----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $176,519 $144,400
Short-term investments 391,429 410,425
Accounts receivable, net 40,950 40,111
Inventories 33,414 41,189
Prepayments and other current assets 20,781 29,420
----------- -----------
Total current assets 663,093 665,545
Property, plant and equipment, net 122,561 129,923
Goodwill and other intangibles 54,278 47,266
Other assets 37,344 38,578
----------- -----------
TOTAL ASSETS $877,276 $881,312
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $16,323 $17,514
Accrued compensation and related expenses 11,885 11,020
Deferred income on shipments to distributors 16,082 17,911
Income taxes payable 33,095 32,280
Other accrued liabilities 19,406 20,120
----------- -----------
Total current liabilities 96,791 98,845
Other liabilities 20,359 23,775
----------- -----------
Total liabilities 117,150 122,620
Stockholders' equity 760,126 758,692
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 877,276 $ 881,312
=========== ===========
CONTACT: IDT Investor Relations
Tom McCallum, 408-654-6515
ir@idt.com
or
IDT Corporate Communications
Diana Pailthorpe, 408-492-8210 (Press)
diana.pailthorpe@idt.com
or
Porter Novelli
Brad Langley, 408-369-1500 (Press)
brad.langley@porternovelli.com