Exhibit 99.1
IDT Returns to Profitability in Third Quarter Fiscal Year 2004;
Revenues up 8 Percent as Company Reports $0.04 Non-GAAP EPS, $0.02
GAAP EPS
SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 22, 2004--IDT(TM)
(Integrated Device Technology, Inc.) (Nasdaq:IDTI), a leading
communications IC company, today announced a return to profitability
in the quarter ended December 28, 2003, its third quarter of fiscal
2004.
Revenues for the third fiscal quarter were $87.1 million, an
increase of 8 percent compared to the second quarter of fiscal 2004
and an increase of 10 percent from the quarter ended December 29,
2002. On a non-GAAP basis, the net income for the third fiscal quarter
was $4.0 million, or $0.04 per diluted share, compared to a net loss
of $1.1 million, or ($0.01) per diluted share, in the second quarter
of fiscal 2004 and a net loss of $20.6 million, or ($0.20) per diluted
share, for the same quarter one year ago.
Including certain costs, charges and gains in accordance with
GAAP, the Company earned net income of $2.3 million, or $0.02 per
diluted share, in the third quarter of fiscal 2004 compared to net
income of $1.2 million, or $0.01 per diluted share, in the second
quarter of fiscal 2004. On a GAAP basis, the Company recorded a net
loss of $26.3 million, or ($0.25) per diluted share, for the third
quarter of fiscal 2003. Further information, including a detailed
reconciliation of non-GAAP and GAAP results, is provided in the
financial tables of this release.
"We are pleased with the third-quarter financial results and the
key milestones we achieved. In the past year, we have reduced our
break-even point by more than 20 percent, realized the lowest
inventory levels in 10 years, and returned to operating
profitability," said Greg Lang, president and CEO of IDT. "In
addition, we are experiencing growth in most of our market segments,
with particular strength in the enterprise, wireless and storage
areas. With the combination of operating and market improvements, we
believe that we are well positioned for what appears to be a recovery
in the communications infrastructure market."
Q3FY04 Highlights:
-- IDT received a 2003 top supplier award from Lucent
Technologies. IDT was one of only two semiconductor companies
to receive this award based on product quality, timeliness of
delivery, technology, innovation and overall value.
-- For the third consecutive year, IDT received the EDN Hot 100
products award. The 75K72100 network search engine (NSE) and
the sequential flow-control (SFC) device family were
recognized by EDN's readers and editorial staff as hot
products of 2003. This was the second year that an IDT NSE
received this accolade.
-- The Company launched the RC32434 Interprise(TM) integrated
communications processor targeting the emerging digital home
network. The new integrated processor delivers frequencies up
to 400 MHz and features a standard peripheral component
interconnect (PCI) interface, a 16-bit wide DDR memory
controller, and an integrated non-volatile random access
memory (NVRAM) and an authentication unit (AU) for security
functionality.
-- IDT expanded its flow-control management (FCM) family with the
announcement of the SFC device family. These new products
provide high-performance data-flow management by utilizing a
seamless connection to an external double-data-rate (DDR)
SDRAM for storing and transferring up to 1 Gigabit of data in
a sequential fashion. The IDT SFC devices seamlessly handle
all DDR SDRAM interactions and can support SDRAM densities of
128 Mbits or 256 Mbits for a single part. This new family of
products is targeted for communication and networking
applications as well as medical equipment, graphics, and test
and measurement systems.
-- IDT announced the industry's first monolithic NSEs in 512Kx36
(18-Mbit) and 256Kx36 (9-Mbit) configurations with dual
Network Processor Forum (NPF) Look Aside (LA-1) interfaces.
The fully integrated interfaces allow a seamless connection
between the new IDT NSEs and the network processing units
(NPUs), including the nP3700 NPUs from AMCC and the Intel(R)
IXP2400, Intel(R) IXP2800, and Intel(R) IXP2850 NPUs. Targeted
at metro and edge routers, the new IDT NSEs operate at up to
250 million searches per second (MSPS) and enable line rate
performance up to OC-192 and beyond.
-- IDT expanded its dual-port product portfolio with the
introduction of the industry's first 18-Mbit 512Kx36 dual-port
devices and an enhanced family of 9-Mbit asynchronous
dual-port products. Each product family achieves the
industry's highest-performance devices available at their
respective densities, and the products target applications
such as wireless base stations, network switches and routers,
and storage area networks.
-- IDT has made significant progress in customer design-ins of PC
clocks. IDT was the first clock company to be qualified on
next-generation PC platforms and the first to deliver its
innovative 4-PLL solution for new PCI Express systems due out
in April. This excellent execution puts the Company in a solid
position to enter the PC market.
-- The Company announced its entry into the high-performance
clock distribution market with the introduction of a family of
industry-leading, low-voltage differential signaling (LVDS)
fan-out buffers. IDT is the first in the industry to introduce
LVDS fan-out buffers that offer redundant clocking with
glitchless switchover, a key capability to ensure increased
system reliability in high-performance communications
applications such as routers and access equipment.
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. PST on January 22, 2004. The Webcast replay will
be available after 4 p.m. PST on January 22 through February 12, 2004.
A taped telephone replay of the conference call will be available at
(800) 475-6701 (access code is 716667) beginning at 5 p.m. PST on
January 22 and will be accessible until 9 p.m. PST on January 29,
2004.
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 and
software technologies to create flexible, highly integrated solutions
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, fluctuations in the demand cycle for
communications ICs, 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. In accordance with SEC recommended guidelines,
IDT has changed its nomenclature from "pro-forma" to "non-GAAP." This
nomenclature change has no impact on the Company's accounting
methodologies and practices.
IDT, Interprise 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.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
Dec. 28, Sep. 28, Dec. 29,
2003 2003 2002
-------- -------- ---------
Revenues $ 87,100 $ 80,777 $ 79,010
Cost of revenues 45,625 42,201 59,826
Restructuring charges, asset
impairment and other -- -- 1,010
Gross profit 41,475 38,576 18,174
Operating expenses:
Research and development 23,607 25,716 30,126
Selling, general and administrative 17,888 18,320 21,988
Acquired in-process research
and development -- 264 2,670
-------- -------- --------
Total operating expenses 41,495 44,300 54,784
-------- -------- --------
Operating loss (20) (5,724) (36,610)
Interest expense (69) (118) (143)
Gain (loss) on equity investments -- 3,151 --
Interest income and other, net 2,787 3,142 4,006
-------- -------- --------
Income (loss) before income taxes 2,698 451 (32,747)
Provision (benefit) for income taxes 358 (699) (6,424)
-------- -------- --------
Net income (loss) $ 2,340 $ 1,150 $(26,323)
======== ======== ========
Net income (loss) per share:
Basic $ 0.02 $ 0.01 $ (0.25)
Diluted $ 0.02 $ 0.01 $ (0.25)
Weighted average shares:
Basic 104,915 104,210 103,271
Diluted 108,360 106,148 103,271
Nine Months Ended
Dec. 28, Dec. 29,
2003 2002
--------- ---------
Revenues $250,922 $263,074
Cost of revenues 136,550 165,800
Restructuring charges, asset
impairment and other -- 1,285
Gross profit 114,372 95,989
-------- -------
Operating expenses:
Research and development 74,689 89,751
Selling, general
and administrative 54,533 62,588
Acquired in-process research
and development 264 2,670
-------- --------
Total operating expenses 129,486 155,009
-------- --------
Operating loss (15,114) (59,020)
Interest expense (279) (403)
Gain (loss) on equity investments 3,151 (6,557)
Interest income and other, net 10,153 15,160
-------- --------
Income (loss) before income taxes (2,089) (50,820)
Provision (benefit) for income taxes (827) (12,025)
-------- --------
Net income (loss) $ (1,262) $(38,795)
======== ========
Net income (loss) per share:
Basic $ (0.01) $ (0.37)
Diluted $ (0.01) $ (0.37)
Weighted average shares:
Basic 104,332 103,531
Diluted 104,332 103,531
INTEGRATED DEVICE TECHNOLOGY, INC.
NON-GAAP ADJUSTMENTS
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
Dec. 28, Sep. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2003 2002 2003 2002
------- -------- --------- -------- ---------
Net income (loss) $2,340 $ 1,150 $(26,323) $(1,262) $(38,795)
------ ------- -------- ------- --------
Non-GAAP adjustments:
Cost of goods sold:
Restructuring charges(1) -- -- 1,010 15 1,285
Plant closure costs(3) 269 280 339 831 4,320
Amortization of
acquisition-related
intangibles(2) 603 357 909 1,194 2,481
Operating expenses:
Acquired IPR&D(2) -- 264 2,670 264 2,670
Plant closure costs(3) -- -- 8 36 376
Restructuring charges(1) 227 752 868 1,520 1,086
Amortization of
acquisition-related
intangibles(2) 517 492 1,248 1,453 3,200
(Gain) loss on equity
investments(4) -- (3,151) -- (3,151) 6,557
Other income(5) 108 (180) -- (794) --
Taxes(5) (108) (1,081) (1,285) (2,038) (6,256)
------ ------- -------- ------- --------
Total Non-GAAP
adjustments 1,616 (2,267) 5,767 (670) 15,719
------ ------- -------- ------- --------
Non-GAAP net income
(loss) $3,956 $(1,117) $(20,556) $(1,932) $(23,076)
====== ======= ======== ======= ========
(1) Represents costs, primarily severance, of restructuring actions
and non-recurring period costs, primarily facility exit costs.
(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 the nine months ended Q3
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. Nine months ended Dec. 2002
includes an other-than-temporary impairment charge related to 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.
NON-GAAP STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
Dec. 28, Sep. 28, Dec. 29,
2003 2003 2002
-------- -------- ---------
Revenues $ 87,100 $ 80,777 $ 79,010
Cost of revenues 44,753 41,564 58,578
-------- -------- --------
Gross profit 42,347 39,213 20,432
-------- -------- --------
Operating expenses:
Research and development 23,210 25,261 28,839
Selling, general and administrative 17,541 17,531 21,151
-------- -------- --------
Total operating expenses 40,751 42,792 49,990
-------- -------- --------
Operating income (loss) 1,596 (3,579) (29,558)
Interest expense (69) (118) (143)
Interest income and other, net 2,895 2,962 4,006
-------- -------- --------
Income (loss) before income taxes 4,422 (735) (25,695)
Provision (benefit) for income taxes 466 382 (5,139)
-------- -------- --------
Net income (loss) $ 3,956 $ (1,117) $(20,556)
======== ======== ========
Net income (loss) per share:
Diluted $ 0.04 $ (0.01) $ (0.20)
Weighted average shares:
Diluted 108,360 104,210 103,271
Nine Months Ended
Dec. 28, Dec. 29,
2003 2002
------------- ---------------
Revenues $ 250,922 $ 263,074
Cost of revenues 134,510 158,999
------------- --------------
Gross profit 116,412 104,075
------------- --------------
Operating expenses:
Research and development 73,063 86,456
Selling, general and administrative 53,150 61,221
------------- --------------
Total operating expenses 126,213 147,677
------------- --------------
Operating income (loss) (9,801) (43,602)
Interest expense (279) (403)
Interest income and other, net 9,359 15,160
------------- --------------
Income (loss) before income taxes (721) (28,845)
Provision (benefit) for income taxes 1,211 (5,769)
------------- --------------
Net income (loss) $ (1,932) $ (23,076)
============= ==============
Net income (loss) per share:
Diluted $ (0.02) $ (0.22)
Weighted average shares:
Diluted 104,332 103,531
Our non-GAAP 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 non-GAAP results provide useful information; however, our
presentation of these results is 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.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dec. 28, Mar. 30,
(In thousands) 2003 2003
--------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 180,203 $ 144,400
Short-term investments 411,053 410,425
Accounts receivable, net 47,887 40,111
Inventories 31,911 41,189
Prepayments and other current assets 13,263 29,420
---------- ----------
Total current assets 684,317 665,545
Property, plant and equipment, net 114,962 129,923
Goodwill and other intangibles 53,516 47,266
Other assets 37,986 38,578
---------- ----------
TOTAL ASSETS $ 890,781 $ 881,312
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,233 $ 17,514
Accrued compensation and related expenses 15,678 11,020
Deferred income on shipments to distributors 18,108 17,911
Income taxes payable 33,267 32,280
Other accrued liabilities 19,596 20,120
---------- ----------
Total current liabilities 103,882 98,845
Other liabilities 19,004 23,775
---------- ----------
Total liabilities 122,886 122,620
Stockholders' equity 767,895 758,692
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 890,781 $ 881,312
========== ==========
CONTACT: IDT
Tom McCallum, 408-654-6515 (Investor Relations)
ir@idt.com
Diana Pailthorpe, 408-492-8210 (Press)
diana.pailthorpe@idt.com
or
Porter Novelli
Brad Langley, 408-369-1500 (Press)
brad.langley@porternovelli.com