Exhibit 99.1
IDT Reports Earnings for the Second Quarter of
Fiscal Year 2005; Company Announces $50 Million Stock Repurchase Program
SANTA CLARA, Calif.--(BUSINESS WIRE)--Oct. 21, 2004--IDT(TM)
(Integrated Device Technology, Inc.) (Nasdaq:IDTI), a leading
communications IC company, today announced its quarterly results for
the quarter ended September 26, 2004, its second quarter of fiscal
2005.
Revenues for the second fiscal quarter were $96.7 million, a
decrease of 4.6 percent compared to the first quarter of fiscal 2005
and an increase of 19.7 percent from the second quarter of fiscal
2004. On a non-GAAP basis, net income for the second fiscal quarter
was $9.5 million, or $0.09 per diluted share, compared to a net income
of $12.3 million, or $0.11 per diluted share, in the first quarter of
fiscal 2005 and a net loss of $1.1 million, or ($0.01) per diluted
share, for the same quarter one year ago.
Including certain costs, charges and gains in accordance with
GAAP, the Company reported net income of $8.9 million, or $0.08 per
diluted share, in the second quarter of fiscal 2005 compared to a net
loss of $5.0 million, or ($0.05) per diluted share, in the first
quarter of fiscal 2005. On a GAAP basis, the Company reported net
income of $1.2 million, or $0.01 per diluted share, for the second
quarter of fiscal 2004. The second fiscal quarter of 2005 GAAP results
include a $1.6 million gain on the sale of assets related to
discontinued wafer operations in Salinas, Calif. For the first quarter
of fiscal 2005, GAAP results include a one-time impairment charge of
$12.8 million on an investment in a privately held technology company.
Further information, including a detailed reconciliation of non-GAAP
to GAAP results, is provided in the financial tables of this release.
"The September quarter was a difficult quarter as many of our
customers reduced purchasing activity to realign their inventory
levels in the enterprise and wireless market segments. We anticipate
this will continue through our December quarter," said Greg Lang,
president and CEO of IDT. "We continue to be optimistic about the long
term demand opportunity in the end markets we serve, including the
packet- processing solutions we offer."
In other news, IDT announced that its Board of Directors has
approved a stock repurchase program for the repurchase of up to $50
million of its Common Stock. Repurchases under the Company's stock
repurchase program may be made from time to time in the open market
and in negotiated transactions, including block transactions or
accelerated stock repurchase transactions, at times and at prices
considered appropriate by the Company. The repurchase program is
effective immediately and may be discontinued at any time. As of
October 20, 2004, IDT had approximately 106.7 million shares of Common
Stock outstanding.
Q2FY05 Highlights
-- Marking its 20th year listed on The NASDAQ Stock Market, IDT
President and CEO Greg Lang publicly celebrated the Company
anniversary by opening the NASDAQ market on Friday, September
10, 2004 in New York.
-- Celestica recognized IDT for its excellence in supplier
performance with a 2003 Partner in Performance award.
Celestica's annual Partners in Performance awards are given to
suppliers in recognition of outstanding achievements and
support of the Company's electronics manufacturing services
(EMS) goals. This marks the second year in a row IDT has
received this accolade.
-- The Company extended its technology leadership by unveiling
details of its next generation network search engine (NSE)
architecture. With its support for a wider interface, this is
the first NSE architecture truly optimized for IPv6. Products
based on this architecture will enable new levels of search
performance and will integrate an error correction code
feature to address potential soft errors, ensuring data
integrity and compliance with stringent service level
agreements.
-- IDT announced that Fujitsu Limited selected its IDT 75K62134
NSE to enable the delivery of advanced network services,
including security, content load balancing and quality of
service (QoS) within Fujitsu's enterprise-level IPCOM S2200
network server. More specifically, the IDT NSE offers the
Fujitsu IPCOM S2200 network server a host of innovative
features such as the MDL command that enables Fujitsu to
optimize bandwidth throughput across the LA-1 interface of the
NSE. The IDT 75K62134 also provides a system-level
architecture model (SLAM) that gives Fujitsu extensive
modeling capabilities and offers great technical support on
its high-end modeling requirements.
-- Validating its continued support for DDR2 dual in-line memory
modules (DIMMs), IDT announced that Elpida Memory, Inc.
selected the IDT DDR2 register and phase-locked loop (PLL)
chip set for its 512 Mbit-based 2-Gbyte DDR2 registered DIMMs.
The IDT DDR2 register and PLL chip set buffers clock, address
and command signals on registered DIMMs for the server
workstation market. IDT was the first company to introduce a
complete DDR2 register and PLL chip set in November 2002.
-- IDT introduced new members of its multi-queue family of
flow-control management (FCM) ICs. Among the new products is
the IDT 72P51769, a 4-Mbit device that can access data from a
single data bus and place the data into any of one to 128
queues, offering a 400 percent increase in queue partitioning
when compared to previous offerings. This is an important
improvement because it allows the device to replace at least
four products previously required to perform the same
functions, which translates to a significant savings in
overall system costs.
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 2:30 p.m. PDT on October 21, 2004. The Webcast replay will
be available after 5 p.m. PDT on October 21, 2004. A taped telephone
replay of the conference call will be available on October 21, 2004
beginning at 6 p.m. PDT by calling 800-475-6701 or 320-365-3844 and
will be accessible until 11 p.m. PDT on October 28, 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
switching solutions, 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
timing solutions. 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 3,200 people worldwide and has a wafer manufacturing
facility in Oregon, and test and assembly facilities in the
Philippines and Malaysia.
Investors are cautioned that forward-looking statements in this
release 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, 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. We urge 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 year ended March 28, 2004,
and the Quarterly Report on Form 10-Q for the quarter ended June 27,
2004.
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 Six Months Ended
- ----------------------------------------------------------------------
Sep. 26, Jun. 27, Sep. 28, Sep. 26, Sep. 28,
2004 2004 2003 2004 2003
-------- --------- -------- --------- ---------
Revenues $96,671 $101,307 $80,777 $197,978 $163,822
Cost of revenues 48,247 48,361 42,201 96,608 90,925
Asset Impairment (1,585) (209) - (1,794) -
-------- --------- -------- --------- ---------
Gross profit 50,009 53,155 38,576 103,164 72,897
-------- --------- -------- --------- ---------
Operating expenses:
Research and
development 25,449 26,001 25,716 51,450 51,082
Selling, general and
administrative 17,801 19,387 18,320 37,188 36,645
Acquired in-process
research and
development - 1,736 264 1,736 264
-------- --------- -------- --------- ---------
Total operating
expenses 43,250 47,124 44,300 90,374 87,991
-------- --------- -------- --------- ---------
Operating income
(loss) 6,759 6,031 (5,724) 12,790 (15,094)
Interest expense (26) (47) (118) (73) (210)
Gain (loss) on equity
investments - (12,831) 3,151 (12,831) 3,151
Interest income and
other, net 2,824 2,505 3,142 5,329 7,366
-------- --------- -------- --------- ---------
Income (loss) before
income taxes 9,557 (4,342) 451 5,215 (4,787)
Provision (benefit)
for income taxes 704 705 (699) 1,409 (1,185)
-------- --------- -------- --------- ---------
Net income (loss) $8,853 $(5,047) $1,150 $3,806 $(3,602)
======== ========= ======== ========= =========
Net income (loss) per
share:
Basic $0.08 $(0.05) $0.01 $0.04 $(0.03)
Diluted $0.08 $(0.05) $0.01 $0.03 $(0.03)
Weighted average
shares:
Basic 106,144 106,026 104,210 106,085 104,041
Diluted 107,661 106,026 106,148 109,117 104,041
INTEGRATED DEVICE TECHNOLOGY, INC.
NON-GAAP ADJUSTMENTS
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
- ----------------------------------------------------------------------
Sep. 26, Jun. 27, Sep. 28, Sep. 26, Sep. 28,
2004 2004 2003 2004 2003
-------- -------- -------- -------- --------
Net income (loss) $8,853 $(5,047) $1,150 $3,806 $(3,602)
-------- -------- -------- -------- --------
Non-GAAP adjustments:
Cost of goods sold:
Restructuring charges
(1) - 25 - 25 15
Asset Impairment (2) (1,585) (209) - (1,794) -
Plant closure costs (2) 44 195 280 239 562
Amortization of
acquisition-related
intangibles (3) 1,313 1,014 357 2,327 591
Patent Settlement - (18) - (18) -
Operating expenses:
Acquired IPR&D (3) - 1,736 264 1,736 264
Plant closure costs (2) - - - - 36
Restructuring charges
(1) - 652 752 652 1,293
Amortization of
acquisition-related
intangibles (3) 364 538 492 902 936
Acquisition related
costs (4) 494 592 - 1,086 -
(Gain) Loss on equity
investments (5) - 12,831 (3,151) 12,831 (3,151)
Other income (6) - - (180) - (902)
Taxes (6) 18 (28) (1,081) (10) (1,930)
-------- -------- -------- -------- --------
Total Non-GAAP
adjustments 648 17,328 (2,267) 17,976 (2,286)
-------- -------- -------- -------- --------
Non-GAAP net income
(loss) $9,501 $12,281 $(1,117) $21,782 $(5,888)
======== ======== ======== ======== ========
(1) Consists of costs for restructuring actions announced in fiscal
years 2004-2005. Q1 2005 and Q2 2004 primarily consists of
severance. YTD FY 2004 also includes facility exit costs.
(2) Consists of costs associated with the closure of our Salinas plant
and gains realized on the sale of related assets held for sale.
(3) Consists of costs related to our acquisition of Zettacom in Q1
2005, TCAM3 acquisition from IBM in Q2 2004 and acquisitions of
Newave and Solidum in Q1 2002 and Q3 2003, respectively.
Newave-related costs include stock-based compensation and
amortization of intangible assets. Zettacom, TCAM3 and
Solidum-related costs include only amortization of intangible
assets.
(4) Consists primarily of transitional costs incurred in connection
with the acquisition of Zettacom, such as retention earned by
former Zettacom employees, rent payments for the former Zettacom
facility, and transitional services provided.
(5) Consists of an impairment charge related to our investment in
NetLogic in Q1 2005 and a gain on the sale of our investment in
PMC Sierra in Q2 2004.
(6) In Q1 and Q2 2004, we received non-recurring federal and state tax
refunds for tax years prior to 1996 plus interest.
INTEGRATED DEVICE TECHNOLOGY, INC.
NON-GAAP STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
- ----------------------------------------------------------------------
Sep. 26, Jun. 27, Sep. 28, Sep. 26, Sep. 28,
2004 2004 2003 2004 2003
-------- --------- -------- --------- ---------
Revenues $96,671 $101,307 $80,777 $197,978 $163,822
Cost of Revenues 46,890 47,145 41,564 94,035 89,757
-------- --------- -------- --------- ---------
Gross profit 49,781 54,162 39,213 103,943 74,065
-------- --------- -------- --------- ---------
Operating expenses:
Research and
development 24,775 24,950 25,261 49,725 49,853
Selling, general and
administrative 17,617 18,656 17,531 36,273 35,609
-------- --------- -------- --------- ---------
Total operating
expenses 42,392 43,606 42,792 85,998 85,462
-------- --------- -------- --------- ---------
Operating income
(loss) 7,389 10,556 (3,579) 17,945 (11,397)
Interest expense (26) (47) (118) (73) (210)
Interest income and
other, net 2,824 2,505 2,962 5,329 6,464
-------- --------- -------- --------- ---------
Income (loss) before
income taxes 10,187 13,014 (735) 23,201 (5,143)
Provision for income
taxes 686 733 382 1,419 745
-------- --------- -------- --------- ---------
Net income (loss) $9,501 $12,281 $(1,117) $21,782 $(5,888)
======== ========= ======== ========= =========
Net income (loss) per
share:
Diluted $0.09 $0.11 $(0.01) $0.20 $(0.06)
Weighted average
shares:
Diluted 107,661 110,344 104,210 109,117 104,041
Non-GAAP results exclude acquisition-related charges, and other
expenses and benefits that management believes are not directly
related to our ongoing operations. These non-GAAP results are
consistent with another way management internally analyzes IDT's
results and may be useful; however, 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.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Sep. 26, Mar. 28,
(In thousands) 2004 2004
- ----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $265,398 $223,360
Short-term investments 334,380 384,854
Accounts receivable, net 56,908 53,091
Inventories 44,136 32,745
Prepaids and other current assets 9,897 12,101
--------- ---------
Total current assets 710,719 706,151
Property, plant and equipment, net 109,765 108,424
Goodwill and other intangibles 87,663 52,784
Other assets 8,823 38,194
--------- ---------
TOTAL ASSETS $916,970 $905,553
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $21,758 $20,190
Accrued compensation and related expenses 14,769 11,560
Deferred income on shipments to distributors 24,891 21,411
Income taxes payable 33,089 33,267
Other accrued liabilities 18,055 19,250
--------- ---------
Total current liabilities 112,562 105,678
Long term liabilities 13,169 15,651
--------- ---------
Total liabilities 125,731 121,329
Stockholders' equity 791,239 784,224
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $916,970 $905,553
========= =========
CONTACT: IDT
Dawn Morse, 408-654-6515 (Financial)
(Investor Relations)
dawn.morse@idt.com
Jim Rey, 408-492-8494 (Press)
(Corporate Communications)
jim.rey@idt.com
or
Porter Novelli
Patty Ladegaard, 408-369-1500 (Press)
patty.ladegaard@porternovelli.com