Exhibit 99.1
IDT Reports Fiscal Q4 2005 and Fiscal Year 2005 Results;
Includes Revenue Growth of 13 Percent for the Fiscal Year;
Fiscal Year Non-GAAP EPS of $0.33, GAAP EPS of $0.12 on Revenues of $391 Million
SANTA CLARA, Calif.--(BUSINESS WIRE)--May 3, 2005--IDT(TM) (Integrated
Device Technology, Inc.) (Nasdaq:IDTI), a leading communications IC company,
today announced its results for the fourth fiscal quarter and full fiscal year
ended April 3, 2005. The results announced were in line with the Company's
projections, and represented significant revenue and earnings per share growth
on a year-to-year basis. The following outlines the Company's financial
performance on a GAAP and Non-GAAP basis:
-- Revenues for the fourth fiscal quarter were $97 million, an increase
of just over 1 percent compared to the third quarter of fiscal 2005
and an increase of 3 percent from the fourth quarter of fiscal 2004.
-- Revenues for fiscal year 2005 were $391 million, an increase of 13
percent compared to the previous fiscal year.
-- Non-GAAP net income for the fourth quarter of fiscal 2005 was $7
million, or $0.07 per diluted share, compared to net income of $6
million, or $0.06 per diluted share, in the third quarter of fiscal
2005 and net income of $9 million, or $0.08 per diluted share, for the
same quarter one year ago.
-- Non-GAAP net income for the full fiscal year 2005 was $35 million, or
$0.33 per share, compared to net income of $7 million, or $0.07 per
share, during the previous fiscal year.
-- GAAP net income for the fourth quarter of fiscal 2005 was $6 million,
or $0.06 per diluted share, compared to net income of $3 million, or
$0.03 per diluted share, for the third quarter of fiscal 2005. GAAP
net income for the fourth quarter of fiscal 2004 was $8 million, or
$0.07 per diluted share.
-- GAAP net income for full fiscal year 2005 was $13 million, or $0.12
per share, compared to net income of $6 million, or $0.06 per share,
during the previous fiscal year.
-- GAAP net income includes certain costs, charges and gains in
accordance with GAAP. For example, the fourth quarter of fiscal 2005
GAAP results include a $6 million tax refund and a $2 million net tax
benefit relating both to the partial settlement of an ongoing US tax
audit and adjustments associated with the Company's decision to close
its Manila facilities. For a complete reconciliation of GAAP to
Non-GAAP results see the attached tables.
"We are pleased with our fiscal year end results and are encouraged by a
resumption of growth in the March quarter," said Greg Lang, president and CEO of
IDT. "We view this improvement as a positive indicator that inventory correction
issues are largely behind us."
Continuation of Profitability Measures
During the past 3 months, the Company has disclosed details of its
financial restructuring efforts to further improve profitability. In January,
the Company announced a reduction in force, consolidation of certain functions,
and the consolidation of California operations into a new San Jose campus. In
April, the Company announced the pending closure of its assembly and test
facility in Manila, the Philippines, which when completed will result in a
reduction in force of approximately 750 employees. The test and finish work
currently performed at the Manila facility will be transferred to the Company's
assembly and test facility in Penang, Malaysia at or around June 2005. Certain
assembly functions will be transferred to third party sub-contractors, planned
for the end of September 2005. These actions are a result of the Company's
continued focus on improving profitability by fully utilizing its existing
resources. In time, the combined effects of all these measures are projected to
save approximately $5 to $6 million per quarter through the Company's P&L.
"We are committed to continue strengthening our financial performance in
fiscal 2006," added Lang. "We believe we can achieve stronger results through
the combination of our restructuring efforts and the anticipated revenue growth
resulting from our investments in leading-edge products."
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 Tuesday, May 3, 2005. The Webcast replay will be available after 5 p.m.
PDT on May 3 through May 25, 2005. A taped telephone replay of the conference
call will be available on May 3, 2005 beginning at 5 p.m. PDT by calling (800)
475-6701 or (320) 365-3844 and will be accessible until 11:59 p.m. PDT on May 8,
2005. The access code is 776488.
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.
Currently headquartered in Santa Clara, Calif., the Company employs
approximately 3,000 people worldwide and has a wafer manufacturing facility in
Oregon, and test and assembly facilities in the Philippines and Malaysia.
Additional information about IDT is accessible at www.IDT.com.
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, 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. 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
January 2, 2005.
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.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Years Ended
- ----------------------------------------------------------------------
Apr. 3 Jan. 2 Mar. 28, Apr. 3 Mar. 28,
2005 2005 2004 2005 2004
-------- -------- -------- --------- ---------
Revenues $97,004 $95,658 $94,521 $390,640 $345,443
Cost of revenues 47,321 49,833 48,065 193,762 184,615
Restructuring
charges, asset
impairment and
other 2,961 213 -- 1,380 --
-------- -------- -------- --------- ---------
Gross profit 46,722 45,612 46,456 195,498 160,828
-------- -------- -------- --------- ---------
Operating expenses:
Research and
development 25,914 26,365 23,846 103,729 98,535
Selling, general
and administrative 20,537 18,291 17,876 76,016 72,409
Acquired in-process
research and
development 65 29 -- 1,830 264
-------- -------- -------- --------- ---------
Total operating
expenses 46,516 44,685 41,722 181,575 171,208
-------- -------- -------- --------- ---------
Operating income
(loss) 206 927 4,734 13,923 (10,380)
Interest expense (16) (13) (65) (102) (344)
Gain (loss) on equity
investments -- -- -- (12,831) 3,151
Interest income and
other, net 3,377 3,657 3,545 12,363 13,698
-------- -------- -------- --------- ---------
Income before income
taxes 3,567 4,571 8,214 13,353 6,125
Provision (benefit)
for income taxes (2,612) 1,223 556 20 (271)
-------- -------- -------- --------- ---------
Net income $6,179 $3,348 $7,658 $13,333 $6,396
======== ======== ======== ========= =========
Net income per share:
Basic $0.06 $0.03 $0.07 $0.13 $0.06
Diluted $0.06 $0.03 $0.07 $0.12 $0.06
Weighted average
shares:
Basic 105,325 105,806 105,432 105,825 104,607
Diluted 107,190 107,444 111,434 108,204 108,526
INTEGRATED DEVICE TECHNOLOGY, INC.
NON-GAAP ADJUSTMENTS
(Unaudited)
(In thousands)
Three Months Ended Years Ended
- ----------------------------------------------------------------------
Apr. 3 Jan. 2, Mar. 28, Apr. 3 Mar. 28,
2005 2005 2004 2005 2004
-------- -------- --------- --------- ---------
Net income $6,179 $3,348 $7,658 $13,333 $6,396
-------- -------- --------- --------- ---------
Non-GAAP adjustments:
Cost of goods sold:
Restructuring charges
(1) 3,208 322 -- 3,555 15
Asset impairment (2) (610) (109) -- (2,513) --
Plant closure costs
(2) 20 33 219 292 1,050
Amortization and
impairment of
acquisition-related
intangibles (3) 2,131 1,626 573 6,084 1,767
Sales tax refund (5) (4,175) (4,175) --
Patent settlement -- -- 334 (18) 334
Operating expenses:
Acquired IPR&D (3) 65 29 -- 1,830 264
Plant closure costs
(2) -- -- -- 36
Restructuring charges
(1) 3,490 98 2 4,240 1,522
Amortization of
acquisition-related
intangibles (3) 429 421 518 1,752 1,971
Acquisition related
costs (4) 463 507 -- 2,056 --
Sales tax refund (5) (1,442) -- -- (1,442) --
(Gain) loss on equity
investments (6) -- -- -- 12,831 (3,151)
Other income (7) -- -- -- -- (794)
Taxes (7) (2,341) (21) -- (2,372) (2,038)
-------- -------- --------- --------- ---------
Total Non-GAAP
adjustments 1,238 2,906 1,646 22,120 976
-------- -------- --------- --------- ---------
Non-GAAP net income $7,417 $6,254 $9,304 $35,453 $7,372
======== ======== ========= ========= =========
(1) Consists of costs for restructuring actions announced in fiscal
years 2004-2005, primarily related to severance.
(2) Consists of costs associated with the closure of our Salinas plant
and gains realized on the sale of related assets which were
previously impaired.
(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 a sales tax refund received in Q4 2005 related to the
Manufacturers Investment Credit.
(6) Consists of an impairment charge in Q1 2005 related to our
investment in NetLogic and a gain on the sale of our investment in
PMC Sierra in Q2 2004.
(7) Q405 consists of the net reversal of tax reserves as a result of a
settlement with the IRS and tax affects of the Manila plant
closure announcement. Q1-Q2 2004 represent federal and state tax
refunds received 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 Years Ended
- ----------------------------------------------------------------------
Apr. 3 Jan. 2 Mar. 28, Apr. 3 Mar. 28,
2005 2005 2004 2005 2004
-------- -------- -------- --------- ---------
Revenues $97,004 $95,658 $94,521 $390,640 $345,443
Cost of revenues 49,708 48,174 46,939 191,917 181,449
-------- -------- -------- --------- ---------
Gross profit 47,296 47,484 47,582 198,723 163,994
-------- -------- -------- --------- ---------
Operating expenses:
Research and
development 25,281 25,596 23,485 100,602 96,548
Selling, general
and administrative 18,230 18,034 17,717 72,537 70,867
-------- -------- -------- --------- ---------
Total operating
expenses 43,511 43,630 41,202 173,139 167,415
-------- -------- -------- --------- ---------
Operating income
(loss) 3,785 3,854 6,380 25,584 (3,421)
Interest expense (16) (13) (65) (102) (344)
Interest income and
other, net 3,376 3,657 3,545 12,362 12,904
-------- -------- -------- --------- ---------
Income before income
taxes 7,145 7,498 9,860 37,844 9,139
Provision for income
taxes (272) 1,244 556 2,391 1,767
-------- -------- -------- --------- ---------
Net income $ 7,417 $ 6,254 $ 9,304 $ 35,453 $ 7,372
======== ======== ======== ========= =========
Net income per share:
Diluted $ 0.07 $ 0.06 $ 0.08 $ 0.33 $ 0.07
Weighted average
shares:
Diluted 107,190 107,444 111,434 108,204 108,526
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)
Apr. 3 Mar. 28,
(In thousands) 2005 2004
- ----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $188,761 $207,060
Short-term investments 392,472 401,154
Accounts receivable, net 52,948 53,091
Inventories 37,331 32,745
Prepaids and other current assets 11,292 12,101
--------- ----------
Total current assets 682,804 706,151
Property, plant and equipment, net 124,570 108,424
Goodwill and other intangibles 85,335 52,784
Other assets 9,431 38,194
--------- ----------
TOTAL ASSETS $902,140 $905,553
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,726 $ 20,190
Accrued compensation and related expenses 15,293 11,560
Deferred income on shipments to distributors 19,478 21,411
Income taxes payable 25,722 33,267
Other accrued liabilities 20,206 19,250
--------- ----------
Total current liabilities 99,425 105,678
Long term liabilities 15,599 15,651
--------- ----------
Total liabilities 115,024 121,329
Stockholders' equity 787,116 784,224
--------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $902,140 $905,553
========= ==========
CONTACT: IDT
Dawn Morse, 408-654-6515 (Investor Relations)
dawn.morse@idt.com
Phil Bourekas, 408-727-6116 (Worldwide Marketing)
phil.bourekas@idt.com
or
Porter Novelli
Brad Langley, 408-369-1500
brad.langley@porternovelli.com