Exhibit 99.1
Reports Fiscal Fourth Quarter and Year End
2006 Results; Strength in Enterprise and Consumer Sales Outweighs
Seasonal Weakness in Computing
SAN JOSE, Calif.--(BUSINESS WIRE)--May 8, 2006--IDT(TM)
(Integrated Device Technology, Inc.) (Nasdaq:IDTI), a leading provider
of vital semiconductor solutions, today announced results for the
fiscal fourth quarter and year ended April 2, 2006. The Company's
revenues and EPS for the quarter were at the higher end of the
Company's projections provided on the third quarter earnings call on
January 26, 2006.
The following highlights the Company's financial performance on
both a GAAP and non-GAAP basis. Results for fiscal 2006 include the
impact of the Integrated Circuit Systems, Inc. (ICS) merger, which was
completed on September 16, 2005. 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.
-- Revenues for the fiscal fourth quarter of 2006 were $167.5
million, an increase of 4 percent from the $160.8 million
reported in the fiscal third quarter of 2006.
-- Revenues for fiscal year 2006 were $ 527.8 million, an
increase of 35 percent from the $390.6 million reported in
fiscal year 2005.
-- GAAP net loss for the fourth quarter was $26.5 million, or a
loss of $0.13 per diluted share. This compares to a net loss
of $42.3 million, or a loss of $0.21 per diluted share for the
third quarter of fiscal 2006. Fourth quarter of fiscal 2006
GAAP results include $60.8 million of acquisition-related
charges (including $55.9 million in intangibles amortization),
a $3.2 million tax benefit related to the favorable treatment
of repatriated earnings and $2.3 million in restructuring-
related charges. Non-GAAP net income for the fourth quarter of
fiscal 2006 was $30.7 million or $0.15 per diluted share,
compared to net income of $27.8 million or $0.14 per diluted
share in the third quarter of fiscal 2006. For further
description and a complete reconciliation of GAAP to non-GAAP
results, please refer to the attached tables.
-- GAAP net loss for fiscal year 2006 was $81.7 million, or a
loss of $0.52 per diluted share, compared with GAAP net income
for fiscal year 2005 of $13.3 million, or $0.12 per diluted
share. Non-GAAP net income for fiscal year 2006 was $75.2
million or $0.47 per diluted share, compared to net income of
$35.5 million or $0.33 per diluted share in fiscal year 2005.
Non-GAAP EPS increased 42 percent year over year.
-- GAAP gross profit for the fourth quarter of fiscal 2006 was
$53.5 million, compared to GAAP gross profit of $45.6 million
in the prior quarter. Non-GAAP gross profit for the fourth
quarter of fiscal 2006 was $92.2 million, compared to non-GAAP
gross profit of $86.9 million in the prior quarter.
-- GAAP operating expenses for the fiscal fourth quarter were
$85.8 million, compared to GAAP operating expenses of $83.9
million in the prior quarter. Non-GAAP operating expenses for
the fiscal fourth quarter were $61.3 million, compared to
non-GAAP operating expenses of $59.7 million in the prior
quarter
"We are very pleased to close an exciting year with another strong
quarter that reflects the health of our end markets and new product
momentum," said Greg Lang, president and CEO of IDT. "We saw
significant strength in our communications and consumer end markets
that offset seasonal weakness in computing. We also benefited from new
digital consumer and server product ramps. We look forward to fiscal
2007 as we continue to drive revenue growth and increase our
profitability with best-in-class products targeting communications,
computing and consumer end markets."
Board of Directors Approves New $50 million Share Repurchase
Program
The IDT board of directors has approved a new $50 million share
repurchase program, which the Company expects to commence in the
current quarter. The Company's prior share repurchase program of $75
million was completed during the fiscal fourth quarter of 2006. Under
the prior program, the Company repurchased approximately 5.7 million
shares.
Repurchases under the Company's new 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 April 2, 2006, IDT had
approximately 198 million shares outstanding and approximately $296
million in cash and cash equivalents.
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. PDT on May 8, 2006. The webcast replay
will be available after 5 p.m. PDT on May 8 through May 15, 2006.
Investors can also listen to the live call at 1:30 p.m. PDT May 8,
2006 by calling (888) 423-3271 or (612) 332-0530. The conference call
replay will be available after 5 p.m. PDT on May 8 through 11:59 p.m.
PDT on May 15, 2006 at (800) 475-6701 or (320) 365-3844. The access
code is 823814.
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 world leader in developing and delivering vital
semiconductor solutions that enable customers to accelerate
innovation. IDT solutions help customers solve complex system design
challenges associated with the evolving requirements of
communications, computing and consumer applications. By leveraging its
system knowledge and extensive blend of technologies, IDT is able to
deliver essential solutions, including timing products, network search
engines, flow-control management ICs and products for standards-based
serial switching. Headquartered in San Jose, Calif., IDT has design,
manufacturing and sales facilities throughout the world.
Forward Looking Statements
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, including
integration of both ICS and the assets we recently acquired from
Freescale, 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 year ended April 3, 2005 and Quarterly Report on Form 10-Q for
the period ended January 1, 2006.
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 Year Ended
- ----------------------------------------------------------------------
April 2, Jan. 1, April 3, April 2, April 3,
2006 (a) 2006 (a) 2005 2006 (a) 2005
--------- --------- -------- --------- ---------
Revenues $167,459 $160,792 $97,004 $527,778 $390,640
Cost of revenues 112,760 115,358 47,321 346,843 193,762
Restructuring and
Asset Impairment 1,162 (164) 2,961 3,368 1,380
--------- --------- -------- --------- ---------
Gross profit 53,537 45,598 46,722 177,567 195,498
--------- --------- -------- --------- ---------
Operating expenses:
Research and
development 35,825 36,229 25,914 127,591 103,729
Selling, general
and administrative 49,956 47,844 20,537 142,518 76,016
Acquired in-process
research and
development -- (200) 65 2,300 1,830
--------- --------- -------- --------- ---------
Total operating
expenses 85,781 83,873 46,516 272,409 181,575
--------- --------- -------- --------- ---------
Operating income
(loss) (32,244) (38,275) 206 (94,842) 13,923
Interest expense (87) (61) (16) (222) (102)
Other-than-temporary
impairment of
investments -- -- -- (1,705) (12,831)
Interest income and
other, net 2,586 3,005 3,377 12,660 12,363
--------- --------- -------- --------- ---------
Income (loss) before
income taxes (29,745) (35,331) 3,567 (84,109) 13,353
Provision for income
taxes (3,205) 6,957 (2,612) (2,401) 20
--------- --------- -------- --------- ---------
Net income (loss) $(26,540) $(42,288) $ 6,179 $(81,708) $ 13,333
========= ========= ======== ========= =========
Net income (loss)
per share:
Basic $ (0.13) $ (0.21) $ 0.06 $ (0.52) $ 0.13
Diluted $ (0.13) $ (0.21) $ 0.06 $ (0.52) $ 0.12
Weighted average
shares:
Basic 198,830 199,568 105,325 157,345 105,825
Diluted 198,830 199,568 107,190 157,345 108,204
(a) The results of operations include the results of operations of
ICS from September 16, 2005, the date of acquisition.
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(In thousands)
Three Months Ended Year Ended
- ----------------------------------------------------------------------
April 2, Jan. 1, April 3, April 2, April 3,
2006 (a) 2006 (a) 2005 2006 (a) 2005
----------- --------- --------- --------- ---------
GAAP Net income
(loss) $(26,540) $(42,288) $ 6,179 $(81,708) $ 13,333
=========== ========= ========= ========= =========
GAAP Diluted
Earnings Per Share $ (0.13) $ (0.21) $ 0.06 $ (0.52) $ 0.12
=========== ========= ========= ========= =========
Acquisition
Related:
Acquired IPR&D
(1) -- (200) 65 2,300 1,830
Amortization
and impairment
of acquisition
related
intangibles
(1) 56,537 56,755 2,560 127,468 7,836
Inventory FMV
write-up (1) 2,868 5,539 -- 13,348 --
Acquisition
related
costs (2) 1,375 2,023 463 4,403 2,056
Restructuring
Related:
Reduction in
Force (3) 1,081 922 6,698 4,128 7,795
Facility
closure costs
(4) 1,251 327 20 12,834 292
Asset
impairment (5) (11) (168) (610) (835) (2,513)
Other:
Sales Tax
Refund (6) -- -- (5,617) -- (5,617)
Patent
Settlement -- -- -- -- (18)
Loss on
short-term
investments
(7) -- -- -- 2,597 --
Loss on equity
investments
(8) -- -- -- -- 12,831
Taxes affects
of Non-GAAP
adjustments
(9) (5,881) 4,897 (2,341) (9,354) (2,372)
----------- --------- --------- --------- ---------
Non-GAAP net income $ 30,680 $ 27,807 $ 7,417 $ 75,181 $ 35,453
=========== ========= ========= ========= =========
Non-GAAP Diluted
Earnings Per Share $ 0.15 $ 0.14 $ 0.07 $ 0.47 $ 0.33
=========== ========= ========= ========= =========
Weighted average
shares:
Basic 198,830 199,568 105,325 157,345 105,825
Diluted 205,582 200,441 107,190 159,450 108,204
GAAP gross profit 53,537 45,598 46,722 177,567 195,498
----------- --------- --------- --------- ---------
Acquisition
Related:
Amortization
and impairment
of acquisition
related
intangibles
(1) 33,616 34,551 2,131 77,717 6,084
Inventory FMV
write-up (1) 2,868 5,539 -- 13,348 --
Acquisition
related costs
(2) 739 910 -- 1,713 --
Restructuring
Related:
Reduction in
Force (3) 926 34 3,208 1,875 3,555
Facility
closure costs
(4) 510 481 20 6,823 292
Asset
impairment (5) (11) (168) (610) (835) (2,513)
Other:
Sales Tax
Refund -- -- (4,175) -- (4,175)
Patent
Settlement -- -- -- -- (18)
----------- --------- --------- --------- ---------
Non-GAAP gross
profit 92,185 86,945 47,296 278,208 198,723
----------- --------- --------- --------- ---------
GAAP Operating
Expenses: 85,781 83,873 46,516 272,409 181,575
----------- --------- --------- --------- ---------
Acquisition
Related:
Acquired IPR&D
(1) -- 200 (65) (2,300) (1,830)
Amortization
and impairment
of acquisition
related
intangibles
(1) (22,921) (22,204) (429) (49,751) (1,752)
Acquisition
related costs
(2) (636) (1,113) (463) (2,690) (2,056)
Restructuring
Related:
Reduction in
Force (3) (155) (888) (3,490) (2,253) (4,240)
Facility
closure costs
(4) (741) (185) -- (6,350) --
Other:
Sales Tax
Refund (6) -- -- 1,442 -- 1,442
----------- --------- --------- --------- ---------
Non-GAAP Operating
Expenses 61,328 59,683 43,511 209,065 173,139
----------- --------- --------- --------- ---------
GAAP Interest
income and other,
net 2,499 2,944 3,361 10,733 (570)
----------- --------- --------- --------- ---------
Facility
Closure Costs
(4) -- (339) -- (339) --
Loss on
short-term
investments
(7) -- -- -- 2,597 --
Loss on equity
investments
(8) -- -- -- -- 12,831
----------- --------- --------- --------- ---------
Non-GAAP Interest
income and other,
net 2,499 2,605 3,361 12,991 12,261
----------- --------- --------- --------- ---------
GAAP Provision for
Income Taxes (3,205) 6,957 (2,612) (2,401) 20
----------- --------- --------- --------- ---------
Taxes affects
of Non-GAAP
adjustments
(9) 5,881 (4,897) 2,341 9,354 2,372
----------- --------- --------- --------- ---------
Non-GAAP Provision
for Income Taxes 2,676 2,060 (271) 6,953 2,392
----------- --------- --------- --------- ---------
(a) The results of operations include the results of operations of
ICS from September 16, 2005, the date of acquisition.
(1) Consists of costs related to our acquisition of ICS in Q2 2006,
our acquisition of assets from Freescale in Q2 2006, 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. These costs include amortization of acquired
intangible assets, the FMV adjustment of acquired inventory sold,
acquired in-process research and development, and impairment
charges.
(2) Fiscal 2006 periods consist of additional depreciation, above
market rental costs resulting from purchase accounting and
retention costs incurred in connection with the acquisition of
ICS and the acquisition of Freescale assets in Q2 2006. Fiscal
2006 periods also include costs incurred in connection with our
acquisition of Zettacom in Q1 2005, such as retention earned by
former employees. The prior year periods include only costs
associated with our acquisition of Zettacom.
(3) Fiscal 2006 periods consist of severance and retention costs
related to our merger with ICS in Q2 2006, primarily resulting
from the elimination of duplicative functions, and costs related
to previous reductions in force. The prior year periods consist
of severance and retention costs related to previous reductions
in force.
(4) Fiscal 2006 periods consist of costs associated with the exit of
our leased facilities in Santa Clara during Q1 2006, severance
and retention costs related the closure of our manufacturing
facility in the Philippines during Q1 2006, and severance costs
related to the closure of our design center in Australia in Q3
2006. Fiscal 2005 consists of costs associated with the closure
of our manufacturing facility in Salinas.
(5) Consists of gains realized on the sale of assets related to our
former manufacturing facility in Salinas, which were previously
impaired.
(6) Consists of a sales tax refund related to the Manufacturers
Investment Credit.
(7) Fiscal 2006 periods consist of other-than-temporary impairment
charges recognized in Q2 2006 and Q1 2006 primarily as a result
of our merger with ICS.
(8) Consists of an impairment charge taken in Q1 2005 related to our
investment in NetLogic.
(9) Q3 and Q4 2006 include taxes associated with the repatriation of
cash under the Homeland Investment Act (HIA), offset in Q4 2006
by reversals of certain foreign jurisdiction deferred tax
liabilities. Q3 2006 includes a book to tax return adjustment for
2005. Fiscal 2006 also includes a net reversal of tax reserves
resulting from an audit settlement in Q1 2006, certain tax
effects related to the closure of our manufacturing facility in
the Philippines in Q1 2006 as well the tax effects of certain
non-GAAP adjustments. Fiscal 2005 periods include a net reversal
of tax reserves, resulting from a settlement with the Internal
Revenue Service in Q4 2005, tax effects related to the closure of
our manufacturing facility in the Philippines, as well as the tax
effects of certain non-GAAP adjustments.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
April 3, Jan. 1, Apr. 3,
(In thousands) 2006 2006 2005
- ----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $266,173 $202,252 $188,761
Short-term investments 29,800 87,208 392,472
Accounts receivable, net 90,882 92,750 52,948
Inventories 58,692 59,667 37,331
Prepaid and other current assets 20,370 22,449 11,292
---------------------------------
Total current assets 465,917 464,326 682,804
Property, plant and equipment, net 108,663 120,383 124,570
Goodwill 1,010,314 1,006,348 55,523
Acquisition-related intangibles 427,772 482,926 29,812
Other assets 20,595 20,133 9,431
---------------------------------
TOTAL ASSETS $2,033,261 $2,094,116 $902,140
=================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $39,891 $43,072 $18,726
Accrued compensation and related
expenses 23,198 18,426 15,293
Deferred income on shipments to
distributors 29,797 30,469 19,478
Income taxes payable 29,125 29,549 25,722
Other accrued liabilities 25,633 28,857 20,206
---------------------------------
Total current liabilities 147,644 150,373 99,425
Deferred tax liabilities 12,080 18,540 4,709
Long term liabilities 15,581 15,339 10,890
---------------------------------
Total liabilities 175,305 184,252 115,024
Stockholders' equity 1,857,956 1,909,864 787,116
---------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,033,261 $2,094,116 $902,140
=================================
CONTACT: IDT Investor Relations
Mike Knapp, 408-284-6515
mike.knapp@idt.com
or
IDT Worldwide Marketing
Phil Bourekas, 408-284-8200
phil.bourekas@idt.com
or
Porter Novelli
Brad Langley, 408-369-4600 ext. 636
brad.langley@porternovelli.com