Exhibit 99.1
IDT Reports Fiscal First Quarter 2007 Results; Revenue and EPS Growth Exceed
Forecasted Ranges Driven by Strength in Computing and Communications End Markets
SAN JOSE, Calif.--(BUSINESS WIRE)--July 25, 2006--IDT(TM)
(Integrated Device Technology, Inc.) (NASDAQ:IDTI), a leading provider
of vital semiconductor solutions, today announced results for the
fiscal first quarter of 2007, ended July 2, 2006. The Company's
revenues and EPS for the quarter exceeded the high end of the
Company's projected ranges provided on the fourth quarter earnings
call on May 8, 2006.
The following highlights the Company's financial performance on
both a GAAP and non-GAAP basis. 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 first quarter of 2007 were $185.5
million, an increase of 11 percent from the $167.5 million
reported in the fiscal fourth quarter of 2006.
-- GAAP net loss for the fiscal first quarter of 2007 was $1.6
million, or a loss of $0.01 per diluted share. This compares
to a net loss of $26.5 million or a loss of $0.13 per diluted
share for the fourth quarter of fiscal 2006. First quarter
GAAP results include $40.5 million of acquisition-related
charges (including $37.0 million in intangibles amortization),
$11.0 million of stock based compensation and $0.7 million in
restructuring-related charges.
-- Non-GAAP net income for the first quarter of fiscal 2007 was
$50.6 million or $0.25 per diluted share, an increase of 65
percent over net income of $30.7 million or $0.15 per diluted
share reported in the fourth quarter of fiscal 2006. For
further description and a complete reconciliation of GAAP to
non-GAAP results, please refer to the attached tables.
-- GAAP gross profit for the first quarter of fiscal 2007 was
$84.2 million, compared to GAAP gross profit of $53.5 million
reported in the fiscal fourth quarter of 2006. Non-GAAP gross
profit for the fiscal first quarter of 2007 was $105.4
million, compared to non-GAAP gross profit of $92.2 million
reported in the fiscal fourth quarter of 2006. Non-GAAP gross
margins for the fiscal first quarter were 56.8 percent,
compared to Non-GAAP gross margins for the fiscal fourth
quarter of 55.0 percent.
-- GAAP R&D expense for the fiscal first quarter was $39.6
million, compared to GAAP R&D expense of $35.8 million in the
fiscal fourth quarter. Non-GAAP R&D expense for the fiscal
first quarter of 2007 was $32.3 million, compared to non-GAAP
R&D expense of $34.9 million in the fiscal fourth quarter of
2006.
-- GAAP SG&A expense for the fiscal first quarter was $48.0
million, compared to GAAP SG&A expense of $50.0 million in the
fiscal fourth quarter. Non-GAAP SG&A expense for the fiscal
first quarter of 2007 was $24.2 million, compared to non-GAAP
SG&A expense of $26.4 million in the fiscal fourth quarter of
2006.
"Our double-digit revenue growth in the fiscal first quarter
reflects continued product momentum across our computing and
communication end markets," said Greg Lang, president and CEO of IDT.
"An aggressive ramp of our advanced memory buffer products combined
with continued strength in our communications' sub segments allowed us
to achieve better results than originally anticipated, despite a
softer-than-seasonal market for our PC clock business. We also
demonstrated strong profit growth during the quarter resulting from
the combination of top line growth and excellent cost and expense
management which allowed us to achieve our operating margin target
range at least one year ahead of our plans."
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. PT on July 25, 2006. The webcast
replay will be available after 5 p.m. PT on July 25 through August 1,
2006.
Investors can also listen to the live call at 1:30 p.m. PT on July
25 by calling (888) 423-3271 or (612) 332-0530. The conference call
replay will be available after 5 p.m. PT on July 25 through 11:59 p.m.
PT on August 1, 2006 at (800) 475-6701 or (320) 365-3844. The access
code is 835055.
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. IDT stock is
traded on the NASDAQ Global Select Market(R) under the symbol "IDTI."
Additional information about IDT is accessible at www.IDT.com.
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 acquired from Freescale in
September 2005, 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 2, 2006 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
- ----------------------------------------------------------------------
July 2, April 2, July 3,
2006 (a) 2006 (a) 2005
--------- --------- ---------
Revenues $185,536 $167,459 $ 93,838
Cost of revenues 101,301 113,922 51,145
--------- --------- ---------
Gross profit 84,235 53,537 42,693
--------- --------- ---------
Operating expenses:
Research and development 39,589 35,825 27,456
Selling, general and administrative 47,993 49,956 19,061
--------- --------- ---------
Total operating expenses 87,582 85,781 46,517
--------- --------- ---------
Operating loss (3,347) (32,244) (3,824)
Interest expense (79) (87) (11)
Other-than-temporary impairment of
investments - - (1,705)
Interest income and other, net 3,336 2,586 3,902
--------- --------- ---------
Loss before income taxes (90) (29,745) (1,638)
Provision (benefit) for income taxes 1,474 (3,205) (8,218)
--------- --------- ---------
Net income (loss) $ (1,564) $(26,540) $ 6,580
========= ========= =========
Net income (loss) per share:
Basic $ (0.01) $ (0.13) $ 0.06
Diluted $ (0.01) $ (0.13) $ 0.06
Weighted average shares:
Basic 198,706 198,830 106,474
Diluted 198,706 198,830 108,058
- ----------------------------------------------------------------------
(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
- ----------------------------------------------------------------------
July 2, April 2, July 3,
2006 (a) 2006 (a) 2005
--------- --------- ---------
GAAP Net income (loss) $ (1,564) $(26,540) $ 6,580
========= ========= =========
GAAP Diluted Earnings Per Share $ (0.01) $ (0.13) $ 0.06
========= ========= =========
Acquisition Related:
Amortization and impairment of
acquisition related intangibles (1) 36,985 56,537 1,729
Inventory FMV write-up (1) 1,509 2,868 -
Acquisition related costs (2) 1,962 1,375 498
Restructuring Related:
Reduction in Force (3) 532 1,081 1,273
Facility closure costs (4) 207 1,251 2,954
Asset impairment (5) - (11) (564)
Other:
Stock-Based Compensation Expense (6) 11,010 - -
Loss on short-term investments (7) - - 1,705
Taxes affects of Non-GAAP
adjustments (8) - (5,881) (8,712)
--------- --------- ---------
Non-GAAP net income $ 50,641 $ 30,680 $ 5,463
========= ========= =========
Non-GAAP Diluted Earnings Per Share $ 0.25 $ 0.15 $ 0.05
========= ========= =========
Weighted average shares:
Basic 198,706 198,830 106,474
Diluted 202,504 205,582 108,058
GAAP gross profit 84,235 53,537 42,693
--------- --------- ---------
Acquisition Related:
Amortization and impairment of
acquisition related intangibles (1) 18,324 33,616 1,407
Inventory FMV write-up (1) 1,509 2,868 -
Acquisition related costs (2) 732 739 -
Restructuring Related:
Reduction in Force (3) 100 926 518
Facility closure costs (4) 148 510 1,688
Asset impairment (5) - (11) -
Other:
Stock-Based Compensation Expense (6) 354 - -
--------- --------- ---------
Non-GAAP gross profit 105,402 92,185 46,306
--------- --------- ---------
GAAP R&D Expenses: 39,589 35,825 27,456
--------- --------- ---------
Acquisition Related:
Amortization and impairment of
acquisition related intangibles (1) (125) (124) (105)
Acquisition related costs (2) (1,074) (561) (498)
Restructuring Related:
Reduction in Force (3) (319) 198 (191)
Facility closure costs (4) (34) (421) (466)
Other:
Stock-Based Compensation Expense (6) (5,724) - -
--------- --------- ---------
Non-GAAP R&D Expenses 32,313 34,917 26,196
--------- --------- ---------
GAAP SG&A Expenses: 47,993 49,956 19,061
--------- --------- ---------
Acquisition Related:
Amortization and impairment of
acquisition related intangibles (1) (18,536) (22,797) (217)
Acquisition related costs (2) (156) (76) -
Restructuring Related:
Reduction in Force (3) (113) (352) (564)
Facility closure costs (4) (25) (320) (236)
Other:
Stock-Based Compensation Expense (6) (4,932) - -
--------- --------- ---------
Non-GAAP SG&A Expenses 24,231 26,411 18,044
--------- --------- ---------
GAAP Interest income and other, net 3,257 2,499 2,186
--------- --------- ---------
Loss on short-term investments (7) - - 1,705
Non-GAAP Interest income and other, net 3,257 2,499 3,891
--------- --------- ---------
GAAP Provision for Income Taxes 1,474 (3,205) (8,218)
--------- --------- ---------
Taxes affects of Non-GAAP
adjustments (8) - 5,881 8,712
--------- --------- ---------
Non-GAAP Provision for Income Taxes 1,474 2,676 494
--------- --------- ---------
- ----------------------------------------------------------------------
(a) The results of operations include the results of operations of ICS
from September 16, 2005, the date of acquisition.
(1) Consists of amortization charges of acquisition-related intangible
assets and the FMV adjustment of acquired inventory sold. Q4 2006
also includes an impairment charge related to our acquisition of
Newave.
(2) Q1 2007 and Q4 2006 consists of costs incurred in connection with
our acquisition of ICS and the acquisition of Freescale assets,
such as additional depreciation resulting from purchase accounting
and costs associated with the exit of previously leased
facilities. In addition, all periods presented include retention
costs incurred in connection with our acquisition of Zettacom.
(3) Consists of restructuring actions initiated by the Company,
including those in conjunction with our merger with ICS,
consisting primarily of severance and retention costs.
(4) Consists of costs associated with restructuring actions initiated
by the Company, primarily related to the exit of our leased
facilities in Santa Clara (Q1 2006), the closure of our
manufacturing facility in the Philippines (Q1 2006), and of our
design center in Australia (Q3 2006).
(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 stock-based compensation expense resulting from our
adoption of SFAS 123R in Q1 2007.
(7) Consists of other-than-temporary impairment charges on our
investment portfolio recognized in anticipation of the closure of
our merger with ICS.
(8) Q4 2006 includes taxes associated with the repatriation of cash
under the Homeland Investment Act (HIA), offset by reversals of
certain foreign jurisdiction deferred tax liabilities, and the tax
effects of certain non-GAAP adjustments. Q1 2006 includes a net
reversal of tax reserves resulting from an audit settlement, as
well as the tax effects of certain non-GAAP adjustments.
- ----------------------------------------------------------------------
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 2, Apr. 2,
(In thousands) 2006 2006
- ---------------------------------------------- ----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 291,658 $ 266,173
Short-term investments 42,391 29,800
Accounts receivable, net 107,074 90,882
Inventories 69,845 58,692
Deferred Taxes 325 4,085
Prepaid and other current assets 20,474 20,370
----------- -----------
Total current assets 531,767 470,002
Property, plant and equipment, net 103,027 108,663
Goodwill 1,010,916 1,010,659
Acquisition-related intangibles 390,787 427,772
Other assets 20,531 20,595
----------- -----------
TOTAL ASSETS $2,057,028 $2,037,691
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 49,787 $ 39,891
Accrued compensation and related expenses 22,234 23,198
Deferred income on shipments to distributors 36,044 29,797
Income taxes payable 18,002 29,119
Other accrued liabilities 27,038 25,633
----------- -----------
Total current liabilities 153,105 147,638
Deferred tax liabilities 12,708 16,273
Long term liabilities 16,531 15,581
----------- -----------
Total liabilities 182,344 179,492
Stockholders' equity 1,874,684 1,858,199
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,057,028 $2,037,691
=========== ===========
CONTACT: IDT Investor Relations
Mike Knapp, 408-284-6515 (Investors)
mike.knapp@idt.com
or
IDT Worldwide Marketing
Phil Bourekas, 408-284-8200 (Press)
phil.bourekas@idt.com
or
IDT Corporate Communications
Carolyn Robinson, 408-284-8515 (Press)
carolyn.robinson@idt.com