Third Consecutive Quarter of Revenue Growth Strong Execution Leads to Gross Margin Improvement
January 26, 2010
SAN JOSE, Calif., Jan. 26, 2010 — IDT® (Integrated Device Technology, Inc.; NASDAQ: IDTI), a leading provider of essential mixed signal semiconductor solutions that enrich the digital media experience, today announced results for the fiscal third quarter ended December 27, 2009.
“Fiscal Q3 2010 marked our third consecutive quarter of revenue growth and improved operating performance,” said Dr. Ted Tewksbury, president and CEO of IDT. “Revenue from new product lines represented approximately 15 percent of our total revenue, up from 10 percent in the prior quarter as sales of audio, PCI Express® and display solutions all grew double digits sequentially. In addition, we experienced healthy growth in our core timing solutions for communications and computing. Gross margin was better than we initially anticipated driven by improved product mix and increased fab utilization, and our operating expenses were down over $2 million from the prior quarter as we continue to maintain tight cost controls. All of these improvements allowed us to deliver financial results that were better than we originally expected and provide further evidence that our analog-intensive mixed-signal solutions emphasis, combined with strong execution, will deliver long term value for our shareholders.”
Recently, IDT announced:
· It acquired Mobius Microsystems, the leader in precision CMOS harmonic oscillator technology.
· It divested its Micro Networks business to Spectrum Control, Inc.
· Its first precision temperature sensors targeted at Double Data Rate 2 and 3 (DDR2 and DDR3) memory modules, Solid State Disks (SSD) and computing motherboards.
· It expanded its signal integrity product line with the introduction of a new family of repeater devices for SAS/SATA 6G, PCI Express Gen2 (PCIe®), Serial RapidIO® 2.1 and USB3.0.
· The IDT PureTouchTM capacitive touch controller has been selected by Gionee Communication, a leading China handset provider, for use in its slider-style mobile phone.
· The IDT ViewXpandTM DisplayPortTM –based multimonitor solutionwas selected by EDN Magazine for inclusion in its “Hot 100 Products of 2009."
· The next generation HQV Benchmark 2.0 DVD for testing and evaluating the quality of a wide variety of video and display products.
· It has appointed Mr. Paul Rolls to be Senior Vice President of Worldwide Sales and Marketing.
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. 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. A complete reconciliation of GAAP to non-GAAP results is attached to this press release.
· Revenue for the fiscal third quarter of 2010 was $142.5 million, compared with $167.1 million reported in the same period one year ago.
· GAAP net loss for the fiscal third quarter of 2010 was $7.4 million or a loss of $0.04 per diluted share, versus a GAAP net loss of $345.3 million or a loss of approximately $2.06 per diluted share in the same period one year ago. Fiscal third quarter 2010 GAAP results include $17.3 million in acquisition and divestiture related charges of which $13.2 million is related to the fair value adjustment to acquired inventory that was sold during the quarter and amortization of acquisition related intangibles, $4.2 million of stock-based compensation and $3.1 million in restructuring related charges.
· Non-GAAP net income for the fiscal third quarter of 2010 was $17.3 million or $0.10 per diluted share, compared with non-GAAP net income of $30.1 million or $0.18 per diluted share reported in the same period one year ago.
· GAAP gross profit for the fiscal third quarter of 2010 was $59.7 million, compared with GAAP gross profit of $69.7 million in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2010 was $72.8 million, compared with non-GAAP gross profit of $84.0 million reported in the same period one year ago.
· GAAP R&D expense for the fiscal third quarter of 2010 was $38.3 million, compared with GAAP R&D expense of $37.2 reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2010 was $34.6 million, compared with Non-GAAP R&D of $32.7 million in the same period one year ago.
· GAAP SG&A expense for the fiscal third quarter of 2010 was $24.8 million, compared with GAAP SG&A expense of $30.9 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2010 was $21.0 million, compared with non-GAAP SG&A expense of $22.4 million in the same period one year ago.
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 1:15 p.m. Pacific time on January 26, 2010. The webcast replay will be available after 5:00 p.m. Pacific time on January 26, 2010.
Investors can also listen to the live call at 1:30 p.m. Pacific time on January 26, 2010 by calling (800) 230-1096 or (612) 288-0329. The conference call replay will be available after 5:00 p.m. Pacific time on January 26, 2010 through 11:59 p.m. Pacific time on February 5, 2010 at (800) 475-6701 or (320) 365-3844. The access code is 140583.
With the goal of continuously improving the digital media experience, IDT integrates its fundamental semiconductor heritage with essential innovation, developing and delivering low-power, mixed signal solutions that solve customer problems. Headquartered in San Jose, Calif., IDT has design, manufacturing and sales facilities throughout the world. IDT stock is traded on the NASDAQ Global Select Stock Market® 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, including but not limited to statements regarding demand for Company products, customer ordering patterns, channel inventory, anticipated trends in Company sales, expenses and profits, and macroeconomic conditions 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 introduction 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. 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 fiscal year ended March 29, 2009. All forward-looking statements are made as of the date of this release and the Company disclaims any duty to update such statements.
The Company presents non-GAAP financial measures because the financial community uses non-GAAP results in its analysis and comparison of historical results and projections of the Company's future operating results. These non-GAAP results exclude impairment charges, acquisition-related charges, share-based compensation expense and certain other expenses and benefits. Management uses these non-GAAP measures to manage and assess the profitability of the business. These non-GAAP results are also consistent with another way management internally analyzes IDT’s results and may be useful. The Company has reconciled such non-GAAP results to the most directly comparable GAAP financial measures in the financial tables at the end of this press release.
Reference to these non-GAAP results should be considered in addition to results that are prepared under general accepted accounting standards in the United States, but should not be considered a substitute for results that are presented in accordance with GAAP. It should also be noted that IDT's non-GAAP information may be different from the non-GAAP information provided by other companies.
IDT, HQV, PureTouch, ViewXpand and the IDT logo are trademarks or registered 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.