0000703361-13-000022.txt : 20130715 0000703361-13-000022.hdr.sgml : 20130715 20130712202201 ACCESSION NUMBER: 0000703361-13-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20130712 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130715 DATE AS OF CHANGE: 20130712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED DEVICE TECHNOLOGY INC CENTRAL INDEX KEY: 0000703361 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942669985 STATE OF INCORPORATION: DE FISCAL YEAR END: 0401 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12695 FILM NUMBER: 13966886 BUSINESS ADDRESS: STREET 1: 6024 SILVER CREEK VALLEY ROAD CITY: SAN JOSE STATE: CA ZIP: 95138 BUSINESS PHONE: 4082848200 MAIL ADDRESS: STREET 1: 6024 SILVER CREEK VALLEY ROAD CITY: SAN JOSE STATE: CA ZIP: 95138 8-K 1 idti8-kpmcxsierra.htm 8-K IDTI 8-K PMC-Sierra



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
July 12, 2013
Date of report (Date of earliest event reported)
 
Integrated Device Technology, Inc.
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
0-12695
 
94-2669985
(State of Incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

6024 Silver Creek Valley Road, San Jose, California 95138
(Address of principal executive offices) (Zip Code)
(408) 284-8200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.01 – Completion of Acquisition or Disposition of Assets
On July 12, 2013, Integrated Device Technology, Inc. and Integrated Device Technology (Malaysia) Sdn. Bhd., a wholly-owned subsidiary of IDT (collectively “IDT”), completed the sale of certain assets of its PCI Express ("PCIe") enterprise flash controller business to PMC-Sierra, Inc., a Delaware corporation (“PMC”), for approximately $96 million in cash.
Pursuant to the terms of the Asset Purchase Agreement (the "Purchase Agreement") by and among IDT and PMC, dated May 29, 2103, IDT sold (i) substantially all of the assets that were used by IDT and its subsidiaries in the business of designing, developing, manufacturing, testing, marketing, supporting, maintaining, distributing, provisioning and selling non-volatile memory (flash) controllers and (ii) all technology and intellectual property rights owned by IDT or any of its subsidiaries and used exclusively in, or developed exclusively for use in, (a) switching circuits having the primary function of flexible routing of data from/to multiple switch interface ports, where all switch interface ports conform to the PCIe protocol, or (b) circuits having the primary function of executing all of the capturing, re-timing, re-generating and re-transmitting PCIe signals to help extend the physical reach of the signals in a system (the “Acquisition”).
In connection with the closing of the Acquisition, the license agreement that was entered into by IDT and a subsidiary of PMC simultaneously with the Purchase Agreement, whereby IDT will license certain intellectual property rights and technology to PMC, and PMC will license back to IDT certain of the intellectual property rights and technology acquired by PMC in the Acquisition, became effective.
In connection with the closing of the Acquisition, IDT and PMC entered into (a) a transition services agreement and (b) a supply agreement, whereby IDT will manufacture certain products for PMC.
Additional details regarding the Acquisition are provided in the related Current Report on Form 8-K previously filed by IDT on May 29, 2013.
Item 7.01 – Regulation FD Disclosure
The disclosure under item 2.01 is incorporated herein by reference.
Item 9.01 – Financial Statements and Exhibits
(b) Pro Forma Financial Information
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the fiscal year ended March 31, 2013, the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2013 and the Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements of the Company are included as Exhibit 99.1 to this Current Report on Form 8-K.
These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the sale been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the year ended March 31, 2013, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2013.
These unaudited pro forma condensed consolidated financial statements are being filed to satisfy the requirements under Securities and Exchange Commission Regulation S-X, Rule 11-01 and Rule 11-02, with respect to the Purchase Agreement.





(d) Exhibits
 
 
 
Exhibit No.
  
Description
99.1

  
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the fiscal year ended March 31, 2013 and the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2013 of Integrated Device Technology, Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: July 15, 2013
INTEGRATED DEVICE TECHNOLOGY, INC.
 
 
 
 
By:
/s/ Richard D. Crowley, Jr.
 
 
Richard D. Crowley, Jr.
 
 
Senior Vice President, Chief Financial Officer (duly authorized officer)


 EX-99.1 2 exhibit991.htm EXHIBIT Exhibit 99.1
Exhibit 99.1
Integrated Device Technology, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
 
Twelve Months Ended March 31, 2013
 
As Reported
 
Pro Forma
Adjustments
 
Pro Forma
(in thousands, except per share amounts)
 
 
 
 
 
Revenues
$
487,236

 
$
(1,479
)
a
$
485,757

Cost of revenues
217,636

 
(1,194
)
a
216,442

Gross profit
269,600

 
(285
)
 
269,315

 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
Research and development
169,833

 
(11,196
)
a
158,637

Selling, general and administrative
125,684

 
(743
)
a
124,941

Total operating expenses
295,517

 
(11,939
)
 
283,578

Operating income (loss)
(25,917
)
 
11,654

 
(14,263
)
 
 
 
 
 
 
Other-than-temporary impairment loss on investments
(1,708
)
 
 
 
(1,708
)
Gain on divestiture
7,986

 



7,986

Interest income and other, net
1,708

 
 
 
1,708

Income (loss) from continuing operations before income taxes
(17,931
)
 
11,654

 
(6,277
)
Provision (benefit) for income taxes
(2,007
)
 
173

k
(1,834
)
Net income (loss) from continuing operations
$
(15,924
)
 
$
11,481

 
$
(4,443
)
 
 
 
 
 
 
Basic net income (loss) per share - continuing operations
$
(0.11
)
 
 
 
$
(0.03
)
Diluted net income (loss) per share - continuing operations
$
(0.11
)
 
 
 
$
(0.03
)
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
Basic
144,014

 
 
 
144,014

Diluted
144,014

 
 
 
144,014

The accompanying notes are an integral part of these condensed consolidated financial statements.



Integrated Device Technology, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheets
 
As of March 31, 2013
 
As Reported
 
Pro Forma
Adjustments
 
Pro Forma
(in thousands)
 
 
 
 
 
Assets
 
 
 
 
 
Current assets
 
 
 
 
 
Cash and cash equivalents
$
130,837

 
$
96,098

b
$
226,935

Short-term investments
166,333

 
 
 
166,333

Accounts receivable, net
62,083

 
 
 
62,083

Inventories
56,555

 
(653
)
c
55,902

Income tax receivable
192

 
 
 
192

Prepayments and other current assets
24,505

 


 
24,505

Total current assets
440,505

 
95,445

 
535,950

Property, plant and equipment, net
74,988

 
(1,242
)
d
73,746

Goodwill
144,924

 
(7,339
)
e
137,585

Acquisition-related intangible assets, net
48,602

 
 
 
48,602

Deferred non-current tax assets
671

 
 
 
671

Other assets
18,889

 
(338
)
f
18,551

Total Assets
$
728,579

 
$
86,526

 
$
815,105

 
 
 
 
 
 
Liabilities and stockholders' equity
 
 
 
 
 
Current liabilities
 
 
 
 
 
Accounts payable
$
23,244

 
 
 
$
23,244

Accrued compensation and related expenses
21,090

 
1,458

h,i
22,548

Deferred income on shipments to distributors
14,539

 
 
 
14,539

Deferred tax liabilities
1,000

 
 
 
1,000

Other accrued liabilities
14,652

 
1,514

g
16,166

Total current liabilities
74,525

 
2,972

 
77,497

Deferred tax liabilities
1,552

 
 
 
1,552

Long-term income tax payable
454

 
 
 
454

Other long-term liabilities
22,022

 


 
22,022

Total liabilities
98,553

 
2,972

 
101,525

Stockholders' equity:
 
 
 
 
 
Preferred stock
—

 
 
 
—

Common stock
146

 
 
 
146

Additional paid-in capital
2,407,998

 
 
 
2,407,998

Treasury stock at costs
(977,296
)
 
 
 
(977,296
)
Accumulated deficit
(802,308
)
 
83,554

j
(718,754
)
Accumulated other comprehensive income
1,486

 


 
1,486

Total stockholders' equity
630,026

 
83,554

 
713,580

Total liabilities and stockholders' equity
$
728,579

 
$
86,526

 
$
815,105

The accompanying notes are an integral part of these condensed consolidated financial statements.




Note 1. Description of Transaction
On July 12, 2013, Integrated Device Technology, Inc. and Integrated Device Technology (Malaysia) Sdn. Bhd., a wholly-owned subsidiary of IDT (collectively “IDT”), completed the sale of certain assets of its PCI Express ("PCIe") enterprise flash controller business to PMC-Sierra, Inc., a Delaware corporation (“PMC”), for approximately $96 million in cash.
Pursuant to the terms of the Asset Purchase Agreement (the "Purchase Agreement") by and among IDT and PMC, dated May 29, 2103, IDT sold (i) substantially all of the assets that were used by IDT and its subsidiaries in the business of designing, developing, manufacturing, testing, marketing, supporting, maintaining, distributing, provisioning and selling non-volatile memory (flash) controllers and (ii) all technology and intellectual property rights owned by IDT or any of its subsidiaries and used exclusively in, or developed exclusively for use in, (a) switching circuits having the primary function of flexible routing of data from/to multiple switch interface ports, where all switch interface ports conform to the PCIe protocol, or (b) circuits having the primary function of executing all of the capturing, re-timing, re-generating and re-transmitting PCIe signals to help extend the physical reach of the signals in a system (the “Acquisition”).
In connection with the closing of the Acquisition, the license agreement that was entered into by IDT and a subsidiary of PMC simultaneously with the Purchase Agreement, whereby IDT will license certain intellectual property rights and technology to PMC, and PMC will license back to IDT certain of the intellectual property rights and technology acquired by PMC in the Acquisition, became effective.
In connection with the closing of the Acquisition, IDT and PMC entered into (a) a transition services agreement and (b) a supply agreement, whereby IDT will manufacture certain products for PMC.
Additional details regarding the Acquisition are provided in the related Current Report on Form 8-K previously filed by IDT on May 29, 2013.
Note 2. Pro Forma Adjustments
The accompanying unaudited pro forma condensed consolidated financial statements have been prepared to illustrate the effect of the Purchase Agreement on the Company’s historical results of operations and financial position. The accompanying unaudited pro forma condensed consolidated statements of operations are represented as if the transaction described in Note 1 had occurred on April 2, 2012 (the beginning of fiscal 2013). The unaudited pro forma condensed consolidated balance sheet is presented as if the transaction had occurred on March 31, 2013 (the end of fiscal 2013). The actual effect of the transaction could differ from the pro forma adjustments presented here. However, management believes that the assumptions used and the adjustments made are reasonable under the circumstances and given the information available.
These unaudited pro forma condensed consolidated financial statements are presented for illustrative purpose only and not necessarily indicative of the operating results or the financial position that would have been achieved had the sale been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma condensed consolidated financial statements and accompanying notes should be read together with the Company’s audited consolidated financial statements and accompanying notes as of and for the year ended March 31, 2013, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2013.
The pro forma adjustments are as follows:
a. To eliminate the revenues, cost of revenues and operating expenses which the Company believes are directly attributable to the divested business.
b. To record the cash consideration received from PMC.
c. To eliminate the inventory sold to PMC.
d. To eliminate fixed assets and photo masks transferred to PMC.
e. To eliminate the goodwill allocated to the divested business.
f. To accelerate amortization of prepaid assets due to the divestiture.
g. To accrue for the estimated transaction costs associated with the sale.
h. To accrue employee retention liabilities of $1.6 million.
i. To record the transfer of $0.2 million in employee payroll liabilities to PMC.




j. To record the preliminary gain on sale of IDT's PCIe enterprise flash controller business assets as if the transaction had benn consummated on March 31, 2013:
(in thousands)
 
 
Proceeds from sale
 
$
100,000

Purchase consideration adjustment for employee liabilities in Italy
 
(155
)
Purchase consideration adjustment for retention payments
 
(3,754
)
Other adjustments
 
8

Net consideration
 
96,098

 
 
 
Inventories sold
 
(653
)
Accelerate amortization of prepaid assets
 
(338
)
Fixed assets sold
 
(1,242
)
Goodwill allocated
 
(7,339
)
Employee liabilities transferred to PMC
 
155

Accrued retention expense
 
(280
)
Post close incentive accrued by IDT
 
(1,334
)
Accrued Brokers Fee
 
(1,442
)
Accrued legal costs Q2FY14
 
(50
)
Accrued other costs Q2FY14
 
(23
)
Net gain on divestiture
 
$
83,554

k. To record the tax effects related to the divestiture.