-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A0t3O8OUts1Vta+aXHTMFTJmqNM0WCcvVVtww7cz0zKr4/h2GHeB/qsaQ9kWUukp ds/bMsnbuQDEBf6v2/Tzng== 0001157523-05-000647.txt : 20050126 0001157523-05-000647.hdr.sgml : 20050126 20050126161128 ACCESSION NUMBER: 0001157523-05-000647 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050126 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050126 DATE AS OF CHANGE: 20050126 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: 0328 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12695 FILM NUMBER: 05550272 BUSINESS ADDRESS: STREET 1: 2975 STENDER WAY CITY: SANTA CLARA STATE: CA ZIP: 95054 BUSINESS PHONE: 4087276116 MAIL ADDRESS: STREET 1: 2975 STENDER WAY CITY: SANTA CLARA STATE: CA ZIP: 95054 8-K 1 a4808489.txt INTEGRATED DEVICE TECHNOLOGY, INC. 8-K 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 January 26, 2005 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 (Commission File Number) (IRS Employer Incorporation) Identification No.) 2975 Stender Way, Santa Clara, California 95054 (Address of principal executive offices) (Zip Code) (408) 727-6116 (Registrant's telephone number, including area code) Item 2.02 and Item 7.01. Results of Operations and Financial Condition. The information in this Report, including the Exhibit 99.1 attached hereto, is furnished pursuant to Item 2.02 and Item 7.01 of this Form 8-K. Consequently, it is not deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K. On January 26, 2005, Integrated Device Technology, Inc. (the "Company") announced its results of operations and financial condition as of and for the quarter ended January 2, 2005, and the implementation of a restructuring program in a press release that is attached hereto as Exhibit 99.1. The Company's press release contains non-GAAP financial measures. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures included in the press release. Non-GAAP Statements of Operations are presented in the press release. Non-GAAP Statements of Operations exclude acquisition-related charges and other expenses and benefits that management believes are not directly related to the Company's ongoing operations. For example, the year to date results for the period ended January 2, 2005 exclude gains realized on the sale of assets held in connection with the earlier closure of the Salinas, CA fabrication facility, a loss on an equity investment in NetLogic Microsystems, and restructuring expenses in connection with a reduction in force at the Hillsborough, OR fabrication facility. The year to date results for the period ended December 28, 2003 exclude costs associated with closing the Salinas, CA fabrication facility, restructuring costs and a gain on the sale of equity holdings in PMC-Sierra, Inc. These non-GAAP results are consistent with another way management internally evaluates results of operations and the Company believes this presentation format may be useful to readers of our financial results. However, the Company's 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 provided in the Company's press release should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. The Company also announced the implementation of a restructuring program to reduce manufacturing and operating costs in order to improve profitability. These measures include the consolidation of the Company's Northern California operations, including Santa Clara and Salinas, into its new San Jose-based corporate headquarters. In additional, the Company will centralize and streamline a number of its manufacturing support and R&D positions. Overall, this reduction in force will result in the elimination of approximately 240 positions in North America. The foregoing description is qualified in its entirety by reference to the Company's Press Release dated January 26, 2005, a copy of which is attached hereto as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release dated January 26, 2005. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 26, 2005 INTEGRATED DEVICE TECHNOLOGY, INC. By: /s/ Clyde R. Hosein ---------------------------------- Clyde R. Hosein Vice President and Chief Financial Officer (duly authorized officer) EX-99.1 2 a4808489ex991.txt EXHIBIT 99.1 Exhibit 99.1 IDT Reports Earnings for the Third Quarter of Fiscal Year 2005; Company reports $0.06 Non GAAP EPS, $0.03 GAAP EPS on Revenue of $95.7 Million; Announces Restructuring Activity SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 26, 2005--IDT(TM) (Integrated Device Technology, Inc.)(Nasdaq:IDTI), a leading communications IC company, today announced its results for the quarter ended January 2, 2005, its third quarter of fiscal 2005. The Company also disclosed details of restructuring efforts designed to reduce manufacturing and operating costs. Revenues for the third fiscal quarter were $95.7 million, a decrease of 1 percent compared to the second quarter of fiscal 2005 and an increase of 9.8 percent from the third quarter of fiscal 2004. On a non-GAAP basis, net income for the third fiscal quarter was $6.3 million, or $0.06 per diluted share, compared to net income of $9.5 million, or $0.09 per diluted share, in the second quarter of fiscal 2005 and net income of $4.0 million, or $0.04 per diluted share, for the same quarter one year ago. Including certain costs, charges and gains in accordance with GAAP, the Company reported net income of $3.3 million, or $0.03 per diluted share, in the third quarter of fiscal 2005 compared to net income of $8.9 million, or $0.08 per diluted share, in the second quarter of fiscal 2005. On a GAAP basis, the Company reported net income of $2.3 million, or $0.02 per diluted share, for the third quarter of fiscal 2004. The second fiscal quarter of 2005 GAAP results include a $1.6 million gain on the sale of assets related to discontinued wafer operations in Salinas, Calif. Further information, including a detailed reconciliation of non-GAAP to GAAP results, is provided in the financial tables of this release. Also, as previously announced in October 2004, the IDT Board of Directors authorized the repurchase of up to $50 million of its Common Stock on the open market. Through the date of this release, the Company has repurchased shares totaling approximately $24 million dollars. "As we anticipated, the December quarter was difficult," said Greg Lang, president and CEO of IDT. "However, our investments in new markets, notably PC motherboard and DIMM timing solutions, have helped to mitigate the effects of customer inventory issues and the softness in the wireless infrastructure market. Given the environment, we are pleased with last quarter's results and are implementing activities that will enable us to further strengthen our financial performance." Profitability Measures In response to the current business environment, IDT began a restructuring program designed to reduce manufacturing and operating costs in order to improve profitability. These measures include the consolidation of the Company's Northern California operations, including Salinas operations, into its new San Jose-based corporate headquarters, enabling an estimated $4 million annual operating-cost savings. In addition, IDT is centralizing and otherwise streamlining a number of manufacturing support, sales, IT and R&D positions. Overall, this reduction in force will result in the elimination of approximately 240 positions in North America, with roughly 50 percent implemented as of today, while the balance will be transitioned over the next few quarters. In time, the combined effects of these measures are projected to save approximately $5 to $6 million per quarter through the Company's non-GAAP P&L. Approximately 20 percent of these cost savings are in R&D, with the bulk of the savings split between cost-of-sales and SG&A. The Company projects one-time costs of approximately $17 million associated with this consolidation and restructuring, which will be implemented over the next twelve months. "While the actions we are taking are quite painful, we need to ensure that our resources are dedicated to those areas that will best drive a healthy future for our company," said Lang. "We remain optimistic about the communications infrastructure markets, our portfolio of leading-edge products, and our ability to produce strong financial results over the next year." 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. PST on Wednesday, January 26, 2005. The Webcast replay will be available after 5 p.m. PST on January 26 through February 17, 2005. A taped telephone replay of the conference call will be available on January 26, 2005 beginning at 6 p.m. PST by calling (800) 475-6701 or (320) 365-3844 and will be accessible until 11:59 p.m. PST on February 2, 2005. The access code is 764800. 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 September 26, 2004. IDT, Interprise 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 Nine Months Ended - ---------------------------------------------------------------------- Jan. 2, Sep. 26, Dec. 28, Jan. 2, Dec. 28, 2005 2004 2003 2005 2003 -------- -------- -------- --------- --------- Revenues $95,658 $96,671 $87,100 $293,636 $250,922 Cost of revenues 49,833 48,247 45,625 146,441 136,550 Restructuring and asset impairment 213 (1,585) - (1,581) - -------- -------- -------- --------- --------- Gross profit 45,612 50,009 41,475 148,776 114,372 -------- -------- -------- --------- --------- Operating expenses: Research and development 26,365 25,449 23,607 77,815 74,689 Selling, general and administrative 18,291 17,801 17,888 55,479 54,533 Acquired in-process research and development 29 - - 1,765 264 -------- -------- -------- --------- --------- Total operating expenses 44,685 43,250 41,495 135,059 129,486 -------- -------- -------- --------- --------- Operating income (loss) 927 6,759 (20) 13,717 (15,114) Interest expense (13) (26) (69) (86) (279) Gain (loss) on equity investments - - - (12,831) 3,151 Interest income and other, net 3,657 2,824 2,787 8,986 10,153 -------- -------- -------- --------- --------- Income (loss) before income taxes 4,571 9,557 2,698 9,786 (2,089) Provision (benefit) for income taxes 1,223 704 358 2,632 (827) -------- -------- -------- --------- --------- Net income (loss) $3,348 $8,853 $2,340 $7,154 $(1,262) ======== ======== ======== ========= ========= Net income (loss) per share: Basic $0.03 $0.08 $0.02 $0.07 $(0.01) Diluted $0.03 $0.08 $0.02 $0.07 $(0.01) Weighted average shares: Basic 105,806 106,144 104,915 105,992 104,332 Diluted 107,444 107,661 108,360 108,544 104,332 INTEGRATED DEVICE TECHNOLOGY, INC. NON-GAAP ADJUSTMENTS (Unaudited) (In thousands) Three Months Ended Nine Months Ended - ---------------------------------------------------------------------- Jan. 2, Sep. 26, Dec. 28, Jan. 2, Dec. 28, 2005 2004 2003 2005 2003 -------- -------- -------- -------- -------- Net income (loss) $3,348 $8,853 $2,340 $7,154 $(1,262) -------- -------- -------- -------- -------- Non-GAAP adjustments: Cost of goods sold: Restructuring charges(1) 322 - - 347 15 Asset Impairment(2) (109) (1,585) - (1,903) - Plant closure costs(2) 33 44 269 272 831 Amortization of acquisition-related intangibles(3) 1,626 1,313 603 3,953 1,194 Patent Settlement - - - (18) - Operating expenses: Acquired IPR&D(3) 29 - - 1,765 264 Plant closure costs(2) - - - - 36 Restructuring charges(1) 98 - 227 750 1,520 Amortization of acquisition- related intangibles(3) 421 364 517 1,323 1,453 Acquisition related costs(4) 507 494 - 1,593 - (Gain) Loss on equity investments(5) - - - 12,831 (3,151) Other income(6) - - 108 - (794) Taxes(6) (21) 18 (108) (31) (2,038) -------- -------- -------- -------- -------- Total Non-GAAP adjustments 2,906 648 1,616 20,882 (670) -------- -------- -------- -------- -------- Non-GAAP net income (loss) $6,254 $9,501 $3,956 $28,036 $(1,932) ======== ======== ======== ======== ======== (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 held for sale. (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 an impairment charge related to our investment in NetLogic in Q1 2005 and a gain on the sale of our investment in PMC Sierra in Q2 2004. (6) In Q1 and Q2 2004, we received non-recurring federal and state tax refunds 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 Nine Months Ended - ---------------------------------------------------------------------- Jan. 2, Sep. 26, Dec. 28, Jan. 2, Dec. 28, 2005 2004 2003 2005 2003 ---------- -------- -------- --------- --------- Revenues $95,658 $96,671 $87,100 $293,636 $250,922 Cost of Revenues 48,174 46,890 44,753 142,209 134,510 ---------- -------- -------- --------- --------- Gross profit 47,484 49,781 42,347 151,427 116,412 ---------- -------- -------- --------- --------- Operating expenses: Research and development 25,596 24,775 23,210 75,321 73,063 Selling, general and administrative 18,034 17,617 17,541 54,307 53,150 ---------- -------- -------- --------- --------- Total operating expenses 43,630 42,392 40,751 129,628 126,213 ---------- -------- -------- --------- --------- Operating income (loss) 3,854 7,389 1,596 21,799 (9,801) Interest expense (13) (26) (69) (86) (279) Interest income and other, net 3,657 2,824 2,895 8,986 9,359 ---------- -------- -------- --------- --------- Income (loss) before income taxes 7,498 10,187 4,422 30,699 (721) Provision for income taxes 1,244 686 466 2,663 1,211 ---------- -------- -------- --------- --------- Net income (loss) $6,254 $9,501 $3,956 $28,036 $(1,932) ========== ======== ======== ========= ========= Net income (loss) per share: Diluted $0.06 $0.09 $0.04 $0.26 $(0.02) Weighted average shares: Diluted 107,444 107,661 108,360 108,544 104,332 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) Jan. 2, Mar. 28, (In thousands) 2005 2004 - ---------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $247,392 $223,360 Short-term investments 342,374 384,854 Accounts receivable, net 50,115 53,091 Inventories 44,425 32,745 Prepaids and other current assets 11,431 12,101 --------- --------- Total current assets 695,737 706,151 Property, plant and equipment, net 105,455 108,424 Goodwill and other intangibles 86,558 52,784 Other assets 9,170 38,194 --------- --------- TOTAL ASSETS $896,920 $905,553 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $23,289 $20,190 Accrued compensation and related expenses 15,170 11,560 Deferred income on shipments to distributors 19,783 21,411 Income taxes payable 33,743 33,267 Other accrued liabilities 19,135 19,250 --------- --------- Total current liabilities 111,120 105,678 Long term liabilities 12,903 15,651 --------- --------- Total liablities 124,023 121,329 Stockholders' equity 772,897 784,224 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $896,920 $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 -----END PRIVACY-ENHANCED MESSAGE-----