-----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, MDmbP2uH1wfIKKiWGOQhaiC3gaSphcmP0rj/EAc5pqNA2nd7wbg6fjqYb/Uc1Lm5 IGE3E38fZuR7T5eKEGP81g== 0001157523-06-000731.txt : 20060126 0001157523-06-000731.hdr.sgml : 20060126 20060126162115 ACCESSION NUMBER: 0001157523-06-000731 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060126 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060126 DATE AS OF CHANGE: 20060126 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: 0403 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12695 FILM NUMBER: 06553862 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 a5065654.txt INTEGRATED DEVICE TECHNOLOGY, INC., 8-K 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 January 26, 2006 Date of Report (Date of earliest event reported) ----------- Integrated Device Technology, Inc. (Exact name of registrant as specified in charter) ----------- Delaware 0-12695 94-2669985 (State of Incorporation) (Commission (IRS Employer File Number) 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)) 1 Item 2.02. 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 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, 2006, Integrated Device Technology, Inc. (the "Company") announced its results of operations and financial condition as of and for the quarter ended January 1, 2006 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, in addition to acquisition related charges, including our merger with Integrated Circuit Systems, Inc., the results for the quarter ended January 1, 2006 also exclude tax expense attributable to expected repatriation of offshore cash in connection with the Homeland Investment Act, restructuring related expenses, including the closure of our Philippines manufacturing facility, and gains realized on the sale of assets held in connection with the earlier closure of our Salinas manufacturing facility. For the quarter ended October 2, 2005, we also excluded costs related to the consolidation of our Northern California facilities. 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 foregoing description is qualified in its entirety by reference to the Company's Press Release dated January 26, 2006, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. 2 Item 9.01 Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release dated January 26, 2006. 3 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, 2006 INTEGRATED DEVICE TECHNOLOGY, INC. By: /s/ Clyde R. Hosein -------------------------------------- Clyde R. Hosein Vice President and Chief Financial Officer (duly authorized officer) 4 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated January 26, 2006. 5 EX-99.1 2 a5065654ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 IDT Reports Fiscal Q3 2006 Results; Revenue Growth and EPS at High End of Company's Forecast SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 26, 2006--IDT(TM) (Integrated Device Technology, Inc.)(Nasdaq: IDTI), a vital semiconductor solutions supplier, today announced results for the third quarter of its 2006 fiscal year, ended January 1, 2006. The Company's revenues and non-GAAP EPS for the quarter were at the high end of the Company's projections provided on the second quarter earnings call on November 8, 2005. These results reflect the first full quarter of results for the combined company following the Company's merger with Integrated Circuit Systems (ICS), as well as growth in the Company's end markets. The following highlights the Company's financial performance on both a GAAP and non-GAAP basis. The GAAP results include certain costs, charges and gains 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 third quarter were $160.8 million, an increase of 52 percent compared to the second quarter of fiscal 2006, and an increase of 68 percent from the third quarter of fiscal 2005. -- Non-GAAP net income for the third quarter of fiscal 2006 was $27.8 million or $0.14 per diluted share, compared to net income of $11.2 million or $0.09 per diluted share in the second quarter of fiscal 2006. Non-GAAP net income for the third quarter of fiscal 2005 was $6.3 million, or $0.06 per diluted share. -- GAAP net loss for the third quarter was $42.3 million, or a loss of $0.21 per diluted share. This compares to a net loss of $19.5 million, or a loss of $0.16 per diluted share, for the second quarter of fiscal 2006. GAAP net income for the third quarter of fiscal 2005 was $3.3 million, or $0.03 per diluted share. Third quarter of fiscal 2006 GAAP results include $64.8 million of acquisition related charges (including $56.8 million in intangibles amortization), $4.1 million in taxes related to foreign earnings repatriation under the Homeland Investment Act (HIA) and $0.6 million in restructuring related charges. For further description and a complete reconciliation of GAAP to non-GAAP adjustments, please refer to the attached tables. "We are very pleased with our financial performance for the third quarter," said Greg Lang, president and CEO of IDT. "Strong customer demand for our products serving the PC and communications end markets, particularly in the enterprise sub-segment, enabled us to deliver results at the high end of our forecast. Our integration of ICS is on track and we are beginning to realize synergies relating to this merger. Our profitability in the third quarter reflects the benefits of the merger integration as well as our own restructuring 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. PST on January 26, 2006. The webcast replay will be available after 5 p.m. PST on January 26 through February 2, 2006. Investors can also listen to the live call at 1:30 p.m. PST January 26, 2006 by calling (888) 423-3271 or (612) 332-0530. The conference call replay will be available after 5 p.m. PST on January 26 through 11:59 p.m. PST on February 2, 2006 at (800) 475-6701 or (320) 365-3844. The access code is 811507. 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 October 2, 2005. 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 Nine Months Ended - ---------------------------------------------------------------------- Jan. 1, Oct. 2, Jan. 2, Jan. 1, Jan. 2, 2006 (a) 2005 (a) 2005 2006 (a) 2005 --------- --------- -------- --------- --------- Revenues $160,792 $105,689 $95,658 $360,319 $293,636 Cost of revenues 115,358 67,129 49,833 234,083 146,441 Restructuring and Asset Impairment (164) 2,821 213 2,206 (1,581) --------- --------- -------- --------- --------- Gross profit 45,598 35,739 45,612 124,030 148,776 --------- --------- -------- --------- --------- Operating expenses: Research and development 36,229 28,081 26,365 91,766 77,815 Selling, general and administrative 47,844 25,657 18,291 92,562 55,479 Acquired in-process research and development (200) 2,500 29 2,300 1,765 --------- --------- -------- --------- --------- Total operating expenses 83,873 56,238 44,685 186,628 135,059 --------- --------- -------- --------- --------- Operating income (loss) (38,275) (20,499) 927 (62,598) 13,717 Interest expense (61) (63) (13) (135) (86) Other-than-temporary impairment of investments -- -- -- (1,705) (12,831) Interest income and other, net 3,005 3,167 3,657 10,074 8,986 --------- --------- -------- --------- --------- Income (loss) before income taxes (35,331) (17,395) 4,571 (54,364) 9,786 Provision for income taxes 6,957 2,065 1,223 804 2,632 --------- --------- -------- --------- --------- Net income (loss) $(42,288) $(19,460) $ 3,348 $(55,168) $ 7,154 ========= ========= ======== ========= ========= Net income (loss) per share: Basic $ (0.21) $ (0.16) $ 0.03 $ (0.38) $ 0.07 Diluted $ (0.21) $ (0.16) $ 0.03 $ (0.38) $ 0.07 Weighted average shares: Basic 199,568 124,507 105,806 143,516 105,992 Diluted 199,568 124,507 107,444 143,516 108,544 (a) The results of operations include the results of operations of ICS from September 16, 2005, the date of acquisition. INTEGRATED DEVICE TECHNOLOGY, INC. NON-GAAP ADJUSTMENTS (Unaudited) (In thousands) Three Months Ended Nine Months Ended - ---------------------------------------------------------------------- Jan. 1, Oct. 2, Jan. 2, Jan. 1, Jan. 2, 2006 (a) 2005 (a) 2005 2006 (a) 2005 ---------- --------- ------- --------- -------- Net income (loss) $(42,288) $(19,460) $3,348 $(55,168) $7,154 ---------- --------- ------- --------- -------- Non-GAAP adjustments: ICS Merger Related: Cost of goods sold: Amortization of acquisition related intangibles (1) 30,148 6,301 -- 36,449 -- Inventory FMV write-up (1) 3,507 4,799 -- 8,306 -- Restructuring charges (2) 4 278 -- 282 -- Acquisition related costs (3) 848 64 -- 912 -- Operating and Other Expenses: Acquired IPR&D (1) (200) 2,500 -- 2,300 -- Amortization of acquisition related intangibles (1) 20,702 3,885 -- 24,587 -- Restructuring charges (2) 719 168 -- 887 -- Acquisition related costs (3) 664 (19) -- 645 -- Loss on short- term investments (4) -- 892 -- 2,597 IDT Restructuring Related: Cost of goods sold: Restructuring charges (5) 30 119 322 667 347 Facility closure costs (6) 481 3,580 33 6,313 272 Operating and Other Expenses: Restructuring charges (5) 169 287 98 1,211 750 Facility closure costs (6) (154) 4,722 -- 5,270 -- Other: Cost of goods sold: Asset impairment (7) (168) (92) (109) (824) (1,903) Amortization of acquisition- related intangibles (8) 4,403 1,842 1,626 7,652 3,953 Inventory FMV write-up (12) 2,032 142 -- 2,174 -- Acquisition related costs (9) 62 -- -- 62 -- Patent settlement -- -- -- -- (18) Operating and Other Expenses: Amortization of acquisition- related intangibles (8) 1,502 419 421 2,243 1,323 Acquired IPR&D (8) -- -- 29 -- 1,765 Acquisition related costs (9) 449 462 507 1,409 1,593 Loss on equity investments (10) -- -- -- 12,831 Taxes (11) 4,897 342 (21) (3,473) (31) ---------- --------- ------- --------- -------- Total Non-GAAP adjustments 70,095 30,691 2,906 99,669 20,882 ---------- --------- ------- --------- -------- Non-GAAP net income $27,807 $11,231 $6,254 $44,501 $28,036 ========== ========= ======= ========= ======== (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, including amortization of acquired intangible assets, the FMV adjustment of acquired inventory sold, and acquired in-process research and development. (2) Consists of restructuring costs related to our acquisition of ICS in Q2 2006, primarily composed of severance costs for IDT employees related to the elimination of duplicative functions. (3) Consists of additional depreciation and above market rental costs resulting from purchase accounting and retention costs incurred in connection with the acquisition of ICS in Q2 2006. (4) Consists of other-than-temporary impairment charges and losses on the sale of securities incurred primarily as a result of our acquisition of ICS. (5) Consists of costs related to restructuring actions, all of which consist of severance and retention. (6) Q3 2006 consists of costs associated with the exit of our leased facilities in Santa Clara, severance and retention payments associated with the closure of our Manila manufacturing plant and gains realized on the sale of equipment related to our Manila facility. Q3 2005 consists of costs associated with the closure of our Salinas facility. (7) Consists of gains realized on the sale of assets related to our Salinas facility, which were previously impaired. (8) Consists of costs related to our acquisition of assets from Freescale in Q2 2006, 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. Others include only amortization of intangible assets. (9) Q3 2006 consists of retention costs incurred in connection with our acquisition of Zettacom in Q1 2005, such as retention earned by former employees, rent payments for the former Zettacom facility, and transitional services provided. Q2 2006 and the nine months ended January 1, 2006 include retention costs associated with our acquisition of Freescale assets in Q2 2006 and Zettacom. The nine months ended January 2, 2005 include only costs associated with our acquisition of Zettacom. (10) Consists of an impairment charge taken in Q1 2005 related to our investment in NetLogic. (11) In addition to the tax effects of non-GAAP adjustments, Q3 2006 and Q2 2006 include tax associated with the repatriation of cash under the Homeland Investment Act (HIA) and Q3 2006 includes a book to 2005 tax return adjustment. (12) Consists of the FMV adjustment of acquired inventory sold in conjunction with our acquisition of Freescale assets in Q2 2006. INTEGRATED DEVICE TECHNOLOGY, INC. NON-GAAP STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended - ---------------------------------------------------------------------- Jan. 1, Oct. 2, Jan. 2, Jan. 1, Jan. 2, 2006 (a) 2005 (a) 2005 2006 (a) 2005 ---------- --------- -------- --------- --------- Revenues $160,792 $105,689 $95,658 $360,319 $293,636 Cost of Revenues 73,847 52,917 48,174 174,296 142,209 ---------- --------- -------- --------- --------- Gross profit 86,945 52,772 47,484 186,023 151,427 ---------- --------- -------- --------- --------- Operating expenses: Research and development 34,252 25,283 25,596 85,731 75,321 Selling, general and administrative 25,431 18,531 18,034 62,006 54,307 ---------- --------- -------- --------- --------- Total operating expenses 59,683 43,814 43,630 147,737 129,628 ---------- --------- -------- --------- --------- Operating income 27,262 8,958 3,854 38,286 21,799 Interest expense (61) (63) (13) (135) (86) Interest income and other, net 2,666 4,059 3,657 10,627 8,986 ---------- --------- -------- --------- --------- Income before income taxes 29,867 12,954 7,498 48,778 30,699 Provision for income taxes 2,060 1,723 1,244 4,277 2,663 ---------- --------- -------- --------- --------- Net income $ 27,807 $ 11,231 $ 6,254 $ 44,501 $ 28,036 ========== ========= ======== ========= ========= Net income per share: Diluted $ 0.14 $ 0.09 $ 0.06 $ 0.31 $ 0.26 Weighted average shares: Diluted 200,441 125,057 107,444 144,495 108,544 (a) The results of operations include the results of operations of ICS from September 16, 2005, the date of acquisition. Non-GAAP results exclude acquisition-related charges, and other expenses and benefits that management believes are not directly reflective of 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. 1, Oct. 2, Apr. 3, (In thousands) 2006 2005 2005 - ---------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $204,752 $177,535 $188,761 Short-term investments 84,708 90,193 392,472 Accounts receivable, net 92,750 79,972 52,948 Inventories, net 59,667 60,920 37,331 Prepaid and other current assets 22,449 13,490 11,292 ---------------------------------- Total current assets 464,326 422,110 682,804 Property, plant and equipment, net 120,383 136,007 124,570 Goodwill 1,006,348 998,369 55,523 Acquisition-related intangibles 482,926 545,720 29,812 Other assets 20,133 19,681 9,431 ---------------------------------- TOTAL ASSETS $2,094,116 $2,121,887 $902,140 ================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $43,072 $38,187 $18,726 Accrued compensation and related expenses 18,426 17,193 15,293 Deferred income on shipments to distributors 30,469 20,274 19,478 Income taxes payable 29,549 23,446 25,722 Other accrued liabilities 28,857 34,602 20,206 ---------------------------------- Total current liabilities 150,373 133,702 99,425 Deferred tax liabilities 18,540 18,265 4,709 Long term liabilities 15,339 17,163 10,890 ---------------------------------- Total liabilities 184,252 169,130 115,024 Stockholders' equity 1,909,864 1,952,757 787,116 ---------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,094,116 $2,121,887 $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 -----END PRIVACY-ENHANCED MESSAGE-----