EX-99.1 2 dex991.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS Unaudited Pro Forma Condensed Consolidated Statement of Operations

Exhibit 99.1

INTEGRATED DEVICE TECHNOLOGY, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

     Year Ended March 29, 2009  
(In thousands, except per share data)    As Reported     Pro Forma
Adjustments
    Pro Forma  

Revenues

   $ 663,245      $ (63,591 )a    $ 599,654   

Cost of revenues

     388,796        (38,692 )a      350,104   
                        

Gross profit

     274,449        (24,899     249,550   

Operating expenses:

      

Research and development

     161,192        (20,649 )a      140,543   

Selling, general and administrative

     125,810        (8,318 )a      117,492   

Acquired in-process research and development

     5,597        —          5,597   

Goodwill and acquisition-related intangible asset impairment

     1,025,685        (262 )a      1,025,423   
                        

Total operating expenses

     1,318,284        (29,229     1,289,055   

Operating loss

     (1,043,835     (4,330     (1,039,505

Other-than-temporary impairment loss on investments

     (3,000     —          (3,000

Interest expense

     (60     —          (60

Interest income and other, net

     1,308        —          1,308   

Loss before income taxes

     (1,045,587     (4,330     (1,041,257

Income taxes benefit

     (420     —          (420

Net loss

   $ (1,045,167   $ (4,330   $ (1,040,837

Basic net loss per share:

   $ (6.22     $ (6.19

Diluted net loss per share:

   $ (6.22     $ (6.19

Weighted average shares:

      

Basic

     168,114          168,114   

Diluted

     168,114          169,114   

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


INTEGRATED DEVICE TECHNOLOGY, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

 

     As of March 29, 2009  
(In thousands)    As Reported     Pro Forma
Adjustments
    Pro Forma  

Assets

      

Current assets:

      

Cash and cash equivalents

   $ 136,036      $ 100,000   $ 236,036   

Short-term investments

     160,037        —          160,037   

Accounts receivable

     54,894        —          54,894   

Inventories

     69,722        (8,125 )c      61,597   

Deferred tax assets

     1,696        —          1,696   

Prepayments and other current assets

     19,881        —          19,881   
                        

Total current assets

     442,266        91,875        534,141   

Property, plant and equipment, net

     71,561        (687 )d      70,874   

Goodwill

     89,404        (3,701 )e      85,703   

Acquisition-related intangibles, net

     50,509        —          50,509   

Other assets

     24,627        —          24,627   
                        

Total assets

   $ 678,367      $ 87,487      $ 765,854   
                        

Liabilities and stockholders’ equity

      

Current liabilities:

      

Accounts payable

   $ 25,837      $ —        $ 25,837   

Accrued compensation and related expenses

     18,820        —          18,820   

Deferred income on shipments to distributors

     16,538        —          16,538   

Income taxes payable

     457        —          457   

Other accrued liabilities

     21,206        1,746     22,952   
                        

Total current liabilities

     82,858        1,746        84,604   

Deferred tax liabilities

     3,220        —          3,220   

Long-term income tax payable

     20,907        —          20,907   

Other long-term obligations

     14,314        1,672     15,986   
                        

Total liabilities

     121,299        3,418        124,717   
                        

Stockholders’ equity:

      

Preferred stock; $.001 par value: 10,000 shares authorized; no shares issued

     —          —          —     

Common stock; $.001 par value: 350,000 shares authorized; 165,298 and 171,282 shares outstanding

     165        —          165   

Additional paid-in capital

     2,283,601        —          2,283,601   

Treasury stock (57,752 and 49,395 shares) at cost

     (777,847     —          (777,847

Retained earnings (accumulated deficit)

     (949,721     84,069     (865,652

Accumulated other comprehensive income

     870        —          870   
                        

Total stockholders’ equity

     557,068        84,069        641,137   
                        

Total liabilities and stockholders’ equity

   $ 678,367      $ 87,487      $ 765,854   
                        

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


INTEGRATED DEVICE TECHNOLOGY, INC.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1

Description of Transaction

On July 17, 2009, Integrated Device Technology, Inc. (“IDT” or the “Company”) completed the sale of certain assets related to its network search engine business (the “NWD Assets”) to NetLogic Microsystems, Inc. (“NetLogic” and together with IDT, the “Parties”), pursuant to an Asset Purchase Agreement by and between the Company and NetLogic dated April 30, 2009 (the “Agreement”). Upon closing of the transaction, NetLogic paid the Company $100 million in cash consideration, which included inventory valued at approximately $10 million (subject to adjustment) and assumed specified liabilities related to these assets. The Company’s NWD Assets are part of the Communication reportable segment.

Upon closing of the transaction, the Parties entered into an Intellectual Property Cross-License Agreement (the “Cross-License Agreement”) pursuant to which IDT granted to NetLogic and certain of its affiliates a license to use certain of IDT’s retained technology assets in connection with the NWD Assets in certain fields of use. In addition, NetLogic and its affiliates granted back to IDT and its affiliates a license to use certain of the technology assets included in the NWD Assets in certain fields of use. The licenses granted in the Cross-License Agreement are royalty-free and irrevocable.

In connection with the closing of the transaction, IDT entered into a noncompetition agreement with NetLogic related to the NWD Assets for a term of three years, subject to certain exceptions. In addition, the Company will provide certain transitional services and supplies to NetLogic for a limited time following the closing of the sale. Additional details regarding the transaction are provided in the related Current Report on Form 8-K previously filed by the Company on April 30, 2009 and Current Report on Form 8-K previously filed by the Company on May 6, 2009.

Note 2

Pro Forma Adjustments

The accompanying unaudited pro forma condensed consolidated financial statements have been prepared to illustrate the effect of the sale of the disposed NWD Assets on the Company’s historical results of operations and financial position. The accompanying unaudited pro forma condensed consolidated statements of operations and consolidated balance sheet are represented as if the transaction described in Note 1 had occurred on April 1, 2008 (the beginning of fiscal 2009). The unaudited pro forma condensed consolidated balance sheet is presented as if the transaction had occurred on March 29, 2009 (the end of fiscal 2009). The actual effect of the sale 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 29, 2009, 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 29, 2009.

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 disposed NWD Assets.

b. To record the cash consideration received from NetLogic.

c. To eliminate the inventory sold to NetLogic.

d. To eliminate the photomask sets transferred to NetLogic.

e. To eliminate the goodwill relating to the NWD Assets in accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”

f. To accrue for the estimated transaction costs associated with the sale and record short term portion of estimated deferred gain associated with the supply agreement with NetLogic.

g. To record the long term portion of estimated deferred gain associated with the supply agreement with NetLogic.


h. To record the preliminary gain on sale of NWD Assets as if the transaction had consummated on March 29, 2009:

 

(in thousands)       

Proceeds from sale

   $ 100,000   

Inventories sold to NetLogic

     (8,125

Goodwill

     (3,701

Photomask sets transferred to Netlogic

     (687

Accrued transaction costs

     (525

Estimated deferred gain related to the supply agreement with Netlogic

     (2,893
        

Gain on sale of NWD Assets

   $ 84,069