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) |
Exhibit No. | Description |
99.1 | Press Release Dated October 31, 2016 |
Dated: | October 31, 2016 | |
INTEGRATED DEVICE TECHNOLOGY, INC. | ||
By: | /S/ BRIAN C. WHITE | |
Brian C. White | ||
Vice President and Chief Financial Officer (duly authorized officer) |
Exhibit No. | Description |
99.1 | Press Release Dated October 31, 2016. |
Suzanne Schmidt IDT Investor Relations Phone: (415) 217-4962 E-mail: suzanne@blueshirtgroup.com | Daniel Aitken IDT Senior Director of Corporate Marketing and Communications Phone: (408) 574-6480 E-mail: daniel.aitken@idt.com |
• | IDT and IBM Introduced a high-performance computing solution for 5G and connected car “edge” computing networks that combines its RapidIO technology with IBM’s POWER8-based servers |
• | Taiwan-based Micro-Star INT’L CO., LTD. (MSI) selected IDT’s distributed-power architecture for two industrial compute boards. IDT’s power management ICs (PMICs) and proprietary distributed power unit (DPU) technology together deliver a solution with unparalleled flexibility and scalability. |
• | Diablo Technologies selected the IDT® DDR4 LRDIMM chipset as the preferred interface solution for its award-winning Memory1™ 128GB system memory module. |
• | ZTE Corporation, a major international provider of telecommunications, enterprise and consumer technology solutions for the mobile Internet, selected the new IDT® RapidIO 10xN interconnect semiconductors for its next generation of wireless base stations. |
• | IDT announced its new generation of RapidIO technology is interoperable Xilinx UltraScale™ FPGAs, enabling a key technology for global rollout of 5G and other advanced network systems |
• | Samsonite selected IDT’s P9038 wireless power transmitter, making IDT the exclusive IC provider of its first generation of wireless charging enabled consumer products. |
• | IDT has expanded its automotive capabilities through the TS 16949 certification of a second test and production facility. The company’s longstanding production facility in Penang, Malaysia passed the two-stage certification process for automotive backend manufacturing under the requirements of TS 16949, the International Standard for Automotive Quality Management Systems. The new Penang automotive backend production floor joins the IDT Automotive Center of Excellence of ZMD AG in Dresden, Germany, which has been successfully certified since 2004 as ZMDI, a company IDT acquired in December 2015. |
• | Revenue from continuing operations for the fiscal second quarter of 2017 was $184.1 million. This compared with $192.1 million reported last quarter, and $169.5 million reported in the same period one year ago. |
• | GAAP net income from continuing operations for the fiscal second quarter of 2017 was $24.6 million, or $0.18 per diluted share, versus GAAP net income from continuing operations of $20.9 million or $0.15 per diluted share last quarter, and GAAP net income from continuing operations of $42.4 million or $0.28 per diluted share in the same period one year ago. Fiscal second quarter GAAP results include $9.2 million in stock-based compensation, $10.8 million in acquisition and restructuring charges, $3.3 million in non-cash interest expense, $0.6 million in other income and $0.1 million in related tax effects. |
• | Non-GAAP net income for the fiscal second quarter of 2017 was $47.4 million or $0.34 per diluted share, compared with non-GAAP net income of $51.2 million or $0.36 per diluted share last quarter, and non-GAAP net income of $53.9 million or $0.35 per diluted share reported in the same period one year ago. |
• | GAAP gross profit from continuing operations for the fiscal second quarter of 2017 was $106.5 million, or 57.9 percent, compared with GAAP gross profit of $108.3 million or 56.4 percent last quarter, and $106.5 million, or 62.9 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal second quarter of 2017 was |
• | GAAP R&D expense for the fiscal second quarter of 2017 was $41.8 million, compared with GAAP R&D expense of $49.6 million last quarter, and $35.3 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal second quarter of 2017 was $35.3 million, compared with non-GAAP R&D expense of $37.7 million last quarter, and $31.5 million in the same period one year ago. |
• | GAAP SG&A expense for the fiscal second quarter of 2017 was $37.4 million, compared with GAAP SG&A expense of $38.8 million last quarter, and $29.2 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal second quarter of 2017 was $28.2 million, compared with non-GAAP SG&A expense of $28.3 million last quarter, and $23.5 million in the same period one year ago. |
• | Amortization of acquisition related intangibles, which include acquired intangibles such as purchased technology, patents, customer relationships, trademarks, backlog and non-compete agreements. |
• | Acquisition related costs such as legal, accounting and other professional or consulting fees directly related to an acquisition. |
• | Fair market value adjustment to acquired inventory sold. |
• | Severance and retention costs directly related to a restructuring action. |
• | Facility closure costs consist of ongoing costs associated with the exit of our leased and owned facilities. |
• | Gain on divestiture consists of gains recognized upon the strategic sale of business units. |
• | Assets impairments including accelerated depreciation of certain assets no longer in use. |
• | Stock based compensation expense. |
• | Compensation expense (benefit) - deferred compensation, consists of gains and losses on marketable equity securities related to our deferred compensation arrangements. |
• | Non-cash interest expense, consists of amortization of issuance cost and accretion of discount related to the convertible notes. |
• | Loss (gain) on deferred compensation plan securities represents the changes in the fair value of the assets in a separate trust that is invested in corporate owned life insurance under our deferred compensation plan. |
• | Tax effects of non-GAAP adjustments. Non-GAAP tax calculation is based on estimated cash tax expense and reserves. The Company forecasts its annual cash tax liability and allocates the tax to each quarter in proportion to earnings for that period. This approach is designed to enhance the ability of investors to understand the impact of the Company's tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP to non-GAAP adjustments, which may not reflect actual cash tax expense. |
• | Diluted weighted average shares non-GAAP adjustment, for purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the benefits of stock compensation expense attributable to future services not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury method. |
INTEGRATED DEVICE TECHNOLOGY, INC. | ||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
Oct. 2, | July 3 | Sept. 27, | Oct. 2, | Sept. 27, | ||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Revenues | $ | 184,059 | $ | 192,128 | $ | 169,498 | $ | 376,187 | $ | 330,405 | ||||||||||||
Cost of revenues | 77,527 | 83,779 | 62,952 | 161,306 | 124,625 | |||||||||||||||||
Gross profit | 106,532 | 108,349 | 106,546 | 214,881 | 205,780 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Research and development | 41,750 | 49,648 | 35,301 | 91,398 | 69,055 | |||||||||||||||||
Selling, general and administrative | 37,415 | 38,816 | 29,227 | 76,231 | 57,370 | |||||||||||||||||
Total operating expenses | 79,165 | 88,464 | 64,528 | 167,629 | 126,425 | |||||||||||||||||
Operating income | 27,367 | 19,885 | 42,018 | 47,252 | 79,355 | |||||||||||||||||
Interest and other income (expense), net | (2,597 | ) | (2,496 | ) | 1,016 | (5,093 | ) | 2,834 | ||||||||||||||
Income from continuing operations before income taxes | 24,770 | 17,389 | 43,034 | 42,159 | 82,189 | |||||||||||||||||
Provision for (benefit from) income taxes | 179 | (3,558 | ) | 611 | (3,379 | ) | 1,046 | |||||||||||||||
Net income from continuing operations | 24,591 | 20,947 | 42,423 | 45,538 | 81,143 | |||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||
Loss from discontinued operations | — | — | — | — | (547 | ) | ||||||||||||||||
Provision for income taxes | — | — | — | — | 15 | |||||||||||||||||
Net loss from discontinued operations | — | — | — | — | (562 | ) | ||||||||||||||||
Net income | $ | 24,591 | $ | 20,947 | $ | 42,423 | $ | 45,538 | $ | 80,581 | ||||||||||||
Basic net income per share - continuing operations | $ | 0.18 | $ | 0.16 | $ | 0.29 | $ | 0.34 | $ | 0.55 | ||||||||||||
Basic net loss per share - discontinued operations | — | — | — | — | — | |||||||||||||||||
Basic net income per share | $ | 0.18 | $ | 0.16 | $ | 0.29 | $ | 0.34 | $ | 0.55 | ||||||||||||
Diluted net income per share - continuing operations | $ | 0.18 | $ | 0.15 | $ | 0.28 | $ | 0.33 | $ | 0.53 | ||||||||||||
Diluted net loss per share - discontinued operations | — | — | — | — | — | |||||||||||||||||
Diluted net income per share | $ | 0.18 | $ | 0.15 | $ | 0.28 | $ | 0.33 | $ | 0.53 | ||||||||||||
Weighted average shares: | ||||||||||||||||||||||
Basic | 134,186 | 133,934 | 147,724 | 134,059 | 148,058 | |||||||||||||||||
Diluted | 137,206 | 138,109 | 152,152 | 137,698 | 152,997 |
INTEGRATED DEVICE TECHNOLOGY, INC. | ||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
Oct. 2, | July 3 | Sept. 27, | Oct. 2, | Sept. 27, | ||||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
GAAP net income from continuing operations | $ | 24,591 | $ | 20,947 | $ | 42,423 | $ | 45,538 | $ | 81,143 | ||||||||||||
GAAP diluted net income per share - continuing operations | $ | 0.18 | $ | 0.15 | $ | 0.28 | $ | 0.33 | $ | 0.53 | ||||||||||||
Acquisition related: | ||||||||||||||||||||||
Amortization of acquisition related intangibles | 5,246 | 5,775 | 751 | 11,021 | 1,583 | |||||||||||||||||
Acquisition related fees | 72 | — | — | 72 | — | |||||||||||||||||
Amortization of fair market value adjustment to inventory | 520 | 2,395 | — | 2,915 | — | |||||||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | 5,002 | 11,918 | 1,894 | 16,920 | 2,815 | |||||||||||||||||
Facility closure costs | — | 19 | 154 | 19 | 154 | |||||||||||||||||
Assets impairment and other | — | 870 | — | 870 | 147 | |||||||||||||||||
Other: | ||||||||||||||||||||||
Stock-based compensation expense | 9,181 | 10,515 | 8,581 | 19,696 | 16,447 | |||||||||||||||||
Non-cash interest expense | 3,309 | 3,268 | — | 6,577 | — | |||||||||||||||||
Gain from divestiture | — | — | (25 | ) | — | (76 | ) | |||||||||||||||
Asset impairment and other | (652 | ) | — | (28 | ) | (652 | ) | (353 | ) | |||||||||||||
Compensation expense (benefit) - deferred compensation plan | 435 | 402 | (817 | ) | 837 | (702 | ) | |||||||||||||||
Loss (gain) on deferred compensation plan securities | (417 | ) | (392 | ) | 827 | (809 | ) | 719 | ||||||||||||||
Non-GAAP tax adjustments | 147 | (4,540 | ) | 182 | (4,393 | ) | 265 | |||||||||||||||
Non-GAAP net income from continuing operations | $ | 47,434 | $ | 51,177 | $ | 53,942 | $ | 98,611 | $ | 102,142 | ||||||||||||
GAAP weighted average shares - diluted | 137,206 | 138,109 | 152,152 | 137,698 | 152,997 | |||||||||||||||||
Non-GAAP adjustment | 2,581 | 2,287 | 2,600 | 2,313 | 2,149 | |||||||||||||||||
Non-GAAP weighted average shares - diluted | 139,787 | 140,396 | 154,752 | 140,011 | 155,146 | |||||||||||||||||
Non-GAAP diluted net income per share - continuing operations | $ | 0.34 | $ | 0.36 | $ | 0.35 | $ | 0.70 | $ | 0.66 | ||||||||||||
GAAP gross profit | $ | 106,532 | $ | 108,349 | $ | 106,546 | $ | 214,881 | $ | 205,780 | ||||||||||||
Acquisition related: | ||||||||||||||||||||||
Amortization of acquisition related intangibles | 3,108 | 3,415 | 617 | 6,523 | 1,234 | |||||||||||||||||
Amortization of fair market value adjustment to inventory | 520 | 2,395 | — | 2,915 | — | |||||||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | 257 | 2,430 | 6 | 2,687 | 188 | |||||||||||||||||
Assets impairment and other | — | 336 | — | 336 | 147 | |||||||||||||||||
Other: | ||||||||||||||||||||||
Compensation expense (benefit) - deferred compensation plan | 159 | 148 | (299 | ) | 307 | (257 | ) | |||||||||||||||
Stock-based compensation expense | 802 | 779 | 645 | 1,581 | 1,327 | |||||||||||||||||
Non-GAAP gross profit | $ | 111,378 | $ | 117,852 | $ | 107,515 | $ | 229,230 | $ | 208,419 |
GAAP R&D expenses: | $ | 41,750 | $ | 49,648 | $ | 35,301 | $ | 91,398 | $ | 69,055 | ||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | (3,074 | ) | (7,334 | ) | (681 | ) | (10,408 | ) | (1,028 | ) | ||||||||||||
Facility closure costs | — | — | (154 | ) | — | (154 | ) | |||||||||||||||
Assets impairment and other | — | (107 | ) | 261 | (107 | ) | 261 | |||||||||||||||
Other: | ||||||||||||||||||||||
Compensation benefit (expense) - deferred compensation plan | (170 | ) | (157 | ) | 319 | (327 | ) | 274 | ||||||||||||||
Stock-based compensation expense | (3,191 | ) | (4,308 | ) | (3,543 | ) | (7,499 | ) | (7,175 | ) | ||||||||||||
Non-GAAP R&D expenses | $ | 35,315 | $ | 37,742 | $ | 31,503 | $ | 73,057 | $ | 61,233 | ||||||||||||
GAAP SG&A expenses: | $ | 37,415 | $ | 38,816 | $ | 29,227 | $ | 76,231 | $ | 57,370 | ||||||||||||
Acquisition related: | ||||||||||||||||||||||
Amortization of acquisition related intangibles | (2,138 | ) | (2,360 | ) | (134 | ) | (4,498 | ) | (349 | ) | ||||||||||||
Acquisition related fees | (72 | ) | — | — | (72 | ) | — | |||||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | (1,671 | ) | (2,154 | ) | (1,207 | ) | (3,825 | ) | (1,599 | ) | ||||||||||||
Facility closure costs | — | (18 | ) | — | (18 | ) | — | |||||||||||||||
Assets impairment and other | — | (428 | ) | (233 | ) | (428 | ) | (233 | ) | |||||||||||||
Other: | ||||||||||||||||||||||
Compensation benefit (expense) - deferred compensation plan | (106 | ) | (97 | ) | 199 | (203 | ) | 171 | ||||||||||||||
Stock-based compensation expense | (5,188 | ) | (5,428 | ) | (4,393 | ) | (10,616 | ) | (7,945 | ) | ||||||||||||
Non-GAAP SG&A expenses | $ | 28,240 | $ | 28,331 | $ | 23,459 | $ | 56,571 | $ | 47,415 | ||||||||||||
GAAP interest and other income (expense), net | $ | (2,597 | ) | $ | (2,496 | ) | $ | 1,016 | $ | (5,093 | ) | $ | 2,834 | |||||||||
Non-cash interest expense | 3,309 | 3,268 | — | 6,577 | — | |||||||||||||||||
Gain from divestiture | — | — | (25 | ) | — | (76 | ) | |||||||||||||||
Loss (gain) on deferred compensation plan securities | (417 | ) | (393 | ) | 827 | (809 | ) | 719 | ||||||||||||||
Assets impairment and other | (652 | ) | — | — | (652 | ) | (325 | ) | ||||||||||||||
Non-GAAP interest and other income (expense), net | $ | (357 | ) | $ | 379 | $ | 1,818 | $ | 23 | $ | 3,152 | |||||||||||
GAAP provision for (benefit from) income taxes - continuing operations | $ | 179 | $ | (3,558 | ) | $ | 611 | $ | (3,379 | ) | $ | 1,046 | ||||||||||
Non-GAAP tax adjustments | (147 | ) | 4,540 | (182 | ) | 4,393 | (265 | ) | ||||||||||||||
Non-GAAP provision for income taxes - continuing operations | $ | 32 | $ | 982 | $ | 429 | $ | 1,014 | $ | 781 | ||||||||||||
(a) Refer to the accompanying “Notes to Non-GAAP Financial Measures” for a detailed discussion of Management’s use of non-GAAP financial measures. |
INTEGRATED DEVICE TECHNOLOGY, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited) | |||||||||
Oct. 2, | April 3 | ||||||||
(In thousands) | 2016 | 2016 | |||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 113,872 | $ | 203,231 | |||||
Short-term investments | 260,362 | 151,233 | |||||||
Accounts receivable, net | 82,028 | 74,386 | |||||||
Inventories | 44,035 | 54,243 | |||||||
Prepaid and other current assets | 15,374 | 15,008 | |||||||
Assets held for sale | 4,045 | — | |||||||
Total current assets | 519,716 | 498,101 | |||||||
Property, plant and equipment, net | 75,415 | 73,877 | |||||||
Goodwill | 306,925 | 305,733 | |||||||
Other intangible assets, net | 117,186 | 127,761 | |||||||
Deferred non-current tax assets | 84,892 | 60,929 | |||||||
Other assets | 31,942 | 32,788 | |||||||
TOTAL ASSETS | $ | 1,136,076 | $ | 1,099,189 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 33,340 | $ | 39,858 | |||||
Accrued compensation and related expenses | 25,094 | 45,269 | |||||||
Deferred income on shipments to distributors | 7,225 | 7,006 | |||||||
Other accrued liabilities | 30,084 | 14,974 | |||||||
Liabilities held for sale | 2,663 | — | |||||||
Total current liabilities | 98,406 | 107,107 | |||||||
Deferred tax liabilities | 15,003 | 19,712 | |||||||
Convertible notes | 278,798 | 272,221 | |||||||
Other long-term obligations | 21,436 | 23,454 | |||||||
Total liabilities | 413,643 | 422,494 | |||||||
Stockholders' equity | 722,433 | 676,695 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,136,076 | $ | 1,099,189 |