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 January 30, 2017 |
Dated: | January 30, 2017 | |
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 January 30, 2017. |
Financial Contact: | Press Contact: | |
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’s ZMOD3250 gas sensor was selected as a CES 2017 Innovation Awards Honoree, receiving high marks from judges in the embedded technologies product category. The ZMOD3250 family is a miniscule but highly sensitive gas sensor product line that can detect air quality (total VOC) as well as selectively identify several volatile organic compounds, including formaldehyde and ethanol. |
• | Scosche selected IDT’s 15W Qi-certified wireless power transmitter for its new MagicMount™ Charge Wireless Charging Magnetic Mount for fast-charging mobile devices. The company launched the industry’s highest efficiency 15W turnkey wireless power reference kit, delivering the same ease of use and support that have become the hallmark of its two prior wireless power kits. With this latest kit, IDT now presents an off-the-shelf library of turnkey wireless power solutions covering the range of one to 15 watts. |
• | At the recent Consumer Electronics Show (CES) in Las Vegas, IDT demonstrated 17 in-car wireless charging applications via a joint development with Eggtronic offering OEMs an easy path to an elegant built-in wireless power |
• | IDT showcased its wireless power and environmental sensing products at the IDTechEx Wearable USA Conference in November, drawing from a broad portfolio of environmental sensing products that measure ambient light, UVA, UVB, body temperature, object temperature, various gases, and humidity. In addition, the company demonstrated its wireless power receivers and transmitters, already in consumer products throughout the world. |
• | IDT introduced an RF switch that supports the DOCSIS 3.1 standard for cable networking equipment. The Data Over Cable Service Interface Specification (DOCSIS) is an international standard for the transfer of data via high-bandwidth cable modems. |
• | IDT broadened its 1.8V RF timing family with dual-channel buffer devices delivering high performance and low power, making them ideal for wireless infrastructure and other communications equipment. |
• | IDT introduced a broadband SPST absorptive RF switch built on its constant impedance technology, making it valuable for 4G/LTE-Advanced base stations, portable wireless applications, point-to-point, public safety infrastructure, and test equipment. |
• | IDT and Mosys announced a collaboration to deliver 100 Gbps base station, data center and mobile edge computing solutions. Leveraging IDT’s RapidIO technology these solutions will deliver ultra-low latency and high-bandwidth in both wireless and wireline 100G, 400G, and terabit network infrastructure applications, such as mobile edge computing, high-performance computing, and data analytics. |
• | IDT introduced the industry’s first integrated power management IC (PMIC) developed for enterprise DDR4 NVDIMM applications. The IDT P8800 enables NVDIMM solutions to efficiently scale to greater density, reliability and performance. |
• | The company’s products for the automotive and industrial markets received much interest at CES. In addition to sensors for the automotive industry, IDT demonstrated the integration of wireless power chips for automotive applications and was awarded the CES Innovation Honoree Award (Jan 2017) for the IDT Multi-Purpose Gas Sensor. |
• | IDT announced it has signed a global franchise agreement with Future Electronics, IDT’s newest distributor of products through its offices in 44 countries spanning the globe. |
• | IDT appointed Selena Loh LaCroix, an executive with Egon Zehnder, to the Board of Directors, bringing global experience in organizational excellence, cyber security, and compliance. |
• | Revenue from continuing operations for the fiscal third quarter of 2017 was $176.4 million. This compared with $184.1 million reported last quarter, and $177.6 million reported in the same period one year ago. |
• | GAAP net income from continuing operations for the fiscal third quarter of 2017 was $33.4 million, or $0.24 per diluted share, versus GAAP net income from continuing operations of $24.6 million or $0.18 per diluted share last quarter, and GAAP net income from continuing operations of $32.5 million or $0.22 per diluted share in the same period one year ago. Fiscal third quarter GAAP results include $9.9 million in stock-based compensation, $6.1 million in acquisition and restructuring charges, $3.3 million in non-cash interest expense, $0.7 million in other income and $4.5 million in related tax effects. |
• | Non-GAAP net income for the fiscal third quarter of 2017 was $49.0 million or $0.35 per diluted share, compared with non-GAAP net income of $47.4 million or $0.34 per diluted share last quarter, and non-GAAP net income of $52.2 million or $0.35 per diluted share reported in the same period one year ago. |
• | GAAP gross profit from continuing operations for the fiscal third quarter of 2017 was $104.1 million, or 59.0 percent, compared with GAAP gross profit of $106.5 million or 57.9 percent last quarter, and $107.9 million, or 60.8 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2017 was $108.7 million, or 61.6 percent, compared with non-GAAP gross profit of $111.4 million, or 60.5 percent last quarter, and $111.1 million, or 62.6 percent, reported in the same period one year ago. |
• | GAAP R&D expense for the fiscal third quarter of 2017 was $38.2 million, compared with GAAP R&D expense of $41.8 million last quarter, and $38.4 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2017 was $33.5 million, compared with non-GAAP R&D expense of $35.3 million last quarter, and $33.8 million in the same period one year ago. |
• | GAAP SG&A expense for the fiscal third quarter of 2017 was $32.7 million, compared with GAAP SG&A expense of $37.4 million last quarter, and $38.9 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2017 was $25.7 million, compared with non-GAAP SG&A expense of $28.2 million last quarter, and $25.1 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 | Nine Months Ended | |||||||||||||||||||||
Jan. 1 | Oct. 2 | Jan. 3 | Jan. 1 | Jan. 3 | ||||||||||||||||||
2017 | 2016 | 2016 | 2017 | 2016 | ||||||||||||||||||
Revenues | $ | 176,358 | $ | 184,059 | $ | 177,610 | $ | 552,545 | $ | 508,015 | ||||||||||||
Cost of revenues | 72,273 | 77,527 | 69,699 | 233,579 | 194,324 | |||||||||||||||||
Gross profit | 104,085 | 106,532 | 107,911 | 318,966 | 313,691 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Research and development | 38,173 | 41,750 | 38,429 | 129,571 | 107,484 | |||||||||||||||||
Selling, general and administrative | 32,737 | 37,415 | 38,851 | 108,968 | 96,221 | |||||||||||||||||
Total operating expenses | 70,910 | 79,165 | 77,280 | 238,539 | 203,705 | |||||||||||||||||
Operating income | 33,175 | 27,367 | 30,631 | 80,427 | 109,986 | |||||||||||||||||
Interest and other income (expense), net | (3,810 | ) | (2,597 | ) | (2,008 | ) | (8,903 | ) | 826 | |||||||||||||
Income from continuing operations before income taxes | 29,365 | 24,770 | 28,623 | 71,524 | 110,812 | |||||||||||||||||
Provision for (benefit from) income taxes | (4,072 | ) | 179 | (3,922 | ) | (7,451 | ) | (2,876 | ) | |||||||||||||
Net income from continuing operations | 33,437 | 24,591 | 32,545 | 78,975 | 113,688 | |||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||
Gain from divestiture | 1,385 | — | — | 1,385 | — | |||||||||||||||||
Loss from discontinued operations | — | — | — | — | (547 | ) | ||||||||||||||||
Provision for income taxes | 87 | — | — | 87 | 15 | |||||||||||||||||
Net income (loss) from discontinued operations | 1,298 | — | — | 1,298 | (562 | ) | ||||||||||||||||
Net income | $ | 34,735 | $ | 24,591 | $ | 32,545 | $ | 80,273 | $ | 113,126 | ||||||||||||
Basic net income per share - continuing operations | $ | 0.25 | $ | 0.18 | $ | 0.23 | $ | 0.59 | $ | 0.78 | ||||||||||||
Basic net loss per share - discontinued operations | 0.01 | — | — | 0.01 | — | |||||||||||||||||
Basic net income per share | $ | 0.26 | $ | 0.18 | $ | 0.23 | $ | 0.60 | $ | 0.78 | ||||||||||||
Diluted net income per share - continuing operations | $ | 0.24 | $ | 0.18 | $ | 0.22 | $ | 0.57 | $ | 0.75 | ||||||||||||
Diluted net loss per share - discontinued operations | 0.01 | — | — | 0.01 | — | |||||||||||||||||
Diluted net income per share | $ | 0.25 | $ | 0.18 | $ | 0.22 | $ | 0.58 | $ | 0.75 | ||||||||||||
Weighted average shares: | ||||||||||||||||||||||
Basic | 133,846 | 134,186 | 140,411 | 133,987 | 145,382 | |||||||||||||||||
Diluted | 137,167 | 137,206 | 145,705 | 137,581 | 150,614 |
INTEGRATED DEVICE TECHNOLOGY, INC. | ||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
Jan. 1 | Oct. 2 | Jan. 3 | Jan. 1 | Jan. 3 | ||||||||||||||||||
2017 | 2016 | 2016 | 2017 | 2016 | ||||||||||||||||||
GAAP net income from continuing operations | $ | 33,437 | $ | 24,591 | $ | 32,545 | $ | 78,975 | $ | 113,688 | ||||||||||||
GAAP diluted net income per share - continuing operations | $ | 0.24 | $ | 0.18 | $ | 0.22 | $ | 0.57 | $ | 0.75 | ||||||||||||
Acquisition related: | ||||||||||||||||||||||
Amortization of acquisition related intangibles | 5,557 | 5,246 | 2,732 | 16,578 | 4,315 | |||||||||||||||||
Acquisition related fees | — | 72 | 2,113 | 72 | 2,346 | |||||||||||||||||
Acquisition related foreign exchange loss | — | — | 536 | — | 536 | |||||||||||||||||
Amortization of fair market value adjustment to inventory | 757 | 520 | 890 | 3,672 | 890 | |||||||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | (216 | ) | 5,002 | 6,091 | 16,723 | 9,060 | ||||||||||||||||
Assets impairment and other | — | — | — | 870 | 147 | |||||||||||||||||
Other: | ||||||||||||||||||||||
Stock-based compensation expense | 9,912 | 9,181 | 9,462 | 29,608 | 25,909 | |||||||||||||||||
Non-cash interest expense | 3,360 | 3,309 | 2,164 | 9,936 | 2,164 | |||||||||||||||||
Loan prepayment penalty | — | — | 164 | — | 164 | |||||||||||||||||
Loss (gain) from divestiture | 710 | — | (22 | ) | 710 | (98 | ) | |||||||||||||||
Asset impairment and other | — | (652 | ) | — | (652 | ) | (586 | ) | ||||||||||||||
Compensation expense (benefit) - deferred compensation plan | 262 | 435 | 366 | 1,100 | (336 | ) | ||||||||||||||||
Loss (gain) on deferred compensation plan securities | (249 | ) | (417 | ) | (363 | ) | (1,058 | ) | 356 | |||||||||||||
Non-GAAP tax adjustments | (4,527 | ) | 147 | (4,506 | ) | (8,920 | ) | (4,242 | ) | |||||||||||||
Non-GAAP net income from continuing operations | $ | 49,003 | $ | 47,434 | $ | 52,172 | $ | 147,614 | $ | 154,313 | ||||||||||||
GAAP weighted average shares - diluted | 137,167 | 137,206 | 145,705 | 137,581 | 150,614 | |||||||||||||||||
Non-GAAP adjustment | 2,006 | 2,581 | 1,920 | 2,168 | 2,057 | |||||||||||||||||
Non-GAAP weighted average shares - diluted | 139,173 | 139,787 | 147,625 | 139,749 | 152,671 | |||||||||||||||||
Non-GAAP diluted net income per share - continuing operations | $ | 0.35 | $ | 0.34 | $ | 0.35 | $ | 1.06 | $ | 1.01 | ||||||||||||
GAAP gross profit | $ | 104,085 | $ | 106,532 | $ | 107,911 | $ | 318,966 | $ | 313,691 | ||||||||||||
Acquisition related: | ||||||||||||||||||||||
Amortization of acquisition related intangibles | 3,178 | 3,108 | 1,521 | 9,701 | 2,755 | |||||||||||||||||
Amortization of fair market value adjustment to inventory | 757 | 520 | 890 | 3,672 | 890 | |||||||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | (146 | ) | 257 | — | 2,541 | 188 | ||||||||||||||||
Assets impairment and other | — | — | — | 336 | 147 | |||||||||||||||||
Other: | ||||||||||||||||||||||
Compensation expense (benefit) - deferred compensation plan | 96 | 159 | 134 | 403 | (123 | ) | ||||||||||||||||
Stock-based compensation expense | 695 | 802 | 666 | 2,276 | 1,993 | |||||||||||||||||
Non-GAAP gross profit | $ | 108,665 | $ | 111,378 | $ | 111,122 | $ | 337,895 | $ | 319,541 |
GAAP R&D expenses: | $ | 38,173 | $ | 41,750 | $ | 38,429 | $ | 129,571 | $ | 107,484 | ||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | (225 | ) | (3,074 | ) | (66 | ) | (10,634 | ) | (1,248 | ) | ||||||||||||
Assets impairment and other | — | — | — | (106 | ) | 261 | ||||||||||||||||
Other: | ||||||||||||||||||||||
Compensation benefit (expense) - deferred compensation plan | (102 | ) | (170 | ) | (143 | ) | (429 | ) | 131 | |||||||||||||
Stock-based compensation expense | (4,342 | ) | (3,191 | ) | (4,433 | ) | (11,841 | ) | (11,608 | ) | ||||||||||||
Non-GAAP R&D expenses | $ | 33,504 | $ | 35,315 | $ | 33,787 | $ | 106,561 | $ | 95,020 | ||||||||||||
GAAP SG&A expenses: | $ | 32,737 | $ | 37,415 | $ | 38,851 | $ | 108,968 | $ | 96,221 | ||||||||||||
Acquisition related: | ||||||||||||||||||||||
Amortization of acquisition related intangibles | (2,379 | ) | (2,138 | ) | (1,211 | ) | (6,877 | ) | (1,560 | ) | ||||||||||||
Acquisition related fees | — | (72 | ) | (2,113 | ) | (72 | ) | (2,346 | ) | |||||||||||||
Restructuring related: | ||||||||||||||||||||||
Severance and retention costs | 295 | (1,671 | ) | (6,025 | ) | (3,548 | ) | (7,624 | ) | |||||||||||||
Assets impairment and other | — | — | — | (428 | ) | — | ||||||||||||||||
Other: | ||||||||||||||||||||||
Compensation benefit (expense) - deferred compensation plan | (64 | ) | (106 | ) | (89 | ) | (268 | ) | 82 | |||||||||||||
Stock-based compensation expense | (4,875 | ) | (5,188 | ) | (4,363 | ) | (15,491 | ) | (12,308 | ) | ||||||||||||
Non-GAAP SG&A expenses | $ | 25,714 | $ | 28,240 | $ | 25,050 | $ | 82,284 | $ | 72,465 | ||||||||||||
GAAP interest and other income (expense), net | $ | (3,810 | ) | $ | (2,597 | ) | $ | (2,008 | ) | $ | (8,903 | ) | $ | 826 | ||||||||
Non-cash interest expense | 3,360 | 3,309 | 2,164 | 9,936 | 2,164 | |||||||||||||||||
Loan prepayment penalty | — | — | 164 | — | 164 | |||||||||||||||||
Acquisition related foreign exchange loss | — | — | 536 | — | 536 | |||||||||||||||||
Loss (gain) from divestiture | 710 | — | (22 | ) | 710 | (98 | ) | |||||||||||||||
Loss (gain) on deferred compensation plan securities | (249 | ) | (417 | ) | (363 | ) | (1,058 | ) | 356 | |||||||||||||
Assets impairment and other | (652 | ) | — | (652 | ) | (325 | ) | |||||||||||||||
Non-GAAP interest and other income (expense), net | $ | 11 | $ | (357 | ) | $ | 471 | $ | 33 | $ | 3,623 | |||||||||||
GAAP provision for (benefit from) income taxes - continuing operations | $ | (4,072 | ) | $ | 179 | $ | (3,922 | ) | $ | (7,451 | ) | $ | (2,876 | ) | ||||||||
Non-GAAP tax adjustments | 4,527 | (147 | ) | 4,506 | 8,920 | 4,241 | ||||||||||||||||
Non-GAAP provision for income taxes - continuing operations | $ | 455 | $ | 32 | $ | 584 | $ | 1,469 | $ | 1,365 | ||||||||||||
(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) | |||||||||
Jan. 1 | April 3 | ||||||||
(In thousands) | 2017 | 2016 | |||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 117,325 | $ | 203,231 | |||||
Short-term investments | 277,139 | 151,233 | |||||||
Accounts receivable, net | 81,261 | 74,386 | |||||||
Inventories | 45,058 | 54,243 | |||||||
Prepaid and other current assets | 13,500 | 15,008 | |||||||
Total current assets | 534,283 | 498,101 | |||||||
Property, plant and equipment, net | 81,498 | 73,877 | |||||||
Goodwill | 306,925 | 305,733 | |||||||
Other intangible assets, net | 114,158 | 127,761 | |||||||
Deferred non-current tax assets | 83,578 | 60,929 | |||||||
Other assets | 38,215 | 32,788 | |||||||
TOTAL ASSETS | $ | 1,158,657 | $ | 1,099,189 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 40,592 | $ | 39,858 | |||||
Accrued compensation and related expenses | 23,734 | 45,269 | |||||||
Deferred income on shipments to distributors | 5,539 | 7,006 | |||||||
Other accrued liabilities | 24,099 | 14,974 | |||||||
Total current liabilities | 93,964 | 107,107 | |||||||
Deferred tax liabilities | 15,419 | 19,712 | |||||||
Convertible notes | 282,149 | 272,221 | |||||||
Other long-term obligations | 18,731 | 23,454 | |||||||
Total liabilities | 410,263 | 422,494 | |||||||
Stockholders' equity | 748,394 | 676,695 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,158,657 | $ | 1,099,189 |