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

April 24, 2003

(Date of earliest event reported)

INTEGRATED CIRCUIT SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	0-19299	23-2000174
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

2435 Boulevard of the Generals Norristown, Pennsylvania	19403
(Address of principal executive offices)	(Zip Code)

(610) 630-5300

(Registrant’s telephone number including area code)

Not Applicable

(Former name former address and former fiscal year, if changed since last report)

Item 7. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits

99.1 Press Release issued by Integrated Circuit Systems, Inc. dated as of April 24, 2003

99.2 Supplemental Financial Information disclosed on April 24, 2003

Item 9. REGULATION FD DISCLOSURE

The information contained in the Item 9 of this Current Report is being furnished pursuant to “Item 12. Results of Operations and Financial Condition” of Form 8-K in accordance with interim procedures promulgated by the Securities and Exchange Commission in Release No. 34-47583 that were issued March 27, 2003. Accordingly, the information set forth in Item 12 below is incorporated by reference into this Item 9.

Item 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On April 24, 2003, Integrated Circuit Systems, Inc. issued a press release and held a broadly accessible conference call to discuss its financial results for the third fiscal quarter ended March 29, 2003. A copy of the press release is attached hereto as Exhibit 99.1. Exhibit 99.2 attached hereto sets forth financial information discussed on the conference call that was not included in the press release. The disclosure in this Current Report, including the exhibits hereto, of any financial information shall not constitute an admission that such information is material.

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in the Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the

Securities Act of 1933, as amended.

Use of Non-GAAP Financial Information

We have provided certain non-GAAP financial measures as additional information relating to our operating results for the quarter and nine months ended March 30, 2002. Our management believes that the presentation of these measures provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations. The non-GAAP financial information presented has been adjusted to exclude certain non-recurring special charges relating to our acquisition made in that period. These measures are not in accordance with, or an alternative to, generally accepted accounting principles and may be different from non-GAAP measures used by other companies.

Pursuant to the requirements of Regulation G, we have provided in the press release filed as Exhibit 99.1 hereto a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

2

SIGNATURES

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 thereunto duly authorized.

	INTEGRATED CIRCUIT SYSTEMS, INC.
Date: April 28, 2003	By:	/s/    JUSTINE F. LIEN
		Justine F. Lien Vice President and CFO

INTEGRATED CIRCUIT SYSTEMS, INC.

INDEX TO EXHIBITS FILED WITH THE CURRENT REPORT ON FORM 8-K

Exhibit	Description
99.1	Press Release issued by Integrated Circuit Systems, Inc. dated April 24, 2003.
99.2	Supplemental Financial Information

EX-99.1

Exhibit 99.1

[LOGO] ICS Integrated Circuit Systems, Inc.

Corporate Headquarters

2435 Boulevard of the Generals

Norristown, PA 19403

Phone: 610-630-5300

Fax: 610-630-5399

Web Site: http://www.icst.com

Company Contact:

Justine Lien, CFO

Integrated Circuit Systems, Inc.

610-630-5300

INTEGRATED CIRCUIT SYSTEMS, INC. ANNOUNCES FISCAL 2003

THIRD QUARTER RESULTS

48% Increase In Operating Income Over Prior Year Period

Norristown, PA – April 24, 2003 – Integrated Circuit Systems, (Nasdaq: ICST), today announced results for the fiscal third quarter ending March 29, 2003. As expected, revenue for the quarter was seasonally down after the Christmas quarter to $60.9 million, but shows a 14% growth year over year.

($Millions, except EPS)

	Q3 FY 2003		Q3 FY 2002(1)		Y-Y GROWTH		Q2 FY 2003		Q-Q GROWTH
Revenue	$	60.9	$	53.3	14	%	$	62.0	-2	%
Gross Margin	$	36.1	$	31.3	15	%	$	36.3	—
Operating Income	$	17.9	$	12.1	48	%	$	18.2	-2	%
Fully Diluted EPS	$	0.22	$	0.16	38	%	$	0.23	-4	%

(1) Q3FY2002 information (other than revenue) is presented on a pro forma basis to exclude certain special charges relating to an acquisition. See reconciliation to comparable GAAP financial measures below.

Revenues in seasonal businesses like PC and Digital Consumer were down on a quarterly basis, but show growth year over year. Communications and Military showed growth both quarterly and yearly.

Revenues

	Q3 FY2003 % of revenue		Q3 FY2002 % of revenue		Y-Y Growth		Q2 FY2003 % of revenue		Q-Q Growth
PC	48	%	47	%	15	%	48	%	-2	%
Digital Consumer	15	%	15	%	10	%	17	%	-15	%
Communications	28	%	30	%	10	%	27	%	3	%
Military	9	%	8	%	34	%	8	%	10	%

Gross margin increased during the quarter to 59.4% because of material cost savings due to design efficiencies. Operating income was 29.4% of revenue, same as the previous quarter but a 670 basis point increase year over year for the third quarter. In dollar terms, this represents a 48% increase year over year for the third quarter. This all resulted in an earnings per share of $0.22 for the quarter.

Hock Tan, CEO and President stated, “The results for the quarter show the continued penetration of ICS silicon timing devices into new markets like ADSL and registered memory modules, compared to the same period a year ago. Also we have focused on cost savings which is reflected in the gross margin.”

“Our business, timing solutions for the electronic world, has been about gaining share over older technologies, and we plan for that to continue in the communications and digital consumer markets. We will continue to invest in new products in new market applications and do so at the lowest cost in order to promote future growth.”

Third Quarter Fiscal 2003 Conference Call

ICS will host a conference call to discuss the earnings results for the third quarter of fiscal year 2003 at 9:00 a.m. EDT on Thursday, April 24, 2003. The company will also discuss its strategic direction and market conditions. Any interested parties are invited to listen to the conference call by dialing (877) 405-3430 or (706) 634-6397 for international callers. The call will also be broadcast via the Internet and can be accessed from ICS’s corporate website at the address www.icst.com.

About ICS

Integrated Circuit Systems, Inc. is a leader in the design, development and marketing of silicon timing devices for communications, networking, computing and digital multimedia applications. The Company is headquartered in Norristown, PA, with key facilities in San Jose, CA; Tempe, AZ; Worcester, MA and Singapore.

Statements included in this release, to the extent they are forward looking, involve a number of risks and uncertainties related to competitive factors, technological developments and market demand. Further information on these and other potential factors that could affect the Company’s financial results can be found in the Company’s Form 10-K filed on September 11, 2002.

INTEGRATED CIRCUIT SYSTEMS, Inc.

CONSOLIDATED OPERATING RESULTS

	Unaudited Three Months Ended						Unaudited Nine Months Ended
	Mar. 29, 2003		Mar. 30, 2002		Dec. 28, 2002		Mar. 29, 2003		Mar. 30, 2002
(In thousands)
REVENUES	$	60,853	$	53,262	$	62,026	$	180,668	$	127,529
Cost of sales		24,709		23,200		25,701		73,731		54,360
Gross Margin		36,144		30,062		36,325		106,937		73,169
Expenses:
Research and development		8,772		8,083		8,803		25,793		20,577
Selling, general and administrative		8,678		10,142		8,472		25,776		19,627
In process research and development		—		2,900		—		—		2,900
Deferred compensation		244		472		244		1,538		961
Amortization of intangibles		575		500		575		1,725		500
		18,269		22,097		18,094		54,832		44,565
Operating income		17,875		7,965		18,231		52,105		28,604
Other income (expense)		28		636		565		699		2,182
Income before income taxes		17,903		8,601		18,796		52,804		30,786
Income taxes		2,626		1,554		2,871		7,889		4,740
Net income	$	15,277	$	7,047	$	15,925	$	44,915	$	26,046
Basic EPS
Net income	$	0.22	$	0.11	$	0.24	$	0.66	$	0.39
Diluted EPS
Net income	$	0.22	$	0.10	$	0.23	$	0.64	$	0.37
Weighted Shares
Basic		68,155		66,533		67,711		67,733		66,380
Diluted		70,879		70,230		70,313		70,401		70,125
Supplemental operating results:
Capital expenditures	$	776	$	1,127	$	526	$	2,704	$	2,748
Depreciation and amortization	$	2,050	$	2,267	$	2,222	$	6,534	$	4,845

INTEGRATED CIRCUIT SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands, excluding Other Financial Data)	Mar 29, 2003			June 29, 2002
	(unaudited)
ASSETS
Current Assets:
Cash and marketable securities	$	110,428		$	110,521
Accounts receivable, net		34,481			28,741
Inventory, net		16,648			18,556
Deferred tax asset		7,733			6,791
Prepaid income taxes		1,151			1,181
Other current assets		6,093			13,705
Total current assets		176,534			179,495
Property and equipment, net		15,774			18,324
Long term investments		30,037			—
Investment in Maxtek Technologies		3,000			4,000
Intangibles		30,675			32,400
Goodwill		39,230			41,575
Other assets, net		357			598
Total assets	$	295,607		$	276,392
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term obligations	$	17,010		$	13,744
Accounts payable		14,970			11,416
Accrued expenses and other current liabilities		11,461			25,272
Total current liabilities		43,441			50,432
Long-term debt, less current portion		3,001			28,514
Deferred tax liability		10,842			12,876
Other long term liabilities		521			599
Total liabilities		57,805			92,421
Shareholders’ Equity:
Common stock		694			678
Additional paid in capital		238,813			227,531
Accumulated deficit		12,465			(32,451	)
Deferred compensation		(975	)		(3,988	)
Treasury stock		(13,195	)		(7,799	)
Total shareholders’ equity		237,802			183,971
Total liabilities and shareholders’ equity	$	295,607		$	276,392
OTHER FINANCIAL DATA:
Days sales outstanding		52			47
Inventory turns		5.7			4.7

INTEGRATED CIRCUIT SYSTEMS, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Supplemental Financial Information

Reconciliation of Gross Margin to Pro Forma Gross Margin

(in thousands)

(unaudited)

	Three Months Ended				Nine Months Ended
	Mar. 29, 2003		Mar. 30, 2002		Mar. 29, 2003		Mar. 30, 2002
Gross margin	$	36,144	$	30,062	$	106,937	$	73,169
Add: Inventory step up		—		1,252		—		1,252
Pro forma gross margin	$	36,144	$	31,314	$	106,937	$	74,421

Reconciliation of Operating Income to Pro Forma Operating Income

(in thousands)

(unaudited)

	Three Months Ended				Nine Months Ended
	Mar. 29, 2003		Mar. 30, 2002		Mar. 29, 2003		Mar. 30, 2002
Operating income	$	17,875	$	7,965	$	52,105	$	28,604
Add: Inventory step up		—		1,252		—		1,252
Add: In-process research and development expenses		—		2,900		—		2,900
Pro forma operating income	$	17,875	$	12,117	$	52,105	$	32,756

Reconciliation of Net Income to Pro Forma Net Income and Diluted Pro Forma EPS:

(in thousands)

(unaudited)

	Three Months Ended				Nine Months Ended
	Mar. 29, 2003		Mar. 30, 2002		Mar. 29, 2003		Mar. 30, 2002
Net income	$	15,277	$	7,047	$	44,915	$	26,046
Add: Inventory step up		—		1,252		—		1,252
Add: In-process research and development expenses		—		2,900		—		2,900
Pro forma net income	$	15,277	$	11,199	$	44,915	$	30,198
Diluted pro forma EPS	$	0.22	$	0.16	$	0.64	$	0.43
Diluted weighted shares		70,879		70,230		70,401		70,125

EX-99.2

EXHIBIT 99.2 SUPPLEMENTAL FINANCIAL INFORMATION

The following additional financial information was disclosed in our conference call on April 24, 2003:

Business Outlook:

Revenues are expected to be flat in our fourth quarter of fiscal 2003 in comparison to our third quarter. Gross margin is expected to increase by 30 basis points due to sales from higher margin products. In addition, we expect research and development expenses to increase due to strong design activities. Selling, general and administrative expenses should be relatively flat. We are expecting our earnings per share to be $0.22 in our June quarter.

Business Updates:

In the first week of April, past our quarter end, we divested an additional 1.0 million shares of our investment in Maxtek Technology Inc, a distributor in Taiwan. This reduces our ownership to 5%.