IDT Announces Results for Third Quarter of Fiscal 2003
Thursday January 23, 4:12 pm ET
SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 23, 2003--IDT(TM) (Integrated Device Technology, Inc.)(Nasdaq:IDTI - News), a leading communications IC company, today announced results for the quarter ended December 29, 2002, its third quarter of fiscal 2003. Revenues for the third quarter were $79.0 million, a decrease of 14 percent compared to the second quarter of fiscal 2003 and a decrease of 1 percent compared to the quarter ended December 30, 2001. On a pro-forma basis, the net loss for the third fiscal quarter was $20.6 million ($0.20 loss per share), compared to net income of $1.0 million ($0.01 per diluted share) in the second quarter of fiscal 2003 and a net loss of $11.9 million ($0.11 loss per share) for the quarter one year ago.
Including certain costs, charges and gains in accordance with GAAP, the Company lost $26.3 million in the third quarter of fiscal 2003 ($0.25 loss per share) compared to a loss of $4.9 million in the second quarter of fiscal 2003 ($0.05 loss per share). One year ago, on a GAAP basis, the Company earned $214,000 ($0.00 per diluted share) for the third quarter of fiscal 2002. Further information, including a detailed reconciliation of pro-forma and GAAP results, is provided in the financial tables of this release.
"We experienced a difficult third fiscal quarter with declining revenue and a substantial reduction in inventories," said Greg Lang, IDT president and CEO. "While the business climate remains challenging, we believe that working down our inventory levels will put us in better financial shape as we enter fiscal 2004. Additionally, our strong balance sheet enables us to continue to invest in technology and product development, which has resulted in new design-win momentum."
Q3FY03 Highlights:
"We introduced new offerings in most of our product segments, including a new integrated communications processor that enhances overall system bandwidth in Enterprise and access markets, and new software development tools to accompany our growing line of classification and content inspection processors," said Thomas Brenner, vice president of worldwide marketing for IDT. "We continue to make strides in developing innovative products that address our customers' need for more complete intelligent packet-processing solutions."
Additional Highlights:
The IDT 128Kx72 (256Kx36) full-ternary network search engine was named one of the EDN Top 100 Products for 2002 and has won several designs at key communications customers. In its special report published in the December 12, 2002 issue, EDN praised the IDT device for "performing as many as 100 million database look-ups/sec" and supporting "searches as wide as 576 bits."
The Company is shipping the latest version of its complete classification processing software development kit (SDK) for the PAX.port family of classification and content inspection processors. PAX.works 3.4 is used to prototype, test, and debug complex classification, content inspection and regular expression matching that enables intelligent application management in next-generation networking equipment. PAX.works software can be used to program the IDT family of PAX.port classification processors, thereby reducing time to market development cycles for new equipment designs. IDT is also now demonstrating OC-48 classification on its PAX.ware 2500 evaluation system for its PAX.port 2500 classification and content inspection processor. The evaluation system allows next-generation system designers to evaluate full, wire-speed classification processing in network processing architectures featuring the PAX.port 2500 classification processor.
In November, IDT expanded its family of newly branded Interprise(TM) processors with the introduction of the RC32438 integrated communications processor. Building on the company's position as the leading provider of integrated processors for managed Layer-2 Ethernet switches, the new device delivers up to 250 MHz in performance and incorporates a DDR memory controller, a 32-bit version 2.2 PCI controller and two on-chip Ethernet interfaces to address the bandwidth-demanding requirements of communications applications within the Enterprise and access market segments, including managed Layer-2 and Layer-3 switches, gateways, wireless access points and VPN equipment.
IDT strengthened its position as a leading integrated processor supplier for the growing Asia Pacific communications infrastructure market with key design wins in China and Taiwan. Lite-On has selected the IDT RC32332 and RC32334 integrated communications processors for several of their managed local area network (LAN) switches and wireless routers for the Enterprise market.
The Company announced its TeraClock(TM) family of zero delay buffers and programmable skew devices that provide the industry's broadest range of translation capabilities between I/O standards as well as pin-to-pin compatibility for ease of migration between the zero delay buffer and programmable skew devices. The IDT TeraClock devices address design challenges by supporting the high-speed I/O standards required in next-generation communications applications such as network routers, wireless 3G base stations and storage area networks (SANs).
IDT introduced a portfolio of CODEC devices with the addition of a fully integrated 3.3-volt quad CODEC and ringing SLIC chip set. As the Company's first complete analog line-card solution, these devices provide a four-channel function for analog line termination, supervision, filtering and pulse code modulation (PCM) encoding of POTS subscriber lines, making them ideal for VoX systems in small-to-medium-sized enterprises and customer premises equipment (CPE). The IDT CODEC/SLIC chip set offers a glue-less interface between the CODEC and SLIC devices, minimizing the need for external components, resulting in conservation of board space and a reduction in overall system costs.
Investor Information
Investors can listen to a live or on-demand replay Webcast of the IDT quarterly financial conference call at www.idt.com. The live call begins at 1:30 p.m. PST on January 23, 2003. A taped replay of the Company's quarter-end conference call will also be available by calling 800/475-6701 (pass code is 670718) beginning at 5 p.m. PST on January 23, 2003 and will be accessible until 9 p.m. PST on January 30, 2003.
IDT stock is traded on the Nasdaq Stock Market® 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. The investor hotline is 408/654-6420.
About IDT
IDT enhances the global network with semiconductor solutions for communications companies that lead innovation and drive convergence in voice, data and wireless networks. IDT is focused on enhancing system bandwidth with communications-specific products including network search engines, classification and content inspection processors and integrated communications processors. The portfolio is also comprised of products optimized for communications applications, including telecom products, FIFOs, multi-ports, and clock management products. In addition, the product mix includes high-performance digital logic and high-speed SRAMs to meet the requirements of leading communications companies.
Headquartered in Santa Clara, Calif., the company employs approximately 3,200 people worldwide and has a wafer manufacturing facility in Oregon, and test and assembly facilities in the Philippines and Malaysia. Additional information about IDT is easily accessible at www.idt.com.
Forward-looking statements in this release involve a number of risks and uncertainties including, but not limited to, product demand, manufacturing capacity and costs, competition, pricing, patent and other intellectual property rights of third parties, timely development and supply of new products and manufacturing processes, availability of capital, cash flow and other risk factors detailed in the Company's Securities and Exchange Commission filings. Actual results may differ materially from the Company's projections.
Note to Editors: IDT, Interprise and TeraClock are trademarks and the IDT logo is a registered trademark 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
-------------------------------------------------- -------------------
Dec. 29, Sep. 29, Dec. 30, Dec. 29, Dec. 30,
2002 2002 2001 2002 2001
----------------------------- --------- ---------
Revenues $ 79,010 $ 92,252 $ 80,171 $263,074 $293,196
Cost of revenues 59,826 49,246 53,555 165,800 185,678
Restructuring
charges, asset
impairment and
other 1,010 -- 18,571 1,285 20,872
-------- -------- -------- -------- --------
Gross profit 18,174 43,006 8,045 95,989 86,646
-------- -------- -------- -------- --------
Operating expenses:
Research and
development 30,126 29,384 31,542 89,751 97,184
Selling, general
and administrative 21,827 19,862 20,176 62,115 65,280
Acquired in-process
research and
development 2,670 -- -- 2,670 16,000
Amortization of
intangibles 161 156 1,681 473 5,043
-------- -------- -------- -------- --------
Total operating
expenses 54,784 49,402 53,399 155,009 183,507
-------- -------- -------- -------- --------
Operating loss (36,610) (6,396) (45,354) (59,020) (96,861)
Interest expense (143) (129) (153) (403) (1,035)
Loss on equity
investments -- (6,557) 36,160 (6,557) 36,160
Interest income and
other, net 4,006 5,231 7,136 15,160 32,285
-------- -------- -------- -------- --------
Loss before
income taxes (32,747) (7,851) (2,211) (50,820) (29,451)
Benefit for
income taxes (6,424) (2,969) (2,425) (12,025) (3,239)
-------- -------- -------- -------- --------
Net income (loss) $(26,323) $ (4,882) $ 214 $(38,795) $(26,212)
======== ======== ======== ======== ========
Net income (loss)
per share:
Basic $ (0.25) $ (0.05) $ 0.00 $ (0.37) $ (0.25)
Diluted $ (0.25) $ (0.05) $ 0.00 $ (0.37) $ (0.25)
Weighted average
shares:
Basic 103,271 103,091 104,111 103,531 104,630
Diluted 103,271 103,091 107,680 103,531 104,630
INTEGRATED DEVICE TECHNOLOGY, INC.
PRO FORMA ADJUSTMENTS
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
-------------------------------------------------- -------------------
Dec. 29, Sep. 29, Dec. 30, Dec. 29, Dec. 30,
2002 2002 2001 2002 2001
--------- -------- --------- --------- ---------
Net income (loss) $(26,323) $(4,882) $ 214 $(38,795) $(26,212)
-------- ------- -------- -------- --------
Special items:
Cost of goods sold:
Restructuring
charges (1) 1,010 -- 1,138 1,285 3,439
Asset impairment (1) -- -- 17,433 -- 17,433
Other (3) 339 619 -- 4,320 --
Amortization of
acquisition-related
charges (2) 909 786 786 2,481 2,358
Operating expenses:
Acquired IPR&D (2) 2,670 -- -- 2,670 16,000
Other (3) 8 108 -- 376 --
Restructuring
charges (1) 868 -- 902 1,086 1,117
Amortization of
goodwill (2) -- -- 1,500 -- 4,500
Other acquisition-
related costs (2) 1,248 976 1,490 3,200 4,087
Losses (gains) on
equity investments (4) -- 6,557 (35,860) 6,557 (35,860)
Other income (5) -- -- -- -- (5,085)
Tax effects (1,285) (3,208) 539 (6,256) 1,053
-------- ------- -------- -------- --------
Total special items 5,767 5,838 (12,072) 15,719 9,042
-------- ------- -------- -------- --------
Pro forma net income
(loss) $(20,556) $ 956 $(11,858) $(23,076) $(17,170)
======== ======= ======== ======== ========
(1) Consists of costs, primarily severance, of restructuring actions
taken in Q1 2002, Q3 2002, Q1 2003 and Q3 2003. We also recorded
an asset impairment charge related to our Salinas, Calif. wafer
fabrication plant in Q3 2002.
(2) Costs relate to our acquisitions of Newave and Solidum in April
2001 and October 2002, respectively. Newave-related costs include
an IPR&D charge and amortization of contingent compensation,
stock-based compensation and intangible assets. Solidum-related
costs include an IPR&D charge and amortization of intangible
assets.
(3) Consists of costs related to the June 2002 closure of our Salinas
plant, including $3.0 million in retention bonuses for Q1 2003.
(4) The item for Q2 2003 consists of an other-than-temporary
impairment charge related to our equity investment in
PMC-Sierra Inc. (PMC). We sold all of our holdings in Monolithic
Systems Technology (MoSys) in Q3 2002 and recorded a pretax gain
of $35.7 million. We also sold a portion of our holdings in PMC in
Q3 2002 and recorded a pretax gain of $0.5 million.
(5) In Q2 2002, we exercised an option to purchase land. The land was
immediately sold at a pretax gain of $5.1 million.
INTEGRATED DEVICE TECHNOLOGY, INC.
PRO FORMA STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands,
except per share
data) Three Months Ended Nine Months Ended
-------------------------------------------------- -------------------
Dec. 29, Sep. 29, Dec. 30, Dec. 29, Dec. 30,
2002 2002 2001 2002 2001
----------------------------- --------- ---------
Revenues $ 79,010 $ 92,252 $ 80,171 $263,074 $293,196
Cost of revenues 58,578 47,841 52,769 158,999 183,320
-------- -------- -------- -------- --------
Gross profit 20,432 44,411 27,402 104,075 109,876
-------- -------- -------- -------- --------
Operating expenses:
Research and
development 28,839 28,456 29,842 86,456 93,305
Selling, general
and administrative 21,151 19,862 19,665 61,221 64,498
-------- -------- -------- -------- --------
Total operating
expenses 49,990 48,318 49,507 147,677 157,803
-------- -------- -------- -------- --------
Operating loss (29,558) (3,907) (22,105) (43,602) (47,927)
Interest expense (143) (129) (153) (403) (1,035)
Interest income and
other, net 4,006 5,231 7,436 15,160 27,500
-------- -------- -------- -------- --------
Income (loss) before
income taxes (25,695) 1,195 (14,822) (28,845) (21,462)
Provision (benefit)
for income taxes (5,139) 239 (2,964) (5,769) (4,292)
-------- -------- -------- -------- --------
Net income (loss) $(20,556) $ 956 $(11,858) $(23,076) $(17,170)
======== ======== ======== ======== ========
Net income (loss)
per share:
Diluted $ (0.20) $ 0.01 $ (0.11) $ (0.22) $ (0.16)
Weighted average
shares:
Diluted 103,271 104,508 104,111 103,531 104,630
Our pro forma results exclude acquisition-related charges and unusual
or infrequent expenses and benefits that are not directly related to
our ongoing operations. We believe that these pro forma results
provide useful information; however, our presentation of pro forma
results is not in accordance with GAAP and may not be comparable to
pro forma information provided by other companies. Pro forma
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)
Dec. 29, Mar. 31,
(In thousands) 2002 2002
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 169,299 $ 256,172
Short-term investments 401,880 418,228
Accounts receivable, net 38,786 40,067
Inventories 56,641 78,247
Deferred tax assets 72,492 74,874
Prepayments and other current assets 32,801 19,787
---------- ----------
Total current assets 771,899 887,375
Property, plant and equipment, net 239,426 221,499
Goodwill and other intangibles 61,836 57,281
Other assets 39,431 59,664
---------- ----------
TOTAL ASSETS $1,112,592 $1,225,819
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,334 $ 18,342
Accrued compensation and related expenses 14,214 14,068
Deferred income on shipments to distributors 20,096 36,443
Income taxes payable 10,390 21,863
Other accrued liabilities 21,143 29,173
---------- ----------
Total current liabilities 83,177 119,889
Other liabilities 36,136 51,221
---------- ----------
Total liabilities 119,313 171,110
Stockholders' equity 993,279 1,054,709
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,112,592 $1,225,819
========== ==========
--------------------------------------------------------------------------------
Contact:
Integrated Device Technology, Inc.
Diana Pailthorpe, 408/492-8210 (Corporate Communications)
diana.pailthorpe@idt.com
Investor Relations, 408/654-6420
ir@idt.com
--------------------------------------------------------------------------------
Source: Integrated Device Technology, Inc. |
