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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: flickerful who wrote (5772)	1/16/1998 10:41:00 PM
From: srvhap	Read Replies (1) \| Respond to of 11555

Flickerful - thanks for the Lehman Report - BTW what does flickerful mean. For those who don't download the link so kindly provided by flickerful lehman.com Headline: Integrated Dev. Tech: IDTI 1/14 Post Close EPS at $0.03 Author: M. A. Gumport, CFA 1(212)526-5368/T. Berg -5276 Rating: 2 Company: IDTI Country: EPS CUS Industry: SEMICO Ticker : IDTI Rank: 2-Outpeform Price : $11 7/16 52wk Range: $15 1/2 -9 Price Target: $16 Today's Date : 01/15/98 Fiscal Year : MAR ------------------------------------------------------------------------------ EPS 1997 1998 1999 2000 QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr. 1st: 0.11A 0.02A 0.02A 0.10E 0.06E 0.25E 0.25E 2nd: -0.13A@ 0.03A@ 0.03A@ 0.13E 0.09E 0.30E 0.30E 3rd: -0.55A@ 0.00E 0.03A 0.17E 0.15E 0.30E 0.30E 4th: 0.03A@ 0.03E 0.03E 0.20E 0.20E 0.35E 0.35E ------------------------------------------------------------------------------ Year:$ -0.54A@ $ 0.08E $ 0.11E $ 0.60E $ 0.50E $ 1.20E $ 1.20E Street Est.: $ 0.10E $ 0.10E $ 0.72E $ 0.72E $ -.-- $ -.-- @-Includes: FY2Q97 $-0.08 inventory write down, FY3Q97 $-0.48 restructuring, FY4Q97 $+0.01 nonrecurring, FY2Q98 $0.01 after tax net of bad debt reversal, foreign exchange loss and charges related to marketing of C6 mpu. ------------------------------------------------------------------------------ Revenue (1997) : $537.2 Mil. Proj. 5yr EPS Grth : 6.0 % Return On Equity : -5.9 % Dividend Yield : 0.0% Shares Outstanding* : 89.5 Mil. Book/Price to Book: $8.06; 1.42x Mkt Capitalization : 1023.7 Mil. P/E FY98; FY99 : 104.0x; 19.1x Net Cash per Share* : $2.22 Convertible : Yes Disclosure(s) : G,C, A Includes convertible as equity ------------------------------------------------------------------------------ * IDTI REPORTS POST CLOSE 1/14 DEC. FY3Q98 EPS $0.03; INCLUDES $0.02 1-TIME GAIN; SLIGHTLY ABOVE TARGET; PROJECTIONS MAINTAINED. ***************************************************************************** 10/14 POST CLOSE IDTI REPORTED EPS OF $0.03 VS. OUR TARGET OF $0.00; NONRECURRING ADDED $0.02. Vs our targets, sales 0.3% above Sept. FY2Q98 were $1.8 mil. short (-1.2%) and EBITD $-2.1 mil. (-6.4%). Gross margin (GM) at 38.1% was 0.1 points above target (each margin point impacts quarterly EPS by $0.01), and op. expense ratio at 37.2% was 0.9% higher than our target. A recovery on outstanding litigation added $0.02 to EPS and was principally responsible for reported results above our target (lower than anticipated depreciation charges also were a slight benefit). EXPECT A SLIGHT POSITIVE REACTION FROM CURRENT RESULTS. Obviously, results around break-even hardly support the current valuation. But consensus anticipated a slight loss. Management indicated book-to-bill is 1.00, 5% sales growth in the current quarter is likely unless Asia-Pacific turns into a world slowdown. IDTI is concerned memory prices are in jeopardy given currency fluctuations, but THE CURRENT TENOR OF BUSINESS OVERALL IS OK. LONG TERM STORY MAY NOT EXCITE INVESTORS YET: FY99 CONSENSUS SEEMS HIGH (WE ARE FINE-TUNING OUR PROJECTIONS DOWN). IDTI is focused on profitability and is working to move during the next year to a model of 45% gross margin (now 38%), 11.5% SG&A (now 15.5%), and 17.5% R&D (now 21.7%), goals which we believe are achievable. A CONSERVATIVE INTERPRETATION OF IDTI'S MODEL IS SUPPORTIVE OF A $0.50 FY99 ESTIMATE (OLD: $0.60), AND CONSENSUS IS HIGH AT $0.72. WE ARE MAINTAINING OUR $1.20 FY00 ESTIMATE. EXPECT INVESTOR INTEREST TO STEADILY RISE: KEY STORY IS DIVERSIFICATION, AND THE FOUNDATION FOR THAT PROGRAM IS FIRMLY IN PLACE. Besides a good position IDTI Page 2 as a high end memory manufacturer, the key IDTI story is diversification into high margin businesses. This diversification program is already well advanced. For the moment, it is a negative (start up operations probably cost $0.06 in EPS for FY3Q98). But we expect diversification to be the driving force allowing IDTI to grow in excess of 20% in the upcoming year with improved margins. THE NEXT KEY NEWS WITH REGARD TO THIS PROGRAM IS 1/19 WHEN IDTI'S CLEAR LOGIC SUBSIDIARY INTRODUCES PARTS AIMED AT REPLACING ALTR'S-$32 7/16-NR; IN MARCH IDTI'S X86 PROCESSOR MOVES INTO VOLUME; IN APRIL, A GRAPHICS ACCELERATOR IS INTRODUCED; IDTI ALSO IS INTRODUCING SPECIALTY MEMORIES FOR ATM SWITCHES. WE BELIEVE THIS PORTFOLIO OF PRODUCTS WILL BE VERY WELL RECEIVED AS THE YEAR ADVANCES, AND WE ARE MAINTAINING OUR $16 1 YEAR TARGET. ------12/29/96--- -------12/28/97------------------ IDTI FY3Q98 ----------------- -LB EST Actual------------ Vs. -$Mil.- -Ratio-- -$Mil.-- -$Mil.-- -Ratio--- Est. Sales (ratio: % ch.) $ 131.0 -30.5 % $ 146.0 $ 144.2 10.1 % $ -1.8 SRAM $ 43.3 -52.2 $ 47.0 $ 47.6 10.1 % Specialty Memory $ 41.3 -12.3 $ 54.0 $ 50.5 22.2 % Logic $ 26.2 -18.3 $ 29.0 $ 27.4 4.6 % RISC $ 19.6 -4.2 $ 15.0 $ 17.5 -11.1 % DRAM $ 0.6 NM $ 0.0 $ 0.0 NM Centaur (X86) $ 0.0 --.- $ 1.0 $ 1.3 NM CGS (ratio: % of sales)-1 $( 53.0) ( 40.5)% $( 60.0) $( 59.7) ( 41.4)% R&D (ratio: % of sales) $( 38.6) ( 29.5)% $( 31.0) $( 31.3) ( 21.7)% SG&A (ratio: % of sales) $( 19.8) ( 15.1)% $( 22.0) $( 22.3) ( 15.5)% EBITD (ratio: margin) $ 19.6 14.9 % $ 33.0 $ 30.9 21.4 % $ -2.1 Dep. (ratio: % of sales)-e$( 26.7) ( 20.4)% $( 30.5) $( 29.5) ( 20.5)% Int. (ratio: % of sales) $( 1.4) ( 1.2)% $( 1.7) $( 0.4) ( 0.2)% Nonrec. (r:% of sales)-1,3$( 54.9) ( 41.9)% $ 0.0 $ 2.3 1.6 % Pretax Inc.(ratio: margin)$( 63.5) ( 48.5)% $ 0.8 $ 3.3 2.3 % Tax (ratio: tax rate) $ 20.6 32.4 % $( 0.6) $( 0.9) ( 28.0)% Net Inc. (ratio: margin) $( 42.9) ( 32.8)% $ 0.2 $ 2.4 1.7 % EPS (ratio: % ch.)-Basic $( 0.55) NM $ 0.00 $ 0.03 105.4 % EPS (r: % ch.)-Diluted $( 0.55) NM $ 0.00 $ 0.03 105.4 % Shares (ratio: %ch.)-2 78.5 -3.5 % 83.5 83.6 -2.1 % NOTES: 1) FY3Q97 Other: $-45.2 mil. write-off, $-3.9 mil. CGS reallocation, $-1.9 mil. R&D reallocation, $-1.9 mil. SG&A reallocation, $-2.0 mil. minority investment write-off. 2) Shares for FY97 are basic (due to loss) and shares for FY98 are diluted. 3) FY3Q98 litigation settlement. ....