IDT Posts Pro-forma Profit for Second Quarter of Fiscal 2003.Business Editors SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif.--(BUSINESS WIRE)--Oct. 17, 2002 IDT IDT Integrated Device Technology, Inc. (Santa Clara, CA, USA) IDT I Don't Think IDT Identity Theft IDT Interrupt Descriptor Table IDT Integrated DNA Technologies IDT Inactive Duty Training IDT Instructional Design & Technology (TM) (Integrated Device Technology IDT (NASDAQ: IDTI) was founded in 1980 as a semiconductor vendor. Employing approximately 2500 people worldwide, headquartered in San Jose, California and operating a fab in Hillsboro, Oregon, the company both designs and fabricates semiconductor components. , Inc.); (Nasdaq:IDTI IDTI Integrated Device Technology Inc ), a leading communications IC company, today announced results for the quarter ended September September: see month. 29, 2002, the second quarter of fiscal 2003. Revenues for the second quarter were $92.3 million, a slight increase compared to the first quarter of fiscal 2003 and a decrease of 5 percent from the quarter ended September 30, 2001. On a pro-forma basis, net income for the second fiscal quarter was $1.0 million ($0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), compared to a net loss of $3.5 million ($0.03 per diluted share) in the first quarter of fiscal 2003 and a net loss of $5.4 million ($0.05 per diluted share) for the quarter one year ago. Including certain costs, charges and gains in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , the Company lost $4.9 million in the second quarter of fiscal 2003 ($0.05 per diluted share) compared to a loss of $7.6 million in the first quarter of fiscal 2003 ($0.07 per diluted share). One year ago, on a GAAP basis, the Company recorded a net loss of $4.9 million ($0.05 per diluted share) for the second quarter of fiscal 2002. Further information, including a detailed reconciliation of pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma and GAAP results, is provided in the financial tables of this release. "We generated a pro-forma profit for the first time in six quarters and are pleased with the improvement made in earnings," said Jerry Taylor Jerry Taylor (born 1963 or 1964) is a senior fellow at the Cato Institute where he researches environmental policy. He holds a Bachelor of Arts degree in political science from the University of Iowa. , IDT's chief executive officer. "While we met our expectations this quarter, the end-markets we serve continue to experience challenging conditions. This economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. is proving to be longer and more severe than almost anyone initially anticipated. However, IDT is financially strong and well-positioned to sustain long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth and success once the markets improve." Q2FY03 Highlights: "During the second quarter, IDT made significant progress toward its goal of delivering solutions that address intelligent packet processing," said Greg GREG Great Egg Harbor National Scenic and Recreational River (US National Park Service) Lang Lang language LANG Louisiana Army National Guard Lang Langobardian (linguistics) LANG Los Angeles Newspaper Guild , IDT's president and CEO-elect. "In addition to the introduction of several new products, IDT also acquired Solidum Systems Solidum Systems was a fabless semiconductor company founded by Feliks Welfeld and Misha Nossik in Ottawa, Ontario Canada in 1997. It developed a series of rule-based network classification semiconductor devices. and added classification processors to its packet processing offerings. This acquisition combines the packet-processing strengths of two industry leaders and enables IDT to provide a complete Layer 2-7 classification solution." Additional Highlights: -- IDT delivered the industry's highest-density, highest-performance, full-ternary network search engine. IDT's 256Kx72 device currently operates at 100 million searches per second (MSPS), with a planned performance upgrade to 250 MSPS. This device extends IDT's family of pin- and software-compatible IP co-processors, offering designers the capability to seamlessly upgrade from 2-Mbit (32Kx72) through 18-Mbit (256Kx72) densities. -- IDT delivered the industry's first system-level architecture model for the Microengine Development Environment of the Intel(R) Internet Exchange Architecture Software Development Kit (IXA SDK) 3.0, which allows designers to fully evaluate and test packet-processing solutions in a pre-silicon simulation environment. The data- and cycle-accurate simulation model is offered as part of IDT's software development kit (SDK) that includes a comprehensive suite of software tools that aid designers' time to market, lower system cost, and increase system performance. -- IDT announced new versions of its RC32334 and RC32332 integrated communications processors, featuring performance capabilities of up to four times the PCI throughput when compared to the previous device revision. The latest product enhancements strengthen IDT's position as a leading supplier of integrated communications processors for managed Layer-2 Ethernet switches, and enable the Company to continue its focus on high-growth communications applications in the Enterprise market, including wireless access points, SOHO gateways and virtual private networks (VPNs). -- The Company extended its multi-port product offerings with the introduction of the industry's first 2.5-volt x8, x9, x16, and x18 synchronous and asynchronous dual-port devices and the industry's fastest and lowest-powered synchronous FourPort(TM) devices. The lower-voltage extension of IDT's existing dual-port family enables designers to cost-effectively support applications where the reduction of power consumption is critical, such as wireless base station transceivers and controllers in the mobile network. The new FourPort devices run at speeds up to 200 MHz with power consumption as low as 230mA, enabling customers to achieve a 40 percent increase in bandwidth relative to competing solutions. -- IDT shipped its one-millionth IP co-processor and one-millionth integrated communications processor during the second quarter. These milestones, reached within two years of entering these markets, demonstrate IDT's success and acceptance in these emerging areas. Investor Information Investors can listen to a live or on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front replay Webcast of IDT's quarterly financial conference call at www.idt.com. The live call begins at 1:30 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT on October October: see month. 17, 2002. A taped replay of the Company's quarter-end conference call will also be available by calling (800) 475-6701 (pass code is 655998) beginning at 5 p.m. PDT on October 17, 2002 and will be accessible until 9 p.m. PDT on October 24, 2002. IDT stock is traded on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. (R) under the symbol "IDTI." The Company is included in the S&P 1000, which is a combination of the S&P MidCap mid·cap adj. 1. Or or relating to corporations whose retained earnings and outstanding shares of common stock have a value between those of small cap companies and large cap corporations. 2. 400 and S&P SmallCap 600 Indices, as well as the Nasdaq-100 Index(R) (NDX NDX Index NDX Index (File Name Extension) NDX Northern Document Exchange NDX Index File ), which includes the largest non-financial companies on the Nasdaq Stock Market. Additional information about IDT is easily accessible at www.idt.com or on CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). by calling (800) 345-7015. The investor hotline 1. (company) Hotline - Hotline Communications Ltd.. 2. (messaging) Hotline - Hotline Connect. is (408) 654-6420. About IDT IDT enhances the global network with semiconductor solutions for communications companies Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. that lead innovation and drive convergence convergence Mathematical property of infinite series, integrals on unbounded regions, and certain sequences of numbers. An infinite series is convergent if the sum of its terms is finite. in voice, data and wireless networks. IDT is focused on enhancing system bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz with communications-specific products, including IP co-processors, integrated communications processors and telecom products. The portfolio is also comprised of key foundational products optimized for communications applications, including the industry's broadest selection of FIFOs, multi-ports, and clock management products. In addition, the product mix includes high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" digital logic and high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. SRAMs to meet the requirements of leading communications companies. Headquartered in Santa Clara, Calif., the Company employs approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3,400 people worldwide and has a wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. manufacturing facility in Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. , and test and assembly facilities in the Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. and Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. . Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. IDT and FourPort are trademarks and the IDT logo is a registered trademark of Integrated Device Technology, Inc. All other trademarks mentioned are the property of their respective owners.
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share data) Three Months Ended Six Months Ended
------------------------- -------------------
Sep. 29, Jun. 30, Sep. 30, Sep. 29, Sep. 30,
2002 2002 2001 2002 2001
------- ------- ------- -------- --------
Revenues $92,252 $91,812 $97,117 $184,064 $213,025
Cost of revenues 49,246 57,003 60,190 106,249 132,123
Restructuring charges,
asset impairment and
other -- -- -- -- 2,301
------- ------- ------- -------- --------
Gross profit 43,006 34,809 36,927 77,815 78,601
------- ------- ------- -------- --------
Operating expenses:
Research and
development 29,384 30,241 32,569 59,625 65,642
Selling, general and
administrative 19,862 20,426 21,136 40,288 45,104
Acquired in-process
research and
development -- -- -- -- 16,000
Amortization of
intangibles 156 156 1,681 312 3,362
------- ------- ------- -------- --------
Total operating
expenses 49,402 50,823 55,386 100,225 130,108
------- ------- ------- -------- --------
Operating loss (6,396) (16,014) (18,459) (22,410) (51,507)
Interest expense (129) (131) (227) (260) (882)
Loss on equity
investments (6,557) -- -- (6,557) --
Interest income and
other, net 5,231 5,923 13,420 11,154 25,149
------- ------- ------- -------- --------
Loss before income
taxes (7,851) (10,222) (5,266) (18,073) (27,240)
Benefit for income
taxes (2,969) (2,632) (329) (5,601) (814)
------- ------- ------- -------- --------
Net loss $(4,882) $(7,590) $(4,937) $(12,472) $(26,426)
======= ======= ======= ======== ========
Net loss per share:
Basic $(0.05) $(0.07) $(0.05) $(0.12) $(0.25)
Diluted $(0.05) $(0.07) $(0.05) $(0.12) $(0.25)
Weighted average
shares:
Basic 103,091 104,232 104,836 103,662 104,890
Diluted 103,091 104,232 104,836 103,662 104,890
INTEGRATED DEVICE TECHNOLOGY, INC.
PRO FORMA ADJUSTMENTS
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
-------------------------- ------------------
Sep. 29, Jun. 30, Sep. 30, Sep. 29, Sep. 30,
2002 2002 2001 2002 2001
-------- -------- -------- -------- ---------
Net loss $(4,882) $(7,590) $(4,937) $(12,472) $(26,426)
-------- -------- -------- --------- ---------
Special items:
Cost of goods sold:
Restructuring
charges (1) -- -- -- -- (2,301)
Other (3) (619) (3,637) -- (4,256) --
Amortization of
acquisition-
related charges (2) (786) (786) (786) (1,572) (1,572)
Operating expenses:
Acquired IPR&D (2) -- -- -- -- (16,000)
Other (3) (108) (478) -- (586) --
Restructuring
charges (1) -- -- -- -- (215)
Amortization of
goodwill (2) -- -- (1,500) -- (3,000)
Other acquisition-
related costs (2) (976) (976) (1,334) (1,952) (2,597)
Loss on equity
investments (4) (6,557) -- -- (6,557) --
Other income (5) -- -- 5,085 -- 5,085
Tax effects 3,208 1,763 (1,017) 4,971 (514)
-------- -------- -------- --------- ---------
Total special items (5,838) (4,114) 448 (9,952) (21,114)
-------- -------- -------- --------- ---------
Pro forma net income
(loss) $956 $(3,476) $(5,385) $(2,520) $(5,312)
======== ======== ======== ========= =========
(1) Represents costs, primarily severance, of restructuring actions
taken in Q1 2002.
(2) Costs relate to our Newave acquisition in April 2001 and include
an IPR&D charge, contingent compensation, stock-based compensation
amortization and amortization of intangible assets. In accordance
with SFAS 142, goodwill was not amortized beginning in fiscal
2003.
(3) Consists of costs associated with the closure of our Salinas
plant, primarily $3.0 million in retention bonuses for Q1 2003.
(4) Represents an other-than-temporary impairment charge related to
our equity investment in PMC-Sierra Inc.
(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 Six Months Ended
------------------------- ------------------
Sep. 29, Jun. 30, Sep. 30, Sep. 29, Sep. 30,
2002 2002 2001 2002 2001
-------- -------- -------- --------- --------
Revenues $92,252 $91,812 $97,117 $184,064 $213,025
Cost of revenues 47,841 52,580 59,404 100,421 130,551
-------- -------- -------- --------- ---------
Gross profit 44,411 39,232 37,713 83,643 82,474
-------- -------- -------- --------- ---------
Operating expenses:
Research and
development 28,456 29,161 31,540 57,617 63,463
Selling, general and
administrative 19,862 20,208 21,012 40,070 44,833
-------- -------- -------- --------- ---------
Total operating
expenses 48,318 49,369 52,552 97,687 108,296
-------- -------- -------- --------- ---------
Operating loss (3,907) (10,137) (14,839) (14,044) (25,822)
Interest expense (129) (131) (227) (260) (882)
Interest income and
other, net 5,231 5,923 8,335 11,154 20,064
-------- -------- -------- --------- ---------
Income (loss) before
income taxes 1,195 (4,345) (6,731) (3,150) (6,640)
Provision (benefit) for
income taxes 239 (869) (1,346) (630) (1,328)
-------- -------- -------- --------- ---------
Net income (loss) $956 $(3,476) $(5,385) $(2,520) $(5,312)
======== ======== ======== ========= =========
Net income (loss) per
share:
Diluted $0.01 $(0.03) $(0.05) $(0.02) $(0.05)
Weighted average
shares:
Diluted 104,508 104,232 104,836 103,662 104,890
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)
Sep. 29, Mar. 31,
(In thousands) 2002 2002
------- --------
ASSETS
Current assets:
Cash and cash equivalents $145,414 $256,172
Short-term investments 441,667 418,228
Accounts receivable, net 45,549 40,067
Inventories 70,789 78,247
Deferred tax assets 72,860 74,874
Prepayments and other current assets 23,713 19,787
------------ ------------
Total current assets 799,992 887,375
Property, plant and equipment, net 249,575 221,499
Goodwill and other intangibles 55,397 57,281
Other assets 39,675 59,664
------------ ------------
TOTAL ASSETS $1,144,639 $1,225,819
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $19,536 $18,342
Accrued compensation and related expenses 12,756 14,068
Deferred income on shipments to
distributors 20,717 36,443
Income taxes payable 17,291 21,863
Other accrued liabilities 22,268 29,173
------------ ------------
Total current liabilities 92,568 119,889
Other liabilities 38,555 51,221
------------ ------------
Total liabilities 131,123 171,110
Stockholders' equity 1,013,516 1,054,709
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,144,639 $1,225,819
============ ============
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