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IDT Reports Fiscal 2019 Q1 Financial Results

Q1 FY19 Revenue of $228.5 M

SAN JOSE, Calif., July 30, 2018 — (PRNewswire) —  Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI) today announced results for the fiscal first quarter 2019, ended July 1, 2018.

IDT Logo (PRNewsFoto/Integrated Device Technology, I)

"First quarter fiscal 2019 revenues totaled $228.5 million, 16 percent higher than the year ago period.  Strength in the quarter was driven by diversified growth in our target end markets.  Going forward, our growth outlook remains robust and we expect improving margins driven by new products and higher operating efficiencies" said Greg Waters, President and Chief Executive Officer.

Recent Business Highlights – Datacenter/HPC & Communications Infrastructure

Recent Business Highlights – Auto and Industrial

Recent Business Highlights – Consumer      

The following highlights the Company's financial performance on both a GAAP and supplemental non-GAAP basis. The Company provides supplemental information regarding its operating performance on a non-GAAP basis that excludes certain gains, losses and charges, or events which occur relatively infrequently and which management considers to be outside our core operating results. Non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. A complete reconciliation of GAAP to non-GAAP results is attached to this press release.   

Webcast and Conference Call Information

Investors may listen to the live call at 1:30 p.m. Pacific Time on July 30, 2018 by calling (866) 917-0554.  The access code is 2768649.  Investors may listen to a live or replay webcast of the Company's quarterly financial conference call at http://ir.idt.com/.  The live webcast will begin at 1:30 p.m. Pacific Time on July 30, 2018. The webcast replay will be available after 4:30 p.m. Pacific Time on July 30, 2018 for one week.

IDT's next regularly scheduled Quiet Period will begin September 17, 2018, during which time IDT representatives will not comment on IDT's business outlook, financial results or expectations. The Quiet Period will extend until the day when IDT's second quarter fiscal 2019 earnings release is published.

About IDT

Integrated Device Technology, Inc. develops system-level solutions that optimize its customers' applications. IDT's market-leading products in RF, timing, wireless power transfer, serial switching, interfaces and sensing solutions are among the company's broad array of complete mixed-signal solutions for the communications, computing, consumer, automotive and industrial segments. Headquartered in San Jose, Calif., IDT has design, manufacturing, sales facilities and distribution partners throughout the world. IDT stock is traded on the NASDAQ Global Select Stock Market® under the symbol "IDTI." Additional information about IDT is accessible at www.IDT.com. Follow IDT on Facebook, LinkedIn, Twitter, YouTube and Google+.

Forward Looking Statements

Investors are cautioned that forward-looking statements in this release, including but not limited to statements regarding demand for Company products, anticipated trends in Company sales, expenses and profits, involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include, but are not limited to, global business and economic conditions, fluctuations in product demand, manufacturing capacity and costs, inventory management, competition, pricing, patent and other intellectual property rights of third parties, timely development and introduction of new products and manufacturing processes, dependence on one or more customers for a significant portion of sales, successful integration of acquired businesses and technology, availability of capital, cash flow and other risk factors detailed in the Company's Securities and Exchange Commission filings. The Company urges investors to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the fiscal year ended April 1, 2018. All forward-looking statements are made as of the date of this release and the Company disclaims any duty to update such statements.

Non-GAAP Reporting

To supplement its consolidated financial results presented in accordance with GAAP, IDT uses non-GAAP financial measures, which are adjusted from the most directly comparable GAAP financial measures to exclude certain items, as described in detail below. Management believes that these non-GAAP financial measures reflect an additional and useful way of viewing aspects of the Company's operations that, when viewed in conjunction with IDT's GAAP results, provide a more comprehensive understanding of the various factors and trends affecting the Company's business and operations. It should also be noted that IDT's non-GAAP information may be different from the non-GAAP information provided by other companies. Non-GAAP financial measures used by IDT include:

The Company presents non-GAAP financial measures because the investor community uses non-GAAP results in its analysis and comparison of historical results and projections of the Company's future operating results. These non-GAAP results exclude acquisition-related expense, restructuring and divestiture related costs (gains), share-based compensation expense, and certain other expenses and benefits. Management uses these non-GAAP measures to manage and assess the profitability of the business. These non-GAAP results are also consistent with the way management internally analyzes IDT's financial results.

There are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measures. The non-GAAP financial measures supplement, and should be viewed in conjunction with, GAAP financial measures. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the accompanying press release.

As presented in the "Reconciliation of GAAP to Non-GAAP" tables in the accompanying press release, each of the non-GAAP financial measures excludes one or more of the following items:

Acquisition-related.  Acquisition-related charges are not factored into management's evaluation of potential acquisitions or IDT's performance after completion of acquisitions, because they are not related to the Company's core operating performance. Adjustments of these items provide investors with a basis to compare IDT's performance to other companies without the variability caused by purchase accounting. Acquisition-related expenses primarily include:

Restructuring-related.  Restructuring charges primarily relate to changes in IDT's infrastructure in efforts to reduce costs and expenses (gains) associated with strategic divestitures and restructuring in force actions.  Restructuring charges (gains) are excluded from non-GAAP financial measures because they are not considered core operating activities. Although IDT has engaged in various restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. As such, management believes that it is appropriate to exclude restructuring charges (gains) from IDT's non-GAAP financial measures as it enhances the ability of investors to compare the Company's period-over-period operating results.  Restructuring-related charges (gains) primarily include:

Other adjustments.  These items are excluded from non-GAAP financial measures because they are not related to the core operating activities and on-going future operating performance of IDT. Excluding this data allows investors to better compare IDT's period-over-period performance without such expense, which IDT believes may be useful to the investor community. 

Other adjustments primarily include:

IDT and the IDT logo are trademarks or registered trademarks 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.                                                                 

Financial Contact:


Press Contact:

Krishna Shankar


Krista Pavlakos

Head of Investor Relations


IDT Director, Communications

Phone: (408) 574-6995


Phone: (408) 574-6640

E-mail: krishna.shankar@idt.com


E-mail: krista.pavlakos@idt.com

 

INTEGRATED DEVICE TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


Three Months Ended


July 1, 2018


April 1, 2018


July 2, 2017

Revenues

$   228,516


$    224,578


$   196,713

Cost of revenues

91,909


97,478


86,675

Gross profit 

136,607


127,100


110,038

Operating expenses:






  Research and development

52,234


55,694


48,449

  Selling, general and administrative

42,995


41,532


41,942

Total operating expenses

95,229


97,226


90,391

Operating income

41,378


29,874


19,647







Other-than-temporary impairment loss on investment

(2,000)


-


-

Interest and other expense, net

(5,514)


(4,875)


(3,915)

Income before income taxes

33,864


24,999


15,732

Benefit from (provision for) income taxes

(3,144)


(4,288)


982

Net income

$     30,720


$      20,711


$     16,714







Basic net income per share

$        0.24


$         0.16


$        0.13

Diluted net income per share

$        0.23


$         0.15


$        0.12

Weighted average shares:






Basic 

129,560


131,341


133,302

Diluted

132,806


135,016


136,642

 

INTEGRATED DEVICE TECHNOLOGY, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)

(Unaudited)

(In thousands, except per share data)


Three Months Ended


July 1, 2018


April 1, 2018


July 2, 2017

GAAP net income

$     30,720


$      20,711


$     16,714

GAAP diluted net income per share

$        0.23


$         0.15


$        0.12

   Acquisition-related:






        Amortization of acquisition-related intangibles 

9,334


9,326


8,876

        Acquisition-related costs

-


-


2,225

        Amortization of fair market value adjustment to inventory

790


753


4,081

   Restructuring-related:






        Severance costs

367


4,953


653

        Facility closure costs

121


299


-

        Assets impairment and other

-


9,862


1,965

   Other:






        Stock-based compensation expense 

15,063


12,436


11,820

        Non-cash interest expense

3,955


3,792


3,892

        Assets impairment and other

-


(184)


-

        Other-than-temporary impairment loss on investment

2,000


-


-

        Certain unrealized foreign exchange loss (gain)

1,311


(794)


(1,675)

        Compensation expense (benefit) - deferred compensation plan

576


(128)


412

        Loss (gain) on deferred compensation plan securities

(564)


158


(360)

        Non-GAAP tax adjustments

(3,538)


2,183


(3,341)

Non-GAAP net income 

$     60,135


$      63,367


$     45,262

GAAP weighted average shares - diluted

132,806


135,016


136,642

        Non-GAAP adjustment

2,378


1,773


2,319

Non-GAAP weighted average shares - diluted

135,184


136,789


138,961

Non-GAAP diluted net income per share

$        0.44


$         0.46


$        0.33







GAAP gross profit

$   136,607


$    127,100


$   110,038

   Acquisition-related:






        Amortization of acquisition-related intangibles 

6,243


6,264


5,682

        Amortization of fair market value adjustment to inventory

790


753


4,081

   Restructuring-related:






        Severance costs

-


164


196

        Assets impairment and other

-


5,460


-

   Other:






        Compensation expense (benefit) - deferred compensation plan

135


(29)


97

        Stock-based compensation expense 

1,028


830


632

Non-GAAP gross profit

$   144,803


$    140,542


$   120,726







GAAP R&D expenses:

$     52,234


$      55,694


$     48,449

   Restructuring-related:






        Severance costs

(110)


(3,733)


(45)

        Assets impairment and other

-


(4,402)


(1,965)

   Other:






        Compensation benefit (expense) - deferred compensation plan

(294)


66


(210)

        Stock-based compensation expense 

(7,136)


(5,390)


(5,963)

Non-GAAP R&D expenses

$     44,694


$      42,235


$     40,266







GAAP SG&A expenses:

$     42,995


$      41,532


$     41,942

   Acquisition-related:






        Amortization of acquisition-related intangibles 

(3,091)


(3,062)


(3,194)

        Acquisition-related costs

-


-


(2,225)

   Restructuring-related:






        Severance costs

(257)


(1,056)


(412)

        Facility closure costs

(121)


(299)


-

   Other:






        Compensation benefit (expense) - deferred compensation plan

(147)


33


(105)

        Stock-based compensation expense 

(6,899)


(6,216)


(5,225)

Non-GAAP SG&A expenses

$     32,480


$      30,932


$     30,781







GAAP interest and other expense, net

$      (5,514)


$       (4,875)


$      (3,915)

        Non-cash interest expense

3,955


3,792


3,892

        Assets impairment and other

-


(184)


-

        Loss (gain) on deferred compensation plan securities

(564)


158


(360)

        Certain unrealized foreign exchange loss (gain)

1,311


(794)


(1,675)

Non-GAAP interest and other expense, net

$        (812)


$       (1,903)


$      (2,058)







GAAP benefit from (provision for) income taxes

$      (3,144)


$       (4,288)


$         982

        Non-GAAP tax adjustments

3,538


(2,183)


3,341

Non-GAAP provision for income taxes 

$      (6,682)


$       (2,105)


$      (2,359)


(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)





(In thousands)

July 1, 2018


April 1, 2018





ASSETS




Current assets:




Cash and cash equivalents

$   148,071


$    136,873

Short-term investments

198,188


222,026

Accounts receivable, net

122,977


108,779

Inventories

66,177


68,702

Prepayments and other current assets

12,193


12,734

Total current assets

547,606


549,114

Property, plant and equipment, net

86,935


86,845

Goodwill

420,117


420,117

Intangible assets, net

170,899


180,781

Deferred tax assets 

9,355


11,764

Other assets

48,809


61,910

TOTAL ASSETS

$1,283,721


$ 1,310,531





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$     33,579


$      41,070

Accrued compensation and related expenses

28,679


44,002

Current portion of bank loan

1,980


2,000

Other accrued liabilities

32,493


26,524

Total current liabilities

96,731


113,596

Deferred tax liabilities

11,516


10,221

Long-term income tax payable

23,573


25,034

Convertible notes

303,166


299,551

Long-term bank loan, net

190,803


191,073

Other long-term liabilities

27,369


25,684

Total liabilities

653,158


665,159

Stockholders' equity

630,563


645,372





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$1,283,721


$ 1,310,531

 

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SOURCE Integrated Device Technology, Inc.

Contact:
Company Name: Integrated Device Technology, Inc.
Web: http://www.idt.com
Financial data for Integrated Device Technology, Inc.