IDT Reports Q2 Fiscal Year 2014 Financial Results



INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
	Three Months Ended								Six Months Ended
	Sept. 29,		June 30,			Sept. 30,			Sept. 29,			Sept. 30,
	2013		2013			2012			2013			2012
Revenues	$	124,649	$	117,982		$	133,401		$	242,631		$	263,562
Cost of revenues		53,800		51,809			58,774			105,609			116,422
Gross profit		70,849		66,173			74,627			137,022			147,140
Operating expenses:
Research and development		42,216		40,849			42,387			83,065			83,931
Selling, general and administrative		28,045		27,843			32,750			55,888			69,162
Total operating expenses		70,261		68,692			75,137			138,953			153,093

Operating income (loss)		588		(2,519	)		(510	)		(1,931	)		(5,953	)

Gain from divestiture		82,349		-			-			82,349			-
Other income (expense), net		756		57			(206	)		813			1,794
Income (loss) from continuing operations before income taxes		83,693		(2,462	)		(716	)		81,231			(4,159	)
Provision (benefit) for income taxes		42		(198	)		(33	)		(156	)		(4,019	)

Net income (loss) from continuing operations		83,651		(2,264	)		(683	)		81,387			(140	)

Discontinued operations:
Gain from divestiture		-		-			886			-			886
Loss from discontinued operations		-		-			(273	)		-			(5,131	)
Provision for income taxes		-		-			3			-			3
Net income (loss) from discontinued operations		-		-			610			-			(4,248	)

Net income (loss)	$	83,651	$	(2,264	)	$	(73	)	$	81,387		$	(4,388	)

Basic net income (loss) per share continuing operations	$	0.56	$	(0.02	)	$	-		$	0.55		$	-
Basic net income (loss) per share discontinued operations		-		-			-			-			(0.03	)
Basic net income (loss) per share	$	0.56	$	(0.02	)	$	-		$	0.55		$	(0.03	)

Diluted net income (loss) per share continuing operations	$	0.54	$	(0.02	)	$	-		$	0.54		$	-
Diluted net income (loss) per share discontinued operations		-		-			-			-			(0.03	)
Diluted net income (loss) per share	$	0.54	$	(0.02	)	$	-		$	0.54		$	(0.03	)

Weighted average shares:
Basic		149,814		147,056			143,519			148,157			143,055
Diluted		153,497		147,056			143,519			151,630			143,055



INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)
(Unaudited)
(In thousands, except per share data)
	Three Months Ended									Six Months Ended
	Sept. 29,			June 30,			Sept. 30,			Sept. 29,			Sept. 30,
		2013			2013			2012			2013			2012

GAAP net income (loss) from continuing operations	$	83,651		$	(2,264	)	$	(683	)	$	81,387		$	(140	)
GAAP diluted net income (loss) per share continuing operations	$	0.54		$	(0.02	)	$	-		$	0.54		$	-
Acquisition related:
Amortization of acquisition related intangibles		4,238			4,321			5,573			8,559			10,464
Acquisition related legal and consulting fees		271			730			3,630			1,001			8,466
Other acquisition related costs		-			-			1,200			-			3,000
Fair market value adjustment to acquired inventory sold		-			-			100			-			458
Restructuring related:
Severance and retention costs		4,499			1,174			2,237			5,673			2,952
Facility closure costs		13			8			34			21			47
Gain on divestiture		(82,349	)		-			-			(82,349	)		-
Assets impairment and other		4,080			(36	)		(59	)		4,044			(118	)
Other:
Stock-based compensation expense		2,492			4,986			3,617			7,478			6,739
Expenses related to stockholder activities		-			-			38			-			2,614
Compensation expense (benefit)—deferred compensation plan		623			(100	)		480			523			344
Loss (gain) on deferred compensation plan securities		(619	)		101			(477	)		(518	)		(163	)
Life insurance proceeds received		-			-			-			-			(2,313	)
Tax effects of Non-GAAP adjustments		(1,169	)		(761	)		(3,076	)		(1,930	)		(8,753	)
Non-GAAP net income from continuing operations	$	15,730		$	8,159		$	12,614		$	23,889		$	23,597
GAAP weighted average shares - diluted		153,497			147,056			143,519			151,630			143,055
Non-GAAP adjustment		3,065			5,884			2,907			2,836			2,929
Non-GAAP weighted average shares - diluted		156,562			152,940			146,426			154,466			145,984
Non-GAAP diluted net income per share continuing operations	$	0.10		$	0.05		$	0.09		$	0.15		$	0.16

GAAP gross profit		70,849			66,173			74,627			137,022			147,140
Acquisition and divestiture related:
Amortization of acquisition related intangibles		2,905			2,905			3,890			5,810			7,512
Fair market value adjustment to acquired inventory sold		-			-			100			-			458
Restructuring related:
Severance and retention costs		86			1			306			87			607
Facility closure costs		4			2			3			6			9
Assets impairment and other		(38	)		(36	)		(59	)		(74	)		(118	)
Other:
Compensation expense (benefit)—deferred compensation plan		192			(31	)		120			161			86
Stock-based compensation expense		392			333			252			725			555
Non-GAAP gross profit		74,390			69,347			79,239			143,737			156,249

GAAP R&D expenses:		42,216			40,849			42,387			83,065			83,931
Restructuring related:
Severance and retention costs		(2,751	)		(1,092	)		(1,070	)		(3,843	)		(1,410	)
Facility closure costs		(5	)		(2	)		(28	)		(7	)		(32	)
Other:
Assets impairment & other		(4,118	)		-			-			(4,118	)		-
Compensation expense (benefit)—deferred compensation plan		(323	)		52			(290	)		(271	)		(208	)
Stock-based compensation expense		(550	)		(2,472	)		(1,873	)		(3,022	)		(3,415	)
Non-GAAP R&D expenses		34,469			37,335			39,126			71,804			78,866

GAAP SG&A expenses:		28,045			27,843			32,750			55,888			69,162
Acquisition and divestiture related:
Amortization of acquisition related intangibles		(1,333	)		(1,416	)		(1,683	)		(2,749	)		(2,952	)
Acquisition related legal and consulting fees		(271	)		(730	)		(3,630	)		(1,001	)		(8,466	)
Other acquisition related costs		-			-			(1,200	)		-			(3,000	)
Restructuring related:
Severance and retention costs		(1,662	)		(81	)		(861	)		(1,743	)		(935	)
Facility closure costs		(4	)		(4	)		(3	)		(8	)		(6	)
Other:
Compensation expense (benefit)—deferred compensation plan		(108	)		17			(70	)		(91	)		(50	)
Stock-based compensation expense		(1,550	)		(2,181	)		(1,492	)		(3,731	)		(2,769	)
Expenses related to stockholder activities		-			-			(38	)		-			(2,614	)
Non-GAAP SG&A expenses		23,117			23,448			23,773			46,565			48,370

GAAP interest income and other, net		756			57			(206	)		813			1,794
Loss (gain) on deferred compensation plan securities		(619	)		101			(477	)		(518	)		(163	)
Life insurance proceeds received		-			-			-			-			(2,313	)
Non-GAAP interest income and other, net		137			158			(683	)		295			(682	)

GAAP provision (benefit) for income taxes continuing operations		42			(198	)		(33	)		(156	)		(4,019	)
Tax effects of Non-GAAP adjustments (7)		1,169			761			3,076			1,930			8,753
Non-GAAP provision for income taxes continuing operations		1,211			563			3,043			1,774			4,734

(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)

	Sept. 29,		March 31,
(In thousands)	2013		2013

ASSETS
Current assets:
Cash and cash equivalents	$	109,671	$	130,837
Short-term investments		320,237		166,333
Accounts receivable, net		71,491		62,083
Inventories		57,675		56,555
Prepaid and other current assets		15,614		24,697
Total current assets		574,688		440,505

Property, plant and equipment, net		73,470		74,988
Goodwill		137,601		144,924
Acquisition-related intangibles		40,042		48,602
Other assets		18,992		19,560
TOTAL ASSETS	$	844,793	$	728,579

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	27,928	$	23,244
Accrued compensation and related expenses		20,931		21,090
Deferred income on shipments to distributors		13,566		14,539
Deferred taxes liabilities		997		1,000
Other accrued liabilities		14,943		14,652
Total current liabilities		78,365		74,525

Deferred tax liabilities		1,552		1,552
Long term income taxes payable		299		454
Other long term obligations		20,411		22,022
Total liabilities		100,627		98,553

Stockholders' equity		744,166		630,026

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	844,793	$	728,579

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