Delaware | 0-12695 | 94-2669985 |
(State of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
6024 Silver Creek Valley Road, San Jose, California 95138 |
(Address of principal executive offices) (Zip Code) |
Emerging growth company o |
Exhibit No. | Description | |
99.1 | Press Release Dated January 28, 2019 |
Dated: | January 28, 2019 | |
INTEGRATED DEVICE TECHNOLOGY, INC. | ||
By: | /S/ BRIAN C. WHITE | |
Brian C. White | ||
Senior Vice President and Chief Financial Officer (duly authorized officer) |
Exhibit No. | Description | |
Press Release Dated January 28, 2019 |
Financial Contact: | Press Contact: | |
Krishna Shankar Head of Investor Relations Phone: (408) 574-6995 E-mail: krishna.shankar@idt.com | Krista Pavlakos IDT Director, Communications Phone: (408) 574-6640 E-mail: krista.pavlakos@idt.com |
• | IDT announced that it is providing Toshiba Memory Corporation with power management ICs (PMIC) for its new flagship model of enterprise solid-state drive (SSD) solutions. The IDT family of scalable multiphase power management solutions enables Toshiba Memory Corporation to rapidly deploy power systems that are precisely tailored to the power requirements of their various SSDs. IDT’s scalable PMIC solution offers best-in-industry integration, programmability and modularity and is based on a modular power delivery architecture and an integrated microcontroller that offers tremendous flexibility. |
• | IDT introduced its new high-gain broadband RF amplifier offering configurable high linearity performance at the lowest possible power consumption for 4G and 5G cellular applications. It is an ideal solution for macro base stations, massive MIMO, repeaters, small cell and test equipment for wireless infrastructure, military communications, and industrial applications. |
• | IDT announced the availability of its new ZWIR4532 connectivity module, which is FCC certified and provides critical and secure 6LoWPAN wireless connectivity to link devices to the Internet of Things (IoT). IDT also provides the optional IDT SensorShare firmware, a 6LoWPAN open standard stack that has no associated license fees or royalties. The low power consumption and small form factor makes it ideal for embedding into a variety of IoT-connected consumer, industrial and medical devices with space constraints. These include home automation devices, factory automation monitors, environmental sensors and LED lamps for smart city applications. |
• | IDT has given its ZMOD™ family of integrated gas sensors low-power capabilities with the release of new firmware. This firmware allows the ZMOD family to be used in a variety of gas sensing applications that require low-power operation, such as smart, battery-powered devices for measuring indoor air quality (IAQ) or controlling HVAC systems. The low power requirements of the new gas sensors - approximately 1mW - can maximize battery life in smart devices, dramatically reducing how often batteries have to be replaced and improving the user experience. It is an excellent solution for a wide range of indoor air quality applications including smart thermostats, air purifiers, and smart HVAC equipment. |
• | IDT is enabling manufacturers to add new odor detection and mitigation capabilities to their smart refrigerators with the introduction of the software-configurable ZMOD4450 gas sensor platform, the first integrated digital gas sensor for Refrigeration Air Quality (RAQ) applications. The ZMOD4450 can detect the gases produced by spoiling fruits, vegetables, and meat or dairy products, enables smart refrigerators to post alerts on their door-mounted displays, notify users via their smartphones, and even trigger active deodorizing systems. |
• | At CES 2019 in Las Vegas, IDT displayed its latest advancements in wireless power technology for consumer, automotive, and industrial applications. IDT led the first wave of wireless power adoption and continues to be at the core of all leading Android smartphone receiver and transmitter device implementation. IDT’s wireless power technology demonstrations at CES included: |
• | Bi-directional communications: smart, contextually aware transmitters also enable authentication. |
• | IDT demonstrated a cutting-edge wireless power transmitter that enables mobile OEMs and peripheral manufacturers to design high-capacity wireless charging into their products. The demonstration is the product of collaboration with Ventiva, a Silicon Valley-based startup developing ionically-cooled solid-state air moving technologies. |
• | Devices that combine both receivers and transmitters: the next step for portable power ecosystem. |
• | In-vehicle wireless charging: customer reference board and GUI for quick deployment |
• | Wirelessly-powered smart locks: battery-less security technology for electronic locks. |
• | IDT announced that Supply & Demand Chain Executive, the executive’s user manual for successful supply and demand chain transformation, has selected IDT as a recipient of an SDCE Green Supply Chain Award for 2018. The Green Supply Chain Award recognizes companies that are working to achieve measurable sustainability goals within their own operations and supply chains and making green sustainability practices a core part of their supply chain strategy. |
• | IDT announced that its ZMOD4410 integrated digital gas sensor and P9242-G 15W wireless power transmitter received Technology Innovation Awards at the Elecfans IoT Innovation Conference 2018. The ZMOD4410 gas sensor was recognized because it offers best-in-class stability and sensing for measuring volatile organic compound (VOC) gases and is ideal for consumer and industrial indoor air quality (IAQ) applications. The IDT® P9242-G fixed frequency transmitter IC was acknowledged for its high level of integration and wireless power convergence covering WPC Qi charging profiles and allowing fast wireless charging for both Android and iOS smartphones. |
• | Revenue for the fiscal third quarter of 2019 was $240.6 million. This compared with $235.5 million reported last quarter, and $217.1 million reported in the same period one year ago. |
• | GAAP net income for the fiscal third quarter of 2019 was $21.6 million, or $0.16 per diluted share versus GAAP net income of $35.5 million or $0.26 per diluted share last quarter, and GAAP net loss of $68.2 million or loss of $0.51 per diluted share in the same period one year ago. The year ago period included a one-time GAAP provision of $101.9 million for estimated impacts of the Tax Cuts and Jobs Act (“TCJA”), which was enacted on December 22, 2017. Fiscal third quarter GAAP results include $13.9 million in acquisition-related charges, $37.5 million in stock-based compensation, $3.9 million in non-cash interest expense, $0.8 million in investment impairment loss, $2.0 million loss on available-for-sale securities, $0.4 million in unrealized foreign exchange loss and $11.9 million in related tax effects. |
• | Non-GAAP net income for the fiscal third quarter of 2019 was $68.3 million or $0.50 per diluted share, compared with non-GAAP net income of $63.5 million or $0.47 per diluted share last quarter, and non-GAAP net income of $57.6 million or $0.42 per diluted share reported in the same period one year ago. |
• | GAAP gross profit for the fiscal third quarter of 2019 was $149.3 million, or 62.0 percent, compared with GAAP gross profit of $143.6 million or 61.0 percent last quarter, and $128.4 million, or 59.1 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2019 was $156.0 million, or 64.8 percent, compared with non-GAAP gross profit of $151.2 million, or 64.2 percent last quarter, and $136.6 million, or 62.9 percent, reported in the same period one year ago. |
• | GAAP R&D expense for the fiscal third quarter of 2019 was $62.5 million, compared with GAAP R&D expense of $55.5 million last quarter, and $49.8 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2019 was $45.9 million, compared with non-GAAP R&D expense of $46.4 million last quarter, and $42.8 million in the same period one year ago. |
• | GAAP SG&A expense for the fiscal third quarter of 2019 was $58.6 million, compared with GAAP SG&A expense of $46.8 million last quarter, and $40.7 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2019 was $32.7 million, compared with non-GAAP SG&A expense of $32.7 million last quarter, and $31.1 million in the same period one year ago. |
• | Amortization of acquisition-related intangibles, which include acquired intangibles such as purchased technology, patents, customer relationships, trademarks, backlog and non-compete agreements. |
• | Acquisition-related costs such as legal, accounting and other professional or consulting fees directly related to an acquisition by the Company. |
• | Merger-related expenses such as legal, financial advisory and other fees and expenses associated with pending Renesas acquisition. |
• | Fair market value adjustment to acquired inventory sold. |
• | Severance costs directly related to a restructuring action. |
• | Facility closure costs consist of ongoing costs associated with the exit of our leased and owned facilities. |
• | Gain on divestiture consists of gains recognized upon the strategic sale of business units. |
• | Assets impairments including accelerated depreciation and amortization of certain assets no longer in use or related to discontinued product lines. |
• | Stock based compensation expense. |
• | Compensation expense (benefit) - deferred compensation, consists of gains and losses on marketable equity securities related to our deferred compensation arrangements. |
• | Non-cash interest expense, consists of amortization of issuance cost and accretion of discount related to the convertible notes. |
• | Loss (gain) on deferred compensation plan securities represents the changes in the fair value of the assets in a separate trust that is invested in corporate owned life insurance under our deferred compensation plan. |
• | Loss on available-for-sale securities which is due to the actual and anticipated liquidation of these investments, that will be used to fully settle the Term B-1 loan prior to the merger with Renesas. |
• | Unrealized foreign currency gains and losses resulting from remeasurement of certain non-functional currency account balances. |
• | Tax effects of non-GAAP adjustments: The non-GAAP tax calculation eliminates the effects of certain non-GAAP financial measures in order to provide investors with improved modeling accuracy and consistency across financial reporting periods. The Company forecasts its annual non-GAAP tax rate and makes adjustments for significant events including stock based compensation, acquisition and restructuring related items, and material tax law changes in the major tax jurisdictions in which the company operates. |
• | Diluted weighted average shares non-GAAP adjustment, for purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the benefits of stock compensation expense attributable to future services not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury method. |
INTEGRATED DEVICE TECHNOLOGY, INC. | ||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
December 30, | September 30, | December 31, | December 30, | December 31, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Revenues | $ | 240,587 | $ | 235,484 | $ | 217,075 | $ | 704,587 | $ | 618,186 | ||||||||||
Cost of revenues | 91,311 | 91,900 | 88,690 | 275,120 | 263,001 | |||||||||||||||
Gross profit | 149,276 | 143,584 | 128,385 | 429,467 | 355,185 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 62,496 | 55,509 | 49,836 | 170,239 | 147,027 | |||||||||||||||
Selling, general and administrative | 58,573 | 46,753 | 40,689 | 148,321 | 127,116 | |||||||||||||||
Total operating expenses | 121,069 | 102,262 | 90,525 | 318,560 | 274,143 | |||||||||||||||
Operating income | 28,207 | 41,322 | 37,860 | 110,907 | 81,042 | |||||||||||||||
Other-than-temporary impairment loss on investment | (841 | ) | — | — | (2,841 | ) | — | |||||||||||||
Interest and other expense, net | (10,045 | ) | (4,608 | ) | (5,068 | ) | (20,167 | ) | (13,869 | ) | ||||||||||
Income before income taxes | 17,321 | 36,714 | 32,792 | 87,899 | 67,173 | |||||||||||||||
Benefit from (provision for) income taxes | 4,285 | (1,214 | ) | (101,033 | ) | (73 | ) | (100,020 | ) | |||||||||||
Net income (loss) | $ | 21,606 | $ | 35,500 | $ | (68,241 | ) | $ | 87,826 | $ | (32,847 | ) | ||||||||
Basic net income (loss) per share | $ | 0.17 | $ | 0.27 | $ | (0.51 | ) | $ | 0.68 | $ | (0.25 | ) | ||||||||
Diluted net income (loss) per share | $ | 0.16 | $ | 0.26 | $ | (0.51 | ) | $ | 0.65 | $ | (0.25 | ) | ||||||||
Weighted average shares: | ||||||||||||||||||||
Basic | 129,074 | 129,155 | 132,689 | 129,283 | 133,087 | |||||||||||||||
Diluted | 137,182 | 134,755 | 132,689 | 135,438 | 133,087 |
INTEGRATED DEVICE TECHNOLOGY, INC. | |||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
December 30, | September 30, | December 31, | December 30, | December 31, | |||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
GAAP net income (loss) | $ | 21,606 | $ | 35,500 | $ | (68,241 | ) | $ | 87,826 | $ | (32,847 | ) | |||||||
GAAP diluted net income (loss) per share | $ | 0.16 | $ | 0.26 | $ | (0.51 | ) | $ | 0.65 | $ | (0.25 | ) | |||||||
Acquisition-related: | |||||||||||||||||||
Amortization of acquisition-related intangibles | 9,423 | 9,365 | 9,287 | 28,122 | 27,126 | ||||||||||||||
Acquisition-related costs | — | — | — | — | 2,225 | ||||||||||||||
Amortization of fair market value adjustment to inventory | — | — | 1,178 | 790 | 7,270 | ||||||||||||||
Merger-related expense | 4,511 | 3,884 | — | 8,395 | — | ||||||||||||||
Restructuring-related: | |||||||||||||||||||
Severance costs | — | 1,351 | 378 | 1,718 | 2,596 | ||||||||||||||
Facility closure costs (benefit) | — | (125 | ) | — | (4 | ) | 2,614 | ||||||||||||
Assets impairment and other | — | — | — | — | 2,882 | ||||||||||||||
Other: | |||||||||||||||||||
Stock-based compensation expense | 37,470 | 15,637 | 13,578 | 68,170 | 38,348 | ||||||||||||||
Non-cash interest expense | 3,928 | 3,881 | 3,744 | 11,764 | 11,331 | ||||||||||||||
Other-than-temporary impairment loss on investment | 841 | — | — | 2,841 | — | ||||||||||||||
Realized loss on available-for-sale securities | 652 | — | — | 652 | — | ||||||||||||||
Impairment of available-for-sale securities | 1,325 | — | — | 1,325 | — | ||||||||||||||
Certain unrealized foreign exchange loss (gain) | 373 | (144 | ) | (360 | ) | 1,540 | (2,789 | ) | |||||||||||
Compensation expense (benefit) - deferred compensation plan | (2,185 | ) | 654 | 525 | (955 | ) | 1,406 | ||||||||||||
Loss (gain) on deferred compensation plan securities | 2,233 | (650 | ) | (518 | ) | 1,019 | (1,321 | ) | |||||||||||
Non-GAAP tax adjustments | (11,927 | ) | (5,892 | ) | 98,003 | (21,357 | ) | 92,144 | |||||||||||
Non-GAAP net income | $ | 68,250 | $ | 63,461 | $ | 57,574 | $ | 191,846 | $ | 150,985 | |||||||||
GAAP weighted average shares - diluted | 137,182 | 134,755 | 132,689 | 135,438 | 133,087 | ||||||||||||||
Non-GAAP adjustment | (1,400 | ) | 1,214 | 5,714 | 608 | 5,787 | |||||||||||||
Non-GAAP weighted average shares - diluted | 135,782 | 135,969 | 138,403 | 136,046 | 138,874 | ||||||||||||||
Non-GAAP diluted net income per share | $ | 0.50 | $ | 0.47 | $ | 0.42 | $ | 1.41 | $ | 1.09 | |||||||||
GAAP gross profit | $ | 149,276 | $ | 143,584 | $ | 128,385 | $ | 429,467 | $ | 355,185 | |||||||||
Acquisition-related: | |||||||||||||||||||
Amortization of acquisition-related intangibles | 6,332 | 6,274 | 6,127 | 18,849 | 17,631 |
Amortization of fair market value adjustment to inventory | — | — | 1,178 | 790 | 7,270 | ||||||||||||||
Restructuring-related: | |||||||||||||||||||
Severance costs | — | 397 | — | 397 | 226 | ||||||||||||||
Other: | |||||||||||||||||||
Compensation expense (benefit) - deferred compensation plan | (507 | ) | 153 | 123 | (219 | ) | 330 | ||||||||||||
Stock-based compensation expense | 919 | 829 | 814 | 2,776 | 2,210 | ||||||||||||||
Non-GAAP gross profit | $ | 156,020 | $ | 151,237 | $ | 136,627 | $ | 452,060 | $ | 382,852 | |||||||||
GAAP R&D expenses: | $ | 62,496 | $ | 55,509 | $ | 49,836 | $ | 170,239 | $ | 147,027 | |||||||||
Restructuring-related: | |||||||||||||||||||
Severance benefits (costs) | — | (587 | ) | 18 | (697 | ) | (345 | ) | |||||||||||
Facility closure costs | — | (315 | ) | — | (315 | ) | — | ||||||||||||
Assets impairment and other | — | — | — | — | (2,800 | ) | |||||||||||||
Other: | |||||||||||||||||||
Compensation benefit (expense) - deferred compensation plan | 1,119 | (334 | ) | (268 | ) | 491 | (717 | ) | |||||||||||
Stock-based compensation expense | (17,701 | ) | (7,829 | ) | (6,816 | ) | (32,666 | ) | (18,873 | ) | |||||||||
Non-GAAP R&D expenses | $ | 45,914 | $ | 46,444 | $ | 42,770 | $ | 137,052 | $ | 124,292 | |||||||||
GAAP SG&A expenses: | $ | 58,573 | $ | 46,753 | $ | 40,689 | $ | 148,321 | $ | 127,116 | |||||||||
Acquisition-related: | |||||||||||||||||||
Amortization of acquisition-related intangibles | (3,091 | ) | (3,091 | ) | (3,160 | ) | (9,273 | ) | (9,495 | ) | |||||||||
Acquisition-related costs | — | — | — | — | (2,225 | ) | |||||||||||||
Merger-related expense | (4,511 | ) | (3,884 | ) | — | (8,395 | ) | — | |||||||||||
Restructuring-related: | |||||||||||||||||||
Severance costs | — | (367 | ) | (396 | ) | (624 | ) | (2,025 | ) | ||||||||||
Facility closure benefit (costs) | — | 440 | — | 319 | (2,614 | ) | |||||||||||||
Assets impairment and other | — | — | — | — | (82 | ) | |||||||||||||
Other: | |||||||||||||||||||
Compensation benefit (expense) - deferred compensation plan | 559 | (167 | ) | (134 | ) | 245 | (359 | ) | |||||||||||
Stock-based compensation expense | (18,850 | ) | (6,979 | ) | (5,948 | ) | (32,728 | ) | (17,265 | ) | |||||||||
Non-GAAP SG&A expenses | $ | 32,680 | $ | 32,705 | $ | 31,051 | $ | 97,865 | $ | 93,051 | |||||||||
GAAP interest and other expense, net | $ | (10,045 | ) | $ | (4,608 | ) | $ | (5,068 | ) | $ | (20,167 | ) | $ | (13,869 | ) | ||||
Non-cash interest expense | 3,928 | 3,881 | 3,744 | 11,764 | 11,331 | ||||||||||||||
Realized loss on available-for-sale securities | 652 | — | — | 652 | — | ||||||||||||||
Impairment of available-for-sale securities | 1,325 | — | — | 1,325 | — | ||||||||||||||
Loss (gain) on deferred compensation plan securities | 2,233 | (650 | ) | (518 | ) | 1,019 | (1,321 | ) | |||||||||||
Certain unrealized foreign exchange loss (gain) | 373 | (144 | ) | (360 | ) | 1,540 | (2,789 | ) | |||||||||||
Non-GAAP interest and other expense, net | $ | (1,534 | ) | $ | (1,521 | ) | $ | (2,202 | ) | $ | (3,867 | ) | $ | (6,648 | ) | ||||
GAAP benefit from (provision for) income taxes | $ | 4,285 | $ | (1,214 | ) | $ | (101,033 | ) | $ | (73 | ) | $ | (100,020 | ) | |||||
Non-GAAP tax adjustments | 11,927 | 5,892 | (98,003 | ) | 21,357 | (92,144 | ) | ||||||||||||
Non-GAAP provision for income taxes | $ | (7,642 | ) | $ | (7,106 | ) | $ | (3,030 | ) | $ | (21,430 | ) | $ | (7,876 | ) | ||||
(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) | |||||||||
December 30, | April 1, | ||||||||
(In thousands) | 2018 | 2018 | |||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 287,239 | $ | 136,873 | |||||
Short-term investments | 157,129 | 222,026 | |||||||
Accounts receivable, net | 119,909 | 108,779 | |||||||
Inventories | 66,142 | 68,702 | |||||||
Prepayments and other current assets | 14,860 | 12,734 | |||||||
Total current assets | 645,279 | 549,114 | |||||||
Property, plant and equipment, net | 90,877 | 86,845 | |||||||
Goodwill | 420,117 | 420,117 | |||||||
Intangible assets, net | 163,585 | 180,781 | |||||||
Deferred tax assets | 10,970 | 11,764 | |||||||
Other assets | 46,772 | 61,910 | |||||||
TOTAL ASSETS | $ | 1,377,600 | $ | 1,310,531 | |||||
LIABILITIES, CONVERTIBLE NOTES CONVERSION OBLIGATION AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 48,461 | $ | 41,070 | |||||
Accrued compensation and related expenses | 46,497 | 44,002 | |||||||
Short-term convertible notes | 310,535 | — | |||||||
Current portion of bank loan | 192,698 | 2,000 | |||||||
Other accrued liabilities | 45,434 | 26,524 | |||||||
Total current liabilities | 643,625 | 113,596 | |||||||
Deferred tax liabilities | 11,723 | 10,221 | |||||||
Long-term income tax payable | 23,706 | 25,034 | |||||||
Convertible notes | — | 299,551 | |||||||
Long-term bank loan, net | — | 191,073 | |||||||
Other long-term liabilities | 27,386 | 25,684 | |||||||
Total liabilities | 706,440 | 665,159 | |||||||
Convertible notes conversion obligation | 63,214 | — | |||||||
Stockholders' equity | 607,946 | 645,372 | |||||||
TOTAL LIABILITIES, CONVERTIBLE NOTES CONVERSION OBLIGATION AND STOCKHOLDERS' EQUITY | $ | 1,377,600 | $ | 1,310,531 |