IDT Reports Fiscal 2016 Q4 and Full Year Financial Results

  • 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.
  • Tax effects of non-GAAP adjustments. Effective first quarter of fiscal 2016, the Company changed its methodology for reporting non-GAAP taxes to be based on estimated cash tax expense and reserves. The Company forecasts its annual cash tax liability and allocates the tax to each quarter in proportion to earnings for that period. This approach is designed to enhance the ability of investors to understand the impact of the Company's tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP to non-GAAP adjustments, which may not reflect actual cash tax expense. Non-GAAP tax amounts for periods prior to March 30, 2015 have not been adjusted to reflect the new methodology.
  • 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.

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.

       
 
INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
Apr. 3 Jan. 3 Mar. 29, Apr. 3 Mar. 29,
  2016     2016     2015     2016     2015  
Revenues $ 189,361 $ 177,610 $ 158,350 $ 697,376 $ 572,905
Cost of revenues   81,398     69,699     60,295     275,722     227,601  
Gross profit 107,963 107,911 98,055 421,654 345,304
Operating expenses:
Research and development 41,023 38,429 32,071 148,507 127,688
Selling, general and administrative   40,287     38,851     27,050     136,508     106,469  
Total operating expenses   81,310     77,280     59,121     285,015     234,157  
 
Operating income 26,653 30,631 38,934 136,639 111,147
 
Other income (expense), net   (3,601 )   (2,008 )   1,966     (2,775 )   4,791  
Income from continuing operations before income taxes 23,052 28,623 40,900 133,864 115,938
Provision for (benefit from) income taxes   (58,559 )   (3,922 )   517     (61,435 )   1,357  
 
Net income from continuing operations   81,611     32,545     40,383     195,299     114,581  
 
Discontinued operations:
Gain from divestiture - - - - 16,840
Loss from discontinued operations - - (799 ) (547 ) (37,237 )
Provision for income taxes   -     -     318     15     275  
Net loss from discontinued operations   -     -     (1,117 )   (562 )   (20,672 )
 
Net income $ 81,611   $ 32,545     $ 39,266   $ 194,737   $ 93,909  
 
Basic net income per share - continuing operations $ 0.61 $ 0.23 $ 0.27 $ 1.37 $ 0.77
Basic net loss per share - discontinued operations   -     -     (0.01 )   -     (0.14 )
Basic net income per share $ 0.61   $ 0.23   $ 0.26   $ 1.37   $ 0.63  
 
Diluted net income per share - continuing operations $ 0.59 $ 0.22 $ 0.26 $ 1.32 $ 0.74
Diluted net loss per share - discontinued operations   -     -     (0.01 )   -     (0.13 )
Diluted net income per share $ 0.59   $ 0.22   $ 0.25   $ 1.32   $ 0.61  
 
Weighted average shares:
Basic   134,788     140,411     148,326     142,783     148,714  
Diluted   139,239     145,705     154,111     147,652     153,983  
 
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)
(Unaudited)        
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
Apr. 3 Jan. 3 Mar. 29, Apr. 3 Mar. 29,
  2016     2016     2015     2016     2015  
 
GAAP net income from continuing operations $ 81,611  

 

$ 32,545   $ 40,383   $ 195,299  

 

$ 114,581  
GAAP diluted net income per share - continuing operations $ 0.59  

 

$ 0.22   $ 0.26   $ 1.32  

 

$ 0.74  
Acquisition related:
Amortization of acquisition related intangibles 9,347

 

2,732 1,001 13,662

 

6,573
Acquisition related fees 245

 

2,113 - 2,591

 

(125 )
Acquisition related foreign exchange loss - 536 - 536 -
Amortization of fair market value adjustment to inventory 4,641 890 - 5,531 -
Restructuring related:
Severance and retention costs 2,587

 

6,091 - 11,493

 

974
Facility closure costs 53

 

- 265 207

 

276
Assets impairment and other -

 

- - 147

 

2,968
Other:
Stock-based compensation expense 8,249

 

9,462 5,684 34,157

 

22,453
Non-cash interest expense 3,191 2,164 - 5,355 -
Loan prepayment penalty - 164 - 164 -
Gain from divestiture - (22 ) (168 ) (98 ) (272 )
Assets impairment and other - - - (586 ) -
Compensation expense (benefit) - deferred compensation plan 157

 

366 213 (179 )

 

990
Loss (gain) on deferred compensation plan securities (151 )

 

(363 ) (205 ) 205

 

(940 )
Non-GAAP tax adjustments   (58,388 )

 

  (4,506 )   (1,391 )   (62,629 )

 

  (4,596 )
Non-GAAP net income from continuing operations $ 51,542  

 

$ 52,172   $ 45,782   $ 205,855  

 

$ 142,882  
GAAP weighted average shares - diluted 139,239

 

145,705 154,111 147,652

 

153,983
Non-GAAP adjustment   2,100  

 

  1,920     1,558     2,206  

 

  2,014  
Non-GAAP weighted average shares - diluted   141,339  

 

  147,625     155,669     149,858  

 

  155,997  
Non-GAAP diluted net income per share - continuing operations $ 0.36  

 

$ 0.35   $ 0.29   $ 1.37  

 

$ 0.92  
 
GAAP gross profit $ 107,963  

 

$ 107,911   $ 98,055   $ 421,654  

 

$ 345,304  
Acquisition related:
Amortization of acquisition related intangibles 3,355

 

1,521 625 6,110

 

4,534
Amortization of fair market value adjustment to inventory 4,641 890 - 5,531 -
Restructuring related:
Severance and retention costs 262

 

- - 450

 

23
Assets impairment and other -

 

- 220 147

 

2,489
Other:
Compensation expense (benefit) - deferred compensation plan 58

 

134 78 (65 )

 

311
Stock-based compensation expense   715  

 

  666     589     2,708  

 

  1,936  
Non-GAAP gross profit $ 116,994  

 

$ 111,122   $ 99,567   $ 436,535  

 

$ 354,597  
 
GAAP R&D expenses: $ 41,023  

 

$ 38,429   $ 32,071   $ 148,507  

 

$ 127,688  
Restructuring related:
Severance and retention costs (1,152 )

 

(66 ) - (2,246 )

 

(467 )
Facility closure costs -

 

- - (154 )

 

(209 )
Assets impairment and other - - (45 ) 261 (479 )
Other:
Compensation benefit (expense) - deferred compensation plan (61 )

 

(143 ) (83 ) 70

 

(464 )
Stock-based compensation expense   (3,660 )

 

  (4,433 )   (2,266 )   (15,268 )

 

  (9,813 )
Non-GAAP R&D expenses $ 36,150  

 

$ 33,787   $ 29,677   $ 131,170  

 

$ 116,256  
 
GAAP SG&A expenses: $ 40,287  

 

$ 38,851   $ 27,050   $ 136,508  

 

$ 106,469  
Acquisition related:
Amortization of acquisition related intangibles (5,992 )

 

(1,211 ) (376 ) (7,552 )

 

(2,039 )
Acquisition related fees (245 )

 

(2,113 ) - (2,358 )

 

125
Restructuring related:
Severance and retention costs (1,173 )

 

(6,025 ) - (8,797 )

 

(484 )
Facility closure costs (53 )

 

- - (53 )

 

(67 )
Other:
Compensation benefit (expense) - deferred compensation plan (38 )

 

(89 ) (52 ) (189 )

 

(215 )
Stock-based compensation expense   (3,874 )

 

  (4,363 )   (2,829 )   (16,182 )

 

  (10,704 )
Non-GAAP SG&A expenses $ 28,912  

 

$ 25,050   $ 23,793   $ 101,377  

 

$ 93,085  
 
GAAP interest and other income (expense), net $ (3,601 )

 

$ (2,008 ) $ 1,966 $ (2,775 )

 

$ 4,791
Non-cash interest expense 3,191 2,164 - 5,355 -
Loan prepayment penalty - 164 - 164 -
Acquisition related foreign exchange loss - 536 - 536 -
Gain from divestiture - (22 ) (168 ) (98 ) (272 )
Loss (gain) on deferred compensation plan securities (151 )

 

(363 ) (205 ) 205

 

(940 )
Assets impairment and other   -  

 

  -     -     (325 )

 

  -  
Non-GAAP interest and other income (expense), net $ (561 )

 

$ 471   $ 1,593   $ 3,062  

 

$ 3,579  
 
GAAP provision for (benefit from) income taxes - continuing operations $ (58,559 )

 

$ (3,922 ) $ 517 $ (61,435 )

 

$ 1,357
Non-GAAP tax adjustments   58,388  

 

  4,506     1,391     62,629  

 

  4,596  
Non-GAAP provision for (benefit from) income taxes - continuing operations $ (171 )

 

$ 584   $ 1,908   $ 1,194  

 

$ 5,953  
 
(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)
 
Apr. 3 Mar. 29,
(In thousands)   2016   2015
 
ASSETS
Current assets:
Cash and cash equivalents $ 203,231 $ 116,945
Short-term investments 151,233 438,115
Accounts receivable, net 74,386 63,618
Inventories 54,243 45,410
Prepaid and other current assets   15,008   16,041
Total current assets 498,101 680,129
 
Property, plant and equipment, net 73,877 65,508
Goodwill 305,733 135,644
Acquisition-related intangibles 127,761 5,535
Other assets   93,717   26,843
TOTAL ASSETS $ 1,099,189 $ 913,659
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 39,858 $ 28,006
Accrued compensation and related expenses 45,269 43,649
Deferred income on shipments to distributors 7,006 15,694
Deferred tax liabilities - 1,401
Other accrued liabilities   14,974   17,582
Total current liabilities 107,107 106,332
 
Deferred tax liabilities 19,712 1,121
Long term income taxes payable 2,190 347
Convertible notes 272,221 -
Other long-term obligations   21,264   17,605
Total liabilities 422,494 125,405
 
Stockholders' equity   676,695   788,254
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,099,189 $ 913,659

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