SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 23, 2003
Date of report (Date of earliest event reported)
Integrated Device Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-12695 94-2669985
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
2975 Stender Way, Santa Clara, California 95054
(Address of principal executive offices) (Zip Code)
(408) 727-6116
(Registrant's telephone number, including area code)
Item 7. Exhibits.
(c) Exhibits:
99.1 Financial Information for Integrated Device Technology, Inc. for the
quarter and fiscal year ended March 30, 2003 and forward-looking statements
relating to fiscal year 2004 as presented in a press release of April 23, 2003.
Item 12. Results of Operations and Financial Condition.
The information contained in this Current Report, including the Exhibit
99.1 attached hereto, is being furnished pursuant to "Item 12. Results of
Operations and Financial Condition" of Form 8-K in accordance with SEC Release
Nos. 33-8216 and 34-47583.
The information in this Current Report, including Exhibit 99.1, is being
furnished and shall not be deemed "filed" for purposes of Section 18 of the
Securities and Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section. The information in this Current Report shall not be
incorporated by reference into any registration statement or other document
pursuant to the Securities Act of 1933, as amended.
On April 23, 2003, Integrated Device Technology, Inc. issued a press
release announcing its financial results for the fourth quarter and fiscal year
ended March 30, 2003. A copy of the press release is attached as Exhibit 99.1.
The Company's press release contains non-GAAP financial measures. Pursuant
to the requirements of Regulation G, the Company has provided reconciliations
within the press release of the non-GAAP financial measures to the most directly
comparable GAAP financial measures included in the press release.
Pro Forma Statements of Operations are presented in the press release. Pro
Forma Statements of Operations exclude certain costs, charges and gains that
impacted the Company's results of operations. In particular, the Company has
excluded asset impairment charges related to fixed and intangible assets, a
reserve against net deferred tax assets, restructuring charges,
acquisition-related costs and gains and losses related to equity investments.
Management uses this information excluding these charges in evaluating results
of the operations of the Company and believes that this information provides
investors a valuable insight into the underlying results of the ongoing
operations of the Company and facilitates comparison between the Company and
other companies.
The foregoing description is qualified in its entirety by reference to the
Registrant's Press Release dated April 23, 2003, a copy of which is attached
hereto as Exhibit 99.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 23, 2003
INTEGRATED DEVICE TECHNOLOGY, INC.
By: /s/ Clyde R. Hosein
----------------------------------
Clyde R. Hosein
Vice President and Chief
Financial Officer
(duly authorized officer)
Exhibit 99.1
IDT Announces Results for Fourth Fiscal Quarter and
Full Fiscal Year 2003
Revenue Growth Resumes as the Company Posts $80.8 Million
in the Fourth Fiscal Quarter
SANTA CLARA, Calif.--(BUSINESS WIRE)--April 23, 2003--IDT(TM)
(Integrated Device Technology, Inc.; Nasdaq:IDTI), a leading
communications IC company, today announced results for the fourth
fiscal quarter and full fiscal year 2003, ended March 30, 2003.
Revenues for the fourth quarter were $80.8 million, an increase of
2.3 percent over the third quarter of fiscal 2003 and a decrease of
6.7 percent from the fiscal quarter ended March 31, 2002. Revenues for
fiscal year 2003 were $343.9 million, a decrease of 9.5 percent over
the previous fiscal year. On a pro-forma basis, net loss for the
fourth fiscal quarter was $23.6 million ($0.23 per share), compared to
a net loss of $6.6 million ($0.06 per share) for the quarter one year
ago; and the net loss for the full fiscal year 2003 was $53.2 million
($0.51 per share), compared to a net loss of $23.7 million ($0.23 per
share) during the previous fiscal year.
Including certain costs, charges and gains in accordance with
GAAP, the Company lost $239.1 million in the fourth quarter of fiscal
2003 ($2.31 per share). On a GAAP basis, one year ago the Company
recorded a net loss of $20.0 million ($0.19 per share) for the fourth
quarter. On a GAAP basis for fiscal year 2003, the net loss was $277.9
million ($2.68 per share), compared to a net loss of $46.2 million
($0.44 per share) during the previous fiscal year. Included in the
fourth-quarter results were restructuring and impairment charges, and
asset write-downs of $213.3 million. This included a $107.9 million
write-down of manufacturing fixed assets, a reserve of $88.5 million
to fully reserve the Company's net deferred tax assets, and a charge
of $13.5 million related to certain intangible technology assets. Of
the $213.3 million, only about $3 million represent cash charges,
primarily severance related to reducing headcount by approximately 150
positions during the quarter. Further information, including a
detailed reconciliation of pro-forma and GAAP results, is provided in
the financial tables of this release.
"We are pleased with the progress we've made in substantially
reducing our inventory levels and aggressively cutting spending to
better align our business model with the current industry conditions
and forecasted revenue," said Greg Lang, president and CEO of IDT.
"Assuming moderate improvement in economic conditions, we anticipate
that the actions we have taken will position us to generate positive
cash flow starting as early as the first quarter and achieve pro-forma
profitability during the fiscal year."
FY03 Highlights:
-- IDT added several key senior executives in fiscal 2003. IDT
named Clyde Hosein as vice president and chief financial
officer, Thomas Brenner as vice president of worldwide
marketing, and Scott Sarnikowski as vice president and
co-general manager of the IP co-processor division. In
addition, Lang completed his planned transition to president
and CEO and joined the IDT board of directors.
-- The Company received several accolades with its network search
engines (NSEs), including the EDN Top 100 Products Award for
2002, being named the leading vendor of routing and switching
semiconductors by RHK, Inc. and named the technology and
volume shipment leader by IDC, and securing several new design
wins at key communications customers.
-- IDT continued to enhance its leadership in packet processing
by shipping its one-millionth NSE and introducing the
industry's fastest, widest and highest-performance NSE. In
addition, IDT also began sampling its devices with fully
integrated interfaces to the Intel and AMCC network
processors, and introduced a suite of development tools that
help speed development time, decrease system costs and improve
overall system performance.
-- IDT acquired Solidum Systems, the leading provider of
classification and content-inspection processing solutions.
This acquisition combined the packet-processing strengths of
two industry leaders and allows for IDT to provide a complete
Layer 2-7 classification solution.
-- IDT introduced the RC32438 Interprise(TM) integrated
communications processor for managed Layer-2 and Layer-3
Ethernet switches. This integrated processor received a
product-of-the-year award from analogZONE for boosting system
bandwidth and efficiency. The RC32438 processor delivers up to
266 MHz in performance and incorporates a DDR memory
controller, a 32-bit version 2.2 PCI controller and two
on-chip Ethernet interfaces to address the bandwidth-demanding
requirements of enterprise and access applications.
-- The Company extended its leadership in FIFO technology with
the introduction of high-speed TeraSync(TM) quad/dual FIFO
products that provide two or four TeraSync FIFOs in a single
package, thereby reducing board space and overall system
costs. These new TeraSync FIFOs are ideal for applications
where data-stream convergence and parallel buffering of
multiple data paths are required, including
bandwidth-demanding communications systems, data acquisition
systems and medical equipment.
-- IDT announced several new multi-port devices, including the
industry's first 9-Mbit, monolithic, synchronous dual-ports;
the industry's first 2.5-volt synchronous and asynchronous
dual-ports; and the industry's fastest and lowest-powered
synchronous FourPort(TM) devices. These new families further
expand the Company's leadership in multi-port technology.
-- IDT enhanced its clock portfolio with the new TeraClock(TM)
family of zero delay buffers and programmable skew devices
that provide the industry's broadest range of translation
capabilities between I/O standards. In addition, the Company
also announced the industry's first family of zero delay
buffers capable of user-selectable 2.5- and 3.3-volt outputs,
allowing designers increased flexibility to integrate multiple
voltage inputs on a single board.
Webcast and Conference Call Information
Investors can listen to a live or replay Webcast of the Company's
quarterly financial conference call at www.idt.com. The live Webcast
begins at 1:30 p.m. PDT on April 23, 2003. The Webcast replay will be
available after 4 p.m. PDT on April 23 through May 14, 2003. A taped
telephone replay of the conference call will be available at
800/475-6701 (access code is 681310) beginning at 5 p.m. PDT on April
23 and will be accessible until 9 p.m. PDT on April 30, 2003.
Investor Information
IDT stock is traded on the Nasdaq Stock Market(R) under the symbol
"IDTI." The Company is included in the S&P 1000, which is a
combination of the S&P MidCap 400 and S&P SmallCap 600 Indices. The
investor hotline is 408/654-6420.
About IDT
IDT enhances the global network with semiconductor solutions for
communications companies that lead innovation and drive convergence in
voice, data and wireless networks. IDT is focused on enhancing system
bandwidth with communications-specific products including network
search engines, classification and content inspection processors and
integrated communications processors. The portfolio is also comprised
of products optimized for communications applications, including
telecom products, FIFOs, multi-ports, and clock management products.
In addition, the product mix includes high-performance digital logic
and high-speed SRAMs to meet the requirements of leading
communications companies.
Headquartered in Santa Clara, Calif., the Company employs
approximately 3,100 people worldwide and has a wafer manufacturing
facility in Oregon, and test and assembly facilities in the
Philippines and Malaysia. Additional information about IDT is easily
accessible at www.idt.com.
Forward-looking statements in this release involve a number of
risks and uncertainties including, but not limited to, global business
and economic conditions, 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.
FourPort, Interprise, IDT, TeraClock and TeraSync are 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
------------------ ------------------------------ --------------------
Mar. 30, Dec. 29, Mar. 31, Mar. 30, Mar. 31,
2003 2002 2002 2003 2002
------------------------------ ---------- ---------
Revenues $80,804 $79,010 $86,621 $343,878 $379,817
Cost of revenues 60,893 59,826 56,163 226,693 241,841
Restructuring
charges, asset
impairment and
other 114,085 1,010 3,870 115,370 24,742
---------- --------- --------- ---------- ---------
Gross profit (loss) (94,174) 18,174 26,588 1,815 113,234
---------- --------- --------- ---------- ---------
Operating
expenses:
Research and
development 39,357 30,126 31,962 129,108 129,146
Selling, general
and
administrative 20,396 21,827 18,707 82,511 83,987
Acquired in-
process
research and
development -- 2,670 -- 2,670 16,000
Amortization of
intangibles 161 161 1,681 634 6,724
---------- --------- --------- ---------- ---------
Total operating
expenses 59,914 54,784 52,350 214,923 235,857
---------- --------- --------- ---------- ---------
Operating loss (154,088) (36,610) (25,762) (213,108) (122,623)
Interest expense (111) (143) (203) (514) (1,238)
Gain (loss) on
equity
investments -- -- -- (6,557) 36,160
Interest income
and other, net 3,880 4,006 6,459 19,040 38,744
---------- --------- --------- ---------- ---------
Loss before income
taxes (150,319) (32,747) (19,506) (201,139) (48,957)
Provision
(benefit) for
income taxes 88,782 (6,424) 474 76,757 (2,765)
---------- --------- --------- ---------- ---------
Net loss $(239,101) $(26,323) $(19,980) $(277,896) $(46,192)
========== ========= ========= ========== =========
Net loss per
share:
Basic $(2.31) $(0.25) $(0.19) $(2.68) $(0.44)
Diluted $(2.31) $(0.25) $(0.19) $(2.68) $(0.44)
Weighted average
shares:
Basic 103,574 103,271 104,351 103,520 104,560
Diluted 103,574 103,271 104,351 103,520 104,560
INTEGRATED DEVICE TECHNOLOGY, INC.
PRO FORMA ADJUSTMENTS
(Unaudited)
(In thousands) Three Months Ended Twelve Months Ended
------------------ ------------------------------ --------------------
Mar. 30, Dec. 29, Mar. 31, Mar. 30, Mar. 31,
2003 2002 2002 2003 2002
---------- --------- --------- ---------- ---------
Net loss $(239,101) $(26,323) $(19,980) $(277,896) $(46,192)
---------- --------- --------- ---------- ---------
Non-GAAP
adjustments:
Cost of goods
sold:
Restructuring
charges (1) 1,031 1,010 3,870 2,316 7,309
Asset
impairment
(2), (3) 113,054 -- -- 113,054 17,433
Other (4) 288 339 3,127 4,608 3,127
Amortization
of
acquisition-
related
charges (3) 909 909 786 3,390 3,144
Operating
expenses:
Asset
impairment
(2) 8,329 -- -- 8,329 --
Acquired IPR&D
(3) -- 2,670 -- 2,670 16,000
Other (4) 9 8 76 385 76
Restructuring
charges (1) 2,373 868 172 3,459 1,289
Amortization
of goodwill
(3) -- -- 1,500 -- 6,000
Other
acquisition-
related costs
(3) 991 1,248 1,752 4,191 5,839
Losses (gains)
on equity
Investments
(5) -- -- -- 6,557 (36,160)
Other income (6) -- -- -- -- (4,785)
Taxes (7) 88,536 (1,285) 2,118 75,773 3,171
---------- --------- --------- ---------- ---------
Total special
items 215,520 5,767 13,401 224,732 (22,443)
---------- --------- --------- ---------- ---------
Pro forma net loss $(23,581) $(20,556) $(6,579) $(53,164) $(23,749)
========== ========= ========= ========== =========
(1) Consists of costs, primarily severance, of restructuring actions
taken during FY 2002 and FY 2003.
(2) We recorded impairment charges related to our Salinas, Calif.
wafer fabrication plant (Q3 2002) and other manufacturing assets,
principally our Hillsboro, Ore. fabrication plant (Q4 2003).
(3) Costs relate to our acquisitions of Newave and Solidum in April
2001 and October 2002, respectively. Newave-related costs include
an IPR&D charge and amortization of contingent compensation,
stock-based compensation and intangible assets. Solidum-related
costs include an IPR&D charge and amortization of intangible
assets. We also recorded an intangible asset impairment charge of
$13.5 million in Q4 2003 related to Newave existing technology.
(4) Consists of costs related to the June 2002 closure of our Salinas
plant, including $3.0 million and $2.9 million in retention
bonuses for Q1 2003 and Q4 2002, respectively.
(5) We recorded an other-than-temporary impairment charge related to
an equity investment in Q2 2003. We sold another equity investment
in Q3 2002 and recorded a pretax gain of $35.7 million.
(6) In Q2 2002, we exercised an option to purchase land. The land was
immediately sold at a pretax gain of $5.1 million.
(7) We recorded a valuation allowance of $88.5 million against our net
deferred tax assets in Q4 2003.
INTEGRATED DEVICE TECHNOLOGY, INC.
PRO FORMA STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share data) Three Months Ended Twelve Months Ended
--------------------- ---------------------------- -------------------
Mar. 30, Dec. 29, Mar. 31, Mar. 30, Mar. 31,
2003 2002 2002 2003 2002
---------------------------- --------- ---------
Revenues $80,804 $79,010 $86,621 $343,878 $379,817
Cost of revenues 59,696 58,578 52,250 218,695 235,570
--------- --------- -------- --------- ---------
Gross profit 21,108 20,432 34,371 125,183 144,247
--------- --------- -------- --------- ---------
Operating expenses:
Research and
development 29,354 28,839 30,143 115,810 123,448
Selling, general
and administrative 18,858 21,151 18,707 80,079 83,205
--------- --------- -------- --------- ---------
Total operating
expenses 48,212 49,990 48,850 195,889 206,653
--------- --------- -------- --------- ---------
Operating loss (27,104) (29,558) (14,479) (70,706) (62,406)
Interest expense (111) (143) (203) (514) (1,238)
Interest income and
other, net 3,880 4,006 6,459 19,040 33,959
--------- --------- -------- --------- ---------
Loss before income
taxes (23,335) (25,695) (8,223) (52,180) (29,685)
Provision (benefit)
for income taxes (1) 246 (5,139) (1,644) 984 (5,936)
--------- --------- -------- --------- ---------
Net loss $(23,581) $(20,556) $(6,579) $(53,164) $(23,749)
========= ========= ======== ========= =========
Net loss per share:
Diluted $(0.23) $(0.20) $(0.06) $(0.51) $(0.23)
Weighted average
shares:
Diluted 103,574 103,271 104,351 103,520 104,560
(1) In the fourth quarter of fiscal 2003, we established a valuation
allowance to reserve 100% of our deferred tax assets and ceased to
recognize any tax benefit associated with period losses.
Therefore, pro forma results presented for the three and twelve
month periods ended March 30, 2003 exclude any domestic tax
benefits associated with losses for those periods and include only
estimated foreign taxes payable of $246 thousand and $984
thousand, respectively.
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)
Mar. 30, Mar. 31,
(In thousands) 2003 2002
------------------------------------------- ----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $144,400 $256,172
Short-term investments 410,425 418,228
Accounts receivable, net 40,111 40,067
Inventories 41,189 78,247
Deferred tax assets -- 74,874
Prepayments and other current assets 29,420 19,787
----------- ------------
Total current assets 665,545 887,375
Property, plant and equipment, net 129,923 221,499
Goodwill and other intangibles 47,266 57,281
Other assets 38,578 59,664
----------- ------------
TOTAL ASSETS $881,312 $1,225,819
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $17,514 $18,342
Accrued compensation and related expenses 11,020 14,068
Deferred income on shipments to
distributors 17,911 36,443
Income taxes payable 32,280 21,863
Other accrued liabilities 20,120 29,173
----------- ------------
Total current liabilities 98,845 119,889
Other liabilities 23,775 51,221
----------- ------------
Total liabilities 122,620 171,110
Stockholders' equity 758,692 1,054,709
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 881,312 $1,225,819
=========== ============
CONTACT: Integrated Device Technology
Diana Pailthorpe 408/492-8210 (Corporate Communications)
diana.pailthorpe@idt.com
Investor Relations, 408/654-6420
ir@idt.com
or
Porter Novelli
Ricky Gradwohl, 408/369-1500 ext. 31 (Press)
ricky.gradwohl@porternovelli.com