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Integrated Device Technology, Inc. (IDT®) (NASDAQ: IDTI), the Analog and Digital Company™ delivering essential mixed-signal semiconductor solutions, today announced results for the fiscal third quarter ended January 1, 2012.

“We achieved better bottom line results than originally projected for our fiscal third quarter by tightly managing operating expenses,” said Dr. Ted Tewksbury, president and CEO of IDT. “Despite weaker demand for communications, consumer and PC solutions during the December quarter, we saw improved bookings trends for server-related products. New product introductions and design wins increased during the quarter and we continue to win prestigious awards for innovation. While some customer ramps have been delayed by macroeconomic factors, we remain well positioned for multi-year growth driven by the ongoing rollout of cloud computing, 4G wireless infrastructure and mobility platforms.”

Recent Highlights

IDT recently announced:

  • It has expanded its portfolio of wireless infrastructure solutions with two low-power, low-distortion radio frequency (RF) to intermediate frequency (IF) mixers and a dual IF variable gain amplifier (VGA) that reduce system cost while increasing signal quality and capacity in 4G base stations.
  • The industry's most complete and lowest-power timing solution specifically optimized to meet the stringent performance requirements of Intel’s Romley server platform.
  • It has expanded its leading timing portfolio with the industry's most versatile WAN PLL that supports Synchronous Ethernet, IEEE 1588 and a range of other protocols, making it ideal for cloud-based networking and 4G wireless infrastructure.
  • It has developed and demonstrated the world's first commercially available oscillators incorporating piezoelectric microelectromechanical system (pMEMS) resonators and packaged these devices in a multi-output clock generator, removing the need for the use of quartz crystal technology and opening new markets within the timing space.
  • It was honored with Electronic Products' Product of the Year Award for its 3LG family of ±50 ppm CrystalFree™ solid-state oscillators.
  • Its wide dynamic range energy metering IC was awarded the Leading Product Award at the seventh-annual EDN China Innovation Awards in the Analog/Mixed Signal IC category.
  • Two IDT mixed-signal product families were included in the prestigious list of EDN magazine's “Hot 100 Products of 2011” -- an integrated timing, thermal management and fan controller that reduces BOM and application footprint, and the world's first portable audio subsystem with integrated programmable clock generator that eliminates the need for multiple external crystals and oscillators.

The following highlights the Company’s financial performance on both a GAAP and non-GAAP basis. The GAAP results include certain costs, charges, gains and losses, which are excluded from non-GAAP results based on management’s determination that they are not directly reflective of ongoing operations. 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 from continuing operations is attached to this press release.

  • Revenue for the fiscal third quarter of 2012 was $120.0 million, compared with $147.5 million reported in the same period one year ago.
  • GAAP net loss from continuing operations for the fiscal third quarter of 2012 was $903 thousand or a loss $0.01 per diluted share, versus GAAP net income of $14.9 million or $0.10 per diluted share in the same period one year ago. Fiscal third quarter 2012 GAAP results include $3.3 million in acquisition and restructuring related charges, $4.3 million in stock-based compensation and a $2.1 million net impairment charge related to strategic investments.
  • Non-GAAP net income from continuing operations for the fiscal third quarter of 2012 was $8.5 million or $0.06 per diluted share, compared with non-GAAP net income from continuing operations of $27.3 million or $0.18 per diluted share reported in the same period one year ago.
  • GAAP gross profit for the fiscal third quarter of 2012 was $63.9 million, or 53.2 percent, compared with GAAP gross profit of $80.3 million, or 54.5 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2012 was $65.7 million, or 54.7 percent, compared with non-GAAP gross profit of $86.5 million, or 58.6 percent, reported in the same period one year ago.
  • GAAP R&D expense for the fiscal third quarter of 2012 was $38.4 million, compared with GAAP R&D expense of $40.7 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2012 was $34.9 million, compared with non-GAAP R&D of $36.3 million in the same period one year ago.
  • GAAP SG&A expense for the fiscal third quarter of 2012 was $23.7 million, compared with GAAP SG&A expense of $26.0 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2012 was $20.6 million, compared with non-GAAP SG&A expense of $22.4 million in the same period one year ago.

Webcast and Conference Call Information

Investors can listen to a live or replay webcast of the Company’s quarterly financial conference call at http://www.IDT.com. The live webcast will begin at 1:30 p.m. Pacific time on January 30, 2012. The webcast replay will be available after 5 p.m. Pacific time on January 30, 2012.

Investors can also listen to the live call at 1:30 p.m. Pacific time on January 30, 2012 by calling (800) 230-1096 or (612) 332-0819. The conference call replay will be available after 5 p.m. Pacific time on January 30, 2012 through 11:59 p.m. Pacific time on February 6, 2012 at (800) 475-6701 or (320) 365-3844. The access code is 231988.

About IDT

Integrated Device Technology, Inc., the Analog and Digital Company™, develops system-level solutions that optimize its customers’ applications. IDT uses its market leadership in timing, serial switching and interfaces, and adds analog and system expertise to provide complete application-optimized, mixed-signal solutions for the communications, computing and consumer segments. Headquartered in San Jose, Calif., IDT has design, manufacturing and sales facilities 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, and YouTube.

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 3, 2011. 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

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 restructuring-related costs, acquisition and divestiture-related charges, share-based compensation expense, results from discontinued operations 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 another way management internally analyzes IDT’s results and may be useful to investor community. The Company has reconciled non-GAAP results to the most directly comparable GAAP financial measures in the financial tables at the end of this press release.

Reference to these non-GAAP results should be considered in addition to results that are prepared under general accepted accounting standards in the United States (GAAP), but should not be considered a substitute for results that are presented in accordance with GAAP. It should also be noted that IDT's non-GAAP information may be different from the non-GAAP information provided by other companies.

IDT, PureTouch, PowerSmart, 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       Nine Months Ended
January 1,   October 2,   January 2, January 1,   January 2,
2012 2011 (1) 2011 (1) 2012 (1)

2011 (1)

Revenues $ 119,977 $ 138,318 $ 147,524 $ 407,580 $ 460,715
Cost of revenues   56,093     64,685     67,177     190,627       213,222  
Gross profit 63,884 73,633 80,347 216,953 247,493
Operating expenses:
Research and development 38,410 39,184 40,674 117,409 116,774
Selling, general and administrative   23,661     24,888     26,017     74,478       77,732  
Total operating expenses   62,071     64,072     66,691     191,887       194,506  
 
Operating income   1,813     9,561     13,656     25,066       52,987  
 
Other-than-temporary impairment loss on investments (2,130 ) - - (2,130 ) -
Other income (expense), net   (10 )   (1,828 )   1,352     (1,794 )   2,793  
Income (loss) from continuing operations before income taxes (327 ) 7,733 15,008 21,142 55,780
Provision (benefit) for income taxes   576     (560 )   111     1,176       1,659  
 
Net income (loss) from continuing operations (903 ) 8,293 14,897 19,966 54,121
 
Discontinued operations:
Gain from divestiture - 45,939 - 45,939 -
Loss from discontinued operations (5,290 ) (7,352 ) (5,124 ) (20,286 ) (15,404 )
Provision (benefit) for income taxes   -     (60 )   (21 )   (89 )     (64 )
Net income (loss) from discontinued operations (5,290 ) 38,647 (5,103 ) 25,742 (15,340 )
 
Net income (loss) $ (6,193 ) $ 46,940   $ 9,794   $ 45,708     $ 38,781  
 
Basic net income (loss) per share continuing operations $ (0.01 ) $ 0.06 $ 0.10 $ 0.14 $ 0.35
Basic net income (loss) per share discontinued operations   (0.03 )   0.26     (0.04 )   0.18       (0.10 )
Basic net income (loss) per share $ (0.04 ) $ 0.32   $ 0.06   $ 0.32     $ 0.25  
 
Diluted net income (loss) per share continuing operations $ (0.01 ) $ 0.06 $ 0.10 $ 0.14 $ 0.35
Diluted net income (loss) per share discontinued operations   (0.03 )   0.26     (0.04 )   0.17       (0.10 )
Diluted net income (loss) per share $ (0.04 ) $ 0.32   $ 0.06   $ 0.31     $ 0.25  
 
Weighted average shares:
Basic   141,839     144,682     151,421     144,792       154,487  
Diluted   141,839     146,169     152,975     146,706       155,525  
 
 
1) The Company's prior period financial results have been revised to reflect an immaterial correction. During the third quarter of fiscal 2012
the Company identified errors related to its accounting for certain accrued employee retention costs and other accrued liabilities. The Company
has concluded that the errors were not material to any of its prior period financial statements and has revised its prior financial statements
according to SEC guidance related to immaterial corrections.
 
As a result of the revisions, net income for the three months ended October 2, 2011 and January 2, 2011 decreased by $0.1 million and $0.8 million
respectively and net income for the nine months ended January 1, 2012 and January 2, 2011 decreased by $2.5 million and $2.2 million, respectively.
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(In thousands, except per share data)    
Three Months Ended Nine Months Ended
January 1, October 2, January 2, January 1, January 2,
2012 2011 (1) 2011 (1) 2012 (1) 2011 (1)
 
GAAP net income (loss) from continuing operations $ (903 ) $ 8,293   $ 14,897   $ 19,966   $ 54,121  
GAAP diluted net income (loss) per share continuing operations $ (0.01 ) $ 0.06   $ 0.10   $ 0.14   $ 0.35  
Acquisition related:
Amortization of acquisition related intangibles 4,006 3,861 4,739 11,995 14,533
Acquisition related costs (1) 109 - 694 109 1,834
Assets impairment (2) (73 ) (92 ) (107 ) (255 ) (384 )
Fair market value adjustment to acquired inventory sold - - - - 379
Restructuring related:
Severance and retention costs (1,978 ) 816 2,263 625 4,038
Facility closure costs (3) 16 (5 ) 124 39 1,386
Fabrication production transfer costs (4) 1,233 816 1,639 3,894 3,851
Other:
 
Other-than-temporary impairment loss on investments (5) 2,130 - - 2,130 -
Compensation expense (benefit)—deferred compensation plan (6) 649 (1,337 ) 815 (632 ) 1,306
Loss (gain) on deferred compensation plan securities (6) (629 ) 1,359 (793 ) 685 (1,260 )
Stock-based compensation expense 4,312 4,282 4,007 12,366 11,771
Tax effects of Non-GAAP adjustments (7)   (347 )   (787 )   (1,008 )   (1,413 )   (1,514 )
Non-GAAP net income from continuing operations $ 8,525 $ 17,206 $ 27,270 $ 49,509 $ 90,061
GAAP weighted average shares - diluted 141,839 146,169 152,975 146,706 155,525
Non-GAAP adjustment   2,676     1,994     2,058     1,835     1,945  
Non-GAAP weighted average shares - diluted (8)   144,515     148,163     155,033     148,541     157,470  
Non-GAAP diluted net income per share continuing operations $ 0.06   $ 0.12   $ 0.18   $ 0.33   $ 0.57  
 
GAAP gross profit   63,884     73,633     80,347     216,953     247,493  
Acquisition and divestiture related:
Amortization of acquisition related intangibles 2,733 2,917 3,365 8,834 10,374
Acquisition related costs (1) - - - - 5
Assets impairment (2) (73 ) (92 ) (107 ) (255 ) (384 )
Fair market value adjustment to acquired inventory sold - - 379
Restructuring related:
Severance and retention costs (2,784 ) 670 718 (824 ) 2,000
Facility closure costs (3) 3 (4 ) 4 1 900
Fabrication production transfer costs (4) 1,233 816 1,639 3,894 3,851
Other:
Compensation expense (benefit) - deferred compensation plan (6) 140 (289 ) 176 (137 ) 282
Stock-based compensation expense   535     453     370     1,415     1,260  
Non-GAAP gross profit   65,671     78,104     86,512     229,881     266,160  
 
GAAP R&D expenses:   38,410     39,184     40,674     117,409     116,774  
Acquisition and divestiture related:
Acquisition related costs (1) - - (400 ) - (1,196 )
Restructuring related:
Severance and retention costs (870 ) (126 ) (1,053 ) (1,473 ) (1,388 )
Facility closure costs (3) (4 ) 5 (6 ) (14 ) (122 )
Other:
Compensation expense (benefit) - deferred compensation plan (6) (421 ) 867 (529 ) 409 (847 )
Stock-based compensation expense   (2,174 )   (2,320 )   (2,400 )   (6,493 )   (6,746 )
Non-GAAP R&D expenses   34,941     37,610     36,286     109,838     106,475  
 
GAAP SG&A expenses:   23,661     24,888     26,017     74,478     77,732  
Acquisition and divestiture related:
Amortization of acquisition related intangibles (1,273 ) (944 ) (1,374 ) (3,161 ) (4,159 )
Acquisition related costs (1) (109 ) - (294 ) (109 ) (633 )
Restructuring related:
Severance and retention costs 64 (20 ) (492 ) 24 (650 )
Facility closure costs (3) (9 ) (4 ) (114 ) (24 ) (364 )
Other:
Compensation expense (benefit) - deferred compensation plan (6) (88 ) 181 (110 ) 86 (177 )
Stock-based compensation expense   (1,603 )   (1,509 )   (1,237 )   (4,458 )   (3,765 )
Non-GAAP SG&A expenses   20,643     22,592     22,396     66,836     67,984  
 
GAAP interest income and other, net   (10 )   (1,828 )   1,352     (1,794 )   2,793  
Loss (gain) on deferred compensation plan securities (6)   (629 )   1,359     (793 )   685     (1,260 )
Non-GAAP interest income and other, net   (639 )   (469 )   559     (1,109 )   1,533  
 
GAAP provision (benefit) for income taxes continuing operations   576     (560 )   111     1,176     1,659  
Tax effects of Non-GAAP adjustments (7)   347     787     1,008     1,413     1,514  
Non-GAAP provision (benefit) for income taxes continuing operations   923     227     1,119     2,589     3,173  
 

(1) Consists of costs incurred in connection with merger and acquisition-related activities, including legal and accounting fees.

(2) Consists of an impairment charge related to a note receivable and subsequent recoveries.

(3) Consists of ongoing costs associated with the exit of our leased and owned facilities.

(4) Consists of costs incurred in connection with the transition of our wafer fabrication processes in Oregon facility to TSMC.

(5) Consists of an other-than-temporary impairment charge related to an investment in a non-marketable equity security, offset in part by a gain on the sale of a non-marketable security

(6) Consists of gains and losses on marketable equity securities related to our deferred compensation arrangements and 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.

(7) Consists of the tax effects of non-GAAP adjustments.

(8) 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 BALANCE SHEETS
(Unaudited)
     
January 1, April 3,
(In thousands) 2012 2011 (1)
 
ASSETS
Current assets:
Cash and cash equivalents $ 110,414 $ 104,680
Short-term investments 204,200 194,512
Accounts receivable, net 58,422 81,798
Inventories 78,649 67,041
Prepaid and other current assets   22,273   23,929  
Total current assets 473,958 471,960
 
Property, plant and equipment, net 69,977 67,754
Goodwill 96,092 104,020
Acquisition-related intangibles 44,908 51,021
Other assets   31,859   32,705  
TOTAL ASSETS $ 716,794

$

727,460

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,351 $ 35,419
Accrued compensation and related expenses 33,402 32,784
Deferred income on shipments to distributors 14,087 12,853
Deferred taxes liabilities 2,268 2,224
Other accrued liabilities   21,870   30,886  
Total current liabilities 94,978 114,166
 
Deferred tax liabilities 1,519 1,513
Long term income taxes payable 764 712
Other long term obligations   17,504   15,808  
Total liabilities 114,765 132,199
 
Stockholders' equity   602,029   595,261  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 716,794 $ 727,460  
 
(1) Amounts as of April 3, 2011 are revised due to the correction of an immaterial error. As a result of the revision, current liabilities increased and stockholders' equity decreased by $3.5 million.

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