Integrated Device Technology Inc (NASDAQ:IDTI) announced results for the fiscal third quarter 2017, ended January 1, 2017.
“Third quarter fiscal 2017 revenue totaled $176.4 million, slightly better than the midpoint of our prior guidance range, on strength in sensing solutions sold into our Consumer end market,” commented Gregory Waters, president and chief executive officer. “We have increasing momentum in multiple new growth areas, particularly automotive, industrial, and sensors, that will drive future growth. Additionally, we remain disciplined in managing our operating model, delivering best-in-class profitability and earnings leverage,” concluded Mr. Waters.
Recent Business Highlights – Consumer
- IDT’s ZMOD3250 gas sensor was selected as a CES 2017 Innovation Awards Honoree, receiving high marks from judges in the embedded technologies product category. The ZMOD3250 family is a miniscule but highly sensitive gas sensor product line that can detect air quality (total VOC) as well as selectively identify several volatile organic compounds, including formaldehyde and ethanol.
- Scosche selected IDT’s 15W Qi-certified wireless power transmitter for its new MagicMount™ Charge Wireless Charging Magnetic Mount for fast-charging mobile devices. The company launched the industry’s highest efficiency 15W turnkey wireless power reference kit, delivering the same ease of use and support that have become the hallmark of its two prior wireless power kits. With this latest kit, IDT now presents an off-the-shelf library of turnkey wireless power solutions covering the range of one to 15 watts.
- At the recent Consumer Electronics Show (CES) in Las Vegas, IDT demonstrated 17 in-car wireless charging applications via a joint development with Eggtronic offering OEMs an easy path to an elegant built-in wireless power transmitter for charging mobile devices on the road.
- IDT showcased its wireless power and environmental sensing products at the IDTechEx Wearable USA Conference in November, drawing from a broad portfolio of environmental sensing products that measure ambient light, UVA, UVB, body temperature, object temperature, various gases, and humidity. In addition, the company demonstrated its wireless power receivers and transmitters, already in consumer products throughout the world.
Recent Business Highlights – Communications
- IDT introduced an RF switch that supports the DOCSIS 3.1 standard for cable networking equipment. The Data Over Cable Service Interface Specification (DOCSIS) is an international standard for the transfer of data via high-bandwidth cable modems.
- IDT broadened its 1.8V RF timing family with dual-channel buffer devices delivering high performance and low power, making them ideal for wireless infrastructure and other communications equipment.
- IDT introduced a broadband SPST absorptive RF switch built on its constant impedance technology, making it valuable for 4G/LTE-Advanced base stations, portable wireless applications, point-to-point, public safety infrastructure, and test equipment.
Recent Business Highlights – Computing
- IDT and Mosys announced a collaboration to deliver 100 Gbps base station, data center and mobile edge computing solutions. Leveraging IDT’s RapidIO technology these solutions will deliver ultra-low latency and high-bandwidth in both wireless and wireline 100G, 400G, and terabit network infrastructure applications, such as mobile edge computing, high-performance computing, and data analytics.
- IDT introduced the industry’s first integrated power management IC (PMIC) developed for enterprise DDR4 NVDIMM applications. The IDT P8800 enables NVDIMM solutions to efficiently scale to greater density, reliability and performance.
Recent Business Highlights – Auto and Industrial
- The company’s products for the automotive and industrial markets received much interest at CES. In addition to sensors for the automotive industry, IDT demonstrated the integration of wireless power chips for automotive applications and was awarded the CES Innovation Honoree Award (Jan 2017) for the IDT Multi-Purpose Gas Sensor.
Recent Business Highlights – Other
- IDT announced it has signed a global franchise agreement with Future Electronics, IDT’s newest distributor of products through its offices in 44 countries spanning the globe.
- IDT appointed Selena Loh LaCroix, an executive with Egon Zehnder, to the Board of Directors, bringing global experience in organizational excellence, cyber security, and compliance.
The following highlights the Company’s financial performance on both a GAAP and supplemental non-GAAP basis. The Company provides supplemental information regarding its operating performance on a non-GAAP basis that excludes certain gains, losses and charges which occur relatively infrequently and which management considers to be outside our core operating results. 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 from continuing operations for the fiscal third quarter of 2017 was $176.4 million. This compared with $184.1 million reported last quarter, and $177.6 million reported in the same period one year ago.
- GAAP net income from continuing operations for the fiscal third quarter of 2017 was $33.4 million, or $0.24 per diluted share, versus GAAP net income from continuing operations of $24.6 million or $0.18 per diluted share last quarter, and GAAP net income from continuing operations of $32.5 million or $0.22 per diluted share in the same period one year ago. Fiscal third quarter GAAP results include $9.9 million in stock-based compensation, $6.1 million in acquisition and restructuring charges, $3.3 million in non-cash interest expense, $0.7 million in other income and $4.5 million in related tax effects.
- Non-GAAP net income for the fiscal third quarter of 2017 was $49.0 million or $0.35 per diluted share, compared with non-GAAP net income of $47.4 million or $0.34 per diluted share last quarter, and non-GAAP net income of $52.2 million or $0.35 per diluted share reported in the same period one year ago.
- GAAP gross profit from continuing operations for the fiscal third quarter of 2017 was $104.1 million, or 59.0 percent, compared with GAAP gross profit of $106.5 million or 57.9 percent last quarter, and $107.9 million, or 60.8 percent, reported in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2017 was $108.7 million, or 61.6 percent, compared with non-GAAP gross profit of $111.4 million, or 60.5 percent last quarter, and $111.1 million, or 62.6 percent, reported in the same period one year ago.
- GAAP R&D expense for the fiscal third quarter of 2017 was $38.2 million, compared with GAAP R&D expense of $41.8 million last quarter, and $38.4 million reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2017 was $33.5 million, compared with non-GAAP R&D expense of $35.3 million last quarter, and $33.8 million in the same period one year ago.
- GAAP SG&A expense for the fiscal third quarter of 2017 was $32.7 million, compared with GAAP SG&A expense of $37.4 million last quarter, and $38.9 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2017 was $25.7 million, compared with non-GAAP SG&A expense of $28.2 million last quarter, and $25.1 million in the same period one year ago.
Shares of Integrated Device Technology are down nearly 4% to $25.26 in after-hours trading. IDTI has a 1-year high of $26.66 and a 1-year low of $16.22. The stock’s 50-day moving average is $24.76 and its 200-day moving average is $22.35.
On the ratings front, IDTI has been the subject of a number of recent research reports. In a report issued on January 18, Barclays analyst Blayne Curtis maintained a Sell rating on the stock, with a price target of $22, which reflects a potential downside of 17% from last closing price. Separately, on January 4, Pacific Crest’s John Vinh assigned a Buy rating to the stock and has a price target of $30.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Blayne Curtis and John Vinh have a yearly average return of 10.5% and 10.4% respectively. Curtis has a success rate of 66% and is ranked #296 out of 4378 analysts, while Vinh has a success rate of 57% and is ranked #487.
Sentiment on the street is mostly bullish on IDTI stock. Out of 6 analysts who cover the stock, 5 suggest a Buy rating and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $25.83, which represents a slight downside potential from current levels.
Integrated Device Technology, Inc. designs, develops, manufactures and markets low-power, high-performance mixed signal semiconductor solutions for the advanced communications, computing and consumer industries. It offers communications solutions for customers within the enterprise, data center and wireless markets. The company operates business through two segments: Communications and Computing & Consumer. The Communications segment includes clock and timing solutions, Serial RapidIO switching solutions, Crystal Oscillator replacements, radio frequency, signal path products, flow-control management devices and first in and first out, integrated communications processors, high-speed static random access memory and digital logic and telecommunications products. The Computing & Consumer segment includes clock generation and distribution products, high-performance server memory interfaces, PCI Express switching solutions, signal integrity products, multi-port products, touch controllers, PC audio, power management solutions and video products.