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Integrated Device Technology Inc. Reports Operating Results (10-Q)

November 03, 2010 | About:
10qk

10qk

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Integrated Device Technology Inc. (IDTI) filed Quarterly Report for the period ended 2010-09-26.

Integrated Device Technology Inc. has a market cap of $943.4 million; its shares were traded at around $5.91 with a P/E ratio of 16.9 and P/S ratio of 1.7. IDTI is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Columbia Wanger of Columbia Wanger Asset Management, Bruce Kovner of Caxton Associates, Paul Tudor Jones of The Tudor Group, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

R&D (the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010). R&D expenses increased $2.5 million, or 6%, to $44.0 million in the second quarter of fiscal 2011 compared to the second quarter fiscal 2010 primarily due to $2.8 million increase in variable compensation expense and $0.9 million increase in other performance bonus expense associated with the acquisitions. Equipment expenses, product development and other outside services increased $0.4 million, $0.3 million and $0.2 million, respectively, as we increased development efforts to bring products to market to meet customer requirements. Partially offsetting these increases were a $1.4 million decrease in severance and retention expense and $0.5 million decrease in stock based compensation expense.

R&D (the first six months of fiscal 2011 compared to the first six months of fiscal 2010). Our year to date R&D expenses through the second quarter of fiscal 2011 were $87.7 million, an increase of $10.0 million, or 13% compared to the same period one year ago. The increase was primarily attributable to a $4.8 million increase in variable compensation expense. The salary and related costs and other performance bonus expense increased $2.7 million and $1.9 million as a result of acquisitions. Equipment expenses and other outside services increased $2.3 million and $1.5 million, respectively. Partially offsetting these increases were a $1.2 million decrease in severance and retention expense, $0.8 million decrease in gain in the participant portfolio of the executive deferred compensation plan and $0.5 million decrease in stock based compensation expense.

SG&A (the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010). SG&A expenses decreased $3.8 million, or 13%, to $26.8 million in the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010 due to $5.3 million decrease in severance and retention expense as a result of the restructuring action associated with the Tundra acquisition in the second quarter of fiscal 2010, while we had no such action in the second quarter of fiscal 2011. The salary and related costs decreased $1.0 million due to the lower headcounts in the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010. In addition, intangible assets amortization expense decreased $0.4 million as the majority of intangible assets acquired from the ICS acquisition were fully amortized. Partially offsetting these decreases were a $1.1 million increase in variable compensation expense. The stock based compensation expense increased $1.2 million. Other increases in SG&A expense included a $0.4 million increase in travel and entertainment costs and $0.3 million in sales conference and trade shows.

SG&A (the first six months of fiscal 2011 compared to the first six months of fiscal 2010). Our year to date SG&A expenses through the second quarter of fiscal 2011 were $54.2 million, a decrease of $1.9 million, or 3% compared to the same period one year ago. The decrease was primarily attributable to a $5.9 million decrease in severance and retention expense. The gain in the participant portfolio of the executive deferred compensation plan decreased $0.6 million. In addition, outside service expense decreased $2.3 million primarily related to reductions in legal, tax, accounting and outside consulting services. Partially offsetting these decreases were a $2.0 million increase in variable compensation expense, a $1.8 million increase in stock based compensation expense, a $0.8 million increase in travel and entertainment costs and $0.3 million increase in sales conference and trade shows. In addition, sales commission expense increased $0.4 million due to revenue increase.

During the second quarter of fiscal 2006, we completed the consolidation of our Northern California workforce into our San Jose headquarters and exited a leased facility in Salinas, California. We recorded lease impairment charges of approximately $2.1 million, of which $0.6 million was recorded as cost of revenues, $0.9 million was recorded as R&D expense and $0.6 million was recorded as SG&A expense. Since the initial restructuring, we have made lease payments of $1.3 million related to the vacated facility in Salinas. As of September 26, 2010, the remaining accrued lease liabilities were $0.8 million.

Our cash and available for sale investments were $339.1 million at September 26, 2010, a decrease of $4.1 million compared to March 28, 2010. The decrease was primarily attributable to the repurchase of approximately $55.5 million of common stock, net cash payments of $8.0 million relating to the acquisition of IKOR including $1.8 million held in escrow and $9.5 million used to purchase capital equipment, partially offset by $66.7 million cash from operations in the first six months of fiscal 2011. We had no outstanding debt at September 26, 2010 and March 28, 2010.

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