Integrated Device Technology Inc
Integrated Device Technology — Integrated Circuit Systems — Merger or Acquisition (September 2005)
29 slides from Integrated Device Technology's merger presentation, Sep 8, 2005
Slide 1: IDT and ICS Merger
IDT and ICS Merger September 2005 Accelerated ThinkingSM
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements, including forecasts of market growth, future revenue, benefits of the proposed merger, and expectations that the merger will be accretive to IDT’s results and other matters that involve known and unknown risks, uncertaintie
Slide 3: Where to Find Additional Information
Where to Find Additional Information IDT Corporation and ICS have filed a registration statement on Form S-4 containing a joint proxy statement/prospectus in connection with the merger transaction involving IDT and ICS. Investors and security holders are urged to read this filing because it contains
Slide 4: Merged Company Overview
Merged Company Overview Overview Merger of IDT and ICS Combined company will maintain IDT’s name and ticker (IDTI) Combined revenues of $645MM (LTM 03/31/05) Headquartered in San Jose Transaction Structure IDT offers 1.3 shares of IDT common stock and $7.25 of cash for each share of ICS $1.7Bn deal
Slide 5: Transaction Overview
Transaction Overview Financial impact Approximately $40M-$50M annual synergies within 3 years Pro forma revenues of ~$645MM (LTM) Estimated to be neutral (non-dilutive) to IDT FY06 earnings (non GAAP) Estimated to be accretive to IDT FY07 earnings (non GAAP) Time Line Announced June 2005 Anticipated
Slide 6: About ICS
About ICS Founded in 1976; IPO in 2000 (Nasdaq: ICST) Worldwide leader of silicon timing devices focused on Computing, Communication and Digital Consumer applications Delivered over 160M PC Clocks in 2004 Leading clock supplier to enterprise networking/storage Growing Presence in Game Console, hands
Slide 7: ICS Financial
ICS Financial Revenue Trend $400 $300 $200 $100 $0 $272 $183 $242 $245 FY02 FY03 FY04 FY05 Non-GAAP Q3FY05 (March) FY04 FY05(1) Revenues $58 million $272 million $245 million Gross Margin 59% 60% 59% Operating Income $15 million $88 million $62 million Net Income $14 million $ 82 million $61 million
Slide 8: IDT – A Multi-Year Transformation
IDT – A Multi-Year Transformation Final phase of a transition from our commodity heritage to application optimized solutions Changing mindset, investments, staffing, development skills, customer and partner engagement Become a ‘vital solution provider’ to our key customers Sustained profitability an
Slide 9: IDT Financial
IDT Financial Revenue Trend $500 $400 $300 $200 $100 $0 $380 $344 $345 $391 FY02 FY03 FY04 FY05 Non-GAAP FY03 FY04 FY05 Revenues $344 million $345 million $391 million Gross Margin 36% 48% 51% Operating Income $(71) million $(3) million $26 million Operating Margin (27)% (1)% 6.5% Net Income $(53) m
Slide 10: IDT Restructuring Continues As Planned
IDT Restructuring Continues As Planned Strengthens the Base Streamlining operating expenses (announced Jan ‘05) Consolidation of common functions Consolidation of California operations into single San Jose campus Strengthening of Penang capability Substantially complete Closure of Manila operation (
Slide 11: Synergies from merger
Synergies from merger Sources Lower manufacturing costs through use of IDT fab Lower expenses from elimination of operational overlap Growth in communications silicon timing Acceleration of crystal oscillator replacement solutions Timing Start production of new ICS products in IDT fab within 2 quart
Slide 12: Financial Summary
Financial Summary $800 $600 $400 $200 $0 $391 IDT $254 ICS $645 Combined Last Twelve Months (March) IDT ICS Merged Company (Pre-Transaction) Revenues $391 million $254 million $645 million Gross Margin 51% 59% 54% Operating Income $26 million $70 million $96 million Operating Margin 7% 28% 15% Cash
Slide 13: Strong Combined Balance Sheet
Strong Combined Balance Sheet Solid capital structure No long-term debt Substantial cash balance: combined cash of approximately $833mm as of 06/05 Approximately $550mm needed for transaction consideration Approximately $130mm to $140mm of annual cash flow No major CapEx requirements Initial or ongo
Slide 14: The Merged Companies
The Merged Companies A Global Force in Semiconductor Solutions Hillsboro, OR San Jose, CA Headquarters Tempe AZ Ottawa Worcester, MA Auburn, NY Norristown, PA Atlanta, GA Penang Shanghai Singapore Sydney Design Engineering Center Wafer Fabrication Facility Assembly/Test
Slide 15: Strategic Rationale
Strategic Rationale Expand Timing Opportunity Growth Platform Synergies Accelerate expansion of silicon replacements for crystal oscillators Grow share of silicon-based communications timing Largest silicon sub-segment Significant presence in 3 major industry segments—communications, consumer, compu
Slide 16: Next Steps (Projected)
Next Steps (Projected) Jun Jun- Jul Aug Sep CYQ4 Announcement of merger File form S-4 / Proxy statement with SEC HSR review SEC filings declared effective Shareholder meeting Close merger
Slide 17: Summary
Summary A strategically and financially compelling company combination Leadership in financial performance Leadership in technology Strong customer relevance Strong, balanced management team Shareholder value Leverage IDT manufacturing capability Revenue expansion opportunity Operating synergies PAG
Slide 18: Thank You
Thank You
Slide 19: Scale to Drive Efficiency, Market Service
Scale to Drive Efficiency, Market Service Peer Group Revenue Comparison (Last 4 Qtrs ending March) Revenue ($ 000s) $1,000 $800 $600 $400 $200 $0 CY CNXT Post-Close IDT IDT PMCS MCRL ICS AMCC ZL NETL EXAR IDT + ICS IDT Standalone ICS Standalone
Slide 20: ICS Worldwide Presence
ICS Worldwide Presence Worcester, MA Auburn, NY Norristown, PA Headquarters San Jose, CA Tempe, AZ Singapore Design Engineering Center Wafer Fabrication Facility Assembly/Test
Slide 21: IDT Provides Vital Semiconductor Solutions
IDT Provides Vital Semiconductor Solutions to Accelerate Innovation so our Customers can Create and Capitalize on Higher Value Networks Unequalled Market Knowledge Applications Expertise: Systems level vision Market-making innovations Standards creation Unrivalled Technology Delivery Breadth of adva
Slide 22: IDT Today
IDT Today Worldwide Presence Hillsboro San Jose Headquarters Ottawa Atlanta Penang Shanghai Sydney Design Engineering Center Wafer Fabrication Facility Assembly/Test
Slide 23: Timing Industry Opportunity
Timing Industry Opportunity Crystal & Osc. $3,200M Comm. $450M DIMM $180M PC $140M Consumer $130M *Source: IDT estimates based on multiple market research sources, 2005
Slide 24: The Biggest Silicon Clock Sub-segment: Communications Clocks
The Biggest Silicon Clock Sub-segment: Communications Clocks ICS 10% IDT 5% Exar 4% Micrel 5% On 5% Zarlink 7% Freescale 7% Semtech 9% Cypress 20% Others 28% Source: IDT estimates based on multiple market research sources, 2005 PAGE 24 Accelerated ThinkingSM
Slide 25: Broadening The Customer Base
Broadening The Customer Base
Slide 26: Multiple Market Platforms for Growth
Multiple Market Platforms for Growth Other 8% Computing 13% Comm 79% Other 9% Consumer 6% Comm Computing 57% 28% LTM $645M Other 9% Comm 20% Consumer 16% Computing 55% FY05 $391M LTM $254M *Figures above represent IDT management estimates, based on limited sample data
Slide 27: Multiple Technology Platforms for Growth
Multiple Technology Platforms for Growth FY05 $391M Other 1% SRAM 16% Timing Products Comms 19% ASSPs 64% LTM $645M Other 4% SRAM 9% Comms ASSPs 38% Timing Products 49% LTM $254M Other/Mil 9% Timing 91% *Figures above represent IDT management estimates, based on limited sample data
Slide 28: Strategic Rationale
Strategic Rationale Accelerated ThinkingSM
Slide 29: Financial Overview
Financial Overview Accelerated ThinkingSM Safe Harbor Statement This filing contains, in addition to statements of historical fact, certain forward-looking statements. These forward-looking statements relate to the proposed merger and the combined company and involve risk and uncertainty. Actual res
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