Transcript Current IDT Company Presentation

Solutions for
Intelligent
Bandwidth
Forward-looking statements in this
presentation involve a number of risks and
uncertainties which are detailed in IDT’s
SEC filings. Actual results may differ
materially from the Company’s projections.
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IDT is…
• A global semiconductor solutions provider to
leading-edge communications companies
• Generating approximately 75% of revenues
from communications and SAN markets
• Financially strong and well-positioned as the
market stabilizes and begins to grow
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Prepared for Growth
Resized the organization
Dramatic reduction in discretionary spending
Capital spending reduced
Manufacturing consolidation announced $6-8 million savings per quarter
RESULTS:
50% gross margin at $90 million in revenue
Pro forma break-even at $90 million in revenue
Cash flow break-even at $80 million in revenue
High fall-through to profits with revenue growth
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Serving The Communications
Infrastructure
Revenue Across All Products
Calendar Q4 2001
Communications
19%
Enterprise/Carrier-Class
Wireless/Mobile
Broadband Access
Storage Area Networks
8%
3%
6%
46%
18%
Personal Computing
Miscellaneous
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Leading Communications
Customers
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Alcatel
Cisco
EMC
Ericsson
Fujitsu
IBM
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Lucent
Motorola
NEC
Nokia
Nortel
Siemens
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The Changing Global Network
Core Routing
Voice
Entridia
Wireless
Metro Router
Enterprise
OC-48c / 192c
Metro
Transport
IP
Broadband
Access
Core
Metro
ATM
ATM
Edge
Router
Core
Router
EDGE
Metro
Transport
Metro
Transport
Metro
Transport
Edge
Router
ATM
Core
Switch
OC-48c / 192c / 768
Web
Switch
SAN
Fibre Channel
Edge Aggregation
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Key Growth Segments
Application Segment
Wireless Broadband Access
Growth Rate
High
Core Routers
Moderate
Metro Edge Routers
Moderate
Multi-Service Access Switches
Very High
LAN Switch Ports
Moderate
VPN Equipment
Moderate
Web Switches
Moderate
Fibre Channel SAN
High
Source: Gartner Dataquest & IDT, December 2001
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Intelligent Bandwidth
Throughput
OC-768
40 Gbps
Major performance increase
needed to service wire-speed
throughput and deeper
classification
10 Mbit
Layer 3
Classification
Layer 3-7
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Key Market Drivers
• Faster, more intelligent packet processing
• The convergence of data and voice
• Distributed intelligence throughout the
network
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IDT’s Increasing Integration
Integrated System Technology
Integration of
Memory & Logic
Blocks of
Intellectual
Property
Development
Platforms
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Strengthening Solutions Focus
• Residential gateway reference designs
• Alcatel, Wind River (high-end), Jungo (low-end)
• Managed LAN switch reference design
• Broadcom, Wind River
• Voice access solution
• Intersil
• High performance packet processing/classification
• AMCC – integrated interface to NPU
• Solidum – classification processing solution
• Xelerated Packet Devices – joint solution
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Products for Communications
Communications ASSPs
IP
Co-Processors
Integrated
Processors
Telecom
Products
FIFOs
Multi-Ports
Clock Management
Digital Logic
SRAMs
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Product Execution
• 2001 – Most prolific year for new products
in IDT history
• Continued to deliver leadership products in
traditional businesses
• New business opportunities represent over
$1 billion in new TAM
• Strong design activity mitigated by:
– Timing of new system ramps
– Competing/cancelled projects
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Our Communications
Foundation
#1 Market Share – FIFOs
#1 Market Share – Multi-ports
#1 Market Share – FCT Digital Logic
#1 Market Share – Bus Switches
#2 Market share – ALVC/LVC Digital Logic
A growing portfolio of clock generators, clock
distribution and clock buffering products.
These products represent more than 60% of
IDT’s revenues
Source: Insite/Onsite & IDT estimates
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IP Co-Processors
• Faster, more intelligent packet processing
required for >OC-48 emerging market segment
• Accelerates deep packet classification and highspeed packet forwarding, working with ASICs or
NPUs
• Integration of CAM (content addressable memory)
with high-performance logic – core competence of
IDT
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IP Co-Processor Benefits
• High performance
– Portfolio of 2 Mbit to 18 Mbit devices
– Up to 4 million entries at 200 MSPS*
– Wide-width searches - up to 576 bits
• Advanced database support
– Multiple databases allowing for integration of services
• Significant power savings
– Up to 60% savings over traditional approaches
• Quick time to market
– Software driver support
– Pin-compatible family (2 Mbit - 9 Mbit)
• Strategic partnerships for easier integration
* MSPS – millions of searches per second
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IP Co-Processor Update
• Cisco-specific IP co-processor ramping
– Inventory depleted
– New programs beginning to ramp
• Major announcements for commercial products
– Shipping fastest, full-featured products in production
– Roadmap to 200 MSPS, 1 million entry – 2nd half CY02
– Roadmap to integrated IP co-processors for major
NPUs – summer CY02
• Current design activity will drive late CY02
revenue for commercial products
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Telecom Products
• Address the convergence of data and voice
• Industry-leading position in TSI switching, voice
processing, transport, roadmap to HDLC control
– The addition of mixed-signal/voice expertise
complements IDT competencies in data systems
– June 2001 - introduced the industry’s first octal CODEC,
capable of 8 voice channels
– November 2001 - introduced octal T1/E1/J1 line interface
unit (LIU) and octal T1/E1/J1 framer
• IDT’s goal is to be the broadest provider of telecom
semiconductors in the market by 2005
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Integrated Processors
• Provide distributed intelligence across network
• Blend industry-standard IP modules with
differentiated, value-added proprietary IP
• Utilize MIPS architecture CPU core
• Partner to supply complementary hardware and
software technology for complete solutions to
specific applications
• 3 out of top 5 managed LAN switch vendors use
IDT RC32332 integrated processor
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Financials
Revenue From Operations
$300
$250
$269
$279
$ Millions
$213
$200
$150
$116
$97
$80
$100
$50
$0
Q2F01 Q3F01 Q4F01 Q1F02 Q2F02 Q3F02
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Earnings Per Share
$1.00
$0.90
$0.80
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
-$0.10
$0.87
(Excludes special items)
$0.77
$0.51
Q2F01
Q3F01
Q4F01
$0.00
-$0.05
Q1F02
Q2F02
$-0.11
Q3F02
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Cash and Investments*
Net of Debt
$800
$700
$600
$500
$400
$300
$200
$100
$0
Q2F01
Q3F01
Q4F01
* Excludes equity investments
Q1F02
Q2F02
Q3F02
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Gross Margin Leverage*
65%
60%
55%
50%
45%
40%
$90
$110
$130
$150
(Millions of Dollars)
* Includes closure of the Salinas Fab
$170
$190
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Pre Tax Margin Leverage*
40%
35%
30%
25%
20%
15%
10%
5%
0%
(5%)
$90
$110
$130
$150
$170
$190
(Millions of Dollars)
* Includes closure of the Salinas Fab
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IDT Delivers Value
• IDT delivers innovative communications IC solutions to
maximize the use of bandwidth in the converging global
network
– A strong foundation of products for communications
– A growing portfolio of leadership products for
• Packet classification – IP co-processors
• Voice/data convergence – telecom products
• Distributed Intelligence – integrated processors
• IDT has held costs in check while continuing to execute
new products during the downturn
• IDT has a business model that is poised to perform well as
the market recovers
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Thank You