Integrated Circuit Systems, Inc. Announces Fiscal 2005 Fourth Quarter and Full Year Results

Integrated Circuit Systems, Inc. (NASDAQ: ICST)today
announced financial results for the fourth quarter and fiscal year
ended July 2, 2005.
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($ millions, except EPS)          Q4FY    Q4FY     Y-Y    Q3FY   Q-Q
                                  2005    2004   Growth   2005  Growth
                                --------------------------------------
Revenue                           $58.3   $69.5  -16.1%  $58.1    0.3%
Gross Margin                      $34.4   $42.0  -18.1%  $34.3    0.3%
Operating Income                  $11.3   $21.7  -47.9%  $13.7  -17.5%
Net Income                        $10.3   $24.0  -57.1%  $13.0  -20.8%
Fully Diluted EPS                 $0.15   $0.33  -54.5%  $0.18  -16.7%
Pro Forma Operating Income (1)    $14.5   $21.7  -33.2%  $13.7    5.8%
Pro Forma Net Income (1)          $13.5   $24.0  -43.8%  $13.0    3.8%
Pro Forma Fully Diluted EPS (1)   $0.19   $0.33  -42.4%  $0.18    5.6%

(1) Pro Forma operating income, net income and fully diluted EPS are
    derived by removing acquisition costs relating to the merger with
    IDT.


Revenues                    Q4FY2005   Q4FY2004  Y-Y   Q3FY2005   Q-Q
                              % of      % of    Growth  % of    Growth
                             Revenue    Revenue         Revenue
                          --------------------------------------------
PC                             46%        39%      0%     46%      0%
Digital Consumer               18%        15%     -5%     17%      6%
Communications                 31%        38%    -31%     32%     -2%
Military                        5%         8%    -49%      5%      1%
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   Revenues for the quarter were slightly up from the previous
quarter driven by an increase in digital consumer sales, offset by
declines in communications. Clocks into set-top boxes increased
seasonally, and clocks into digital TVs ramped. Communications
declined driven by a slowness of shipments of clocks into DDR II.
While the quarter was slow for DDR II, we saw an increase in bookings
for these products toward the end of the quarter.
   Product mix for Q4FY2005 was approximately the same as Q3FY2005,
keeping gross margin at 59%.
   Operating expenses for the quarter were down compared to last
quarter without the $3.2 million of expense associated with the
proposed merger with IDT, which contributed to a pro forma operating
income of $14.5 million, compared to $13.7 million in the previous
quarter. Pro forma operating income was 25% of revenue for the
quarter.
   Net income for the quarter was $10.3 million or $0.15 per share.
Pro forma net income was $13.5 million or $0.19 per share.
   The accounts receivable balance declined 12% from the end of the
third fiscal quarter, and inventory also decreased as inventory turns
went from 4.4 times last quarter to 4.8 times this quarter. These both
contributed to the increase in cash and investments of $26 million
from last quarter. The ending balance for cash and investments at July
2, 2005 was $233 million.
   Hock Tan, President and CEO commented,"Despite flatness in
communications and PC end demand, we continue to see strength in our
business as the book-to-bill exceeded 1:1 in this quarter of weak
seasonality. We ended the quarter with the strongest backlog of fiscal
2005 and, as fully expected, are benefiting from accelerating orders
in PC and Digital Consumer as we enter fiscal 2006."
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($ millions, except EPS)                FY2005     FY2004  Y-Y Growth
                                     ---------------------------------
Revenue                                 $243.1     $272.1      -11%
Gross Margin                            $143.4     $163.4      -12%
Operating Income                         $51.4      $84.8      -39%
Net Income                               $47.4      $78.5      -40%
Fully Diluted EPS                        $0.67      $1.08      -38%
Pro Forma Operating Income (1)           $61.6      $84.8      -27%
Pro Forma Net Income (1)                 $57.7      $78.5      -26%
Pro Forma Fully Diluted EPS (1)          $0.81      $1.08      -25%

(1) Pro Forma operating income, net income, and fully diluted EPS are
    derived by removing research and development expense related to
    the asset acquisition which occurred in the first quarter of
    fiscal 2005 and by removing costs relating to the merger with IDT.
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   The company reported revenues of $243.1 million, an 11% decrease
from fiscal year 2004. The downfall in revenue from last year is
mostly attributed to the slowness in the communications markets in the
first half of fiscal 2005. Gross margin for fiscal 2005 was 59%,
compared to 60% in fiscal 2004, as the product mix shifted to the
lower margin markets. Operating expenses increased during the year as
non-cash charges increased by $2 million due to the purchase of the
Video business unit in the first fiscal quarter; R&D decreased as
variable compensation declined; and SG&A increased due to costs
associated with Sarbanes-Oxley, legal fees and increased sales
commission rates. Net Income for the year was $47.4 million and
earnings per share of $0.67. Pro forma net income for the year was
$57.7 million and earnings per share of $0.81.

   Fourth Quarter Fiscal 2005 Conference Call

   ICS will host a conference call to discuss the earnings results
for the fourth quarter of fiscal year 2005 at 9:00AM eastern time
August 11, 2005. The company will also discuss its strategic direction
and market conditions. Interested parties are invited to listen to the
conference call by dialing toll free 1-877-405-3430, or 1-706-634-6397
for international callers; conference ID# 7368389. The call will also
be broadcast via the internet and can be accessed from ICS' corporate
website at www.icst.com.

   About ICS

   Integrated Circuit Systems, Inc. is a leader in the design,
development and marketing of silicon timing devices for
communications, networking, computing and digital multimedia
applications. The Company is headquartered in Norristown, PA, with key
facilities in San Jose, CA; Tempe, AZ; Worcester, MA and Singapore.

   In our upcoming Annual Report for the fiscal year ended July 2,
2005, we will report on the effectiveness of our system of internal
controls over financial reporting for such fiscal year, as required by
Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and
regulations adopted pursuant thereto. We are endeavoring to complete
our assessment and remediation procedures in a timely manner and
expect to achieve this goal. We also would like to note that the
results stated above are subject to change as the Company's
independent registered public accounting firm completes its procedures
with regard to the preparation of the Company's Annual Report on Form
10-K for the year ended July 2, 2005.

   Statements included in this release, to the extent they are
forward looking, involve a number of risks and uncertainties related
to competitive factors, technological developments and market demand.
Further information on these and other potential factors that could
affect the Company's financial results can be found in the Company's
Form 10-K filed on September 16, 2004.
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                   INTEGRATED CIRCUIT SYSTEMS, INC.
                    CONSOLIDATED OPERATING RESULTS


                                Unaudited               Unaudited
                            Three Months Ended     Twelve Months Ended

                        July 2,  April 2, July 3,   July 2,   July 3,
                         2005      2005    2004      2005      2004
                      ---------------------------- -------------------
(In thousands)
Revenues                $58,262  $58,124  $69,496  $243,110  $272,140
Cost of sales            23,845   23,817   27,476    99,703   108,764
-------------------------------------------------- -------------------
Gross Margin             34,417   34,307   42,020   143,407   163,376
-------------------------------------------------- -------------------

-------------------------------------------------- -------------------
Expenses:
  Research and
   development            9,421    9,943   10,604    38,977    40,352
  Research and
   development Video
   acquisition                -        -        -     7,051         -
  Selling, general and
   administrative         9,407    9,495    9,138    38,372    35,218
  Deferred compensation       1       60        -       162       731
  Amortization of
   intangibles            1,114    1,115      575     4,277     2,300
  Acquisition Costs       3,203        -        -     3,203         -
-------------------------------------------------- -------------------
                         23,146   20,613   20,317    92,042    78,601

-------------------------------------------------- -------------------
Operating income         11,271   13,694   21,703    51,365    84,775
-------------------------------------------------- -------------------

Other income (expense)    1,400    1,234      606     4,173     2,241

-------------------------------------------------- -------------------
Income before income
 taxes                   12,671   14,928   22,309    55,538    87,016
-------------------------------------------------- -------------------

Income taxes              2,404    1,921   (1,727)    8,135     8,501

-------------------------------------------------- -------------------
Net income               10,267   13,007   24,036    47,403    78,515
-------------------------------------------------- -------------------

Basic  EPS:
  Net income            $  0.15  $  0.19  $  0.34  $   0.68  $   1.12

Diluted EPS:
  Net income            $  0.15  $  0.18  $  0.33  $   0.67  $   1.08

Weighted Shares:
  Basic                  70,062   70,041   70,246    70,197    70,358
  Diluted                70,751   70,718   71,913    71,109    72,578

Capital expenditures    $ 1,005  $   923  $ 2,758  $  7,221  $  8,587
Depreciation and
 amortization           $ 2,795  $ 2,722  $ 2,144  $ 11,064  $  8,436

Prepared in accordance with GAAP


                   INTEGRATED CIRCUIT SYSTEMS, INC.
               PRO FORMA CONSOLIDATED OPERATING RESULTS


                                Unaudited               Unaudited
                            Three Months Ended     Twelve Months Ended

                        July 2,  April 2, July 3,   July 2,   July 3,
                         2005      2005    2004      2005      2004
                      ---------------------------- -------------------
(In thousands)
Revenues                $58,262  $58,124  $69,496  $243,110  $272,140
Cost of sales            23,845   23,817   27,476    99,703   108,764
-------------------------------------------------- -------------------
Gross margin             34,417   34,307   42,020   143,407   163,376
-------------------------------------------------- -------------------

Expenses:
  Research and
   development            9,421    9,943   10,604    38,977    40,352
  Selling, general and
   administrative         9,407    9,495    9,138    38,372    35,218
  Deferred compensation       1       60        -       162       731
  Amortization of
   intangibles            1,114    1,115      575     4,277     2,300
-------------------------------------------------- -------------------
                         19,943   20,613   20,317    81,788    78,601

-------------------------------------------------- -------------------
Operating income         14,474   13,694   21,703    61,619    84,775
-------------------------------------------------- -------------------

Other income (expense)    1,400    1,234      606     4,173     2,241

-------------------------------------------------- -------------------
Income before income
 taxes                   15,874   14,928   22,309    65,792    87,016
-------------------------------------------------- -------------------

Income taxes              2,404    1,921   (1,727)    8,135     8,501

-------------------------------------------------- -------------------
Pro forma net income     13,470   13,007   24,036    57,657    78,515
-------------------------------------------------- -------------------

Basic  EPS:
  Pro forma Net income  $  0.19  $  0.19  $  0.34  $   0.82  $   1.12

Diluted EPS:
  Pro forma Net income  $  0.19  $  0.18  $  0.33  $   0.81  $   1.08

Weighted Shares:
  Basic                  70,062   70,041   70,246    70,197    70,358
  Diluted                70,751   70,718   71,913    71,109    72,578


                   INTEGRATED CIRCUIT SYSTEMS, INC.
               PRO FORMA CONSOLIDATED OPERATING RESULTS
                              (continued)


                                  Unaudited              Unaudited
                              Three Months Ended      Twelve Months
                                                           Ended

(In thousands)            July 2,  April 2, July 3,  July 2,  July 3,
                           2005      2005    2004     2005     2004
                        ---------------------------- -----------------

Reconciliation of our GAAP Net Income to our Pro Forma Net Income:

GAAP Net Income           $10,267  $13,007  $24,036  $47,403  $78,515
Adjustments to Net Income:
   Research and
    development Video
    acquisition                 -        -        -    7,051        -
   Acquisition Costs        3,203                      3,203
Pro Forma Net Income      $13,470  $13,007  $24,036  $57,657  $78,515


Reconciliation of our GAAP Operating Income to our Pro Forma Operating
 Income:

GAAP Operating Income     $11,271  $13,694  $21,703  $51,365  $84,775
Adjustments to Operating
 Income:
   Research and
    development Video
    acquisition                 -        -        -    7,051        -
   Acquisition Costs        3,203                      3,203
Pro Forma Operating
 Income                   $14,474  $13,694  $21,703  $61,619  $84,775


Reconciliation of our GAAP Basic Net Income per share to our Pro Forma
 Net Income Per Share:

GAAP Basic Net Income per
 share                      $0.15    $0.19    $0.34    $0.68    $1.12
Adjustments to Basic Net
 Income per share:
   Research and
    development Video
    acquisition                 -        -        -     0.10        -
   Acquisition Costs         0.04                       0.04
Pro Forma Basic Net Income
 Per Share                  $0.19    $0.19    $0.34    $0.82    $1.12


Reconciliation of our GAAP Diluted Net Income Per Share to our Pro
 Forma Diluted Net Income Per Share:

GAAP Diluted Net Income
 per share                  $0.15    $0.18    $0.33    $0.67    $1.08
Adjustments to Diluted Net
 Income per share:
   Research and
    development Video
    acquisition                 -        -              0.10        -
     Acquisition Costs       0.04                       0.04
Pro Forma Diluted Net
 Income Per Share           $0.19    $0.18    $0.33    $0.81    $1.08

    To supplement the consolidated financial results prepared under
    generally accepted accounting principles ("GAAP"), ICS uses a
    non-GAAP conforming, or pro forma, measure of net income that is
    GAAP net income adjusted to exclude certain costs, expenses and
    gains. Pro forma net income gives an indication of ICS's baseline
    performance before gains, losses or other charges that are
    considered by management to be outside of the company's core
    operating results. In addition, pro forma net income (loss) is
    among the primary indicators management uses as a basis for
    planning and forecasting future periods. ICS computes pro forma
    net income (loss) by adjusting GAAP net income (loss) with the
    impact of non-recurring acquisition-related charges. ICS provides
    pro forma results as additional information for its operating
    results. These measures are not in accordance with, or an
    alternative for, generally accepted accounting principles and may
    be different from pro forma measures used by other companies.


                   INTEGRATED CIRCUIT SYSTEMS, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEET

----------------------------------------------------------------------
                                       July 2,    April 2,    July 3,
                                        2005        2005       2004
  (in thousands, excluding Other     (unaudited) (unaudited)
   Financial Data)
----------------------------------------------------------------------
ASSETS
  Current Assets:
    Cash and marketable securities   $  126,980  $   68,072  $195,579
    Accounts receivable, net             40,110      45,489    45,717
    Inventory, net                       17,430      18,431    18,772
    Deferred tax assets                   5,678      18,658    22,759
    Other current assets                  6,849       7,160     7,189
  --------------------------------------------------------------------
      Total current assets              197,047     157,810   290,016
  --------------------------------------------------------------------

  Property & equipment, net              19,416      20,417    19,254
  Long term investments                 105,865     139,001     5,000
  Intangibles                            40,943      42,077    27,842
  Goodwill                               35,422      35,422    35,422
  Other assets, net                       4,502       5,143        62
  Deferred tax assets                     4,527           -         -
  --------------------------------------------------------------------
      Total assets                   $  407,722  $  399,870  $377,596
  --------------------------------------------------------------------

----------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
  Current Liabilities:
    Lease payable                    $        8  $       38  $     82
    Accounts payable                     14,103      13,879    17,557
    Accrued expenses and other
     current liabilities                  6,070       6,285     8,518
    Income taxes payable                  2,197         930     3,576
  --------------------------------------------------------------------
      Total current liabilities          22,378      21,132    29,733
  --------------------------------------------------------------------

    Other long term liabilities           3,751      12,448    11,638
  --------------------------------------------------------------------
      Total liabilities                  26,129      33,580    41,371
  --------------------------------------------------------------------

  Shareholders' Equity:
    Common stock                            734         731       727
    Additional paid in capital          294,683     289,908   282,569
    Retained earnings                   154,543     144,276   107,140
    Deferred compensation                  (543)       (801)        -
    Treasury stock                      (67,824)    (67,824)  (54,211)
  --------------------------------------------------------------------
      Total shareholders' equity        381,593     366,290   336,225
  --------------------------------------------------------------------
      Total liabilities and
       shareholder's equity          $  407,722  $  399,870  $377,596
  --------------------------------------------------------------------

OTHER FINANCIAL DATA:
Days sales outstanding                       62          62        58
Inventory turns                             4.8         4.4       5.2
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