EXHIBIT 99.1
INVESTOR CONTACT | MEDIA CONTACT | |||
Scott Wylie | James Adams | |||
Vice President – Investor Relations | Public Relations Manager | |||
(408) 544-6996 | (408) 544-6397 | |||
swylie@altera.com | newsroom@altera.com |
ALTERA ANNOUNCES SECOND QUARTER RESULTS
EPS UP 43 PERCENT YEAR OVER YEAR
San Jose, Calif., July 15, 2008—Altera Corporation (NASDAQ: ALTR) today announced second quarter sales of $359.9 million, up 7 percent from the first quarter of 2008 and up 13 percent from the second quarter of 2007. Second quarter net income was $98.0 million, $0.32 per diluted share, up from net income of $83.9 million, $0.27 per diluted share, in the first quarter of 2008. Second quarter net income was up 22 percent and earnings per diluted share were up 43 percent compared with the second quarter of 2007.
First half cash flow from operating activities was $226.8 million. Altera repurchased 65,000 shares of its common stock during the second quarter at a cost of $1.4 million. To date during the third quarter, Altera has repurchased an additional 526,000 shares at a cost of $10.4 million. Altera ended the second quarter with $1.2 billion in cash and investments.
Altera’s board of directors has declared a quarterly dividend of $0.05 per share payable on September 2, 2008 to shareholders of record on August 11, 2008.
“The second quarter exceeded our expectations for growth and profitability. Our 90-nm FPGAs were the largest growth drivers and 65-nm FPGA sales more than doubled sequentially, leading to FPGA growth of 18 percent year over year. The combination of solid top line growth, continued gross margin improvement, and lower than planned operating expense created significant operating leverage and a very strong operating margin,” said John Daane, president, chief executive officer, and chairman of the board. “We are on schedule to ship the industry’s first 40-nm Stratix IV FPGAs later this year, the result of work we began several years ago to accelerate the availability of 40-nm programmable logic devices. The architectural and process leadership that these products represent will further strengthen our competitive position and growth prospects over the next several years.”
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Several recent accomplishments mark the company’s continuing progress.
• | Altera has announced the industry’s first 40-nm FPGAs and HardCopy® ASICs, and hundreds of early adopter customers have already begun designs with these devices. Stratix® IV FPGAs and HardCopy IV ASICs, both with a transceiver option, provide unprecedented densities, performance and low-power leadership. The Stratix IV family has twice the logic density of Altera’s Stratix III family, currently the largest FPGAs on the market. The HardCopy IV ASIC family offers equivalent densities as the Stratix IV devices with up to 13.3 million gates. Manufactured on Taiwan Semiconductor Manufacturing Company’s 40-nm process, the Stratix IV FPGA family is comprised of two variants: first, Stratix IV E FPGAs, a set of devices rich with memory and digital signal processing resources, and, in addition, Stratix IV GX FPGAs, an enhanced version with transceivers. To address the low-power demands of customers, the Stratix IV family members feature Altera’s Programmable Power Technology. |
For the first time, Altera offers a transceiver-based ASIC option with the new HardCopy IV ASIC family. Stratix FPGAs deliver the benefits of FPGA-based hardware and software co-design and co-verification—saving months in time to market—and the use of HardCopy ASICs delivers the benefits of ASICs in production. Quartus® II development software fully supports these devices. First sample silicon for the Stratix IV GX family is expected in the fourth quarter.
• | With Altera’s re-entry into the military market and benefiting from the company’s record of reliability and innovation, military market customers increasingly have selected Altera for their newest designs. Altera now has been recognized as the number-one supplier at Rockwell Collins, a top-tier government electronics contractor. Altera won the 2008 President’s Award, making it the top supplier among the more than 10,000 Rockwell Collins suppliers. The award is based on quality, product excellence, delivery schedules, and a team-based partnership. Altera’s devices are today used in a variety of military market applications including software defined radio, electronic warfare, secure communications, guidance, radar, and avionics systems. |
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Business Outlook for the Third Quarter 2008
Sequential Sales Growth | Flat to down 3% | |||
Gross Margin | 67% +/- .5% | |||
Research and Development | $66 to 68 million | |||
SG&A | $63 to 65 million | |||
Other Income | Approximately $4 million | |||
Tax Rate | 16% to 17% | |||
Diluted Share Count | 305 to 310 million |
Conference Call and Quarterly Update
A conference call will be held today at 1:45 p.m. Pacific Time to discuss the quarter’s results and management’s outlook for the third quarter of 2008. The web cast and subsequent replay will be available in the investor relations section of the company’s web site at http://www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.
Altera’s third quarter business update will be issued in a press release available after the market close on September 2, 2008.
Forward-Looking Statements
Statements in this press release that are not historical are “forward-looking statements” as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as “will,” “expects,” “anticipates,” or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release as well as comments describing expected 40-nm shipment timing, future competitive position and sales growth prospects. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, customer business environment, vertical market mix, market acceptance of the company’s products,
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product introduction schedules, the rate of growth of the company’s new products including the Stratix IV, Arria™ GX, Cyclone® III, Stratix III, MAX II and HardCopy device families, changes in the mix of our business between prototyping and production-based demand, as well as changes in economic conditions, the company’s share price, share repurchases, and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission from time to time. Copies of Altera’s SEC filings are posted on the company’s web site and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.
About Altera
Altera’s programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more atwww.altera.com.
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Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.
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ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||||
June 27, 2008 | March 28, 2008 | June 29, 2007 | June 27, 2008 | June 29, 2007 | ||||||||||||||||
Net sales | $ | 359,854 | $ | 336,071 | $ | 319,682 | $ | 695,925 | $ | 624,598 | ||||||||||
Cost of sales | 118,299 | 117,250 | 113,093 | 235,549 | 217,605 | |||||||||||||||
Gross margin | 241,555 | 218,821 | 206,589 | 460,376 | 406,993 | |||||||||||||||
Operating expenses(1) | ||||||||||||||||||||
Research and development | 64,166 | 58,261 | 63,071 | 122,427 | 121,526 | |||||||||||||||
Selling, general, and administrative | 63,952 | 61,037 | 67,863 | 124,989 | 139,647 | |||||||||||||||
Total operating expenses | 128,118 | 119,298 | 130,934 | 247,416 | 261,173 | |||||||||||||||
Income from operations (Operating Margin) | 113,437 | 99,523 | 75,655 | 212,960 | 145,820 | |||||||||||||||
Interest and other income(1) | 7,814 | 4,122 | 18,079 | 11,936 | 35,291 | |||||||||||||||
Interest expense | (3,907 | ) | (3,137 | ) | (94 | ) | (7,044 | ) | (193 | ) | ||||||||||
Income before income taxes | 117,344 | 100,508 | 93,640 | 217,852 | 180,918 | |||||||||||||||
Provision for income taxes | 19,362 | 16,584 | 13,110 | 35,946 | 25,329 | |||||||||||||||
Net income | $ | 97,982 | $ | 83,924 | $ | 80,530 | $ | 181,906 | $ | 155,589 | ||||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | 0.33 | $ | 0.27 | $ | 0.23 | $ | 0.60 | $ | 0.44 | ||||||||||
Diluted | $ | 0.32 | $ | 0.27 | $ | 0.22 | $ | 0.59 | $ | 0.43 | ||||||||||
Shares used in computing per share amounts: | ||||||||||||||||||||
Basic | 300,535 | 307,418 | 352,721 | 304,000 | 355,157 | |||||||||||||||
Diluted | 305,868 | 310,010 | 359,542 | 307,950 | 361,595 | |||||||||||||||
Cash dividends per common share | $ | 0.05 | $ | 0.04 | $ | 0.04 | $ | 0.09 | $ | 0.04 | ||||||||||
Tax rate | 16.5 | % | 16.5 | % | 14.0 | % | 16.5 | % | 14.0 | % | ||||||||||
% of Net sales: | ||||||||||||||||||||
Gross margin | 67.1 | % | 65.1 | % | 64.6 | % | 66.2 | % | 65.2 | % | ||||||||||
Research and development | 17.8 | % | 17.3 | % | 19.7 | % | 17.6 | % | 19.5 | % | ||||||||||
Selling, general, and administrative | 17.8 | % | 18.2 | % | 21.2 | % | 18.0 | % | 22.4 | % | ||||||||||
Income from operations (Operating Margin) | 31.5 | % | 29.6 | % | 23.7 | % | 30.6 | % | 23.3 | % | ||||||||||
Net income | 27.2 | % | 25.0 | % | 25.2 | % | 26.1 | % | 24.9 | % | ||||||||||
Notes: |
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(1) Includes expense (benefit) related to the company’s non-qualified deferred compensation plan, which were fully offset by income (loss) in interest and other income: |
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Cost of sales | $ | (38 | ) | $ | (59 | ) | $ | 41 | $ | (97 | ) | $ | 59 | |||||||
Research and development | 543 | (2,876 | ) | 1,566 | (2,333 | ) | 2,137 | |||||||||||||
Selling, general, and administrative | (221 | ) | (2,094 | ) | 1,427 | (2,315 | ) | 1,995 | ||||||||||||
Total | $ | 284 | $ | (5,029 | ) | $ | 3,034 | $ | (4,745 | ) | $ | 4,191 | ||||||||
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ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 27, 2008 | March 28, 2008 | December 28, 2007 | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and short-term investments | $ | 1,231,943 | $ | 994,632 | $ | 1,021,379 | ||||||
Accounts receivable, net | 257,239 | 231,370 | 198,889 | |||||||||
Inventories | 76,006 | 71,013 | 74,110 | |||||||||
Deferred compensation plan assets | 68,275 | 67,828 | 74,768 | |||||||||
Deferred income taxes and other current assets | 166,477 | 148,136 | 164,942 | |||||||||
Total current assets | 1,799,940 | 1,512,979 | 1,534,088 | |||||||||
Property and equipment, net | 176,997 | 165,558 | 169,850 | |||||||||
Deferred income taxes and other assets, net | 68,998 | 71,767 | 65,980 | |||||||||
$ | 2,045,935 | $ | 1,750,304 | $ | 1,769,918 | |||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable and current liabilities | $ | 154,536 | $ | 134,262 | $ | 134,450 | ||||||
Deferred compensation plan obligations | 68,275 | 67,828 | 74,768 | |||||||||
Deferred income and allowances on sales to distributors | 335,641 | 349,228 | 280,440 | |||||||||
Total current liabilities | 558,452 | 551,318 | 489,658 | |||||||||
Income taxes payable non-current | 162,092 | 159,093 | 152,010 | |||||||||
Long-term credit facility | 500,000 | 350,000 | 250,000 | |||||||||
Other non-current liabilities | 19,569 | 17,151 | 16,800 | |||||||||
Stockholders’ equity | 805,822 | 672,742 | 861,450 | |||||||||
$ | 2,045,935 | $ | 1,750,304 | $ | 1,769,918 | |||||||
Key Ratios & Information | ||||||||||||
Current Assets/Current Liabilities | 3:1 | 3:1 | 3:1 | |||||||||
Liabilities/Equity | 2:1 | 2:1 | 1:1 | |||||||||
TTM Return on Equity | 31 | % | 26 | % | 21 | % | ||||||
Quarterly Depreciation Expense | $ | 7,096 | $ | 8,005 | $ | 7,693 | ||||||
Quarterly Capital Expenditures | $ | 7,380 | $ | 3,713 | $ | 9,545 | ||||||
Annualized Net Sales per Employee | $ | 523 | $ | 509 | $ | 473 | ||||||
Number of Employees | 2,696 | 2,632 | 2,651 | |||||||||
Inventory MSOH(a): Altera | 1.9 | 1.8 | 1.9 | |||||||||
Inventory MSOH(a): Distribution | 1.1 | 1.2 | 1.1 | |||||||||
Days Sales Outstanding | 65 | 63 | 56 |
(a) MSOH: Months Supply On Hand
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ALTERA CORPORATION
REVENUE SUMMARY
(Unaudited)
Three Months Ended | |||||||||||||||
June 27, 2008 | March 28, 2008 | June 29, 2007 | Sequential Change | Year- Over-Year Change | |||||||||||
Geography | |||||||||||||||
North America | 24 | % | 23 | % | 21 | % | 13 | % | 27 | % | |||||
Asia Pacific | 35 | % | 32 | % | 33 | % | 15 | % | 17 | % | |||||
Europe | 23 | % | 23 | % | 25 | % | 7 | % | 6 | % | |||||
Japan | 18 | % | 22 | % | 21 | % | -10 | % | -1 | % | |||||
International | 76 | % | 77 | % | 79 | % | 5 | % | 9 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 7 | % | 13 | % | |||||
Product Category | |||||||||||||||
New | 42 | % | 40 | % | 30 | % | 13 | % | 58 | % | |||||
Mainstream | 27 | % | 27 | % | 32 | % | 8 | % | -5 | % | |||||
Mature & Other | 31 | % | 33 | % | 38 | % | -1 | % | -9 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 7 | % | 13 | % | |||||
Market Segment | |||||||||||||||
Communications | 43 | % | 41 | % | 40 | % | 14 | % | 22 | % | |||||
Industrial | 35 | % | 35 | % | 35 | % | 5 | % | 11 | % | |||||
Consumer | 14 | % | 15 | % | 16 | % | 2 | % | 5 | % | |||||
Computer & Storage | 8 | % | 9 | % | 9 | % | -8 | % | -9 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 7 | % | 13 | % | |||||
FPGAs and CPLDs | |||||||||||||||
FPGA | 74 | % | 72 | % | 70 | % | 9 | % | 18 | % | |||||
CPLD | 18 | % | 19 | % | 19 | % | 1 | % | 8 | % | |||||
Other | 8 | % | 9 | % | 11 | % | 1 | % | -15 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 7 | % | 13 | % | |||||
Product Category Description
Category | Products | |
New | Stratix® II, Stratix II GX, Stratix III, Arria GX, Cyclone® II, Cyclone III, MAX® II, HardCopy, and Hardcopy II devices | |
Mainstream | Stratix, Stratix GX, Cyclone, and MAX 3000A devices | |
Mature & Other | Classic™, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, FLEX® series, APEX™ series, Mercury™, Excalibur™, configuration and other devices, intellectual property cores, and software and other tools |
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