Exhibit 99.1
INVESTOR CONTACT | MEDIA CONTACT | |
Scott Wylie – Vice President | Mark Plungy – Senior Manager | |
Investor Relations | Corporate Communications | |
(408) 544-6996 | (408) 544-6397 | |
swylie@altera.com | newsroom@altera.com |
ALTERA ANNOUNCES FIRST QUARTER RESULTS
San Jose, Calif., April 21, 2009—Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $264.6 million, down 16 percent from the fourth quarter of 2008 and down 21 percent from the first quarter of 2008. First quarter net income was $44.0 million, $0.15 per diluted share, down from net income of $83.0 million, $0.28 per diluted share, in the fourth quarter of 2008 and $83.9 million, $0.27 per diluted share, in the first quarter of 2008.
First quarter 2009 results include a previously announced $5.2 million pretax restructuring charge. The company’s first quarter 2009 tax expense also includes $2.0 million related to a recently enacted change in California tax law. The combined after-tax impact of these two items was $0.02 per diluted share.
First quarter cash flow from operating activities was $44.0 million. Altera ended the quarter with $1.2 billion in cash and short-term investments.
Altera’s board of directors has declared a quarterly cash dividend of $0.05 per share payable on June 1, 2009 to stockholders of record on May 11, 2009.
“The first quarter business environment was better than we originally anticipated yet overall remains quite challenging. With double digit sequential growth, sales to wireless equipment customers, including those targeting new 3G deployments in China, were a bright spot in the quarter,” said John Daane, president, chief executive officer, and chairman of the board. “Our 40-nm FPGA sales are growing quickly, creating the fastest new product ramp in our history. The product roll out has been on schedule, reinforcing our first mover process advantage as well as providing customers access to the industry’s highest density FPGAs and most advanced transceiver functionality.”
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Several recent accomplishments mark the company’s continuing progress.
• | Altera reached another milestone in the successful rollout of the 40-nm Stratix® IV GX FPGA family with initial shipments of the EP4SGX530. This new device is the industry’s largest FPGA—more than 60% larger than any other FPGA on the market. This device is the next member of the Stratix IV GX family to ship following the initial shipment of the industry’s first 40-nm FPGA, the EP4SGX230, in December 2008. The Stratix IV GX family combines advanced transceiver and FPGA technology targeting numerous applications in the communications, broadcast, test, medical, and military markets. |
• | Altera further expanded its transceiver FPGA portfolio with the announcement of two additional FPGA families with integrated transceivers. The highest performing FPGAs available, Stratix IV GT devices are also the industry’s first FPGAs to include integrated transceivers operating at 11.3 Gbps. This architecture is optimized specifically for 40G and 100G applications such as communications systems, high-end test equipment, and military communications systems. In addition, Altera announced the Arria® II GX family, the lowest power 3.75-Gbps transceiver FPGAs available. With a cost-optimized structure, Arria II GX FPGAs are well suited for wireless infrastructure equipment, wire line access and networking applications, as well as broadcast and other video processing equipment. Stratix IV GT devices began shipping in February, and the first Arria II GX devices will ship in the second quarter of 2009. |
• | Altera’s 40-nm FPGAs received significant recognition at the 19th annualEDN Innovation Awards ceremony where Stratix IV FPGAs won the “Innovation of the Year Award” in the programmable logic category. In addition, the Stratix IV design team also took top honors, receiving the “Innovator of the Year” award for their innovation in product design and technical leadership. TheEDN Innovation Awards honor outstanding products in the electronics industry.EDN uses a combination of balloting by theEDN Advisory Board and voting byEDN’s editorial staff andEDN’s readership to determine the ultimate winners. |
• | Altera’s 40-nm Stratix IV FPGAs received theElectronic Products China Product of the Year Award. TheElectronic Products ChinaProduct of the Year award is given to products that show significant progress in technology, innovative design, or offer distinct price/performance improvements compared with competing devices. The Stratix IV family has now received eight industry awards since May 2008 when the family was initially announced and the supporting Quartus® II development software was released. |
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Business Outlook for the Second Quarter 2009
Sequential Sales Growth | 2% to 7% | |
Gross Margin | 64.5% +/– .5% | |
Research and Development | $67 to $69 million | |
SG&A | $56 to $58 million | |
Other Income | approximately $1 million | |
Tax Rate | 14% to 15% |
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 current business outlook. The webcast and subsequent replay will be available in the Investor Relations section of the company’s website at 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 second quarter business update will be issued in a press release available after the market close on June 1, 2009.
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. 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, current global economic conditions, customer business environment, vertical market mix, market acceptance of the company’s products, product introduction schedules, the rate of growth of the company’s new products including the Arria GX, Cyclone® II, Cyclone III, Stratix II, Stratix II GX, Stratix III, Stratix IV, MAX® II and HardCopy® device families, changes in the mix of our business between prototyping and production-based demand, as well as changes in
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economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission (SEC) from time to time. Copies of Altera’s SEC filings are posted on the company’s website 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 programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more about Altera’sFPGA, CPLD and ASIC devices 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 | ||||||||||||
March 27, 2009 | December 31, 2008 | March 28, 2008 | ||||||||||
Net sales | $ | 264,602 | $ | 314,544 | $ | 336,071 | ||||||
Cost of sales | 94,029 | 96,699 | 117,309 | |||||||||
Gross margin | 170,573 | 217,845 | 218,762 | |||||||||
Operating expenses(1) | ||||||||||||
Research and development | 58,190 | 68,846 | 61,137 | |||||||||
Selling, general, and administrative | 60,659 | 62,757 | 63,131 | |||||||||
Total operating expenses | 118,849 | 131,603 | 124,268 | |||||||||
Operating margin(2) | 51,724 | 86,242 | 94,494 | |||||||||
Compensation expense (benefit) - deferred compensation plan | 23 | (10,184 | ) | (5,029 | ) | |||||||
Loss (gain) on deferred compensation plan securities | (23 | ) | 10,184 | 5,029 | ||||||||
Interest income and other | (3,378 | ) | (6,118 | ) | (9,151 | ) | ||||||
Interest expense | 1,338 | 4,456 | 3,137 | |||||||||
Income before income taxes | 53,764 | 87,904 | 100,508 | |||||||||
Income tax expense | 9,803 | 4,863 | 16,584 | |||||||||
Net income | $ | 43,961 | $ | 83,041 | $ | 83,924 | ||||||
Net income per share: | ||||||||||||
Basic | $ | 0.15 | $ | 0.28 | $ | 0.27 | ||||||
Diluted | $ | 0.15 | $ | 0.28 | $ | 0.27 | ||||||
Shares used in computing per share amounts: | ||||||||||||
Basic | 293,105 | 294,803 | 307,418 | |||||||||
Diluted | 294,881 | 296,298 | 310,010 | |||||||||
Cash dividends per common share | $ | 0.05 | $ | 0.05 | $ | 0.04 | ||||||
Tax rate | 18.2 | % | 5.5 | % | 16.5 | % | ||||||
% of Net sales: | ||||||||||||
Gross margin | 64.5 | % | 69.3 | % | 65.1 | % | ||||||
Research and development | 22.0 | % | 21.9 | % | 18.2 | % | ||||||
Selling, general, and administrative | 22.9 | % | 20.0 | % | 18.8 | % | ||||||
Operating margin(2) | 19.5 | % | 27.4 | % | 28.1 | % | ||||||
Net income | 16.6 | % | 26.4 | % | 25.0 | % | ||||||
Notes: | ||||||||||||
(1) Includes restructuring expenses as follows: | ||||||||||||
THREE MONTHS ENDED | ||||||||||||
March 27, 2009 | December 31, 2008 | March 28, 2008 | ||||||||||
Research and development | $ | 226 | $ | — | $ | — | ||||||
Selling, general, and administrative | 4,990 | — | — | |||||||||
$ | 5,216 | $ | — | $ | — | |||||||
(2) | We define operating margin as gross margin less research and development and selling, general and administrative expenses, as presented above. This presentation differs from income from operations as defined by U.S. Generally Accepted Accounting Principles (GAAP), as it excludes compensation expense (benefit) associated with deferred compensation plan obligations. Since compensation expense (benefit) associated with our deferred compensation plan obligations is offset by losses (gains) from related securities, we believe this presentation provides a more meaningful representation of our ongoing operating performance. A reconciliation of operating margin to income from operations follows: |
THREE MONTHS ENDED | |||||||||||
March 27, 2009 | December 31, 2008 | March 28, 2008 | |||||||||
Operating margin (non-GAAP) | $ | 51,724 | $ | 86,242 | $ | 94,494 | |||||
Compensation expense (benefit) - deferred compensation plan | 23 | (10,184 | ) | (5,029 | ) | ||||||
Income from operations (GAAP) | $ | 51,701 | $ | 96,426 | $ | 99,523 | |||||
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ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 27, 2009 | December 31, 2008 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,234,291 | $ | 1,216,743 | ||||
Accounts receivable, net | 182,120 | 83,430 | ||||||
Inventories | 63,333 | 84,637 | ||||||
Deferred compensation plan assets | 59,340 | 55,990 | ||||||
Deferred income taxes and other current assets | 167,916 | 186,361 | ||||||
Total current assets | 1,707,000 | 1,627,161 | ||||||
Property and equipment, net | 191,628 | 192,262 | ||||||
Deferred income taxes and other assets, net | 57,389 | 60,484 | ||||||
$ | 1,956,017 | $ | 1,879,907 | |||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and current liabilities | $ | 119,125 | $ | 124,358 | ||||
Deferred compensation plan obligations | 59,340 | 55,990 | ||||||
Deferred income and allowances on sales to distributors | 245,582 | 205,674 | ||||||
Total current liabilities | 424,047 | 386,022 | ||||||
Income taxes payable, non-current | 180,786 | 173,880 | ||||||
Long-term credit facility | 500,000 | 500,000 | ||||||
Other non-current liabilities | 7,554 | 20,128 | ||||||
Stockholders’ equity | 843,630 | 799,877 | ||||||
$ | 1,956,017 | $ | 1,879,907 | |||||
Key Ratios & Information | ||||||||
Current Assets/Current Liabilities | 4:1 | 4:1 | ||||||
Liabilities/Equity | 1:1 | 1:1 | ||||||
TTM Return on Equity | 40 | % | 45 | % | ||||
Quarterly Depreciation Expense | $ | 7,457 | $ | 7,625 | ||||
Quarterly Capital Expenditures | $ | 4,553 | $ | 11,354 | ||||
Annualized Net Sales per Employee | $ | 386 | $ | 508 | ||||
Number of Employees | 2,717 | 2,760 | ||||||
Inventory MSOH(1): Altera | 2.0 | 2.6 | ||||||
Inventory MSOH(1): Distribution | 1.0 | 1.0 | ||||||
Days Sales Outstanding | 59 | 25 |
(1) | MSOH: Months Supply On Hand |
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ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
THREE MONTHS ENDED | ||||||||||||
March 27, 2009 | December 31, 2008 | March 28, 2008 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net income | $ | 43,961 | $ | 83,041 | $ | 83,924 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 7,516 | 7,684 | 8,065 | |||||||||
Stock-based compensation | 15,842 | 13,743 | 12,260 | |||||||||
Deferred income tax expense | 1,838 | 21,147 | 4,524 | |||||||||
Tax effect of employee stock plans | (1,026 | ) | (12,860 | ) | (509 | ) | ||||||
Excess tax benefit from employee stock plans | (45 | ) | (194 | ) | (905 | ) | ||||||
Gain on sale of land | — | — | (112 | ) | ||||||||
Gain on substantive termination of retiree medical plan | (6,488 | ) | — | — | ||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable, net | (98,690 | ) | 137,901 | (32,482 | ) | |||||||
Inventories | 21,304 | (10,407 | ) | 3,097 | ||||||||
Other assets | 19,385 | (25,896 | ) | (2,549 | ) | |||||||
Accounts payable and other liabilities | (10,399 | ) | (11,202 | ) | (3,674 | ) | ||||||
Deferred income and allowances on sales to distributors | 39,908 | (94,107 | ) | 68,788 | ||||||||
Income taxes payable | 7,551 | (1,601 | ) | 11,142 | ||||||||
Deferred compensation plan obligations | 3,327 | 581 | (1,912 | ) | ||||||||
Net cash provided by operating activities | 43,984 | 107,830 | 149,657 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Purchases of property and equipment | (4,553 | ) | (11,354 | ) | (3,714 | ) | ||||||
Proceeds from the maturities and sales of available-for-sale investments | — | 3,776 | 41,929 | |||||||||
Proceeds from sale of land | — | — | 9,063 | |||||||||
Sales (purchases) of deferred compensation plan securities, net | (3,327 | ) | (581 | ) | 1,912 | |||||||
Purchases of intangible assets | (438 | ) | — | — | ||||||||
Net cash provided by (used for) investing activities | (8,318 | ) | (8,159 | ) | 49,190 | |||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds from issuance of common stock through various stock plans | 2,305 | 11,301 | 3,224 | |||||||||
Minimum statutory withholding-restricted stock units | (3,783 | ) | (12 | ) | (70 | ) | ||||||
Repurchases of common stock | — | (154,201 | ) | (275,255 | ) | |||||||
Payment of dividends to stockholders | (14,663 | ) | (14,626 | ) | (12,338 | ) | ||||||
Excess tax benefit from stock-based compensation | 45 | 194 | 905 | |||||||||
Increase in book overdrafts | — | — | 16 | |||||||||
Proceeds from long-term credit facility | — | — | 100,000 | |||||||||
Principal payments on capital lease obligations | (2,022 | ) | (4,980 | ) | (217 | ) | ||||||
Net cash used for financing activities | (18,118 | ) | (162,324 | ) | (183,735 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 17,548 | (62,653 | ) | 15,112 | ||||||||
Cash and cash equivalents at beginning of period | 1,216,743 | 1,279,396 | 890,095 | |||||||||
Cash and cash equivalents at end of period | $ | 1,234,291 | $ | 1,216,743 | $ | 905,207 | ||||||
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ALTERA CORPORATION
REVENUE SUMMARY
(Unaudited)
THREE MONTHS ENDED | Quarterly Growth Rate | ||||||||||||||
March 27, 2009 | December 31, 2008 | March 28, 2008 | Sequential Change | Year- Over-Year Change | |||||||||||
Geography | |||||||||||||||
North America | 19 | % | 23 | % | 23 | % | -33 | % | -36 | % | |||||
Asia Pacific | 38 | % | 36 | % | 32 | % | -10 | % | -6 | % | |||||
Europe | 24 | % | 23 | % | 23 | % | -12 | % | -19 | % | |||||
Japan | 19 | % | 18 | % | 22 | % | -11 | % | -30 | % | |||||
Total | 100 | % | 100 | % | 100 | % | -16 | % | -21 | % | |||||
Product Category | |||||||||||||||
New | 53 | % | 48 | % | 40 | % | -8 | % | 3 | % | |||||
Mainstream | 24 | % | 25 | % | 27 | % | -19 | % | -30 | % | |||||
Mature & Other | 23 | % | 27 | % | 33 | % | -27 | % | -45 | % | |||||
Total | 100 | % | 100 | % | 100 | % | -16 | % | -21 | % | |||||
Market Segment(1) | |||||||||||||||
Telecom & Wireless | 46 | % | 38 | % | 34 | % | 2 | % | 6 | % | |||||
Industrial Automation, Military & Auto | 21 | % | 25 | % | 22 | % | -30 | % | -27 | % | |||||
Networking, Computer & Storage | 15 | % | 14 | % | 18 | % | -14 | % | -33 | % | |||||
Other | 18 | % | 23 | % | 26 | % | -33 | % | -45 | % | |||||
Total | 100 | % | 100 | % | 100 | % | -16 | % | -21 | % | |||||
(1) Vertical market segment classifications have been modified. For comparative purposes, we have provided supplemental information on the following page that presents market segment results based on the current and previous definitions.
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FPGAs and CPLDs | |||||||||||||||
FPGA | 77 | % | 75 | % | 72 | % | -13 | % | -16 | % | |||||
CPLD | 14 | % | 16 | % | 19 | % | -27 | % | -41 | % | |||||
Other | 9 | % | 9 | % | 9 | % | -17 | % | -21 | % | |||||
Total | 100 | % | 100 | % | 100 | % | -16 | % | -21 | % | |||||
Product Category Description
Category | Products | |
New | Stratix II (and GX), Stratix III, Stratix IV (and GX/GT), Arria GX, Cyclone II, Cyclone III, MAX II, HardCopy, and Hardcopy II devices | |
Mainstream | Stratix (and 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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ALTERA CORPORATION
REVENUE SUMMARY
(Unaudited)
THREE MONTHS ENDED | |||||||||||||||
March 27, 2009 | March 28, 2008 | June 27, 2008 | September 26, 2008 | December 31, 2008 | |||||||||||
Market Segment- Previous | |||||||||||||||
Communications | 56 | % | 41 | % | 43 | % | 44 | % | 44 | % | |||||
Industrial | 28 | % | 35 | % | 35 | % | 36 | % | 36 | % | |||||
Consumer | 11 | % | 15 | % | 14 | % | 14 | % | 14 | % | |||||
Computer & Storage | 5 | % | 9 | % | 8 | % | 6 | % | 6 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||
Market Segment- Current | |||||||||||||||
Telecom & Wireless | 46 | % | 34 | % | 37 | % | 38 | % | 38 | % | |||||
Industrial Automation, Military & Auto | 21 | % | 22 | % | 22 | % | 25 | % | 25 | % | |||||
Networking, Computer & Storage | 15 | % | 18 | % | 16 | % | 14 | % | 14 | % | |||||
Other | 18 | % | 26 | % | 25 | % | 23 | % | 23 | % | |||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||
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