LINEAR TECHNOLOGY REPORTS REVENUE AND NET INCOME SIMILAR TO THE SECOND QUARTER OF THE PREVIOUS FISCAL YEAR, BUT DOWN SEQUENTIALLY FROM THE SEPTEMBER QUARTER. THE COMPANY IS INCREASING ITS QUARTERLY CASH DIVIDEND FROM $0.15 TO $0.18 PER SHARE.
Milpitas, California, January 16, 2007, Linear Technology Corporation (NASDAQ-LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today announced that revenue for its quarterly period ended December 31, 2006, was $267.9 million, an increase of 1% over revenue of $265.1 million for the second quarter of the previous fiscal year. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the second quarter of fiscal year 2007 was $105.0 million, or $0.34 diluted earnings per share, and was similar to GAAP net income of $103.3 million or $0.33 diluted earnings per share reported in the second quarter of the previous fiscal year. On a pro forma basis excluding the effects of all forms of stock-based compensation, net income was $117.8 million, or $0.39 diluted earnings per share, an increase of $5.0 million over pro forma net income of $112.8 million, or $0.36 per share reported in the second quarter of the previous fiscal year. Sequentially, compared with the September quarter, sales were down 8%. GAAP income before tax was down 10%. The effective tax rate improved from 31% to 28%, primarily due to the reinstatement of the R&D tax credit, and consequently net income decreased by 7%. During the most recent quarter the Company’s cash and short-term investments balance decreased $30.3 million net of spending $91.7 million to purchase 3.0 million shares of its common stock.
The Company also declared a 20% increase in its dividend from $0.15 per share to $0.18 per share for the quarter. This cash dividend will be paid on February 14, 2007 to stockholders of record on January 26, 2007.
According to Lothar Maier, CEO, "We are seeing an overall reduction in our inventories at our end customers, which coupled with some general market weakness, has resulted in a decrease in bookings, sales and profits for the December quarter. The upcoming March quarter is a challenge to accurately forecast. Visibility continues to be low and customers remain guarded in their forecasting and inventory management. The March quarter has historically been strong for Linear due to seasonal strength in industrial markets. However, with inventory reductions expected to continue and low market visibility, this year we expect will be an exception. It is likely that improvements in Europe and the USA may be offset by slowness in Asia, particularly in consumer related markets. Consequently, we currently expect revenue to be down 4% to 7% with profits slightly more impacted primarily due to an increase in the tax rate. However, any increase in confidence in the overall business environment would positively impact this outlook.”
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. In particular, the statements regarding the demand for our products, our customers’ ordering patterns and the anticipated trends in our sales and profits are forward-looking statements. The forward-looking statements are dependent on certain risks and uncertainties, including such factors, among others, as the timing, volume and pricing of new orders received and shipped, the timely introduction of new processes and products, general conditions in the world economy and financial markets and other factors described in our 10-K for the fiscal year ended July 2, 2006.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, January 17, 2007 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 955-1566 before 8:15 a.m. to be included in the audience. There will be a live webcast of this conference call that can be accessed through www.linear.com or www.streetevents.com. A replay of the conference call will be available from January 17 through January 23, 2007. You may access this post view by calling (719) 457-0820 and entering reservation #6574365. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of January 17, 2007 until the second quarter earnings release next year.
Linear Technology Corporation was founded in 1981 as a manufacturer of high performance linear integrated circuits. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, and many other analog functions. Applications for Linear Technology’s high performance circuits include telecommunications, cellular telephones, networking products such as optical switches, notebook and desktop computers, computer peripherals, video/multimedia, industrial instrumentation, security monitoring devices, high-end consumer products such as digital cameras and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems.
For further information contact Paul Coghlan at Linear Technology Corporation, 1630 McCarthy Blvd., Milpitas, California 95035-7417, (408) 432-1900.
FAS123R - Share-Based Payment became effective and was adopted by the Company during the quarter ended October 2, 2005. FAS123R requires the Company to estimate the cost of all forms of stock-based compensation, including employee stock options, and to record a commensurate expense in the income statement. To supplement our consolidated financial statements presented in accordance with GAAP, we have shown above a non-GAAP (pro forma) presentation of the Company’s earnings per share, which is adjusted to reflect the GAAP results to exclude all stock-based compensation. This non-GAAP presentation of earnings per share is provided to enhance the user’s overall understanding of the Company’s historical financial performance and comparability between periods. We believe the non-GAAP results provide useful information to investors by excluding stock-based compensation.
