Altera Announces Fourth Quarter Results

                   Altera Announces Fourth Quarter Results

PR Newswire

SAN JOSE, Calif., Jan. 23, 2013

SAN JOSE, Calif., Jan.23, 2013 /PRNewswire/ --Altera Corporation (NASDAQ:
ALTR) today announced fourth quarter sales of $439.4 million, down 11 percent
from the third quarter of 2012 and down 4 percent from the fourth quarter of
2011. Fourth quarter net income was $120.8 million, $0.37 per diluted share,
compared with net income of $157.5 million, $0.49 per diluted share, in the
third quarter of 2012 and $146.6 million, $0.45 per diluted share, in the
fourth quarter of 2011.

(Logo: http://photos.prnewswire.com/prnh/20101012/SF78952LOGO)

Cash flow from operating activities in 2012 was $587.2 million. Altera
repurchased 1.6 million shares of its common stock during the quarter at a
cost of $50.0 million. Altera ended the quarter with $3.7 billion in cash and
investments.

Altera's board of directors has declared a quarterly cash dividend of $0.10
per share payable on March1, 2013 to stockholders of record on February11,
2013.

"While our new products had a double-digit sequential growth quarter, sales of
our older products were soft—the result of a sluggish global economy," said
John Daane, president, chief executive officer, and chairman of the board.
"Sales of 40 nm devices, our largest selling process node, and where we are
the market leader, are likely to strengthen further as we progress through
2013. At the most advanced process node, 28 nm, Altera remains the design-win
value leader, giving us a substantial growth opportunity as these customer
designs transition into production."

Several recent accomplishments mark the company's continuing progress:

  oHuawei Technologies, a leading global information and communications
    technology solutions provider, has presented Altera with its 2012
    Excellent Core Partner Award. In making this award, Huawei specifically
    recognized Altera for its excellence in terms of quality, delivery of
    leading-edge technologies and services. The Excellent Core Partner Award
    is the highest recognition Huawei gives to its suppliers. Altera is among
    an elite set of suppliers to earn this award for outstanding contribution
    toward Huawei's business success throughout 2012. In 2012, Huawei realized
    the performance advantage offered by Altera's 28 nm Stratix^® V FPGAs and
    selected the high-end product family for use in the company's 400G
    high-capacity OTN system. By using the industry's first high-end 28 nm
    production FPGAs, Huawei enabled the evolution of communications
    infrastructure such as 400G systems and other high-performance systems in
    a variety of markets throughout the world.
  oAltera also received the 2012 Global Excellent Partnership Award from ZTE
    Corporation, a leading provider of telecommunications equipment and
    network solutions. The award recognizes Altera for overall performance in
    delivering best-in-class products and services to ZTE during the past
    year. According to ZTE, innovative programmable solutions and technical
    support from Altera played a critical role in supporting product
    development for the company's existing and next-generation communication
    products. ZTE presents its Global Excellent Partnership Award each year to
    suppliers meeting rigorous performance criteria. Winners are chosen based
    on partner satisfaction surveys among company staff, including development
    and material engineers and purchasing employees. Suppliers are evaluated
    on cost efficiencies, on-time delivery, quality standards and service
    records. Altera scored the highest marks in all categories.
  oAltera is now shipping the first of its 28 nm SoC devices, which combine a
    dual-core ARM® Cortex™-A9 processor systemwith FPGA logic on a single
    device. The initial devices to ship are the low-power, low-cost Cyclone^®
    V SoCs. Altera SoCs include several distinctive features that enable
    developers in the wireless communications, industrial, video surveillance,
    automotive and medical equipment markets to create custom SoC variants
    optimized for system power, board space, performance and cost
    requirements. In addition, Altera is the only FPGA vendor today shipping
    SoCs that offer 32-bit error correction code (ECC) support which helps
    ensure data integrity throughout the embedded system. ECC support is a
    requirement for customers who must have high-performance and reliable
    systems. With silicon now available, customers who used Altera's SoC
    Virtual Target to develop their application software can now quickly port
    their application software into the SoC, saving months of development
    time. Further strengthening the SoC device tools ecosystem support, Altera
    and ARM have jointly developed the ARM Development Studio 5™ Altera
    Edition (DS-5™) toolkit with FPGA-adaptive debugging, which exclusively
    supports Altera SoC devices. The DS-5 toolkit is designed to remove the
    debugging barrier between the integrated dual-core CPU subsystem and the
    FPGA fabric in Altera SoC devices, providing embedded software developers
    an unprecedented level of full-chip visibility and control.
  oAltera has developed the FPGA industry's first Software Development Kit
    (SDK) for OpenCL™ (Open Computing Language) which combines the massively
    parallel architecture of an FPGA with the OpenCL parallel programming
    model. OpenCL is an open, royalty-free standard for cross-platform,
    parallel programming of hardware accelerators, including CPUs, GPGPUs and
    FPGAs.The semiconductor industry's approach for boosting system
    performance has evolved from increasing frequency in single-core CPUs, to
    using multi-core CPUs, to using parallel processor arrays. Today, system
    designers are turning to FPGAs, which are fine-grained, massively parallel
    digital logic arrays architected to execute computations in parallel to
    create higher performance levels at a fraction of the power compared to
    other hardware alternatives. By allowing system developers and programmers
    familiar with C to quickly and easily develop high-performance,
    power-efficient FPGA-based applications in a high-level language, Altera's
    SDK for OpenCL enables customers to easily adopt FPGAs and leverage the
    performance and power benefits the devices provide. This unified,
    high-level design flow for hardware and software development automates the
    time-consuming tasks required in typical hardware-design language flows,
    and the resulting FPGA-based solution can deliver more than 5X
    performance/watt compared to alternative hardware implementations.



SELECTED FOURTH QUARTER REVENUE AND RELATED RESULTS

Key New Product Devices  Sequential Comparisons
Stratix V                (9)%
Arria V                  152%
Stratix IV               19%
Arria II                 (6)%
Cyclone IV               21%
HardCopy IV              (15)%





Vertical Markets        Sequential Comparisons  Comments
Telecom & Wireless      (12)%                   Both Telecom and Wireless down
Industrial Automation,
                        (9)%                    Broadly down
Military & Automotive
Networking, Computer &  (12)%                   Networking down and Computer
Storage                                         and Storage up
Other                   (10)%                   –





($ in thousands)                       December 31, 2012  September 30, 2012
Key Ratios & Information
Current Ratio                          7:1               6:1
Liabilities/Equity                     1:3               1:2
Quarterly Operating Cash Flows         $    126,709       $    285,203
TTM Return on Equity                   18%                19%
Quarterly Depreciation Expense         $    9,170         $    9,677
Quarterly Capital Expenditures         $    7,201         $    17,749
Inventory MSOH ^(1): Altera            3.4                3.1
Inventory MSOH ^(1): Distribution      0.6                0.6
TTM Cash Conversion Cycle (Days)       117                140
Turns                                  40%                37%
Book to Bill                           <1.0              <1.0
Note (1): MSOH: Months Supply On Hand







ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)
            Three Months Ended             Quarterly Growth       Years Ended
                                           Rate
                                                       Year-
            December  September  December  Sequential             December  December  Annual
            31, 2012  28, 2012   31, 2011  Change      Over-Year  31, 2012  31, 2011  Growth

                                                       Change
Geography
Americas    19    %   19    %    21    %   (8)    %    (12)   %   18    %   19    %   (18) %
Asia        39    %   43    %    40    %   (21)   %    (7)    %   43    %   41    %   (9)  %
Pacific
EMEA        28    %   25    %    22    %   (2)    %    20     %   25    %   25    %   (15) %
Japan       14    %   13    %    17    %   (4)    %    (19)   %   14    %   15    %   (18) %
Net Sales   100   %   100   %    100   %   (11)   %    (4)    %   100   %   100   %   (14) %
Product
Category
New         39    %   31    %    27    %   11     %    39     %   32    %   22    %   22   %
Mainstream  28    %   32    %    33    %   (20)   %    (18)   %   30    %   34    %   (22) %
Mature and  33    %   37    %    40    %   (22)   %    (21)   %   38    %   44    %   (26) %
Other
Net Sales   100   %   100   %    100   %   (11)   %    (4)    %   100   %   100   %   (14) %
Vertical
Market
Telecom &   44    %   45    %    43    %   (12)   %    0      %   44    %   43    %   (12) %
Wireless
Industrial
Automation, 21    %   20    %    24    %   (9)    %    (17)   %   21    %   23    %   (22) %
Military &
Automotive
Networking,
Computer &  17    %   17    %    16    %   (12)   %    0      %   17    %   17    %   (11) %
Storage
Other       18    %   18    %    17    %   (10)   %    1      %   18    %   17    %   (10) %
Net Sales   100   %   100   %    100   %   (11)   %    (4)    %   100   %   100   %   (14) %
FPGAs and
CPLDs
FPGA        84    %   82    %    82    %   (9)    %    (2)    %   84    %   81    %   (11) %
CPLD        9     %   9     %    9     %   (12)   %    (12)   %   9     %   10    %   (22) %
Other       7     %   9     %    9     %   (29)   %    (19)   %   7     %   9     %   (27) %
Products
Net Sales   100   %   100   %    100   %   (11)   %    (4)    %   100   %   100   %   (14) %



Product Category Description

  oNew Products include the Stratix^® V, Stratix IV, Arria^® V, Arria II,
    Cyclone^® V, Cyclone IV, MAX^® V and HardCopy^® IV devices.
  oMainstream Products include the Stratix III, Cyclone III, MAX II and
    HardCopy III devices.
  oMature and Other Products include the Stratix II, Stratix, Arria GX,
    Cyclone II, Cyclone, Classic™, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B,
    MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX^® series, APEX™ series,
    Mercury™, Excalibur™ devices, configuration and other devices,
    intellectual property cores, and software and other tools.

Business Outlook for the First Quarter 2013

Sales and Income Statement
Sequential Sales Growth  Down 4% to 8%
Gross Margin             69% to 70%
Research and Development $99 to 101 million
SG&A                     $77 to 78 million
Tax Rate                 4% to 5%
Diluted Share Count      Approximately 323 million
Turns                    Mid-40's
Inventory MSOH           Approximately 4.0



Vertical Market
Telecom & Wireless                           Wireless down
Industrial Automation, Military & Automotive Up slightly
Networking, Computer & Storage               Down slightly
Other                                        Up slightly

Fourth Quarter Earnings Conference Call

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 web cast 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.

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, but are not limited to, statements regarding our competitive position
at 40 nm, our expectation of stronger sales at 40 nm in 2013, our expectation
of expansion in 28 nm FPGA opportunities, and our competitive position at 28
nm, as well as any projection of revenue, gross margin, expense or other
financial items discussed in the Business Outlook section or elsewhere in 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, customer inventory levels, vertical market mix, market acceptance
of the company's products, product introduction schedules, the rate of growth
of the company's new products including Cyclone^® V, Cyclone ^ IV, Arria^® V,
Arria ^ II, Stratix^® V, ^ Stratix IV FPGAs, MAX^® V CPLDs and HardCopy^® IV
device families, as well as changes in 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's FPGA, CPLD and ASIC devices at www.altera.com.
Follow Altera via Facebook, RSS and Twitter.

ALTERA, ARRIA, CYCLONE, HARDCOPY, MAX, MEGACORE, NIOS, QUARTUS and STRATIX
words and logos are trademarks of Altera Corporation and registered in the
U.S. Patent and Trademark Office and in other countries. All other words and
logos identified as trademarks or service marks are the property of their
respective holders as described at www.altera.com/legal.

INVESTOR CONTACT              MEDIA CONTACT
Scott Wylie - Vice President  Sue Martenson - Senior Manager
Investor Relations            Public Relations
(408) 544-6996                (408) 544-8158
swylie@altera.com             newsroom@altera.com





ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
                  Three Months Ended                       Years Ended
(In thousands,    December     September 28,  December     December 31,   December 31,
except per share  31, 2012     2012           31, 2011     2012           2011
amounts)
Net sales         $ 439,440    $  495,010     $ 457,804    $ 1,783,035    $ 2,064,475
Cost of sales     133,367      152,007        136,764      541,523        610,329
Gross margin      306,073      343,003        321,040      1,241,512      1,454,146
Operating
expense
Research and
development       94,162       91,606         90,295       360,421        325,733
expense
Selling,
general, and      74,030       74,243         70,667       289,854        279,217
administrative
expense
Total operating   168,192      165,849        160,962      650,275        604,950
expense
Operating margin  137,881      177,154        160,078      591,237        849,196
^(1)
Compensation
expense
(benefit) -       358          3,274          2,962        7,055          (1,964)
deferred
compensation
plan
(Gain) loss on
deferred          (358)        (3,274)        (2,962)      (7,055)        1,964
compensation
plan securities
Interest income   (2,390)      (2,775)        (1,039)      (8,388)        (3,544)
and other
(Gain)/loss
reclassified
from other        (205)        108            18           (268)          18
comprehensive
income
Interest expense  2,589        2,333          1,013        7,976          3,730
Income before     137,887      177,488        160,086      591,917        848,992
income taxes
Income tax        17,082       19,999         13,475       35,110         78,281
expense
Net income        $ 120,805    $  157,489     $ 146,611    $ 556,807      $ 770,711
Other
comprehensive
(loss) income:
Unrealized
(loss)/gain on
investments:
Unrealized
holding
(loss)/gain on
investments
arising during    (889)        3,620          41           5,839          (149)
period, net of
tax of ($11),
$43, $8, $114
and ($17)
Less:
Reclassification
adjustments for
(gain)/loss on
investments       (44)         (41)           16           (114)          16
included in net
income, net of
tax of $24, $1,
($2), $25 and
($2)
                  (933)        3,579          57           5,725          (133)
Unrealized
(loss)/gain on
derivatives:
Unrealized
gain/(loss) on
derivatives
arising during    17           (10)           —            84             —
period, net of
tax of $9, ($6)
and $45
Less:
Reclassification
adjustments for
(gain)/loss on
derivatives       (89)         97             —            (84)           —
included in net
income, net of
tax of $48,
($53) and $45
                  (72)         87             —            —              —
Other
comprehensive     (1,005)      3,666          57           5,725          (133)
(loss) income:
Comprehensive     $ 119,800    $  161,155     $ 146,668    $ 562,532      $ 770,578
income
Net income per
share:
Basic             $ 0.38       $  0.49        $ 0.46       $ 1.74         $ 2.39
Diluted           $ 0.37       $  0.49        $ 0.45       $ 1.72         $ 2.35
Shares used in
computing per
share amounts:
Basic             319,765      319,870        321,553      320,830        321,892
Diluted           322,209      323,560        325,653      324,497        327,606
Cash dividends    $ 0.10       $  0.10        $ 0.08       $ 0.36         $ 0.28
per common share
Tax rate          12.4      %  11.3        %  8.4       %  5.9         %  9.2         %
% of Net sales:
Gross margin      69.7      %  69.3        %  70.1      %  69.6        %  70.4        %
Research and      21.4      %  18.5        %  19.7      %  20.2        %  15.8        %
development
Selling,
general, and      16.8      %  15.0        %  15.4      %  16.3        %  13.5        %
administrative
Operating         31.4      %  35.8        %  35.0      %  33.2        %  41.1        %
margin^(1)
Net income        27.5      %  31.8        %  32.0      %  31.2        %  37.3        %
Notes:
(1)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 the effect of compensation associated with the
deferred compensation plan obligations. Since the effect of compensation associated
with our deferred compensation plan obligations is offset by gains and losses 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                       Years Ended
                  December     September30,  December     December 31,   December 31,
(In thousands)    31, 2012     2012           31, 2011
                                                           2012           2011
Operating margin  $ 137,881    $  177,154     $ 160,078    $ 591,237      $ 849,196
(non-GAAP)
Compensation
expense
(benefit) —       358          3,274          2,962        7,055          (1,964)
deferred
compensation
plan
Income from
operations        $ 137,523    $  173,880     $ 157,116    $ 584,182      $ 851,160
(GAAP)







ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                    December31,  December31,
(In thousands, except par value amount)
                                                    2012          2011
Assets
Current assets:
Cash and cash equivalents                           $ 2,876,627   $ 3,371,933
Short-term investments                              140,958       65,222
Total cash, cash equivalents, and short-term        3,017,585     3,437,155
investments
Accounts receivable, net                            323,708       232,273
Inventories                                         152,721       122,279
Deferred income taxes - current                     59,049        58,415
Deferred compensation plan - marketable securities  60,321        54,041
Deferred compensation plan - restricted cash        17,116        17,938
equivalents
Other current assets                                49,852        52,710
Total current assets                                3,680,352     3,974,811
Property and equipment, net                         206,148       171,721
Long-term investments                               704,758       74,033
Deferred income taxes - non-current                 17,082        26,629
Other assets, net                                   49,488        35,074
Total assets                                        $ 4,657,828   $ 4,282,268
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                                    $ 50,036      $ 52,154
Accrued liabilities                                 29,005        34,029
Accrued compensation and related liabilities        40,606        78,181
Deferred compensation plan obligations              77,437        71,979
Deferred income and allowances on sales to          345,993       279,876
distributors
Credit facility                                     —             500,000
Total current liabilities                           543,077       1,016,219
Income taxes payable - non-current                  272,000       263,423
Long-term debt                                      500,000       —
Other non-current liabilities                       9,304         8,730
Total liabilities                                   1,324,381     1,288,372
Commitments and contingencies
Stockholders' equity:
Common stock: $.001 par value; 1,000,000 shares
authorized; outstanding - 319,564 at December 31,   320           322
2012 and 322,054 shares at December31, 2011
Capital in excess of par value                      1,122,555     1,050,752
Accumulated other comprehensive income (loss)       5,592         (133)
Retained earnings                                   2,204,980     1,942,955
Total stockholders' equity                          3,333,447     2,993,896
Total liabilities and stockholders' equity          $ 4,657,828   $ 4,282,268







ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                      YEARS ENDED
                                      December31,  December31,  December31,
(In thousands)
                                      2012          2011          2010
Cash Flows from Operating
Activities:
Net income                            $ 556,807     $ 770,711     $ 782,884
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization         36,862        31,927        27,535
Stock-based compensation              93,586        82,750        62,118
Deferred income tax expense           8,824         15,657        34,256
Tax effect of employee stock plans    9,811         16,162        27,444
Excess tax benefit from employee      (16,278)      (17,307)      (21,866)
stock plans
Changes in assets and liabilities,
net of the effects of acquisition:
Accounts receivable, net              (91,435)      131,341       (145,330)
Inventories                           (30,442)      24,245        (76,819)
Other assets                          (3,050)       54,661        (52,805)
Accounts payable and other            (50,566)      (32,534)      59,200
liabilities
Deferred income and allowances on     66,117        (148,836)     146,826
sales to distributors
Income taxes payable                  8,576         31,116        15,746
Deferred compensation plan            (1,598)       (293)         (2,494)
obligations
Net cash provided by operating        587,214       959,600       856,695
activities
Cash Flows from Investing
Activities:
Purchases of property and equipment   (60,913)      (31,812)      (12,442)
Proceeds from sales of deferred       1,598         293           2,494
compensation plan securities, net
Purchases of available-for-sale       (921,430)     (164,408)     —
securities
Proceeds from sale and maturity of    220,784       25,003        —
available-for-sale securities
Acquisition related payments, net of  —             —             (8,004)
cash acquired
Purchases of intangible assets        (2,280)       —             (5,000)
Purchase of other investments         (4,935)       —             —
Net cash used in investing            (767,176)     (170,924)     (22,952)
activities
Cash Flows from Financing
Activities:
Proceeds from issuance of common      49,665        119,989       453,719
stock through various stock plans
Shares withheld for employee taxes    (31,472)      (32,152)      (20,164)
Payment of dividends to stockholders  (115,514)     (90,060)      (67,774)
Proceeds from issuance of long-term   500,000       —             —
debt
Repayment of credit facility          (500,000)     —             —
Long-term debt and credit facility    (5,244)       —             —
issuance costs
Repurchases of common stock           (229,057)     (197,023)     —
Excess tax benefit from employee      16,278        17,307        21,866
stock plans
Principal payments on capital lease   —             —             (2,866)
obligation
Net cash (used in) provided by        (315,344)     (181,939)     384,781
financing activities
Net (decrease) increase in cash and   (495,306)     606,737       1,218,524
cash equivalents
Cash and cash equivalents at          3,371,933     2,765,196     1,546,672
beginning of period
Cash and cash equivalents at end of   $ 2,876,627   $ 3,371,933   $ 2,765,196
period
Supplemental cash flow information:
Income taxes paid, net                $ 9,797       $ 9,856       $ 29,887
Interest paid                         $ 6,898       $ 3,704       $ 3,395



SOURCE Altera Corporation

Website: http://www.altera.com