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 March 1, 2013 to stockholders of record on February 11,
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:
o Huawei 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.
o Altera 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.
o Altera is now shipping the first of its 28 nm SoC devices, which combine a
dual-core ARM® Cortex™-A9 processor system with 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.
o Altera 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
o New Products include the Stratix^® V, Stratix IV, Arria^® V, Arria II,
Cyclone^® V, Cyclone IV, MAX^® V and HardCopy^® IV devices.
o Mainstream Products include the Stratix III, Cyclone III, MAX II and
HardCopy III devices.
o Mature 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 September 30, 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)
December 31, December 31,
(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 December 31, 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
December 31, December 31, December 31,
(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
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