Altera Announces First Quarter Results

                    Altera Announces First Quarter Results

PR Newswire

SAN JOSE, Calif., April 25, 2013

SAN JOSE, Calif., April25, 2013 /PRNewswire/ -- Altera Corporation (NASDAQ:
ALTR) today announced first quarter sales of $410.5 million, down 7 percent
from the fourth quarter of 2012 and up 7 percent from the first quarter of
2012. First quarter net income was $120.2 million, $0.37 per diluted share,
compared with net income of $120.8 million, $0.37 per diluted share, in the
fourth quarter of 2012 and $115.8 million, $0.35 per diluted share, in the
first quarter of 2012.

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

Cash flow from operating activities was $149.5 million. Altera ended the
quarter with $3.8 billion in cash and investments.

Altera's board of directors has declared a quarterly cash dividend of $0.10
per share, to be paid on June3, 2013 to stockholders of record on May10,
2013.

"The quarter's overall sales were roughly as expected and represent the low
point in the recent communications equipment and industrial cycles. We expect
second quarter growth in these markets," said John Daane, president, chief
executive officer, and chairman of the board. "Development work for our next
generation products is well under way. Using TSMC's 55 nm EmbFlash and their
20 nm planar technology plus Intel's 14 nm Tri-Gate process, we expect to have
an optimized, competitively differentiated set of offerings, with notable
performance improvements across all our products. As the only major FPGA
company with access to the second-generation Tri-Gate process, we will benefit
from much reduced implementation risk, the unique finFET power, performance
and density advantages, and process availability long before any comparable
alternative."

Several recent accomplishments mark the company's continuing progress:

  oAltera and Intel jointly announced that the companies have entered into an
    agreement for the future manufacture of certain Altera FPGAs on Intel's 14
    nm Tri-Gate transistor technology. Altera is the only major FPGA company
    with access to this technology, significantly strengthening the company's
    next-generation competitive position. These 14 nm products target
    ultra-high-performance systems for military, wireline communications,
    cloud computing, and computer and storage applications, and will enable
    breakthrough levels of performance and power efficiencies not otherwise
    possible. Extending the company's tailored architecture approach, Altera's
    next- generation products will now utilize this 14 nm technology in
    addition to previously announced 20 and 55 nm devices supplied by TSMC.
  oAltera reached another significant milestone in transceiver technology by
    demonstrating the industry's first programmable device with 32-Gbps
    transceiver technology capabilities. The demonstration uses a 20 nm device
    based on TSMC's 20SoC process technology and is a positive indicator to
    the more than 500 customers in Altera's early access program who are
    looking to use Altera devices in the development of performance-demanding,
    bandwidth-centric applications. Altera has a proven track record in
    integrating leading-edge transceiver technology into its devices. Altera
    is the only company today shipping production 28 nm FPGAs with
    monolithically integrated low-power transceivers operating at 28 Gbps.
  oExtending a 20-year relationship that has resulted in repeated
    semiconductor industry innovations, Altera and TSMC's technology
    collaboration now extends to Altera's use of TSMC's 55 nm Embedded Flash
    (EmbFlash) technology. Programmable devices based on TSMC's 55 nm EmbFlash
    target a wide range of low-power, high-volume applications in a variety of
    markets, including automotive and industrial. Compared to prior-generation
    embedded flash technology, TSMC's 55 nm EmbFlash delivers faster
    computing, increases gate density 10 times and shrinks flash and SRAM cell
    sizes by 70 and 80 percent respectively.
  oAltera has acquired TPACK, previously a wholly-owned subsidiary of Applied
    Micro Circuits Corporation. With FPGA-based optical transport network
    (OTN) intellectual property targeting packet and optical networking
    equipment suppliers, TPACK enables Altera to accelerate and expand its OTN
    solutions road map. TPACK OTN solutions are available today as
    SoftSilicon^® products, built on Altera FPGAs and in production for many
    years. TPACK's engineers will make Altera more responsive to the OTN
    industry's evolution beyond 100G by delivering flexible solutions not
    possible in fixed-function ASSPs.

SELECTED FIRST QUARTER REVENUE AND RELATED RESULTS

Key New Product Devices  Sequential Comparisons
Stratix V                35            %
Stratix IV               (23)          %
Arria II                 24            %
Arria V                  30            %
Cyclone IV               0             %
Cyclone V                318           %
HardCopy IV              59            %

($ in thousands)                   March 29, 2013   December 31, 2012
Key Ratios & Information
Current Ratio                      7:1              7:1
Liabilities/Equity                 1:3              1:3
Quarterly Operating Cash Flows     $    149,478     $     126,709
TTM Return on Equity               17%              18%
Quarterly Depreciation Expense     $    10,175      $     9,170
Quarterly Capital Expenditures     $    5,984       $     7,201
Inventory MSOH ^(1): Altera        3.3              3.4
Inventory MSOH ^(1): Distribution  0.6              0.6
Cash Conversion Cycle (Days)       117              117
Turns                              43%              40%
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 Rate
                                                                   Year-
                   March29,  December31,  March30,  Sequential
                                                       Change      Over-Year
                   2013       2012          2012
                                                                   Change
Geography
Americas           20    %    19      %     18    %    (3)    %    21     %
Asia Pacific       38    %    39      %     43    %    (7)    %    (3)    %
EMEA               27    %    28      %     23    %    (11)   %    22     %
Japan              15    %    14      %     16    %    (2)    %    (3)    %
Net Sales          100   %    100     %     100   %    (7)    %    7      %
Product Category
New                39    %    39      %     26    %    (5)    %    64     %
Mainstream         29    %    28      %     32    %    (5)    %    (3)    %
Mature and Other   32    %    33      %     42    %    (10)   %    (20)   %
Net Sales          100   %    100     %     100   %    (7)    %    7      %
Vertical Market
Telecom & Wireless 41    %    44      %     41    %    (13)   %    8      %
Industrial
Automation,        22    %    21      %     22    %    (2)    %    3      %
Military &
Automotive
Networking,        18    %    17      %     17    %    1      %    17     %
Computer & Storage
Other              19    %    18      %     20    %    (2)    %    1      %
Net Sales          100   %    100     %     100   %    (7)    %    7      %
FPGAs and CPLDs
FPGA               85    %    84      %     83    %    (6)    %    9      %
CPLD               8     %    9       %     10    %    (10)   %    (11)   %
Other Products     7     %    7       %     7     %    (5)    %    7      %
Net Sales          100   %    100     %     100   %    (7)    %    7      %

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 Second Quarter 2013
Sales and Income Statement
Sequential Sales                             Flat to up 4%
Gross Margin                                 69% +/- .5%
Research and Development                     $97 to 99 million
SG&A                                         $77 to 79 million
Tax Rate                                     12% to 13%
Diluted Share Count                          Approximately 324 million
Turns                                        High 40's
MSOH                                         Mid 3's
Vertical Market
Telecom & Wireless                           Up
Industrial Automation, Military & Automotive Up
Networking, Computer & Storage               Down
Other                                        Flat



First 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 projected growth in the
communications equipment and industrial markets in the second quarter of 2013;
the status of the development of our next generation products; expected
performance improvements in and the competitive position of our next
generation products, our competitive advantage related to our use of Intel
Tri-Gate technology; the projected development in and expansion of our OTN
solutions resulting from our acquisition of TPACK; and 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
(In thousands, except per share         March29,    December31,  March30,
amounts)
                                        2013         2012          2012
Net sales                               $ 410,501    $  439,440    $ 383,754
Cost of sales                           126,083      133,367       114,834
Gross margin                            284,418      306,073       268,920
Operating expense
Research and development expense        87,930       94,162        82,297
Selling, general, and administrative    78,600       74,030        69,785
expense
Total operating expense                 166,530      168,192       152,082
Operating margin ^(1)                   117,888      137,881       116,838
Compensation expense — deferred         3,422        358           5,736
compensation plan
Gain on deferred compensation plan      (3,422)      (358)         (5,736)
securities
Interest income and other               (1,659)      (2,390)       (1,807)
Gain reclassified from other            (54)         (205)         (102)
comprehensive income
Interest expense                        2,465        2,589         937
Income before income taxes              117,136      137,887       117,810
Income tax (benefit)/expense            (3,053)      17,082        1,976
Net income                              120,189      120,805       115,834
Other comprehensive (loss) income:
Unrealized (loss)/gain on investments:
Unrealized holding (loss)/gain on
investments arising during period, net  (1)          (889)         304
of tax of ($5), ($11) and $58
Less: Reclassification adjustments for
gain on investments included in net     (49)         (44)          (20)
income, net of tax of $5, $24 and $5
                                        (50)         (933)         284
Unrealized gain on derivatives:
Unrealized gain on derivatives arising  —            17            14
during period, net of tax of $9 and $8
Less: Reclassification adjustments for
gain on derivatives included in net     —            (89)          (50)
income, net of tax of $48 and $27
                                        —            (72)          (36)
Other comprehensive (loss) income       (50)         (1,005)       248
Comprehensive income                    $ 120,139    $  119,800    $ 116,082
Net income per share:
Basic                                   $ 0.38       $  0.38       $ 0.36
Diluted                                 $ 0.37       $  0.37       $ 0.35
Shares used in computing per share
amounts:
Basic                                   319,867      319,765       322,586
Diluted                                 323,021      322,209       327,061
Cash dividends per common share         $ 0.10       $  0.10       $ 0.08
Tax rate                                (2.6)     %  12.4       %  1.7       %
% of Net sales:
Gross margin                            69.3      %  69.7       %  70.1      %
Research and development                21.4      %  21.4       %  21.4      %
Selling, general, and administrative    19.1      %  16.8       %  18.2      %
Operating margin^(1)                    28.7      %  31.4       %  30.4      %
Net income                              29.3      %  27.5       %  30.2      %

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 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
(In thousands,        March29,           December31,          March30,
except per share
amounts)              2013                2012                  2012
Operating margin      $   117,888         $    137,881          $   116,838
(non-GAAP)
Compensation
expense — deferred    3,422               358                   5,736
compensation plan
Income from           $   114,466         $    137,523          $   111,102
operations (GAAP)





ALTERA CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)
                                                     March29,    December31,
(In thousands, except par value amount)
                                                     2013         2012
Assets
Current assets:
Cash and cash equivalents                            $ 2,953,587  $  2,876,627
Short-term investments                               171,343      140,958
Total cash, cash equivalents, and short-term         3,124,930    3,017,585
investments
Accounts receivable, net                             366,417      323,708
Inventories                                          139,282      152,721
Deferred income taxes — current                      72,803       59,049
Deferred compensation plan — marketable securities   57,627       60,321
Deferred compensation plan — restricted cash         17,115       17,116
equivalents
Other current assets                                 47,113       49,852
Total current assets                                 3,825,287    3,680,352
Property and equipment, net                          201,964      206,148
Long-term investments                                712,040      704,758
Deferred income taxes — non-current                  18,934       17,082
Other assets, net                                    46,485       49,488
Total assets                                         $ 4,804,710  $  4,657,828
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                                     $ 31,613     $  50,036
Accrued liabilities                                  36,571       29,005
Accrued compensation and related liabilities         43,920       40,606
Deferred compensation plan obligations               74,742       77,437
Deferred income and allowances on sales to           382,642      345,993
distributors
Total current liabilities                            569,488      543,077
Income taxes payable — non-current                   276,238      272,000
Long-term debt                                       500,000      500,000
Other non-current liabilities                        9,188        9,304
Total liabilities                                    1,354,914    1,324,381
Stockholders' equity:
Common stock: $.001 par value; 1,000,000 shares
authorized; outstanding - 320,140 shares at March   320          320
29, 2013 and 319,564 shares at December31, 2012
Capital in excess of par value                       1,153,098    1,122,555
Retained earnings                                    2,290,836    2,204,980
Accumulated other comprehensive income               5,542        5,592
Total stockholders' equity                           3,449,796    3,333,447
Total liabilities and stockholders' equity           $ 4,804,710  $  4,657,828





ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)
                                                      Three Months Ended
                                                      March29,    March30,
(In thousands)
                                                      2013         2012
Cash Flows from Operating Activities:
Net income                                            $ 120,189    $ 115,834
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                         11,374       8,160
Stock-based compensation                              22,242       22,393
Deferred income tax benefit                           (15,606)     (7,055)
Tax effect of employee stock plans                    861          10,566
Excess tax benefit from employee stock plans          (741)        (10,044)
Changes in assets and liabilities:
Accounts receivable, net                              (42,709)     (39,119)
Inventories                                           13,439       12,828
Other assets                                          13,317       6,416
Accounts payable and other liabilities                (9,660)      (28,462)
Deferred income and allowances on sales to            36,649       130
distributors
Income taxes payable                                  6,239        (4,696)
Deferred compensation plan obligations                (6,116)      2,812
Net cash provided by operating activities             149,478      89,763
Cash Flows from Investing Activities:
 Purchases of property and equipment      (14,586)     (23,903)
Sales (purchases) of deferred compensation plan      6,116        (2,812)
securities, net
 Purchases of available-for-sale          (121,111)    (47,174)
securities
 Proceeds from sale and maturity of       83,394       48,387
available-for-sale securities
 Purchases of other investments           (176)        —
Net cash used in investing activities                 (46,363)     (25,502)
Cash Flows from Financing Activities:
 Proceeds from issuance of common stock   8,442        12,888
through various stock plans
 Shares withheld for employee taxes       (3,360)      (4,884)
 Payment of dividends to stockholders     (31,978)     (25,822)
  Repurchases of common stock              —            (8,238)
 Excess tax benefit from employee stock   741          10,044
plans
Net cash used in financing activities                 (26,155)     (16,012)
Net increase in cash and cash equivalents             76,960       48,249
Cash and cash equivalents at beginning of period      2,876,627    3,371,933
Cash and cash equivalents at end of period            $ 2,953,587  $ 3,420,182





SOURCE Altera Corporation

Website: http://www.altera.com
 
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