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 firstname.lastname@example.org email@example.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
Altera Announces First Quarter Results
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