Altera Announces First Quarter Results

SAN JOSE, Calif., April 25, 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 June 3, 2013 to stockholders of record on May 10, 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:

  • Altera 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.
  • Altera 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.
  • Extending 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.
  • Altera 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)
Key Ratios & Information      


March 29, 2013



December 31, 2012


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


March 29,

2013


December 31,

2012


March 30,

2012


Sequential Change


Year-

Over-Year

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, Military & Automotive

22

%


21

%


22

%


(2)

%


3

%

Networking, Computer & Storage

18

%


17

%


17

%


1

%


17

%

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

  • New Products include the Stratix® V, Stratix IV, Arria® V, Arria II, Cyclone® V, Cyclone IV, MAX® V and HardCopy® IV devices.
  • Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices.
  • 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 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 amounts)


March 29,

2013


December 31,

2012


March 30,

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 expense


78,600



74,030



69,785


Total operating expense


166,530



168,192



152,082


Operating margin (1)


117,888



137,881



116,838


Compensation expense — deferred compensation plan


3,422



358



5,736


Gain on deferred compensation plan securities


(3,422)



(358)



(5,736)


Interest income and other


(1,659)



(2,390)



(1,807)


Gain reclassified from other comprehensive income


(54)



(205)



(102)


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 of tax of ($5), ($11) and $58


(1)



(889)



304


Less: Reclassification adjustments for gain on investments included in net income, net of tax of $5, $24 and $5


(49)



(44)



(20)




(50)



(933)



284


Unrealized gain on derivatives:










Unrealized gain on derivatives arising during period, net of tax of $9 and $8




17



14


Less: Reclassification adjustments for gain on derivatives included in net income, net of tax of $48 and $27




(89)



(50)






(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, except per share amounts)


March 29,

2013


December 31,

2012


March 30,

2012

Operating margin (non-GAAP)


$

117,888



$

137,881



$

116,838


Compensation expense — deferred compensation plan


3,422



358



5,736


Income from operations (GAAP)


$

114,466



$

137,523



$

111,102


 

 

ALTERA CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)




(In thousands, except par value amount)


March 29,

2013


December 31,

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 investments


3,124,930


3,017,585

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 equivalents


17,115


17,116

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 distributors


382,642


345,993

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 29, 2013 and 319,564 shares at December 31, 2012


320


320

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

 (In thousands)


March 29,

2013


March 30,

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 distributors


36,649


130

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 securities, net


6,116


(2,812)

             Purchases of available-for-sale securities


(121,111)


(47,174)

             Proceeds from sale and maturity of available-for-sale securities


83,394


48,387

             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 through various stock plans


8,442


12,888

             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 plans


741


10,044

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



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