Published: April 26, 2011
Altera Announces First Quarter Results
SAN JOSE, Calif., April 26, 2011 /PRNewswire/ -- Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $535.8 million, down 4 percent from the fourth quarter of 2010 and up 33 percent from the first quarter of 2010. New product sales increased 13 percent sequentially. First quarter net income was $224.1 million, $0.68 per diluted share, compared with net income of $231.6 million, $0.72 per diluted share, in the fourth quarter of 2010 and $153.2 million, $0.50 per diluted share, in the first quarter of 2010.
First quarter cash flow from operating activities was $297.0 million. Altera ended the quarter with $3.1 billion in cash and short-term investments.
Altera's board of directors has declared a quarterly cash dividend of $0.06 per share payable on
June 1, 2011 to stockholders of record on May 10, 2011.
"Despite the anticipated slow down in first quarter sales following a remarkable 2010 growth year, we experienced double-digit sequential growth in our 40-nm based devices, as these products are now entering the best part of their growth phase," said John Daane, president, chief executive officer, and chairman of the board. "Our initial 28-nm Stratix V devices, the first high-end FPGAs at this advanced node, are now shipping--giving us additional capabilities to accelerate the displacement of ASICs and ASSPs."
Several recent accomplishments mark the company's continuing progress:
-- At 3.9 billion transistors, more than any other commercially available
integrated circuit, Altera has set a semiconductor industry milestone
with the initial shipments of its 28-nm Stratix® V FPGAs. Stratix V
devices are the only FPGAs to leverage TSMC's 28-nm high-performance
(28HP) process for maximum performance and bandwidth. The 28HP process,
combined with optimizations in the FPGA, enable Altera to dramatically
increase the capabilities of this high-end device family. This approach
also delivers better performance with lower power consumption than
competing FPGAs. The level of functionality implemented in a single
Stratix V FPGA, including 28-Gbps transceivers, variable-precision DSP
blocks and embedded HardCopy® blocks, enable the device to be leveraged
into the highest performance, highest bandwidth applications across the
wide range of markets served by Altera.
-- Altera's Stratix V FPGAs have received the Application of Electronic
Technique China magazine's (AET China) "2010 Top Product Award" in the
programmable logic category. The Top Product Award recognizes
technologies that have demonstrated the greatest innovations targeting
the systems design community. This is the second consecutive year that
Altera has received this award, selected by AET China readers and
industry experts. In granting the award, AET China specifically
recognized the key Stratix V architectural innovations that allow system
designers to achieve higher bandwidth and lower power through an
unprecedented level of system integration.
-- Altera's variable-precision DSP block architecture won the DesignCon
2011 DesignVision Award in the semiconductor and IC category. This
unique architecture is implemented within Altera's portfolio of 28-nm
FPGAs to increase system performance, reduce power consumption and
reduce architectural constraints for DSP algorithm designers. The
variable-precision approach allows each DSP block in the FPGA to be
configured at compile time to closely match the unique level of
precision called for in a customer's design. The variable-precision DSP
block architecture supports high-bandwidth, high precision applications,
as well as delivering more cost effective silicon usage for lower
performance requirements. The DesignVision Award recognizes
technologies, applications, products and services judged to be the most
unique and beneficial to the industry.
-- Altera has announced plans for optically interconnected programmable
devices, allowing a wide range of applications to significantly increase
their bandwidth capabilities while also reducing overall system
complexity, cost and power. Because transceivers are vital for this
major industry development, Altera is leveraging its technology
leadership in this area to make this vision a reality. Altera's deep
knowledge of system interconnect technologies will drive the creation of
direct optical interfaces in future device packages, breaking through
the bandwidth and signal integrity barriers inherent in copper
technology. For instance, in computer and storage intensive applications
such as data centers, the integration of optical interfaces into device
packages could reduce power by 70 percent to 80 percent while increasing
port density and bandwidth by orders of magnitude. Additional
information, and a White Paper on this topic, is available at
www.altera.com/optical.
Business Outlook for the Second Quarter 2011
Sequential Sales Growth Flat to up 5%
Gross Margin 71% to 72%
Research and Development $84 to 85 million
SG&A $70 to 71 million
Tax Rate 10% to 12%
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.
Second Quarter Update
Altera's second quarter business update will be issued in a press release available after the market close on June 2, 2011.
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 any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release, accelerating ASIC and ASSP displacement, and Altera's plans for optically interconnected programmable devices. 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, supply chain or demand impacts from the recent Japanese earthquake, 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® IV, Arria® II, Stratix® V, Stratix IV FPGAs, MAX® V CPLDs and HardCopy® IV device families, changes in the mix of our business between prototyping and production-based demand, 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, NIOS, QUARTUS, 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
---------------- -------------
Mark Plungy -Senior
Scott Wylie - Vice President Manager
Investor Relations Public Relations
(408) 544-6996 (408) 544-6397
swylie@altera.com newsroom@altera.com
----------------- -------------------
ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
------------------
(In thousands, except per December
share amounts) April 1, 31, April 2,
------------------------- -------- --------- --------
2011 2010 2010
---- ---- ----
Net sales $535,813 $555,378 $402,295
Cost of sales 146,910 161,296 114,936
------- ------- -------
Gross margin 388,903 394,082 287,359
Operating expense
Research and development
expense 74,408 66,788 64,340
Selling, general, and
administrative expense 69,022 64,074 62,181
------ ------ ------
Total operating expense 143,430 130,862 126,521
------- ------- -------
Operating margin(1) 245,473 263,220 160,838
Compensation expense -
deferred compensation plan 1,662 3,554 2,228
Gain on deferred
compensation plan
securities (1,662) (3,554) (2,228)
Interest income and other (885) (936) (592)
Interest expense 1,041 351 1,291
----- --- -----
Income before income taxes 245,317 263,805 160,139
Income tax expense 21,248 32,192 6,966
------ ------ -----
Net income $224,069 $231,613 $153,173
======== ======== ========
Net income per share:
Basic $0.70 $0.73 $0.51
===== ===== =====
Diluted $0.68 $0.72 $0.50
===== ===== =====
Shares used in computing
per share amounts:
Basic 321,020 316,440 298,566
======= ======= =======
Diluted 327,843 323,592 304,327
======= ======= =======
Cash dividends per common
share $0.06 $0.06 $0.05
===== ===== =====
Tax rate 8.7% 12.2% 4.3%
% of Net sales:
Gross margin 72.6% 71.0% 71.4%
Research and development 13.9% 12.0% 16.0%
Selling, general, and
administrative 12.9% 11.5% 15.5%
Operating margin(1) 45.8% 47.4% 40.0%
Net income 41.8% 41.7% 38.1%
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
------------------
April 1, December April 2,
(In thousands, except per share amounts) 2011 31, 2010 2010
--------- -------- ---------
Operating margin (non-GAAP) $245,473 $263,220 $160,838
Compensation expense -deferred
compensation plan 1,662 3,554 2,228
Income from operations (GAAP) $243,811 $259,666 $158,610
======== ======== ========
ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December
(In thousands, except par value amount) April 1, 31,
--------------------------------------- -------- ---------
2011 2010
---- ----
Assets
Current assets:
Cash and cash equivalents $3,097,981 $2,765,196
Accounts receivable, net 310,669 363,614
Inventories 135,760 146,524
Deferred income taxes - current 68,266 66,839
Deferred compensation plan - marketable
securities 56,040 54,419
Deferred compensation plan - restricted
cash equivalents 18,784 19,817
Other current assets 83,268 114,601
------ -------
Total current assets 3,770,768 3,531,010
Property and equipment, net 164,400 164,155
Deferred income taxes - non-current 31,662 37,319
Other assets, net 29,971 27,353
------ ------
Total assets $3,996,801 $3,759,837
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $63,676 $86,061
Accrued liabilities 22,379 23,278
Accrued compensation and related
liabilities 58,091 83,773
Deferred compensation plan obligations 74,824 74,236
Deferred income and allowances on sales
to distributors 429,779 428,711
Income taxes payable - 428
--- ---
Total current liabilities 648,749 696,487
Income taxes payable - non-current 233,574 231,833
Long-term credit facility 500,000 500,000
Other non-current liabilities 7,806 7,865
----- -----
Total liabilities 1,390,129 1,436,185
--------- ---------
Commitments and contingencies
(See "Note 10 - Commitments and
Contingencies")
Stockholders' equity:
Common stock: $.001 par value; 1,000,000
shares authorized; outstanding -
322,193 at April 1, 2011 and 319,493 at
December 31, 2010 322 319
Capital in excess of par value 990,548 908,989
Retained earnings 1,615,802 1,414,344
--------- ---------
Total stockholders' equity 2,606,672 2,323,652
--------- ---------
Total liabilities and stockholders'
equity $3,996,801 $3,759,837
========== ==========
Key Ratios & Information
Current Ratio 6:1 5:1
Liabilities/Equity 1:2 1:2
Quarterly Operating Cash Flows $297,009 $210,151
TTM Return on Equity 44% 48%
Quarterly Depreciation Expense $6,804 $6,815
Quarterly Capital Expenditures $6,587 $6,117
Inventory MSOH (1): Altera 2.8 2.7
Inventory MSOH (1): Distribution 0.8 0.8
Cash Conversion Cycle 90 85
Note (1): MSOH: Months Supply On Hand
ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended
------------------
April 1, April 2,
-------- --------
2011 2010
---- ----
Cash Flows from Operating Activities:
Net income $224,069 $153,173
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 7,561 7,066
Stock-based compensation 17,233 14,062
Deferred income tax expense 700 909
Tax effect of employee stock plans 13,444 3,105
Excess tax benefit from employee
stock plans (11,334) (1,828)
Changes in assets and liabilities:
Accounts receivable, net 52,944 (141,991)
Inventories 10,764 (17,614)
Other assets 31,491 (2,694)
Accounts payable and other
liabilities (51,169) 11,477
Deferred income and allowances on
sales to distributors 1,068 117,984
Income taxes payable 1,312 (7,434)
Deferred compensation plan
obligations (1,074) (3,545)
------ ------
Net cash provided by operating
activities 297,009 132,670
Cash Flows from Investing Activities:
Purchases of property and equipment (4,905) (1,538)
Sales of deferred compensation plan
securities, net 1,074 3,545
Net cash (used in) provided by
investing activities (3,831) 2,007
------ -----
Cash Flows from Financing Activities:
Proceeds from issuance of common
stock through various stock plans 52,739 77,482
Shares withheld for employee taxes (5,193) (4,784)
Payment of dividends to stockholders (19,273) (14,873)
Excess tax benefit from stock-based
compensation 11,334 1,828
Principal payments on capital lease
obligations - (2,627)
--- ------
Net cash provided by financing
activities 39,607 57,026
------ ------
Net increase in cash and cash
equivalents 332,785 191,703
Cash and cash equivalents at
beginning of period 2,765,196 1,546,672
--------- ---------
Cash and cash equivalents at end of
period $3,097,981 $1,738,375
========== ==========
ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)
Three Months Ended
------------------
December
April 1, 31, April 2,
-------- --------- --------
2011 2010 2010
---- ---- ----
Geography
---------
Americas 21% 17% 19%
Asia Pacific 38% 43% 40%
EMEA 26% 22% 24%
Japan 15% 18% 17%
--- --- ---
Net Sales 100% 100% 100%
=== === ===
Product Category (1)
--------------------
New 18% 16% 7%
Mainstream 33% 37% 27%
Mature and Other 49% 47% 66%
Net Sales 100% 100% 100%
=== === ===
Vertical Market
---------------
Telecom & Wireless 42% 47% 40%
Industrial Automation,
Military & Automotive 24% 19% 24%
Networking, Computer &
Storage 15% 15% 13%
Other 19% 19% 23%
--- --- ---
Net Sales 100% 100% 100%
=== === ===
FPGAs and CPLDs
---------------
FPGA 81% 83% 79%
CPLD 11% 10% 14%
Other Products 8% 7% 7%
--- --- ---
Net Sales 100% 100% 100%
=== === ===
Quarterly Growth Rate
---------------------
Sequential
Change Year-
-----
Over-Year
---------
Change
------
Geography
---------
Americas 20% 42%
Asia Pacific (14)% 29%
EMEA 12% 43%
Japan (20)% 18%
Net Sales (4)% 33%
Product Category (1)
--------------------
New 13% 267%
Mainstream (15)% 58%
Mature and Other - (1)%
Net Sales (4)% 33%
Vertical Market
---------------
Telecom & Wireless (14)% 38%
Industrial Automation,
Military & Automotive 25% 36%
Networking, Computer &
Storage (4)% 53%
Other (4)% 11%
Net Sales (4)% 33%
FPGAs and CPLDs
---------------
FPGA (6)% 36%
CPLD 1% 4%
Other Products 25% 64%
Net Sales (4)% 33%
Product Category Description
-- New Products include the Stratix® IV (including E, GX and GT), Arria®
II (including GX and GZ), Cyclone® IV (including E and GX), 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 (and GX), Stratix (and
GX), Arria GX, Cyclone II, Cyclone, Classic(TM), MAX 3000A, MAX 7000,
MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX®
series, APEX(TM) series, Mercury(TM), and Excalibur(TM) devices,
configuration and other devices, intellectual property cores, and
software and other tools.
Note:
(1) Effective January 2011, the product classification (new, mainstream and mature & other) has changed. All prior period data has been adjusted to conform to the current classification. Data calculated under both the new and former classification are available in the investor relations section of the company's website at www.altera.com.
SOURCE Altera Corporation
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