(Source: Business Wire)
Linear Technology Corporation (NASDAQ:LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the quarter ended March 29, 2009. Revenue of $200.9 million for the third quarter of fiscal year 2009 decreased 19% compared to the previous quarter's revenue of $249.2 million and decreased 33% or $97.0 million from $297.9 million reported in the third quarter of fiscal year 2008. Diluted earnings per share ("EPS") of $0.25 decreased $0.18 per share or 42% from the second quarter of fiscal year 2009, which had benefited from a $21.0 million gain, or $0.07 diluted EPS, on the early retirement of debt. EPS decreased $0.19 per share or 43% from the third quarter of fiscal year 2008. Net income of $54.5 million decreased $40.7 million or 43% from the second quarter of fiscal year 2009 and decreased $44.8 million or 45% from the third quarter of fiscal year 2008.
Major factors impacting the March quarter were:
Revenue decreased by $48.3 million;
The Company's quarterly effective tax rate of 19.5% was positively impacted by a discrete tax benefit related to the Company's domestic manufacturing deduction;
Operating expenses were favorably impacted by lower labor costs as employees were required to take approximately 2.5 weeks of time-off during the quarter;
The Company purchased and retired $30.0 million face value of its 3.125% Convertible Senior Notes, resulting in a gain of approximately $1.7 million, or $0.01 diluted EPS, net of deferred issuance costs.
In summary, although revenues declined 19% this quarter and 20% last quarter, the Company remained strongly profitable with operating income of 36.4% of sales.
During the March quarter the Company's cash and short-term investments balance increased by $19.8 million to $920.0 million, net of spending approximately $28.3 million to purchase $30 million face value of its 3.125% Convertible Senior Notes. A cash dividend of $0.22 per share will be paid on May 27, 2009 to stockholders of record on May 15, 2009.
According to Lothar Maier, CEO, "With revenues down 19% from the previous quarter, it was another difficult quarter as the Company continued to experience the fallout from the ongoing global credit crisis. Nevertheless, the Company's results were within the range of its guidance. The Company continued to control its variable expenses where possible to reduce the impact on profits from the decline in revenues. As a result, the Company delivered pre-tax profits of 34% and maintained positive cash flow during this turbulent period.
Looking ahead to the June quarter, there is continued uncertainty in the marketplace and our customers continue to be cautious with their ordering patterns. Forecasting operating results in the current environment is difficult, particularly since lead times are shorter than usual as customers tend to order only what they need urgently. However, we are encouraged going into the fourth quarter as we expect to see some stability in customer bookings. Our book to bill ratio was slightly positive in the March quarter. Accordingly, our current estimate anticipates that our fourth quarter revenues will be down 2% to up 4% over the third quarter. In order to meet these expectations, turns business, or bookings that are recorded and shipped during the quarter, will need to remain at a high level as customers order to current demand. Also, we will continue to control costs where possible. Subsequent to the end of the third quarter, we reduced our workforce by approximately 130 employees to further reduce our cost structure. Over the past few quarters in addition to layoffs we have substantially reduced variable compensation benefits and have taken other actions to reduce labor costs. We appreciate the sacrifices our employees have made in this regard to limit further workforce reductions. These tight expense controls we expect will allow the Company to maintain pre-tax profits in the low to mid thirties range as a percentage of net sales."
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. In particular, the statements regarding the demand for our products, our customers' ordering patterns and the anticipated trends in our sales and profits are forward-looking statements. The forward-looking statements are dependent on certain risks and uncertainties, including such factors, among others, as the timing, volume and pricing of new orders received and shipped, the timely introduction of new processes and products, general conditions in the world economy and financial markets and other factors described in our 10-K for the fiscal year ended June 29, 2008.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, April 15, 2009 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 325-4755, or toll free (877) 852-6561 before 8:15 a.m. to be included in the audience. There will be a live webcast of this conference call that can be accessed through www.linear.com or www.streetevents.com. A replay of the conference call will be available from April 15, 2009 through April 21, 2009.
You may access the archive by calling (719) 457-0820 and entering reservation #9145870. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of April 15, 2009 until the third quarter earnings release next year.
Linear Technology Corporation, a manufacturer of high performance linear integrated circuits, was founded in 1981, became a public company in 1986 and joined the S&P 500 index of major public companies in 2000. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModuleTM products, and many other analog functions. Applications for Linear Technology's high performance circuits include telecommunications, cellular telephones, networking products such as optical switches, notebook and desktop computers, computer peripherals, video/multimedia, industrial instrumentation, security monitoring devices, high-end consumer products such as digital cameras and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems. For more information, visit www.linear.com.
For further information contact Paul Coghlan at Linear Technology Corporation, 1630 McCarthy Blvd., Milpitas, California 95035-7417, (408) 432-1900.
LINEAR TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) GAAP (unaudited) Three Months Ended Nine Months Ended Mar. 29, Dec. 28, Mar. 30, Mar. 29, Mar. 30, 2009 2008 2008 2009 2008 Revenues $ 200,933 $ 249,196 $ 297,865 $ 760,480 $ 868,073 Cost of sales ((1)) 52,662 60,278 66,939 184,412 197,212 Gross profit 148,271 188,918 230,926 576,068 670,861 Expenses: Research & development ((1)) 44,724 45,793 49,613 141,377 145,192 Selling, general & administrative ((1)) 30,430 32,573 35,423 100,110 101,761 Restructuring - 1,564 - 1,564 - 75,154 79,930 85,036 243,051 246,953 Operating income 73,117 108,988 145,890 333,017 423,908 Interest expense (12,529 ) (13,246 ) (14,435 ) (40,182 ) (43,371 ) Interest income 5,397 6,113 7,334 18,484 21,026 Gain on early retirement of convertible senior notes 1,673 20,989 - 22,662 - Income before income taxes 67,658 122,844 138,789 333,981 401,563 Provision for income taxes 13,193 27,640 39,555 76,703 117,099 Net income $ 54,465 $ 95,204 $ 99,234 $ 257,278 $ 284,464 Earnings per share: Basic $ 0.25 $ 0.43 $ 0.45 $ 1.16 $ 1.28 Diluted $ 0.25 $ 0.43 $ 0.44 $ 1.15 $ 1.26 Shares used in the calculation of earnings per share: Basic 221,812 221,563 222,046 221,621 221,979 Diluted 222,017 221,657 224,489 223,120 225,842 ((1)) Includes stock-based compensation charges as follows: Cost of sales $ 2,288 $ 1,933 $ 1,996 $ 6,107 $ 5,865 Research & development 9,541 8,236 8,360 25,763 24,289 Sales, general & administrative 5,444 4,595 4,675 14,541 13,503 -------------------------------------------------------------------------------
LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) March 29, June 29, 2009 2008 (unaudited) (1) ASSETS: Current assets: Cash, cash equivalents and marketable securities $ 920,003 $ 966,701 Accounts receivable, net of allowance for doubtful accounts of $1,790 ($1,752 at June 29, 2008) 103,834 161,452 Inventories 53,230 56,017 Deferred tax assets and other current assets 76,807 61,370 Total current assets 1,153,874 1,245,540 Property, plant & equipment, net 265,154 261,085 Other noncurrent assets 72,486 77,264 Total assets $ 1,491,514 $ 1,583,889 LIABILITIES & STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 10,206 $ 16,860 Accrued income taxes, payroll & other accrued liabilities 116,844 120,521 Deferred income on shipments to distributors 31,279 37,777 Total current liabilities 158,329 175,158 Convertible senior notes 1,470,000 1,700,000 Deferred tax and other long-term liabilities 152,057 142,649 Stockholders' equity: Common stock 1,100,115 1,050,259 Accumulated deficit (1,394,848 ) (1,485,629 ) Accumulated other comprehensive income 5,861 1,452 Total stockholders' deficit (288,872 ) (433,918 ) $ 1,491,514 $ 1,583,889 (1) Derived from audited financial statements at June 29, 2008. -------------------------------------------------------------------------------
LINEAR TECHNOLOGY CORPORATION RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (In thousands, except per share amounts) Three Months Ended Nine Months Ended Mar. 29, Dec. 28, Mar. 30, Mar. 29, Mar. 30, 2009 2008 2008 2009 2008 Reported net income (GAAP basis) $ 54,465 $ 95,204 $ 99,234 $ 257,278 $ 284,464 Stock-based compensation ((1)) 17,273 14,764 15,031 46,411 43,657 Income tax effect of non-GAAP adjustments (3,368 ) (3,322 ) (4,284 ) (10,659 ) (12,731 ) Non-GAAP net income $ 68,370 $ 106,646 $ 109,981 $ 293,030 $ 315,390 Non-GAAP earnings per share excluding the effects of stock-based compensation: Basic $ 0.31 $ 0.48 $ 0.50 $ 1.32 $ 1.42 Diluted $ 0.31 $ 0.48 $ 0.49 $ 1.32 $ 1.41 Shares used in the calculation of Non-GAAP earnings per share: Basic 221,812 221,563 222,046 221,621 221,979 Diluted 222,041 ((2)) 221,628 ((2)) 223,119 ((2)) 222,384 ((3)) 224,385 ((3)) -------------------------------------------------------------------------------
1) Linear began expensing stock options in the first quarter of fiscal year 2006.
2) Excludes (24); 29; and 1,370 shares for the three months ended March 29, 2009, December 28, 2008 and March 30, 2008, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards.
3) Excludes 736 and 1,457 shares for the nine months ended March 29, 2009 and March 30, 2008, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards.
The Company's non-GAAP measures set forth above exclude charges related to stock-based compensation. The Company's management uses non-GAAP net income and non-GAAP net income per diluted share to evaluate the Company's current operating results and financial results and to compare them against historical financial results. The Company excludes stock-based compensation expenses and the related tax effects primarily because they are significant non-cash expense estimates which management separates for consideration when evaluating and managing business operations.
In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include other items. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share prepared in accordance with GAAP.
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