(Source: Business Wire)
Altera Corporation (NASDAQ:ALTR) today announced second quarter sales of $279.2 million, up 6 percent from the first quarter of 2009 and down 22 percent from the second quarter of 2008. New products grew 16 percent sequentially.
Second quarter net income was $47.4 million, $0.16 per diluted share, up from net income of $44.0 million, $0.15 per diluted share, in the first quarter of 2009 and down from $98.0 million, $0.32 per diluted share, in the second quarter of 2008. Second quarter 2009 tax expense includes an additional $11.5 million charge as a result of a United States court ruling announced during the quarter related to worldwide equity compensation cost sharing. Altera was not a party to the case. The additional tax expense reduced second quarter earnings by $0.04 per diluted share.
Year-to-date cash flow from operating activities was $90.9 million. Altera ended the quarter with $1.3 billion in cash and short-term investments.
Altera's board of directors has declared a quarterly cash dividend of $0.05 per share payable on September 1, 2009 to stockholders of record on August 10, 2009.
"With a more than doubling of our 40-nm sales and surging 65-nm sales, new products resumed sequential growth and drove our top line results this quarter," said John Daane, president, chief executive officer, and chairman of the board. "Combined, our three 40-nm FPGA families continue to set design win value records. We believe that these newest Altera FPGAs will be our most successful ever."
Several recent accomplishments mark the company's continuing progress.
With the arrival of the newest members of the Stratix® IV GT FPGA family, Altera is now shipping the industry's highest density and highest bandwidth FPGAs. These 40-nm FPGAs feature 11.3-Gbps transceivers and 530K logic elements (LEs). Stratix IV GT FPGAs support next-generation 40G/100G technologies used in communications systems, military systems, and high-end test equipment. The unprecedented density and bandwidth in StratixIVGT FPGAs provide designers of 40G/100G applications the flexibility to incorporate traffic management, packet processing, and their own custom functionality into a single device. Telecommunications industry OEMs are quickly ramping their new 40G/100G networks to handle HDTV and Internet video broadband content. Stratix IV GT FPGAs deliver a single-chip solution that is optimized specifically to address the demanding bandwidth requirements of this emerging market.
Altera now is shipping its third 40-nm FPGA, the Arria® II GX family. Optimized for midrange applications in broadcast, communications, and military systems, the Arria II GX family features fast core performance combined with a cost-optimized 3-Gbps transceiver architecture. With logic densities ranging from 20K -- 260K LEs, and over 8 Mbits of RAM, this new product offering complements the Stratix IV GX and GT flagship families.
Altera announced the immediate availability of its latest addition to the Cyclone® FPGA series the Cyclone III LS family. This new device family offers the lowest power FPGA that includes security features, including anti-tamper, design security, and design separation. These devices are the lowest power FPGAs at less than 0.25W of static power for 200K LEs. These devices address challenging security and power requirements in military and industrial markets. The software is publicly available, and the first devices are shipping now.
Business Outlook for the Third Quarter 2009 Sequential Sales Growth Down 1% to 5% Gross Margin 67% +/- .5% Research and Development $67 to $69 million SG&A $55 to $57 million Other Income Approximately $0.5 million Tax Rate 13% to 14% -------------------------------------------------------------------------------
Conference Call and Quarterly Update:
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 webcast 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.
Altera's third quarter business update will be issued in a press release available after the market close on September 8, 2009.
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 as well as the company's future 40-nm sales. 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, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including the Arria GX, Arria II GX, Cyclone II, Cyclone III, Stratix II, Stratix II GX, Stratix III, Stratix IV, Stratix IV GX, Stratix IV GT, MAX® II and HardCopy® 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.
Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.
ALTERA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED June 26, March 27, June 27, June 26, June 27, 2009 2009 2008 2009 2008 Net sales $ 279,201 $ 264,602 $ 359,854 $ 543,803 $ 695,925 Cost of sales 93,588 94,029 118,337 187,617 235,646 Gross margin 185,613 170,573 241,517 356,186 460,279 Operating expenses((1)) Research and development 64,981 58,190 63,623 123,171 124,760 Selling, general, and administrative 53,679 60,659 64,173 114,338 127,304 Total operating expenses 118,660 118,849 127,796 237,509 252,064 Operating margin((2)) 66,953 51,724 113,721 118,677 208,215 Compensation expense (benefit) - deferred compensation plan 3,586 23 284 3,609 (4,745 ) Loss (gain) on deferred compensation plan securities (3,586 ) (23 ) (284 ) (3,609 ) 4,745 Interest income and other (1,717 ) (3,378 ) (7,530 ) (5,095 ) (16,681 ) Interest expense 1,321 1,338 3,907 2,659 7,044 Income before income taxes 67,349 53,764 117,344 121,113 217,852 Income tax expense 19,926 9,803 19,362 29,729 35,946 Net income $ 47,423 $ 43,961 $ 97,982 $ 91,384 $ 181,906 Net income per share: Basic $ 0.16 $ 0.15 $ 0.33 $ 0.31 $ 0.60 Diluted $ 0.16 $ 0.15 $ 0.32 $ 0.31 $ 0.59 Shares used in computing per share amounts: Basic 293,895 293,105 300,535 293,511 304,000 Diluted 295,503 294,881 305,868 295,157 307,950 Cash dividends per common share $ 0.05 $ 0.05 $ 0.05 $ 0.10 $ 0.09 Tax rate 29.6 % 18.2 % 16.5 % 24.5 % 16.5 % % of Net sales: Gross margin 66.5 % 64.5 % 67.1 % 65.5 % 66.1 % Research and development 23.3 % 22.0 % 17.7 % 22.6 % 17.9 % Selling, general, and administrative 19.2 % 22.9 % 17.8 % 21.0 % 18.3 % Operating margin((2)) 24.0 % 19.5 % 31.6 % 21.8 % 29.9 % Net income 17.0 % 16.6 % 27.2 % 16.8 % 26.1 % Notes: (1) Includes restructuring expenses as follows: THREE MONTHS ENDED SIX MONTHS ENDED June 26, March 27, June 27, June 26, June 27, 2009 2009 2008 2009 2008 Research and development $ - $ 226 $ - $ 226 $ - Selling, general, and administrative - 4,990 - 4,990 - $ - $ 5,216 $ - $ 5,216 $ - (2) 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 compensation expense (benefit) associated with deferred compensation plan obligations. Since compensation expense (benefit) 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 SIX MONTHS ENDED June 26, March 27, June 27, June 26, June 27, 2009 2009 2008 2009 2008 Operating margin (non-GAAP) $ 66,953 $ 51,724 $ 113,721 $ 118,677 $ 208,215 Compensation expense (benefit) - deferred compensation plan 3,586 23 284 3,609 (4,745 ) Income from operations (GAAP) $ 63,367 $ 51,701 $ 113,437 $ 115,068 $ 212,960 -------------------------------------------------------------------------------
ALTERA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 26, March 27, December 31, 2009 2009 2008 Assets Current assets: Cash and cash equivalents $ 1,274,975 $ 1,234,291 $ 1,216,743 Accounts receivable, net 196,070 182,120 83,430 Inventories 66,219 63,333 84,637 Deferred compensation plan assets 60,865 59,340 55,990 Deferred income taxes and other current assets 170,068 167,916 186,361 Total current assets 1,768,197 1,707,000 1,627,161 Property and equipment, net 185,307 191,628 192,262 Deferred income taxes and other assets, net 52,752 57,389 60,484 $ 2,006,256 $ 1,956,017 $ 1,879,907 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and current liabilities $ 104,656 $ 119,125 $ 124,358 Deferred compensation plan obligations 60,865 59,340 55,990 Deferred income and allowances on sales to distributors 232,834 245,582 205,674 Total current liabilities 398,355 424,047 386,022 Income taxes payable, non-current 201,685 180,786 173,880 Long-term credit facility 500,000 500,000 500,000 Other non-current liabilities 7,392 7,554 20,128 Stockholders' equity 898,824 843,630 799,877 $ 2,006,256 $ 1,956,017 $ 1,879,907 Key Ratios & Information Current Assets/Current Liabilities 4:1 4:1 4:1 Liabilities/Equity 1:1 1:1 1:1 TTM Return on Equity 32 % 40 % 45 % Quarterly Depreciation Expense $ 7,149 $ 7,457 $ 7,625 Quarterly Capital Expenditures $ 2,299 $ 4,553 $ 11,354 Annualized Net Sales per Employee $ 400 $ 386 $ 508 Number of Employees 2,684 2,717 2,760 Inventory MSOH ((1)): Altera 2.1 2.0 2.6 Inventory MSOH ((1)): Distribution 1.1 1.0 1.0 Days Sales Outstanding 64 59 25 (1) MSOH: Months Supply On Hand -------------------------------------------------------------------------------
ALTERA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 26, June 27, 2009 2008 Cash Flows from Operating Activities: Net income $ 91,384 $ 181,906 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,714 15,220 Stock-based compA service of YellowBrix, Inc.
