Altera Reports Third Quarter Results
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 22, 2001--Altera Corporation (Nasdaq: ALTR - news) today announced third quarter earnings of $0.05 per diluted share, meeting First Call consensus estimates. Earnings per diluted share were $0.28 in the third quarter of 2000. Net income for the third quarter of 2001 was $20.9 million versus $118.0 million net income in the prior year's third quarter.
Third quarter sales of $174.2 million were down 19% from the previous quarter and down 56% from the same period last year, consistent with prior guidance.
Altera repurchased 2.5 million shares of its common stock during the quarter at a cost of $63.5 million. Altera ended the quarter with $750.7 million of cash.
``This quarter's financial performance was in line with the expectations we set in July. We remain very encouraged by the overall level of customer response to the products we introduced earlier this year. Our design win pace remains strong,'' said John Daane, president and CEO. ``With a solid gross profit margin, a strong balance sheet, and an ever increasing array of new products, we are well equipped to weather this challenging economic period and emerge in an even stronger competitive position as markets improve.''
Altera continued to enhance its leadership position in system-on-a-programmable-chip (SOPC) solutions:
The first HardCopy(TM) devices have been delivered to customers, signaling an industry milestone and the opening of an important new market for Altera. Customers who, for cost reasons, previously would have migrated their high-density PLD designs to an ASIC for volume production, can now quickly and seamlessly convert their original design into an Altera HardCopy device, dramatically lowering their costs. HardCopy devices provide the same functionality and fit in the same socket as the Altera PLD they replace eliminating the need for any board re-design. The first generation of HardCopy devices will support high-density APEX(TM) 20KE, APEX 20KC, APEX II, and Excalibur(TM)devices. The combination of Altera PLDs and HardCopy devices delivers the traditional PLD benefits of fast time-to-market and flexibility, together with the lower costs that are so important to customers in today's markets.
Altera's industry-leading Excalibur embedded processor solutions continued to gain momentum in the marketplace. Sales of Excalibur development kits featuring the Nios(TM) embedded processor have accelerated. Since launch in June 2000, more than 2,500 Nios development kits have been sold with more than 850 kits delivered in the third quarter, a new record. The Nios processor version 2.0 will be available by year-end, further strengthening the position of this unique Altera product as the de facto industry standard. There also has been intense customer interest in Altera's newly introduced ARM®-based Excalibur devices, the industry's only PLDs with an ARM9(TM)embedded hard core processor. ARM-based Excalibur devices and development boards are now shipping to major customers around the world. The company has identified over 250 design opportunities ranging from high performance communications to industrial automation and medical instrumentation, demonstrating the attractiveness of the ARM architecture and the broad customer appeal of PLDs with embedded processors.
In August, Altera convened the first industry conference on high-speed interfaces in programmable logic devices. Altera engineers were joined by industry experts to present to an audience of more than 900 participants located at 11 sites across the country. The successful design of high-speed interfaces has become increasingly important to designers as system capabilities have reached new performance levels and PLDs have progressed into higher realms of I/O performance. Altera's I/O capabilities, which lead the industry, can be seen in the company's APEX II devices which have the industry's only 1.0-Gbps True-LVDS(TM) capability and the Mercury(TM) device family, which offers the first PLDs with an embedded CDR transceiver and 1.25-Gbps performance. Using Altera's experience as an advanced component supplier, the conference presenters explained how industry trends will drive emerging standards and protocols, how those standards will impact the design process, and how Altera devices have been designed to respond to these challenges.
Conference Call and Quarterly Update
A conference call will be held today at 2:00 p.m. Pacific Daylight Time to discuss the quarter's results and management's business outlook. A webcast and subsequent replay will be available on the company's website, 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.
On November 28, Altera will provide a fourth quarter business update. This business update will be made available after the market close and will be posted on the company's web site. Those who do not have access to the Internet may contact Altera's investor relations department directly at (408) 544-7707.
Forward-Looking Statements
Statements in this press release which 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'' or words that imply or predict a future state. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty which can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation the risk that future performance is dependent on product development schedules, the design performance of software and other tools, customer business environment, market acceptance of the company's products, changing economic and global political conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission from time to time. 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 Corporation, The Programmable Solutions Company®, was founded in 1983 and is a leading supplier of programmable logic devices (PLDs). Altera's CMOS-based PLDs are user-programmable semiconductor chips that enhance flexibility and reduce time-to-market for companies in the communications, computer peripheral, and industrial markets. By using high-performance devices, software development tools, and sophisticated intellectual property cores, system-on-a-programmable-chip (SOPC) solutions can be created with embedded processors, memory, and other complex logic together on a single PLD. Altera common stock is traded on the Nasdaq Stock Market under the symbol ALTR. More information on Altera is available on the Internet at altera.com.
Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations, and all other words and logos 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. ARM is a registered trademark of ARM Limited. All other product or service names are the property of their respective holders. All rights reserved.
ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED
--------------------------------------
Sept. 30 Sept. 30 Jun. 30
2001 2000 2001
---------- ---------- ----------
(a)Pro forma
Net sales $ 174,153 $ 395,395 $ 215,260
Costs and expenses:
Cost of sales 64,521 132,694 76,632
Research and development 40,192 48,475 40,001
Selling, general and
administrative 48,713 57,293 56,836
Acquired in-process research
and development -- -- --
---------- ---------- ----------
Total costs and expenses 153,426 238,462 173,469
---------- ---------- ----------
Income from operations 20,727 156,933 41,791
Interest and other income, net 9,060 12,912 9,634
---------- ---------- ----------
Income before income taxes
and equity investment 29,787 169,845 51,425
Provision for income taxes (8,937) (52,651) (15,427)
Equity in income (loss) of
WaferTech, LLC -- 795 --
---------- ---------- ----------
Net income $ 20,850 $ 117,989 $ 35,998
========== ========== ==========
Income per share:
Basic $ 0.05 $ 0.30 $ 0.09
========== ========== ==========
Diluted $ 0.05 $ 0.28 $ 0.09
========== ========== ==========
Shares used in computation:
Basic 385,292 398,540 385,333
========== ========== ==========
Diluted 399,022 419,396 399,305
========== ========== ==========
Tax rate 30.0% 31.0% 30.0%
% of Sales:
Gross margin 63.0% 66.4% 64.4%
Total research and development 23.1% 12.2% 18.6%
Selling, general and
administrative 28.0% 14.5% 26.4%
Income from operations 11.9% 39.7% 19.4%
Net income 12.0% 29.8% 16.7%
NINE MONTHS ENDED
------------------------
Sept. 30 Sept. 30
2001 2000
---------- ----------
(a)Pro forma
Net sales $ 676,851 $1,008,862
Costs and expenses:
Cost of sales 240,348 341,969
Research and development 131,166 121,813
Selling, general and
administrative 167,512 149,490
Acquired in-process research
and development -- 6,305
---------- ----------
Total costs and expenses 539,026 619,577
---------- ----------
Income from operations 137,825 389,285
Interest and other income, net 33,375 33,858
---------- ----------
Income before income taxes
and equity investment 171,200 423,143
Provision for income taxes (51,360) (131,175)
Equity in income (loss) of
WaferTech, LLC -- (563)
---------- ----------
Net income $ 119,840 $ 291,405
========== ==========
Income per share:
Basic $ 0.31 $ 0.73
========== ==========
Diluted $ 0.30 $ 0.70
========== ==========
Shares used in computation:
Basic 386,270 398,267
========== ==========
Diluted 400,515 419,232
========== ==========
Tax rate 30.0% 31.0%
% of Sales:
Gross margin 64.5% 66.1%
Total research and development 19.4% 12.7%
Selling, general and
administrative 24.7% 14.8%
Income from operations 20.4% 38.6%
Net income 17.7% 28.9%
(a) The pro forma financial data excludes the effects of the inventory
charges of $116.1 million and the restructuring and other special
charges of $30.8 million taken during the second quarter of 2001.
ALTERA CORPORATION
COMPARISONS WITH AND WITHOUT EFFECTS OF SPECIAL CHARGES
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED
---------------------------------------
Sept. 30 Jun. 30 Jun. 30
2001 2001 2001
---------- ---------- ----------
(b)Pro forma
Net sales $ 174,153 $ 215,260 $ 215,260
Costs and expenses:
Cost of sales 64,521 76,632 192,718
Research and development 40,192 40,001 40,001
Selling, general and
administrative 48,713 56,836 56,836
Restructuring and other
special charges -- -- 30,828
---------- ---------- ----------
Total costs and expenses 153,426 173,469 320,383
---------- ---------- ----------
Income (loss) from operations 20,727 41,791 (105,123)
Interest and other income, net 9,060 9,634 9,634
---------- ---------- ----------
Income (loss) before
income taxes 29,787 51,425 (95,489)
Benefit from (provision for)
income taxes (8,937) (15,427) 6,287
---------- ---------- ----------
Net income (loss) $ 20,850 $ 35,998 $ (89,202)
========== ========== ==========
Income (loss) per share:
Basic $ 0.05 $ 0.09 $ (0.23)
========== ========== ==========
Diluted $ 0.05 $ 0.09 $ (0.23)
========== ========== ==========
Shares used in computation:
Basic 385,292 385,333 385,333
========== ========== ==========
Diluted 399,022 399,305 385,333
========== ========== ==========
Tax rate 30.0% 30.0% -
% of Sales:
Gross margin 63.0% 64.4% 10.5%
Total research and development 23.1% 18.6% 18.6%
Selling, general and
administrative 28.0% 26.4% 26.4%
Income (loss) from operations 11.9% 19.4% (48.8%)
Net income (loss) 12.0% 16.7% (41.4%)
NINE MONTHS ENDED
------------------------
Sept. 30 Sept. 30
2001 2001
---------- ----------
(b)Pro forma
Net sales $ 676,851 $ 676,851
Costs and expenses:
Cost of sales 240,348 356,434
Research and development 131,166 131,166
Selling, general and
administrative 167,512 167,512
Restructuring and other
special charges -- 30,828
---------- ----------
Total costs and expenses 539,026 685,940
---------- ----------
Income (loss) from operations 137,825 (9,089)
Interest and other income, net 33,375 33,375
---------- ----------
Income (loss) before
income taxes 171,200 24,286
Benefit from (provision for)
income taxes (51,360) (29,646)
---------- ----------
Net income (loss) $ 119,840 $ (5,360)
========== ==========
Income (loss) per share:
Basic $ 0.31 $ (0.01)
========== ==========
Diluted $ 0.30 $ (0.01)
========== ==========
Shares used in computation:
Basic 386,270 386,270
========== ==========
Diluted 400,515 386,270
========== ==========
Tax rate 30.0% -
% of Sales:
Gross margin 64.5% 47.3%
Total research and development 19.4% 19.4%
Selling, general and
administrative 24.7% 24.7%
Income (loss) from operations 20.4% (1.3%)
Net income (loss) 17.7% (0.8%)
(b) The pro forma financial data excludes the effects of the inventory
charges of $116.1 million and the restructuring and other special
charges of $30.8 million taken during the second quarter of 2001.
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Sept. 30 Jun. 30
2001 2001
---------- ----------
Assets
Current assets:
Cash and short-term investments $ 750,684 $ 832,950
Accounts receivable, net 66,326 52,559
Inventories 142,726 175,940
Other assets 181,887 194,461
---------- ----------
Total current assets 1,141,623 1,255,910
Property and equipment, net 231,397 233,210
Investments and other assets 17,040 19,319
---------- ----------
$1,390,060 $1,508,439
========== ==========
Liabilities and Stockholders' Equity
Accounts payable and current liabilities $ 79,464 $ 119,411
Deferred income on sales to distributors 192,222 241,090
---------- ----------
Total current liabilities 271,686 360,501
Stockholders' equity 1,118,374 1,147,938
---------- ----------
$1,390,060 $1,508,439
========== ==========
Key Ratios & Information
Current Assets/Current Liabilities 4:1 3:1
Liabilities/Equity 1:4 1:3
Annualized Return on Equity(c) 13% 16%
Quarterly Depreciation Expense, Net 11,678 12,007
Quarterly Capital Expenditures 9,865 27,323
Annualized Sales per Employee 446 496
Number of Employees 2,009 2,021
Inventory MSOH(d): Altera 6.6 6.9
Inventory MSOH(d): Distribution 2.6 3.0
Days Sales Outstanding 35 22
(c) Calculated based on pro forma financial data
(d) MSOH: Months Supply On Hand
ALTERA CORPORATION
REVENUE SUMMARY
Q-Q Y-Y
Q3'01 Q3'00 Q2'01 Growth Growth
----- ----- ----- ----- -----
Geography
North America 44% 58% 44% -19% -67%
----- ----- -----
Europe 26% 21% 27% -24% -46%
Japan 21% 14% 20% -11% -34%
Asia/Pacific 9% 7% 9% -25% -40%
----- ----- -----
International 56% 42% 56% -20% -41%
----- ----- -----
Total 100% 100% 100% -19% -56%
===== ===== =====
Market Segment
Communications 56% 70% 56% -19% -64%
EDP 17% 16% 17% -20% -53%
Industrial 17% 9% 18% -25% -22%
Consumer 3% 2% 3% -12% -25%
Other 7% 3% 6% -1% 13%
----- ----- -----
Total 100% 100% 100% -19% -56%
===== ===== =====
Product Category
New 16% 5% 12% 5% 44%
Mainstream 44% 50% 46% -22% -62%
Mature & Other 40% 45% 42% -23% -61%
----- ----- -----
Total 100% 100% 100% -19% -56%
===== ===== =====
Product Category Description
Category Products
New APEX 20KE, APEX 20KC, APEX II, MAX 7000B, ACEX 1K,
Excalibur and Mercury families
Mainstream MAX 7000A, MAX 3000A, FLEX 6000, FLEX 10KA, FLEX 10KE,
APEX 20K families
Mature & Other Classic, MAX 7000, MAX 7000S, MAX 9000, FLEX 8000,
FLEX 10K families, configuration and other devices,
Tools, intellectual property and Northwest Logic
design services |
