Altera Reports Second Quarter Results
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SAN JOSE, Calif.--(BUSINESS WIRE)--July 22, 2002--Altera Corporation (Nasdaq:ALTR - News) today announced second quarter sales of $178.9 million, up 4% from the first quarter of 2002, in line with the company's previous expectations. Sales of the company's new products grew 35% sequentially.
Second quarter net income was $21.7 million, $0.06 per diluted share. Second quarter net income compares to first quarter net income of $19.0 million, $0.05 per diluted share. Second quarter gross profit margin was 60.8% of sales and included a favorable gross profit contribution related to the sale of devices from inventory written off in 2001. Excluding this benefit, the gross profit margin was 60.0%, in line with the company's earlier expectations.
Altera repurchased 4.0 million shares of its common stock during the quarter at a cost of $75.1 million. Altera ended the quarter with an $894.4 million cash position.
"The growth rate of our new products continues to accelerate and our competitive position at the high-growth leading edge has never been stronger," said John Daane, president and CEO. "The first member of the Stratix(TM) device family began shipping in May, ahead of schedule. The product performs superbly, customer engagements are growing rapidly and the manufacturing roll out has been very smooth. The Stratix family is on track for a record setting revenue ramp and is already changing the nature of competition in the PLD industry."
Altera continued to advance its leadership position in system-on-a-programmable-chip (SOPC) solutions.
Customers around the world are now taking delivery of the first member of the Stratix device family, the EP1S25 device. Announced in February, the Stratix family now has a rapidly growing list of customer engagements and design wins. Utilizing a high-performance architecture, unrivaled digital signal processing (DSP) capabilities, and industry-leading memory resources, the Stratix device family provides customers with capabilities and levels of performance not available in other FPGAs. Stratix devices are built using 0.13-micron all-layer-copper technology, a process previously proven with the APEX(TM) II EP2A70 device.
With the recent release of the Quartus® II software version 2.1, Altera extends its software leadership and delivers the industry's most comprehensive development tool for optimizing performance in large FPGA designs. As PLDs are now capable of supporting larger and more complex designs with multiple clock domains, the designer's task is dramatically more complex. Altera's Quartus II software continues to evolve to address that complexity. By integrating new timing closure tools that build on Altera's unique LogicLock(TM) block-based design flow, this latest Quartus II version simplifies an increasingly labor-intensive, iterative design optimization process. These capabilities mean that designers can reach higher levels of performance in less time, thereby increasing the attractiveness of Altera's PLD solutions across a wider range of applications.
The newest release of Altera's Nios® soft core embedded processor, with improved performance and core efficiency, fully supports the Stratix device family. Running at more than 125 MHz, this version of the Nios processor is fully optimized to take advantage of the Stratix device family's unique TriMatrix(TM) on-chip memory, high-performance interconnects, and embedded DSP blocks. Named among the top ten 16-bit embedded processors by the attendees at a recent embedded systems conference and the only soft core processor to be mentioned, the Nios processor has become the de facto industry standard for soft core processors. Introduced two years ago, long before the arrival of any PLD competition, Nios designs are now in production in applications across all the markets Altera serves.
Conference Call and Quarterly Update:
A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the third quarter. The webcast and subsequent replay will be available on the company's web site at altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 764563. The telephonic replay will be available for two weeks following the live call.
Altera's third quarter business update will be made available on August 27 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 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," 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 the design performance of software and other tools, customer business environment, Altera's ability to meet product introduction schedules, market acceptance of the company's products, the rate of growth of the company's new products and in particular the Stratix device family, as well as changing economic 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 (Nasdaq:ALTR - News) is the world's pioneer of system-on-a-programmable-chip (SOPC) solutions. Combining programmable logic technology with software tools, intellectual property, and technical services, Altera provides high-value programmable solutions to approximately 14,000 customers worldwide. More information is available at altera.com.
Note to Editors: 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.
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ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED
Jun. 30 Jun. 30 Jun. 30 Mar. 31
2002(1) 2001(2) 2001 2002
--------- --------- --------- ---------
Pro forma
Net sales $ 178,936 $ 215,260 $ 215,260 $ 171,957
Costs and expenses:
Cost of sales 70,165 76,632 192,718 68,583
Research and development 43,838 40,001 40,001 41,185
Selling, general,
and administrative 42,276 56,836 56,836 43,540
Restructuring and
other special charges -- -- 30,828 --
--------- --------- --------- ---------
Total costs and expenses 156,279 173,469 320,383 153,308
--------- --------- --------- ---------
Income (loss)
from operations 22,657 41,791 (105,123) 18,649
Interest and other
income, net 6,707 9,634 9,634 7,047
--------- --------- --------- ---------
Income (loss) before
income taxes 29,364 51,425 (95,489) 25,696
Benefit from (provision
for) income taxes (7,635) (15,427) 6,287 (6,681)
--------- --------- --------- ---------
Net income (loss) $ 21,729 $ 35,998 $ (89,202) $ 19,015
========= ========= ========= =========
Income (loss) per share:
Basic $ 0.06 $ 0.09 $ (0.23) $ 0.05
========= ========= ========= =========
Diluted $ 0.06 $ 0.09 $ (0.23) $ 0.05
========= ========= ========= =========
Shares used in computation:
Basic 384,411 385,333 385,333 385,586
========= ========= ========= =========
Diluted 394,190 399,305 385,333 396,917
========= ========= ========= =========
Tax rate 26.0% 30.0% -- 26.0%
% of Sales:
Gross margin 60.8% 64.4% 10.5% 60.1%
Research and development 24.5% 18.6% 18.6% 24.0%
Selling, general,
and administrative 23.6% 26.4% 26.4% 25.3%
Income (loss) from
operations 12.7% 19.4% (48.8%) 10.8%
Net income (loss) 12.1% 16.7% (41.4%) 11.1%
(1) The statement of operations for the three months ended June 30,
2002 includes a benefit of $1.4 million resulting from a release
of inventory reserves due to the sale of inventory previously
written off in 2001. Excluding this benefit, gross margin was
60.0% for the three months ended June 30, 2002.
(2) 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.
Note: The company provides pro forma financial data as an alternative
for understanding its operating results. These measures are not in
compliance with accounting principles generally accepted in the United
States of America, and may be different from pro forma measures used
by other companies.
ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
SIX MONTHS ENDED
Jun. 30 Jun. 30 Jun. 30
2002(3) 2001(4) 2001
--------- --------- ---------
Pro forma
Net sales $ 350,893 $ 502,698 $ 502,698
Costs and expenses:
Cost of sales 138,748 175,827 291,913
Research and development 85,023 90,974 90,974
Selling, general,
and administrative 85,816 118,799 118,799
Restructuring and
other special charges -- -- 30,828
--------- --------- ---------
Total costs and expenses 309,587 385,600 532,514
--------- --------- ---------
Income (loss) from operations 41,306 117,098 (29,816)
Interest and other
income, net 13,754 24,315 24,315
--------- --------- ---------
Income (loss) before
income taxes 55,060 141,413 (5,501)
Provision for income taxes (14,316) (42,423) (20,709)
--------- --------- ---------
Net income (loss) $ 40,744 $ 98,990 $ (26,210)
========= ========= =========
Income (loss) per share:
Basic $ 0.11 $ 0.26 $ (0.07)
========= ========= =========
Diluted $ 0.10 $ 0.25 $ (0.07)
========= ========= =========
Shares used in computation:
Basic 385,085 386,763 386,763
========= ========= =========
Diluted 395,641 401,266 386,763
========= ========= =========
Tax rate 26.0% 30.0% --
% of Sales:
Gross margin 60.5% 65.0% 41.9%
Research and development 24.2% 18.1% 18.1%
Selling, general,
and administrative 24.5% 23.6% 23.6%
Income (loss) from operations 11.8% 23.3% (5.9%)
Net income (loss) 11.6% 19.7% (5.2%)
(3) The statement of operations for the six months ended June 30, 2002
includes a benefit of $1.4 million resulting from a release of
inventory reserves due to the sale of inventory previously written
off in 2001. Excluding this benefit, gross margin was 60.1% for
the six months ended June 30, 2002.
(4) 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)
Jun. 30 Mar. 31
2002 2002
---------- ----------
Assets
Current assets:
Cash and short-term investments $ 894,438 $ 899,368
Accounts receivable, net 80,619 62,910
Inventories 31,779 50,674
Other current assets 140,566 133,998
---------- ----------
Total current assets 1,147,402 1,146,950
Property and equipment, net 198,266 206,286
Investments and other assets 11,173 12,040
---------- ----------
$1,356,841 $1,365,276
========== ==========
Liabilities and Stockholders' Equity
Accounts payable and current liabilities $ 111,040 $ 110,902
Deferred income on sales to distributors 154,164 124,962
---------- ----------
Total current liabilities 265,204 235,864
Stockholders' equity 1,091,637 1,129,412
---------- ----------
$1,356,841 $1,365,276
========== ==========
Key Ratios & Information
Current Assets/Current Liabilities 4:1 5:1
Liabilities/Equity 1:4 1:5
Annualized Return on Equity 7% 7%
Quarterly Depreciation Expense, Net 10,711 11,972
Quarterly Capital Expenditures 2,691 976
Annualized Sales per Employee 367 356
Number of Employees 1,872 1,873
Inventory MSOH(5): Altera 1.4 2.2
Inventory MSOH(5): Distribution 1.8 1.8
Days Sales Outstanding 41 33
(5) MSOH: Months Supply On Hand
ALTERA CORPORATION
REVENUE SUMMARY
Q-Q Y-Y
Q2'02 Q1'02 Q2'01 Growth Growth
----- ----- ----- ------ ------
Geography
---------
North America 43% 44% 44% 1% -19%
----- ----- -----
Europe 24% 25% 27% -1% -27%
Japan 20% 19% 20% 9% -15%
Asia/Pacific 13% 12% 9% 19% 17%
----- ----- -----
International 57% 56% 56% 7% -15%
----- ----- -----
Total 100% 100% 100% 4% -17%
===== ===== =====
Product Category
----------------
New 26% 20% 12% 35% 74%
Mainstream 40% 43% 46% -3% -28%
Mature & Other 34% 37% 42% -4% -32%
----- ----- -----
Total 100% 100% 100% 4% -17%
===== ===== =====
Market Segment (6)
------------------
Communications 49% 49% 4%
Digital Consumer 12% 11% 9%
Computer & Storage 13% 15% -8%
Industrial & Automotive 26% 25% 9%
----- -----
Total 100% 100% 4%
===== =====
Product Category Description
Category Products
New APEX 20KE, APEX 20KC, APEX II, MAX 7000B, ACEX 1K,
Excalibur, Mercury, HardCopy, and Stratix families
Mainstream MAX 7000A, MAX 3000A, FLEX 6000, FLEX 10KA,
FLEX 10KE, and APEX 20K families
Mature & Other Classic, MAX 7000, MAX 7000S, MAX 9000, FLEX 8000,
and FLEX 10K families, configuration and other
devices, tools, and intellectual property
(6) Effective 1/1/02 Altera adopted a new revenue classification
methodology.
--------------------------------------------------------------------------------
Contact:
Altera Corporation
Scott Wylie, 408/544-6996 (Investor Relations)
swylie@altera.com
Anna del Rosario, 408/544-7496 (Public Relations)
adelrosa@altera.com |
