Altera Reports Second Quarter Results
Monday July 21, 4:15 pm ET
New Products Grow 21%, Drive 5% Sequential Sales Increase
SAN JOSE, Calif.--(BUSINESS WIRE)--July 21, 2003--Altera Corporation (Nasdaq:ALTR - News) today announced second quarter sales of $205.3 million, up 5% from the first quarter of 2003, ahead of the company's previous expectations of 3 - 4% sequential growth. Sales of the company's new products grew 21% sequentially.
Second quarter net income was $36.1 million, $0.09 per diluted share, and compares to first quarter net income of $30.1 million, $0.08 per diluted share. Second quarter gross profit margin was 68.1% of sales and included a $9.2 million pretax benefit resulting from the sale of inventory previously written down in 2001.
Altera repurchased 1.7 million shares of its common stock during the quarter at a cost of $30.2 million and ended the quarter with $1.1 billion in cash and short-term investments.
"Rapidly increasing sales of Altera's 0.13-micron-based device families, Stratix(TM), Stratix GX and Cyclone(TM), drove very strong new product growth this quarter. We designed all these families with completely new and innovative architectures in order to take full advantage of the performance gains achievable at this advanced process node, and, as a result, Altera has the strongest PLD offering available in the market today," said John Daane, president and chief executive officer. "With the announcement of HardCopy(TM) Stratix devices we have taken another step to extend the attractiveness of our high-end FPGAs. Our unique HardCopy solution gives customers all the benefits of PLD-based design and delivers a lower cost production device with enhanced performance, which will help drive more gains against competing alternatives."
Altera continued to advance its leadership position in system-on-a-programmable-chip (SOPC) solutions.
With the growing popularity of the company's Stratix, Stratix GX, and Cyclone devices, Altera continues to extend its product leadership at the advanced 0.13-micron process node. To date, Altera has delivered 300,000 0.13-micron-based devices to distributors and customers around the world, well ahead of any other PLD supplier. Extensive customer interaction during the design stage helped create devices with a unique set of features highly desired by customers. The resulting rapid adoption of these devices has allowed Altera to further leverage its position as the first programmable vendor to offer production qualified devices at 0.13-micron.
Cyclone devices, which began shipping in December, have now been shipped to more than 1,000 customers, setting an Altera record for number of customers six months after introduction. This achievement demonstrates the appeal of this FPGA device family that targets high-volume PLD applications. Customers increasingly are turning to Cyclone devices because of ready availability, superior performance, and low price.
Stratix FPGAs, which are Altera's highest performance general purpose PLD family, were named Digital IC of the Year at EDN's 2002 Innovation of the Year competition. Altera was selected from among three semi-finalists including Xilinx's Virtex-II Pro FPGAs and Fujitsu's MirrorFlash flash memory. Stratix devices utilize a new highly efficient architecture and offer many industry-unique capabilities, including complete DSP blocks and Tri-Matrix memory. The entire Stratix family is available as production qualified devices, and is steadily winning new designs across all the markets served by Altera.
Altera announced the HardCopy Stratix device family, the latest generation of low-cost mask-programmed devices. Coupled with the capabilities of Altera's Quartus® II version 3.0 software, HardCopy Stratix devices deliver new alternatives for customers to convert an FPGA-based design into a lower-cost device for volume production. System designers may now select a HardCopy device that provides performance equal to the original FPGA device, or may instead choose to access even higher levels of performance and lower power consumption by directly targeting a HardCopy device as they compile their design in Quartus II. This flexibility allows customers to capture an average performance boost of 50% with as much as a 40% decrease in power consumption, further extending Altera's reach into applications previously suitable only for ASIC implementation.
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 outlook for the third quarter. The webcast and subsequent replay will be available in the investor relations section of 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 258712. The telephonic replay will be available for two weeks following the live call.
Altera's third quarter business update will be made available on September 2 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, market acceptance of the company's products, the rate of growth of the company's new products and in particular the Stratix, Stratix GX, and Cyclone device families, 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. Copies of Altera's SEC filings are posted on the company's web site 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
Celebrating its 20th anniversary this year, Altera Corporation is the world's pioneer in 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 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.
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ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- --------------------
Jun. 30 Mar. 31 Jun. 30 Jun. 30 Jun. 30
2003 2003 2002 2003 2002
-------- -------- -------- -------- --------
Net sales $205,259 $195,076 $178,936 $400,335 $350,893
Costs and expenses:
Cost of sales 65,424 64,258 70,165 129,682 138,748
Research and
development 46,105 50,188 43,838 96,293 85,023
Selling, general,
and administrative 45,594 44,203 42,276 89,797 85,816
-------- -------- -------- -------- --------
Total costs and
expenses 157,123 158,649 156,279 315,772 309,587
-------- -------- -------- -------- --------
Income from
operations 48,136 36,427 22,657 84,563 41,306
Interest and other
income, net 1,314 4,836 6,707 6,150 13,754
-------- -------- -------- -------- --------
Income before
income taxes 49,450 41,263 29,364 90,713 55,060
Provision for
income taxes (13,352) (11,141) (7,635) (24,493) (14,316)
-------- -------- -------- -------- --------
Net income $ 36,098 $ 30,122 $ 21,729 $ 66,220 $ 40,744
======== ======== ======== ======== ========
Income per share:
Basic $ 0.09 $ 0.08 $ 0.06 $ 0.17 $ 0.11
======== ======== ======== ======== ========
Diluted $ 0.09 $ 0.08 $ 0.06 $ 0.17 $ 0.10
======== ======== ======== ======== ========
Shares used in
computation:
Basic 382,725 382,637 384,411 382,698 385,085
======== ======== ======== ======== ========
Diluted 390,902 388,253 394,190 389,594 395,641
======== ======== ======== ======== ========
Tax rate 27.0% 27.0% 26.0% 27.0% 26.0%
% of Sales:
Gross margin 68.1% 67.1% 60.8% 67.6% 60.5%
Research and
development 22.5% 25.7% 24.5% 24.1% 24.2%
Selling, general,
and administrative 22.1% 22.7% 23.6% 22.4% 24.5%
Income from
operations 23.5% 18.7% 12.7% 21.1% 11.8%
Net income 17.6% 15.4% 12.1% 16.5% 11.6%
Note: Statements of operations for the three month periods ended June
30, 2003, March 31, 2003, and June 30, 2002 included benefits of $9.2
million, $9.1 million, and $1.4 million, respectively, resulting from
the sale of inventory previously written down in 2001. Such benefits
had a favorable gross margin impact of 4.5%, 4.7%, and 0.8%,
respectively. For the six month periods ended June 30, 2003 and June
30, 2002, these benefits were $18.3 million and $1.4 million,
respectively. Such benefits had a gross margin benefit of 4.6% and
0.4%, respectively.
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Jun. 30 Mar. 31 Dec. 31
2003 2003 2002
---------- ---------- ----------
Assets
Current assets:
Cash and short-term
investments $1,075,882 $ 985,373 $ 942,659
Accounts receivable, net 79,516 88,136 57,111
Inventories 28,944 30,352 39,089
Other current assets 133,151 126,988 137,317
---------- ---------- ----------
Total current assets 1,317,493 1,230,849 1,176,176
Property and equipment, net 172,771 178,176 183,999
Investments and other assets 9,002 10,844 11,562
---------- ---------- ----------
$1,499,266 $1,419,869 $1,371,737
========== ========== ==========
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable and
current liabilities $ 123,969 $ 86,161 $ 96,194
Deferred income on sales
to distributors 201,402 183,084 144,307
---------- ---------- ----------
Total current liabilities 325,371 269,245 240,501
Stockholders' equity 1,173,895 1,150,624 1,131,236
---------- ---------- ----------
$1,499,266 $1,419,869 $1,371,737
========== ========== ==========
Key Ratios & Information
Current Assets/
Current Liabilities 4:1 5:1 5:1
Liabilities/Equity 1:4 1:4 1:5
Annualized Return on Equity 11% 11% 8%
Quarterly Depreciation Expense $ 8,749 $ 9,192 $ 10,321
Quarterly Capital Expenditures $ 3,344 $ 3,369 $ 3,258
Annualized Sales per Employee $ 417 $ 411 $ 375
Number of Employees 1,958 1,917 1,882
Inventory MSOH (a): Altera 1.3 1.4 2.0
Inventory MSOH (a):
Distribution 1.5 1.5 1.6
Days Sales Outstanding 35 44 29
(a) MSOH: Months Supply On Hand
ALTERA CORPORATION
REVENUE SUMMARY
Q-Q Y-Y
Q2'03 Q1'03 Q2'02 Growth Growth
----- ----- ----- ------ ------
Geography
---------
North America 33% 34% 43% 3% -11%
----- ----- -----
Europe 21% 25% 24% -11% 4%
Japan 24% 25% 20% 0% 34%
Asia Pacific 22% 16% 13% 42% 89%
----- ----- -----
International 67% 66% 57% 6% 34%
----- ----- -----
Total 100% 100% 100% 5% 15%
===== ===== =====
Product Category
----------------
New 39% 34% 26% 21% 74%
Mainstream 33% 36% 40% -4% -5%
Mature & Other 28% 30% 34% -2% -6%
----- ----- -----
Total 100% 100% 100% 5% 15%
===== ===== =====
Market Segment
--------------
Communications 45% 44% 49% 8% 6%
Industrial & Automotive 29% 29% 26% 3% 24%
Computer & Storage 10% 11% 13% -2% -8%
Consumer 16% 16% 12% 7% 52%
----- ----- -----
Total 100% 100% 100% 5% 15%
===== ===== =====
Product Category Description
----------------------------
Category Products
New ACEX 1K, APEX 20KC, APEX 20KE, APEX II, MAX
7000B, Cyclone, Excalibur, HardCopy, Mercury,
Stratix, and Stratix GX families
Mainstream APEX 20K, FLEX 6000, FLEX 10KA, FLEX 10KE, MAX
3000A, and MAX 7000A families
Mature & Other Classic, FLEX 8000, FLEX 10K, MAX 7000, MAX
7000S, and MAX 9000 families, MPLD,
configuration and other devices, tools, and
intellectual property |
