Altera Announces Third Quarter Results
Wednesday October 20, 4:15 pm ET
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 20, 2004--Altera Corporation (Nasdaq:ALTR - News) today announced third quarter sales of $264.6 million, up 26% from the third quarter of 2003 and down 2% from the second quarter of 2004. Sales of the company's new products grew 25% sequentially and were up 212% versus the prior year's third quarter.
Third quarter net income was $83.1 million, $0.22 per diluted share, up 90%, versus net income of $43.8 million, $0.11 per diluted share, in the third quarter of 2003. Gross profit margin was 69.4% for the third quarter of 2004 versus 68.7% for the third quarter of 2003. Net income was favorably impacted by a one-time tax benefit of $17.1 million, $0.05 per diluted share, primarily related to a settlement with Hong Kong's Inland Revenue Department for the tax years 1997 to 2003.
Altera repurchased 1.2 million shares of its common stock during the quarter at a cost of $23.2 million and ended the quarter with $1.1 billion in cash and short-term investments.
"Despite this quarter's challenges, our new 0.13-micron products remain on a fast track, with very strong sequential growth. While we continue to see increasing production-driven demand for the Stratix® and Cyclone(TM) families, we are still early in the transition from customer prototype volumes to large scale production-based orders. The peak of demand for these families is still ahead of us," said John Daane, president and CEO. "Available since June, and the only FPGAs to use a 90-nanometer process with high-performance, low-k dielectric materials, our Stratix II family rollout is progressing smoothly. The combination of this proven 90-nanometer manufacturing process, the new Stratix II architecture, and our Quartus® II development software delivers benchmarking comparisons that confirm the Stratix II family's performance superiority in the PLD industry."
Altera continued to advance its leadership position in system-on-a-programmable-chip (SOPC) solutions.
Current design-win activity indicates that the Stratix II family is continuing the momentum set by the original Stratix family. Thousands of units of the EP2S60 device, the first member of the Stratix II family, available since June, have now shipped. The Stratix II family leverages a well thought out design methodology and uses a highly reliable mainstream 90-nanometer process. As a result, Stratix II customers can be confident of on-time delivery of the critical first parts needed to complete their prototype hardware design. In addition, Altera's unique redundancy-based silicon design helps drive higher and more predictable yields. With redundancy, Altera can rapidly roll out new devices to supply customers with leading-edge technology for their development requirements. The next two Stratix II family members will begin shipping in the fourth quarter. The EP2S130 device is expected to ship at the end of December and will provide Altera customers with logic density well beyond any FPGAs available today, giving Altera both density and performance leadership. Also shipping in the quarter will be the EP2S30, which will be delivered as a fully production-qualified device, demonstrating the manufacturing stability of the Stratix II family and the fast rollout of this leading-edge FPGA family.
Altera has now shipped more than five million low-cost Cyclone FPGA devices. Introduced only 21 months ago, the Cyclone family has reached this milestone faster than any other Altera FPGA family. Cyclone devices have proven to be a compelling ASIC and ASSP alternative for designers of price-sensitive, high-volume products. The Cyclone family was the industry's first to be developed from the ground up to deliver a dramatically lower cost FPGA, allowing Altera to compete for business previously beyond the reach of any FPGA vendor. The Cyclone family also delivers best-in-class performance -- significantly faster than Xilinx's competing low-cost device, the 90-nanometer-based Spartan-3 family. In the hands of 3,800 customers worldwide, Cyclone devices have broadened the company's presence in all of its served markets and in a wide range of applications including video displays, cameras, telematics, home networking, and office automation equipment.
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 fourth 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 fourth quarter business update will be made available on December 8 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, 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, Stratix GX, and Cyclone device families, the rate at which our customers new platforms enter production, the rollout of the company's Stratix II, Cyclone II, and MAX® II 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
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.
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 and note)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- -------------------
Oct. 1 Jul. 2 Oct. 3 Oct. 1 Oct. 3
2004 2004 2003 2004 2003
--------- --------- --------- --------- ---------
Net sales $264,599 $268,972 $209,446 $776,479 $609,781
Costs and expenses:
Cost of sales 80,966 81,026 65,578 237,833 195,260
Research and
development 48,259 42,738 40,976 133,579 137,269
Selling, general,
and administrative 53,577 52,712 46,943 156,167 136,740
--------- --------- --------- --------- ---------
Total costs and
expenses 182,802 176,476 153,497 527,579 469,269
--------- --------- --------- --------- ---------
Income from
operations 81,797 92,496 55,949 248,900 140,512
Interest and other
income, net 3,892 3,272 4,002 10,900 10,152
--------- --------- --------- --------- ---------
Income before income
taxes 85,689 95,768 59,951 259,800 150,664
Provision for income
taxes (2,608) (20,459) (16,188) (42,653) (40,681)
--------- --------- --------- --------- ---------
Net income $83,081 $75,309 $43,763 $217,147 $109,983
========= ========= ========= ========= =========
Income per share:
Basic $0.22 $0.20 $0.11 $0.58 $0.29
========= ========= ========= ========= =========
Diluted $0.22 $0.20 $0.11 $0.57 $0.28
========= ========= ========= ========= =========
Shares used in
computation:
Basic 372,137 373,696 381,366 373,873 382,290
========= ========= ========= ========= =========
Diluted 379,785 382,819 391,013 382,810 390,104
========= ========= ========= ========= =========
Tax rate 3.0% 21.4% 27.0% 16.4% 27.0%
% of Sales:
Gross margin 69.4% 69.9% 68.7% 69.4% 68.0%
Research and
development 18.2% 15.9% 19.6% 17.2% 22.5%
Selling,
general, and
administrative 20.3% 19.6% 22.4% 20.1% 22.5%
Income from
operations 30.9% 34.4% 26.7% 32.1% 23.0%
Net income 31.4% 28.0% 20.9% 28.0% 18.0%
Note: Statements of income for the three and nine month periods ended
October 1, 2004 included a one-time tax benefit of $17.1 million
primarily related to a settlement with Hong Kong's Inland Revenue
Department for the tax years 1997 to 2003.
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
Oct. 1 Jul. 2 Jan. 2
2004 2004 2004
----------- ----------- -----------
Assets
Current assets:
Cash and short-term investments $1,148,525 $1,079,042 $1,031,890
Accounts receivable, net 61,593 132,554 87,204
Inventories 59,707 50,245 44,583
Other current assets 179,177 154,884 136,938
----------- ----------- -----------
Total current assets 1,449,002 1,416,725 1,300,615
Long-term investments - - 14,451
Property and equipment, net 156,970 157,283 160,924
Deferred income taxes and other
assets, net 47,317 41,157 42,199
----------- ----------- -----------
$1,653,289 $1,615,165 $1,518,189
=========== =========== ===========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and current
liabilities $214,952 $212,082 $170,364
Deferred income and allowances on
sales to distributors 235,076 269,257 245,421
----------- ----------- -----------
Total current liabilities 450,028 481,339 415,785
Stockholders' equity 1,203,261 1,133,826 1,102,404
----------- ----------- -----------
$1,653,289 $1,615,165 $1,518,189
=========== =========== ===========
Key Ratios & Information
Current Assets/Current Liabilities 3:1 3:1 3:1
Liabilities/Equity 1:3 1:2 1:3
Annualized Return on Equity 25% 24% 14%
Quarterly Depreciation Expense $6,184 $6,637 $10,875
Quarterly Capital Expenditures $5,871 $5,548 $4,615
Annualized Sales per Employee $504 $504 $426
Number of Employees 2,132 2,069 1,995
Inventory MSOH(a): Altera 2.2 1.9 1.9
Inventory MSOH(a): Distribution 1.3 1.5 1.7
Days Sales Outstanding 21 45 36
(a) MSOH: Months Supply On Hand
Note: Certain reclassifications have been made to prior period
balances in order to conform to the current period's presentation.
ALTERA CORPORATION
REVENUE SUMMARY
(Unaudited)
Q-Q Y-Y
Q3'04 Q2'04 Q3'03 Growth Growth
-------------------------------------------
Geography
---------
North America 28% 27% 33% -1% 5%
---------------------------
Europe 22% 24% 22% -12% 25%
Japan 26% 26% 24% 4% 39%
Asia Pacific 24% 23% 21% 2% 46%
---------------------------
International 72% 73% 67% -2% 37%
---------------------------
Total 100% 100% 100% -2% 26%
===========================
Product Category
----------------
New 32% 25% 13% 25% 212%
Mainstream 39% 43% 50% -10% 0%
Mature & Other 29% 32% 37% -11% -2%
---------------------------
Total 100% 100% 100% -2% 26%
===========================
Market Segment
--------------
Communications 48% 47% 43% 1% 42%
Industrial 27% 29% 30% -8% 13%
Computer & Storage 11% 10% 11% 3% 22%
Consumer 14% 14% 16% -2% 11%
---------------------------
Total 100% 100% 100% -2% 26%
===========================
Product Category Description
----------------------------
Category Products
New Stratix, Stratix II, Stratix GX, Cyclone,
MAX 3000A, MAX II, and HardCopy devices
Mainstream APEX 20K, APEX 20KC, APEX 20KE, APEX II,
FLEX 10KE, ACEX 1K, Excalibur, Mercury,
MAX 7000A, and MAX 7000B devices
Mature & Other FLEX 6000, FLEX 8000, FLEX 10K, FLEX 10KA,
MAX 7000, MAX 7000S, MAX 9000, Classic,
configuration and other devices, software
and other tools, and intellectual property
cores
--------------------------------------------------------------------------------
Source: Altera Corporation |
