Attached files
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| 8-K - FORM 8-K - ALTERA CORP | q48k.htm |
INVESTOR CONTACT | MEDIA CONTACT | |
Scott Wylie - Vice President | Mark Plungy - Senior Manager | |
Investor Relations | Public Relations | |
(408) 544-6996 | (408) 544-6397 | |
swylie@altera.com | newsroom@altera.com |
ALTERA ANNOUNCES RECORD FOURTH QUARTER RESULTS
San Jose, Calif., January 25, 2011 — Altera Corporation (NASDAQ: ALTR) today announced fourth quarter sales of $555.4 million, up 5 percent from the third quarter of 2010 and up 52 percent from the fourth quarter of 2009. New product sales increased 26 percent sequentially. Fourth quarter net income was $231.6 million, $0.72 per diluted share, compared with net income of $217.5 million, $0.69 per diluted share, in the third quarter of 2010 and $103.0 million, $0.34 per diluted share, in the fourth quarter of 2009.
Cash flow from operating activities in 2010 was $856.7 million. Altera ended the quarter with $2.8 billion in cash and short-term investments.
Altera's board of directors has declared a quarterly cash dividend of $0.06 per share payable on March 1, 2011 to stockholders of record on February 10, 2011.
"The fourth quarter delivered a positive note to end a remarkable sales growth year. Our sales were up 64 percent in 2010, significantly outpacing most companies in the semiconductor industry. In the fourth quarter, new products continued to be growth drivers as we saw substantial sales gains from our 65-nm and 40-nm FPGAs," said John Daane, president, chief executive officer, and chairman of the board. "During the fourth quarter we taped out our first 28-nm FPGAs. We believe Altera's unique features and performance will extend our technology leadership into this next FPGA generation adding to the momentum we have established at the 40-nm node."
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Several recent accomplishments mark the company's continuing progress:
• | Altera announced its portfolio of 28-nm devices that will deliver the industry's most diverse product offering designed to effectively address the different needs of customers across the varied markets Altera serves. With this 28-nm portfolio, Altera leverages advantages in transceiver technology, product architecture, intellectual property (IP) integration, and process technology. Included in this announcement are the recently expanded Stratix® V and the new Cyclone® V and Arria® V FPGAs as well as the previously announced HardCopy® V ASIC family. Stratix V FPGAs address a broad range of high-bandwidth applications such as advanced LTE basestations, high-end RF cards and military radar. Arria V FPGAs target applications that require a balance of cost, low power and high performance, such as remote radio units, in-studio mixers and 10G/40G line cards. Cyclone V FPGAs are designed for applications where low power and board space are concerns, such as motor controls, displays and software-defined radios. |
• | Altera acquired Avalon Microelectronics during the fourth quarter. Avalon's strong system expertise in transmission applications and detailed FPGA knowledge adds to Altera's portfolio of customizable IP solutions for an optical transport network (OTN). Avalon has established itself as an industry leader in flexible OTN IP used in FPGA and ASIC products. Avalon is a key provider to numerous top-tier communications infrastructure OEMs. Combining the two companies' IP capabilities offers the potential for customers to accelerate their time to market for next-generation optical networks and broadens Altera's attractiveness in this high-growth market. |
• | Altera also announced the availability of the MAX® V CPLD family, expanding the company's market-leading MAX CPLD series of devices. The MAX V family uses half the total power of competitive CPLDs while maintaining the instant-on, single chip, non-volatile characteristics of earlier MAX series devices. The combination of low power and high performance make MAX V CPLDs ideal for general-purpose and portable designs in a wide variety of the vertical markets served by Altera. Altera has long been the market leader in CPLDs. The first MAX V family members are available now with the entire family shipping in full production during the second quarter of this year. |
• | The Global Semiconductor Alliance (GSA) has named Altera the "Best Financially Managed Semiconductor Company." With member companies in 25 countries across the world, the GSA's mission is to accelerate the growth and increase the return on invested capital of the semiconductor industry by fostering a more effective fabless ecosystem. Altera received this award based on a number of financial metrics such as revenue, net income, return on investment, return on equity, inventory turns, days sales outstanding, cash per share, cash burn, gross profit margin, operating margin and current ratio. |
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Business Outlook for the First Quarter 2011
Sequential Sales Growth | Down 1% to 5% | |
Gross Margin | 71% to 72% | |
Research and Development | $76 to 77 million | |
SG&A | $69 to 70 million | |
Tax Rate | 10% to 12% |
Fourth Quarter Earnings Conference Call
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 web cast 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 first quarter business update will be issued in a press release available after the market close on March 1, 2011.
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, the timing of MAX V shipments and the potential for continued technology leadership at 28 nm. 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, customer inventory levels, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including Arria® II, Cyclone® III, Cyclone IV, Stratix® III, Stratix IV FPGAs, MAX® II and MAX V CPLDs 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.
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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. Follow Altera via Facebook, RSS and Twitter.
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ALTERA, ARRIA, CYCLONE, HARDCOPY, MAX, MEGACORE, NIOS, QUARTUS and STRATIX words and logos are trademarks of Altera Corporation and registered in the U.S. Patent and Trademark Office and in other countries. All other words and logos identified as trademarks or service marks are the property of their respective holders as described at www.altera.com/legal.
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ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended | Years Ended | |||||||||||||||||||
(In thousands, except per share amounts) | December 31, 2010 | October 1, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | |||||||||||||||
Net sales | $ | 555,378 | $ | 527,453 | $ | 364,998 | $ | 1,954,426 | $ | 1,195,413 | ||||||||||
Cost of sales | 161,296 | 157,899 | 115,281 | 566,942 | 396,584 | |||||||||||||||
Gross margin | 394,082 | 369,554 | 249,717 | 1,387,484 | 798,829 | |||||||||||||||
Operating expense | ||||||||||||||||||||
Research and development expense | 66,788 | 67,896 | 66,940 | 264,649 | 260,208 | |||||||||||||||
Selling, general, and administrative expense | 64,074 | 63,473 | 63,404 | 254,495 | 234,074 | |||||||||||||||
Total operating expense | 130,862 | 131,369 | 130,344 | 519,144 | 494,282 | |||||||||||||||
Operating margin (1) | 263,220 | 238,185 | 119,373 | 868,340 | 304,547 | |||||||||||||||
Compensation expense — deferred compensation plan | 3,554 | 4,699 | 2,629 | 6,839 | 11,776 | |||||||||||||||
Gain on deferred compensation plan securities | (3,554 | ) | (4,699 | ) | (2,629 | ) | (6,839 | ) | (11,776 | ) | ||||||||||
Interest income and other | (936 | ) | (1,092 | ) | (248 | ) | (3,330 | ) | (6,083 | ) | ||||||||||
Interest expense | 351 | 1,098 | 1,208 | 3,843 | 5,092 | |||||||||||||||
Income before income taxes | 263,805 | 238,179 | 118,413 | 867,827 | 305,538 | |||||||||||||||
Income tax expense | 32,192 | 20,688 | 15,439 | 84,943 | 54,476 | |||||||||||||||
Net income | $ | 231,613 | $ | 217,491 | $ | 102,974 | $ | 782,884 | $ | 251,062 | ||||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | 0.73 | $ | 0.70 | $ | 0.35 | $ | 2.55 | $ | 0.85 | ||||||||||
Diluted | $ | 0.72 | $ | 0.69 | $ | 0.34 | $ | 2.49 | $ | 0.84 | ||||||||||
Shares used in computing per share amounts: | ||||||||||||||||||||
Basic | 316,440 | 309,766 | 296,036 | 307,302 | 294,493 | |||||||||||||||
Diluted | 323,592 | 317,069 | 300,613 | 313,912 | 297,180 | |||||||||||||||
Cash dividends per common share | $ | 0.06 | $ | 0.06 | $ | 0.05 | $ | 0.22 | $ | 0.20 | ||||||||||
Tax rate | 12.2 | % | 8.7 | % | 13.0 | % | 9.8 | % | 17.8 | % | ||||||||||
% of Net sales: | ||||||||||||||||||||
Gross margin | 71.0 | % | 70.1 | % | 68.4 | % | 71.0 | % | 66.8 | % | ||||||||||
Research and development | 12.0 | % | 12.9 | % | 18.3 | % | 13.5 | % | 21.8 | % | ||||||||||
Selling, general, and administrative | 11.5 | % | 12.0 | % | 17.4 | % | 13.0 | % | 19.6 | % | ||||||||||
Operating margin(1) | 47.4 | % | 45.2 | % | 32.7 | % | 44.4 | % | 25.5 | % | ||||||||||
Net income | 41.7 | % | 41.2 | % | 28.2 | % | 40.1 | % | 21.0 | % | ||||||||||
Notes: | ||||||||||||||||||||
(1)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 the effect of compensation associated with the deferred compensation plan obligations. Since the effect of compensation associated with our deferred compensation plan obligations is offset by gains and losses 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 | Years Ended | |||||||||||||||||||
(In thousands) | December 31, 2010 | October 1, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | |||||||||||||||
Operating margin (non-GAAP) | $ | 263,220 | $ | 238,185 | $ | 119,373 | $ | 868,340 | $ | 304,547 | ||||||||||
Compensation expense - deferred compensation plan | 3,554 | 4,699 | 2,629 | 6,839 | 11,776 | |||||||||||||||
Income from operations (GAAP) | $ | 259,666 | $ | 233,486 | $ | 116,744 | $ | 861,501 | $ | 292,771 | ||||||||||
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ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except par value amount) | December 31, 2010 | December 31, 2009 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,765,196 | $ | 1,546,672 | ||||
Accounts receivable, net | 363,614 | 218,144 | ||||||
Inventories | 146,524 | 69,705 | ||||||
Deferred income taxes — current | 66,839 | 79,164 | ||||||
Deferred compensation plan — marketable securities | 54,419 | 50,905 | ||||||
Deferred compensation plan — restricted cash equivalents | 19,817 | 18,986 | ||||||
Other current assets | 114,601 | 58,194 | ||||||
Total current assets | 3,531,010 | 2,041,770 | ||||||
Property and equipment, net | 164,155 | 174,516 | ||||||
Deferred income taxes — non-current | 37,319 | 59,249 | ||||||
Other assets, net | 27,353 | 17,696 | ||||||
Total assets | $ | 3,759,837 | $ | 2,293,231 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 86,061 | $ | 50,520 | ||||
Accrued liabilities | 23,278 | 32,256 | ||||||
Accrued compensation and related liabilities | 83,773 | 49,862 | ||||||
Deferred compensation plan obligations | 74,236 | 69,891 | ||||||
Deferred income and allowances on sales to distributors | 428,711 | 281,885 | ||||||
Income taxes payable | 428 | 5,547 | ||||||
Total current liabilities | 696,487 | 489,961 | ||||||
Income taxes payable — non-current | 231,833 | 210,967 | ||||||
Long-term credit facility | 500,000 | 500,000 | ||||||
Other non-current liabilities | 7,865 | 6,967 | ||||||
Total liabilities | 1,436,185 | 1,207,895 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 319,494 at December 31, 2010 and 296,817 shares at December 31, 2009 | 319 | 297 | ||||||
Capital in excess of par value | 908,989 | 372,098 | ||||||
Retained earnings | 1,414,344 | 712,941 | ||||||
Total stockholders' equity | 2,323,652 | 1,085,336 | ||||||
Total liabilities and stockholders' equity | $ | 3,759,837 | $ | 2,293,231 | ||||
Key Ratios & Information | ||||||||
Current Ratio | 5:1 | 4:1 | ||||||
Liabilities/Equity | 1:2 | 1:1 | ||||||
Quarterly Operating Cash Flows | $ | 210,151 | $ | 176,352 | ||||
TTM Return on Equity | 48 | % | 27 | % | ||||
Quarterly Depreciation Expense | $ | 6,815 | $ | 6,839 | ||||
Quarterly Capital Expenditures | $ | 6,117 | $ | 1,824 | ||||
Inventory MSOH (1): Altera | 2.7 | 1.8 | ||||||
Inventory MSOH (1): Distribution | 0.8 | 0.7 | ||||||
Cash Conversion Cycle | 85 | 77 | ||||||
Note (1): MSOH: Months Supply On Hand | ||||||||
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ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
YEARS ENDED | ||||||||||||
(In thousands) | December 31, 2010 | December 31, 2009 | December 31, 2008 | |||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net income | $ | 782,884 | $ | 251,062 | $ | 359,651 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 27,535 | 29,022 | 29,969 | |||||||||
Stock-based compensation | 62,118 | 64,446 | 48,630 | |||||||||
Deferred income tax (benefit) expense | (23,483 | ) | (5,890 | ) | 737 | |||||||
Tax effect of employee stock plans | 27,444 | (3,648 | ) | 1,311 | ||||||||
Excess tax benefit from employee stock plans | (21,866 | ) | (990 | ) | (6,767 | ) | ||||||
Gain on sale of land | — | — | (112 | ) | ||||||||
Gain on substantive termination of retiree medical plan | — | (6,488 | ) | — | ||||||||
Changes in assets and liabilities, net of the effects of acquisition: | ||||||||||||
Accounts receivable, net | (145,330 | ) | (136,115 | ) | 115,459 | |||||||
Inventories | (76,819 | ) | 14,931 | (10,527 | ) | |||||||
Other assets | (52,805 | ) | 38,862 | (26,173 | ) | |||||||
Accounts payable and other liabilities | 59,200 | 7,918 | 2,810 | |||||||||
Deferred income and allowances on sales to distributors | 146,826 | 77,611 | (74,766 | ) | ||||||||
Income taxes payable | 73,485 | 39,860 | 9,717 | |||||||||
Deferred compensation plan obligations | (2,494 | ) | 2,125 | (673 | ) | |||||||
Net cash provided by operating activities | 856,695 | 372,706 | 449,266 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Purchases of property and equipment | (12,442 | ) | (11,060 | ) | (40,273 | ) | ||||||
Proceeds from the maturities and sales of available-for-sale investments | — | — | 131,060 | |||||||||
Proceeds from sale of land | — | — | 9,063 | |||||||||
Acquisition related payments, net of cash acquired | (8,004 | ) | — | — | ||||||||
Sales (purchases) of deferred compensation plan securities, net | 2,494 | (2,125 | ) | 673 | ||||||||
Purchases of intangible assets | (5,000 | ) | (690 | ) | — | |||||||
Net cash (used in) provided by investing activities | (22,952 | ) | (13,875 | ) | 100,523 | |||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds from issuance of common stock through various stock plans | 453,719 | 42,144 | 67,138 | |||||||||
Shares withheld for employee taxes | (20,164 | ) | (10,738 | ) | (8,229 | ) | ||||||
Repurchases of common stock | — | — | (473,229 | ) | ||||||||
Payment of dividends to stockholders | (67,774 | ) | (58,925 | ) | (57,051 | ) | ||||||
Excess tax benefit from stock-based compensation | 21,866 | 990 | 6,767 | |||||||||
Decrease in book overdrafts | — | — | (320 | ) | ||||||||
Proceeds from long-term credit facility | — | — | 250,000 | |||||||||
Principal payments on capital lease obligations | (2,866 | ) | (2,373 | ) | (8,217 | ) | ||||||
Net cash provided by (used in) financing activities | 384,781 | (28,902 | ) | (223,141 | ) | |||||||
Net increase in cash and cash equivalents | 1,218,524 | 329,929 | 326,648 | |||||||||
Cash and cash equivalents at beginning of period | 1,546,672 | 1,216,743 | 890,095 | |||||||||
Cash and cash equivalents at end of period | $ | 2,765,196 | $ | 1,546,672 | $ | 1,216,743 | ||||||
Supplemental cash flow information: | ||||||||||||
Income taxes paid, net | $ | 29,887 | $ | 7,310 | $ | 66,503 | ||||||
Interest paid | $ | 3,395 | $ | 4,503 | $ | 15,666 | ||||||
Noncash Investing and Financing Activities: | ||||||||||||
Assets acquired under capital leases | $ | — | $ | — | $ | 11,871 | ||||||
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ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)
Three Months Ended | Quarterly Growth Rate | Years Ended | |||||||||||||||||||||
December 31, 2010 | October 1, 2010 | December 31, 2009 | Sequential Change | Year- Over-Year Change | December 31, 2010 | December 31, 2009 | Annual Growth | ||||||||||||||||
Geography | |||||||||||||||||||||||
Americas | 17 | % | 20 | % | 21 | % | (14 | )% | 21 | % | 19 | % | 20 | % | 50 | % | |||||||
Asia Pacific | 43 | % | 44 | % | 39 | % | 3 | % | 66 | % | 42 | % | 40 | % | 74 | % | |||||||
EMEA | 22 | % | 21 | % | 21 | % | 12 | % | 64 | % | 23 | % | 22 | % | 71 | % | |||||||
Japan | 18 | % | 15 | % | 19 | % | 29 | % | 45 | % | 16 | % | 18 | % | 47 | % | |||||||
Net Sales | 100 | % | 100 | % | 100 | % | 5 | % | 52 | % | 100 | % | 100 | % | 64 | % | |||||||
Product Category | |||||||||||||||||||||||
New | 53 | % | 44 | % | 29 | % | 26 | % | 175 | % | 43 | % | 24 | % | 196 | % | |||||||
Mainstream | 23 | % | 29 | % | 32 | % | (14 | )% | 12 | % | 28 | % | 33 | % | 36 | % | |||||||
Mature and Other | 24 | % | 27 | % | 39 | % | (8 | )% | (7 | )% | 29 | % | 43 | % | 11 | % | |||||||
Net Sales | 100 | % | 100 | % | 100 | % | 5 | % | 52 | % | 100 | % | 100 | % | 64 | % | |||||||
Vertical Market | |||||||||||||||||||||||
Telecom & Wireless | 47 | % | 45 | % | 41 | % | 10 | % | 73 | % | 44 | % | 44 | % | 64 | % | |||||||
Industrial Automation, Military & Automotive | 19 | % | 22 | % | 23 | % | (9 | )% | 25 | % | 21 | % | 22 | % | 61 | % | |||||||
Networking, Computer & Storage | 15 | % | 13 | % | 14 | % | 17 | % | 59 | % | 14 | % | 14 | % | 55 | % | |||||||
Other | 19 | % | 20 | % | 22 | % | 2 | % | 36 | % | 21 | % | 20 | % | 73 | % | |||||||
Net Sales | 100 | % | 100 | % | 100 | % | 5 | % | 52 | % | 100 | % | 100 | % | 64 | % | |||||||
FPGAs and CPLDs | |||||||||||||||||||||||
FPGA | 83 | % | 82 | % | 78 | % | 6 | % | 61 | % | 82 | % | 77 | % | 73 | % | |||||||
CPLD | 10 | % | 11 | % | 15 | % | (1 | )% | 10 | % | 12 | % | 15 | % | 29 | % | |||||||
Other Products | 7 | % | 7 | % | 7 | % | 6 | % | 39 | % | 6 | % | 8 | % | 36 | % | |||||||
Net Sales | 100 | % | 100 | % | 100 | % | 5 | % | 52 | % | 100 | % | 100 | % | 64 | % | |||||||
Product Category Description
• | New Products include the Stratix® III, Stratix IV (including E, GX and GT), Arria® II GX, Cyclone® III, Cyclone IV (including E and GX), MAX® II, HardCopy® III, and HardCopy IV devices. |
• | Mainstream Products include the Stratix II (and GX), Arria GX, Cyclone II, and HardCopy II devices. |
• | Mature and Other Products include the Stratix (and GX), Cyclone, Classic™, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy, FLEX® series, APEX™ series, Mercury™, and Excalibur™ devices, configuration and other devices, intellectual property cores, and software and other tools. |
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