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8-K - 8-K - LINEAR TECHNOLOGY CORP /CA/lltc-8kq2fy13.htm


Contact:
Paul Coghlan
5:00 EST
 
 
Vice President, Finance, Chief Financial Officer
January 15, 2013
 
 
(408) 432-1900
NATIONAL DISTRIBUTION
 

LINEAR TECHNOLOGY REPORTS SEQUENTIAL QUARTERLY DECLINES, BUT MODEST YEAR OVER YEAR QUARTERLY INCREASES IN REVENUES AND NET INCOME AND GUIDES FOR SEQUENTIAL QUARTERLY IMPROVEMENT.

Milpitas, California, January 15, 2013, Linear Technology Corporation (NASDAQ:LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the fiscal quarter ended December 30, 2012. Quarterly revenues of $305.3 million for the second quarter of fiscal year 2013 decreased $29.9 million or 8.9% from the previous quarter's revenue of $335.1 million and increased $10.9 million or 3.7% over $294.3 million reported in the second quarter of fiscal year 2012. Net income of $88.8 million decreased $16.3 million or 15.5% from the first quarter of fiscal year 2013 and increased $0.9 million or 1% over the second quarter of fiscal year 2012. Diluted earnings per share of $0.38 per share in the second quarter of fiscal year 2013 decreased $0.07 per share or 16% from the first quarter of fiscal year 2013 and was flat compared to the second quarter of fiscal year 2012.

During the second quarter the Company's cash, cash equivalents and marketable securities decreased by $20.6 million to $1.299 billion from the first quarter of fiscal year 2013. The Company's cash, cash equivalents and marketable securities balance decreased primarily due to the Company accelerating the payment of its March quarterly dividend payment into the December quarter to benefit shareholders due to fiscal cliff tax rate uncertainties. Concurrent with the December payout, the Company's Board of Directors approved an increase in the Company's quarterly dividend from $0.25 per share to $0.26 per share. This marked the 21st consecutive year the Company has increased its dividend. At the current stock price the Company's dividend yield is approximately 3%.

According to Lothar Maier, CEO, “As we reported at this time last quarter, we expected a difficult second fiscal quarter given the tough economic climate existing domestically and globally. Revenue declined 9% compared to the preceding quarter. This was within our guidance, though at the low end, as bookings continued to be weak throughout the first two months of the quarter. Though we were disappointed in the revenue decline, we are encouraged that we saw stronger bookings momentum exiting the quarter and this improvement has continued through the early stage of the current quarter. Innovation is prevalent in our end markets and our product positioning is strong. Based upon our current bookings rate, and assuming business confidence improves, we expect to resume moderate revenue growth. We currently estimate that fiscal third quarter revenues will grow in the range of 1% to 4% over the second quarter.”

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. In particular, the statements regarding the demand for our products, our customers' ordering patterns and the anticipated trends in our sales and profits are forward-looking statements. The forward-looking statements are dependent on certain risks and uncertainties, including such factors, among others, as the timing, volume and pricing of new orders received and shipped, the timely introduction of new processes and products, general and country specific conditions in the world economy and financial markets and other factors described in our 10-Q for the quarterly period ended September 30, 2012.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, January 16, 2013 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call 719-325-4833, or toll free 877-741-4249 before 8:15 a.m. to be included in the audience. There will be a live webcast of this conference call that can be accessed through www.linear.com or www.streetevents.com. A replay of the conference call will be available from January 16, 2013 through January 22, 2013. You may access the archive by calling (719) 457-0820 or toll free (888) 203-1112 and entering reservation #1296943. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of January 16, 2013 until the second quarter earnings release next year.

Linear Technology Corporation, a member of the S&P 500, has been designing, manufacturing and marketing a broad line of high performance analog integrated circuits for major companies worldwide for three decades. The Company's products provide an essential bridge between our analog world and the digital electronics in communications, networking, industrial, automotive, computer, medical, instrumentation, consumer, and military and aerospace systems. Linear Technology produces power management, data conversion, signal conditioning, RF and interface ICs, µModule subsystems, and wireless sensor network products. For more information, visit www.linear.com.

For further information contact Paul Coghlan at Linear Technology Corporation, 1630 McCarthy Blvd., Milpitas, California 95035-7417, (408) 432-1900.





LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
U.S. GAAP (unaudited)

 
Three Months Ended
 
Six Months Ended
 
December 30, 2012
 
September 30, 2012
 
January 1, 2012
 
December 30,
2012

January 1,
2012
Revenues
$
305,281

 
$
335,148

 
$
294,333

 
$
640,429

 
$
624,253

Cost of sales (1)
78,185

 
83,758

 
73,821

 
161,943

 
153,614

Gross profit
227,096

 
251,390

 
220,512

 
478,486

 
470,639

Expenses:
 
 
 
 
 
 
 
 
 
Research & development (1)
57,304

 
58,803

 
52,519

 
116,107

 
107,408

Selling, general & administrative (1)
37,090

 
37,504

 
34,922

 
74,594

 
72,594

 
94,394

 
96,307

 
87,441

 
190,701

 
180,002

Operating income
132,702

 
155,083

 
133,071

 
287,785

 
290,637

Interest expense
(6,835
)
 
(6,855
)
 
(6,925
)
 
(13,690
)
 
(13,866
)
Amortization of debt discount(2)
(5,219
)
 
(5,146
)
 
(4,931
)
 
(10,365
)
 
(9,793
)
Acquisition related costs

 

 
(3,195
)
 

 
(3,195
)
Interest and other income
1,043

 
1,003

 
1,146

 
2,046

 
2,367

Income before income taxes
121,691

 
144,085

 
119,166

 
265,776

 
266,150

Provision for income taxes
32,857

 
38,903

 
31,281

 
71,760

 
69,864

Net income
$
88,834

 
$
105,182

 
$
87,885

 
$
194,016

 
$
196,286

 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.38

 
$
0.45

 
$
0.38

 
$
0.82

 
$
0.85

Diluted
$
0.38

 
$
0.45

 
$
0.38

 
$
0.82

 
$
0.84

 
 
 
 
 
 
 
 
 
 
Shares used in determining earnings per share:
 
 
 
 
 
 
 
 
 
Basic
235,852

 
234,990

 
232,209

 
235,613

 
232,051

Diluted
236,850

 
236,010

 
233,565

 
236,636

 
233,347

 
 
 
 
 
 
 
 
 
 
Includes the following non-cash charges:
 
 
 
 
 
 
(1) Stock-based compensation
 
 
 
 
 
 
 
 
 
 Cost of sales
$
1,984

 
$
1,970

 
$
1,844

 
$
3,954

 
$
3,748

 Research & development
9,255

 
9,196

 
8,609

 
18,451

 
17,496

 Selling, general & administrative
4,778

 
4,745

 
4,442

 
9,523

 
9,028

(2) Amortization of debt discount (non-
 
 
 
 
 
 
 
 
 
 cash interest expense)
5,219


5,146


4,931

 
10,365

 
9,793

 
 
 
 
 
 
 
 
 
 





LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
U.S. GAAP (unaudited)
 
December 30,
2012
 
July 1,
2012
ASSETS:
 
 
 
Current assets:
 
 
 
Cash, cash equivalents and marketable securities
$
1,299,402

 
$
1,203,059

Accounts receivable, net of allowance for doubtful
 

 
 

accounts of $1,891 ($2,035 at July 1, 2012)
145,174

 
153,090

Inventories
85,166

 
79,664

Deferred tax assets and other current assets
69,334

 
69,597

Total current assets
1,599,076

 
1,505,410

 
 
 
 
Property, plant & equipment, net
303,520

 
320,222

Other noncurrent assets
20,558

 
25,436

Total assets
$
1,923,154

 
$
1,851,068

 
 
 
 
LIABILITIES & STOCKHOLDERS’ EQUITY:
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
11,857

 
$
11,459

Accrued income taxes, payroll & other accrued liabilities
108,785

 
117,789

Deferred income on shipments to distributors
42,291

 
41,333

Total current liabilities
162,933

 
170,581

 
 
 
 
Convertible senior notes
815,965

 
805,599

Deferred tax and other noncurrent liabilities
151,749

 
138,380

 
 
 
 
Stockholders’ equity:
 

 
 

Common stock
1,641,590

 
1,588,045

Accumulated deficit
(849,490
)
 
(851,702
)
Accumulated other comprehensive income
407

 
165

Total stockholders’ equity
792,507

 
736,508

 
$
1,923,154

 
$
1,851,068








LINEAR TECHNOLOGY CORPORATION
RECONCILIATION OF U.S. GAAP NET INCOME TO NON-GAAP NET INCOME
(In thousands, except per share amounts)
(unaudited)

 
Three Months Ended
 
Six Months Ended
 
December 30, 2012
 
September 30, 2012
 
January 1, 2012
 
December 30,
2012
 
January 1,
2012
Reported net income
 
 
 
 
 
 
 
 
 
(GAAP basis)
$
88,834

 
$
105,182

 
$
87,885

 
$
194,016

 
$
196,286

 
 
 
 
 
 
 
 
 
 
Stock-based compensation
16,017

 
15,911

 
14,895

 
31,928

 
30,272

Amortization of debt
 

 
 

 
 

 
 
 
 
discount(1)
5,219

 
5,146

 
4,931

 
10,365

 
9,793

 Acquisition related costs

 

 
3,195

 

 
3,195

Income tax effect of non-GAAP adjustments
(5,734
)
 
(5,685
)
 
(6,043
)
 
(11,419
)
 
(11,356
)
 
 
 
 
 
 
 
 
 
 
Non-GAAP net income
$
104,336

 
$
120,554

 
$
104,863

 
$
224,890

 
$
228,190

 
 
 
 
 
 
 
 
 
 
Non-GAAP earnings per share
 
 
 
 
 
 
 
 
 
Basic
$
0.44

 
$
0.51

 
$
0.45

 
$
0.95

 
$
0.98

Diluted
$
0.44

 
$
0.51

 
$
0.45

 
$
0.95

 
$
0.98


1) Amortization of debt discount is non-cash interest expense related to the Company’s Convertible Senior Notes.

The Company’s non-GAAP measures set forth above exclude charges related to stock-based compensation and the amortization of the Company’s debt discount which is a non-cash interest expense. In addition, the Company's non-GAAP measures exclude the special expense items related to the acquisition.  The Company’s management uses non-GAAP net income and non-GAAP earnings per share to evaluate the Company’s current operating results and financial results and to compare them against historical financial results.  The Company excludes stock-based compensation, non-cash interest expenses, acquisition related costs and the related tax effects primarily because they are significant special expense estimates, which management separates for consideration when evaluating and managing business operations. In addition management believes it is useful to investors because it is frequently used by securities analysts, investors and other interested parties in evaluating the Company and provides further clarity on its profitability.

In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company’s business against that of its many competitors who employ and disclose similar non-GAAP measures.  This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company’s competitors to the extent their non-GAAP measures include other items.  The presentation of this additional information should not be considered a substitute for net income or net income per diluted share prepared in accordance with GAAP.