Attached files
| file | filename |
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| 8-K - PRESS RELEASE - ALTERA CORP | a2013q18-ker.htm |
INVESTOR CONTACT | MEDIA CONTACT | |
Scott Wylie - Vice President | Sue Martenson - Senior Manager | |
Investor Relations | Public Relations | |
(408) 544-6996 | (408) 544-8158 | |
swylie@altera.com | newsroom@altera.com | |
ALTERA ANNOUNCES FIRST QUARTER RESULTS
San Jose, Calif., April 25, 2013 — Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $410.5 million, down 7 percent from the fourth quarter of 2012 and up 7 percent from the first quarter of 2012. First quarter net income was $120.2 million, $0.37 per diluted share, compared with net income of $120.8 million, $0.37 per diluted share, in the fourth quarter of 2012 and $115.8 million, $0.35 per diluted share, in the first quarter of 2012.
Cash flow from operating activities was $149.5 million. Altera ended the quarter with $3.8 billion in cash and investments.
Altera's board of directors has declared a quarterly cash dividend of $0.10 per share, to be paid on June 3, 2013 to stockholders of record on May 10, 2013.
"The quarter's overall sales were roughly as expected and represent the low point in the recent communications equipment and industrial cycles. We expect second quarter growth in these markets," said John Daane, president, chief executive officer, and chairman of the board. "Development work for our next generation products is well under way. Using TSMC's 55 nm EmbFlash and their 20 nm planar technology plus Intel's 14 nm Tri-Gate process, we expect to have an optimized, competitively differentiated set of offerings, with notable performance improvements across all our products. As the only major FPGA company with access to the second-generation Tri-Gate process, we will benefit from much reduced implementation risk, the unique finFET power, performance and density advantages, and process availability long before any comparable alternative."
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Several recent accomplishments mark the company's continuing progress:
• | Altera and Intel jointly announced that the companies have entered into an agreement for the future manufacture of certain Altera FPGAs on Intel's 14 nm Tri-Gate transistor technology. Altera is the only major FPGA company with access to this technology, significantly strengthening the company's next-generation competitive position. These 14 nm products target ultra-high-performance systems for military, wireline communications, cloud computing, and computer and storage applications, and will enable breakthrough levels of performance and power efficiencies not otherwise possible. Extending the company's tailored architecture approach, Altera's next- generation products will now utilize this 14 nm technology in addition to previously announced 20 and 55 nm devices supplied by TSMC. |
• | Altera reached another significant milestone in transceiver technology by demonstrating the industry's first programmable device with 32-Gbps transceiver technology capabilities. The demonstration uses a 20 nm device based on TSMC's 20SoC process technology and is a positive indicator to the more than 500 customers in Altera's early access program who are looking to use Altera devices in the development of performance-demanding, bandwidth-centric applications. Altera has a proven track record in integrating leading-edge transceiver technology into its devices. Altera is the only company today shipping production 28 nm FPGAs with monolithically integrated low-power transceivers operating at 28 Gbps. |
• | Extending a 20-year relationship that has resulted in repeated semiconductor industry innovations, Altera and TSMC's technology collaboration now extends to Altera's use of TSMC's 55 nm Embedded Flash (EmbFlash) technology. Programmable devices based on TSMC's 55 nm EmbFlash target a wide range of low-power, high-volume applications in a variety of markets, including automotive and industrial. Compared to prior-generation embedded flash technology, TSMC's 55 nm EmbFlash delivers faster computing, increases gate density 10 times and shrinks flash and SRAM cell sizes by 70 and 80 percent respectively. |
• | Altera has acquired TPACK, previously a wholly-owned subsidiary of Applied Micro Circuits Corporation. With FPGA-based optical transport network (OTN) intellectual property targeting packet and optical networking equipment suppliers, TPACK enables Altera to accelerate and expand its OTN solutions road map. TPACK OTN solutions are available today as SoftSilicon® products, built on Altera FPGAs and in production for many years. TPACK's engineers will make Altera more responsive to the OTN industry's evolution beyond 100G by delivering flexible solutions not possible in fixed-function ASSPs. |
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SELECTED FIRST QUARTER REVENUE AND RELATED RESULTS
Key New Product Devices | Sequential Comparisons | ||
Stratix V | 35 | % | |
Stratix IV | (23 | )% | |
Arria II | 24 | % | |
Arria V | 30 | % | |
Cyclone IV | 0 | % | |
Cyclone V | 318 | % | |
HardCopy IV | 59 | % | |
($ in thousands) Key Ratios & Information | March 29, 2013 | December 31, 2012 | ||||||
Current Ratio | 7:1 | 7:1 | ||||||
Liabilities/Equity | 1:3 | 1:3 | ||||||
Quarterly Operating Cash Flows | $ | 149,478 | $ | 126,709 | ||||
TTM Return on Equity | 17 | % | 18 | % | ||||
Quarterly Depreciation Expense | $ | 10,175 | $ | 9,170 | ||||
Quarterly Capital Expenditures | $ | 5,984 | $ | 7,201 | ||||
Inventory MSOH (1): Altera | 3.3 | 3.4 | ||||||
Inventory MSOH (1): Distribution | 0.6 | 0.6 | ||||||
Cash Conversion Cycle (Days) | 117 | 117 | ||||||
Turns | 43 | % | 40 | % | ||||
Book to Bill | <1.0 | <1.0 | ||||||
Note (1): MSOH: Months Supply On Hand | ||||||||
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ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)
Three Months Ended | Quarterly Growth Rate | |||||||||||||
March 29, 2013 | December 31, 2012 | March 30, 2012 | Sequential Change | Year- Over-Year Change | ||||||||||
Geography | ||||||||||||||
Americas | 20 | % | 19 | % | 18 | % | (3 | )% | 21 | % | ||||
Asia Pacific | 38 | % | 39 | % | 43 | % | (7 | )% | (3 | )% | ||||
EMEA | 27 | % | 28 | % | 23 | % | (11 | )% | 22 | % | ||||
Japan | 15 | % | 14 | % | 16 | % | (2 | )% | (3 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (7 | )% | 7 | % | ||||
Product Category | ||||||||||||||
New | 39 | % | 39 | % | 26 | % | (5 | )% | 64 | % | ||||
Mainstream | 29 | % | 28 | % | 32 | % | (5 | )% | (3 | )% | ||||
Mature and Other | 32 | % | 33 | % | 42 | % | (10 | )% | (20 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (7 | )% | 7 | % | ||||
Vertical Market | ||||||||||||||
Telecom & Wireless | 41 | % | 44 | % | 41 | % | (13 | )% | 8 | % | ||||
Industrial Automation, Military & Automotive | 22 | % | 21 | % | 22 | % | (2 | )% | 3 | % | ||||
Networking, Computer & Storage | 18 | % | 17 | % | 17 | % | 1 | % | 17 | % | ||||
Other | 19 | % | 18 | % | 20 | % | (2 | )% | 1 | % | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (7 | )% | 7 | % | ||||
FPGAs and CPLDs | ||||||||||||||
FPGA | 85 | % | 84 | % | 83 | % | (6 | )% | 9 | % | ||||
CPLD | 8 | % | 9 | % | 10 | % | (10 | )% | (11 | )% | ||||
Other Products | 7 | % | 7 | % | 7 | % | (5 | )% | 7 | % | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (7 | )% | 7 | % | ||||
Product Category Description
• | New Products include the Stratix® V, Stratix IV, Arria® V, Arria II, Cyclone® V, Cyclone IV, MAX® V and HardCopy® IV devices. |
• | Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices. |
• | Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, Classic™, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX® series, APEX™ series, Mercury™, Excalibur™ devices, configuration and other devices, intellectual property cores, and software and other tools. |
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Business Outlook for the Second Quarter 2013
Sales and Income Statement
Sequential Sales | Flat to up 4% |
Gross Margin | 69% +/- .5% |
Research and Development | $97 to 99 million |
SG&A | $77 to 79 million |
Tax Rate | 12% to 13% |
Diluted Share Count | Approximately 324 million |
Turns | High 40's |
MSOH | Mid 3's |
Vertical Market
Telecom & Wireless | Up |
Industrial Automation, Military & Automotive | Up |
Networking, Computer & Storage | Down |
Other | Flat |
First 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.
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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, but are not limited to, statements regarding projected growth in the communications equipment and industrial markets in the second quarter of 2013; the status of the development of our next generation products; expected performance improvements in and the competitive position of our next generation products, our competitive advantage related to our use of Intel Tri-Gate technology; the projected development in and expansion of our OTN solutions resulting from our acquisition of TPACK; and any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section or elsewhere in this press release. 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 Cyclone® V, Cyclone IV, Arria® V, Arria II, Stratix® V, Stratix IV FPGAs, MAX® V CPLDs and HardCopy® IV device families, 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.
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 COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended | ||||||||||||
(In thousands, except per share amounts) | March 29, 2013 | December 31, 2012 | March 30, 2012 | |||||||||
Net sales | $ | 410,501 | $ | 439,440 | $ | 383,754 | ||||||
Cost of sales | 126,083 | 133,367 | 114,834 | |||||||||
Gross margin | 284,418 | 306,073 | 268,920 | |||||||||
Operating expense | ||||||||||||
Research and development expense | 87,930 | 94,162 | 82,297 | |||||||||
Selling, general, and administrative expense | 78,600 | 74,030 | 69,785 | |||||||||
Total operating expense | 166,530 | 168,192 | 152,082 | |||||||||
Operating margin (1) | 117,888 | 137,881 | 116,838 | |||||||||
Compensation expense — deferred compensation plan | 3,422 | 358 | 5,736 | |||||||||
Gain on deferred compensation plan securities | (3,422 | ) | (358 | ) | (5,736 | ) | ||||||
Interest income and other | (1,659 | ) | (2,390 | ) | (1,807 | ) | ||||||
Gain reclassified from other comprehensive income | (54 | ) | (205 | ) | (102 | ) | ||||||
Interest expense | 2,465 | 2,589 | 937 | |||||||||
Income before income taxes | 117,136 | 137,887 | 117,810 | |||||||||
Income tax (benefit)/expense | (3,053 | ) | 17,082 | 1,976 | ||||||||
Net income | 120,189 | 120,805 | 115,834 | |||||||||
Other comprehensive (loss) income: | ||||||||||||
Unrealized (loss)/gain on investments: | ||||||||||||
Unrealized holding (loss)/gain on investments arising during period, net of tax of ($5), ($11) and $58 | (1 | ) | (889 | ) | 304 | |||||||
Less: Reclassification adjustments for gain on investments included in net income, net of tax of $5, $24 and $5 | (49 | ) | (44 | ) | (20 | ) | ||||||
(50 | ) | (933 | ) | 284 | ||||||||
Unrealized gain on derivatives: | ||||||||||||
Unrealized gain on derivatives arising during period, net of tax of $9 and $8 | — | 17 | 14 | |||||||||
Less: Reclassification adjustments for gain on derivatives included in net income, net of tax of $48 and $27 | — | (89 | ) | (50 | ) | |||||||
— | (72 | ) | (36 | ) | ||||||||
Other comprehensive (loss) income | (50 | ) | (1,005 | ) | 248 | |||||||
Comprehensive income | $ | 120,139 | $ | 119,800 | $ | 116,082 | ||||||
Net income per share: | ||||||||||||
Basic | $ | 0.38 | $ | 0.38 | $ | 0.36 | ||||||
Diluted | $ | 0.37 | $ | 0.37 | $ | 0.35 | ||||||
Shares used in computing per share amounts: | ||||||||||||
Basic | 319,867 | 319,765 | 322,586 | |||||||||
Diluted | 323,021 | 322,209 | 327,061 | |||||||||
Cash dividends per common share | $ | 0.10 | $ | 0.10 | $ | 0.08 | ||||||
Tax rate | (2.6 | )% | 12.4 | % | 1.7 | % | ||||||
% of Net sales: | ||||||||||||
Gross margin | 69.3 | % | 69.7 | % | 70.1 | % | ||||||
Research and development | 21.4 | % | 21.4 | % | 21.4 | % | ||||||
Selling, general, and administrative | 19.1 | % | 16.8 | % | 18.2 | % | ||||||
Operating margin(1) | 28.7 | % | 31.4 | % | 30.4 | % | ||||||
Net income | 29.3 | % | 27.5 | % | 30.2 | % | ||||||
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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 losses/(gains) 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 | ||||||||||||
(In thousands, except per share amounts) | March 29, 2013 | December 31, 2012 | March 30, 2012 | |||||||||
Operating margin (non-GAAP) | $ | 117,888 | $ | 137,881 | $ | 116,838 | ||||||
Compensation expense — deferred compensation plan | 3,422 | 358 | 5,736 | |||||||||
Income from operations (GAAP) | $ | 114,466 | $ | 137,523 | $ | 111,102 | ||||||
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ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except par value amount) | March 29, 2013 | December 31, 2012 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,953,587 | $ | 2,876,627 | ||||
Short-term investments | 171,343 | 140,958 | ||||||
Total cash, cash equivalents, and short-term investments | 3,124,930 | 3,017,585 | ||||||
Accounts receivable, net | 366,417 | 323,708 | ||||||
Inventories | 139,282 | 152,721 | ||||||
Deferred income taxes — current | 72,803 | 59,049 | ||||||
Deferred compensation plan — marketable securities | 57,627 | 60,321 | ||||||
Deferred compensation plan — restricted cash equivalents | 17,115 | 17,116 | ||||||
Other current assets | 47,113 | 49,852 | ||||||
Total current assets | 3,825,287 | 3,680,352 | ||||||
Property and equipment, net | 201,964 | 206,148 | ||||||
Long-term investments | 712,040 | 704,758 | ||||||
Deferred income taxes — non-current | 18,934 | 17,082 | ||||||
Other assets, net | 46,485 | 49,488 | ||||||
Total assets | $ | 4,804,710 | $ | 4,657,828 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 31,613 | $ | 50,036 | ||||
Accrued liabilities | 36,571 | 29,005 | ||||||
Accrued compensation and related liabilities | 43,920 | 40,606 | ||||||
Deferred compensation plan obligations | 74,742 | 77,437 | ||||||
Deferred income and allowances on sales to distributors | 382,642 | 345,993 | ||||||
Total current liabilities | 569,488 | 543,077 | ||||||
Income taxes payable — non-current | 276,238 | 272,000 | ||||||
Long-term debt | 500,000 | 500,000 | ||||||
Other non-current liabilities | 9,188 | 9,304 | ||||||
Total liabilities | 1,354,914 | 1,324,381 | ||||||
Stockholders' equity: | ||||||||
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 320,140 shares at March 29, 2013 and 319,564 shares at December 31, 2012 | 320 | 320 | ||||||
Capital in excess of par value | 1,153,098 | 1,122,555 | ||||||
Retained earnings | 2,290,836 | 2,204,980 | ||||||
Accumulated other comprehensive income | 5,542 | 5,592 | ||||||
Total stockholders' equity | 3,449,796 | 3,333,447 | ||||||
Total liabilities and stockholders' equity | $ | 4,804,710 | $ | 4,657,828 | ||||
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ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended | ||||||||
(In thousands) | March 29, 2013 | March 30, 2012 | ||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 120,189 | $ | 115,834 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 11,374 | 8,160 | ||||||
Stock-based compensation | 22,242 | 22,393 | ||||||
Deferred income tax benefit | (15,606 | ) | (7,055 | ) | ||||
Tax effect of employee stock plans | 861 | 10,566 | ||||||
Excess tax benefit from employee stock plans | (741 | ) | (10,044 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable, net | (42,709 | ) | (39,119 | ) | ||||
Inventories | 13,439 | 12,828 | ||||||
Other assets | 13,317 | 6,416 | ||||||
Accounts payable and other liabilities | (9,660 | ) | (28,462 | ) | ||||
Deferred income and allowances on sales to distributors | 36,649 | 130 | ||||||
Income taxes payable | 6,239 | (4,696 | ) | |||||
Deferred compensation plan obligations | (6,116 | ) | 2,812 | |||||
Net cash provided by operating activities | 149,478 | 89,763 | ||||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | (14,586 | ) | (23,903 | ) | ||||
Sales (purchases) of deferred compensation plan securities, net | 6,116 | (2,812 | ) | |||||
Purchases of available-for-sale securities | (121,111 | ) | (47,174 | ) | ||||
Proceeds from sale and maturity of available-for-sale securities | 83,394 | 48,387 | ||||||
Purchases of other investments | (176 | ) | — | |||||
Net cash used in investing activities | (46,363 | ) | (25,502 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from issuance of common stock through various stock plans | 8,442 | 12,888 | ||||||
Shares withheld for employee taxes | (3,360 | ) | (4,884 | ) | ||||
Payment of dividends to stockholders | (31,978 | ) | (25,822 | ) | ||||
Repurchases of common stock | — | (8,238 | ) | |||||
Excess tax benefit from employee stock plans | 741 | 10,044 | ||||||
Net cash used in financing activities | (26,155 | ) | (16,012 | ) | ||||
Net increase in cash and cash equivalents | 76,960 | 48,249 | ||||||
Cash and cash equivalents at beginning of period | 2,876,627 | 3,371,933 | ||||||
Cash and cash equivalents at end of period | $ | 2,953,587 | $ | 3,420,182 | ||||
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