Altera Announces Third Quarter Results; Sales up 2% Sequentially; New Products Grow 23%.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif. -- Altera Altera Corporation (NASDAQ: ALTR) is a leading manufacturer of programmable logic devices. It is a member of the NASDAQ-100 group of technology stocks and the S&P 500. Corporation (Nasdaq:ALTR) today announced third quarter 2005 sales of $291.5 million, up 2% from the second quarter of 2005 and up 10% from the third quarter of 2004. Sales of the company's new products grew 23% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and were up 66% from the prior year's third quarter. Third quarter net income was $77.8 million, $0.21 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $83.1 million, $0.22 per diluted share, in the third quarter of 2004. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. was 66.5% for the third quarter of 2005 versus 69.4% for the third quarter of 2004. The third quarter tax provision includes a $3.6 million charge related to the future repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of an additional $100 million of foreign earnings pursuant to the provisions of the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act of 2004. In addition, the company recorded a tax benefit of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.6 million arising primarily from the settlement of federal and California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). income tax audits and the filing of U.S. and state 2004 income tax returns during the quarter. The net impact of these three items added $1 million to the company's third quarter tax provision. Altera repurchased 4.7 million shares of its common stock during the quarter at a cost of $93.8 million. Altera ended the quarter with $1.3 billion in cash and short- and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investments. "Every new product family grew sequentially this quarter, including FPGAs, CPLDs, and HardCopy (jargon) hardcopy - A paper printout of data displayed on a screen. Contrast softcopy. (R) structured ASICs A type of application specific IC (ASIC) chip that contains blocks of logic, called "tiles" or "modules," that have their transistors already wired together forming gates along with some combination of multiplexors, flip/flops, look up tables and the like. , creating another quarter of strong new product growth. The Stratix(R) and Stratix GX families collectively grew 40% sequentially and now represent more than 20% of Altera's revenues, demonstrating Altera's continuing leadership across this generation of high-density high-den·si·ty adj. Having a high concentration: high-density urban areas. FPGAs," said John Daane, president, chief executive officer, and chairman of the board. "Among our most recently introduced products, the Cyclone cyclone, atmospheric pressure distribution in which there is a low central pressure relative to the surrounding pressure. The resulting pressure gradient, combined with the Coriolis effect, causes air to circulate about the core of lowest pressure in a (TM) II family is off to a fast start, extending the lead established with the original Cyclone family in the low-cost FPGA (Field Programmable Gate Array) A type of gate array that is programmed in the field rather than in a semiconductor fab. Containing up to hundreds of thousands of gates, there are a variety of FPGA architectures on the market. space. At the high end, the Stratix II FPGA family also grew strongly and remains the 90-nm high-density leader." Altera's innovation and execution made the company the fastest-growing programmable logic See PLD. supplier in 2004. This track record of innovation and execution continues in 2005: --Altera launched the Stratix II GX family, the company's third generation of FPGAs with embedded Inserted into. See embedded system. serial transceivers. Stratix II GX FPGAs address the growing demand for high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. serial data transmission. Stratix II GX transceivers can accommodate a wide range of protocol standards and multiple data rates while delivering best-in-class See best-of-class. signal integrity. System engineers may now begin their Stratix II GX device designs using Altera's Quartus Quartus (Latin "fourth") was a Corinthian Christian who sent messages to friends in Rome through Paul of Tarsus. He is mentioned in Rom. 16:23. This entry incorporates text from the public domain Easton's Bible Dictionary, originally published in 1897. (R) II version 5.1 software. Initial devices will ship in early 2006. The 90-nm-based Stratix II GX devices use the same innovative logic structure as the Stratix II family, the industry's fastest 90-nm FPGAs. Stratix II GX transceivers operate at up to 6.375 Gbps, targeting the data rates required by today's leading designers, while consuming less than half the power of competing alternatives. Altera offers a comprehensive system solution that includes intellectual property, system models, reference designs, and signal integrity tools. As the usage of serial transceivers continues to expand, Stratix II GX FPGAs offer a highly efficient, low-risk development path for high-speed designs across the markets served by Altera. --Continuing Altera's record of consistent product delivery, all members of Altera's Cyclone II FPGA family are now available as production-qualified devices. This milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. was reached only seven months after the family began shipping, demonstrating to customers that they can rely on Altera as they take their Cyclone II-based designs into production. These second-generation sec·ond-gen·er·a·tion adj. 1. Of or relating to a person or persons whose parents are immigrants. 2. Of or relating to a person or persons whose parents are citizens by birth and whose grandparents are immigrants. 3. Cyclone devices are based on an architecture optimized for a 90-nm, low-k In semiconductor manufacturing, a Low-κ dielectric is a material with a small dielectric constant relative to silicon dioxide. Although the proper symbol for the dielectric constant is the Greek letter κ (kappa), in conversation such materials are referred to as being process and provide more than three times the logic capacity of the first-generation first-gen·er·a·tion adj. 1. Of or relating to a person who has left one country and settled in another. 2. Of or relating to a person or persons whose parents are immigrants. 3. , industry-leading Cyclone family. Cyclone II FPGAs deliver on average 60% faster performance and half the power consumption of competing low-cost FPGAs. Cyclone II devices are supported by the free Quartus II Quartus II is a software tool produced by Altera for analysis and synthesis of HDL designs. Quartus II enables the developer to compile their designs, perform timing analysis, examine RTL diagrams and configure the target device with the programmer. Web Edition software, which is the industry's most advanced design software for FPGAs. With cost to the customer 30% lower than the prior generation, Cyclone II devices can support complex digital system designs at a price that rivals that of ASICs. These capabilities mean that the Cyclone II family is well suited for volume applications such as video displays, digital set top boxes, DSL modems ADSL modem or DSL modem is a device used to connect a single computer or router to a DSL phone line, in order to use an ADSL service. The acronym NTBBA (network termination broad band adapter, network termination broad band access) is also common in various countries. , medical imaging, and mid-range
adj. 1. Cheapest in a line of merchandise: low-end subcompact cars. 2. Informal Of, relating to, or intended for low-income consumers; downscale: routers. Business Outlook Altera expects sales in the fourth quarter to be unchanged compared to the third quarter, plus or minus 2%. Gross margins are likely to be in the range of 66%. The company further anticipates that R&D spending will approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $53 million and that SG&A expenses will approximate $58 million. Other income will approximate $9 million. The expected tax rate is 20%. 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 the fourth quarter 2005 outlook. The web cast and subsequent replay will be available in the investor relations Investor relations The process by which the corporation communicates with its investors. section of the company's web site at http://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 fourth quarter business update will be issued in a press release available after the market close on December December: see month. 5. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are generally written in the future tense future tense n. A verb tense expressing future time. Noun 1. future tense - a verb tense that expresses actions or states in the future future and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. preceded by words such as "will", "anticipates", "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 that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, customer business environment, market acceptance of the company's products, the rate of growth of the company's new products including the Stratix, Stratix II, Cyclone, Cyclone II, MAX(R) II, and HardCopy II device families, changes in customer 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 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . About Altera Altera Corporation (Nasdaq:ALTR) is the world's pioneer of system-on-a-programmable-chip (SOPC SOPC System on a Programmable Chip SOPC Special Operations Preparation Course SOPC Second-Order Power Control SOPC Shuttle Operations and Planning Center SOPC 1-Stearoyl-2-Oleoyl-Sn-Glycero-3-Phosphatidylcholine SOPC Shaastra Online Programming Contest ) 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 http://www.altera.com. Altera, The Programmable Solutions Company, the stylized styl·ize tr.v. styl·ized, styl·iz·ing, styl·iz·es 1. To restrict or make conform to a particular style. 2. To represent conventionally; conventionalize. 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.
ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data and note)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- -------------------
Sept. 30 Jul. 1 Oct. 1 Sept. 30 Oct. 1
2005 2005 2004 2005 2004
--------- --------- --------- --------- ---------
Net sales $291,530 $285,477 $264,599 $841,829 $776,479
Cost of sales 97,647 90,592 80,966 272,129 237,833
--------- --------- --------- --------- ---------
Gross margin 193,883 194,885 183,633 569,700 538,646
--------- --------- --------- --------- ---------
Operating expenses:
Research and
development 49,443 55,340 48,259 156,172 133,579
Selling, general,
and administrative 57,289 55,895 53,577 167,518 156,167
--------- --------- --------- --------- ---------
Total operating
expenses 106,732 111,235 101,836 323,690 289,746
--------- --------- --------- --------- ---------
Income from
operations 87,151 83,650 81,797 246,010 248,900
Interest and other
income, net 11,368 8,058 3,892 23,924 10,900
--------- --------- --------- --------- ---------
Income before income
taxes 98,519 91,708 85,689 269,934 259,800
Provision for income
taxes (20,704) (24,142) (2,608) (60,787) (42,653)
--------- --------- --------- --------- ---------
Net income $77,815 $67,566 $83,081 $209,147 $217,147
========= ========= ========= ========= =========
Income per share:
Basic $0.21 $0.18 $0.22 $0.56 $0.58
========= ========= ========= ========= =========
Diluted $0.21 $0.18 $0.22 $0.55 $0.57
========= ========= ========= ========= =========
Shares used in
computation:
Basic 372,690 373,040 372,137 372,870 373,873
========= ========= ========= ========= =========
Diluted 378,987 379,585 379,785 379,339 382,810
========= ========= ========= ========= =========
Tax rate 21.0% 26.3% 3.0% 22.5% 16.4%
% of Net Sales:
Gross margin 66.5% 68.3% 69.4% 67.7% 69.4%
Research and
development 17.0% 19.4% 18.2% 18.6% 17.2%
Selling, general,
and administrative 19.7% 19.6% 20.3% 19.9% 20.1%
Income from
operations 29.9% 29.3% 30.9% 29.2% 32.1%
Net income 26.7% 23.7% 31.4% 24.8% 28.0%
Note: Our Nonqualified Deferred Compensation Plan (NQDC Plan) had
gains of $2.1 million and $0.7 million, respectively, for the three
month periods ended September 30, 2005 and July 1, 2005. The gains
were included in interest and other income, as well as compensation
expense as follows. There is no net impact on income before income
taxes or net income.
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- -------------------
NQDC Impact Sept. 30 Jul. 1 Q-Q Sept. 30 Oct. 1
(In Millions) 2005 2005 Change 2005 2004
---------------------------- --------- --------- --------- ---------
Increase in R&D
Expense $0.7 $0.4 $0.3 $0.7 $-
Increase in SG&A
Expense 1.4 0.3 1.1 0.9 -
--------- --------- --------- --------- ---------
Increase in
Interest and other
income $2.1 $0.7 $1.4 $1.6 $-
========= ========= ========= ========= =========
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
Sept. 30 Jul. 1 Dec. 31
2005 2005 2004
----------- ----------- -----------
Assets
Current assets:
Cash and short-term investments $1,171,636 $1,203,033 $1,203,248
Accounts receivable, net 125,371 146,252 67,522
Inventories 70,677 63,588 67,454
Deferred compensation plan assets 60,188 57,134 56,148
Other current assets 179,682 165,094 159,725
----------- ----------- -----------
Total current assets 1,607,554 1,635,101 1,554,097
Long-term investments 137,005 72,301 -
Property and equipment, net 160,230 156,937 159,587
Deferred income taxes and other
assets, net 45,723 47,321 49,982
----------- ----------- -----------
$1,950,512 $1,911,660 $1,763,666
=========== =========== ===========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and current
liabilities $266,598 $217,735 $207,813
Deferred compensation plan
obligations 60,188 57,134 56,148
Deferred income and allowances on
sales to distributors 246,284 255,554 221,081
----------- ----------- -----------
Total current liabilities 573,070 530,423 485,042
Capital lease obligations 1,625 - -
Stockholders' equity 1,375,817 1,381,237 1,278,624
----------- ----------- -----------
$1,950,512 $1,911,660 $1,763,666
=========== =========== ===========
Key Ratios & Information
Current Assets/Current Liabilities 3:1 3:1 3:1
Liabilities/Equity 1:2 1:3 1:3
Annualized YTD Return on Equity 21% 20% 24%
Quarterly Depreciation Expense $6,468 $6,480 $6,245
Quarterly Capital Expenditures $9,761 $5,272 $8,862
Annualized Sales per Employee $503 $499 $489
Number of Employees 2,310 2,259 2,164
Inventory MSOH(a): Altera 2.2 2.1 2.8
Inventory MSOH(a): Distribution 1.2 1.3 1.4
Days Sales Outstanding 39 47 26
(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
Q3'05 Q2'05 Q3'04 Growth Growth
----- ----- ----- ------ ------
Geography
-------------------
North America 24% 24% 28% 6% -3%
----- ----- -----
Europe 25% 25% 22% 1% 26%
Japan 25% 25% 26% 0% 3%
Asia Pacific 26% 26% 24% 2% 19%
----- ----- -----
International 76% 76% 72% 1% 15%
----- ----- -----
Total 100% 100% 100% 2% 10%
===== ===== =====
Product Category
-------------------
New 48% 40% 32% 23% 66%
Mainstream 29% 36% 39% -18% -20%
Mature & Other 23% 24% 29% -2% -11%
----- ----- -----
Total 100% 100% 100% 2% 10%
===== ===== =====
Market Segment
-------------------
Communications 40% 43% 43% -5% 2%
Industrial 33% 31% 32% 9% 15%
Computer & Storage 11% 10% 11% 9% 7%
Consumer 16% 16% 14% 3% 26%
----- ----- -----
Total 100% 100% 100% 2% 10%
===== ===== =====
FPGAs and CPLDs
-------------------
FPGA 70% 69% 70% 4% 12%
CPLD 19% 20% 22% -5% -4%
Other 11% 11% 8% 3% 33%
----- ----- -----
Total 100% 100% 100% 2% 10%
===== ===== =====
Product Category
Description
-------------------
Category Products
New Stratix, Stratix II, Stratix GX, Cyclone,
Cyclone II, 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
Note: During the quarter ended July 1, 2005, we refined our
methodology for classifying revenue by market segment. All prior
period data have been adjusted to conform to the current period's
methodology. Data calculated under both the new and former
methodologies are available in the investor relations section of the
Company's website at http://www.altera.com.
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