Altera Reports First Quarter Results Sales Increase 8% Sequentially Earnings Exceed Expectations.Business Editors 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.--(BUSINESS WIRE)--April 28, 2003 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 first quarter sales of $195.1 million, up 8% from the fourth quarter of 2002, ahead of the company's previous expectations of 4% sequential One after the other in some consecutive order such as by name or number. growth. Sales of the company's new products grew 11% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . First quarter net income was $30.1 million, $0.08 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, and compares to fourth quarter net income of $27.1 million, $0.07 per diluted share. The First Call consensus estimate for the current quarter was $0.07 per diluted share. First quarter 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 67.1% of sales and included a $9.1 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern benefit resulting from the sale of inventory previously written down in 2001. Altera repurchased 1.9 million shares of its common stock during the quarter at a cost of $21.7 million and ended the quarter with $985.4 million in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. "For the seventh quarter in a row, new product sales increased, demonstrating our competitive momentum and ability to penetrate new applications across a broad spectrum of markets," said John Daane, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Customer design opportunities and design wins continue to be strong as more and more system engineers turn to programmable technology with its lower development costs and increased flexibility." Altera continued to advance its leadership position in 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. -- Seven members of the Stratix(TM) 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. family are now qualified and shipping. The Stratix production rollout was accomplished in record time and on or ahead of schedule -- proving to customers that they can rely on Altera to deliver leading-edge technology on time and in quantity. Altera's Stratix devices provide an attractive alternative to traditional ASIC-based solutions with their high up-front up-front or up·front Informal adj. 1. Straightforward; frank. 2. Paid or due in advance: up-front cash. adv. cost and limited flexibility. Stratix devices are penetrating penetrating breaching the tissues of the body. all the markets Altera serves and are now designed into a broad range of applications ranging from wireless base stations to broadcast equipment, high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. routers and consumer electronics. -- All initial members of 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) device family, which began shipping in December December: see month. , are available as fully qualified devices and now have been delivered to more than 500 customers worldwide. The Cyclone family is the industry's first FPGA to be developed from the ground up to address the needs of the high volume/cost sensitive PLD (Programmable Logic Device) Refers to a variety of logic chips that are programmable at the customer's site, the customer being the vendor of the finished chip, not the end user. customer. The price and performance offered by these devices opens up many new market opportunities previously beyond the reach of programmable logic. Cyclone customers often have shorter design cycles and some of these customers already are purchasing Cyclone devices in volume to support their production needs. -- The first Stratix GX devices, which feature an integrated 3.125Gbps transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. and a high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" Stratix core, began shipping to customers this quarter. Initial design wins confirm the competitive strength of this second generation transceiver product. The Stratix GX family builds on the knowledge gained from the Mercury(TM) family, the industry's first embedded Inserted into. See embedded system. transceiver device, and offers a combination of features, core logic and low power that is unique in the industry. Stratix devices target data intensive, 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. backplane An interconnecting device that has sockets for printed circuit boards to plug into. Passive and Active Although resistors may be used, a "passive" backplane adds no processing in the circuit. and chip-to-chip applications in mass storage systems, high-end broadcast and electronic communications markets. -- All of Altera's advanced FPGA families -- Stratix, Stratix GX, and Cyclone, are manufactured utilizing a 0.13-micron process, establishing Altera as the leading supplier of PLDs at this leading-edge process node node, in astronomy, point at which the orbit of a body crosses a reference plane. One reference plane that is often used is the plane of the earth's orbit around the sun (ecliptic). . Altera's customers may choose among 13 production qualified 0.13-micron-based devices to support their applications. Altera's distribution network is now stocking these devices in a combination of package offerings creating 35 distinct product types, giving Altera customers unrivaled access to the benefits of advanced 0.13-micron PLD technology. 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 second quarter. The webcast 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 second quarter business update will be made available on June June: see month. 3 after the market close and will be posted on the company's web site. Those who do not have access to the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the may contact Altera's investor relations department directly at (408) 544-7707. 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", "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, the risk that future performance is dependent on the design performance of software and other tools, 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, 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 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) solutions. Combining programmable logic See PLD. technology with software tools, intellectual property, and technical services, Altera provides high-value programmable solutions to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
-------------------------------
Mar. 31 Mar. 31 Dec. 31
2003 (a) 2002 2002 (a)
--------- --------- ---------
Net sales $195,076 $171,957 $180,647
Costs and expenses:
Cost of sales 64,258 68,583 59,130
Research and development 50,188 41,185 49,294
Selling, general, and administrative 44,203 43,540 41,515
--------- --------- ---------
Total costs and expenses 158,649 153,308 149,939
--------- --------- ---------
Income from operations 36,427 18,649 30,708
Interest and other income, net 4,836 7,047 5,944
--------- --------- ---------
Income before income taxes 41,263 25,696 36,652
Provision for income taxes (11,141) (6,681) (9,529)
--------- --------- ---------
Net income $ 30,122 $ 19,015 $ 27,123
========= ========= =========
Income per share:
Basic $ 0.08 $ 0.05 $ 0.07
========= ========= =========
Diluted $ 0.08 $ 0.05 $ 0.07
========= ========= =========
Shares used in computation:
Basic 382,637 385,586 382,176
========= ========= =========
Diluted 388,253 396,917 387,595
========= ========= =========
Tax rate 27.0% 26.0% 26.0%
% of Sales:
Gross margin 67.1% 60.1% 67.3%
Research and development 25.7% 24.0% 27.3%
Selling, general, and
administrative 22.7% 25.3% 23.0%
Income from operations 18.7% 10.8% 17.0%
Net income 15.4% 11.1% 15.0%
(a) Statements of operations for the three month periods ended
March 31, 2003 and December 31, 2002 included benefits of $9.1
million and $11.2 million, respectively, resulting from the sale
of inventory previously written down in 2001. Such benefits had a
favorable gross margin impact of 4.7% and 6.2%, respectively.
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Mar. 31 Dec. 31
2003 2002
----------- -----------
Assets
Current assets:
Cash and short-term investments $ 985,373 $ 942,659
Accounts receivable, net 88,136 57,111
Inventories 30,352 39,089
Other current assets 126,988 137,317
----------- -----------
Total current assets 1,230,849 1,176,176
Property and equipment, net 178,176 183,999
Investments and other assets 10,844 11,562
----------- -----------
$1,419,869 $1,371,737
=========== ===========
Liabilities and Stockholders' Equity
Accounts payable and current liabilities $ 86,161 $ 96,194
Deferred income on sales to distributors 183,084 144,307
----------- -----------
Total current liabilities 269,245 240,501
Stockholders' equity 1,150,624 1,131,236
----------- -----------
$1,419,869 $1,371,737
=========== ===========
Key Ratios & Information
Current Assets/Current Liabilities 5:1 5:1
Liabilities/Equity 1:4 1:5
Annualized Return on Equity 11% 8%
Quarterly Depreciation Expense, Net 9,192 10,321
Quarterly Capital Expenditures 3,369 3,258
Annualized Sales per Employee 411 375
Number of Employees 1,917 1,882
Inventory MSOH (b): Altera 1.4 2.0
Inventory MSOH (b): Distribution 1.5 1.6
Days Sales Outstanding 44 29
(b) MSOH: Months Supply On Hand
ALTERA CORPORATION
REVENUE SUMMARY
Q-Q Y-Y
Q1'03 Q4'02 Q1'02 Growth Growth
----- ----- ----- ------ ------
Geography
North America 34% 34% 44% 7% -13%
----- ----- -----
Europe 25% 24% 25% 17% 15%
Japan 25% 25% 19% 5% 45%
Asia Pacific 16% 17% 12% 2% 58%
----- ----- -----
International 66% 66% 56% 9% 35%
----- ----- -----
Total 100% 100% 100% 8% 13%
===== ===== =====
Product Category
New 34% 33% 20% 11% 93%
Mainstream 36% 35% 43% 10% -5%
Mature & Other 30% 32% 37% 3% -8%
----- ----- -----
Total 100% 100% 100% 8% 13%
===== ===== =====
Market Segment
Communications 44% 45% 49% 6% 3%
Industrial &
Automotive 29% 27% 25% 16% 31%
Computer & Storage 11% 13% 15% -4% -14%
Consumer 16% 15% 11% 11% 56%
----- ----- -----
Total 100% 100% 100% 8% 13%
===== ===== =====
Product Category Description
----------------------------
Category Products
New ACEX 1K, APEX 20KC, APEX 20KE, APEX II, MAX 7000B,
Cyclone, Excalibur, HardCopy, Mercury, Stratix,
and Stratix GX families
Mainstream APEX 20K, FLEX 6000, FLEX 10KA, FLEX 10KE, MAX
3000A, and MAX 7000A families
Mature & Other Classic, FLEX 8000, FLEX 10K, MAX 7000, MAX 7000S,
and MAX 9000 families, MPLD, configuration and
other devices, tools, and intellectual property
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