Altera Reports Record Annual Sales and Profits; 2000 Sales Increase 65%, Fourth Quarter Sales Up 55% Annually.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)--Jan. 18, 2001 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 reported record annual sales of $1.38 billion. Income, excluding the net gain associated with the previously announced sale of the company's interest in WaferTech, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , was $394.1 million, up 76% over 1999 and a record 28.6% of sales. On this basis, income was $0.95 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 versus $0.54 in the prior year. Including the gain, total year net income was $496.9 million or $1.19 per diluted share. Fourth quarter sales of $368.0 million, up 55% over the same period last year, were down 7% from the previous quarter. Fourth quarter net income of $205.5 million, or $0.50 per diluted share, included a $102.8 million net after-tax gain Net after-tax gain Capital gain after income taxes have been paid. related to the sale of the company's 23% interest in WaferTech to Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan Semiconductor Manufacturing Company. This one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. net after-tax gain results from the effects of a $178.1 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain offset by an associated increase in the company's tax provision and a $4.1 million net change in equity income (loss). Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income, excluding these one-time effects, was $102.7 million or 27.9% of sales, a decline of 13% from the prior quarter and an increase of 46% over the fourth quarter of 1999. Pro forma net income of $0.25 per diluted share was down $0.03 from the $0.28 reported in the third quarter of 2000 and up $0.08 from the $0.17 reported in the fourth quarter of 1999. Altera repurchased 12.3 million shares of its common stock during the quarter at a cost of $368.1 million, received $350.4 million in gross proceeds from the WaferTech transaction, and ended the quarter with a $1.13 billion cash position. "The year 2000 was an excellent year for Altera. Overall annual sales growth was robust as customers increasingly turned to our programmable devices to meet their needs for design flexibility and fast time-to-market. Although an industry-wide inventory correction CORRECTION,punishment. Chastisement by one having authority of a person who has committed some offence, for the purpose of bringing him to legal subjection. 2. It is chiefly exercised in a parental manner, by parents, or those who are placed in loco parentis. is impacting demand in the 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. , our new product portfolio positions us well for 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. growth. We are particularly pleased with the positive customer reaction to the introduction of our industry-leading Excalibur Excalibur (ĕkskăl`ĭbər), in Arthurian legend, sword given to King Arthur by the Lady of the Lake. At Arthur's death Sir Bedivere threw Excalibur into the lake; a hand rose from the water, caught the sword, and disappeared. family of embedded processor A CPU chip used in a system other than a general purpose workstation, desktop or laptop computer. Such chips are used by the billions every year in a myriad of products. See embedded system. solutions," 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. . Altera continued to enhance 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: -- Altera announced the APEX(TM) 20KC, the industry's first programmable logic device (PLD) using all-layer copper interconnect. Copper interconnect presents lower electrical resistance, and coupled with the device's 0.15-micron process technology, delivers performance up to 25% faster than comparable 0.18-micron aluminum devices. Benefiting from its unique True-LVDS(TM) capability, the APEX 20KC features the industry's fastest I/O speeds -- particularly appealing in advanced communications applications. -- Altera has reduced the price of its highest density APEX 20KE devices by 60% as a result of manufacturing cost reductions from the company's patented redundancy technology. Altera is the only company in the PLD industry with an architecture that facilitates the use of redundancy, a technology that enhances yield and lowers cost. Redundancy's benefits contribute to Altera's position as the industry's most profitable PLD company and help make the APEX EP20K1500E the largest PLD available in commercial quantities today. -- Delivering an attractive extension to Altera's intellectual property offerings, Mentor Graphics has joined the Altera Megafunction Partners Program (AMPP(SM)) and will offer twenty Inventra commodity cores to Altera customers developing next generation signal processing, networking, bus interface and memory applications. Intellectual property cores offer customers the benefit of parameterizable standard functions that can be easily incorporated into a PLD design thereby speeding time-to-market. Cores offered by Altera AMPP partners are reusable, synthesizable megafunctions that are optimized for Altera PLDs. -- Altera's Toronto Technology Center and San Diego Applications Engineering Center opened during the quarter. The Toronto facility will focus on development of next generation software and device architectures for SOPC solutions and will leverage the extensive knowledge and resources available from the University of Toronto's engineering program. Conference Call and Updates: A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results. The webcast and subsequent replay will be available on the company's web site, 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 424062. Altera first quarter business updates will be made available after the market close on January January: see month. 30 and February February: see month. 27 and will be posted on the company's web site. For 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 , Altera's investor relations Investor relations The process by which the corporation communicates with its investors. department may be contacted directly at (408) 544-7707. Fax-on-Demand: Copies of Altera's announcement are available from its fax-on-demand service. In the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , to request a copy call 1-800-789-ALTR. International users may dial their local International Access Code followed by 1-408-894-0466. About Altera: Altera Corporation, The Programmable Solutions Company(TM), was founded in 1983 and is a leading supplier of programmable logic devices See PLD. (PLDs). Altera's CMOS-based PLDs are user-programmable semiconductor chips that enhance flexibility and reduce time-to-market for companies in the communications, computer peripheral Any input, output or storage device connected externally or internally to the computer's CPU, such as a monitor, keyboard, printer, disk, tape, graphics tablet, scanner, joy stick, paddle or mouse. , and industrial markets. By using high performance devices, software development tools, and sophisticated intellectual property cores, system-on-a-programmable-chip (SOPC) solutions can be created with embedded processors, memory, and other complex logic together on a single 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. . Altera common stock is traded on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol ALTR. More information on Altera is available on the Internet at http://www.altera.com. Altera, The Programmable Solutions Company, AMPP AMPP Apache, MySQL, PHP and Perl AMPP Actual Medicinal Product Pack (UK) AMPP Advanced Materials and Processing Program , APEX apex (a´peks) pl. apexes, a´pices [L.] tip; the pointed end of a conical part; the top of a body, organ, or part.ap´ical apex of lung the rounded upper extremity of either lung. , True-LVDS, and specific device designations are trademarks 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. service marks of Altera Corporation in the U.S. and other countries. All other trademarks are the property of their respective holders.
ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED YEAR ENDED
Dec. 31 Dec. 31 Sept. 30 Dec. 31 Dec. 31
2000 1999 2000 2000 1999
---- ---- ---- ---- ----
Net sales $367,953 $237,320 $395,395 $1,376,815 $836,623
Costs & expenses:
Cost of sales 125,025 83,193 132,694 466,994 301,322
Research and
development 50,560 25,967 48,475 172,373 86,065
Selling, general
and administrative 60,489 40,369 57,293 209,979 143,214
Acquired in-process
research and
development -- -- -- 6,305 --
------- ------- ------- -------- --------
Total costs and
expenses 236,074 149,529 238,462 855,651 530,601
Income from
operations 131,879 87,791 156,933 521,164 306,022
Gain on sale
of WaferTech 178,105 -- -- 178,105 --
Interest & other
income, net 12,287 18,445 12,912 46,145 37,055
------- ------- ------- -------- --------
Income before income
taxes and equity
investment 322,271 106,236 169,845 745,414 343,077
Provision for
income taxes (115,932) (34,526) (52,651) (247,107) (111,499)
Equity in income
(loss) of WaferTech (837) (1,341) 795 (1,400) (7,584)
------- ------- ------- -------- --------
Net income $205,502 $70,369 $117,989 $496,907 $223,994
======== ======= ======== ======== ========
Income per share:
Basic $ 0.52 $ 0.18 $ 0.30 $ 1.25 $ 0.57
======== ======= ======== ======== ========
Diluted $ 0.50 $ 0.17 $ 0.28 $ 1.19 $ 0.54
======== ======= ======== ======== ========
Shares used in
computation:
Basic 392,655 398,780 398,540 396,849 396,158
======== ======= ======== ======== ========
Diluted 408,836 417,826 419,396 416,629 414,928
======== ======= ======== ======== ========
Supplemental
information:
Income excluding
acquired in-process
research and
development, net
of tax $205,502 $ 70,369 $117,989 $ 501,258 $223,994
======== ======= ======== ======== ========
Diluted income
per share $ 0.50 $ 0.17 $ 0.28 $ 1.20 $ 0.54
======== ======= ======== ======== ========
Tax rate 36.0% 32.5% 31.0% 33.2% 32.5%
% of Sales:
Gross margin 66.0% 64.9% 66.4% 66.1% 64.0%
Total research
and development 13.8% 10.9% 12.2% 13.0% 10.3%
Selling, general
and administrative 16.4% 17.0% 14.5% 15.2% 17.1%
Income from operations 35.8% 37.0% 39.7% 37.9% 36.6%
Net income 55.9% 29.7% 29.8% 36.1% 26.8%
Income excluding
acquired in-process
research and
development, net
of tax 55.9% 29.7% 29.8% 36.4% 26.8%
Note: Income per share and shares used in computation have been
retroactively restated, for all periods presented, to give effect to
the two-for-one stock split effective August 10, 2000.
ALTERA CORPORATION
COMPARISONS WITH AND WITHOUT ONE-TIME EFFECTS OF WAFERTECH SALE(A)
(In thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED YEAR ENDED
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2000 2000 2000 2000
(A)Pro forma (A)Pro forma
Net sales $367,953 $367,953 $1,376,815 $1,376,815
Costs & expenses:
Cost of sales 125,025 125,025 466,994 466,994
Research and development 50,560 50,560 172,373 172,373
Selling, general and
administrative 60,489 60,489 209,979 209,979
Acquired in-process
research and development -- -- 6,305 6,305
------- ------- ------- -------
Total costs and expenses 236,074 236,074 855,651 855,651
------- ------- ------- -------
Income from operations 131,879 131,879 521,164 521,164
Gain on sale of WaferTech 178,105 -- 178,105 --
Interest & other income,
net 12,287 12,287 46,145 46,145
------- ------- ------- -------
Income before income taxes
and equity investment 322,271 144,166 745,414 567,309
Provision for income taxes (115,932) (44,691) (247,107) (175,866)
Equity in income (loss)
of WaferTech (837) 3,242 (1,400) 2,679
------- ------- ------- -------
Net income $205,502 $102,717 $496,907 $394,122
======== ======== ======== ========
Income per share:
Basic $ 0.52 $ 0.26 $ 1.25 $ 0.99
======== ======== ======== ========
Diluted $ 0.50 $ 0.25 $ 1.19 $ 0.95
======== ======== ======== ========
Shares used in computation:
Basic 392,655 392,655 396,849 396,849
======== ======== ======== ========
Diluted 408,836 408,836 416,629 416,629
======== ======== ======== ========
Supplemental information:
Income excluding acquired
in-process research and
development, net of tax $205,502 $102,717 $501,258 $398,473
======== ======== ======== ========
Diluted income per share $ 0.50 $ 0.25 $ 1.20 $ 0.96
======== ======== ======== ========
Tax rate 36.0% 31.0% 33.2% 31.0%
% of Sales:
Gross margin 66.0% 66.0% 66.1% 66.1%
Total research and
development 13.8% 13.8% 13.0% 13.0%
Selling, general and
administrative 16.4% 16.4% 15.2% 15.2%
Income from operations 35.8% 35.8% 37.9% 37.9%
Net income 55.9% 27.9% 36.1% 28.6%
Income excluding
acquired in-process
research and development,
net of tax 55.9% 27.9% 36.4% 28.9%
(A) The pro forma financial data excludes the one-time gain and
other one-time charges and credits relating to WaferTech.
Note: Income per share and shares used in computation have been
retroactively restated, for all periods presented, to give effect to
the two-for-one stock split effective August 10, 2000.
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Dec. 31 Sept. 30 Dec. 31
2000 2000 1999
Assets
Current assets:
Cash and short-term
investments $1,133,609 $1,022,805 $ 845,666
Accounts receivable,
net 168,940 170,729 90,101
Inventories 273,562 177,339 64,027
Other assets 193,248 151,020 107,091
---------- ---------- ----------
Total current assets 1,769,359 1,521,893 1,106,885
Property and
equipment, net 207,858 197,916 155,217
Investments & intangibles 26,917 202,207 177,497
---------- ---------- ----------
$2,004,134 $1,922,016 $1,439,599
========== ========== ==========
Liabilities and
Stockholders' Equity
Accounts payable and
current liabilities $ 295,890 $ 170,014 $ 93,766
Deferred income on
sales to distributors 460,314 366,202 227,760
---------- ---------- ----------
Total current liabilities 756,204 536,216 321,526
Stockholders' equity 1,247,930 1,385,800 1,118,073
---------- ---------- ----------
$2,004,134 $1,922,016 $1,439,599
========== ========== ==========
Key Ratios & Information
Current Assets/Current
Liabilities 2:1 3:1 3:1
Liabilities/Equity 1:2 1:3 1:4
Annualized Quarterly
Return on Equity 38% 36% 26%
Quarterly Depreciation
Expense, Net 9,901 9,681 7,639
Quarterly Capital
Expenditures 19,843 31,105 10,774
Annualized Sales
per Employee 830 848 689
Number of Employees 1,945 1,799 1,398
Inventory MSOH(a): Altera 6.6 4.0 2.3
Inventory MSOH(a): Distribution 2.5 1.9 2.3
Days Sales Outstanding 42 39 35
(a) MSOH: Months Supply On Hand
ALTERA CORPORATION
REVENUE SUMMARY
Q-Q Y-Y Year ending Annual
Q4'99 Q3'00 Q4'00 Growth Growth 1999 2000 Growth
----- ----- ----- ------ ------ ---- ---- ------
Geography
---------
North America 56% 58% 56% -10% 57% 56% 57% 68%
Europe 20% 21% 22% -2% 70% 19% 22% 88%
Japan 18% 14% 16% 1% 32% 19% 15% 31%
Asia/Pacific 6% 7% 6% -14% 62% 6% 6% 70%
International 44% 42% 44% -3% 53% 44% 43% 61%
---- ---- ---- ---- ----
Total 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
Market Segment
--------------
Communications 70% 70% 66% -12% 48% 66% 67% 67%
EDP 14% 16% 18% 3% 98% 16% 17% 80%
Industrial 10% 9% 11% 9% 68% 11% 11% 51%
Consumer 3% 2% 2% -11% -11% 3% 2% 15%
Others 3% 3% 3% 10% 49% 4% 3% 44%
---- ---- ---- ---- ----
Total 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
Voltage Category (1)
------------------
1.8 Volt 0% 5% 6% 15% N/A 0% 4% N/A
2.5 Volt 10% 17% 14% -21% 134% 5% 14% 324%
3.3 Volt 28% 34% 35% -2% 95% 25% 34% 124%
5.0 Volt 56% 39% 39% -9% 7% 63% 43% 13%
Other 6% 5% 6% 5% 43% 7% 5% 31%
---- ---- ---- ---- ----
Total 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
Product Category (2)
------------------
New 0% 5% 6% 22% N/A 0% 4% N/A
Mainstream 33% 45% 44% -9% 105% 26% 42% 167%
Mature & Other 67% 50% 50% -8% 15% 74% 54% 20%
---- ---- ---- ---- ----
Total 100% 100% 100% 100% 100%
==== ==== ==== ==== ====
(1) Voltage Category Description
Voltage Products
1.8V APEX 20KE
2.5V MAX 7000B, FLEX 10KE, APEX 20K, ACEX 1K
3.3V MAX 7000A, MAX 3000A, FLEX 6000, FLEX 10KA
5.0V CLASSIC, MAX 5000, MAX 7000, MAX 7000S, MAX 9000,
FLEX 8000, FLEX 10K
Other Tools, FLASHlogic, MPLD's, configuration devices
and Northwest Logic design services
(2) Product Category Description
Category Products
New APEX 20KE, MAX 7000B, ACEX 1K, Excalibur
Mainstream MAX 7000A, MAX 3000A, FLEX 6000, FLEX 10KA,
FLEX 10KE, APEX 20K
Mature & Other CLASSIC, MAX 5000, MAX 7000, MAX 7000S, MAX 9000,
FLEX 8000, FLEX 10K, Tools,FLASHlogic, MPLD's,
configuration devices and Northwest Logic design
services
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