Altera Reports Record Quarterly Results; First Quarter Sales Increase 83% Annually And 9% Sequentially; Net Income Up 108% Annually And 11% Sequentially.

SAN JOSE, Calif.--(BUSINESS WIRE)--April 10, 1996--Altera Corporation (Nasdaq: ALTR) today reported record levels of sales, operating income, net income, and earnings per share for the quarter ended March 31, 1996.

First quarter sales of $137.1 million were up 83% over the same period last year, and 9% over the previous quarter.

Operating margin as a percentage of sales for the first quarter was 35.2%, up 4.5 percentage points over the same period last year and essentially equaling the record set in the previous quarter. Gross margin as a percentage of sales for the first quarter was 61.3%, up 1.3 percentage points over the same period last year and matching the previous quarter. Gross margin improvements over the prior year are attributed to a greater proportion of proprietary product shipments at higher margins and improved manufacturing yields.

Net income for the first quarter was a record $31.4 million, up 108% over the first quarter of 1995 and 11% over the prior quarter. First quarter earnings per share, on a fully-diluted basis, were $0.66, an increase of $0.32 from the same period last year and up $0.05 from the fourth quarter of 1995.

Quarterly cash activity included expenditures of $57.1 million as deposits for future wafer procurements to TSMC and capital expenditures of $6.2 million. This resulted in a cash reduction of $15.6 million. Annualized return on equity was 46% for the quarter. Rodney Smith, President & CEO stated, "Altera's revenue growth for this quarter was balanced between the Domestic and International channels. The communications marketplace continued to pace our growth."

Mr. Smith continued, "Our mainstream products are sole-sourced and account for the major portion of Q1'96 revenues. The Company's newest product families, MAX 9000 and FLEX 10K, are being well accepted in the marketplace. FLEX 10K50, the first member of our FLEX 10K family and the industry's first programmable embedded array, began shipping in the December quarter. The second member, FLEX 10K10, began shipping in the March quarter as planned."

Mr. Smith concluded, "Although price reductions on Altera's mainstream products reduced orders by approximately $15 million for the quarter, the backlog grew by over $5 million. However, due to the improved availability on mainstream and new products we expect the backlog to be reduced over the next six months as distributors revert to short lead time ordering."

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation risks of dependence on third-party wafer suppliers, intellectual property rights and litigation, market acceptance of and demand for the Company's products as well as general market conditions, competition and pricing, and development of technology and manufacturing capabilities. Please refer to the Company's Securities and Exchange Commission filings, copies of which are available from the Company without charge, for further information.

Fax on Demand:

Copies of Altera's quarterly earnings are available from its fax-on-demand service. In the U.S. and Canada to request a copy call 1-800-789-ALTR. International users can dial their local International Access Code followed by 1-408-894-0466.

Altera Corporation, founded in 1983, is a world-wide leader in high-performance, high-density programmable logic devices and associated computer aided engineering (CAE) logic development tools. Programmable logic devices are semiconductor chips that offer on-site programmability to customers. The chips are programmed with tools that run on personal computers or engineering workstations. User benefits include ease of use, lower risk, and fast time-to-market. The Company offers the broadest line of CMOS programmable logic devices that address high-speed, high density, and lower power applications. Altera products serve a broad range of market areas, including telecommunications, data communications, computers, and industrial applications. Altera common stock is traded on The Nasdaq Stock Market using the symbol ALTR. -0-

                          ALTERA CORPORATION

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Thousands, except per share data)
                             (Unaudited)

                                   THREE MONTHS ENDED
                               Mar. 31,  Mar. 31,  Dec. 31,
                                1996       1995     1995

Sales                          $137,098  $  75,038 $125,316

Cost & Expenses:
Cost of Sales                    53,054    30,051    48,451
Research and Development         12,523     6,586    10,481
Selling, General, &
 Administrative                  23,320    15,382    21,922

Total Costs & Expenses           88,897    52,019    80,854

Income from Operations           48,201    23,019    44,462
Interest & Other Income, Net        923       945       638
Income before Taxes              49,124    23,964    45,100
Taxes                            17,684     8,867    16,687
Net Income                    $  31,440 $  15,097 $  28,413
Net Income per Share:
Primary                       $    0.68 $    0.34 $    0.62
Fully diluted                 $    0.66 $    0.34 $    0.61

Weighted average shares and equivalents:

Primary                          45,968    45,062    45,837
Fully diluted                    50,463    45,062    50,332

Tax rate                             36%       37%       37%

% of Sales:
Gross Margin                         61%       60%       61%
Research & Development                9%        9%        8%
Selling, General, and Administrative 17%       20%       17%
Income from Operations               35%       31%       36%
Net Income                           23%       20%       23%

                         ALTERA CORPORATION

                    CONSOLIDATED BALANCE SHEETS
                           (Thousands)

                                           (Unaudited)
Assets                                      March 31,      Dec. 31,
Current assets:                               1996          1995

Cash and short-term investments             $ 349,666    $  365,219
Accounts receivable, net                       60,362        54,518
Inventories                                    75,146        55,421
Other assets                                   48,960        42,849
Total current assets                          534,134       518,007
Property and equipment, net                    57,935        54,846
Investments & intangibles                     143,237       142,701
                                            $ 735,306    $  715,554

Liabilities and Shareholders' Equity

Current liabilities                         $ 205,705    $  171,765
Long term debt                                239,600       288,600
Shareholders' equity                          290,001       255,189
                                            $ 735,306    $  715,554

Key Ratios & Information

Current Assets/Current Liabilities                3:1           3:1
Liabilities/Equity                                2:1           2:1
Annualized Quarterly Return on Equity             46%           48%
Quarterly Depreciation Expense                  3,139         2,531
Quarterly Capital Expenditures                  6,228         8,174
Annualized Sales per Employee                     608           591

CONTACT: Altera Corporation

Thomas J. Nicoletti, Vice President, Investor Relations 

and Business Development, 408-894-7000