Altera Reports Record Quarterly Results; Second Quarter Sales Increase 96%; Net Income up 137%.

SAN JOSE, CALIF.--(BUSINESS WIRE)--July 13, 1995--Altera Corporation (Nasdaq: ALTR) today reported record levels of sales, operating income, net income, and earnings per share for the quarter ended June 30, 1995. Second quarter sales of $92.2 million were up 96% over the same period last year, and 23% over the previous quarter.

Operating margin as a percentage of sales for the second quarter was 32.5%, up 5.9 percentage points over the same period last year and 1.8 percentage points over the previous quarter.

Net income was a record $19.6 million, up 137% over the second quarter of 1994 and 30% above the previous quarter. Second quarter earnings per share were $0.43, an increase of $0.24 from the same period last year and up $0.10 from the previous quarter.

The Company completed a $230 million private placement of 5-3/4% convertible subordinated notes on June 21, 1995. The notes, due 2002, added $224.8 million of cash to the balance sheet. The notes are non-callable for three years and are convertible at a conversion price of $51.17 into a maximum of 4,494,821 shares of Altera common stock. Related fees and expenses of $5.6 million will be amortized over 7 years. Quarterly coupon interest and amortization expenses of $3.5 million will be partially offset by the interest income received from the net proceeds.

Excluding the convertible debt financing and the purchase of approximately 25 acres of undeveloped land for development of a new corporate headquarters facility, Altera added $10.6 million of cash to its balance sheet during the quarter, after other capital expenditures of $5.6 million. Annualized return on equity was 42% for the quarter.

Rodney Smith, President & CEO stated, Altera's financial results for this quarter are indicative of our increasing momentum in the marketplace. The largest sales increase occurred in the International sector with Japan and Europe generating solid growth. The Domestic sector was also strong with the OEM and distribution channels each reporting double-digit growth.

Mr. Smith continued, Quarterly sales growth was driven by both old and new products. New products, which are sole-sourced, account for the major portion of our business and are the fastest growing of our product offerings.

Mr. Smith concluded, This strong demand for our products is heavily driven by the communications marketplace. Incoming orders for this quarter were beyond our expectations. The Company's backlog increased by over $63 million from the prior quarter.

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 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        SIX MONTHS ENDED
                     June 30, June 30,  March 31,  June 30, June 30,
                      1995       1994      1995      1995     1994
                      ----       ----      ----      ----     ----

Sales               $92,165    $47,061   $75,038   $167,203  $90,571
Costs & Expenses:
Cost of Sales        37,489     18,207    30,051     67,540   35,186
Research and
 Development          7,677      5,167     6,586     14,263    9,899
Selling, General, &
  Administrative     17,014     11,170    15,382     32,396   21,079
Total Costs &
 Expenses            62,180     34,544    52,019    114,199   66,164
Income from
 Operations          29,985     12,517    23,019     53,004   24,407
Interest Income,
  Net                 1,177        645       945      2,122      910
Income before Taxes  31,162     13,162    23,964     55,126   25,317
Taxes                11,530      4,870     8,867     20,397    9,368
Net Income          $19,632   $  8,292   $15,097    $34,729  $15,949
Net Income per
 Share              $  0.43   $   0.19   $  0.34    $  0.77  $  0.37
Avg. shares and
 equivalents used
 in calculation of
 net income per
 share               45,524     42,844    45,062     45,339   42,818

Tax rate                37%        37%       37%        37%      37%

% of Sales
Gross Margin            59%        61%       60%        60%      61%
Research & Development   8%        11%        9%         9%      11%
Selling, General and
  Administrative        18%        23%       20%        19%      23%
Income from Operations  33%        27%       31%        32%      27%
Net Income              21%        18%       20%        21%      18%

ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands)
(Unaudited)
                                    June 30       March 31
                                     1995           1995
Assets
Current assets:
Cash and short-term investments     $323,653       $108,155
Accounts receivable, net              52,903         43,904
Inventories                           38,283         37,403
Other assets                          20,919         15,748
Total Current Assets                 435,758        205,210
Property and equipment, net           44,480         21,187
Investments & Intangibles             23,601         17,650
                                    --------       --------
                                    $503,839       $244,047

Liabilities and Shareholders' Equity
Current Liabilities                 $ 78,486       $ 69,120
Long Term Debt                       230,000              0
Shareholders' Equity                 195,353        174,927
                                    --------       --------
                                    $503,839       $244,047

Key Ratios & Information
Current assets/current liabilities       6:1            3:1
Liabilities/Equity                       2:1            1:3
Annualized Quarterly Return on Equity    42%            36%
Quarterly Depreciation Expense         2,175          1,951
Quarterly Capital Expenditures        25,499          5,280
Annualized Sales per Employee            505            437

CONTACT: Altera Corporation, San Jose, CA

Thomas J. Nicoletti, 408/894-7000