Altera Reports Third Quarter Results; New Products Drive Continuing Growth.Business Editors/High-Tech Writers 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)--Oct. 20, 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 third quarter sales of $209.4 million, up 2% from the prior quarter and 16% from the third quarter of 2002. Sales of the company's new products grew 10% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen . Third quarter net income of $43.8 million, or $0.11 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, was up compared to second quarter net income of $36.1 million, or $0.09 per diluted share. Third quarter net income increased 87% compared to net income of $23.4 million reported in the third quarter of 2002. Third 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 68.7% of sales and included a $7.6 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 2.9 million shares of its common stock during the quarter at a cost of $58.0 million and ended the quarter with $1.1 billion 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. "Our new products once again drove our revenue growth. 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) family remains on a very fast growth path, with sales double that of second quarter levels. We continue to see strong prototyping (1) Creating a demo of a new system. Prototyping is essential for clarifying information requirements. The design of a system (functional specs) must be finalized before the system can be built. sales and a growing list of design wins for our Stratix(TM) family," said John Daane, president and chief executive officer. "We have announced our plans and are gearing up for 2004 to be a year of new product introductions across virtually all of our product range. We are confident that the development work that we have put into these new products will continue the market share gains we have experienced with our Stratix and Cyclone families." 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. -- The company's Cyclone device family continues to set Altera new product records. More than 1,600 customers are now using Cyclone devices, attracted by the Cyclone family's ready availability, low cost, and performance. Hundreds of thousands of Cyclone devices have been delivered to end customers and distributors. Cyclone devices have won designs across all the market segments served by Altera, and some of these designs are now beginning their production phase. -- Building on twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights. 2. of innovation and incorporating extensive customer product definition input, Altera has announced the company's 2004 product roadmap A roadmap may refer to:
product introduction schedule includes Stratix II and Cyclone II FPGAs, MAX(R) II CPLDs, as well as upgrades to the company'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 design software and Nios(R) embedded Inserted into. See embedded system. processors. Both Stratix II and Cyclone II devices will be manufactured utilizing advanced 90 nanometer One billionth of a meter. Nanometers are used to measure the wavelengths of light. See angstrom and metric system. process technology and will be based on redesigned architectures in order to optimize optimize - optimisation performance at this advanced 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). . Stratix II devices will offer nearly twice the density of the current Stratix family, with an average 50% performance boost, and accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by cost reductions of up to 50% among the highest density members. Cyclone II devices, designed specifically for the high-volume market, will deliver higher densities and lower cost than the original Cyclone family, benefiting from a unique architecture optimized for customers in this rapidly growing 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. market segment. The MAX II device family will offer customers an unprecedented cost structure that is expected to set a new industry standard for CPLD (Complex PLD) A programmable logic device that is made up of several simple PLDs (SPLDs) with a programmable switching matrix in between the logic blocks. CPLDs typically use EEPROM, flash memory or SRAM to hold the logic design interconnections. See PLD and SPLD. technology, along with as much as a 50% performance improvement and 90% lower power consumption versus the company's current, market-leading MAX families. 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 fourth 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 fourth quarter business update will be made available on December December: see month. 10 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, 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, market demand for the company's mainstream and mature products, 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 Celebrating its 20th anniversary this year, Altera Corporation is the world's pioneer in 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 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 and note)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ------------------
Sept. 30 Jun. 30 Sept. 30 Sept. 30 Sept. 30
2003 2003 2002 2003 2002
-------- -------- -------- -------- --------
Net sales $209,446 $205,259 $180,144 $609,781 $531,037
Costs and expenses:
Cost of sales 65,578 65,424 65,189 195,260 203,937
Research and
development 40,976 46,105 48,449 137,269 133,472
Selling, general,
and administrative 46,943 45,594 41,153 136,740 126,969
-------- -------- -------- -------- --------
Total costs and
expenses 153,497 157,123 154,791 469,269 464,378
-------- -------- -------- -------- --------
Income from
operations 55,949 48,136 25,353 140,512 66,659
Interest and other
income, net 4,002 1,314 6,263 10,152 20,017
-------- -------- -------- -------- --------
Income before income
taxes 59,951 49,450 31,616 150,664 86,676
Provision for income
taxes (16,188) (13,352) (8,220) (40,681) (22,536)
-------- -------- -------- -------- --------
Net income $ 43,763 $ 36,098 $ 23,396 $109,983 $ 64,140
======== ======== ======== ======== ========
Income per share:
Basic $ 0.11 $ 0.09 $ 0.06 $ 0.29 $ 0.17
======== ======== ======== ======== ========
Diluted $ 0.11 $ 0.09 $ 0.06 $ 0.28 $ 0.16
======== ======== ======== ======== ========
Shares used in
computation:
Basic 381,366 382,725 381,594 382,290 383,952
======== ======== ======== ======== ========
Diluted 391,013 390,902 387,428 390,104 392,933
======== ======== ======== ======== ========
Tax rate 27.0% 27.0% 26.0% 27.0% 26.0%
% of Sales:
Gross margin 68.7% 68.1% 63.8% 68.0% 61.6%
Research and
development 19.6% 22.5% 26.9% 22.5% 25.1%
Selling,
general, and
administrative 22.4% 22.1% 22.8% 22.5% 23.9%
Income from
operations 26.7% 23.5% 14.1% 23.0% 12.6%
Net income 20.9% 17.6% 13.0% 18.0% 12.1%
Note: Statements of operations for the three month periods ended
September 30, 2003, June 30, 2003, and September 30, 2002 included
benefits of $7.6 million, $9.2 million, and $5.4 million,
respectively, resulting from the sale of inventory previously written
down in 2001. Such benefits had a favorable gross margin impact of
3.6%, 4.5%, and 3.0%, respectively. For the nine month periods ended
September 30, 2003 and September 30, 2002, these benefits were $25.9
million and $6.8 million, respectively. Such benefits had a gross
margin impact of 4.2% and 1.3%, respectively.
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
Sept. 30 Jun. 30 Dec. 31
2003 2003 2002
---------- ---------- ----------
Assets
Current assets:
Cash and short-term
investments $1,087,737 $1,075,882 $ 942,659
Accounts receivable, net 62,367 79,516 57,111
Inventories 43,151 28,944 39,089
Other current assets 131,263 133,151 137,317
---------- ---------- ----------
Total current assets 1,324,518 1,317,493 1,176,176
Long-term investments 14,452 - -
Property and equipment, net 167,184 172,771 183,999
Intangible and other assets, net 7,024 9,002 11,562
---------- ---------- ----------
$1,513,178 $1,499,266 $1,371,737
========== ========== ==========
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and current
liabilities $ 143,178 $ 123,969 $ 96,194
Deferred income and allowances
on sales to distributors 199,505 201,402 144,307
---------- ---------- ----------
Total current liabilities 342,683 325,371 240,501
Stockholders' equity 1,170,495 1,173,895 1,131,236
---------- ---------- ----------
$1,513,178 $1,499,266 $1,371,737
========== ========== ==========
Key Ratios & Information
Current Assets/Current Liabilities 4:1 4:1 5:1
Liabilities/Equity 1:3 1:4 1:5
Annualized Return on Equity 13% 11% 8%
Quarterly Depreciation Expense $ 8,160 $ 8,749 $ 10,321
Quarterly Capital Expenditures $ 2,573 $ 3,344 $ 3,258
Annualized Sales per Employee $ 421 $ 417 $ 375
Number of Employees 1,959 1,958 1,882
Inventory MSOH (a): Altera 2.0 1.3 2.0
Inventory MSOH (a): Distribution 1.5 1.5 1.6
Days Sales Outstanding 27 35 29
(a) MSOH: Months Supply On Hand
ALTERA CORPORATION
REVENUE SUMMARY
(Unaudited)
Q-Q Y-Y
Q3'03 Q2'03 Q3'02 Growth Growth
----- ----- ----- ------ ------
Geography
-----------------
North America 33% 33% 38% 3% 2%
----- ----- -----
Europe 22% 21% 23% 4% 11%
Japan 24% 24% 21% 5% 32%
Asia Pacific 21% 22% 18% -4% 36%
----- ----- -----
International 67% 67% 62% 2% 25%
----- ----- -----
Total 100% 100% 100% 2% 16%
===== ===== =====
Product Category
-----------------
New 42% 39% 30% 10% 61%
Mainstream 31% 33% 37% -3% -2%
Mature & Other 27% 28% 33% -2% -5%
----- ----- -----
Total 100% 100% 100% 2% 16%
===== ===== =====
Market Segment
-----------------
Communications 43% 44% 43% 1% 15%
Industrial & Automotive 30% 30% 28% 1% 23%
Computer & Storage 11% 10% 13% 12% 5%
Consumer 16% 16% 16% 1% 15%
----- ----- -----
Total 100% 100% 100% 2% 16%
===== ===== =====
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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