SAN JOSE, Calif., Oct. 23, 2014 /PRNewswire/ -- Altera Corporation (NASDAQ: ALTR) today announced third quarter sales of $499.6 million, up 2 percent from the second quarter of 2014 and up 12 percent from the third quarter of 2013. Third quarter net income was $118.0 million, $0.38 per diluted share, compared with net income of $127.0 million, $0.41 per diluted share, in the second quarter of 2014 and $119.4 million, $0.37 per diluted share, in the third quarter of 2013.
http://photos.prnewswire.com/prnvar/20101012/SF78952LOGO
Year-to-date cash flow from operating activities was $515.4 million. Altera repurchased approximately 4.2 million shares during the quarter at a cost of approximately $144.2 million.
Altera's board of directors has declared a quarterly cash dividend of $0.18 per share, to be paid on December 1, 2014 to shareholders of record on November 10, 2014.
"Sales were at the high end of expectations, on the back of solid new product growth, led by strong 28 nm gains," said John Daane, president, chief executive officer, and chairman of the board. "We continue to be encouraged by the positive feedback from early access customers of our first-ever FinFET-based FPGAs, the high-end Stratix 10 family. Utilizing a new proprietary HyperFlex architecture and manufactured with 14 nm Intel TriGate process technology, Stratix 10 devices will offer dramatic improvements in logic density, performance, and power consumption, significantly expanding the reach of Altera FPGA solutions."
Several recent accomplishments mark the company's continuing progress:
-- Altera has released early access design software for Stratix(®) 10 FPGAs and SoCs, the industry's first design software targeting 14 nm FPGAs. Customers today can start their Stratix 10 designs and experience firsthand the doubling, on average, in core performance they can achieve as a result of the Stratix 10 HyperFlex(TM) architecture and the 14 nm Intel Tri-Gate FinFET process. Stratix 10 FPGAs and SoCs are designed to enable the most advanced, highest performance applications in the communications, military, broadcast and computer and storage markets. For high-performance systems that have strict power budgets, Stratix 10 devices will allow customers to achieve up to a 70 percent reduction in power consumption compared with Stratix V FPGAs. Stratix 10 FPGAs and SoCs will also provide the industry's highest levels of system integration, including: -- The highest density monolithic device with greater than four million logic elements. -- A high-performance, quad-core 64-bit ARM(®) Cortex-A53 processor system. -- Multi-die solutions capable of integrating DRAM, SRAM, ASIC, processors and analog components in a single package. -- Over 10 TeraFLOPs of single-precision, hardened floating point DSP performance. -- More than 4X serial transceiver bandwidth compared to previous generation FPGAs, including 28-Gbps backplane-capable transceivers and a path to 56-Gbps transceivers. -- Altera and Baidu, China's largest online search engine, are collaborating on the use of FPGAs and convolutional neural network (CNN) algorithms for deep learning applications. These applications are set to play a critical role in the development of more accurate and faster online search. Altera demonstrated its work with Baidu at the recent High Performance Computing for Wall Street conference. In key search functions, such as image classification and recognition tasks, CNNs are considered to be state-of-the-art and provide record-setting accuracy. To dramatically simplify the implementation of parallel processing applications, Baidu is leveraging Altera's Stratix V FPGAs and the Altera SDK for OpenCL(TM), which achieved Khronos OpenCL conformance testing certification in May 2013. Altera remains the only FPGA supplier with such certification. -- Altera has signed a three-year strategic agreement with China Mobile Research Institute (CMRI) to research and prototype next-generation green wireless network infrastructure solutions based on the Centralized Radio Access Network (C-RAN) architecture that leverages network function virtualization (NFV). Cooperation between Altera and CMRI will center on joint research and development for centralized baseband processing of wireless base stations, with a goal of delivering lower power consumption, lower total operating costs and higher scalability than conventional infrastructure. The new, jointly developed C-RAN architecture will enable operators to increase the spectrum efficiency and to add or upgrade processing capabilities with ease via NFV of the baseband processing resources. This will allow operators to reduce their operating expense and create new business models while leveraging existing investments. FPGAs serve key roles in data processing acceleration, component connectivity and front-haul data transportation. -- Altera has announced the availability of non-volatile MAX(®) 10 FPGAs, Altera's latest addition to its Generation 10 portfolio. Using TSMC's 55 nm embedded flash process technology, MAX 10 FPGAs revolutionize non-volatile FPGAs by delivering dual-configuration flash, analog and embedded processing capabilities in a small-form-factor, low-cost, instant-on programmable logic device. The highly integrated FPGAs provide up to 50 percent board area savings compared to other low-cost FPGAs and provide several important system functions, such as an instant-on configuration, fail-safe upgrades, and system monitoring and control. MAX 10 FPGAs are shipping today and are supported by Quartus(®) II software, evaluation kits, design services through the Altera Design Services Network (DSN), documentation and training to accelerate system development.
SELECTED THIRD QUARTER REVENUE AND RELATED RESULTS ($ in thousands) June 27, 2014 Key September 26, Ratios 2014 & Information ------------ -------------- Current Ratio 6:1 6:1 Liabilities/ Equity 3:4 2:3 Quarterly Operating Cash Flows $214,049 $170,958 TTM Return on Equity 13% 13% Quarterly Depreciation Expense $11,874 $12,222 Quarterly Capital Expenditures $13,691 $9,620 Inventory MSOH (1): Altera 3.4 3.2 Inventory MSOH (1): Distribution 0.6 0.6 Cash Conversion Cycle (Days) 154 160 Turns 37% 42% Book to Bill <1.0 >1.0 Note (1): MSOH: Months Supply On Hand
ALTERA CORPORATION NET SALES SUMMARY (Unaudited) Three Months Ended Quarterly Growth Rate ------------------ --------------------- September 26, June 27, September 27, Sequential Change Year- 2014 2014 2013 Over-Year Change ------ Geography --------- Americas 16% 16% 18% 7% 1% Asia Pacific 42% 43% 39% 0% 20% EMEA 29% 27% 28% 6% 15% Japan 13% 14% 15% (7)% (1)% --- --- --- Net Sales 100% 100% 100% 2% 12% === === === Product Category ---------------- New 56% 53% 44% 9% 45% Mainstream 21% 21% 26% (3)% (13)% Mature and Other 23% 26% 30% (10)% (14)% --- --- --- Net Sales 100% 100% 100% 2% 12% === === === Vertical Market --------------- Telecom & Wireless 45% 46% 41% (1)% 23% Industrial Automation, Military & Automotive 21% 21% 23% - % 3% Networking, Computer & Storage 16% 15% 19% 14% (5)% Other 18% 18% 17% 1% 18% --- --- --- Net Sales 100% 100% 100% 2% 12% === === === FPGAs and CPLDs --------------- FPGA 85% 84% 82% 3% 17% CPLD 8% 8% 9% (6)% (10)% Other Products 7% 8% 9% (6)% (7)% --- --- --- Net Sales 100% 100% 100% 2% 12% === === ===
Product Category Description
-- New Products include the Arria(®) 10, Stratix(®) V, Stratix IV, Arria V, Arria II, Cyclone(® )V, Cyclone IV, MAX(® )10, MAX V, HardCopy(®) IV devices and Enpirion PowerSoCs. -- Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices. -- Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX(®) series, APEX(TM) series, Mercury(TM), Excalibur(TM) devices, configuration and other devices, intellectual property cores, and software and other tools.
Business Outlook for the Fourth Quarter 2014 Sales and Income Statement -------------------------- Sequential Sales -2% to -6% Gross Margin 66.5% +/- 0.5% Research and Development (1) $111 - $113 million SG&A $78 - $80 million Other Income/Expense, Net (2) Net expense of approximately $4 - $5 million Tax Rate 12% - 13% Diluted Share Count Less than 310 million Turns Low 40's Inventory MSOH Mid 3's Note (1): The business outlook for Research and Development expense includes amortization of acquisition-related intangible assets Note (2): Other Income/Expense, Net includes Interest income and other and Interest expense in our consolidated statements of comprehensive income. Vertical Market --------------- Telecom & Wireless Down Industrial Automation, Military & Automotive Flat Networking, Computer & Storage Down Other Down
Third Quarter Earnings Conference Call
A conference call will be held today at 1:45 p.m. Pacific time to discuss the quarter's results and management's current business outlook. The web cast and subsequent replay will be available in the Investor Relations section of the company's website at 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.
Forward-Looking Statements
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 of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include, but are not limited to, statements regarding both absolute and relative product performance and features, product development schedules, potential FPGA market expansion, and any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section or elsewhere in this press release. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ materially from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, customer inventory levels, product availability, vertical market mix, market acceptance of the company's products, the performance of products once introduced, product introduction schedules, the rate of growth of the company's new products including Cyclone(®) V, Cyclone IV, Arria(®) 10, Arria V, Arria II, Stratix(®) V, Stratix IV, MAX(®) 10 FPGAs, MAX V CPLDs, HardCopy(® )IV device families and Enpirion PowerSoCs, as well as changes in economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission (SEC) from time to time. Copies of Altera's SEC filings are posted on the company's website 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.
About Altera
Altera(®) programmable solutions enable designers of electronic systems to rapidly and cost effectively innovate, differentiate and win in their markets. Altera offers FPGAs, SoCs, CPLDs, ASICs and complementary technologies, such as power management, to provide high-value solutions to customers worldwide. Visit www.altera.com.
ALTERA, ARRIA, CYCLONE, ENPIRION, MAX, MEGACORE, NIOS, QUARTUS and STRATIX words and logos are trademarks of Altera Corporation and registered in the U.S. Patent and Trademark Office and in other countries. All other words and logos identified as trademarks or service marks are the property of their respective holders as described at www.altera.com/legal.
INVESTOR CONTACT MEDIA CONTACT ---------------- ------------- Scott Wylie - Vice President Sue Martenson - Senior Manager Investor Relations Public Relations (408) 544-6996 (408) 544-8158 swylie@altera.com newsroom@altera.com ----------------- -------------------
ALTERA CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended ------------------ ----------------- (In thousands, except per share amounts) September 26, June 27, September 27, September 26, September 27, 2014 2014 2013 2014 2013 --- ---- ---- ---- ---- ---- Net sales $499,606 $491,517 $445,945 $1,452,216 $1,278,205 Cost of sales 166,019 162,391 141,525 480,279 402,712 ------- ------- ------- ------- ------- Gross margin 333,587 329,126 304,420 971,937 875,493 Operating expense Research and development expense 112,078 101,121 95,336 310,856 278,542 Selling, general, and administrative expense 77,724 78,974 78,907 231,205 235,376 Amortization of acquisition-related intangible assets 2,465 2,464 1,846 7,394 2,974 ----- ----- ----- Total operating expense 192,267 182,559 176,089 549,455 516,892 ------- ------- ------- ------- ------- Operating margin (1) 141,320 146,567 128,331 422,482 358,601 Compensation (benefit)/expense - deferred compensation plan (487) 3,126 3,462 4,093 6,724 Loss/(gain) on deferred compensation plan securities 487 (3,126) (3,462) (4,093) (6,724) Interest income and other (4,558) (7,819) (2,214) (18,362) (6,651) Gain reclassified from other comprehensive (loss)/income (59) (43) (33) (150) (129) Interest expense 10,774 10,877 2,511 32,139 8,365 ------ ------ ----- Income before income taxes 135,163 143,552 128,067 408,855 357,016 Income tax expense 17,154 16,548 8,635 47,328 15,885 ------ ----- Net income 118,009 127,004 119,432 361,527 341,131 ------- ------- ------- ------- ------- Other comprehensive (loss)/income: Unrealized (loss)/gain on investments: Unrealized holding (loss)/gain on investments arising during period, net of tax of ($6), $23, $30, $41 and ($12) (4,929) 14,471 2,419 22,102 (6,613) Less: Reclassification adjustments for gain on investments included in net income, net of tax of $11, $6, $11, $21 and $21 (48) (37) (22) (129) (108) --- --- --- ---- ---- Other comprehensive (loss)/income (4,977) 14,434 2,397 21,973 (6,721) ------ ------ ------ ------ Comprehensive income $113,032 $141,438 $121,829 $383,500 $334,410 ======== ======== ======== ======== ======== Net income per share: Basic $0.38 $0.41 $0.37 $1.16 $1.07 ===== ===== ===== ===== ===== Diluted $0.38 $0.41 $0.37 $1.15 $1.05 ===== ===== ===== ===== ===== Shares used in computing per share amounts: Basic 308,215 311,000 320,445 311,853 320,266 ======= ======= ======= ======= ======= Diluted 310,184 313,513 323,505 314,130 323,355 ======= ======= ======= ======= ======= Dividends per common share $0.18 $0.15 $0.15 $0.48 $0.35 ===== ===== ===== ===== ===== Tax rate 12.7% 11.5% 6.7% 11.6% 4.4% % of Net sales: Gross margin 66.8% 67.0% 68.3% 66.9% 68.5% Research and development (1) 22.9% 21.1% 21.8% 21.9% 22.0% Selling, general, and administrative 15.6% 16.1% 17.7% 15.9% 18.4% Operating margin(2) 28.3% 29.8% 28.8% 29.1% 28.1% Net income 23.6% 25.8% 26.8% 24.9% 26.7% Notes: (1) Research and development expense as a percentage of Net sales includes amortization of acquisition-related intangible assets. (2) We define operating margin as gross margin less research and development expense, selling, general and administrative expense and amortization of acquisition-related intangible assets, as presented above. This presentation differs from income from operations as defined by U.S. Generally Accepted Accounting Principles ("GAAP"), as it excludes the effect of compensation associated with the deferred compensation plan obligations. Since the effect of compensation associated with our deferred compensation plan obligations is offset by losses/(gains) from related securities, we believe this presentation provides a more meaningful representation of our ongoing operating performance. A reconciliation of operating margin to income from operations follows: Three Months Ended Nine Months Ended ------------------ ----------------- (In thousands, except per share amounts) September 26, June 27, September 27, September 26, September 27, 2014 2014 2013 2014 2013 ---- ---- ---- ---- ---- Operating margin (non-GAAP) $141,320 $146,567 $128,331 $422,482 $358,601 Compensation (benefit)/expense - deferred compensation plan (487) 3,126 3,462 4,093 6,724 ----- ----- Income from operations (GAAP) $141,807 $143,441 $124,869 $418,389 $351,877 ======== ======== ======== ======== ========
ALTERA CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except par value amount) September 26, December 31, 2014 2013 --- ---- ---- Assets Current assets: Cash and cash equivalents $2,680,085 $2,869,158 Short-term investments 134,059 141,487 ------- ------- Total cash, cash equivalents, and short-term investments 2,814,144 3,010,645 Accounts receivable, net 406,708 483,032 Inventories 186,338 163,880 Deferred income taxes - current 54,402 63,228 Deferred compensation plan -marketable securities 65,492 66,455 Deferred compensation plan -restricted cash equivalents 15,897 16,699 Other current assets 41,260 48,901 ------ ------ Total current assets 3,584,241 3,852,840 Property and equipment, net 197,213 204,142 Long-term investments 1,744,830 1,695,066 Deferred income taxes - non-current 21,929 10,806 Goodwill 74,341 73,968 Acquisition-related intangible assets, net 74,756 82,150 Other assets, net 83,720 76,676 ------ ------ Total assets $5,781,030 $5,995,648 ========== ========== Liabilities and stockholders' equity Current liabilities: Accounts payable $47,910 $44,163 Accrued liabilities 41,403 41,218 Accrued compensation and related liabilities 73,354 51,105 Deferred compensation plan obligations 81,389 83,154 Deferred income and allowances on sales to distributors 397,002 487,746 Total current liabilities 641,058 707,386 Income taxes payable - non-current 310,199 276,326 Long-term debt 1,492,436 1,491,466 Other non-current liabilities 7,629 8,403 ----- ----- Total liabilities 2,451,322 2,483,581 --------- --------- Stockholders' equity: Common stock: $.001 par value; 1,000,000 shares authorized; outstanding -305,851 shares at September 26, 2014 and 317,769 shares at December 31, 2013 306 318 Capital in excess of par value 1,171,744 1,216,826 Retained earnings 2,163,647 2,322,885 Accumulated other comprehensive loss (5,989) (27,962) ------ ------- Total stockholders' equity 3,329,708 3,512,067 --------- --------- Total liabilities and stockholders' equity $5,781,030 $5,995,648 ========== ==========
ALTERA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Nine Months Ended ----------------- (In thousands) September 26, September 27, 2014 2013 --- ---- ---- Cash Flows from Operating Activities: Net income $361,527 $341,131 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 42,426 34,256 Amortization of acquisition-related intangible assets 7,394 2,974 Amortization of debt discount and debt issuance costs 2,337 844 Stock-based compensation 70,518 73,011 Net gain on sale of available-for-sale securities (150) (129) Amortization of investment discount/ premium 1,900 2,575 Deferred income tax expense/(benefit) 11,509 (5,629) Tax effect of employee stock plans 7,434 5,405 Excess tax benefit from employee stock plans (4,719) (4,165) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable, net 76,324 (111,231) Inventories (22,458) (2,494) Other assets 3,939 28,673 Accounts payable and other liabilities 32,581 12,509 Deferred income and allowances on sales to distributors (90,744) 95,961 Income taxes payable 21,477 (8,753) Deferred compensation plan obligations (5,858) (5,489) Net cash provided by operating activities 515,437 459,449 ------- ------- Cash Flows from Investing Activities: Purchases of property and equipment (34,946) (31,216) Sales of deferred compensation plan securities, net 5,858 5,489 Purchases of available-for-sale securities (276,867) (258,809) Proceeds from sale of available-for-sale securities 79,424 84,900 Proceeds from maturity of available-for- sale securities 175,280 143,392 Acquisitions, net of cash acquired - (145,321) Purchases of intangible assets (1,269) - Purchases of other investments (8,224) (2,101) Net cash used in investing activities (60,744) (203,666) ------- -------- Cash Flows from Financing Activities: Proceeds from issuance of common stock through stock plans 29,871 38,748 Shares withheld for employee taxes (20,852) (24,787) Payment of dividends to stockholders (149,844) (112,175) Holdback payment for prior acquisition (3,353) - Payment of debt assumed in acquisitions - (22,000) Long-term debt and credit facility issuance costs (1,321) - Repurchases of common stock (502,986) (60,276) Excess tax benefit from employee stock plans 4,719 4,165 ----- ----- Net cash used in financing activities (643,766) (176,325) -------- -------- Net (decrease)/increase in cash and cash equivalents (189,073) 79,458 Cash and cash equivalents at beginning of period 2,869,158 2,876,627 --------- --------- Cash and cash equivalents at end of period $2,680,085 $2,956,085 ========== ==========
Logo - http://photos.prnewswire.com/prnh/20101012/SF78952LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/altera-announces-third-quarter-results-457756531.html
SOURCE Altera Corporation