ALTERA CORPORATION 
By SAN JOSE, Calif., Jan. 23, 2013 /PRNewswire/ -- Altera Corporation (NASDAQ: ALTR) today announced fourth quarter sales of $439.4 million, down 11 percent from the third quarter of 2012 and down 4 percent from the fourth quarter of 2011. Fourth quarter net income was $120.8 million, $0.37 per diluted share, compared with net income of $157.5 million, $0.49 per diluted share, in the third quarter of 2012 and $146.6 million, $0.45 per diluted share, in the fourth quarter of 2011.
(Logo: http://photos.prnewswire.com/prnh/20101012/SF78952LOGO)
Cash flow from operating activities in 2012 was $587.2 million. Altera repurchased 1.6 million shares of its common stock during the quarter at a cost of $50.0 million. Altera ended the quarter with $3.7 billion in cash and investments.
Altera's board of directors has declared a quarterly cash dividend of $0.10 per share payable on March 1, 2013 to stockholders of record on February 11, 2013.
"While our new products had a double-digit sequential growth quarter, sales of our older products were soft--the result of a sluggish global economy," said John Daane, president, chief executive officer, and chairman of the board. "Sales of 40 nm devices, our largest selling process node, and where we are the market leader, are likely to strengthen further as we progress through 2013. At the most advanced process node, 28 nm, Altera remains the design-win value leader, giving us a substantial growth opportunity as these customer designs transition into production."
Several recent accomplishments mark the company's continuing progress:
-- Huawei Technologies, a leading global information and communications
technology solutions provider, has presented Altera with its 2012
Excellent Core Partner Award. In making this award, Huawei specifically
recognized Altera for its excellence in terms of quality, delivery of
leading-edge technologies and services. The Excellent Core Partner Award
is the highest recognition Huawei gives to its suppliers. Altera is
among an elite set of suppliers to earn this award for outstanding
contribution toward Huawei's business success throughout 2012. In 2012,
Huawei realized the performance advantage offered by Altera's 28 nm
Stratix(®) V FPGAs and selected the high-end product family for use in
the company's 400G high-capacity OTN system. By using the industry's
first high-end 28 nm production FPGAs, Huawei enabled the evolution of
communications infrastructure such as 400G systems and other
high-performance systems in a variety of markets throughout the world.
-- Altera also received the 2012 Global Excellent Partnership Award from
ZTE Corporation, a leading provider of telecommunications equipment and
network solutions. The award recognizes Altera for overall performance
in delivering best-in-class products and services to ZTE during the past
year. According to ZTE, innovative programmable solutions and technical
support from Altera played a critical role in supporting product
development for the company's existing and next-generation communication
products. ZTE presents its Global Excellent Partnership Award each year
to suppliers meeting rigorous performance criteria. Winners are chosen
based on partner satisfaction surveys among company staff, including
development and material engineers and purchasing employees. Suppliers
are evaluated on cost efficiencies, on-time delivery, quality standards
and service records. Altera scored the highest marks in all categories.
-- Altera is now shipping the first of its 28 nm SoC devices, which combine
a dual-core ARM® Cortex(TM)-A9 processor system with FPGA logic on a
single device. The initial devices to ship are the low-power, low-cost
Cyclone(®) V SoCs. Altera SoCs include several distinctive features
that enable developers in the wireless communications, industrial, video
surveillance, automotive and medical equipment markets to create custom
SoC variants optimized for system power, board space, performance and
cost requirements. In addition, Altera is the only FPGA vendor today
shipping SoCs that offer 32-bit error correction code (ECC) support
which helps ensure data integrity throughout the embedded system. ECC
support is a requirement for customers who must have high-performance
and reliable systems. With silicon now available, customers who used
Altera's SoC Virtual Target to develop their application software can
now quickly port their application software into the SoC, saving months
of development time. Further strengthening the SoC device tools
ecosystem support, Altera and ARM have jointly developed the ARM
Development Studio 5(TM) Altera Edition (DS-5(TM)) toolkit with
FPGA-adaptive debugging, which exclusively supports Altera SoC devices.
The DS-5 toolkit is designed to remove the debugging barrier between the
integrated dual-core CPU subsystem and the FPGA fabric in Altera SoC
devices, providing embedded software developers an unprecedented level
of full-chip visibility and control.
-- Altera has developed the FPGA industry's first Software Development Kit
(SDK) for OpenCL(TM) (Open Computing Language) which combines the
massively parallel architecture of an FPGA with the OpenCL parallel
programming model. OpenCL is an open, royalty-free standard for
cross-platform, parallel programming of hardware accelerators, including
CPUs, GPGPUs and FPGAs. The semiconductor industry's approach for
boosting system performance has evolved from increasing frequency in
single-core CPUs, to using multi-core CPUs, to using parallel processor
arrays. Today, system designers are turning to FPGAs, which are
fine-grained, massively parallel digital logic arrays architected to
execute computations in parallel to create higher performance levels at
a fraction of the power compared to other hardware alternatives. By
allowing system developers and programmers familiar with C to quickly
and easily develop high-performance, power-efficient FPGA-based
applications in a high-level language, Altera's SDK for OpenCL enables
customers to easily adopt FPGAs and leverage the performance and power
benefits the devices provide. This unified, high-level design flow for
hardware and software development automates the time-consuming tasks
required in typical hardware-design language flows, and the resulting
FPGA-based solution can deliver more than 5X performance/watt compared
to alternative hardware implementations.
SELECTED FOURTH QUARTER REVENUE AND RELATED RESULTS
Key New Product Devices Sequential
Comparisons
----------------------- -----------
Stratix V (9)%
Arria V 152%
Stratix IV 19%
Arria II (6)%
Cyclone IV 21%
HardCopy IV (15)%
Vertical
Markets Sequential Comparisons Comments
-------- ---------------------- --------
Telecom
&
Wireless (12)% Both Telecom and Wireless down
Industrial
Automation, (9)% Broadly down
Military
&
Automotive
Networking, Networking down and Computer
Computer and Storage up
&
Storage (12)%
Other (10)% -
($ in
thousands) December 31, 2012 September 30, 2012
Key
Ratios &
Information
------------
Current
Ratio 7:1 6:1
Liabilities/
Equity 1:3 1:2
Quarterly
Operating
Cash
Flows $126,709 $285,203
TTM
Return
on
Equity 18% 19%
Quarterly
Depreciation
Expense $9,170 $9,677
Quarterly
Capital
Expenditures $7,201 $17,749
Inventory
MSOH (1):
Altera 3.4 3.1
Inventory
MSOH (1):
Distribution 0.6 0.6
TTM Cash
Conversion
Cycle
(Days) 117 140
Turns 40% 37%
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 Years Ended
------------------ --------------------- -----------
December September December Sequential Year- December December Annual
31, 2012 28, 2012 31, 2011 Change 31, 2012 31, 2011 Growth
Over-Year
Change
------
Geography
---------
Americas 19% 19% 21% (8)% (12)% 18% 19% (18)%
Asia Pacific 39% 43% 40% (21)% (7)% 43% 41% (9)%
EMEA 28% 25% 22% (2)% 20% 25% 25% (15)%
Japan 14% 13% 17% (4)% (19)% 14% 15% (18)%
--- --- ---
Net Sales 100% 100% 100% (11)% (4)% 100% 100% (14)%
=== === === === ===
Product Category
----------------
New 39% 31% 27% 11% 39% 32% 22% 22%
Mainstream 28% 32% 33% (20)% (18)% 30% 34% (22)%
Mature and Other 33% 37% 40% (22)% (21)% 38% 44% (26)%
--- --- ---
Net Sales 100% 100% 100% (11)% (4)% 100% 100% (14)%
=== === === === ===
Vertical Market
---------------
Telecom & Wireless 44% 45% 43% (12)% 0% 44% 43% (12)%
Industrial Automation,
Military & Automotive 21% 20% 24% (9)% (17)% 21% 23% (22)%
Networking, Computer & Storage 17% 17% 16% (12)% 0% 17% 17% (11)%
Other 18% 18% 17% (10)% 1% 18% 17% (10)%
--- --- ---
Net Sales 100% 100% 100% (11)% (4)% 100% 100% (14)%
=== === === === ===
FPGAs and CPLDs
---------------
FPGA 84% 82% 82% (9)% (2)% 84% 81% (11)%
CPLD 9% 9% 9% (12)% (12)% 9% 10% (22)%
Other Products 7% 9% 9% (29)% (19)% 7% 9% (27)%
--- --- ---
Net Sales 100% 100% 100% (11)% (4)% 100% 100% (14)%
=== === === === ===
Product Category Description
-- New Products include the Stratix(®) V, Stratix IV, Arria(®) V, Arria
II, Cyclone(® )V, Cyclone IV, MAX(®) V and HardCopy(®) IV devices.
-- 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, Classic(TM), 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 First Quarter 2013
Sales and Income Statement
--------------------------
Sequential Sales Growth Down 4% to 8%
Gross Margin 69% to 70%
Research and Development $99 to 101 million
SG&A $77 to 78 million
Tax Rate 4% to 5%
Diluted Share Count Approximately 323 million
Turns Mid-40's
Inventory MSOH Approximately 4.0
Vertical Market
---------------
Telecom & Wireless Wireless down
Industrial Automation,
Military & Automotive Up slightly
Networking, Computer & Storage Down slightly
Other Up slightly
Fourth 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 our competitive position at 40 nm, our expectation of stronger sales at 40 nm in 2013, our expectation of expansion in 28 nm FPGA opportunities, and our competitive position at 28 nm, as well as 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 from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, customer inventory levels, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including Cyclone(®) V, Cyclone( )IV, Arria(®) V, Arria( )II, Stratix(®) V,( )Stratix IV FPGAs, MAX(®) V CPLDs and HardCopy(® )IV device families, 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 system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more about Altera's FPGA, CPLD and ASIC devices at www.altera.com. Follow Altera via Facebook, RSS and Twitter.
ALTERA, ARRIA, CYCLONE, HARDCOPY, 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 Years Ended
------------------ -----------
(In thousands, except per share amounts) December 31, 2012 September 28, 2012 December 31, 2011 December 31, December 31,
2012 2011
--- ---- ----
Net sales $439,440 $495,010 $457,804 $1,783,035 $2,064,475
Cost of sales 133,367 152,007 136,764 541,523 610,329
------- ------- ------- ------- -------
Gross margin 306,073 343,003 321,040 1,241,512 1,454,146
Operating expense
Research and development expense 94,162 91,606 90,295 360,421 325,733
Selling, general, and administrative expense 74,030 74,243 70,667 289,854 279,217
------ ------ ------ ------- -------
Total operating expense 168,192 165,849 160,962 650,275 604,950
------- ------- ------- ------- -------
Operating margin (1) 137,881 177,154 160,078 591,237 849,196
Compensation expense (benefit) -deferred compensation
plan 358 3,274 2,962 7,055 (1,964)
(Gain) loss on deferred compensation plan securities (358) (3,274) (2,962) (7,055) 1,964
Interest income and other (2,390) (2,775) (1,039) (8,388) (3,544)
(Gain)/loss reclassified from other comprehensive income (205) 108 18 (268) 18
Interest expense 2,589 2,333 1,013 7,976 3,730
----- ----- ----- ----- -----
Income before income taxes 137,887 177,488 160,086 591,917 848,992
Income tax expense 17,082 19,999 13,475 35,110 78,281
------ ------ ------ ------ ------
Net income $120,805 $157,489 $146,611 $556,807 $770,711
========
Other comprehensive (loss) income:
Unrealized (loss)/gain on investments:
Unrealized holding (loss)/gain on investments arising
during period, net of tax of ($11), $43, $8, $114 and
($17) (889) 3,620 41 5,839 (149)
Less: Reclassification adjustments for (gain)/loss on
investments included in net income, net of tax of $24,
$1, ($2), $25 and ($2) (44) (41) 16 (114) 16
(933) 3,579 57 5,725 (133)
Unrealized (loss)/gain on derivatives:
Unrealized gain/(loss) on derivatives arising during
period, net of tax of $9, ($6) and $45 17 (10) - 84 -
Less: Reclassification adjustments for (gain)/loss on
derivatives included in net income, net of tax of $48,
($53) and $45 (89) 97 - (84) -
(72) 87 - - -
Other comprehensive (loss) income: (1,005) 3,666 57 5,725 (133)
Comprehensive income $119,800 $161,155 $146,668 $562,532 $770,578
======== ======== ======== ======== ========
Net income per share:
Basic $0.38 $0.49 $0.46 $1.74 $2.39
===== ===== ===== ===== =====
Diluted $0.37 $0.49 $0.45 $1.72 $2.35
===== ===== ===== ===== =====
Shares used in computing per share amounts:
Basic 319,765 319,870 321,553 320,830 321,892
======= ======= ======= ======= =======
Diluted 322,209 323,560 325,653 324,497 327,606
======= ======= ======= ======= =======
Cash dividends per common share $0.10 $0.10 $0.08 $0.36 $0.28
===== ===== ===== ===== =====
Tax rate 12.4% 11.3% 8.4% 5.9% 9.2%
% of Net sales:
Gross margin 69.7% 69.3% 70.1% 69.6% 70.4%
Research and development 21.4% 18.5% 19.7% 20.2% 15.8%
Selling, general, and administrative 16.8% 15.0% 15.4% 16.3% 13.5%
Operating margin(1) 31.4% 35.8% 35.0% 33.2% 41.1%
Net income 27.5% 31.8% 32.0% 31.2% 37.3%
Notes:
(1)We define operating margin as gross margin less research and development and selling, general and administrative expenses, 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 gains and losses 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 Years Ended
------------------ -----------
(In thousands) December 31, 2012 September 30, 2012 December 31, 2011 December 31, December 31,
2012 2011
---- ----
Operating margin (non-GAAP) $137,881 $177,154 $160,078 $591,237 $849,196
Compensation expense (benefit) -deferred compensation
plan 358 3,274 2,962 7,055 (1,964)
Income from operations (GAAP) $137,523 $173,880 $157,116 $584,182 $851,160
======== ======== ======== ======== ========
ALTERA CORPORATION
------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Unaudited)
----------
(In thousands, except par value amount) December 31, December 31,
2012 2011
--- ---- ----
Assets
Current assets:
Cash and cash equivalents $2,876,627 $3,371,933
Short-term investments 140,958 65,222
------- ------
Total cash, cash equivalents, and short-
term investments 3,017,585 3,437,155
Accounts receivable, net 323,708 232,273
Inventories 152,721 122,279
Deferred income taxes - current 59,049 58,415
Deferred compensation plan -marketable
securities 60,321 54,041
Deferred compensation plan -restricted
cash equivalents 17,116 17,938
Other current assets 49,852 52,710
------ ------
Total current assets 3,680,352 3,974,811
Property and equipment, net 206,148 171,721
Long-term investments 704,758 74,033
Deferred income taxes - non-current 17,082 26,629
Other assets, net 49,488 35,074
------ ------
Total assets $4,657,828 $4,282,268
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $50,036 $52,154
Accrued liabilities 29,005 34,029
Accrued compensation and related
liabilities 40,606 78,181
Deferred compensation plan obligations 77,437 71,979
Deferred income and allowances on sales
to distributors 345,993 279,876
Credit facility - 500,000
--- -------
Total current liabilities 543,077 1,016,219
Income taxes payable - non-current 272,000 263,423
Long-term debt 500,000 -
Other non-current liabilities 9,304 8,730
----- -----
Total liabilities 1,324,381 1,288,372
--------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock: $.001 par value; 1,000,000
shares authorized; outstanding -319,564
at December 31, 2012 and 322,054 shares
at December 31, 2011 320 322
Capital in excess of par value 1,122,555 1,050,752
Accumulated other comprehensive income
(loss) 5,592 (133)
Retained earnings 2,204,980 1,942,955
--------- ---------
Total stockholders' equity 3,333,447 2,993,896
--------- ---------
Total liabilities and stockholders'
equity $4,657,828 $4,282,268
========== ==========
ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
YEARS ENDED
-----------
(In thousands) December 31, December 31, December 31,
2012 2011 2010
--- ---- ---- ----
Cash Flows from Operating
Activities:
Net income $556,807 $770,711 $782,884
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 36,862 31,927 27,535
Stock-based compensation 93,586 82,750 62,118
Deferred income tax expense 8,824 15,657 34,256
Tax effect of employee stock
plans 9,811 16,162 27,444
Excess tax benefit from employee
stock plans (16,278) (17,307) (21,866)
Changes in assets and
liabilities, net of the effects
of acquisition:
Accounts receivable, net (91,435) 131,341 (145,330)
Inventories (30,442) 24,245 (76,819)
Other assets (3,050) 54,661 (52,805)
Accounts payable and other
liabilities (50,566) (32,534) 59,200
Deferred income and allowances on
sales to distributors 66,117 (148,836) 146,826
Income taxes payable 8,576 31,116 15,746
Deferred compensation plan
obligations (1,598) (293) (2,494)
------ ---- ------
Net cash provided by operating
activities 587,214 959,600 856,695
------- ------- -------
Cash Flows from Investing
Activities:
Purchases of property and
equipment (60,913) (31,812) (12,442)
Proceeds from sales of deferred
compensation plan securities,
net 1,598 293 2,494
Purchases of available-for-sale
securities (921,430) (164,408) -
Proceeds from sale and maturity
of available-for-sale
securities 220,784 25,003 -
Acquisition related payments, net
of cash acquired - - (8,004)
Purchases of intangible assets (2,280) - (5,000)
Purchase of other investments (4,935) - -
------ --- ---
Net cash used in investing
activities (767,176) (170,924) (22,952)
-------- -------- -------
Cash Flows from Financing
Activities:
Proceeds from issuance of common
stock through various stock
plans 49,665 119,989 453,719
Shares withheld for employee
taxes (31,472) (32,152) (20,164)
Payment of dividends to
stockholders (115,514) (90,060) (67,774)
Proceeds from issuance of long-
term debt 500,000 - -
Repayment of credit facility (500,000) - -
Long-term debt and credit
facility issuance costs (5,244) - -
Repurchases of common stock (229,057) (197,023) -
Excess tax benefit from employee
stock plans 16,278 17,307 21,866
Principal payments on capital
lease obligation - - (2,866)
--- --- ------
Net cash (used in) provided by
financing activities (315,344) (181,939) 384,781
-------- -------- -------
Net (decrease) increase in cash
and cash equivalents (495,306) 606,737 1,218,524
Cash and cash equivalents at
beginning of period 3,371,933 2,765,196 1,546,672
--------- --------- ---------
Cash and cash equivalents at end
of period $2,876,627 $3,371,933 $2,765,196
========== ========== ==========
Supplemental cash flow
information:
Income taxes paid, net $9,797 $9,856 $29,887
Interest paid $6,898 $3,704 $3,395
SOURCE Altera Corporation
