Altera Corporation Reports Second Quarter Results, Sales Increase 2% Sequentially, Net Income Up 4% Sequentially
San Jose, Calif., July 15, 1998 - Altera Corporation (Nasdaq: ALTR) today reported that second quarter sales of $160.5 million were up 2% from the previous quarter, and down 3% over the same period last year.
Net income for the second quarter was $36.6 million, up 4% from the previous quarter, and down 9% from the second quarter of 1997. Second quarter earnings included a charge of $2.3 million, or $0.02 per share, representing the Company's share in the start-up losses of WaferTech. WaferTech is a joint venture with TSMC and other partners to manufacture wafers in a state-of-the-art facility in Camas, Washington. Second quarter earnings per share, on a diluted basis, were $0.38, up $0.01 from the prior quarter, and down $0.03 from the same period last year. Excluding WaferTech results, diluted earnings per share were $0.40, down $0.01 from the same period last year.
Altera added $30.7 million of cash to its balance sheet during the quarter, after the repurchase of 1,010,000 shares of its common stock for $34.7 million and routine capital expenditures of $6.8 million. On June 15, 1998 the Company's subordinated debt of $230 million was eliminated by conversion to approximately 9 million shares of the Company's common stock. The Company's balance sheet was further strengthened during the quarter by a $20.0 million reduction in inventories.
Rodney Smith, President & CEO stated, "The financial results for the quarter were in line with our expectations. Overall sales growth of 2% was achieved by sequential gains in North America, Japan and Asia/Pacific of 2%, 8% and 21%, respectively. Growth in these regions was offset by a 5% decline in Europe which, coming off strong 10% sequential growth in the first quarter, still represented the second highest quarter for Europe sales in the Company's history."
"New products continued to show strong sales growth, increasing 34% sequentially and 139% over the same quarter a year ago. New products accounted for 44% of our total sales in the quarter and were equivalent to mainstream products in sales. New products' sales performance fully offset declines in mainstream and mature products leading to the sequential gain in the quarter."
Mr. Smith concluded, "During the quarter Altera continued to demonstrate its high-density leadership in programmable logic devices (PLDs) by completing customer shipments of the FLEX®
10K250A, the industry's highest density PLD with 250,000 gates, providing 12,160 logic elements and 20 embedded array blocks with 41 Kbits of RAM. During the quarter Altera announced the formation of the Intellectual Property (IP) Business Unit. This new business unit has comprehensive responsibility for marketing, applications, product planning, and management of the Altera Megafunction Partner Program (AMPPSM) and MegaCore™ development activities. Altera is the leader in providing its customers with PLD IP Solutions with over 15 MegaCores, 85 MegaFunctions, and 22 AMPP Partners."
"During the third quarter we expect to begin shipping the FLEX 10KE family. The FLEX 10KE family is fabricated using a 0.25 micron, five metal layer process and provides on-chip, dual port RAM further extending Altera's leadership position in PLD performance and density. Concurrently, we will also release Version 9.0 of our MAX+PLUS®
II design software. This new software release provides improved compile and design performance for all Altera devices and will support the entire FLEX 10KE family from date of release."
This press release contains "forward looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements are generally written in the future tense and/or are preceded by words such as "expects," "believes," "anticipates," "projects," or "intends". Investors are cautioned that all forward looking statements in this release involve risks and uncertainty, including without limitation the risk that future performance is dependent on product and software development, development of technology and manufacturing capabilities, and third-party wafer suppliers meeting the Company's wafer requirements. 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 announcement 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. More information can be obtained on the world-wide web at http://www.altera.com.
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, EDP, and industrial applications. Altera common stock is traded on The Nasdaq Stock Market using the symbol ALTR.
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