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EDITOR CONTACT:
Scott Wylie, Vice President - Investor Relations
Altera Corporation
San Jose, CA
(408-544-6996)
RELEASE DATE: July 13, 2000
Altera Reports Record Second Quarter 2000 Results
Sales Increase 25% Sequentially &
72% Annually
San Jose, Calif., July 13, 2000 - Altera Corporation (Nasdaq: ALTR) today reported record second quarter sales of $340.7 million, up 25% from the previous quarter and up 72% over the same period last year. Second quarter sales growth of 25% was achieved through gains of 27% in North America, 20% in Europe, 28% in Asia/Pacific, and 25% in Japan. Sales of 2.5-volt devices and 3.3-volt devices were up 42% and 44%, respectively, from the previous quarter and collectively represent 48% of second quarter sales.
Second quarter net income of $98.3 million, or $0.47 per diluted share, includes a $6.3 million in-process research and development charge related to the previously announced acquisitions of DesignPRO Inc. and Right Track CAD Corporation. Excluding this charge, income was a record $102.6 million or 30.1% of sales, up 37% over the previous quarter's income and up 101% compared to the same period in the prior year. Income, excluding the one-time charge, was $0.49 per diluted share, up $0.13 from the $0.36 per share in the first quarter of 2000 and up $0.24 from the $0.25 reported in the second quarter of 1999. Amortization of intangibles related to the DesignPRO and Right Track acquisitions increased the company's research and development costs by approximately $2.1 million in the quarter. Altera repurchased 2.4 million shares of its common stock during the quarter at a cost of $187.4 million.
Rodney Smith, President and CEO, stated, "This quarter's record sales level and very robust growth was driven by continued strength in the communications market and the success of our new products across a wide range of applications. We kept the pace of new product introductions up during the quarter as well. We announced ExcaliburTM embedded processor solutions, a major new product initiative that integrates, for the first time, industry-leading processor cores into a programmable device-giving designers the ability to create a true system on a programmable chip. At the same time, we continued the rollout of the APEXTM product family. Sales of the newly introduced 1.8-volt APEX 20KE devices quadrupled from first quarter levels with orders on our books that support a continued strong step-up in sales in the coming quarter. The APEX EP20K1500E, the world's largest programmable device, is now shipping. This 1.5 million gate device (2.5 million system gates), with 51,840 logic elements, enables Altera customers to bring the time-to-market advantages of programmability to a new level of designs. With these and other new products providing a strong growth platform for the company, Altera is well positioned for continued market leadership."
Altera continued to advance its leadership in system-on-a-programmable-chip solutions during the quarter.
- Using Excalibur embedded processor solutions, customers can now design integrated systems using a single programmable logic device that combines logic and memory with embedded processors. Altera's pioneering approach uses licensing agreements with MIPS Technologies and ARM Limited, as well as Altera's internally developed NiosTM embedded processor to offer system designers an unprecedented level of design flexibility and integration. The company is in discussions with Motorola Inc. to similarly embed Motorola's PowerPC processor core technology into Altera devices. These offerings allow Altera to address the ASIC, ASSP, and stand-alone embedded processor markets at a time when designers are searching for solutions that improve time-to-market while providing greater design flexibility.
- The rollout of the 1.8-volt APEX 20KE product family progressed further during the second quarter. The APEX 20KE family features True-LVDSTM technology, on-chip content addressable memory (CAM) and phased-locked loops (PLLs), enabling designers to create system-on-a-programmable-chip silicon for leading-edge communications applications. Four new devices began shipping this quarter including the APEX EP20K1500E, the world's largest programmable device. Nine members of this product family are now available.
- Altera completed the rollout of the MAX 7000B family--the industry's most advanced product-term device family. The five-member MAX 7000B family is the industry's first 0.22-micron, 2.5-volt product-term offering and is ideal for communications applications that require high performance, low power, advanced I/O standards and fast in-system programmability.
- Altera acquired DesignPRO Inc. and Right Track CAD Corporation, two privately held Canadian companies. Ottawa-based DesignPRO Inc. is a provider of intellectual property cores and specializes in optical internetworking technologies. DesignPro will now operate as Altera's Ottawa Technology Center and will focus its development efforts on the communications market. Similarly, Right Track CAD Corporation, a Toronto company and a leading independent developer of architectural and computer aided design tools for advanced programmable logic devices, has become the Toronto Technology Center. This center will collaborate with other Altera R&D centers to accelerate the development of future software and device architectures.
Updates:
Altera company updates will be made available on August 2 and September 5 and will be posted on the company's web site. For those who do not have access to the Internet, Altera's investor relations department may be contacted directly.
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 preceded by words such as "will" or words that imply a future state such as "well positioned" or "continued". Investors are cautioned that all forward-looking statements in the release involve risks and uncertainty, including without limitation the risk that future performance is dependent on product development schedules, market acceptance and market demand, the design performance of software tools, as well as the company's development technology and manufacturing capabilities. Please refer to the company's Securities and Exchange Commission filings, copies of which are available from the company without charge.
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.
Altera Corporation, The Programmable Solutions CompanySM, was founded in 1983 and is a leading supplier of programmable logic devices (PLDs). Altera's CMOS-based PLDs are user-programmable semiconductor chips that enhance flexibility and reduce time-to-market for companies in the communications, computer peripheral, and industrial markets. By using high performance devices, software development tools, and sophisticated intellectual property cores, system-on-a-programmable-chip (SOPC) solutions can be created with embedded processors, memory, and other complex logic together on a single PLD. Altera common stock is traded on the Nasdaq Stock Market under the symbol ALTR. More information on Altera is available on the internet at http://www.altera.com.
ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| |
THREE MONTHS ENDED |
SIX MONTHS ENDED
|
|
|
Jun. 30
2000
|
Jun. 30
1999
|
Mar. 31
2000
|
Jun. 30
2000
|
Jun. 30
1999
|
|
Net sales |
$340,686 |
$197,783 |
$272,781 |
$613,467 |
$384,182 |
|
|
|
|
|
|
|
|
Costs & expenses: |
|
|
|
|
|
|
Cost of sales |
114,685 |
72,268 |
94,590 |
209,275 |
141,422 |
|
Research and development |
38,896 |
19,862 |
34,442 |
73,338 |
36,885 |
|
Selling, general and
administrative |
48,819 |
33,741 |
43,378 |
92,197 |
66,061 |
|
Acquired in-process research and
development |
6,305
|
- |
- |
6,305 |
- |
|
Total costs and expenses |
208,705 |
125,871 |
172,410 |
381,115 |
244,368 |
|
|
|
|
|
|
|
|
Income from operations |
131,981 |
71,912 |
100,371 |
232,352 |
139,814 |
|
Interest & other income, net |
10,398 |
6,005 |
10,548 |
20,946 |
10,623 |
|
Income before income taxes and equity investment |
142,379 |
77,917 |
110,919 |
253,298 |
150,437 |
|
Provision for income taxes |
44,138 |
25,323 |
34,386 |
78,524 |
48,892 |
|
Equity in income (loss) of
WaferTech |
21 |
(1,516) |
(1,379) |
(1,358) |
(3,492) |
|
|
|
|
|
|
|
|
Net income |
$ 98,262
====== |
$ 51,078
====== |
$ 75,154
====== |
$173,416
====== |
$ 98,053
====== |
|
Income per share:
Basic |
$ 0.49
====== |
$ 0.26
====== |
$ 0.38
====== |
$ 0.87
====== |
$ 0.50
====== |
|
Diluted |
$ 0.47
====== |
$ 0.25
====== |
$ 0.36
====== |
$ 0.83
====== |
$ 0.48
====== |
|
Shares used in computation:
Basic |
198,818
====== |
197,533
====== |
199,269
====== |
199,044
====== |
196,699
====== |
|
Diluted |
209,298
====== |
206,748
====== |
209,776
====== |
209,539
====== |
206,060
====== |
| |
|
Supplemental
information: |
| |
Income excluding acquired in-process
research and development, net of tax |
$102,613
====== |
$ 51,078
====== |
$ 75,154
====== |
$177,767
====== |
$ 98,053
====== |
|
Diluted income per share |
$ 0.49
====== |
$ 0.25
====== |
$ 0.36
====== |
$ 0.85
====== |
$ 0.48
====== |
| |
|
Tax rate |
31.0% |
32.5% |
31.0% |
31.0% |
32.5% |
|
% of Sales: |
|
|
|
|
|
|
Gross margin |
66.3% |
63.5% |
65.3% |
65.9% |
63.2% |
|
Total research and development |
13.3% |
10.0% |
12.6% |
13.0% |
9.6% |
|
Selling, general and
administrative |
14.3% |
17.1% |
15.9% |
15.0% |
17.2% |
|
Income from operations |
38.7% |
36.4% |
36.8% |
37.9% |
36.4% |
|
Net income |
28.8% |
25.8% |
27.6% |
28.3% |
25.5% |
|
Income excluding acquired in-process
research and development, net of tax |
30.1% |
25.8% |
27.6% |
29.0% |
25.5% |
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
|
Jun. 30
2000
|
Mar. 31
2000
|
| Assets |
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and short-term investments |
$ |
883,546 |
$ |
930,701 |
| Accounts receivable, net |
|
163,137 |
|
119,334 |
| Inventories |
|
117,874 |
|
81,597 |
| Other assets |
|
122,187
----------- |
|
118,739
----------- |
| Total current assets |
|
1,286,744 |
|
1,250,371 |
| Property and equipment, net |
|
176,492 |
|
163,375 |
| Investments & intangibles |
|
198,901
----------- |
|
175,903
----------- |
|
$ |
1,662,137
========= |
$ |
1,589,649
========= |
| Liabilities and Stockholders' Equity |
|
|
|
|
| Accounts payable and current liabilities |
$ |
126,898 |
$ |
103,546 |
| Deferred income on sales to distributors |
|
328,075
----------- |
|
259,696
----------- |
| Total current liabilities |
|
454,973 |
|
363,242 |
| Stockholders' equity |
|
1,207,164
----------- |
|
1,226,407
----------- |
|
$ |
1,662,137
========= |
$ |
1,589,649
========= |
| Key Ratios & Information |
|
|
|
|
| Current Assets/Current Liabilities |
|
3:1 |
|
3:1 |
| Liabilities/Equity |
|
1:3 |
|
1:3 |
| Annualized Quarterly Return on Equity |
|
32% |
|
26% |
| Quarterly Depreciation Expense, net |
|
8,326 |
|
7,334 |
| Quarterly Capital Expenditures |
|
21,443 |
|
15,487 |
| Annualized Sales per Employee |
|
810 |
|
753 |
Altera Corporate Profile
Revenue by Market Segment
|
Q4'99 |
Q1'00 |
Q2'00 |
| |
| Communications | 70% | 65% | 67% | | · Serves over 13,000 customers |
| EDP | 14% | 18% | 18% | | · Two distributors in North America - |
| Industrial | 10% | 11% | 10% | | 85 branch locations |
| Consumer | 3% | 3% | 2% | | · 43% of sales in export markets |
| Other | 3% | 3% | 3% | | · Distributors in all European countries |
| | | | | and major Asian markets |
| Revenue: Product Voltage | | Channel |
| |
Q4'99 |
Q1'00 |
Q2'00 |
| |
Q4'99 |
Q1'00 |
Q2'00 |
| 1.8V |
0% |
1% |
2% |
| North America |
56% |
57% |
57% |
| 2.5V |
10% |
11% |
13% |
| Europe |
20% |
23% |
22% |
| 3.3V |
28% |
30% |
35% |
| Japan |
18% |
15% |
15% |
| 5.0V |
56% |
52% |
45% |
| Asia/Pacific |
6% |
5% |
6% |
| Other |
6% |
6% |
5% |
| International |
44% |
43% |
43% |
| Total |
100%
==== |
100%
==== |
100%
==== |
| Total |
100%
==== |
100%
==== |
100%
==== |
Financial Highlights: (In thousands)
|
1996 |
1997 |
1998 |
1999 |
Q2 2000 |
| Net sales | $497,306 | $631,114 | $654,342 | $836,623 | $340,686 |
Income before effect of
accounting change |
109,135 |
151,517 |
154,387 |
223,994 |
98,262 |
| Cash and investments | 280,850 | 377,569 | 579,106 | 845,666 | 883,546 |
| Total assets | 778,212 | 952,518 | 1,093,331 | 1,439,599 | 1,662,137 |
| Stockholders' equity | 370,245 | 536,687 | 881,721 | 1,118,073 | 1,207,164 |
| Annualized ROE | 35% | 33% | 22% | 22% | 32% |
Ownership:
|
Management/Directors/Employees: |
5% |
|
Corporate Office: San Jose, CA |
|
Institutional Holdings: |
85% |
|
|
|
Retail/Other: |
10% |
|
Employees: 1,649 |
Research Coverage by 15 Most Active Market Makers
| Salomon Smith Barney | Clark Westmont | (415) 951-1886 |
| Morgan Stanley | Mark Edelstone | (415) 576-2381 |
| Credit Suisse First Boston | Tim Mahon | (415) 836-7774 |
| Goldman Sachs | Joe Moore | (212) 902-6834 |
| Merrill Lynch | Christopher Danely | (415) 676-3518 |
| J.P. Morgan | Terry Ragsdale | (212) 648-9047 |
| Lehman Brothers | Dan Niles | (415) 274-5252 |
| Bear Stearns | Charles Boucher | (415) 772-3953 |
| Deutsche Banc Alex Brown | Erika Klauer | (212) 469-8484 |
| Prudential | Hans Mosesman | (650) 320-1631 |
| UBS Warburg | Greg Mischou | (415) 352-5667 |
| Soundview Financial Group | Scott Randall | (203) 462-7246 |
| Robertson Stephens | Eric Rothdeutsch | (415) 693-3241 |
| Needham | Tad La Fountain | (212) 705-0317 |
| Chase H&Q | Sudeep Balain | (415) 371-4409 |
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