|
EDITOR CONTACT:
Scott Wylie, Vice President - Investor Relations
Altera Corporation
San Jose, CA
(408) 544-6996
RELEASE DATE: October 16, 2000
Altera Reports Record Third Quarter 2000 Results
Sales Increase 16% Sequentially & 84% Annually
San Jose, Calif., October 16, 2000 - Altera Corporation (Nasdaq: ALTR) today reported record third quarter sales of $395.4 million, up 16% from the previous quarter and up 84% over the same period last year. Third quarter sales growth of 16% was achieved through gains of 18% in North America, 12% in Europe, 11% in Japan, and 31% in Asia/Pacific. Sales of 2.5-volt devices and 3.3-volt devices were up 57% and 12%, respectively, from the previous quarter and collectively represent 51% of third quarter sales.
Third quarter net income was a record $118.0 million, or $0.28 per diluted share. Net income increased 15% over the previous quarter's income, excluding the effect of the second quarter's acquisition-related charges. Net income increased 112% compared to the same period in the prior year. Diluted earnings per share of $0.28 increased $0.03 from the $0.25 reported in the prior quarter, excluding the one-time charges in the second quarter. Third quarter results include amortization of deferred compensation expenses of $3.2 million related to last quarter's acquisitions and this quarter's Northwest Logic acquisition.
Rodney Smith, President and CEO, stated, "Following an extraordinary June quarter, the strong 16% sequential growth we posted in this typically seasonally slow period reflects the very solid business conditions we see in our end markets. Growth continues to be led by customers in the communications market, where the benefits of Altera devices that deliver greater design flexibility and faster time-to-market are particularly appealing. Our new products remain solid growth drivers. Sales of the leading edge 1.8-volt APEX™ 20KE devices, with unique built-in True-LVDS™ capability, more than doubled from the prior quarter. Additionally, market reception to our Excalibur™ products exceeded our expectations and initial customer designs have begun. With a strong incoming order rate, we remain optimistic about Altera's growth prospects for the remainder of this year and 2001."
Altera continued to advance its leadership in system-on-a-programmable-chip solutions.
- Altera unveiled additional details of its ARM® and MIPS-based™ Excalibur embedded processor solutions, the next additions to the Excalibur product range. The Nios™ family of soft
core embedded processors, the first Excalibur offering, is now shipping to
Altera customers. The unique RISC-based Excalibur embedded processor approach
links an embedded processor core with a high-performance PLD core providing
the benefits of single-chip integration, high performance and
reprogrammability. Altera expects that the ARM and MIPS-based Excalibur
devices will begin shipping in the first quarter of 2001. The company will
ship the associated design tools later this quarter. These tools combine
hardware and software design methodologies in a highly integrated environment
allowing customers to significantly reduce current design cycles. With
industry-leading processors that run at 200 MHz, these new Excalibur solutions
represent a powerful combination of time-to-market, flexibility, and
integration when compared to ASICs, ASSPs, or stand-alone embedded processors.
- In the third quarter, the company reached several key milestones related to its MAX® 7000 products. The MAX EPM7128
devices, which include the original EPM7128 device, introduced in 1991, and
the subsequent EPM7128A, EPM7128S, and EPM7128B devices--have now exceeded
more than 50 million units sold. The 10 millionth MAX 7000A device also
shipped during the quarter. One of the newest MAX 7000 generations, the
MAX 7000A architecture is the fastest growing product-term architecture
ever. The MAX 7000A family is the 3.3-volt industry leader and has been
popular in DSL, VOIP, 3G wireless, optical switches, high-speed routers, and
mass storage devices. Altera continues to invest in new technology for the
product-term market. The MAX 7000B family, the industry's first 2.5-volt
product-term devices and the only 2.5-volt ISP-based product-term devices
available, began shipping in the second quarter and is being well received in
the market. The next generation 1.8-volt MAX 7000C family is targeted for
introduction next year.
- The latest release of Altera's Quartus™ software, version 2000.09, is now available for use by Altera customers. This development software features the new PowerFit™ fitter technology that delivers, on average, 30% better design performance (fMAX), faster compile
times, and improved fitting. The Quartus software, which supports the
company's APEX device family, allows designers to process multi-million gate
designs and enables system-on-a-programmable-chip design methodology.
- Privately-held Northwest Logic was acquired in September. Northwest Logic is a provider of system design services and intellectual property specializing in telecommunications, data communications and embedded processor system design. This acquisition adds customer design services to Altera's comprehensive solution of devices, development software, and IP cores for system-on-a-programmable chip applications. Operating from its Oregon base, Northwest Logic will focus on Altera's major accounts and will complement the Altera Consultants Alliance Program (ACAP®), a network of
62 design services companies that has been serving the company's broad base of
customers.
Conference Call & Updates:
A conference call will be held at 2:00 this afternoon to discuss the quarter's results. The live call and a subsequent replay will be available on the company's web site, www.altera.com.
Altera fourth quarter business updates will be made available after the market close on October 31 and November 28 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 at 1-408-544-7707.
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", words that imply a future state such as "targeted" or "expects", or phrases that reference the future such as "growth prospects". 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. 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 Company®, was founded in 1983 and is a leading supplier of programmable logic devices (PLD's). Altera's CMOS-based PLD's 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 |
NINE MONTHS
ENDED |
|
|
Sept. 30
2000 |
Sept. 30
1999 |
June 30
2000 |
Sept. 30
2000 |
Sept. 30
1999 |
|
Net sales |
$ 395,395 |
$ 215,121 |
$ 340,686 |
$1,008,862 |
$ 599,303 |
|
Costs & expenses: |
|
|
|
|
|
|
Cost of sales |
132,694 |
76,707 |
114,685 |
341,969 |
218,129 |
|
Research and development |
48,475 |
23,213 |
38,896 |
121,813 |
60,098 |
|
Selling, general and administrative |
57,293 |
36,784 |
48,819 |
149,490 |
102,845 |
|
Acquired in-process research and
development |
- |
- |
6,305 |
6,305 |
- |
|
Total costs and expenses |
238,462 |
136,704 |
208,705 |
619,577 |
381,072 |
|
|
|
|
|
|
|
|
Income from operations |
156,933 |
78,417 |
131,981 |
389,285 |
218,231 |
|
Interest & other income, net |
12,912 |
7,987 |
10,398 |
33,858 |
18,610 |
|
Income before income taxes
and
equity investment |
169,845 |
86,404 |
142,379 |
423,143 |
236,841 |
|
Provision for income taxes |
(52,651) |
(28,081) |
(44,138) |
(131,175) |
(76,973) |
|
Equity in income (loss) of WaferTech |
795 |
(2,751) |
21 |
(563) |
(6,243) |
|
|
|
|
|
|
|
|
Net income |
$ 117,989
======= |
$ 55,572
======= |
$ 98,262
====== |
$ 291,405
======= |
$ 153,625
======= |
|
Income per share:
Basic |
$ 0.30
=======
|
$ 0.14
======= |
$ 0.25
====== |
$ 0.73
======= |
$ 0.39
======= |
|
Diluted |
$ 0.28
======= |
$ 0.13
======= |
$ 0.23
====== |
$ 0.70
======= |
$ 0.37
======= |
|
Shares used in computation:
Basic |
398,540
=======
|
397,760
=======
|
397,636
======
|
398,267
=======
|
395,312
=======
|
|
Diluted |
419,396
======= |
416,351
======= |
418,596
====== |
419,232
======= |
413,991
======= |
| |
|
Supplemental
information: |
| |
|
Income excluding acquired in-process
research and development, net of tax |
$ 117,989
=======
|
$ 55,572
=======
|
$ 102,613
=======
|
$ 295,756
=======
|
$ 153,625
=======
|
|
Diluted income per share |
$ 0.28
======= |
$ 0.13
======= |
$ 0.25
======= |
$ 0.71
======= |
$ 0.37
======= |
| |
|
Tax rate |
31.0% |
32.5% |
31.0% |
31.0% |
32.5% |
|
% of Sales: |
|
|
|
|
|
|
Gross margin |
66.4% |
64.3% |
66.3% |
66.1% |
63.6% |
|
Total research and development |
12.2% |
10.8% |
13.3% |
12.7% |
10.0% |
|
Selling, general and
administrative |
14.5% |
17.0% |
14.3% |
14.8% |
17.2% |
|
Income from operations |
39.7% |
36.5% |
38.7% |
38.6% |
36.4% |
|
Net income |
29.8% |
25.8% |
28.8% |
28.9% |
25.6% |
|
Income excluding acquired in-process
research and development, net of
tax |
29.8%
|
25.8%
|
30.1%
|
29.3%
|
25.6%
|
ALTERA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| |
Sept.
30
2000 |
June
30
2000 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and short-term investments |
$ 1,022,805 |
$ 883,546 |
|
Accounts receivable, net |
170,729 |
163,137 |
|
Inventories |
177,339 |
117,874 |
|
Other assets |
151,020 |
122,187 |
|
Total current assets |
1,521,893 |
1,286,744 |
|
Property and equipment, net |
197,916 |
176,492 |
|
Investments & intangibles |
202,207 |
198,901 |
| |
$ 1,922,016
======== |
$ 1,662,137
======== |
|
|
|
|
|
Liabilities & Stockholders' Equity |
|
|
|
|
|
|
|
Accounts payable and current liabilities |
$ 170,014 |
$ 126,898 |
|
Deferred income on sales to distributors |
366,202 |
328,075 |
|
Total current liabilities |
536,216 |
454,973 |
|
Stockholders' equity |
1,385,800 |
1,207,164 |
| |
$ 1,922,016
======== |
$ 1,662,137
======== |
|
|
|
|
|
Key Ratios & Information |
|
|
| |
|
|
|
Current Assets/Current Liabilities |
3:1 |
3:1 |
|
Liabilities/Equity |
1:3 |
1:3 |
|
Annualized Quarterly Return on Equity |
36% |
32% |
|
Quarterly Depreciation Expense, net |
9,681 |
8,326 |
|
Quarterly Capital Expenditures |
31,105 |
21,443 |
|
Annualized Sales per Employee |
848 |
810 |
Revenue by Market Segment
| |
|
Q1'00 |
Q2'00 |
Q3'00 |
|
|
| |
Communications |
65% |
67% |
70% |
|
· Serves over 13,000 customers |
| |
EDP |
18% |
18% |
16% |
|
· Two distributors in North America - |
| |
Industrial |
11% |
10% |
9% |
|
85 branch locations |
| |
Consumer |
3% |
2% |
2% |
|
·
42% of sales in export markets |
| |
Other |
3% |
3% |
3% |
|
·
Distributors in all European countries |
| |
|
100%
===== |
100%
===== |
100%
===== |
|
and major Asian markets |
| Revenue: Product Voltage |
|
Channel |
| |
|
Q1'00 |
Q2'00 |
Q3'00 |
|
Q1'00 |
Q2'00 |
Q3'00 |
| |
1.8V |
1% |
2% |
5% |
|
North America |
57% |
57% |
58% |
| |
2.5V |
11% |
13% |
17% |
|
Europe |
23% |
22% |
21% |
| |
3.3V |
30% |
35% |
34% |
|
Japan |
15% |
15% |
14% |
| |
5.0V |
52% |
45% |
39% |
|
Asia/Pacific |
5% |
6% |
7% |
| |
Other |
6% |
5% |
5% |
|
International |
43% |
43% |
42% |
| |
Total |
100%
===== |
100%
===== |
100%
===== |
|
Total |
100%
===== |
100%
===== |
100%
===== |
Financial Highlights: (In thousands)
|
|
1996 |
1997 |
1998 |
1999 |
Q3 2000 |
|
Net sales |
$497,306 |
$631,114 |
$654,342 |
$836,623 |
$395,395 |
|
Income before effect of
accounting change |
109,135
|
151,517
|
154,387
|
223,994
|
117,989
|
|
Cash and investments |
280,850 |
377,569 |
579,106 |
845,666 |
1,022,805 |
|
Total assets |
778,212 |
952,518 |
1,093,331 |
1,439,599 |
1,922,016 |
|
Stockholders' equity |
370,245 |
536,687 |
881,721 |
1,118,073 |
1,385,800 |
|
Annualized ROE |
35% |
33% |
22% |
22% |
36% |
Ownership:
| Management/Directors/Employees: | 5% | | Corporate Office: | San Jose, CA |
| Institutional Holdings: | 85% | | | |
| Retail/Other: | 10% | | Employees: | 1,799 |
Research Coverage by 15 Most Active Market Makers
| Morgan Stanley | Mark Edelstone | (415) 576-2381 |
| Lehman Brothers | Dan Niles | (415) 274-5252 |
| Salomon Smith Barney | Clark Westmont | (415) 951-1886 |
| Bank of America Securities | Rick Whittington | (212) 583-8426 |
| Goldman Sachs | Joe Moore | (212) 902-6834 |
| Credit Suisse First Boston | Tim Mahon | (415) 836-7774 |
| Merrill Lynch | Christopher Danely | (415) 676-3518 |
| Deutsch Banc Alex Brown | Erika Klauer | (212) 469-8484 |
| Bear Stearns | Charles Boucher | (415) 772-5252 |
| JP Morgan | Terry Ragsdale | (212) 648-9047 |
| Robertson Stephens | Eric Rothdeutsch | (415) 693-3241 |
| Prudential | Hans Mosesman | (650) 320-1631 |
| SG Cowen | Rick Billy | (212) 495-4335 |
| Thomas Weisel | Eric Ross | (415) 364-2773 |
| Soundview | Scott Randall | (203) 462-7246 |
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