Financial News

Altera Announces Third Quarter Results

SAN JOSE, Calif., Oct. 22, 2015 /PRNewswire/ -- Altera Corporation (NASDAQ: ALTR) today announced third quarter sales of $399.6 million, down 4 percent from the second quarter of 2015 and down 20 percent from the third quarter of 2014. Third quarter net income was $61.5 million, $0.20 per diluted share, compared with net income of $70.3 million, $0.23 per diluted share, in the second quarter of 2015 and $118.0 million, $0.38 per diluted share, in the third quarter of 2014.

Altera(R) 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.

Year-to-date cash flow from operating activities was $392.9 million. Altera's board of directors has declared a quarterly cash dividend of $0.18 per share, to be paid on December 1, 2015 to shareholders of record on November 10, 2015.

"Market conditions globally were quite varied this quarter as some vertical markets produced good growth while others were weak. In spite of these headwinds we saw double-digit new product growth plus continued strength in data center demand," said John Daane, president, chief executive officer, and chairman of the board.

Third Quarter Business Summary

The quarter's sequential sales decline reflects choppy conditions across the company's vertical markets. Telecom and Wireless sales grew as wireless equipment demand rebounded from the prior quarter. Industrial market weakness was the major contributor  to a decline in sales in the  Industrial Automation, Military & Auto vertical market. Networking, Computer & Storage sales grew, led by gains in computer and storage, as data center customers increasingly leverage the performance and low power benefits of Altera FPGAs. Gross margin was 66.5 percent, down from the second quarter, due to unfavorable changes in vertical market mix. Reduced merger-related expenses led to a sequential decline in the quarter's operating expenses. The company's tax rate was 21.4 percent, up from the prior quarter, largely the result of continuing adverse geographic mix and reduced acquisition-related costs in the quarter.

SELECTED THIRD QUARTER RATIOS AND RELATED RESULTS


($ in thousands) 
Key Ratios & Information


September 25, 2015


June 26, 2015

Current Ratio


4:1



5:1


Liabilities/Equity


3:4



3:4


Quarterly Operating Cash Flows


$

167,018



$

89,220


TTM Return on Equity


10

%


12

%

Quarterly Depreciation Expense


$

12,183



$

11,985


Quarterly Capital Expenditures


$

10,190



$

7,696


Inventory MSOH (1): Altera


3.6



4.2


Inventory MSOH (1): Distribution


0.8



0.7


Cash Conversion Cycle (Days)


168



162


Turns


48

%


46

%

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 25, 
2015


June 26,
2015


September 26, 
2014


Sequential
Change


Year-
Over-Year
Change

Geography










Americas

17

%


20

%


16

%


(14)

%


(15)

%

Asia Pacific

43

%


41

%


42

%


(1)

%


(19)

%

EMEA

29

%


27

%


29

%


4

%


(19)

%

Japan

11

%


12

%


13

%


(13)

%


(33)

%

Net Sales

100

%


100

%


100

%


(4)

%


(20)

%

Product Category










New

62

%


53

%


56

%


12

%


(12)

%

Mainstream

16

%


23

%


21

%


(31)

%


(37)

%

Mature and Other

22

%


24

%


23

%


(11)

%


(23)

%

Net Sales

100

%


100

%


100

%


(4)

%


(20)

%

Vertical Market










Telecom & Wireless

35

%


31

%


45

%


11

%


(37)

%

Industrial Automation, Military & Automotive

24

%


27

%


21

%


(14)

%


(6)

%

Networking, Computer & Storage

21

%


18

%


16

%


11

%


1

%

Other

20

%


24

%


18

%


(20)

%


(12)

%

Net Sales

100

%


100

%


100

%


(4)

%


(20)

%

FPGAs and CPLDs










FPGA

84

%


83

%


85

%


(2)

%


(21)

%

CPLD

9

%


11

%


8

%


(20)

%


(5)

%

Other Products

7

%


6

%


7

%


7

%


(22)

%

Net Sales

100

%


100

%


100

%


(4)

%


(20)

%

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™ series, Mercury™, Excalibur™ devices, configuration and other devices, intellectual property cores, and software and other tools.

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 data center application growth potential. 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, changing global 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 FPGA, SoC, CPLD products, and complementary technologies, such as power solutions, 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.

ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)















Three Months Ended


Nine Months Ended

(In thousands, except per share amounts)


September 25, 
2015


June 26, 
2015


September 26, 
2014


September 25, 
2015


September 26, 
2014












Net sales


$

399,567



$

414,162



$

499,606



$

1,249,214



$

1,452,216


Cost of sales


133,667



126,590



166,019



416,520



480,279


Gross margin


265,900



287,572



333,587



832,694



971,937


Operating expense











Research and development expense


100,481



105,345



112,078



309,057



310,856


Selling, general, and administrative expense


74,745



75,011



77,724



220,262



231,205


Amortization of acquisition-related intangible assets


2,491



2,427



2,465



7,382



7,394


Merger expenses


10,421



18,458





28,879




Total operating expense


188,138



201,241



192,267



565,580



549,455


Operating margin (2)


77,762



86,331



141,320



267,114



422,482


Compensation (benefit)/expense — deferred compensation plan


(4,468)



2,732



(487)



(1,709)



4,093


Loss/(gain) on deferred compensation plan securities


4,468



(2,732)



487



1,709



(4,093)


Interest income and other


(9,590)



(8,495)



(4,558)



(24,681)



(18,362)


Gain reclassified from other comprehensive income


(1,644)



(1,463)



(59)



(5,613)



(150)


Interest expense


10,772



10,859



10,774



32,039



32,139


Income before income taxes


78,224



85,430



135,163



265,369



408,855


Income tax expense


16,706



15,091



17,154



38,660



47,328


Net income


61,518



70,339



118,009



226,709



361,527













Other comprehensive income/(loss):











Unrealized gain/(loss) on investments:











Unrealized holding gain/(loss) on investments arising during period, net of tax of $190, ($460), ($6), ($228) and $41


13,058



(24,805)



(4,929)



5,038



22,102


Less: Reclassification adjustments for gain on investments included in net income, net of tax of ($1), $9, $11, $15 and $21


(1,644)



(1,454)



(48)



(5,598)



(129)


Other comprehensive income/(loss)


11,414



(26,259)



(4,977)



(560)



21,973


Comprehensive income


$

72,932



$

44,080



$

113,032



$

226,149



$

383,500













Net income per share:











Basic


$

0.20



$

0.23



$

0.38



$

0.75



$

1.16


Diluted


$

0.20



$

0.23



$

0.38



$

0.74



$

1.15













Shares used in computing per share amounts:











Basic


302,707



301,799



308,215



301,950



311,853


Diluted


305,337



304,604



310,184



304,421



314,130













Dividends per common share


$

0.18



$

0.18



$

0.18



$

0.54



$

0.48













Tax rate


21.4

%


17.7

%


12.7

%


14.6

%


11.6

%

% of Net sales:











Gross margin


66.5

%


69.4

%


66.8

%


66.7

%


66.9

%

Research and development (1)


25.8

%


26.0

%


22.9

%


25.3

%


21.9

%

Selling, general, and administrative


18.7

%


18.1

%


15.6

%


17.6

%


15.9

%

Operating margin(2)


19.5

%


20.8

%


28.3

%


21.4

%


29.1

%

Net income


15.4

%


17.0

%


23.6

%


18.1

%


24.9

%

 

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, amortization of acquisition-related intangible assets, and merger 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 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 25, 
2015


June 26, 
2015


September 26, 
2014


September 25, 
2015


September 26, 
2014

Operating margin (non-GAAP)


$

77,762



$

86,331



$

141,320



$

267,114



$

422,482


Compensation (benefit)/ expense — deferred compensation plan


(4,468)



2,732



(487)



(1,709)



4,093


Income from operations (GAAP)


$

82,230



$

83,599



$

141,807



$

268,823



$

418,389


 


ALTERA CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In thousands, except par value amount)


September 25, 
2015


December 31, 
2014






Assets





Current assets:





Cash and cash equivalents


$

1,934,850



$

2,426,367


Short-term investments


185,762



151,519


Total cash, cash equivalents, and short-term investments


2,120,612



2,577,886


Accounts receivable, net


444,107



377,964


Inventories


159,310



153,387


Deferred income taxes — current


60,210



56,048


Deferred compensation plan — marketable securities


57,781



69,367


Deferred compensation plan — restricted cash equivalents


17,166



14,412


Other current assets


50,718



39,479


Total current assets


2,909,904



3,288,543


Property and equipment, net


208,897



194,840


Long-term investments


2,504,693



1,942,343


Deferred income taxes — non-current


20,725



20,077


Goodwill


81,331



74,341


Acquisition-related intangible assets, net


66,989



72,291


Other assets, net


92,646



81,791


Total assets


$

5,885,185



$

5,674,226







Liabilities and stockholders' equity





Current liabilities:





Accounts payable


$

41,520



$

49,140


Accrued liabilities


47,523



28,384


Accrued compensation and related liabilities


74,113



69,837


Deferred compensation plan obligations


74,947



83,779


Deferred income and allowances on sales to distributors


439,504



344,168


Total current liabilities


677,607



575,308


Income taxes payable — non-current


352,433



313,447


Long-term debt


1,493,729



1,492,759


Other non-current liabilities


8,955



6,886


Total liabilities


2,532,724



2,388,400


Stockholders' equity:





Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 302,857 shares at September 25, 2015 and 302,430 shares at December 31, 2014


303



302


Capital in excess of par value


1,227,586



1,165,259


Retained earnings


2,115,487



2,110,620


Accumulated other comprehensive income


9,085



9,645


Total stockholders' equity


3,352,461



3,285,826


Total liabilities and stockholders' equity


$

5,885,185



$

5,674,226







 

ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)




Nine Months Ended

 (In thousands)


September 25, 
2015


September 26, 
2014






Cash Flows from Operating Activities:





Net income


$

226,709



$

361,527


Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization


42,804



42,426


Amortization of acquisition-related intangible assets


7,382



7,394


Amortization of debt discount and debt issuance costs


2,337



2,337


Stock-based compensation


63,560



70,518


Net gain on sale of available-for-sale securities


(5,613)



(150)


Amortization of investment discount/premium


9,025



1,900


Deferred income tax expense


1,065



3,582


Tax effect of employee stock plans


3,352



7,434


Excess tax benefit from employee stock plans


(3,704)



(4,719)


Changes in assets and liabilities, net of the effects of acquisition:





Accounts receivable, net


(66,143)



76,324


Inventories


(5,923)



(22,458)


Other assets


(5,796)



(3,002)


Accounts payable and other liabilities


9,401



32,581


Deferred income and allowances on sales to distributors


95,336



(90,744)


Income taxes payable and receivable, net


26,202



36,345


Deferred compensation plan obligations


(7,123)



(5,858)


Net cash provided by operating activities


392,871



515,437


Cash Flows from Investing Activities:





Purchases of property and equipment


(52,243)



(34,946)


Sales of deferred compensation plan securities, net


7,123



5,858


Purchases of available-for-sale securities


(1,520,789)



(276,867)


Proceeds from sale of available-for-sale securities


804,163



79,424


Proceeds from maturity of available-for-sale securities


111,439



175,280


Acquisition, net of cash acquired


(4,000)




Purchases of intangible assets


(5,359)



(1,269)


Purchases of other investments


(2,000)



(8,224)


Net cash used in investing activities


(661,666)



(60,744)


Cash Flows from Financing Activities:





Proceeds from issuance of common stock through stock plans


19,080



29,871


Shares withheld for employee taxes


(25,052)



(20,852)


Payment of dividends to stockholders


(162,947)



(149,844)


Holdback payment for prior acquisition




(3,353)


Long-term debt and credit facility issuance costs




(1,321)


Repurchases of common stock


(57,507)



(502,986)


Excess tax benefit from employee stock plans


3,704



4,719


Net cash used in financing activities


(222,722)



(643,766)


Net decrease in cash and cash equivalents


(491,517)



(189,073)


Cash and cash equivalents at beginning of period


2,426,367



2,869,158


Cash and cash equivalents at end of period


$

1,934,850



$

2,680,085


 

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

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-300164899.html

SOURCE Altera Corporation

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.

Use the myMotherLode.com Keyword Search to go straight to a specific page

Popular Pages

  • Local News
  • US News
  • Weather
  • State News
  • Events
  • Traffic
  • Sports
  • Dining Guide
  • Real Estate
  • Classifieds
  • Financial News
  • Fire Info
Feedback