Altera Announces Fourth Quarter Results
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Altera Announces Fourth Quarter Results

(PRNewswire) — Altera Corporation (NASDAQ: ALTR) today announced fourth quarter sales of $479.9 million, down 4 percent from the third quarter of 2014 and up 6 percent from the fourth quarter of 2013. Fourth quarter net income was $111.1 million, $0.36 per diluted share, compared with net income of $118.0 million, $0.38 per diluted share, in the third quarter of 2014 and $98.9 million, $0.31 per diluted share, in the fourth quarter of 2013.

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.

Cash flow from operating activities in 2014 was $666.2 million. Altera repurchased approximately 4.3 million shares during the quarter at a cost of approximately $151.5 million.

Altera's board of directors has declared a quarterly cash dividend of $0.18 per share, to be paid on March 2, 2015 to stockholders of record on February 10, 2015.

"We grew 12 percent in 2014, outpacing the semiconductor industry," said John Daane, president, chief executive officer, and chairman of the board. "Our Arria 10 FPGAs, the first of our Generation 10 products, are proving to be competitively quite strong with good design-win momentum and record opportunities to pursue. We are entering the advanced stages of design for our high-end Stratix 10 FPGA, the industry's only 14 nanometer FinFET-based FPGA, with planned introduction later this year."

Several recent accomplishments mark the company's continuing progress:

 

SELECTED FOURTH QUARTER REVENUE AND RELATED RESULTS


($ in thousands)                                         

 Key Ratios & Information


December 31, 2014


September 26, 2014

Current Ratio


6:1



6:1


Liabilities/Equity


3:4



3:4


Quarterly Operating Cash Flows


$

150,778



$

214,049


TTM Return on Equity


14

%


13

%

Quarterly Depreciation Expense


$

12,099



$

11,874


Quarterly Capital Expenditures


$

9,836



$

13,691


Inventory MSOH (1): Altera


2.7



3.4


Inventory MSOH (1): Distribution


0.5



0.6


TTM Cash Conversion Cycle (Days)


144



154


Turns


41

%


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 31, 2014


September 26, 2014


December 31, 2013


Sequential Change


Year-

Over-Year

Change


December 31, 2014


December 31, 2013


Annual Growth

Geography
























Americas

15

%


16

%


19

%


(10)

%


(13)

%


16

%


18

%


(5)

%

Asia Pacific

41

%


42

%


41

%


(6)

%


7

%


42

%


40

%


19

%

EMEA

30

%


29

%


24

%


0

%


29

%


28

%


26

%


17

%

Japan

14

%


13

%


16

%


0

%


(12)

%


14

%


16

%


1

%

Net Sales

100

%


100

%


100

%


(4)

%


6

%


100

%


100

%


12

%

Product Category
























New

59

%


56

%


47

%


1

%


32

%


54

%


43

%


42

%

Mainstream

18

%


21

%


24

%


(15)

%


(20)

%


21

%


27

%


(14)

%

Mature and Other

23

%


23

%


29

%


(5)

%


(17)

%


25

%


30

%


(9)

%

Net Sales

100

%


100

%


100

%


(4)

%


6

%


100

%


100

%


12

%

Vertical Market
























Telecom & Wireless

42

%


45

%


40

%


(11)

%


10

%


44

%


41

%


21

%

Industrial Automation, Military & Automotive

22

%


21

%


22

%


2

%


7

%


22

%


22

%


9

%

Networking, Computer & Storage

16

%


16

%


19

%


(3)

%


(11)

%


16

%


19

%


(8)

%

Other

20

%


18

%


19

%


5

%


13

%


18

%


18

%


14

%

Net Sales

100

%


100

%


100

%


(4)

%


6

%


100

%


100

%


12

%

FPGAs and CPLDs
























FPGA

84

%


85

%


83

%


(5)

%


7

%


84

%


83

%


13

%

CPLD

8

%


8

%


9

%


5

%


(3)

%


8

%


9

%


2

%

Other Products

8

%


7

%


8

%


5

%


1

%


8

%


8

%


8

%

Net Sales

100

%


100

%


100

%


(4)

%


6

%


100

%


100

%


12

%

Product Category Description


Business Outlook for the First Quarter 2015



Sales and Income Statement



Sequential Sales

Flat to - 4%

Gross Margin

65% +/- .5%

Research and Development (1)

$112 - $116 million

SG&A

$76 - $80 million

Other Income/Expense, Net (2)

Net expense of approximately $3 million

Tax Rate

13% - 14%

Diluted Share Count

Approximately 300 million

Turns

Mid 40's

Inventory MSOH

Mid 3's



Note (1): The Business Outlook for Research and Development expense includes amortization of acquisition-related intangible assets.

Note (2): Other Income/ Expense, Net includes Interest income and other and Interest expense in our consolidated statements of comprehensive income.

                                                                              

Vertical Market



Telecom & Wireless

Flat

Industrial Automation, Military & Automotive

Down

Networking, Computer & Storage

Up

Other

Down

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, the Stratix 10 first shipment timing, potential FPGA market expansion, and 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 materially from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, customer inventory levels, product availability, vertical market mix, market acceptance of the company's products, the performance of products once introduced, product introduction schedules, the rate of growth of the company's new products including Cyclone® V, Cyclone IV, Arria® 10, Arria V, Arria II, Stratix® V, Stratix IV, MAX® 10 FPGAs, MAX V CPLDs, HardCopy®  IV device families and Enpirion PowerSoCs, 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 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. 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.

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, 2014


September 26, 2014


December 31, 2013


December 31, 2014


December 31, 2013



















Net sales


$

479,873



$

499,606



$

454,367



$

1,932,089



$

1,732,572



Cost of sales


168,172



166,019



144,024



648,451



546,736



Gross margin


311,701



333,587



310,343



1,283,638



1,185,836



Operating expense

















Research and development expense


107,314



112,078



106,643



418,170



385,185



Selling, general, and administrative expense


81,044



77,724



84,692



312,249



320,068



Amortization of acquisition-related intangible assets


2,465



2,465



1,850



9,859



4,824



Total operating expense


190,823



192,267



193,185



740,278



710,077



Operating margin (2)


120,878



141,320



117,158



543,360



475,759



Compensation expense/(benefit) - deferred compensation plan


1,934



(487)



3,881



6,027



10,605



(Gain)/loss on deferred compensation plan securities


(1,934)



487



(3,881)



(6,027)



(10,605)



Interest income and other


(5,714)



(4,558)



(4,902)



(24,076)



(11,553)



Loss/(gain) reclassified from other comprehensive income


10



(59)



(24)



(140)



(153)



Interest expense


11,410



10,774



8,272



43,549



16,637



Income before income taxes


115,172



135,163



113,812



524,027



470,828



Income tax expense


4,041



17,154



14,878



51,369



30,763



Net income


$

111,131



$

118,009



$

98,934



$

472,658



$

440,065




















Other comprehensive income/(loss):

















Unrealized gain/(loss) on investments:

















   Unrealized holding gain/(loss) on investments arising during period, net of tax of ($55), ($6), ($11), ($14) and ($1)


15,623



(4,929)



(26,811)



37,725



(33,424)



   Less: Reclassification adjustments for loss/(gain) on investments included in net income, net of tax of $1, $11, $2, $22 and $23


11



(48)



(22)



(118)



(130)



Other comprehensive income/(loss):


15,634



(4,977)



(26,833)



37,607



(33,554)



Comprehensive income


$

126,765



$

113,032



$

72,101



$

510,265



$

406,511




















Net income per share:

















Basic


$

0.37



$

0.38



$

0.31



$

1.53



$

1.37



Diluted


$

0.36



$

0.38



$

0.31



$

1.52



$

1.36




















Shares used in computing per share amounts:

















Basic


303,848



308,215



319,993



309,748



320,195



Diluted


305,614



310,184



322,018



311,897



323,018




















Dividends per common share


$

0.18



$

0.18



$

0.15



$

0.66



$

0.50




















Tax rate


3.5

%


12.7

%


13.1

%


9.8

%


6.5

%


% of Net sales:

















Gross margin


65.0

%


66.8

%


68.3

%


66.4

%


68.4

%


Research and development (1)


22.9

%


22.9

%


23.9

%


22.2

%


22.5

%


Selling, general, and administrative


16.9

%


15.6

%


18.6

%


16.2

%


18.5

%


Operating margin(2)


25.2

%


28.3

%


25.8

%


28.1

%


27.5

%


Net income


23.2

%


23.6

%


21.8

%


24.5

%


25.4

%



















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 and selling, general and administrative expenses and amortization of acquisition-related intangible assets, 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, 2014


September 26, 2014


December 31, 2013


December 31, 2014


December 31, 2013


Operating margin (non-GAAP)


$

120,878



$

141,320



$

117,158



$

543,360



$

475,759



Compensation expense/(benefit) - deferred compensation plan


1,934



(487)



3,881



6,027



10,605



Income from operations (GAAP)


$

118,944



$

141,807



$

113,277



$

537,333



$

465,154



 

 

ALTERA CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)






(In thousands, except par value amount)


December 31, 2014


December 31, 2013








Assets







Current assets:







Cash and cash equivalents


$

2,426,367



$

2,869,158


Short-term investments


151,519



141,487


Total cash, cash equivalents, and short-term investments


2,577,886



3,010,645


Accounts receivable, net


377,964



483,032


Inventories


153,387



163,880


Deferred income taxes - current


56,048



63,228


Deferred compensation plan - marketable securities


69,367



66,455


Deferred compensation plan - restricted cash equivalents


14,412



16,699


Other current assets


39,479



48,901


Total current assets


3,288,543



3,852,840


Property and equipment, net


194,840



204,142


Long-term investments


1,942,343



1,695,066


Deferred income taxes - non-current


20,077



10,806


Goodwill


74,341



73,968


Acquisition-related intangible assets, net


72,291



82,150


Other assets, net


81,791



76,676


Total assets


$

5,674,226



$

5,995,648









Liabilities and stockholders' equity







Current liabilities:







Accounts payable


$

49,140



$

44,163


Accrued liabilities


28,384



41,218


Accrued compensation and related liabilities


69,837



51,105


Deferred compensation plan obligations


83,779



83,154


Deferred income and allowances on sales to distributors


344,168



487,746


Total current liabilities


575,308



707,386


Income taxes payable - non-current


313,447



276,326


Long-term debt


1,492,759



1,491,466


Other non-current liabilities


6,886



8,403


Total liabilities


2,388,400



2,483,581









Stockholders' equity:







Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 302,430 at December 31, 2014 and 317,769 shares at December 31, 2013


302



318


Capital in excess of par value


1,165,259



1,216,826


Retained earnings


2,110,620



2,322,885


Accumulated other comprehensive income/(loss)


9,645



(27,962)


Total stockholders' equity


3,285,826



3,512,067


Total liabilities and stockholders' equity


$

5,674,226



$

5,995,648









 

ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




YEARS ENDED


(In thousands)


December 31, 2014


December 31, 2013


December 31, 2012

Cash Flows from Operating Activities:










Net income


$

472,658



$

440,065



$

556,807


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










Depreciation and amortization


56,181



47,225



36,009


Amortization of  acquisition-related intangible assets


9,859



4,824



853


Amortization of debt discount and debt issuance costs


3,116



1,457



648


Stock-based compensation


93,432



96,624



93,586


Net gain on sale of available-for-sale securities


(140)



(153)




Amortization of investment discount/premium


2,746



3,407




Deferred income tax (benefit) expense


(3,329)



3,581



8,824


Tax effect of employee stock plans


4,946



7,009



9,811


Excess tax benefit from employee stock plans


(1,945)



(4,716)



(16,278)


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










Accounts receivable, net


105,068



(157,842)



(91,435)


Inventories


10,493



(7,933)



(30,442)


Other assets


10,085



(1,309)



(3,698)


Accounts payable and other liabilities


14,756



9,414



(50,566)


Deferred income and allowances on sales to distributors


(143,578)



139,002



66,117


Income taxes payable


37,269



14,440



8,576


Deferred compensation plan obligations


(5,402)



(4,887)



(1,598)


Net cash provided by operating activities


666,215



590,208



587,214


Cash Flows from Investing Activities:










Purchases of property and equipment


(40,237)



(42,558)



(60,913)


Sales of deferred compensation plan securities, net


5,402



4,887



1,598


Purchases of available-for-sale securities


(905,283)



(1,347,626)



(921,430)


Proceeds from sale of available-for-sale securities


489,200



136,791



105,411


Proceeds from maturity of available-for-sale securities


191,498



178,221



115,373


Acquisitions, net of cash acquired




(145,321)




Purchases of intangible assets


(1,749)



(13,465)



(2,280)


Purchase of other investments


(10,224)



(7,441)



(4,935)


Net cash used in investing activities


(271,393)



(1,236,512)



(767,176)


Cash Flows from Financing Activities:










Proceeds from issuance of common stock through stock plans


47,123



58,220



49,665


Shares withheld for employee taxes


(22,890)



(28,272)



(31,472)


Payment of dividends to stockholders


(204,609)



(160,377)



(115,514)


Holdback payment for prior acquisition


(3,353)






Payment of debt assumed in acquisitions




(22,000)




Proceeds from issuance of long-term debt




991,786



500,000


Repayment of credit facility






(500,000)


Long-term debt and credit facility issuance costs


(1,321)



(4,143)



(5,244)


Repurchases of common stock


(654,508)



(201,095)



(229,057)


Excess tax benefit from employee stock plans


1,945



4,716



16,278


Net cash (used in) provided by financing activities


(837,613)



638,835



(315,344)


Net decrease in cash and cash equivalents


(442,791)



(7,469)



(495,306)


Cash and cash equivalents at beginning of period


2,869,158



2,876,627



3,371,933


Cash and cash equivalents at end of period


$

2,426,367



$

2,869,158



$

2,876,627


Supplemental cash flow information:










Income taxes (refunded)/paid, net


$

(3,305)



$

16,299



$

9,797


Interest paid


$

41,637



$

10,865



$

6,898


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SOURCE Altera Corporation

Contact:
Altera Corporation
Web: http://www.altera.com