The Company also increased its dividend from $0.18 per share to $0.21 per share for the quarter. This cash dividend will be paid on February 27, 2008 to stockholders of record on February 15, 2008.
Non-GAAP diluted EPS for the second quarter of fiscal year 2008 was $0.46 per share, a $0.01 per share increase over the first quarter of fiscal year 2008 and a $0.07 per share increase over the second quarter of fiscal year 2007. Second quarter non-GAAP net income of $104.0 million increased $2.6 million over $101.4 million in the first quarter and decreased $13.8 million from the second quarter of fiscal year 2007. The Company's non-GAAP measures set forth above exclude charges related to stock-based compensation. The Company's management uses non-GAAP net income and non-GAAP net income per diluted share to evaluate the Company's current operating results and financial results and to compare them against historical financial results. Reconciliations of reported net income and reported net income per diluted share to non-GAAP net income and non-GAAP net income per diluted share, respectively, are included at the end of this press release.
According to Lothar Maier, CEO, "The Company grew revenues sequentially 2.6% in the December quarter. This marks the third consecutive quarter that the Company has sequentially grown revenues. In the same time period the Company has grown EPS faster than revenues. We are pleased with the Company's results as we have grown revenues, sustained our margins, lowered our outstanding shares by 25%, grown EPS and increased our quarterly dividend by 17%.
"Looking ahead, given the concerns about economic difficulties particularly in the USA, March is a challenging quarter to forecast. From a Linear specific point of view, March should be a good growth quarter. We had a positive book to bill ratio in the December quarter and we would expect the March quarter to have strength in the industrial and communication end markets to more than offset the normal seasonal softness in the consumer end market. However, the overriding general economic conditions merit concern. Consequently, we presently estimate that revenues and earnings will grow 1% to 5% sequentially from the December quarter."
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. In particular, the statements regarding the demand for our products, our customers' ordering patterns and the anticipated trends in our sales and profits are forward-looking statements. The forward-looking statements are dependent on certain risks and uncertainties, including such factors, among others, as the timing, volume and pricing of new orders received and shipped, the timely introduction of new processes and products, general conditions in the world economy and financial markets and other factors described in our 10-K for the fiscal year ended July 1, 2007.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, January 16, 2008 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (877) 681-3377 before 8:15 a.m. to be included in the audience. There will be a live webcast of this conference call that can be accessed through www.linear.com or www.streetevents.com. A replay of the conference call will be available from January 16, 2008 through January 22, 2008.
You may access the archive by calling (719) 457-0820 and entering reservation #6421148. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of January 16, 2008 until the second quarter earnings release next year.
Linear Technology Corporation, a manufacturer of high performance linear integrated circuits, was founded in 1981, became a public company in 1986 and joined the S&P 500 index of major public companies in 2000. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModule(TM) products, and many other analog functions. Applications for Linear Technology's high performance circuits include telecommunications, cellular telephones, networking products such as optical switches, notebook and desktop computers, computer peripherals, video/multimedia, industrial instrumentation, security monitoring devices, high-end consumer products such as digital cameras and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems. For more information, visit www.linear.com.
For further information contact Paul Coghlan at Linear Technology Corporation, 1630 McCarthy Blvd., Milpitas, California 95035-7417, (408) 432-1900.
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
GAAP (unaudited)
Three Months Ended Six Months Ended
----------------------------- -------------------
Dec. 30, Sep. 30, Dec. 31, Dec. 30, Dec. 31,
2007 2007 2006 2007 2006
--------- --------- --------- --------- ---------
Revenues $288,720 $281,488 $267,854 $570,208 $559,970
Cost of sales (1) 66,212 64,061 59,313 130,273 123,640
--------- --------- --------- --------- ---------
Gross profit 222,508 217,427 208,541 439,935 436,330
--------- --------- --------- --------- ---------
Expenses:
Research &
development (1) 47,799 47,780 44,961 95,579 91,480
Selling, general &
administrative
(1) 33,557 32,781 33,597 66,338 68,022
--------- --------- --------- --------- ---------
81,356 80,561 78,558 161,917 159,502
--------- --------- --------- --------- ---------
Operating income 141,152 136,866 129,983 278,018 276,828
Interest expense (14,474) (14,462) (433) (28,936) (876)
Interest income 7,258 6,434 16,300 13,692 32,780
--------- --------- --------- --------- ---------
Income before Income
taxes 133,936 128,838 145,850 262,774 308,732
Provision for Income
taxes 40,181 37,363 40,838 77,544 91,331
--------- --------- --------- --------- ---------
Net income $ 93,755 $ 91,475 $105,012 $185,230 $217,401
========= ========= ========= ========= =========
Earnings per share:
Basic $ 0.42 $ 0.41 $ 0.35 $ 0.83 $ 0.72
========= ========= ========= ========= =========
Diluted $ 0.41 $ 0.40 $ 0.34 $ 0.81 $ 0.71
========= ========= ========= ========= =========
Shares used in the calculation of earnings per share:
Basic 223,494 224,093 299,724 223,137 300,385
========= ========= ========= ========= =========
Diluted 227,119 229,230 304,959 227,687 305,774
========= ========= ========= ========= =========
(1) Includes stock-based compensation charges as follows:
Cost of sales $ 1,972 $ 1,897 $ 2,840 $ 3,869 $ 5,602
Research &
development 8,182 7,747 9,281 15,929 18,183
Sales, general &
administrative 4,528 4,300 5,640 8,828 11,062
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
Dec. 30, July 1,
2007 2007
(unaudited) (audited)
------------ ------------
ASSETS:
Current assets:
Cash, cash equivalents and short-term
investments $ 806,633 $ 633,307
Accounts receivable, net of allowance
for doubtful accounts of $1,765 ($1,775
at July 1, 2007) 150,015 130,546
Inventories 52,486 51,075
Deferred tax assets and other current
assets 51,712 46,176
------------ ------------
Total current assets 1,060,846 861,104
------------ ------------
Property, plant & equipment, net 256,875 266,600
Other noncurrent assets 92,059 91,153
------------ ------------
Total assets $ 1,409,780 $ 1,218,857
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 12,263 $ 11,161
Accrued income taxes, payroll & other
accrued liabilities
97,869 128,762
Deferred income on shipments to
distributors 38,283 39,946
------------ ------------
Total current liabilities 148,415 179,869
------------ ------------
Convertible senior notes 1,700,000 1,700,000
Deferred tax and other long-term
liabilities 125,727 46,953
Stockholders' equity:
Common stock 978,963 902,135
Accumulated Deficit (1,545,293) (1,609,453)
Accumulated other
Comprehensive income 1,968 (647)
------------ ------------
Total stockholders' deficit (564,362) (707,965)
------------ ------------
$ 1,409,780 $ 1,218,857
============ ============
LINEAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
--------------------------------- ---------------------
Dec. 30, Sep. 30, Dec. 31, Dec. 30, Dec. 31,
2007 2007 2006 2007 2006
--------- --------- ----------- --------- ---------
Reported
net
income
(GAAP
basis) $ 93,755 $ 91,475 $105,012 $185,230 $217,401
Stock-
based
comp-
ensation
(1) 14,682 13,944 17,761 28,626 34,8477
Income
tax
effect
of non-
GAAP
adjust-
ments (4,405) (4,044) (4,973) (8,447) (10,308)
--------- --------- ----------- --------- ---------
Non-GAAP
net
income $104,032 $101,375 $117,800 $205,409 $241,940
========= ========= =========== ========= =========
Non-GAAP earnings per share excluding the effects of stock-based
compensation:
Basic $ 0.47 $ 0.45 $ 0.39 $ 0.92 $ 0.81
========= ========= ========= ========= =========
Diluted $ 0.46 $ 0.45 $ 0.39 $ 0.91 $ 0.80
========= ========= ========= ========= =========
Shares used in the calculation of Non-GAAP earnings per share:
Basic 223,494 224,093 299,724 223,137 300,385
========= ========= ========= ========= =========
Diluted 225,647 (2) 227,591 (2) 303,005 (2) 226,075 (3) 303,845 (3)
========= ========= ========= ========= =========
1) Linear began expensing stock options in the first quarter of fiscal year 2006.
2) Excludes 1,472, 1,639 and 1,954 shares for the three months ended December 30, 2007, September 30, 2007 and December 31, 2006, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards.
3) Excludes 1,612 and 1,929 shares for the six months ended December 30, 2007 and December 31, 2006, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards.
The Company's non-GAAP measures set forth above exclude charges related to stock-based compensation. The Company's management uses non-GAAP net income and non-GAAP net income per diluted share to evaluate the Company's current operating results and financial results and to compare them against historical financial results. The Company excludes stock-based compensation expenses and the related tax effects primarily because they are significant non-cash expense estimates which management separates for consideration when evaluating and managing business operations.
In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include other items. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share prepared in accordance with GAAP.
Contact:
Linear Technology Corporation
Paul Coghlan, 408-432-1900
Vice
President, Finance