The Company's cash and short-term investments balance decreased $5.8 million net of spending $93.1 million to purchase 2.9 million shares of its common stock. A cash dividend of $0.15 per share will be paid on November 15, 2006 to stockholders of record on October 27, 2006.
According to Lothar Maier, CEO, "As we had forecasted, sales and profits were roughly similar to the previous quarter. However, the overall business environment was weaker than we expected and consequently, our bookings decreased slightly. Consumer bookings grew, but not to the extent we expected as customers remain cautious going into the holiday demand period.
The December quarter that we are entering is difficult to forecast. Macroeconomic trends are reasonable and our positioning in customer programs is good. However, visibility is low and customers are guarded in their forecasting and inventory management. Consequently, given the usual seasonal slowdown in non-consumer businesses that takes place in December, we currently expect sales and profits in the December quarter to be down roughly 5% to 7% from the quarter just completed."
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 2, 2006.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, October 18, 2006 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 234-0008 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 October 18 through November 3, 2006. You may access this post view by calling (719) 457-0820 and entering reservation #5471499. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of October 18, 2006 until the first quarter earnings release next year.
Linear Technology Corporation was founded in 1981 as a manufacturer of high performance linear integrated circuits. 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, 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 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) Three Months Ended (unaudited) October 1, October 2, 2006 2005 Net sales $292,116 $256,013 Cost of sales (1) 64,327 55,999 Gross profit 227,789 200,014 Expenses: Research & development (1) 46,519 37,779 Selling, general & administrative (1) 34,425 31,150 80,944 68,929 Operating income 146,845 131,085 Interest income, net 16,037 11,622 Income before income taxes 162,882 142,707 Provision for income taxes 50,493 43,526 Net income $112,389 $ 99,181 Earnings per share: Basic $ 0.37 $ 0.32 Diluted $ 0.37 $ 0.31 Shares used in the calculation of earnings per share: Basic 302,104 306,336 Diluted 307,740 315,940 Pro forma earnings per share excluding the effects of stock-based compensation: Basic $ 0.41 $ 0.35 Diluted $ 0.41 $ 0.35 Pro forma shares used in the calculation of pro forma earnings per share: Basic 302,104 306,336 Diluted 305,826 313,429 (1) Includes stock-based compensation charges as follows: Cost of sales $2,762 $1,207 Research and development 8,902 5,923 Sales, general and administrative 5,422 6,208 Total stock-based compensation $17,086 $13,338 LINEAR TECHNOLOGY CORPORATION RECONCILIATION OF NET INCOME TO PRO FORMA NET INCOME (In thousands, except per share amounts) Three Months Ended (unaudited) October 1, October 2, 2006 2005 Net income $112,389 $99,181 Adjustments to reconcile net income to pro forma net income Stock-based compensation 17,086 13,338 Tax effect (5,297) (4,068) Pro forma net income $124,178 $108,451 Pro forma earnings per share excluding the effects of stock based compensation: Basic $ 0.41 $ 0.35 Diluted $ 0.41 $ 0.35 Shares used in the calculation of pro forma earnings per share: Basic 302,104 306,336 Diluted 305,826(1) 313,429(1) (1) Excludes 1,914 and 2,511 shares for the three months ended October 1, 2006 and October 2, 2005, respectively, to conform diluted outstanding shares calculated under FAS123R to diluted shares calculated under prior accounting standards. FAS123R -- Share-Based Payment became effective and was adopted by the Company during the quarter ended October 2, 2005. FAS123R requires the Company to estimate the cost of all forms of stock-based compensation, including employee stock options, and to record a commensurate expense in the income statement. To supplement our consolidated financial statements presented in accordance with GAAP, we have shown above a non-GAAP (pro forma) presentation of the Company's earnings per share, which is adjusted to reflect the GAAP results to exclude all stock-based compensation. This non-GAAP presentation of earnings per share is provided to enhance the user's overall understanding of the Company's historical financial performance and comparability between periods. We believe the non-GAAP results provide useful information to investors by excluding stock-based compensation. LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in thousands) October 1, July 2, 2006 2006 (unaudited) (audited) ASSETS Current assets: Cash, cash equivalents and short-term investments $1,813,809 $1,819,587 Accounts receivable, net of allowance for doubtful accounts of $1,797 ($1,818 at July 2, 2006) 154,263 154,297 Inventories 42,085 39,031 Deferred tax assets and Other current assets 61,846 64,221 Total current assets 2,072,003 2,077,136 Property, plant & equipment, net 261,502 247,969 Other noncurrent assets 65,520 65,790 Total assets $2,399,025 $2,390,895 LIABILITIES & STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $21,520 $14,574 Accrued income taxes, payroll & other accrued liabilities 179,495 174,239 Deferred income on shipments to distributors 41,024 48,013 Total current liabilities 242,039 236,826 Deferred tax and other long-term liabilities 48,282 49,571 Stockholders' equity: Common stock 1,080,710 1,063,446 Retained earnings 1,029,654 1,046,137 Accumulated other comprehensive income (1,660) (5,085) Total stockholders' equity 2,108,704 2,104,498 $2,399,025 $2,390,895
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