Revenue for the fourth quarter ended July 2, 2006 was $292.9 million, a 15% increase over revenue of $255.8 million for the fourth quarter of the previous fiscal year. Net income for the fourth quarter of fiscal 2006 was $115.7 million or $0.37 diluted earnings per share, ($125.9 million or $0.41 per share pro forma) compared with $106.0 million or $0.34 diluted earnings per share ($110.0 million or $0.35 per share pro forma) an increase of 9% (14% pro forma) from the fourth quarter of the previous year. Return on sales was 39% for the fourth quarter ended July 2, 2006, including the effects of stock- based compensation.
During the fourth quarter of fiscal 2006 the Company spent a record $202.1 million to purchase 5.7 million shares of its common stock, which contributed to the $96.2 million decrease in cash and short-term investments. During fiscal 2006 the Company generated an additional $28.7 million in cash and short-term investments, net of spending $342.8 million to purchase 9.5 million shares of its common stock. A cash dividend of $0.15 per share will be paid on August 23, 2006 to stockholders of record on August 4, 2006. Total cash dividends paid during the year were $153.9 million, an increase of $42.9 million or 39% over the prior fiscal year.
The Board of Directors authorized the Company to purchase up to an additional 20 million shares of its outstanding common stock in the open market over the next two years.
According to Lothar Maier, CEO, "Fiscal 2006 was a good year for us with strong product sales growth in the last three quarters of the year. The Company generated an impressive 39% return on sales including the effects of stock option accounting. Without stock-based compensation the Company generated an even more impressive 43% return on sales.
The September quarter that we are entering is difficult to confidently forecast. It is typically a slow quarter for industrial and communication businesses, yet should show growing strength in consumer oriented businesses, as the build period for year-end holiday sales approaches. Further, while we expect our bookings to increase over the prior quarter, most of the consumer related bookings increase will not ship until the December quarter. Consequently, we currently expect sales and profits in the September quarter to be roughly similar to 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 3, 2005.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, July 26, 2006 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call 719-955-1567 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 July 26 through August 4, 2006. You may access this post view by calling 719-457-0820 and entering reservation #5348436. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of July 26, 2006 until the fourth 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 Twelve Months Ended
(unaudited) (audited)
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
Net sales $292,930 $255,811 $1,092,977 $1,049,694
Cost of sales (1) 63,615 53,859 238,400 219,188
Gross profit 229,315 201,952 854,577 830,506
Expenses:
Research &
development (1) 44,048 32,380 160,849 131,429
Selling,
general
& administrative (1) 34,045 27,897 129,778 109,448
78,093 60,277 290,627 240,877
Operating income 151,222 141,675 563,950 589,629
Interest income, net 15,225 9,821 52,858 30,335
Income before
income taxes 166,447 151,496 616,808 619,964
Provision for
income taxes 50,767 45,449 188,128 185,990
Net income $115,680 $106,047 $428,680 $433,974
Earnings per share:
Basic $0.38 $0.35 $1.40 $1.41
Diluted $0.37 $0.34 $1.37 $1.38
Shares used in
the calculation of
earnings per share:
Basic 304,296 306,964 305,156 307,426
Diluted 311,221 314,080 313,285 315,067
Pro forma earnings
per share excluding
the effects of stock
based compensation:
Basic $0.41 $0.36 $1.53 $1.46
Diluted $0.41 $0.35 $1.50 $1.42
Pro forma shares used
in the calculation
of pro forma earnings
per share:
Basic 304,296 306,964 305,156 307,426
Diluted 309,196 314,080 311,356 315,067
(1) Includes stock-based compensation charges as follows:
Cost of sales $2,471 $619 $8,307 $2,635
Research and
development 7,533 1,893 24,864 7,111
Sales, general
and administrative 4,764 3,131 21,884 11,036
Total stock-based
compensation $14,768 $5,643 $55,055 $20,782
LINEAR TECHNOLOGY CORPORATION
RECONCILIATION OF NET INCOME TO PRO FORMA NET INCOME
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
(unaudited) (audited)
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
Net income $115,680 $106,047 $428,680 $433,974
Adjustments to
reconcile net income
to pro forma net
income:
Stock-based
compensation 14,768 5,643 55,055 20,782
Tax effect (4,504) (1,693) (16,792) (6,235)
Pro forma net
income $125,944 $109,997 $466,943 $448,521
Pro forma earnings
per share excluding
the effects of stock
based compensation:
Basic $0.41 $0.36 $1.53 $1.46
Diluted $0.41 $0.35 $1.50 $1.42
Shares used in the
calculation of pro
forma earnings per
share:
Basic 304,296 306,964 305,156 307,426
Diluted 309,196(1) 314,080 311,356 315,067
(1) Excludes 2,025 and 1,929 shares for the three and twelve months ended July 2, 2006, 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 particularly during this transitional period when many companies have not yet adopted the provisions of FAS123R.
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
July 2, July 3,
2006 2005
(audited) (audited)
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $1,819,587 $1,790,912
Accounts receivable, net of allowance for
doubtful accounts of $1,808 ($1,713 at
July 3, 2005) 154,297 125,864
Inventories 39,031 34,328
Deferred tax assets and other current assets 64,221 56,205
Total current assets 2,077,136 2,007,309
Property, plant & equipment, net 247,969 221,028
Other noncurrent assets 65,790 57,897
Total assets $2,390,895 $2,286,234
LIABILITIES & STOCKHOLDERS ' EQUITY
Current liabilities:
Accounts payable $14,574 $11,800
Accrued income taxes, payroll & other
accrued liabilities 174,239 152,231
Deferred income on shipments to distributors 48,013 43,708
Total current liabilities 236,826 207,739
Deferred tax and other long-term liabilities 49,571 71,461
Stockholders' equity:
Common stock 1,063,446 926,763
Retained earnings 1,046,137 1,083,110
Accumulated other comprehensive income (5,085) (2,839)
Total stockholders' equity 2,104,498 2,007,034
$2,390,895 $2,286,234
Web site: http://www.linear.com/