In April 2007, the Company entered into a $3.0 billion accelerated share repurchase ("ASR") transaction funded by $1.3 billion of the Company's own cash and $1.7 billion of convertible debt. As a result, the Company's first quarter results had both a decrease in interest income and an increase in interest expense when compared to both last quarter and the first quarter of the prior fiscal year. The first quarter of fiscal year 2008 had higher interest expense than the fourth quarter of fiscal 2007 due to the fourth quarter having two months of accrued interest versus three months in the first quarter of fiscal year 2008. Shares used in the calculation of diluted EPS decreased by 37.2 million shares or 14% from the fourth quarter of fiscal year 2007. Consequently, the ASR transaction has been accretive to EPS as the impact of the reduced shares was greater than the increase in interest expense and lower interest income.
A cash dividend of $0.18 per share will be paid on November 28, 2007 to stockholders of record on November 16, 2007.
Non-GAAP diluted EPS for the first quarter of fiscal year 2008 was $0.45, a $0.03 per share increase over $0.42 per share in the fourth quarter and $0.04 per share increase over the first quarter of fiscal year 2007. First quarter non-GAAP net income of $101.4 million decreased $8.5 million from $109.9 million in the fourth quarter and decreased $22.8 million from the first 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, "This was a good September quarter for us. Revenue, EPS and cash generated from operations all increased and we had a positive book to bill ratio for the quarter. We are pleased with the results of the ASR which was partially responsible for the 11% increase in diluted EPS over the prior quarter which follows on a 12.5% sequential increase in diluted EPS in the quarter before that.
Looking ahead to the December quarter, growth will be impacted by the usual seasonal slowdown in our businesses. Consequently, we expect revenues and diluted EPS to increase in the 1% to 4% range from the September 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 1, 2007.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, October 17, 2007 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 http://www.linear.com or http://www.streetevents.com. A replay of the conference call will be available from October 17 through October 23, 2007. You may access the archive by calling (719) 457-0820 and entering reservation #6421148. An archive of the webcast will also be available at http://www.linear.com and http://www.streetevents.com as of October 17, 2007 until the first 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, 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, global positioning systems and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems. For more information, visit http://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
September 30, July 1, October 1,
2007 2007 2006
Revenues $281,488 $268,116 $292,116
Cost of sales (1) 64,061 61,338 64,327
Gross profit 217,427 206,778 227,789
Expenses:
Research & development
(1) 47,780 46,713 46,519
Selling, general &
administrative (1) 32,781 32,861 34,425
80,561 79,574 80,944
Operating income 136,866 127,204 146,845
Interest expense (14,462) (10,795) (443)
Interest income 6,434 7,908 16,480
Income before income
taxes 128,838 124,317 162,882
Provision for income
taxes 37,363 28,593 50,493
Net income $91,475 $95,724 $112,389
Earnings per share:
Basic $0.41 $0.37 $0.327
Diluted $0.40 $0.36 $0.317
Shares used in the
calculation of earnings
per share:
Basic 224,093 260,664 302,104
Diluted 229,230 266,474 307,740
(1) Includes stock-based compensation charges as
follows:
Cost of sales $1,897 $2,946 $2,762
Research and development 7,747 9,595 8,902
Sales, general and
administrative 4,300 5,885 5,422
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
September 30, July 1,
2007 2007
(unaudited) (audited)
ASSETS:
Current assets:
Cash, cash equivalents and
short-term investments $752,167 $633,307
Accounts receivable, net of
allowance for doubtful
accounts of $1,770 ($1,775
at July 1, 2007) 134,032 130,546
Inventories 51,413 51,075
Deferred tax assets and
other current assets 42,084 46,176
Total current assets 979,696 861,104
Property, plant & equipment, net 261,171 266,600
Other noncurrent assets 93,604 91,153
Total assets $1,334,471 $1,218,857
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities:
Accounts payable $11,324 $11,161
Accrued income taxes, payroll
& other accrued liabilities 101,818 128,762
Deferred income on shipments
to distributors 39,186 39,946
Total current liabilities 152,328 179,869
Convertible senior notes 1,700,000 1,700,000
Deferred tax and other
long-term liabilities 118,072 46,953
Stockholders' equity:
Common stock 932,624 902,135
Accumulated Deficit (1,569,304) (1,609,453)
Accumulated other
comprehensive income 751 (647)
Total stockholders' deficit (635,929) (707,965)
$1,334,471 $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
September 30, July 1, October 1,
2007 2007 2006
Reported net
income (GAAP
basis) $ 91,475 $95,724 $112,389
Stock-based
compensation (1) 13,944 18,426 17,086
Income tax
effect of
non-GAAP
adjustments (4,044) (4,238) (5,297)
Non-GAAP net
income $101,375 $109,912 $124,178
Non-GAAP earnings per share excluding the effects of stock based
compensation:
Basic $ 0.45 $ 0.42 $ 0.41
Diluted $ 0.45 $ 0.42 $ 0.41
Shares used in the calculation of Non-GAAP earnings per share:
Basic 224,093 260,664 302,104
Diluted 227,591 (2) 264,842 (2) 305,826 (2)
1) Linear began expensing stock options in the first quarter of fiscal
year 2006.
2) Excludes 1,639, 1,632 and 1,914 shares for the three months ended
September 30, 2007, July 1, 2007 and October 1, 2006, respectively, to
conform diluted outstanding shares calculated under FAS123R to diluted
shares calculated under prior accounting standards.
