EX-99.1 2 a2013q18-kerexhibit.htm EXHIBIT 2013 Q1 8-K(ER) Exhibit










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 ANNOUNCES FIRST QUARTER RESULTS



San Jose, Calif., April 25, 2013 — Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $410.5 million, down 7 percent from the fourth quarter of 2012 and up 7 percent from the first quarter of 2012. First quarter net income was $120.2 million, $0.37 per diluted share, compared with net income of $120.8 million, $0.37 per diluted share, in the fourth quarter of 2012 and $115.8 million, $0.35 per diluted share, in the first quarter of 2012.

Cash flow from operating activities was $149.5 million. Altera ended the quarter with $3.8 billion in cash and investments.

Altera's board of directors has declared a quarterly cash dividend of $0.10 per share, to be paid on June 3, 2013 to stockholders of record on May 10, 2013.

"The quarter's overall sales were roughly as expected and represent the low point in the recent communications equipment and industrial cycles. We expect second quarter growth in these markets," said John Daane, president, chief executive officer, and chairman of the board. "Development work for our next generation products is well under way. Using TSMC's 55 nm EmbFlash and their 20 nm planar technology plus Intel's 14 nm Tri-Gate process, we expect to have an optimized, competitively differentiated set of offerings, with notable performance improvements across all our products. As the only major FPGA company with access to the second-generation Tri-Gate process, we will benefit from much reduced implementation risk, the unique finFET power, performance and density advantages, and process availability long before any comparable alternative."

 



1




Several recent accomplishments mark the company's continuing progress:

Altera and Intel jointly announced that the companies have entered into an agreement for the future manufacture of certain Altera FPGAs on Intel's 14 nm Tri-Gate transistor technology. Altera is the only major FPGA company with access to this technology, significantly strengthening the company's next-generation competitive position. These 14 nm products target ultra-high-performance systems for military, wireline communications, cloud computing, and computer and storage applications, and will enable breakthrough levels of performance and power efficiencies not otherwise possible. Extending the company's tailored architecture approach, Altera's next- generation products will now utilize this 14 nm technology in addition to previously announced 20 and 55 nm devices supplied by TSMC.

Altera reached another significant milestone in transceiver technology by demonstrating the industry's first programmable device with 32-Gbps transceiver technology capabilities. The demonstration uses a 20 nm device based on TSMC's 20SoC process technology and is a positive indicator to the more than 500 customers in Altera's early access program who are looking to use Altera devices in the development of performance-demanding, bandwidth-centric applications. Altera has a proven track record in integrating leading-edge transceiver technology into its devices. Altera is the only company today shipping production 28 nm FPGAs with monolithically integrated low-power transceivers operating at 28 Gbps.

Extending a 20-year relationship that has resulted in repeated semiconductor industry innovations, Altera and TSMC's technology collaboration now extends to Altera's use of TSMC's 55 nm Embedded Flash (EmbFlash) technology. Programmable devices based on TSMC's 55 nm EmbFlash target a wide range of low-power, high-volume applications in a variety of markets, including automotive and industrial. Compared to prior-generation embedded flash technology, TSMC's 55 nm EmbFlash delivers faster computing, increases gate density 10 times and shrinks flash and SRAM cell sizes by 70 and 80 percent respectively.

Altera has acquired TPACK, previously a wholly-owned subsidiary of Applied Micro Circuits Corporation. With FPGA-based optical transport network (OTN) intellectual property targeting packet and optical networking equipment suppliers, TPACK enables Altera to accelerate and expand its OTN solutions road map. TPACK OTN solutions are available today as SoftSilicon® products, built on Altera FPGAs and in production for many years. TPACK's engineers will make Altera more responsive to the OTN industry's evolution beyond 100G by delivering flexible solutions not possible in fixed-function ASSPs.

2



SELECTED FIRST QUARTER REVENUE AND RELATED RESULTS

Key New Product Devices
 
Sequential Comparisons
Stratix V
 
35
 %
Stratix IV
 
(23
)%
Arria II
 
24
 %
Arria V
 
30
 %
Cyclone IV
 
0
 %
Cyclone V
 
318
 %
HardCopy IV
 
59
 %


($ in thousands) Key Ratios & Information
 
March 29, 2013
 
December 31, 2012
Current Ratio
 
7:1

 
7:1

Liabilities/Equity
 
1:3

 
1:3

Quarterly Operating Cash Flows
 
$
149,478

 
$
126,709

TTM Return on Equity
 
17
%
 
18
%
Quarterly Depreciation Expense
 
$
10,175

 
$
9,170

Quarterly Capital Expenditures
 
$
5,984

 
$
7,201

Inventory MSOH (1): Altera
 
3.3

 
3.4

Inventory MSOH (1): Distribution
 
0.6

 
0.6

Cash Conversion Cycle (Days)
 
117

 
117

Turns
 
43
%
 
40
%
Book to Bill
 
<1.0

 
<1.0

 
 
 
 
 
Note (1): MSOH: Months Supply On Hand
 
 
 
 

                



3




ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)

 
Three Months Ended
 
Quarterly Growth Rate
 
March 29,
2013
 
December 31,
2012
 
March 30,
2012
 
Sequential Change
 
Year-
Over-Year
Change
Geography
 
 
 
 
 
 
 
 
 
Americas
20
%
 
19
%
 
18
%
 
(3
)%
 
21
 %
Asia Pacific
38
%
 
39
%
 
43
%
 
(7
)%
 
(3
)%
EMEA
27
%
 
28
%
 
23
%
 
(11
)%
 
22
 %
Japan
15
%
 
14
%
 
16
%
 
(2
)%
 
(3
)%
Net Sales
100
%
 
100
%
 
100
%
 
(7
)%
 
7
 %
Product Category
 
 
 
 
 
 
 
 
 
New
39
%
 
39
%
 
26
%
 
(5
)%
 
64
 %
Mainstream
29
%
 
28
%
 
32
%
 
(5
)%
 
(3
)%
Mature and Other
32
%
 
33
%
 
42
%
 
(10
)%
 
(20
)%
Net Sales
100
%
 
100
%
 
100
%
 
(7
)%
 
7
 %
Vertical Market
 
 
 
 
 
 
 
 
 
Telecom & Wireless
41
%
 
44
%
 
41
%
 
(13
)%
 
8
%
Industrial Automation, Military & Automotive
22
%
 
21
%
 
22
%
 
(2
)%
 
3
%
Networking, Computer & Storage
18
%
 
17
%
 
17
%
 
1
 %
 
17
%
Other
19
%
 
18
%
 
20
%
 
(2
)%
 
1
%
Net Sales
100
%
 
100
%
 
100
%
 
(7
)%
 
7
%
FPGAs and CPLDs
 
 
 
 
 
 
 
 
 
FPGA
85
%
 
84
%
 
83
%
 
(6
)%
 
9
 %
CPLD
8
%
 
9
%
 
10
%
 
(10
)%
 
(11
)%
Other Products
7
%
 
7
%
 
7
%
 
(5
)%
 
7
 %
Net Sales
100
%
 
100
%
 
100
%
 
(7
)%
 
7
 %

Product Category Description

New Products include the Stratix® V, Stratix IV, Arria® V, Arria II, Cyclone® V, Cyclone IV, MAX® V and HardCopy® IV devices.

Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices.

Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, Classic™, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX® series, APEX™ series, Mercury™, Excalibur™ devices, configuration and other devices, intellectual property cores, and software and other tools.



4



Business Outlook for the Second Quarter 2013

Sales and Income Statement
Sequential Sales
Flat to up 4%
Gross Margin
69% +/- .5%
Research and Development
$97 to 99 million
SG&A
$77 to 79 million
Tax Rate
12% to 13%
Diluted Share Count
Approximately 324 million
Turns
High 40's
MSOH
Mid 3's
        
Vertical Market                         
Telecom & Wireless
Up
Industrial Automation, Military & Automotive
Up
Networking, Computer & Storage
Down
Other
Flat

First 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.
 

 



5



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, statements regarding projected growth in the communications equipment and industrial markets in the second quarter of 2013; the status of the development of our next generation products; expected performance improvements in and the competitive position of our next generation products, our competitive advantage related to our use of Intel Tri-Gate technology; the projected development in and expansion of our OTN solutions resulting from our acquisition of TPACK; 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 from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, customer inventory levels, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including Cyclone® V, Cyclone IV, Arria® V, Arria II, Stratix® V, Stratix IV FPGAs, MAX® V CPLDs and HardCopy® IV device families, 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 system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more about Altera's FPGA, CPLD and ASIC devices at www.altera.com. Follow Altera via Facebook, RSS and Twitter.
 
###
 
 
ALTERA, ARRIA, CYCLONE, HARDCOPY, 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.

 
 










6



ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
(In thousands, except per share amounts)
 
March 29,
2013
 
December 31,
2012
 
March 30,
2012
 
 
 
 
 
 
 
Net sales
 
$
410,501

 
$
439,440

 
$
383,754

Cost of sales
 
126,083

 
133,367

 
114,834

Gross margin
 
284,418

 
306,073

 
268,920

Operating expense
 
 
 
 
 
 
Research and development expense
 
87,930

 
94,162

 
82,297

Selling, general, and administrative expense
 
78,600

 
74,030

 
69,785

Total operating expense
 
166,530

 
168,192

 
152,082

Operating margin (1)
 
117,888

 
137,881

 
116,838

Compensation expense — deferred compensation plan
 
3,422

 
358

 
5,736

Gain on deferred compensation plan securities
 
(3,422
)
 
(358
)
 
(5,736
)
Interest income and other
 
(1,659
)
 
(2,390
)
 
(1,807
)
Gain reclassified from other comprehensive income
 
(54
)
 
(205
)
 
(102
)
Interest expense
 
2,465

 
2,589

 
937

Income before income taxes
 
117,136

 
137,887

 
117,810

Income tax (benefit)/expense
 
(3,053
)
 
17,082

 
1,976

Net income
 
120,189

 
120,805

 
115,834

 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
Unrealized (loss)/gain on investments:
 
 
 
 
 
 
Unrealized holding (loss)/gain on investments arising during period, net of tax of ($5), ($11) and $58
 
(1
)
 
(889
)
 
304

Less: Reclassification adjustments for gain on investments included in net income, net of tax of $5, $24 and $5
 
(49
)
 
(44
)
 
(20
)
 
 
(50
)
 
(933
)
 
284

Unrealized gain on derivatives:
 
 
 
 
 
 
Unrealized gain on derivatives arising during period, net of tax of $9 and $8
 

 
17

 
14

Less: Reclassification adjustments for gain on derivatives included in net income, net of tax of $48 and $27
 

 
(89
)
 
(50
)
 
 

 
(72
)
 
(36
)
Other comprehensive (loss) income
 
(50
)
 
(1,005
)
 
248

Comprehensive income
 
$
120,139

 
$
119,800

 
$
116,082

 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
Basic
 
$
0.38

 
$
0.38

 
$
0.36

Diluted
 
$
0.37

 
$
0.37

 
$
0.35

 
 
 
 
 
 
 
Shares used in computing per share amounts:
 
 
 
 
 
 
Basic
 
319,867

 
319,765

 
322,586

Diluted
 
323,021

 
322,209

 
327,061

 
 
 
 
 
 
 
Cash dividends per common share
 
$
0.10

 
$
0.10

 
$
0.08

 
 
 
 
 
 
 
Tax rate
 
(2.6
)%
 
12.4
%
 
1.7
%
% of Net sales:
 
 
 
 
 
 
Gross margin
 
69.3
 %
 
69.7
%
 
70.1
%
Research and development
 
21.4
 %
 
21.4
%
 
21.4
%
Selling, general, and administrative
 
19.1
 %
 
16.8
%
 
18.2
%
Operating margin(1)
 
28.7
 %
 
31.4
%
 
30.4
%
Net income
 
29.3
 %
 
27.5
%
 
30.2
%


7



Notes:
 
 
 
 
 
 
(1) We define operating margin as gross margin less research and development and selling, general and administrative expenses, 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 losses/(gains) 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
(In thousands, except per share amounts)
 
March 29,
2013
 
December 31,
2012
 
March 30,
2012
Operating margin (non-GAAP)
 
$
117,888

 
$
137,881

 
$
116,838

Compensation expense — deferred compensation plan
 
3,422

 
358

 
5,736

Income from operations (GAAP)
 
$
114,466

 
$
137,523

 
$
111,102



8



ALTERA CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except par value amount)
 
March 29,
2013
 
December 31,
2012
 
 
 
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
2,953,587

 
$
2,876,627

Short-term investments
 
171,343

 
140,958

Total cash, cash equivalents, and short-term investments
 
3,124,930

 
3,017,585

Accounts receivable, net
 
366,417

 
323,708

Inventories
 
139,282

 
152,721

Deferred income taxes — current
 
72,803

 
59,049

Deferred compensation plan — marketable securities
 
57,627

 
60,321

Deferred compensation plan — restricted cash equivalents
 
17,115

 
17,116

Other current assets
 
47,113

 
49,852

Total current assets
 
3,825,287

 
3,680,352

Property and equipment, net
 
201,964

 
206,148

Long-term investments
 
712,040

 
704,758

Deferred income taxes — non-current
 
18,934

 
17,082

Other assets, net
 
46,485

 
49,488

Total assets
 
$
4,804,710

 
$
4,657,828

 
 
 
 
 
Liabilities and stockholders' equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
31,613

 
$
50,036

Accrued liabilities
 
36,571

 
29,005

Accrued compensation and related liabilities
 
43,920

 
40,606

Deferred compensation plan obligations
 
74,742

 
77,437

Deferred income and allowances on sales to distributors
 
382,642

 
345,993

   Total current liabilities
 
569,488

 
543,077

Income taxes payable — non-current
 
276,238

 
272,000

Long-term debt
 
500,000

 
500,000

Other non-current liabilities
 
9,188

 
9,304

 Total liabilities
 
1,354,914

 
1,324,381

Stockholders' equity:
 
 
 
 
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 320,140 shares at March 29, 2013 and 319,564 shares at December 31, 2012
 
320

 
320

Capital in excess of par value
 
1,153,098

 
1,122,555

Retained earnings
 
2,290,836

 
2,204,980

Accumulated other comprehensive income
 
5,542

 
5,592

Total stockholders' equity
 
3,449,796

 
3,333,447

Total liabilities and stockholders' equity
 
$
4,804,710

 
$
4,657,828

 
 
 
 
 

9




ALTERA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
 
Three Months Ended
 (In thousands)
 
March 29,
2013
 
March 30,
2012

 
 
 
 
Cash Flows from Operating Activities:
 
 
 
 
Net income
 
$
120,189

 
$
115,834

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
11,374

 
8,160

Stock-based compensation
 
22,242

 
22,393

Deferred income tax benefit
 
(15,606
)
 
(7,055
)
Tax effect of employee stock plans
 
861

 
10,566

Excess tax benefit from employee stock plans
 
(741
)
 
(10,044
)
Changes in assets and liabilities:
 
 
 
 
Accounts receivable, net
 
(42,709
)
 
(39,119
)
Inventories
 
13,439

 
12,828

Other assets
 
13,317

 
6,416

Accounts payable and other liabilities
 
(9,660
)
 
(28,462
)
Deferred income and allowances on sales to distributors
 
36,649

 
130

Income taxes payable
 
6,239

 
(4,696
)
Deferred compensation plan obligations
 
(6,116
)
 
2,812

Net cash provided by operating activities
 
149,478

 
89,763

Cash Flows from Investing Activities:
 
 
 
 
          Purchases of property and equipment
 
(14,586
)
 
(23,903
)
Sales (purchases) of deferred compensation plan securities, net
 
6,116

 
(2,812
)
          Purchases of available-for-sale securities
 
(121,111
)
 
(47,174
)
          Proceeds from sale and maturity of available-for-sale securities
 
83,394

 
48,387

          Purchases of other investments
 
(176
)
 

Net cash used in investing activities
 
(46,363
)
 
(25,502
)
Cash Flows from Financing Activities:
 
 
 
 
          Proceeds from issuance of common stock through various stock plans
 
8,442

 
12,888

          Shares withheld for employee taxes
 
(3,360
)
 
(4,884
)
          Payment of dividends to stockholders
 
(31,978
)
 
(25,822
)
          Repurchases of common stock
 

 
(8,238
)
          Excess tax benefit from employee stock plans
 
741

 
10,044

Net cash used in financing activities
 
(26,155
)
 
(16,012
)
Net increase in cash and cash equivalents
 
76,960

 
48,249

Cash and cash equivalents at beginning of period
 
2,876,627

 
3,371,933

Cash and cash equivalents at end of period
 
$
2,953,587

 
$
3,420,182



10