Delaware | 0-16617 | 77-0016691 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
101 Innovation Drive, San Jose, California | 95134 | |
(Address of principal executive offices) | (Zip Code) |
Not Applicable |
(Former name or former address, if changed since last report.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ALTERA CORPORATION |
/s/ RONALD J. PASEK |
Ronald J. Pasek Senior Vice President, Finance and Chief Financial Officer |
99.1 | Press release dated July 23, 2013 |
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 has announced its Generation 10 FPGAs and SoCs, offering system developers breakthrough levels of performance and power efficiencies. Stratix® 10 FPGAs and SoCs leverage Intel's 14 nm Tri-Gate process and an enhanced architecture to deliver core performance two times higher than current high-end Altera FPGAs, while enabling an up to 70 percent power savings. Stratix 10 FPGAs and SoCs provide more than 4 million logic elements (LEs) on a single die, 56-Gbps transceivers, a third-generation ultra-high-performance processor system, and multi-die 3D solutions capable of integrating SRAM, DRAM and ASICs. |
• | Altera acquired Enpirion, Inc., the industry's leading provider of high-efficiency, integrated power conversion products known as PowerSoCs (power system-on-chip). The combination of Altera's FPGAs with Enpirion's PowerSoCs offers customers higher performance, lower system power, higher reliability, smaller footprint and faster time-to-market. Enpirion's key enabling power technologies—high-frequency switching, magnetics and packaging—are engineered into complete power system-on-chip products. Enpirion's portfolio of DC-DC converter PowerSoCs with integrated inductors enable the industry's smallest solution footprints and are recognized for their high efficiency, low noise, exceptional thermal performance, high reliability and ease-of-use. Unlike discrete power products, Enpirion's turnkey solutions give designers complete power systems that are fully simulated, characterized, validated and production qualified. Enpirion's technology, when used with an Altera FPGA, increases Altera's share of the customer's bill of materials while, at the same time, reducing the customer's overall bill of materials cost. |
Key New Product Devices | Sequential Comparisons | ||
Stratix V | (22 | )% | |
Stratix IV | 11 | % | |
Arria II | (13 | )% | |
Arria V | 113 | % | |
Cyclone IV | 17 | % | |
Cyclone V | 73 | % | |
HardCopy IV | 64 | % |
($ in thousands) Key Ratios & Information | June 28, 2013 | March 29, 2013 | ||||||
Current Ratio | 6:1 | 7:1 | ||||||
Liabilities/Equity | 1:2 | 1:3 | ||||||
Quarterly Operating Cash Flows | $ | 64,565 | $ | 149,478 | ||||
TTM Return on Equity | 15 | % | 17 | % | ||||
Quarterly Depreciation Expense | $ | 10,285 | $ | 10,175 | ||||
Quarterly Capital Expenditures | $ | 7,221 | $ | 5,984 | ||||
Inventory MSOH (1): Altera | 3.0 | 3.3 | ||||||
Inventory MSOH (1): Distribution | 0.5 | 0.6 | ||||||
Cash Conversion Cycle (Days) | 149 | 117 | ||||||
Turns | 49 | % | 43 | % | ||||
Book to Bill | >1.0 | <1.0 | ||||||
Note (1): MSOH: Months Supply On Hand |
Three Months Ended | Quarterly Growth Rate | |||||||||||||
June 28, 2013 | March 29, 2013 | June 29, 2012 | Sequential Change | Year- Over-Year Change | ||||||||||
Geography | ||||||||||||||
Americas | 17 | % | 20 | % | 17 | % | (14 | )% | (12 | )% | ||||
Asia Pacific | 39 | % | 38 | % | 46 | % | 4 | % | (22 | )% | ||||
EMEA | 28 | % | 27 | % | 23 | % | 7 | % | 11 | % | ||||
Japan | 16 | % | 15 | % | 14 | % | 13 | % | 2 | % | ||||
Net Sales | 100 | % | 100 | % | 100 | % | 3 | % | (9 | )% |
Product Category | ||||||||||||||
New | 41 | % | 39 | % | 31 | % | 6 | % | 20 | % | ||||
Mainstream | 28 | % | 29 | % | 30 | % | 0 | % | (14 | )% | ||||
Mature and Other | 31 | % | 32 | % | 39 | % | 1 | % | (28 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | 3 | % | (9 | )% |
Vertical Market | ||||||||||||||
Telecom & Wireless | 42 | % | 41 | % | 45 | % | 4 | % | (16 | )% | ||||
Industrial Automation, Military & Automotive | 22 | % | 22 | % | 19 | % | 3 | % | 2 | % | ||||
Networking, Computer & Storage | 18 | % | 18 | % | 18 | % | 0 | % | (6 | )% | ||||
Other | 18 | % | 19 | % | 18 | % | 2 | % | (8 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | 3 | % | (9 | )% |
FPGAs and CPLDs | ||||||||||||||
FPGA | 83 | % | 85 | % | 85 | % | 1 | % | (11 | )% | ||||
CPLD | 9 | % | 8 | % | 9 | % | 9 | % | (10 | )% | ||||
Other Products | 8 | % | 7 | % | 6 | % | 22 | % | 19 | % | ||||
Net Sales | 100 | % | 100 | % | 100 | % | 3 | % | (9 | )% |
• | New Products include the Stratix® V, Stratix IV, Arria® V, Arria II, Cyclone® V, Cyclone IV, MAX® V, HardCopy® IV devices and Enpirion PowerSoCs. |
• | 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. |
Sequential Sales | 5% to 9% |
Gross Margin | Approximately 68% |
Research and Development | $99 to 101 million |
SG&A | $80 to 82 million |
Tax Rate | 12% to 13% |
Diluted Share Count | Approximately 323 million |
Turns | Low 40's |
MSOH | Mid 3's |
Telecom & Wireless | Up |
Industrial Automation, Military & Automotive | Up |
Networking, Computer & Storage | Up |
Other | Flat |
Three Months Ended | Six Months Ended | |||||||||||||||||||
(In thousands, except per share amounts) | June 28, 2013 | March 29, 2013 | June 29, 2012 | June 28, 2013 | June 29, 2012 | |||||||||||||||
Net sales | $ | 421,759 | $ | 410,501 | $ | 464,831 | $ | 832,260 | $ | 848,585 | ||||||||||
Cost of sales | 135,104 | 126,083 | 141,315 | 261,187 | 256,149 | |||||||||||||||
Gross margin | 286,655 | 284,418 | 323,516 | 571,073 | 592,436 | |||||||||||||||
Operating expense | ||||||||||||||||||||
Research and development expense | 95,489 | 87,717 | 92,143 | 183,206 | 174,227 | |||||||||||||||
Selling, general, and administrative expense | 77,869 | 78,600 | 71,796 | 156,469 | 141,581 | |||||||||||||||
Amortization of acquisition-related intangible assets | 915 | 213 | 213 | 1,128 | 426 | |||||||||||||||
Total operating expense | 174,273 | 166,530 | 164,152 | 340,803 | 316,234 | |||||||||||||||
Operating margin (1) | 112,382 | 117,888 | 159,364 | 230,270 | 276,202 | |||||||||||||||
Compensation (benefit)/expense — deferred compensation plan | (160 | ) | 3,422 | (2,313 | ) | 3,262 | 3,423 | |||||||||||||
Loss/(gain) on deferred compensation plan securities | 160 | (3,422 | ) | 2,313 | (3,262 | ) | (3,423 | ) | ||||||||||||
Interest income and other | (2,778 | ) | (1,659 | ) | (1,415 | ) | (4,437 | ) | (3,222 | ) | ||||||||||
Gain reclassified from other comprehensive income | (42 | ) | (54 | ) | (69 | ) | (96 | ) | (171 | ) | ||||||||||
Interest expense | 3,389 | 2,465 | 2,116 | 5,854 | 3,053 | |||||||||||||||
Income before income taxes | 111,813 | 117,136 | 158,732 | 228,949 | 276,542 | |||||||||||||||
Income tax expense/(benefit) | 10,304 | (3,053 | ) | (3,947 | ) | 7,251 | (1,971 | ) | ||||||||||||
Net income | 101,509 | 120,189 | 162,679 | 221,698 | 278,513 | |||||||||||||||
Other comprehensive (loss)/income: | ||||||||||||||||||||
Unrealized (loss)/gain on investments: | ||||||||||||||||||||
Unrealized holding (loss)/gain on investments arising during period, net of tax of ($47), ($5), $8 ($41) and $66 | (9,031 | ) | (1 | ) | 2,799 | (9,032 | ) | 3,103 | ||||||||||||
Less: Reclassification adjustments for gain on investments included in net income, net of tax of $5, $5, $1, $10 and $6 | (37 | ) | (49 | ) | (3 | ) | (86 | ) | (23 | ) | ||||||||||
(9,068 | ) | (50 | ) | 2,796 | (9,118 | ) | 3,080 | |||||||||||||
Unrealized gain on derivatives: | ||||||||||||||||||||
Unrealized gain on derivatives arising during period, net of tax of $34 and $42 | — | — | 63 | — | 77 | |||||||||||||||
Less: Reclassification adjustments for gain on derivatives included in net income, net of tax of $23 and $50 | — | — | (42 | ) | — | (92 | ) | |||||||||||||
— | — | 21 | — | (15 | ) | |||||||||||||||
Other comprehensive (loss)/income | (9,068 | ) | (50 | ) | 2,817 | (9,118 | ) | 3,065 | ||||||||||||
Comprehensive income | $ | 92,441 | $ | 120,139 | $ | 165,496 | $ | 212,580 | $ | 281,578 | ||||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | 0.32 | $ | 0.38 | $ | 0.51 | $ | 0.69 | $ | 0.87 | ||||||||||
Diluted | $ | 0.31 | $ | 0.37 | $ | 0.50 | $ | 0.69 | $ | 0.85 | ||||||||||
Shares used in computing per share amounts: | ||||||||||||||||||||
Basic | 320,472 | 319,867 | 321,218 | 320,175 | 321,898 | |||||||||||||||
Diluted | 323,527 | 323,021 | 325,285 | 323,279 | 326,172 | |||||||||||||||
Cash dividends paid per common share | $ | 0.10 | $ | 0.10 | $ | 0.08 | $ | 0.20 | $ | 0.16 | ||||||||||
Tax rate | 9.2 | % | (2.6 | )% | (2.5 | )% | 3.2 | % | (0.7 | )% | ||||||||||
% of Net sales: | ||||||||||||||||||||
Gross margin | 68.0 | % | 69.3 | % | 69.6 | % | 68.6 | % | 69.8 | % | ||||||||||
Research and development | 22.6 | % | 21.4 | % | 19.8 | % | 22.0 | % | 20.5 | % | ||||||||||
Selling, general, and administrative | 18.5 | % | 19.1 | % | 15.4 | % | 18.8 | % | 16.7 | % | ||||||||||
Operating margin(1) | 26.6 | % | 28.7 | % | 34.3 | % | 27.7 | % | 32.5 | % | ||||||||||
Net income | 24.1 | % | 29.3 | % | 35.0 | % | 26.6 | % | 32.8 | % |
Notes: | ||||||||||||||||||||
(1) We define operating margin as gross margin less research and development expense, selling, general and administrative expense and amortization of acquisition-related intangible assets, 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 | Six Months Ended | |||||||||||||||||||
(In thousands, except per share amounts) | June 28, 2013 | March 29, 2013 | June 29, 2012 | June 28, 2013 | June 29, 2012 | |||||||||||||||
Operating margin (non-GAAP) | $ | 112,382 | $ | 117,888 | $ | 159,364 | $ | 230,270 | $ | 276,202 | ||||||||||
Compensation (benefit) expense — deferred compensation plan | (160 | ) | 3,422 | (2,313 | ) | 3,262 | 3,423 | |||||||||||||
Income from operations (GAAP) | $ | 112,542 | $ | 114,466 | $ | 161,677 | $ | 227,008 | $ | 272,779 |
(In thousands, except par value amount) | June 28, 2013 | December 31, 2012 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,788,844 | $ | 2,876,627 | ||||
Short-term investments | 164,835 | 140,958 | ||||||
Total cash, cash equivalents, and short-term investments | 2,953,679 | 3,017,585 | ||||||
Accounts receivable, net | 472,597 | 323,708 | ||||||
Inventories | 134,298 | 152,721 | ||||||
Deferred income taxes — current | 87,270 | 59,049 | ||||||
Deferred compensation plan — marketable securities | 55,753 | 60,321 | ||||||
Deferred compensation plan — restricted cash equivalents | 18,984 | 17,116 | ||||||
Other current assets | 40,095 | 49,852 | ||||||
Total current assets | 3,762,676 | 3,680,352 | ||||||
Property and equipment, net | 200,823 | 206,148 | ||||||
Long-term investments | 689,301 | 704,758 | ||||||
Deferred income taxes — non-current | 5,009 | 17,082 | ||||||
Other assets, net | 221,594 | 49,488 | ||||||
Total assets | $ | 4,879,403 | $ | 4,657,828 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 39,571 | $ | 50,036 | ||||
Accrued liabilities | 31,072 | 29,005 | ||||||
Accrued compensation and related liabilities | 37,654 | 40,606 | ||||||
Dividends payable | 47,937 | — | ||||||
Deferred compensation plan obligations | 74,737 | 77,437 | ||||||
Deferred income and allowances on sales to distributors | 399,630 | 345,993 | ||||||
Total current liabilities | 630,601 | 543,077 | ||||||
Income taxes payable — non-current | 291,656 | 272,000 | ||||||
Long-term debt | 500,000 | 500,000 | ||||||
Other non-current liabilities | 8,948 | 9,304 | ||||||
Total liabilities | 1,431,205 | 1,324,381 | ||||||
Stockholders' equity: | ||||||||
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 319,580 shares at June 28, 2013 and 319,564 shares at December 31, 2012 | 320 | 320 | ||||||
Capital in excess of par value | 1,180,183 | 1,122,555 | ||||||
Retained earnings | 2,271,221 | 2,204,980 | ||||||
Accumulated other comprehensive (loss) income | (3,526 | ) | 5,592 | |||||
Total stockholders' equity | 3,448,198 | 3,333,447 | ||||||
Total liabilities and stockholders' equity | $ | 4,879,403 | $ | 4,657,828 | ||||
Six Months Ended | ||||||||
(In thousands) | June 28, 2013 | June 29, 2012 | ||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 221,698 | $ | 278,513 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 22,449 | 16,323 | ||||||
Amortization of acquisition-related intangible assets | 1,128 | 426 | ||||||
Stock-based compensation | 47,274 | 46,200 | ||||||
Deferred income tax benefit | (21,767 | ) | (12,090 | ) | ||||
Tax effect of employee stock plans | 1,280 | 16,500 | ||||||
Excess tax benefit from employee stock plans | (1,148 | ) | (16,434 | ) | ||||
Changes in assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable, net | (147,407 | ) | (192,994 | ) | ||||
Inventories | 21,649 | (23,811 | ) | |||||
Other assets | 29,351 | 6,019 | ||||||
Accounts payable and other liabilities | (19,585 | ) | (19,066 | ) | ||||
Deferred income and allowances on sales to distributors | 50,886 | 94,299 | ||||||
Income taxes payable | 14,196 | (16,658 | ) | |||||
Deferred compensation plan obligations | (5,961 | ) | (1,925 | ) | ||||
Net cash provided by operating activities | 214,043 | 175,302 | ||||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | (23,337 | ) | (31,312 | ) | ||||
Proceeds from sales of deferred compensation plan securities, net | 5,961 | 1,925 | ||||||
Purchases of available-for-sale securities | (175,642 | ) | (576,568 | ) | ||||
Proceeds from sale and maturity of available-for-sale securities | 155,981 | 92,643 | ||||||
Acquisitions, net of cash acquired | (145,313 | ) | — | |||||
Purchases of other investments | (176 | ) | — | |||||
Net cash used in investing activities | (182,526 | ) | (513,312 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from issuance of common stock through various stock plans | 27,296 | 26,086 | ||||||
Shares withheld for employee taxes | (6,722 | ) | (6,562 | ) | ||||
Payment of dividends to stockholders | (64,048 | ) | (51,558 | ) | ||||
Payment of debt assumed in acquisitions | (22,000 | ) | — | |||||
Proceeds from issuance of long term debt | — | 500,000 | ||||||
Repayment of credit facility | — | (500,000 | ) | |||||
Long-term debt and credit facility issuance costs | — | (5,244 | ) | |||||
Repurchases of common stock | (54,974 | ) | (129,016 | ) | ||||
Excess tax benefit from employee stock plans | 1,148 | 16,434 | ||||||
Net cash used in financing activities | (119,300 | ) | (149,860 | ) | ||||
Net decrease in cash and cash equivalents | (87,783 | ) | (487,870 | ) | ||||
Cash and cash equivalents at beginning of period | 2,876,627 | 3,371,933 | ||||||
Cash and cash equivalents at end of period | $ | 2,788,844 | $ | 2,884,063 |