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 October 22, 2015 |
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 |
($ in thousands) Key Ratios & Information | September 25, 2015 | June 26, 2015 | ||||||
Current Ratio | 4:1 | 5:1 | ||||||
Liabilities/Equity | 3:4 | 3:4 | ||||||
Quarterly Operating Cash Flows | $ | 167,018 | $ | 89,220 | ||||
TTM Return on Equity | 10 | % | 12 | % | ||||
Quarterly Depreciation Expense | $ | 12,183 | $ | 11,985 | ||||
Quarterly Capital Expenditures | $ | 10,190 | $ | 7,696 | ||||
Inventory MSOH (1): Altera | 3.6 | 4.2 | ||||||
Inventory MSOH (1): Distribution | 0.8 | 0.7 | ||||||
Cash Conversion Cycle (Days) | 168 | 162 | ||||||
Turns | 48 | % | 46 | % | ||||
Book to Bill | <1.0 | <1.0 | ||||||
Note (1): MSOH: Months Supply On Hand |
Three Months Ended | Quarterly Growth Rate | |||||||||||||
September 25, 2015 | June 26, 2015 | September 26, 2014 | Sequential Change | Year- Over-Year Change | ||||||||||
Geography | ||||||||||||||
Americas | 17 | % | 20 | % | 16 | % | (14 | )% | (15 | )% | ||||
Asia Pacific | 43 | % | 41 | % | 42 | % | (1 | )% | (19 | )% | ||||
EMEA | 29 | % | 27 | % | 29 | % | 4 | % | (19 | )% | ||||
Japan | 11 | % | 12 | % | 13 | % | (13 | )% | (33 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (4 | )% | (20 | )% |
Product Category | ||||||||||||||
New | 62 | % | 53 | % | 56 | % | 12 | % | (12 | )% | ||||
Mainstream | 16 | % | 23 | % | 21 | % | (31 | )% | (37 | )% | ||||
Mature and Other | 22 | % | 24 | % | 23 | % | (11 | )% | (23 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (4 | )% | (20 | )% |
Vertical Market | ||||||||||||||
Telecom & Wireless | 35 | % | 31 | % | 45 | % | 11 | % | (37 | )% | ||||
Industrial Automation, Military & Automotive | 24 | % | 27 | % | 21 | % | (14 | )% | (6 | )% | ||||
Networking, Computer & Storage | 21 | % | 18 | % | 16 | % | 11 | % | 1 | % | ||||
Other | 20 | % | 24 | % | 18 | % | (20 | )% | (12 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (4 | )% | (20 | )% |
FPGAs and CPLDs | ||||||||||||||
FPGA | 84 | % | 83 | % | 85 | % | (2 | )% | (21 | )% | ||||
CPLD | 9 | % | 11 | % | 8 | % | (20 | )% | (5 | )% | ||||
Other Products | 7 | % | 6 | % | 7 | % | 7 | % | (22 | )% | ||||
Net Sales | 100 | % | 100 | % | 100 | % | (4 | )% | (20 | )% |
• | New Products include the Arria® 10, Stratix® V, Stratix IV, Arria V, Arria II, Cyclone® V, Cyclone IV, MAX® 10, 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, 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. |
Three Months Ended | Nine Months Ended | |||||||||||||||||||
(In thousands, except per share amounts) | September 25, 2015 | June 26, 2015 | September 26, 2014 | September 25, 2015 | September 26, 2014 | |||||||||||||||
Net sales | $ | 399,567 | $ | 414,162 | $ | 499,606 | $ | 1,249,214 | $ | 1,452,216 | ||||||||||
Cost of sales | 133,667 | 126,590 | 166,019 | 416,520 | 480,279 | |||||||||||||||
Gross margin | 265,900 | 287,572 | 333,587 | 832,694 | 971,937 | |||||||||||||||
Operating expense | ||||||||||||||||||||
Research and development expense | 100,481 | 105,345 | 112,078 | 309,057 | 310,856 | |||||||||||||||
Selling, general, and administrative expense | 74,745 | 75,011 | 77,724 | 220,262 | 231,205 | |||||||||||||||
Amortization of acquisition-related intangible assets | 2,491 | 2,427 | 2,465 | 7,382 | 7,394 | |||||||||||||||
Merger expenses | 10,421 | 18,458 | — | 28,879 | — | |||||||||||||||
Total operating expense | 188,138 | 201,241 | 192,267 | 565,580 | 549,455 | |||||||||||||||
Operating margin (2) | 77,762 | 86,331 | 141,320 | 267,114 | 422,482 | |||||||||||||||
Compensation (benefit)/expense — deferred compensation plan | (4,468 | ) | 2,732 | (487 | ) | (1,709 | ) | 4,093 | ||||||||||||
Loss/(gain) on deferred compensation plan securities | 4,468 | (2,732 | ) | 487 | 1,709 | (4,093 | ) | |||||||||||||
Interest income and other | (9,590 | ) | (8,495 | ) | (4,558 | ) | (24,681 | ) | (18,362 | ) | ||||||||||
Gain reclassified from other comprehensive income | (1,644 | ) | (1,463 | ) | (59 | ) | (5,613 | ) | (150 | ) | ||||||||||
Interest expense | 10,772 | 10,859 | 10,774 | 32,039 | 32,139 | |||||||||||||||
Income before income taxes | 78,224 | 85,430 | 135,163 | 265,369 | 408,855 | |||||||||||||||
Income tax expense | 16,706 | 15,091 | 17,154 | 38,660 | 47,328 | |||||||||||||||
Net income | 61,518 | 70,339 | 118,009 | 226,709 | 361,527 | |||||||||||||||
Other comprehensive income/(loss): | ||||||||||||||||||||
Unrealized gain/(loss) on investments: | ||||||||||||||||||||
Unrealized holding gain/(loss) on investments arising during period, net of tax of $190, ($460), ($6), ($228) and $41 | 13,058 | (24,805 | ) | (4,929 | ) | 5,038 | 22,102 | |||||||||||||
Less: Reclassification adjustments for gain on investments included in net income, net of tax of ($1), $9, $11, $15 and $21 | (1,644 | ) | (1,454 | ) | (48 | ) | (5,598 | ) | (129 | ) | ||||||||||
Other comprehensive income/(loss) | 11,414 | (26,259 | ) | (4,977 | ) | (560 | ) | 21,973 | ||||||||||||
Comprehensive income | $ | 72,932 | $ | 44,080 | $ | 113,032 | $ | 226,149 | $ | 383,500 | ||||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | 0.20 | $ | 0.23 | $ | 0.38 | $ | 0.75 | $ | 1.16 | ||||||||||
Diluted | $ | 0.20 | $ | 0.23 | $ | 0.38 | $ | 0.74 | $ | 1.15 | ||||||||||
Shares used in computing per share amounts: | ||||||||||||||||||||
Basic | 302,707 | 301,799 | 308,215 | 301,950 | 311,853 | |||||||||||||||
Diluted | 305,337 | 304,604 | 310,184 | 304,421 | 314,130 | |||||||||||||||
Dividends per common share | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.54 | $ | 0.48 | ||||||||||
Tax rate | 21.4 | % | 17.7 | % | 12.7 | % | 14.6 | % | 11.6 | % | ||||||||||
% of Net sales: | ||||||||||||||||||||
Gross margin | 66.5 | % | 69.4 | % | 66.8 | % | 66.7 | % | 66.9 | % | ||||||||||
Research and development (1) | 25.8 | % | 26.0 | % | 22.9 | % | 25.3 | % | 21.9 | % | ||||||||||
Selling, general, and administrative | 18.7 | % | 18.1 | % | 15.6 | % | 17.6 | % | 15.9 | % | ||||||||||
Operating margin(2) | 19.5 | % | 20.8 | % | 28.3 | % | 21.4 | % | 29.1 | % | ||||||||||
Net income | 15.4 | % | 17.0 | % | 23.6 | % | 18.1 | % | 24.9 | % |
Notes: | ||||||||||||||||||||
(1) Research and development expense as a percentage of Net sales includes amortization of acquisition-related intangible assets. (2) We define operating margin as gross margin less research and development expense, selling, general and administrative expense, amortization of acquisition-related intangible assets, and merger 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 | Nine Months Ended | |||||||||||||||||||
(In thousands, except per share amounts) | September 25, 2015 | June 26, 2015 | September 26, 2014 | September 25, 2015 | September 26, 2014 | |||||||||||||||
Operating margin (non-GAAP) | $ | 77,762 | $ | 86,331 | $ | 141,320 | $ | 267,114 | $ | 422,482 | ||||||||||
Compensation (benefit)/ expense — deferred compensation plan | (4,468 | ) | 2,732 | (487 | ) | (1,709 | ) | 4,093 | ||||||||||||
Income from operations (GAAP) | $ | 82,230 | $ | 83,599 | $ | 141,807 | $ | 268,823 | $ | 418,389 |
(In thousands, except par value amount) | September 25, 2015 | December 31, 2014 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,934,850 | $ | 2,426,367 | ||||
Short-term investments | 185,762 | 151,519 | ||||||
Total cash, cash equivalents, and short-term investments | 2,120,612 | 2,577,886 | ||||||
Accounts receivable, net | 444,107 | 377,964 | ||||||
Inventories | 159,310 | 153,387 | ||||||
Deferred income taxes — current | 60,210 | 56,048 | ||||||
Deferred compensation plan — marketable securities | 57,781 | 69,367 | ||||||
Deferred compensation plan — restricted cash equivalents | 17,166 | 14,412 | ||||||
Other current assets | 50,718 | 39,479 | ||||||
Total current assets | 2,909,904 | 3,288,543 | ||||||
Property and equipment, net | 208,897 | 194,840 | ||||||
Long-term investments | 2,504,693 | 1,942,343 | ||||||
Deferred income taxes — non-current | 20,725 | 20,077 | ||||||
Goodwill | 81,331 | 74,341 | ||||||
Acquisition-related intangible assets, net | 66,989 | 72,291 | ||||||
Other assets, net | 92,646 | 81,791 | ||||||
Total assets | $ | 5,885,185 | $ | 5,674,226 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 41,520 | $ | 49,140 | ||||
Accrued liabilities | 47,523 | 28,384 | ||||||
Accrued compensation and related liabilities | 74,113 | 69,837 | ||||||
Deferred compensation plan obligations | 74,947 | 83,779 | ||||||
Deferred income and allowances on sales to distributors | 439,504 | 344,168 | ||||||
Total current liabilities | 677,607 | 575,308 | ||||||
Income taxes payable — non-current | 352,433 | 313,447 | ||||||
Long-term debt | 1,493,729 | 1,492,759 | ||||||
Other non-current liabilities | 8,955 | 6,886 | ||||||
Total liabilities | 2,532,724 | 2,388,400 | ||||||
Stockholders' equity: | ||||||||
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 302,857 shares at September 25, 2015 and 302,430 shares at December 31, 2014 | 303 | 302 | ||||||
Capital in excess of par value | 1,227,586 | 1,165,259 | ||||||
Retained earnings | 2,115,487 | 2,110,620 | ||||||
Accumulated other comprehensive income | 9,085 | 9,645 | ||||||
Total stockholders' equity | 3,352,461 | 3,285,826 | ||||||
Total liabilities and stockholders' equity | $ | 5,885,185 | $ | 5,674,226 | ||||
Nine Months Ended | ||||||||
(In thousands) | September 25, 2015 | September 26, 2014 | ||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 226,709 | $ | 361,527 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 42,804 | 42,426 | ||||||
Amortization of acquisition-related intangible assets | 7,382 | 7,394 | ||||||
Amortization of debt discount and debt issuance costs | 2,337 | 2,337 | ||||||
Stock-based compensation | 63,560 | 70,518 | ||||||
Net gain on sale of available-for-sale securities | (5,613 | ) | (150 | ) | ||||
Amortization of investment discount/premium | 9,025 | 1,900 | ||||||
Deferred income tax expense | 1,065 | 3,582 | ||||||
Tax effect of employee stock plans | 3,352 | 7,434 | ||||||
Excess tax benefit from employee stock plans | (3,704 | ) | (4,719 | ) | ||||
Changes in assets and liabilities, net of the effects of acquisition: | ||||||||
Accounts receivable, net | (66,143 | ) | 76,324 | |||||
Inventories | (5,923 | ) | (22,458 | ) | ||||
Other assets | (5,796 | ) | (3,002 | ) | ||||
Accounts payable and other liabilities | 9,401 | 32,581 | ||||||
Deferred income and allowances on sales to distributors | 95,336 | (90,744 | ) | |||||
Income taxes payable and receivable, net | 26,202 | 36,345 | ||||||
Deferred compensation plan obligations | (7,123 | ) | (5,858 | ) | ||||
Net cash provided by operating activities | 392,871 | 515,437 | ||||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | (52,243 | ) | (34,946 | ) | ||||
Sales of deferred compensation plan securities, net | 7,123 | 5,858 | ||||||
Purchases of available-for-sale securities | (1,520,789 | ) | (276,867 | ) | ||||
Proceeds from sale of available-for-sale securities | 804,163 | 79,424 | ||||||
Proceeds from maturity of available-for-sale securities | 111,439 | 175,280 | ||||||
Acquisition, net of cash acquired | (4,000 | ) | — | |||||
Purchases of intangible assets | (5,359 | ) | (1,269 | ) | ||||
Purchases of other investments | (2,000 | ) | (8,224 | ) | ||||
Net cash used in investing activities | (661,666 | ) | (60,744 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from issuance of common stock through stock plans | 19,080 | 29,871 | ||||||
Shares withheld for employee taxes | (25,052 | ) | (20,852 | ) | ||||
Payment of dividends to stockholders | (162,947 | ) | (149,844 | ) | ||||
Holdback payment for prior acquisition | — | (3,353 | ) | |||||
Long-term debt and credit facility issuance costs | — | (1,321 | ) | |||||
Repurchases of common stock | (57,507 | ) | (502,986 | ) | ||||
Excess tax benefit from employee stock plans | 3,704 | 4,719 | ||||||
Net cash used in financing activities | (222,722 | ) | (643,766 | ) | ||||
Net decrease in cash and cash equivalents | (491,517 | ) | (189,073 | ) | ||||
Cash and cash equivalents at beginning of period | 2,426,367 | 2,869,158 | ||||||
Cash and cash equivalents at end of period | $ | 1,934,850 | $ | 2,680,085 |