-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DzLD4/EIbCmxGYa7ZTJKRkh58jIKmfxUE+busWGMDmOmr+6oHqAnE4OxAsbtqJFC HgMan0Vd/DInqN0jjhsXKQ== 0000891618-98-002434.txt : 19980518 0000891618-98-002434.hdr.sgml : 19980518 ACCESSION NUMBER: 0000891618-98-002434 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALTERA CORP CENTRAL INDEX KEY: 0000768251 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770016691 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16617 FILM NUMBER: 98622222 BUSINESS ADDRESS: STREET 1: 101 INNOVATION DR CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4085448000 MAIL ADDRESS: STREET 1: 101 INNOVATION DR CITY: SAN JOSE STATE: CA ZIP: 95134 10-Q 1 FORM 10-Q FOR THE PERIOD ENDING 3/31/1998 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1998 or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission file number 0-16617 ALTERA CORPORATION (Exact name of registrant as specified in its charter) Delaware 77-0016691 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 Innovation Drive, San Jose, California 95134 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 544-7000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes [X] No [ ] Number of shares of common stock outstanding at May 8, 1998: 89,084,155 2 ALTERA CORPORATION FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998 PART I FINANCIAL INFORMATION AND MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2 3 ALTERA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)
Mar. 31, Dec.31, 1998 1997 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 64,303 $ 22,761 Short-term investments 348,730 354,808 -------- -------- Total cash, cash equivalents, and short-term investments 413,033 377,569 Accounts receivable, net 55,037 55,251 Inventories 97,258 98,883 Deferred income taxes 64,576 63,076 Other current assets 26,612 21,423 -------- -------- Total current assets 656,516 616,202 Property and equipment, net 151,760 152,417 Investments and other assets 178,339 183,899 -------- -------- $986,615 $952,518 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 25,297 $ 20,649 Accrued liabilities 19,975 16,688 Accrued compensation 10,296 20,226 Deferred income on sales to distributors 126,661 128,268 Income taxes payable 14,118 -- -------- -------- Total current liabilities 196,347 185,831 Convertible subordinated notes 230,000 230,000 -------- -------- Total liabilities 426,347 415,831 -------- -------- Stockholders' equity: Common stock 89 89 Additional paid-in capital 111,990 123,544 Retained earnings 448,189 413,054 -------- -------- Total stockholders' equity 560,268 536,687 -------- -------- $986,615 $952,518 ======== ========
See accompanying notes to financial information. 3 4 ALTERA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
Three Months Ended March 31, ------------------------ 1998 1997* --------- --------- Net sales $ 157,216 $ 146,043 --------- --------- Costs & expenses: Cost of sales 60,090 55,355 Research and development 14,407 12,315 Selling, general and administrative 28,138 24,760 --------- --------- Total costs and expenses 102,635 92,430 --------- --------- Income from operations 54,581 53,613 Interest & other income, net 152 329 --------- --------- Income before taxes 54,733 53,942 Provision for income taxes 17,787 18,340 --------- --------- Income before accounting change and equity investment 36,946 35,602 Equity in income (loss) of WaferTech (1,811) -- --------- --------- Income before cumulative effect of accounting change 35,135 35,602 Cumulative effect of change in accounting principle -- (18,064) --------- --------- Net income $ 35,135 $ 17,538 ========= ========= BASIC EARNINGS PER SHARE: Income before accounting change $ 0.40 $ 0.41 ========= ========= Net income $ 0.40 $ 0.20 ========= ========= DILUTED EARNINGS PER SHARE: Income before accounting change $ 0.37 $ 0.36 ========= ========= Net income $ 0.37 $ 0.19 ========= ========= WEIGHTED AVERAGE SHARES: Basic 88,885 87,873 ========= ========= Diluted 101,961 102,119 ========= =========
* Restated to reflect change in accounting principle. See accompanying notes to financial information. 4 5 ALTERA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Unaudited, in thousands)
Three Months Ended March 31, ------------------------ 1998 1997* --------- --------- Cash flows from operating activities: Net income $ 35,135 $ 17,538 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of change in accounting principle -- 18,064 Equity in loss of WaferTech 1,811 -- Depreciation and amortization 7,636 6,317 Deferred income taxes (1,500) (4,203) Changes in assets and liabilities: Accounts receivable, net 214 (4,265) Inventories 1,625 13,769 Other current assets (5,189) (507) Accounts payable and accrued liabilities (1,995) 8,891 Deferred income on sales to distributors (1,607) 25,992 Income taxes payable 14,990 14,392 --------- --------- Cash provided by operating activities 51,120 95,988 --------- --------- Cash flows from investing activities: Purchases of property and equipment (5,228) (23,345) Net change in short-term investments 6,078 (85,674) Long-term investments 1,126 (688) --------- --------- Cash provided by (used for) investing activities 1,976 (109,707) --------- --------- Cash flows from financing activities: Tax benefit from employee stock transactions 1,680 5,000 Net proceeds from issuance of common stock 3,792 4,966 Repurchase of common stock (17,026) -- --------- --------- Cash provided by (used for) financing activities (11,554) 9,966 --------- --------- Net increase (decrease) in cash and cash equivalents 41,542 (3,753) Cash and cash equivalents at beginning of period 22,761 70,788 --------- --------- Cash and cash equivalents at end of period $ 64,303 $ 67,035 ========= ========= Supplemental disclosure of cash flow information: Cash paid during the period for income taxes $ 221 $ 2,820 Cash paid during the period for interest $ -- $ --
*Restated to reflect change in accounting principle. See accompanying notes to financial information. 5 6 ALTERA CORPORATION NOTES TO FINANCIAL INFORMATION (Unaudited) Note 1 - Interim Statements: In the opinion of the Company, the accompanying unaudited financial data contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial information included therein. This financial data should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report to Stockholders for the year ended December 31, 1997. Results for the interim period presented are not necessarily indicative of results for the entire year. Certain prior year amounts have been reclassified to conform to the current year's presentation. Note 2 - Balance Sheet Details:
(In thousands) Mar. 31, Dec. 31, 1998 1997 --------- --------- Inventories: Purchased parts and raw materials $ 114 $ 1,503 Work-in-process 72,740 67,442 Finished goods 24,404 29,938 --------- --------- $ 97,258 $ 98,883 ========= ========= Property and equipment: Land $ 20,496 $ 20,496 Building 76,094 75,111 Equipment 104,036 102,953 Office furniture and equipment 10,013 9,767 Leasehold improvements 1,032 1,884 --------- --------- 211,671 210,211 Accumulated depreciation and Amortization (59,911) (57,794) --------- --------- $ 151,760 $ 152,417 ========= =========
Note 3 - Income Per Share: Basic net income per share is computed by dividing net income available to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period and excludes the dilutive effect of stock options and convertible securities. Diluted net income per share gives effect to all dilutive common shares and other dilutive securities outstanding during the period. In computing diluted net income per share, the average stock price for the period is used in determining the number of shares assumed to be purchased from exercise of stock options. 6 7 ALTERA CORPORATION NOTES TO FINANCIAL INFORMATION (continued) (Unaudited) A reconciliation of the numerators and denominators of the basic and diluted income per share is presented below:
Three Months Ended March 31, --------------------- 1998 1997* -------- -------- Basic: Net income $ 35,135 $ 17,538 ======== ======== Weighted average common shares outstanding 88,885 87,873 ======== ======== Basic net income per share $ 0.40 $ 0.20 ======== ======== Diluted: Net income $ 35,135 $ 17,538 Convertible notes interest, net of income taxes and capitalized interest 2,232 1,624 -------- -------- $ 37,367 $ 19,162 ======== ======== Weighted average common shares outstanding 88,885 87,873 Dilutive stock options 4,086 5,256 Assumed conversion of notes 8,990 8,990 -------- -------- 101,961 102,119 ======== ======== Diluted net income per share $ 0.37 $ 0.19 ======== ========
*Restated to reflect change in accounting principle. Note 4 - Common Stock Repurchase: In January 1998, the Company repurchased 540,000 shares of common stock for a total price of $17.0 million. The repurchased shares were retired upon acquisition. 7 8 ALTERA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net Sales. Net sales during the first quarter of 1998 were $157.2 million, 7.7% higher than the $146.0 million reported for the same period last year, and flat compared to 1997 fourth quarter net sales of $157.1 million. Net sales in the first quarter of 1998 increased over the same period last year primarily due to significantly higher sales of new product families, including the FLEX 10K and MAX 7000S product families, which were partially offset by declines in sales of mainstream and mature product families. Net sales of new products increased from $16.7 million in the first quarter of 1997 to $52.1 million in the first quarter of 1998 while net sales of mainstream products, consisting of the MAX 7000, FLEX 8000, and FLASHlogic families, decreased from $96.9 million to $79.8 million. During the same periods, net sales of mature products, consisting of the Classic and MAX 5000 families, have decreased from $22.7 million to $14.3 million. Management expects that the decline in sales of the mainstream and mature products, which presently comprise more than half of the Company's revenue base, will continue. The Company's ability to maintain or increase net sales in the future is dependent on sales of new product families increasing more rapidly than the decline in sales of mainstream and mature product families. While management is optimistic that new product sales will increase, there can be no assurances that new product sales growth will offset the decline in sales of mainstream and mature products. Japan and Asia Pacific experienced decreases in net sales in the first quarter of 1998 as compared to the first quarter of 1997, and as compared to the fourth quarter of 1997. A significant portion of the Company's sales are in Japan and the Asia Pacific regions, which are currently experiencing slow or negative economic growth. Management believes that the poor economic environment is limiting sales of its products in those regions, particularly in the communications segment, and this is evidenced by the recent quarter's results. Management expects that as the economic environment in Japan and Asia Pacific remains unfavorable, the Company's overall sales will continue to be diluted as a result. Further economic decline in those regions could result in an overall decrease in sales. During the first quarter of 1998, the Company's inventories decreased to $97.3 million from $98.9 million at December 31, 1997. During the fourth quarter of 1997, the Company increased its inventory levels to improve responsiveness to customer demand, essentially on the Company's newer product families. Gross Margin. The gross margin percentage in the first quarter of 61.8% was down from 62.1% in the same period a year ago and 62.5% during the prior quarter. Gross margins during the first quarter decreased slightly from the fourth quarter of 1997 due to aggressive pricing of newer products, which was 8 9 partially offset by lower manufacturing costs due to process advancements, increased manufacturing activity and lower wafer costs. Yields measured as a total for all product families decreased slightly from the fourth quarter of 1997. Yields for the MAX 7000 product families were slightly lower in the first quarter of 1998 as the Company transitioned certain MAX 7000 product family members to new and more advanced processes. The Company continues to spend significant research and development resources to improve production yields on both new and established products. Difficulties in production yields often occur when the Company is beginning production of new products or transitioning to new processes. These difficulties can potentially result in significantly higher costs and lower product availability. Management expects to continue to introduce new and established products using new process technologies and may encounter similar start-up difficulties during the transition to such process technologies. Further, production throughput times vary considerably among the Company's wafer suppliers, and the Company may experience delays from time to time in processing some of its products which also may result in higher costs and lower product availability. Research and Development. Research and development expenditures were $14.4 million for the first quarter of 1998, $2.1 million higher than the same period a year ago, and $1.1 million higher than the prior quarter. The research and development expenditures include expenditures for labor, prototype and pre-production costs, development of process technology, development of software to support new products and design environments, and development of new packages. As a percentage of sales, research and development expenditures increased to 9.2% for the first quarter of 1998, compared to 8.4% for the first quarter a year ago and 8.5% for the fourth quarter of 1997. Historically, the level of research and development expenditures as a percentage of sales has fluctuated in part due to the timing of the purchase of wafers used in development and prototyping of new products. The Company currently expects that, in the long term, research and development expenses will continue to increase in absolute dollars but may fluctuate as a percentage of sales. The Company expects to continue to make significant investments in prototyping of the FLEX 6000 and FLEX 10K product families. Also, the Company is focusing its efforts on the development of new programmable logic chips, related development software and hardware, and advanced semiconductor wafer fabrication processes. However, even if the Company accomplishes its goals for the development of new products and manufacturing processes, there is no assurance that these products will achieve market acceptance, that the new manufacturing processes will be successful, or that the suppliers will provide the Company with the quality or quantity of wafers and materials that the Company requires. The Company must continue to develop and introduce new products in a timely manner to help counter the industry's historical trend of declining prices as products mature. Selling, General, and Administrative. First quarter selling, general, and administrative expenses of $28.1 million are $3.4 million higher than the same quarter a year ago and $1.2 million lower than the prior 9 10 quarter. Compared to the same period a year ago, the increase in selling, general and administrative expenses relates primarily to higher payroll costs as a result of increased headcount and higher selling expenses on increased sales, offset by decreased legal expenses. The decrease in selling, general, and administrative expenses from the fourth quarter of 1997 to the first quarter of 1998 was a result of a reduction in legal and travel costs. Selling, general, and administrative expenses includes commission and incentive expenses, advertising and promotional expenditures, legal, and salary expenses related to field sales, marketing, and administrative personnel. Operating Income. First quarter 1998 operating income of $54.6 million, representing 34.7% of net sales, was lower than the 36.7% for the same quarter a year ago and the 35.3% achieved during the fourth quarter of 1997. The year-to-year decrease in operating income, as a percentage of net sales, was affected by the overall decrease in the Company's gross margin and the increases in research and development and selling, general and administrative expenses as a percentage of net sales. Interest and Other Income. Interest and other income decreased compared to the same quarter a year ago and increased slightly compared to the fourth quarter of 1997. Interest and other income consists of interest income on cash balances available for investment offset by interest expense related to the Company's convertible notes (such interest expense is net of capitalized interest incurred during the construction of the new headquarters). The increase in interest and other income from the fourth quarter of 1997 to the first quarter of 1998 is primarily a result of higher cash balances available for investment. Income Taxes. The Company's provision for income taxes was 32.5% for the first quarter of 1998 compared to 34.0% for the quarter ended December 31, 1997. The decrease in the income tax provision rate is due in part to increased research and development tax credits, a change in the geographic mix of income, and an increased amount of tax-exempt interest income in 1998 compared to 1997. Equity Investment. In June 1996, Altera, TSMC, and several other partners formed WaferTech, LLC ("WaferTech"), a joint venture company in the development stage, to build and operate a wafer manufacturing plant in Camas, Washington. In return for a $140.4 million cash investment, Altera received an 18% equity ownership in the joint venture company and certain rights to procure output from the facility at market prices. The Company accounts for this investment under the equity method based on the Company's ability to exercise significant influence on the operating and financial policies of WaferTech. During the first quarter of 1998, the Company recorded a charge of $1.8 million representing the Company's equity in the loss of WaferTech, net of tax. Change in Accounting Principle. In October 1997, the Company changed its accounting method for recognizing sales to distributors with an effective date of January 1, 1997. The Company previously recognized sales upon shipment to distributors as title passes to customers, including distributors, net of appropriate reserves for sales returns and allowances. The accounting change involves the deferral of sales 10 11 recognition on shipments to distributors until the product is sold to the end customer. The Company believes that deferral of distributor sales and related gross margins until the product is shipped by the distributors results in a more meaningful measurement of operations and is a preferable method of accounting for distributor sales. The cumulative effect in prior years of the change in accounting method was $18.1 million. The results of operations and cash flows for the period ended March 31, 1997 have been restated to reflect the accounting change. Future Results. Future operating results will depend on the Company's ability to develop, manufacture, and sell complicated semiconductor components and complex software that offers customers greater value than products of competing vendors. The Company's efforts in this regard may not be successful. Also, a number of factors outside of the Company's control, including general economic conditions and cycles in world markets, exchange rate fluctuations, or a lack of growth in the Company's end markets could impact future results. The Company is highly dependent upon subcontractors to fabricate silicon wafers and perform assembly and testing services. Disruptions or adverse supply conditions arising from market conditions, political strife, labor disruptions, natural or man-made disasters, other factors, and normal process variations could have a material adverse effect on the Company's future operating results. Competitive break-throughs and particularly competitive pricing could also impact future operating results. Additionally, litigation relating to competitive patents and intellectual property could have an adverse impact on the Company's financial condition or operating results. The Company owns numerous United States patents and has additional pending United States and foreign patent applications on its semiconductor and software products. The Company also has technology licensing agreements with AMD, Cypress Semiconductor, Intel, and Texas Instruments that give the Company royalty-free rights to design, manufacture, and package products using certain patents they control. Other companies have filed applications for, or have been issued, other patents and may develop, or obtain proprietary rights relating to, products or processes competitive with those of the Company. From time to time the Company may find it desirable to obtain additional licenses from the holders of patents relating to products or processes competitive with those of the Company. Although its patents and patent applications may have value in discouraging competitive entry into the Company's market segment and the Company believes that its current licenses will assist it in developing additional products, there can be no assurance that any additional patents will be granted to the Company, that the Company's patents will provide meaningful protection from competition, or that any additional products will be developed based on any of the licenses that the Company currently holds. The Company believes that its future success will depend primarily upon the technical competence and creative skills of its personnel, rather than on its patents, licenses, or other proprietary rights. The Company, in the normal course of business, from time to time receives and makes inquiries with respect to possible patent infringements. As a result of inquiries received from companies, it may be necessary or desirable for the Company to obtain additional licenses relating to one or more of its current or 11 12 future products. There can be no assurance that such additional licenses could be obtained, and, if obtainable, could be obtained on conditions that would not have a material adverse effect on the Company's operating results. If the inquiring companies were to allege infringement of their patents, as is the case in the Company's current litigation with competitors, there can be no assurance that any necessary licenses could be obtained, and, if obtainable, that such licenses would be on terms or conditions that would not have a material adverse effect on the Company. In addition, if litigation were initiated, there can be no assurance that these companies would not succeed in obtaining significant monetary damages or an injunction against the manufacture and sale of one or more of the Company's product families. It may be necessary or desirable for the Company to incur significant litigation expenses to enforce its intellectual property rights. Liquidity and Capital Resources The Company's cash, cash equivalents and short-term investments increased by $35.5 million in the first three months of 1998, from $377.6 million at December 31, 1997 to $413.0 million at March 31, 1998. The increase is mainly attributable to net income of $35.1 million, adjusted by non-cash items including the equity in loss of WaferTech and depreciation and amortization aggregating $9.4 million. Also during the first quarter, the Company repurchased $17.0 million of common stock. The Company believes that its cash, cash equivalents, and short-term investments, combined with cash generated from ongoing operations, will be adequate to finance the Company's operations and capital expenditures for at least the next year. Impact of Currency and Inflation. The Company purchases the majority of its materials and services in U.S. dollars, and most of its foreign sales are transacted in U.S. dollars. However, Altera does have Yen denominated purchase contracts with Sharp Corporation of Japan for processed silicon wafers. In recent years, the Company did not hold or purchase any foreign exchange contracts for the purchase or sale of foreign currencies. However, in January 1998, the Company entered into a forward exchange contract to purchase Malaysian ringgit to meet a portion of its firm contractual commitments of ringgit required in 1998. The Company may choose to enter into similar contracts from time to time should conditions appear favorable. Effects of inflation on Altera's financial results have not been significant. Safe Harbor Notice This Quarterly Report on Form 10-Q contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward looking statements are generally written in the future tense and/or are preceded preceded by words such as "expects," "suggests," "believes," "anticipates," or "intends." The Company's future results of operations and the other forward looking statements contained in this Report involve a number of risks and uncertainties, 12 13 many of which are outside the Company's control. Some of these risks and uncertainties are described in proximity to forward looking statements that are contained in the section of this Report entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations." Factors that could cause actual results to differ materially from projected results include but are not limited to risks associated with the Company's ability to achieve continued cost reductions and maintain gross margins, the Company's ability to achieve and maintain appropriate inventory levels and respond successfully to changes in product demand, the ability of price reductions to increase demand and strengthen the Company's market share over the long term, successful development of new products through investment in research and development and application of new process technologies to old and new product lines, market acceptance of and demand for the Company's products, litigation involving intellectual property rights, issuance of new patents and acquisition of other intellectual property rights, the Company's ability to finance its operations and expenditures, and general market conditions. Additional risk factors are disclosed in the Company's 1997 Annual Report on Form 10-K on file with the Securities and Exchange Commission. 13 14 ALTERA CORPORATION FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998 PART II OTHER INFORMATION 14 15 Item 1. Legal Proceedings In June 1993, Xilinx, Inc. ("Xilinx") brought suit against the Company seeking monetary damages and injunctive relief based on the Company's alleged infringement of certain patents held by Xilinx. In June 1993, the Company brought suit against Xilinx, seeking monetary damages and injunctive relief based on Xilinx's alleged infringement of certain patents held by the Company. In April 1995, the Company filed a separate lawsuit against Xilinx in Delaware, Xilinx's state of incorporation, seeking monetary damages and injunctive relief based on Xilinx's alleged infringement of one of the Company's patents. In May 1995, Xilinx counterclaimed against the Company in Delaware, asserting defenses and seeking monetary damages and injunctive relief based on the Company's alleged infringement of certain patents held by Xilinx. Subsequently, the Delaware case has been transferred to California. Due to the nature of the litigation with Xilinx and because the lawsuits are still in the pre-trial stage, the Company's management cannot estimate the total expense, the possible loss, if any, or the range of loss that may ultimately be incurred in connection with the allegations. Management cannot ensure that Xilinx will not succeed in obtaining significant monetary damages or an injunction against the manufacture and sale of the Company's MAX 5000, MAX 7000, FLEX 8000, or MAX 9000 families of products, or succeed in invalidating any of the Company's patents. Although no assurances can be given as to the results of these cases, based on the present status, management does not believe that any of such results will have a material adverse effect on the Company's financial condition or results of operations. In August 1994, Advanced Micro Devices, Inc. ("AMD") brought suit against the Company seeking monetary damages and injunctive relief based on the Company's alleged infringement of certain patents held by AMD. In September 1994, Altera answered the complaint asserting that it is licensed to use the patents which AMD claims are infringed and filed a counterclaim against AMD alleging infringement of certain patents held by the Company. In October 1997, upon completion of trials bifurcated from the infringement claims, the Court ruled that the Company is licensed under all patents asserted by AMD in the suit. In December 1997, AMD filed a Notice of Appeal of the Court's rulings. Due to the nature of the litigation with AMD, and because AMD has appealed the court rulings that the Company is licensed under all of the patents asserted by AMD in the suit, the Company's management cannot estimate the total expense, the possible loss, if any, or the range of loss that may ultimately be incurred in connection with the allegations. Management cannot ensure that AMD will not succeed in obtaining significant monetary damages or an injunction against the manufacture and sale of the Classic, MAX 5000, MAX 7000, FLEX 8000, MAX 9000, FLEX 10K and FLASHlogic product families, or succeed in invalidating any of the Company's patents remaining in the suit. Although no assurances can be given to the results of this case, based on its present status, management does not believe that any of such results will have a material adverse effect on the Company's financial condition or results of operations. 15 16 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27.1 Financial Data Schedule for the three months ended March 31, 1998. 27.2 Financial Data Schedule for the periods ended March 31, 1997, June 30, 1997 and September 30, 1997, restated to report basic and diluted earnings per share in accordance with FASB Statement No. 128, "Earnings per Share," and to reflect a change in accounting principle. 27.3 Financial Data Schedule for the periods ended March 31, 1996, June 30, 1996, September 30, 1996, and December 31, 1996, restated to report basic and diluted earnings per share in accordance with FASB Statement No. 128, "Earnings per Share." 27.4 Financial Data Schedule for the year ended December 31, 1995, restated to report basic and diluted earnings per share in accordance with FASB Statement No. 128, "Earnings per Share." (b) Reports on Form 8-K None. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALTERA CORPORATION /s/ NATHAN SARKISIAN --------------------------------------------- Nathan Sarkisian, Senior Vice President (duly authorized officer) and Chief Financial Officer (principal financial officer) Date: May 14, 1998 EX-27.1 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 64,303 348,730 55,037 3,174 97,258 656,516 211,671 59,911 986,615 196,347 230,000 0 0 89 560,179 986,615 157,216 157,216 60,090 60,090 42,545 0 3,491 54,733 17,787 36,946 0 0 0 35,135 0.40 0.37 For purposes of this Exhibit, Primary means Basic.
EX-27.2 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE IS A RESTATEMENT OF SCHEDULES FROM PREVIOUS FILINGS TO INCORPORATE THE PROVISIONS OF SFAS NO. 128 - EARNINGS PER SHARE AND A CHANGE IN ACCOUNTING PRINCIPLE. 3-MOS 6-MOS 9-MOS DEC-31-1997 DEC-31-1997 DEC-31-1997 JAN-01-1997 JAN-01-1997 JAN-01-1997 MAR-31-1997 JUN-30-1997 SEP-30-1997 67,035 66,467 87,282 295,736 306,959 323,511 72,751 57,992 49,259 2,359 2,765 2,465 62,029 71,988 97,913 559,420 587,942 637,416 164,590 187,418 202,041 55,521 57,082 53,573 882,361 923,193 988,562 254,612 247,426 262,477 230,000 230,000 230,000 0 0 0 0 0 0 100,610 89 89 297,139 445,678 495,996 882,361 923,193 988,562 146,043 311,900 474,026 146,043 311,900 474,026 55,355 117,242 177,991 55,355 117,242 177,991 37,075 81,014 124,511 0 0 0 2,647 5,034 8,280 53,942 115,235 174,040 18,340 39,179 59,173 35,602 76,056 114,867 0 0 0 0 0 0 (18,064) (18,064) (18,064) 17,538 57,992 96,803 0.20 0.66 1.10 0.19 0.60 0.99 For purposes of this Exhibit, Primary means Basic.
EX-27.3 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE IS A RESTATEMENT OF SCHEDULES FROM PREVIOUS FILINGS TO INCORPORATE THE PROVISIONS OF SFAS NO. 128 - EARNINGS PER SHARE. 3-MOS 6-MOS 9-MOS 12-MOS DEC-31-1996 DEC-31-1996 DEC-31-1996 DEC-31-1996 JAN-01-1996 JAN-01-1996 JAN-01-1996 JAN-01-1996 MAR-31-1996 JUN-30-1996 SEP-30-1996 DEC-31-1996 102,479 104,067 66,885 70,788 247,187 187,284 218,751 210,062 60,362 40,048 54,282 68,486 1,460 1,662 1,976 2,399 75,146 101,124 89,429 75,798 534,134 479,613 475,568 472,987 100,857 110,171 118,990 141,334 42,922 46,104 47,984 51,530 735,306 762,310 71,006 778,212 205,705 160,606 194,925 177,967 239,600 286,160 230,000 230,000 0 0 0 0 0 0 0 0 86,817 88,095 88,385 90,644 203,184 227,449 250,289 279,601 735,306 762,310 763,599 778,212 137,098 253,393 370,121 497,306 137,098 253,393 370,121 497,306 53,054 97,903 142,997 191,958 53,054 97,903 142,997 191,958 35,843 69,760 103,658 137,255 0 0 0 0 1,920 6,342 9,403 12,284 49,124 87,040 124,725 169,137 17,684 31,335 44,902 60,002 31,440 55,705 79,823 109,135 0 0 0 0 0 0 0 0 0 0 0 0 31,440 55,705 79,823 109,135 0.36 0.64 0.91 1.25 0.33 0.59 0.85 1.16 For purposes of this Exhibit, Primary means Basic.
EX-27.4 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE IS A RESTATEMENT OF SCHEDULES FROM PREVIOUS FILINGS TO INCORPORATE THE PROVISIONS OF SFAS NO. 128 - EARNINGS PER SHARE. 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 79,409 285,810 54,518 1,005 55,421 518,007 94,653 39,807 715,554 171,765 288,600 83,445 0 0 171,744 715,554 401,598 401,598 158,808 158,808 108,507 0 7,401 137,891 51,020 86,871 0 0 0 86,871 1.00 0.95 For purposes of this Exhibit, Primary means Basic.
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