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Press release from Business Wire

Linear Technology Reports Quarterly Increases in Revenues and Net Income and Guides for Growth in the June Quarter

Tuesday, April 17, 2012

Linear Technology Reports Quarterly Increases in Revenues and Net Income and Guides for Growth in the June Quarter17:00 EDT Tuesday, April 17, 2012 MILPITAS, Calif. (Business Wire) -- Linear Technology Corporation (NASDAQ:LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the quarter ended April 1, 2012. Quarterly revenues of $312.4 million for the third quarter of fiscal year 2012 increased $18.0 million or 6.1% over the previous quarter's revenue of $294.3 million and decreased $40.8 million or 11.6% from $353.2 million reported in the third quarter of fiscal year 2011. Net income of $98.5 million increased $10.6 million or 12% over the second quarter of fiscal year 2012 and decreased $43.1 million or 30% from the third quarter of fiscal year 2011 which benefited from a lower tax rate. Diluted earnings per share of $0.42 per share in the third quarter of fiscal year 2012 increased $0.04 per share or 11% over the second quarter of fiscal year 2012 and declined $0.19 per share or 31% from the third quarter of fiscal year 2011. During the third quarter the Company's cash, cash equivalents and marketable securities increased by $74.3 million to $1.1 billion. A cash dividend of $0.25 per share will be paid on May 30, 2012 to stockholders of record on May 18, 2012. According to Lothar Maier, CEO, “This was a transitional quarter for us as we returned to growth in revenue and profit. Our bookings, which began to improve at the end of last quarter, continued strong throughout the March quarter and we had a positive book to bill ratio. Consequently, we grew revenues by 6% in-line with the mid-point of our guidance. We experienced improvements in each of our major end-markets led by industrial and automotive. Our operating margin of 45% was similar to last quarter. Our third quarter results include Dust Networks, which we acquired in late December 2011. While revenues from Dust in the quarter were not significant, Dust's operating expenses included in our consolidated results had a minor negative impact on operating margins and net income. Given the improvement in our bookings and the broad distribution of this strength across all our major end-markets, we are estimating that we will again grow quarterly revenues sequentially in the 4% to 8% range in our fourth fiscal quarter. We also expect operating income and operating margin to improve.” 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 and country specific conditions in the world economy and financial markets and other factors described in our 10-K for the fiscal year ended July 3, 2011. Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, April 18, 2012 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (913) 312-0958, or toll free (888) 778-8904 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 www.linear.com or www.streetevents.com. A replay of the conference call will be available from April 18, 2012 through April 24, 2012. You may access the archive by calling (719) 457-0820 or toll free (888) 203-1112 and entering reservation #2487627. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of April 18, 2012 until the third quarter earnings release next year. Linear Technology Corporation, a member of the S&P 500, has been designing, manufacturing and marketing a broad line of high performance analog integrated circuits for major companies worldwide for three decades. The Company's products provide an essential bridge between our analog world and the digital electronics in communications, networking, industrial, automotive, computer, medical, instrumentation, consumer, and military and aerospace systems. Linear Technology produces power management, data conversion, signal conditioning, RF and interface ICs, µModule® subsystems, and wireless sensor network products. For more information, visit 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)          U.S. GAAP (unaudited)     Three Months Ended Nine Months Ended April 1,2012   January 1,2012   April 3,2011 April 1,2012   April 3,2011 Revenues $ 312,357 $ 294,333 $ 353,192 $ 936,610 $ 1,125,405 Cost of sales (1) 77,662   73,821   79,100   231,276   245,434   Gross profit 234,695   220,512   274,092   705,334   879,971   Expenses: Research & development (1) 57,580 52,519 55,363 164,988 170,566 Selling, general & administrative (1) 37,182   34,922   39,693   109,776   124,733   94,762   87,441   95,056   274,764   295,299   Operating income 139,933 133,071 179,036 430,570 584,672 Interest expense (6,902 ) (6,925 ) (6,981 ) (20,768 ) (25,533 ) Amortization of debt discount(2) (5,002 ) (4,931 ) (4,726 ) (14,795 ) (16,882 ) Acquisition related costs — (3,195 ) — (3,195 ) — Interest and other income 1,152   1,146   3,221   3,519   6,739   Income before income taxes 129,181 119,166 170,550 395,331 548,996 Provision for income taxes 30,682   31,281   28,993   100,546   126,446   Net income $ 98,499   $ 87,885   $ 141,557   $ 294,785   $ 422,550     Earnings per share: Basic $ 0.42   $ 0.38   $ 0.61   $ 1.27   $ 1.83   Diluted $ 0.42   $ 0.38   $ 0.61   $ 1.26   $ 1.82     Shares used in determining earnings per share:   Basic 233,346   232,209   231,225   232,568   230,455   Diluted 234,822   233,565   233,277   233,887   232,439     Includes the following non-cash charges: (1) Stock-based compensation Cost of sales $ 1,902 $ 1,844 $ 2,202 $ 5,650 $ 6,723 Research & development 8,876 8,609 9,869 26,372 30,167 Selling, general & administrative 4,580 4,442 5,282 13,608 16,137   (2) Amortization of debt discount (non- cash interest expense) 5,002 4,931 4,726 14,795 16,882     LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) U.S. GAAP (unaudited)     April 1,2012 July 3,2011 ASSETS: Current assets: Cash, cash equivalents and marketable securities $ 1,111,845 $ 922,537 Accounts receivable, net of allowance for doubtful accounts of $2,035 ($2,043 at July 3, 2011) 145,096 169,637 Inventories 79,856 72,195 Deferred tax assets and other current assets 67,658   81,921   Total current assets 1,404,455   1,246,290     Property, plant & equipment, net 328,817 332,969 Other noncurrent assets 66,073   51,907   Total assets $ 1,799,345   $ 1,631,166     LIABILITIES & STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 10,349 $ 11,606 Accrued income taxes, payroll & other accrued liabilities 100,570 123,613 Deferred income on shipments to distributors 42,099   47,587   Total current liabilities 153,018   182,806     Convertible senior notes 800,526 785,732 Deferred tax and other noncurrent liabilities 165,685 157,017   Stockholders' equity: Common stock 1,546,827 1,466,098 Accumulated deficit (867,291 ) (961,617 ) Accumulated other comprehensive income 580   1,130   Total stockholders' equity 680,116   505,611   $ 1,799,345   $ 1,631,166              LINEAR TECHNOLOGY CORPORATION RECONCILIATION OF U.S. GAAP NET INCOME TO NON-GAAP NET INCOME (In thousands, except per share amounts) (unaudited)     Three Months Ended Nine Months Ended April 1,2012   January 1,2012   April 3,2011 April 1,2012   April 3,2011 Reported net income (GAAP basis) $ 98,499 $ 87,885 $ 141,557 $ 294,785 $ 422,550   Stock-based compensation 15,358 14,895 17,353 45,630 53,027 Amortization of debt discount(1) 5,002 4,931 4,726 14,795 16,882 Acquisition related costs — 3,195 — 3,195 — Income tax effect of non-GAAP adjustments (4,836 ) (6,043 ) (3,753 ) (16,181 ) (16,102 )   Non-GAAP net income $ 114,023   $ 104,863   $ 159,883   $ 342,224   $ 476,357     Non-GAAP earnings per share Basic $ 0.49   $ 0.45   $ 0.69   $ 1.47   $ 2.07   Diluted $ 0.49   $ 0.45   $ 0.69   $ 1.46   $ 2.05     1) Amortization of debt discount is non-cash interest expense related to the Company's Convertible Senior Notes. The Company's non-GAAP measures set forth above exclude charges related to stock-based compensation, the amortization of the Company's debt discount which is a non-cash interest expense and the non-cash charge on early retirement of convertible senior notes. In addition, the Company's non-GAAP measures exclude the special expense items related to the acquisition. The Company's management uses non-GAAP net income and non-GAAP earnings per share to evaluate the Company's current operating results and financial results and to compare them against historical financial results. The Company excludes stock-based compensation, non-cash interest expenses, acquisition related costs and the related tax effects primarily because they are significant special expense estimates, which management separates for consideration when evaluating and managing business operations. In addition management believes it is useful to investors because it is frequently used by securities analysts, investors and other interested parties in evaluating the Company and provides further clarity on its profitability. In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include other items. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share prepared in accordance with GAAP. Linear Technology CorporationPaul Coghlan, 408-432-1900Vice President, Finance, Chief Financial Officer