MILPITAS, Calif. — (BUSINESS WIRE) — April 15, 2014 — Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the fiscal quarter ended March 30, 2014. Quarterly revenues of $348.0 million for the third quarter of fiscal year 2014 increased $13.4 million or 4.0% over the previous quarter's revenue of $334.6 million and increased $33.5 million or 10.6% over $314.5 million reported in the third quarter of fiscal year 2013. Net income of $117.6 million increased $12.9 million or 12.3% over the second quarter of fiscal year 2014 and increased $6.6 million or 6.0% over the third quarter of fiscal year 2013. Diluted earnings per share of $0.48 per share in the third quarter of fiscal year 2014 increased $0.04 per share or 9.1% over the second quarter of fiscal year 2014 and increased $0.02 per share or 4.3% over the third quarter of fiscal year 2013. Net income for the third quarter fiscal 2014 benefited from a lower tax rate of 21% compared to the second quarter of fiscal 2014 rate of 25% due primarily to the release of estimated tax liabilities for fiscal years that are no longer subject to audit. The prior year quarter had a lower tax rate of 12.75% due to the reinstatement of the federal R&D tax credit and secondarily due to the release of estimated tax liabilities for fiscal years that are no longer subject to audit.
During the third quarter the Company's cash, cash equivalents and marketable securities increased by $45.1 million over the second quarter of fiscal year 2014 to $1,763 million net of spending $10.9 million to purchase approximately 242,000 shares of its common stock in the open market. A cash dividend of $0.27 per share will be paid on May 28, 2014 to stockholders of record on May 16, 2014. Additionally, we announced earlier this month that the Company has called for redemption effective May 1, 2014 all of its outstanding Senior Convertible Notes with a principal balance of $845 million. The face value of the Notes will be paid with internally generated cash, with any conversion premium paid in shares of our common stock.
According to Lothar Maier, CEO, “After the slight decline we experienced last quarter, we are pleased to report that the bookings momentum that occurred at the end of our second quarter continued through the third quarter. As a result, we grew revenues 4% sequentially and 10.6% year-over-year. The book-to-bill ratio was positive for the quarter and bookings increased sequentially in all of our major markets, with the automotive, industrial and communications markets showing the most gains. Looking forward, we are encouraged by our current bookings momentum and the breadth of the bookings across our major markets. Accordingly, we are currently estimating sequential revenue growth of 2% to 6% for our fiscal fourth quarter. The redemption of our convertible notes will favorably impact our profitability going forward as interest expense related to the notes will terminate. Shares of common stock will increase modestly to reflect the anticipated premium the notes will have earned.”
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 year ended June 30, 2013.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, April 16, 2014 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call 719-325-4828, or toll free 800-263-0877 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 16, 2014 through April 23, 2014. You may access the archive by calling (719) 457-0820 or toll free (888) 203-1112 and entering reservation #3211661. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of April 23, 2014 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 over 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 | |||||||||||||||||||
| March 30, 2014 | December 29, 2013 | March 31, 2013 | March 30, 2014 | March 31, 2013 | ||||||||||||||||
| Revenues | $ | 348,006 | $ | 334,595 | $ | 314,542 | $ | 1,022,958 | $ | 954,971 | ||||||||||
| Cost of sales (1) | 84,479 | 82,521 | 79,259 | 251,001 | 241,202 | |||||||||||||||
| Gross profit | 263,527 | 252,074 | 235,283 | 771,957 | 713,769 | |||||||||||||||
| Expenses: | ||||||||||||||||||||
| Research & development (1) | 62,129 | 62,008 | 58,517 | 185,649 | 174,624 | |||||||||||||||
| Selling, general & administrative (1) | 40,693 | 38,852 | 38,480 | 118,223 | 113,074 | |||||||||||||||
| 102,822 | 100,860 | 96,997 | 303,872 | 287,698 | ||||||||||||||||
| Operating income | 160,705 | 151,214 | 138,286 | 468,085 | 426,071 | |||||||||||||||
| Interest expense | (6,813 | ) | (6,813 | ) | (6,812 | ) | (20,439 | ) | (20,502 | ) | ||||||||||
| Amortization of debt discount(2) | (5,603 | ) | (5,524 | ) | (5,294 | ) | (16,573 | ) | (15,659 | ) | ||||||||||
| Interest and other income | 581 | 791 | 1,004 | 2,254 | 3,050 | |||||||||||||||
| Income before income taxes | 148,870 | 139,668 | 127,184 | 433,327 | 392,960 | |||||||||||||||
| Provision for income taxes | 31,263 | 34,917 | 16,216 | 103,101 | 87,976 | |||||||||||||||
| Net income | $ | 117,607 | $ | 104,751 | $ | 110,968 | $ | 330,226 | $ | 304,984 | ||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.49 | $ | 0.44 | $ | 0.47 | $ | 1.38 | $ | 1.29 | ||||||||||
| Diluted | $ | 0.48 | $ | 0.44 | $ | 0.46 | $ | 1.37 | $ | 1.28 | ||||||||||
| Shares used in determining earnings per share: | ||||||||||||||||||||
| Basic | 240,669 | 239,206 | 237,296 | 239,592 | 236,323 | |||||||||||||||
| Diluted | 243,992 | 240,670 | 238,641 | 241,724 | 237,388 | |||||||||||||||
| Includes the following non-cash charges: | ||||||||||||||||||||
| (1) Stock-based compensation | ||||||||||||||||||||
| Cost of sales | $ | 1,961 | $ | 2,106 | $ | 1,998 | $ | 6,031 | $ | 5,952 | ||||||||||
| Research & development | 9,133 | 9,816 | 9,324 | 28,111 | 27,775 | |||||||||||||||
| Selling, general & administrative | 4,718 | 5,069 | 4,812 | 14,517 | 14,335 | |||||||||||||||
|
(2) Amortization of debt discount (non-cash interest expense) |
5,603 | 5,524 | 5,294 | 16,573 | 15,659 | |||||||||||||||
| LINEAR TECHNOLOGY CORPORATION | ||||||||
| CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| U.S. GAAP (unaudited) | ||||||||
| March 30, 2014 | June 30, 2013 | |||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and marketable securities | $ | 1,762,728 | $ | 1,524,741 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $1,870 ($1,891 at June 30, 2013) |
182,032 | 145,274 | ||||||
| Inventories | 87,675 | 87,229 | ||||||
| Deferred tax assets and other current assets | 41,291 | 36,646 | ||||||
| Total current assets | 2,073,726 | 1,793,890 | ||||||
| Property, plant & equipment, net | 268,348 | 288,466 | ||||||
| Other noncurrent assets | 14,335 | 15,985 | ||||||
| Total assets | $ | 2,356,409 | $ | 2,098,341 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 18,353 | $ | 10,258 | ||||
| Accrued income taxes, payroll & other accrued liabilities | 85,318 | 109,426 | ||||||
| Deferred income on shipments to distributors | 43,194 | 44,088 | ||||||
| Convertible senior notes | 843,202 | 826,629 | ||||||
| Deferred tax liabilities- current portion | 38,177 | 35,479 | ||||||
| Total current liabilities | 1,028,244 | 1,025,880 | ||||||
| Deferred tax and other noncurrent liabilities | 104,494 | 90,553 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1,874,616 | 1,736,729 | ||||||
| Accumulated deficit | (650,833 | ) | (754,555 | ) | ||||
| Accumulated other comprehensive loss | (112 | ) | (266 | ) | ||||
| Total stockholders’ equity | 1,223,671 | 981,908 | ||||||
| $ | 2,356,409 | $ | 2,098,341 | |||||
| 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 | |||||||||||||||||||
| March 30, 2014 | December 29, 2013 | March 31, 2013 |
March 30, 2014 |
March 31, 2013 |
||||||||||||||||
| Reported net income | ||||||||||||||||||||
| (GAAP basis) | $ | 117,607 | $ | 104,751 | $ | 110,968 | $ | 330,226 | $ | 304,984 | ||||||||||
| Stock-based compensation | 15,812 | 16,991 | 16,134 | 48,659 | 48,062 | |||||||||||||||
|
Amortization of debt discount(1) |
5,603 | 5,524 | 5,294 | 16,573 | 15,659 | |||||||||||||||
| Income tax effect of non-GAAP adjustments | (4,497 | ) | (5,629 | ) | (2,732 | ) | (15,521 | ) | (14,266 | ) | ||||||||||
| Non-GAAP net income | $ | 134,525 | $ | 121,637 | $ | 129,664 | $ | 379,937 | $ | 354,439 | ||||||||||
| Non-GAAP earnings per share | ||||||||||||||||||||
| Basic | $ | 0.56 | $ | 0.51 | $ | 0.55 | $ | 1.59 | $ | 1.50 | ||||||||||
| Diluted | $ | 0.55 | $ | 0.51 | $ | 0.54 | $ | 1.57 | $ | 1.49 | ||||||||||
|
1) Amortization of debt discount is non-cash interest expense related to the Company’s Convertible Senior Notes. |
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The Company’s non-GAAP measures set forth above exclude charges related to stock-based compensation and the amortization of the Company’s debt discount which is a non-cash interest expense. 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 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.
Contact:
Linear Technology Corporation
Paul Coghlan, 408-432-1900
Vice
President, Finance, Chief Financial Officer