MILPITAS, Calif. — (BUSINESS WIRE) — January 13, 2015 — Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the fiscal quarter ended December 28, 2014. Quarterly revenues of $352.6 million for the second quarter of fiscal year 2015 increased $18.0 million or 5.4% over $334.6 million reported in the second quarter of fiscal year 2014 but decreased $18.5 million or 5.0% from the previous quarter's revenue of $371.1 million. Net income of $123.6 million increased $18.9 million or 18.0% over the second quarter of fiscal year 2014 but decreased $5.9 million from the first quarter of fiscal year 2015. Second quarter net income and earnings per share were positively impacted by a lower effective income tax rate of 22%. In addition, the Company had no interest expense compared with $12.3 million of interest expense in the second quarter of the prior fiscal year as a result of the extinguishment of the Convertible Senior Notes at the end of fiscal 2014. Diluted earnings per share of $0.51 per share in the second quarter of fiscal year 2015 increased $0.07 per share or 16% over the second quarter of fiscal year 2014 but decreased $.02 per share or 4% compared to the first quarter of fiscal year 2015.
Our cash, cash equivalents and marketable securities increased by $45.2 million over the first quarter of fiscal year 2015 to $1,073 million. The Company's Board of Directors approved an increase in the Company's quarterly dividend from $0.27 per share to $0.30 per share. This marked the 23rd consecutive year the Company has increased its dividend. A cash dividend of $0.30 per share will be paid on February 25, 2015 to stockholders of record on February 13, 2015. During the second quarter the Company generated positive cash flows from operations of $148.0 million or 42% of total revenues. The Company has historically generated strong cash flows from its operations. During the second quarter of fiscal year 2015 the Company returned $100.5 million to shareholders in the form of dividends of $65.8 million, representing $0.27 per share, and stock purchases of $34.7 million.
According to Lothar Maier, CEO, “Revenues declined 5% sequentially from our first quarter and were up 5% year over year, which was within our guidance. We had expected this sequential decline as the second quarter has historically been seasonally weak for us. Bookings declined slightly although improved as the quarter progressed. The industrial end-market showed the most strength. As is typical, we expect our major end-markets to improve during the second half of our fiscal year. Compared to the first quarter, gross margin and operating margin of 75.4% and 44.9% were also down modestly on lower revenue but remain industry leading. Looking ahead, though there remains some weaker pockets of the global economy, our book-to-bill ratio was slightly positive in the December quarter and we typically see strong bookings momentum in the automotive and industrial markets in the March quarter. Accordingly, we are currently forecasting revenues to grow sequentially by 4% to 7% in our fiscal third quarter. In addition, now that we no longer have debt to repay, we have increased our cash return to shareholders in the form of larger dividends and share buybacks. We increased our quarterly dividend by 11%.”
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 29, 2014.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, January 14, 2015 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call 785-830-7979, or toll free 800-344-6698 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 January 14, 2015 through January 21, 2015. You may access the archive by calling (719) 457-0820 or toll free (888) 203-1112 and entering reservation #8692259. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of January 21, 2015 until the second 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.
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LINEAR TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) U.S. GAAP (unaudited) |
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| Three Months Ended | Six Months Ended | ||||||||||||||||
|
December 28,
2014 |
September 28,
2014 |
December 29,
2013 |
December 28,
2014 |
December 29,
2013 |
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| Revenues | $ | 352,575 | $ | 371,060 | $ | 334,595 | $ | 723,635 | $ | 674,952 | |||||||
| Cost of sales(1) | 86,726 | 89,007 | 82,521 | 175,733 | 166,522 | ||||||||||||
| Gross profit | 265,849 | 282,053 | 252,074 | 547,902 | 508,430 | ||||||||||||
| Expenses: | |||||||||||||||||
| Research and development (1) | 65,101 | 65,600 | 62,008 | 130,701 | 123,520 | ||||||||||||
| Selling, general and administrative(1) | 42,537 | 42,089 | 38,852 | 84,626 | 77,530 | ||||||||||||
| Total operating expenses | 107,638 | 107,689 | 100,860 | 215,327 | 201,050 | ||||||||||||
| Operating income | 158,211 | 174,364 | 151,214 | 332,575 | 307,380 | ||||||||||||
| Interest expense | — | — | (6,813 | ) | — | (13,626 | ) | ||||||||||
| Amortization of debt discount(2) | — | — | (5,524 | ) | — | (10,970 | ) | ||||||||||
| Interest income and other income | 253 | 581 | 791 | 834 | 1,673 | ||||||||||||
| Income before income taxes | 158,464 | 174,945 | 139,668 | 333,409 | 284,457 | ||||||||||||
| Provision for income taxes | 34,862 | 45,486 | 34,917 | 80,348 | 71,838 | ||||||||||||
| Net income | $ | 123,602 | $ | 129,459 | $ | 104,751 | $ | 253,061 | $ | 212,619 | |||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.51 | $ | 0.53 | $ | 0.44 | $ | 1.04 | $ | 0.89 | |||||||
| Diluted | $ | 0.51 | $ | 0.53 | $ | 0.44 | $ | 1.03 | $ | 0.89 | |||||||
| Shares used in determining earnings per share: | |||||||||||||||||
| Basic | 244,033 | 244,145 | 239,206 | 244,067 | 238,857 | ||||||||||||
| Diluted | 244,591 | 244,801 | 240,670 | 244,674 | 240,000 | ||||||||||||
| Includes the following non-cash charges: | |||||||||||||||||
| (1) Stock-based compensation | |||||||||||||||||
| Cost of sales | $ | 2,223 | $ | 2,100 | $ | 2,106 | $ | 4,323 | $ | 4,070 | |||||||
| Research and development | 10,350 | 9,791 | 9,816 | 20,141 | 18,978 | ||||||||||||
| Selling, general and administrative | 5,346 | 5,056 | 5,069 | 10,402 | 9,799 | ||||||||||||
| (2) Amortization of debt discount | |||||||||||||||||
| (non-cash interest expense) | — | — | 5,524 | — | 10,970 | ||||||||||||
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LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) U.S. GAAP (unaudited) |
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| December 28, 2014 | June 29, 2014 | |||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents and marketable securities | $ | 1,072,866 | $ | 1,012,787 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $1,651 ($1,653 at June 29, 2014) |
148,584 | 173,340 | ||||||
| Inventories | 100,141 | 91,310 | ||||||
| Deferred tax assets and other current assets | 99,743 | 87,276 | ||||||
| Total current assets | 1,421,334 | 1,364,713 | ||||||
| Property, plant & equipment, net | 294,529 | 277,080 | ||||||
| Other noncurrent assets | 12,685 | 13,785 | ||||||
| Total assets | $ | 1,728,548 | $ | 1,655,578 | ||||
| LIABILITIES & STOCKHOLDERS’ EQUITY: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 20,017 | $ | 28,221 | ||||
| Accrued income taxes, payroll & other accrued liabilities | 102,690 | 141,275 | ||||||
| Deferred income on shipments to distributors | 47,083 | 45,619 | ||||||
| Total current liabilities | 169,790 | 215,115 | ||||||
| Deferred tax and other noncurrent liabilities | 120,266 | 109,094 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1,989,563 | 1,948,006 | ||||||
| Accumulated deficit | (550,813 | ) | (616,992 | ) | ||||
| Accumulated other comprehensive loss | (258 | ) | 355 | |||||
| Total stockholders’ equity | 1,438,492 | 1,331,369 | ||||||
| $ | 1,728,548 | $ | 1,655,578 | |||||
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LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) |
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| Three Months Ended | Six Months Ended | |||||||||||||||||||
|
December 28,
2014 |
September 28,
2014 |
December 29,
2013 |
December 28,
2014 |
December 29,
2013 |
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| Cash flow from operating activities: | ||||||||||||||||||||
| Net income | $ | 123,602 | $ | 129,459 | $ | 104,751 | $ | 253,061 | $ | 212,619 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 13,555 | 13,214 | 12,792 | 26,769 | 25,627 | |||||||||||||||
| Stock-based compensation | 17,919 | 16,947 | 16,991 | 34,866 | 32,847 | |||||||||||||||
| Amortization of convertible senior notes discount | — | — | 5,524 | — | 10,970 | |||||||||||||||
| Excess tax benefit from stock-based compensation | (2,548 | ) | (2,202 | ) | (300 | ) | (4,750 | ) | (1,829 | ) | ||||||||||
| Change in operating assets and liabilities: | (4,571 | ) | (21,042 | ) | 28,986 | (25,613 | ) | 10,708 | ||||||||||||
| Cash provided by operating activities | 147,957 | 136,376 | 168,744 | 284,333 | 290,942 | |||||||||||||||
| Cash flow from investing activities: | ||||||||||||||||||||
| Net (purchases) and proceeds from sale and maturities of available-for-sale securities | (55,632 | ) | (26,426 | ) | 9,466 | (82,058 | ) | 93,018 | ||||||||||||
| Purchase of property, plant and equipment | (16,201 | ) | (26,917 | ) | (4,009 | ) | (43,118 | ) | (7,897 | ) | ||||||||||
| Cash (used in) provided by investing activities | (71,833 | ) | (53,343 | ) | 5,457 | (125,176 | ) | 85,121 | ||||||||||||
| Cash flow from financing activities: | ||||||||||||||||||||
| Excess tax benefit from stock-based compensation | 2,548 | 2,202 | 300 | 4,750 | 1,829 | |||||||||||||||
| Issuance of common stock under employee stock plans | 12,092 | 3,323 | 37,861 | 15,415 | 59,516 | |||||||||||||||
| Purchase of common stock | (34,709 | ) | (34,086 | ) | (12,182 | ) | (68,795 | ) | (26,853 | ) | ||||||||||
| Payment of cash dividends | (65,822 | ) | (65,739 | ) | (62,023 | ) | (131,561 | ) | (124,082 | ) | ||||||||||
| Cash used in financing activities | (85,891 | ) | (94,300 | ) | (36,044 | ) | (180,191 | ) | (89,590 | ) | ||||||||||
| (Decrease) increase in cash and cash equivalents | (9,767 | ) | (11,267 | ) | 138,157 | (21,034 | ) | 286,473 | ||||||||||||
| Cash and cash equivalents, beginning of period | 146,056 | 157,323 | 274,966 | 157,323 | 126,650 | |||||||||||||||
| Cash and cash equivalents, end of period | $ | 136,289 | $ | 146,056 | $ | 413,123 | $ | 136,289 | $ | 413,123 | ||||||||||
Contact:
Linear Technology Corporation
Paul Coghlan, 408-432-1900
Vice
President, Finance, Chief Financial Officer