EXHIBIT 99.1
INVESTOR CONTACT
Scott Wylie
VP – Investor Relations
Altera Corporation
(408) 544-6996
swylie@altera.com
MEDIA CONTACT
Anna Del Rosario
Director – Public Relations
Altera Corporation
(408) 544-7496
anna.delrosario@altera.com
ALTERA ANNOUNCES SECOND QUARTER
RESULTS
SALES UP 8% SEQUENTIALLY; NEW
PRODUCTS GROW 25%
San Jose, Calif ., July 25, 2005 — Altera Corporation
(Nasdaq: ALTR) today announced second quarter 2005 sales of $285.5
million, up 8% from the first quarter of 2005 and up 6% from the
second quarter of 2004. Sales of the company’s new products
grew 25% sequentially and were up 70% from the prior year’s
second quarter.
Second quarter net income was $67.6 million,
$0.18 per diluted share, compared to net income of $75.3 million,
$0.20 per diluted share, in the second quarter of 2004. Gross
profit margin was 68.3% for the second quarter of 2005 versus 69.9%
for the second quarter of 2004.
The second quarter tax provision includes a $21
million charge related to the planned repatriation of $400 million
in foreign earnings pursuant to the provisions of the American Jobs
Creation Act of 2004. In addition, the company recorded a tax
benefit of approximately $15.2 million arising primarily from the
settlement of Federal and California income tax audits during the
quarter. The net impact of these two items added $5.8 million to
the company’s second quarter tax provision, reducing earnings
per share by $0.01.
Altera repurchased 1.9 million shares of its
common stock during the quarter at a cost of $38.0 million. Altera
ended the quarter with $1.3 billion in cash and short- and
long-term investments.
“Our new product growth rate accelerated
from the first quarter’s pace. Stratix
®
II FPGA sales doubled
from the first quarter, and we continue to lead the 90-nm
high-density FPGA market by a wide margin. While still very early
in their life cycle, Cyclone ™ II FPGA and MAX
®
II CPLD sales more than
tripled, demonstrating the revenue growth potential represented by
these new families. This was also another great quarter for
HardCopy ® structured ASIC sales, with results
up sharply from the first quarter,” said John Daane,
president, chief executive officer, and chairman of the board.
“Our two largest selling product families, Cyclone and
Stratix FPGAs, also posted solid gains in the quarter. They remain
the leading products of their generation in the PLD
industry.”
(more)
Altera’s innovation and execution made the
company the fastest-growing programmable logic supplier in 2004.
This track record of innovation and execution continues in
2005:
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As yet another
indicator of the increasing use of programmable solutions in the
consumer market, Texas Instruments (TI) is now using multiple
Altera devices in its Digital Light Processing (DLP) technology. TI
provides its DLP components to television manufacturers, enabling
them to bring the highest quality visual experience to consumers.
TI initially chose Cyclone FPGAs for its 720p DLP product. Cyclone
devices met TI’s performance goals with the
lowest-speed-grade device, resulting in the maximum
cost/performance benefit. Cyclone devices were also readily
available in high-volume quantities, a critical requirement to
support the steep production ramps encountered in the consumer
market. Building on the contribution made by Cyclone FPGAs, TI next
adopted Stratix devices and HardCopy structured ASICs for its even
higher resolution 1080p DLP product. By incorporating the
high-performance digital signal processing (DSP) capabilities of
Altera’s devices, which bolster TI’s advanced video
processing, TI was able to bring its industry-leading innovations
to market, advancing its competitive position in HDTV
applications.
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Because Altera
is the only PLD vendor to offer a structured ASIC solution, Altera
is uniquely positioned to respond to customers such as TI whose
high-density FPGA-based designs require lower costs for production.
Being first-to-market is critically important in fast-moving
consumer electronics equipment. Programmable logic’s short
design cycle offers significant advantages to these customers.
Altera’s innovative products, such as the low-cost Cyclone
family, are accelerating Altera’s presence in consumer
products and have helped fuel the 22% compound growth Altera has
experienced in the consumer market from 1999 to 2004.
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With the
delivery of MAX II EPM1270 devices to the world’s largest
television manufacturer, TTE Corporation, Altera has now shipped
more than 400 million MAX CPLDs. Altera has led the CPLD market for
more than 15 years, with cumulative MAX sales of more than $4
billion, and is further strengthening its leadership position with
its new MAX II family. The MAX II family is half the cost and
consumes one-tenth the power of previous MAX generations, while
maintaining the same non-volatile memory and ease-of-use
characteristics of the original MAX series. Due to its density and
cost characteristics, the MAX II family can be used to replace less
flexible and more expensive ASSPs, ASICs, and discrete devices,
expanding the market beyond traditional CPLD
applications.
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(2 of 7)
Business Outlook for the Third
Quarter
Note: The following management expectations for
the third quarter are stated in approximate terms and assume no
impact from the operation of the company’s deferred
compensation plan.
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Altera expects
that sales in the third quarter will be up 1% to 3% sequentially.
Sales growth will be more moderate in comparison to the second
quarter largely as a result of typical seasonal slowing in
Europe.
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Gross margins
will be 68% to 69%, unchanged from the company’s previous
second half gross margin expectations.
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Research and
development spending will decrease to approximately $52 million,
reflecting lower new product introduction costs in the
quarter.
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SG&A
expenses will be in the range of $58 million.
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Other income
will be approximately $8 million.
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The expected
tax rate will be approximately 20%.
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Conference Call and Quarterly
Update:
A conference call will be held today at 1:45
p.m. Pacific Time to discuss the quarter’s results and the
third quarter 2005 outlook. The web cast and subsequent replay will
be available in the investor relations section of the
company’s web site at http://www.altera.com. A telephonic
replay of the call may be accessed later in the day by calling
(719) 457-0820 and referencing confirmation code 258712. The
telephonic replay will be available for two weeks following the
live call.
Altera’s third quarter business update
will be issued in a press release available after the market close
on September 6.
Forward-Looking Statements
Statements in this press release that are not
historical are “forward-looking statements” as the term
is defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are generally written in the future
tense and/or preceded by words such as “will”,
“believe”, “expects”, or words that imply
or predict a future state. Investors are cautioned that all
forward-looking statements in this release involve risks and
uncertainty that can cause actual results to differ from those
currently anticipated, due to a number of factors, including
without limitation, customer business environment, market
acceptance of the company’s products, the rate of growth of
the company’s new products including the Stratix, Stratix II,
Cyclone, Cyclone II, MAX II, and HardCopy II device families, the
rate at which our customers’ new platforms enter production,
as well as changing economic conditions, and other risk factors
discussed in documents filed by the
(3 of 7)
company with the Securities and Exchange
Commission from time to time. Copies of Altera’s SEC filings
are posted on the company’s web site and are available from
the company without charge. Forward-looking statements are made as
of the date of this release, and, except as required by law, the
company does not undertake an obligation to update its
forward-looking statements to reflect future events or
circumstances.
About Altera
Altera Corporation (Nasdaq:ALTR) is the
world’s pioneer of system-on-a-programmable-chip (SOPC)
solutions. Combining programmable logic technology with software
tools, intellectual property, and technical services, Altera
provides high-value programmable solutions to approximately 14,000
customers worldwide. More information is available at
http://www.altera.com.
#####
Altera, The Programmable Solutions Company, the
stylized Altera logo, specific device designations and all other
words that are identified as trademarks and/or service marks are,
unless noted otherwise, the trademarks and service marks of Altera
Corporation in the U.S. and other countries. All other product or
service names are the property of their respective
holder.
(4 of 7)
ALTERA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share data and
note)
(Unaudited)
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THREE MONTHS ENDED
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SIX MONTHS ENDED
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Jul. 1
2005
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Apr. 1
2005
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Jul. 2
2004
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Jul. 1
2005
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Jul. 2
2004
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Net sales
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$
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285,477
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$
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264,822
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$
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268,972
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$
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550,299
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$
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511,880
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Cost of sales
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90,592
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83,890
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81,026
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174,482
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156,867
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Gross margin
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194,885
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180,932
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187,946
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375,817
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355,013
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Operating expenses:
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Research and development
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55,340
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51,389
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42,738
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106,729
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85,320
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Selling, general, and administrative
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55,895
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54,334
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52,712
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110,229
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102,590
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Total operating expenses
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111,235
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105,723
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95,450
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216,958
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187,910
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