Design & Reuse

Altera Announces First Quarter Results

SAN JOSE, Calif., April 23, 2015 -- Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $435.5 million, down 9 percent from the fourth quarter of 2014 and down 6 percent from the first quarter of 2014. First quarter net income was $94.9 million, $0.31 per diluted share, compared with net income of $111.1 million, $0.36 per diluted share, in the fourth quarter of 2014 and $116.5 million, $0.37 per diluted share, in the first quarter of 2014.

Cash flow from operating activities was $136.6 million. Altera repurchased approximately 1.6 million shares during the quarter at a cost of approximately $57.5 million.

Altera's board of directors has declared a quarterly cash dividend of $0.18 per share, to be paid on June 1, 2015 to shareholders of record on May 11, 2015.

"While we had anticipated a weak start to the year, the first quarter was more challenging than expected," said John Daane, president, chief executive officer, and chairman of the board. "There continues to be solid market acceptance of our Generation 10 devices, with record opportunities for our high-end 14 nm FinFET Stratix 10 FPGAs. The combination of our HyperFlex architecture and the FinFET manufacturing process delivers substantial competitive advantages and market expansion potential."

Recent accomplishments mark Altera's continuing progress:

  • At this year's Mobile World Congress, Altera and China Mobile demonstrated jointly a Centralized/Coordinated/Cloud Radio Access Network (C-RAN) platform targeting the next generation of virtualized 5G wireless networks. This approach will dramatically improve the user experience, achieving much higher channel capacity and spectrum efficiency, reducing network power consumption, while supporting flexible and agile network deployments. C-RAN offers the potential for new network operator business models and support for numerous new end user 5G wireless network applications. This strategic collaboration, formally established between Altera and China Mobile Research Institute (CMRI) in 2014, has achieved a significant milestone with this innovative wireless network solution. To accelerate the development and deployment of such next-generation wireless networks, FPGA technologies play a key role in data processing acceleration, component connectivity, and front-haul data transportation in the C-RAN system.
  • Altera has strengthened its leadership position in SoC FPGA products by shipping initial devices of its second-generation SoC family. These Arria® 10 SoC devices are the industry's only programmable devices that combine ARM® processors with a 20 nm FPGA fabric. Arria 10 SoCs bring across-the-board improvements to enable higher performing, lower power, and more feature rich embedded systems compared to previous generation SoC FPGAs. Arria 10 SoCs provide up to 50 percent higher performance and up to 40 percent lower power than the previous generation. Arria 10 SoCs are optimized to deliver the performance, power, security and cost requirements for next-generation embedded applications within wireless infrastructure, wireline communications, computer and storage, and broadcast equipment. Altera's SoC portfolio will also include a 3rd-generation 14 nm Stratix® 10 SoC with a 64-bit quad-core ARM CortexTM-A53 processor for embedded developers that demand the highest performance and power efficiency.

SELECTED FIRST QUARTER RATIOS AND RELATED RESULTS

($ in thousands)

Key Ratios & Information

March 27, 2015

December 31, 2014

Current Ratio

5:1

6:1

Liabilities/Equity

3:4

3:4

Quarterly Operating Cash Flows

$ 136,633

$150,778

TTM Return on Equity

13%

14%

Quarterly Depreciation Expense

$ 12,777

$12,099

Quarterly Capital Expenditures

$ 33,245

$9,836

Inventory MSOH (1): Altera

3.0

2.7

Inventory MSOH (1): Distribution

0.7

0.5

Cash Conversion Cycle (Days)

149

144

Turns

41%

41%

Book to Bill

<1.0

<1.0

Note (1): MSOH: Months Supply On Hand

ALTERA CORPORATION
NET SALES SUMMARY
(Unaudited)

 

Three Months Ended

Quarterly Growth Rate

 

March 27,
2015

December 31,
2014

March 28,
2014

Sequential Change

Year-

Over-Year

Change

Geography

         

Americas

17%

15%

15%

(1)%

4%

Asia Pacific

45%

41%

43%

(2)%

(1)%

EMEA

27%

30%

26%

(17)%

(3)%

Japan

11%

14%

16%

(26)%

(32)%

Net Sales

100%

100%

100%

(9)%

(6)%

Product Category

         

New

59%

59%

49%

(9)%

15%

Mainstream

19%

18%

23%

(5)%

(20)%

Mature and Other

22%

23%

28%

(14)%

(29)%

Net Sales

100%

100%

100%

(9)%

(6)%

Vertical Market

         

Telecom & Wireless

42%

42%

45%

(8)%

(12)%

Industrial Automation, Military & Automotive

21%

22%

22%

(13)%

(7)%

Networking, Computer & Storage

17%

16%

15%

(8)%

2%

Other

20%

20%

18%

(8)%

7%

Net Sales

100%

100%

100%

(9)%

(6)%

FPGAs and CPLDs

         

FPGA

84

84

83

(9)

(4)%

CPLD

8

8

9

(8)

(10)%

Other Products

8

8

8

(15)

(14)%

Net Sales

100

100

100

(9)

(6)%

Product Category Description

  • New Products include the Arria® 10, Stratix® V, Stratix IV, Arria V, Arria II, Cyclone® V, Cyclone IV, MAX® 10, MAX V, HardCopy® IV devices and Enpirion PowerSoCs.
  • Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices.
  • Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX® series, APEX™ series, Mercury™, Excalibur™ devices, configuration and other devices, intellectual property cores, and software and other tools.

Business Outlook for the Second Quarter 2015

Sales and Income Statement

Sequential Sales

-4% to -8%

Gross Margin

66.5% - 67.5%

Research and Development (1)

$110 - $112 million

SG&A

$73 - $75 million

Other Income/Expense, Net (2)

Net expense of approximately $2 million

Tax Rate

12% - 14%

Diluted Share Count

Approximately 300 million

Turns

Mid 40's

Inventory MSOH

Approximately 4


Note (1): The business outlook for Research and Development expense includes amortization of acquisition-related intangible assets

Note (2): Other Income/Expense, Net includes Interest income and other and Interest expense in our consolidated statements of comprehensive income.

Vertical Market

Telecom & Wireless

Down

Industrial Automation, Military & Automotive

Up

Networking, Computer & Storage

Flat

Other

Down

First Quarter Earnings Conference Call

A conference call will be held today at 1:45 p.m. Pacific time to discuss the quarter's results and management's current business outlook. The web cast and subsequent replay will be available in the Investor Relations section of the company's website at 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.

About Altera

Altera® programmable solutions enable designers of electronic systems to rapidly and cost effectively innovate, differentiate and win in their markets. Altera offers FPGA, SoC, CPLD products, and complementary technologies, such as power solutions, to provide high-value solutions to customers worldwide. Visit www.altera.com.