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Linear Technology Reports Quarterly Modest Increases In Revenues And Net Income

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 1, 2012.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, October 17, 2012 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (913) 312-1443, or toll free (888) 737-3705 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 October 17, 2012 through October 23, 2012. You may access the archive by calling (719) 457-0820 or toll free (888) 203-1112 and entering reservation #4942174. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of October 17, 2012 until the first 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
 
September 30, 2012     July 1, 2012     October 2, 2011
Revenues $ 335,148 $ 330,011 $ 329,920
Cost of sales (1) 83,758   81,263   79,793  
Gross profit 251,390   248,748   250,127  
Expenses:
Research & development (1) 58,803 59,479 54,889
Selling, general & administrative (1) 37,504   37,803   37,672  
96,307   97,282   92,561  
Operating income 155,083 151,466 157,566
Interest expense (6,855 ) (6,881 ) (6,941 )
Amortization of debt discount (2) (5,146 ) (5,073 ) (4,862 )
Interest and other income 1,003   1,067   1,221  
Income before income taxes 144,085 140,579 146,984
Provision for income taxes 38,903   37,253   38,583  
Net income $ 105,182   $ 103,326   $ 108,401  
 
Earnings per share:
Basic $ 0.45   $ 0.44   $ 0.47  
Diluted $ 0.45   $ 0.44   $ 0.47  
 
Shares used in determining earnings per share:
Basic 234,990   234,290   231,863  
Diluted 236,010   235,297   232,985  
 
Includes the following non-cash charges:
 
(1) Stock-based compensation
Cost of sales $ 1,970 $ 1,929 $ 1,904
Research & development 9,196 9,017 8,887
Selling, general & administrative 4,745 4,649 4,586
 

(2) Amortization of debt discount (non-cash interest expense)

5,146 5,073 4,862
           

LINEAR TECHNOLOGY CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)

U.S. GAAP (unaudited)

 
September 30,2012 July 1,2012
ASSETS:
Current assets:
Cash, cash equivalents and marketable securities $ 1,319,961 $ 1,203,059
Accounts receivable, net of allowance for doubtful
accounts of $2,035 ($2,035 at July 1, 2012) 152,423 153,090
Inventories 81,700 79,664
Deferred tax assets and other current assets 69,898   69,597  
Total current assets 1,623,982   1,505,410  
 
Property, plant & equipment, net 311,221 320,222
Other noncurrent assets 22,997   25,436  
Total assets $ 1,958,200   $ 1,851,068  
 
LIABILITIES & STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable $ 10,929 $ 11,459
Accrued income taxes, payroll & other accrued liabilities 147,043 117,789
Deferred income on shipments to distributors 42,407   41,333  
Total current liabilities 200,379   170,581  
 
Convertible senior notes 810,746 805,599
Deferred tax and other noncurrent liabilities 143,381 138,380
 
Stockholders’ equity:
Common stock 1,612,585 1,588,045
Accumulated deficit (809,363 ) (851,702 )
Accumulated other comprehensive income 472   165  
Total stockholders’ equity 803,694   736,508  
$ 1,958,200   $ 1,851,068  
 

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
 
September 30, 2012     July 1, 2012     October 2, 2011
Reported net income
(GAAP basis) $ 105,182 $ 103,326   $ 108,401
 
Stock-based compensation 15,911 15,595 15,377
Amortization of debt discount (1)
5,146 5,073 4,862
Income tax effect of non-GAAP adjustments (5,685 ) (5,477 ) (5,313 )
 
Non-GAAP net income $ 120,554   $ 118,517   $ 123,327  
 
Non-GAAP earnings per share
Basic $ 0.51   $ 0.51   $ 0.53  
Diluted $ 0.51   $ 0.50   $ 0.53  

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.

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