The Company also declared a 20% increase in its dividend from $0.15 per share to $0.18 per share for the quarter. This cash dividend will be paid on February 14, 2007 to stockholders of record on January 26, 2007.
According to Lothar Maier, CEO, "We are seeing an overall reduction in our inventories at our end customers, which coupled with some general market weakness, has resulted in a decrease in bookings, sales and profits for the December quarter. The upcoming March quarter is a challenge to accurately forecast. Visibility continues to be low and customers remain guarded in their forecasting and inventory management. The March quarter has historically been strong for Linear due to seasonal strength in industrial markets. However, with inventory reductions expected to continue and low market visibility, this year we expect will be an exception. It is likely that improvements in Europe and the USA may be offset by slowness in Asia, particularly in consumer related markets. Consequently, we currently expect revenue to be down 4% to 7% with profits slightly more impacted primarily due to an increase in the tax rate. However, any increase in confidence in the overall business environment would positively impact this outlook."
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 conditions in the world economy and financial markets and other factors described in our 10-K for the fiscal year ended July 2, 2006.
Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, January 17, 2007 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 955-1566 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 17 through January 23, 2007. You may access this post view by calling (719) 457-0820 and entering reservation #6574365. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of January 17, 2007 until the second quarter earnings release next year.
Linear Technology Corporation was founded in 1981 as a manufacturer of high performance linear integrated circuits. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, and many other analog functions. Applications for Linear Technology's high performance circuits include telecommunications, cellular telephones, networking products such as optical switches, notebook and desktop computers, computer peripherals, video/multimedia, industrial instrumentation, security monitoring devices, high-end consumer products such as digital cameras and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems.
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)
GAAP (unaudited)
Three Months Ended Six Months Ended
December 31, January 1, December 31, January 1,
2006 2006 2006 2006
Net sales $267,854 $265,146 $559,970 $521,159
Cost of sales (1) 59,313 58,765 123,640 114,764
Gross profit 208,541 206,381 436,330 406,395
Expenses:
Research
& development (1) 44,961 38,040 91,480 75,819
Selling, general &
administrative (1) 33,597 32,331 68,022 63,481
78,558 70,371 159,502 139,300
Operating income 129,983 136,010 276,828 267,095
Interest income, net 15,867 12,572 31,904 24,194
Income before
income taxes 145,850 148,582 308,732 291,289
Provision for
income taxes 40,838 45,318 91,331 88,844
Net income $105,012 $103,264 $217,401 $202,445
Earnings per share:
Basic $ 0.35 $ 0.34 $ 0.72 $ 0.66
Diluted $ 0.34 $ 0.33 $ 0.71 $ 0.64
Shares used in the
calculation of
earnings per share:
Basic 299,724 305,534 300,385 305,690
Diluted 304,959 313,792 305,774 314,490
Pro forma earnings
per share excluding
the effects of
stock-based
compensation:
Basic $ 0.39 $ 0.37 $ 0.81 $ 0.72
Diluted $ 0.39 $ 0.36 $ 0.80 $ 0.71
Pro forma shares
used in the
calculation of pro
forma earnings per
share:
Basic 299,724 305,534 300,385 305,690
Diluted 303,005 311,782 303,845 312,561
(1) Includes stock-based compensation charges as follows:
Cost of sales $2,840 $2,306 $5,602 $3,513
Research and
development 9,281 5,530 18,183 11,453
Sales, general
and administrative 5,640 5,895 11,062 12,103
Total stock-based
compensation $17,761 $13,731 $34,847 $27,069
LINEAR TECHNOLOGY CORPORATION
RECONCILIATION OF NET INCOME TO PRO FORMA NET INCOME
(In thousands, except per share amounts)
NON-GAAP (unaudited)
Three Months Ended Six Months Ended
December 31, January 1, December 31, January 1,
2006 2006 2006 2006
Net income $105,012 $103,264 $217,401 $202,445
Adjustments to
reconcile net
Income to pro
forma net income
Stock-based
compensation 17,761 13,731 34,847 27,069
Tax effect (4,973) (4,188) (10,308) (8,256)
Pro forma net income $117,800 $112,807 $241,940 $221,258
Pro forma earnings
per share excluding
the effects of
stock-based
compensation:
Basic $ 0.39 $ 0.37 $ 0.81 $ 0.72
Diluted $ 0.39 $ 0.36 $ 0.80 $ 0.71
Shares used in the
calculation of
pro forma earnings
per share:
Basic 299,724(1) 305,534(1) 300,385(2) 305,690(2)
Diluted 303,005 311,782 303,845 312,561
(1) Excludes 1,954 and 2,010 shares for the three months ended
December 31, 2006 and January 1, 2006, respectively, to conform
diluted outstanding shares calculated under FAS123R to diluted shares
calculated under prior accounting standards.
(2) Excludes 1,929 and 1,929 shares for the six months ended December 31,
2006 and January 1, 2006, respectively, to conform diluted outstanding
shares calculated under FAS123R to diluted shares calculated under
prior accounting standards.
FAS123R -- Share-Based Payment became effective and was adopted by the Company during the quarter ended October 2, 2005. FAS123R requires the Company to estimate the cost of all forms of stock-based compensation, including employee stock options, and to record a commensurate expense in the income statement. To supplement our consolidated financial statements presented in accordance with GAAP, we have shown above a non-GAAP (pro forma) presentation of the Company's earnings per share, which is adjusted to reflect the GAAP results to exclude all stock-based compensation. This non-GAAP presentation of earnings per share is provided to enhance the user's overall understanding of the Company's historical financial performance and comparability between periods. We believe the non-GAAP results provide useful information to investors by excluding stock-based compensation.
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, July 2,
2006 2006
(unaudited) (audited)
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments $1,783,558 $1,819,587
Accounts receivable, net of
allowance for doubtful
accounts of $1,797 ($1,808
at July 2, 2006) 151,093 154,297
Inventories 45,365 39,031
Deferred tax assets and
Other current assets 68,659 64,221
Total current assets 2,048,675 2,077,136
Property, plant & equipment, net 260,800 247,969
Other noncurrent assets 65,891 65,790
Total assets $2,375,366 $2,390,895
LIABILITIES & STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $15,216 $14,574
Accrued income taxes, payroll &
other accrued liabilities 157,159 174,239
Deferred income on shipments
to distributors 41,864 48,013
Total current liabilities 214,239 236,826
Deferred tax and other long-term
liabilities 46,913 49,571
Stockholders' equity:
Common stock 1,107,567 1,063,446
Retained earnings 1,008,200 1,046,137
Accumulated other
comprehensive income (1,553) (5,085)
Total stockholders' equity 2,114,214 2,104,498
$2,375,366 $2,390,895
Web site: http://www.linear.com/