Linear Technology Reports Year Over Year Increases to Revenue and Net Income Over the First Quarter of the Previous Fiscal Year.

MILPITAS, Calif., Oct. 17 /PRNewswire-FirstCall/ -- Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today announced that revenue for its quarterly period ended October 1, 2006, was $292.1 million, an increase of 14% over revenue of $256.0 million for the first quarter of the previous fiscal year. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the first quarter of fiscal year 2007 was $112.4 million, or $0.37 diluted earnings per share, an increase of $13.2 million or 13% over GAAP net income of $99.2 million or $0.31 diluted earnings per share reported in the in the first quarter of the previous fiscal year. On a pro forma basis excluding the effects of all forms of stock-based compensation, net income was $124.2 million, or $0.41 diluted earnings per share, an increase of $15.7 million over pro forma net income of $108.5 million, or $0.35 per share reported in the first quarter of the previous fiscal year.

The Company's cash and short-term investments balance decreased $5.8 million net of spending $93.1 million to purchase 2.9 million shares of its common stock. A cash dividend of $0.15 per share will be paid on November 15, 2006 to stockholders of record on October 27, 2006.

According to Lothar Maier, CEO, "As we had forecasted, sales and profits were roughly similar to the previous quarter. However, the overall business environment was weaker than we expected and consequently, our bookings decreased slightly. Consumer bookings grew, but not to the extent we expected as customers remain cautious going into the holiday demand period.

The December quarter that we are entering is difficult to forecast. Macroeconomic trends are reasonable and our positioning in customer programs is good. However, visibility is low and customers are guarded in their forecasting and inventory management. Consequently, given the usual seasonal slowdown in non-consumer businesses that takes place in December, we currently expect sales and profits in the December quarter to be down roughly 5% to 7% from the quarter just completed."

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, October 18, 2006 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 234-0008 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 or . A replay of the conference call will be available from October 18 through November 3, 2006. You may access this post view by calling (719) 457-0820 and entering reservation #5471499. An archive of the webcast will also be available at and as of October 18, 2006 until the first 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.

                   (In thousands, except per share amounts)

                                                       Three Months Ended
                                                    October 1,     October 2,
                                                      2006           2005

    Net sales                                       $292,116       $256,013
    Cost of sales (1)                                 64,327         55,999
        Gross profit                                 227,789        200,014


        Research & development (1)                    46,519         37,779
        Selling, general & administrative (1)         34,425         31,150
                                                      80,944         68,929
    Operating income                                 146,845        131,085
    Interest income, net                              16,037         11,622

    Income before income taxes                       162,882               142,707
        Provision  for  income  taxes                                                50,493                  43,526

        Net  income                                                                            $112,389              $  99,181

        Earnings  per  share:
              Basic                                                                                    $  0.37                  $  0.32
              Diluted                                                                                $  0.37                  $  0.31

        Shares  used  in  the  calculation  of
          earnings  per  share:
              Basic                                                                                  302,104                306,336
              Diluted                                                                              307,740                315,940

        Pro  forma  earnings  per  share  excluding
          the  effects  of  stock-based  compensation:
              Basic                                                                                    $  0.41                  $  0.35
              Diluted                                                                                $  0.41                  $  0.35

        Pro  forma  shares  used  in  the  calculation
          of  pro  forma  earnings  per  share:
              Basic                                                                                  302,104                306,336
              Diluted                                                                              305,826                313,429

        (1)  Includes  stock-based  compensation
                charges  as  follows:

        Cost  of  sales                                                                          $2,762                  $1,207
        Research  and  development                                                      8,902                    5,923
        Sales,  general  and  administrative                                    5,422                    6,208
          Total  stock-based  compensation                                    $17,086                $13,338

                                                LINEAR  TECHNOLOGY  CORPORATION
                                      (In  thousands,  except  per  share  amounts)

                                                                                                              Three  Months  Ended
                                                                                                      October  1,          October  2,
                                                                                                          2006                        2005

        Net  income                                                                            $112,389                $99,181

        Adjustments  to  reconcile  net  income  to
          pro  forma  net  income
                Stock-based  compensation                                            17,086                  13,338
                Tax  effect                                                                      (5,297)                (4,068)
        Pro  forma  net  income                                                        $124,178              $108,451

        Pro  forma  earnings  per  share  excluding
          the  effects  of  stock  based  compensation:
              Basic                                                                                    $  0.41                  $  0.35
              Diluted                                                                                $  0.41                  $  0.35

        Shares  used  in  the  calculation  of
          pro  forma  earnings  per  share:
              Basic                                                                                  302,104                306,336
              Diluted                                                                        305,826(1)          313,429(1)

        (1)  Excludes  1,914  and  2,511  shares  for  the  three  months  ended  October  1,
                2006  and  October  2,  2005,  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

                                                  LINEAR  TECHNOLOGY  CORPORATION
                                          CONSOLIDATED  CONDENSED  BALANCE  SHEETS
                                                          (Dollars  in  thousands)

                                                                                                    October  1,              July  2,
                                                                                                          2006                      2006
                                                                                                  (unaudited)            (audited)
          Current  assets:
            Cash,  cash  equivalents  and
              short-term  investments                                          $1,813,809          $1,819,587

          Accounts  receivable,  net  of
            allowance  for  doubtful
            accounts  of  $1,797  ($1,818
            at  July  2,  2006)                                                              154,263                154,297

        Inventories                                                                              42,085                  39,031
        Deferred  tax  assets  and
            Other  current  assets                                                        61,846                  64,221
              Total  current  assets                                                2,072,003            2,077,136

          Property,  plant  &  equipment,  net                                261,502                247,969
          Other  noncurrent  assets                                                    65,520                  65,790
        Total  assets                                                                    $2,399,025          $2,390,895

          Current  liabilities:
            Accounts  payable                                                              $21,520                $14,574

          Accrued  income  taxes,  payroll  &
            other  accrued  liabilities                                            179,495                174,239

          Deferred  income  on  shipments
            to  distributors                                                                  41,024                  48,013
              Total  current  liabilities                                          242,039                236,826

          Deferred  tax  and  other  long-term
            liabilities                                                                          48,282                  49,571

        Stockholders'  equity:

            Common  stock                                                                  1,080,710            1,063,446
            Retained  earnings                                                        1,029,654            1,046,137
            Accumulated  other  comprehensive
              income                                                                                (1,660)                (5,085)
                Total  stockholders'  equity                                  2,108,704            2,104,498
                                                                                                    $2,399,025          $2,390,895


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