Altera Reports Fourth Quarter and Annual Results,
Fourth Quarter Sales Increase 24% Annually, Net Income up 25% Annually
San Jose, Calif., January 21, 1998--Altera Corporation (Nasdaq: ALTR) today reported that fourth quarter sales of $157.1 million were up 24% over the same period last year, and down 3% from the previous quarter. Total year 1997 sales were a record $631.1 million, an increase of 27% from 1996.
Gross margin as a percentage of sales for the fourth quarter was 62.5%, up 1.0 percentage points over the same period last year and flat compared to the prior quarter. Wafer price reductions, improved yields, and technology advancements have offset price reductions through the year.
Net income for the fourth quarter was $36.7 million, up 25% over the fourth quarter of 1996 and down 6% from the previous quarter. Fourth quarter earnings per share, on a diluted basis, were $0.38, an increase of $0.07 from the same period last year and down $0.02 from the prior quarter. Diluted 1997 earnings per share, excluding one-time charges, were a record $1.55, an increase of 34% from 1996.
Quarterly cash activity included a payment of $56.2 million for Wafertech, a joint venture with TSMC and other partners to manufacture wafers in a state-of-the-art facility in Camas, Washington, and $9.5 million for routine capital expenditures.
Rodney Smith, President & CEO stated, "We continue to be pleased with the growth in new products as new product revenue grew 25% in the quarter. New products now constitute over one-fourth of our revenue base. Customers purchasing new products in the quarter increased 21% which resulted in 40% of our customers purchasing new products in the quarter. Over the last year, new product revenues have increased over 280%."
"However, sales of the Company’s mainstream products which accounted for 61% of our revenue base in the third quarter declined 13% sequentially due to product transitions in specific programs and business conditions at certain customers. Also, as a result of the situation in the Asia-Pacific region (which excludes Japan), sales in that region declined 30% sequentially. Together, these factors more than offset our new product revenue growth."
Mr. Smith continued, "1997 was our fifth consecutive year of record revenues and profits. Net income excluding the one-time charge for the change in accounting policy increased 39% to $152 million and was a record as a percentage of revenue at 24%. Since 1994 Altera has grown 217%, more than double the growth rate of any other programmable logic vendor. In 1997, our 27% growth rate significantly exceeded the growth rate of the programmable logic market segment and was well ahead of all other competitors."
Mr. Smith concluded, "In 1997, we introduced the FLEX® 6000, FLEX 10KA, and MAX® 9000A families. In the last half of the year, we engineered two speed enhancements to our highly successful FLEX 10K family, more than doubling performance. Collectively, these new products have greatly expanded the density, enhanced the performance, and lowered the cost of programmable logic."
As previously announced, the Company changed its revenue recognition policy effective January 1, 1997. As a result, the Company has recorded an $18.1 million charge in the first quarter for the cumulative effect of the change in accounting policy. Also as a result of the change, revenues and net income (before the one-time charge) for the first half of 1997 have increased $5.3 million and $2.3 million respectively.
Fax on Demand:
Copies of Altera’s announcement are available from its fax-on-demand service. In the U.S. and Canada to request a copy call 1-800-789-ALTR. International users can dial their local International Access Code followed by 1-408-894-0466. More information can be obtained on the world wide web at http://www.altera.com.
Altera Corporation, founded in 1983, is a world-wide leader in high-performance, high-density programmable logic devices and associated computer aided engineering (CAE) logic development tools. Programmable logic devices are semiconductor chips that offer on-site programmability to customers. The chips are programmed with tools that run on personal computers or engineering workstations. User benefits include ease of use, lower risk, and fast time-to-market. The Company offers the broadest line of CMOS programmable logic devices that address high-speed, high density, and lower power applications. Altera products serve a broad range of market areas, including telecommunications, data communications, computers, and industrial applications. Altera common stock is traded on The Nasdaq Stock Market using the symbol ALTR.
EDITOR CONTACT:
Thomas J. Nicoletti, Vice President, Investor Relations
Altera Corporation
San Jose, CA
(408) 544-7707
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