Linear Technology Reports a Sequential Quarterly Increase in Revenues and Completes Its Fiscal Year

Linear Technology Reports a Sequential Quarterly Increase in Revenues and Completes Its Fiscal Year with Increases in Revenues and Net Income over the Prior Fiscal Year

MILPITAS, Calif.--(BUSINESS WIRE)-- Linear Technology Corporation (NAS: LLTC) , a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the quarter and fiscal year ended June 30, 2013. Quarterly revenues of $327.3 million for the fourth quarter of fiscal year 2013 increased $12.7 million or 4.0% over the previous quarter's revenue of $314.5 million and decreased $2.7 million or 0.8% from $330.0 million reported in the fourth quarter of fiscal year 2012. Net income of $101.9 million decreased $9.0 million or 8.1% from the third quarter of fiscal year 2013 and decreased $1.4 million or 1.3% from the fourth quarter of fiscal year 2012. Net income in the third quarter of fiscal year 2013 benefited from a lower tax rate of 12.75% whereas the fourth quarter of fiscal year 2013 had a more normalized rate of 25.0%. The Company's tax rate in the third quarter of fiscal year 2013 was lower primarily due to cumulative benefits from the reinstatement of the federal R&D tax credit and secondarily due to the release of estimated tax liabilities for fiscal years that are no longer subject to audit. Diluted earnings per share of $0.43 per share in the fourth quarter of fiscal year 2013 decreased $0.03 per share or 6.5% from the third quarter of fiscal year 2013 due to the change in the tax rate and decreased $0.01 per share from the fourth quarter of fiscal year 2012.

Revenue for fiscal year 2013 was $1,282 million, an increase of 1.2% or $15.6 million over revenue of $1,267 million in the prior fiscal year. Net income of $406.9 million for fiscal year 2013 increased $8.8 million or 2.2% over $398.1 million reported in the previous fiscal year. The results for fiscal year 2013 benefited from a lower tax rate of 23.1% compared to 25.7% in fiscal year 2012. Diluted earnings per share for fiscal year 2013 was $1.71, an increase of $0.01 per share over the prior fiscal year.


During the fourth quarter the Company's cash, cash equivalents and marketable securities increased by $70.2 million to $1.525 billion net of spending $34.0 million to purchase 944 thousand shares in the open market. A cash dividend of $0.26 will be paid on August 28, 2013 to stockholders of record on August 16, 2013.

According to Lothar Maier, CEO, "We completed our fourth fiscal quarter with revenues at the high end of our guidance, up 4% sequentially, led by higher sales into the automotive and industrial markets. In addition, we improved both gross margin and operating margin which continue at industry leading levels. The June quarter was also our fiscal year end, and though fiscal 2013 suffered from a difficult macro economic environment, we managed to grow revenues slightly over the prior fiscal year, up 1.2%, and increase net income and earnings per share. Heading into the new fiscal year, we are optimistic about our future growth prospects. We ended the fiscal year with a good bookings quarter and a book-to-bill ratio greater than one. Historically, the first fiscal quarter is a seasonally weak period for us, but given our current bookings level we are currently forecasting that revenues for our first quarter of fiscal 2014 will be up 2% to 5%."

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-Q for the quarter ended March 31, 2013.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, July 24, 2013 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 325-4936, or toll free (800) 818-6592 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 July 24, 2013 through July 30, 2013.

You may access the archive by calling (719) 457-0820 or toll free (888) 203-1112 and entering reservation #7655285. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of July 24, 2013 until the fourth 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 over 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)


GAAP (unaudited)

Three Months Ended

Twelve Months Ended

June 30,
2013

March 31,
2013

July 1,
2012

June 30,
2013

July 1,
2012

Revenues

$

327,265

$

314,542

$

330,011

$

1,282,236

$

1,266,621

Cost of sales (1)

81,314

79,259

81,263

322,516

312,539

Gross profit

245,951

235,283

248,748

959,720

954,082

Expenses:

Research & development (1)

60,560

58,517

59,479

235,184

224,467

Selling, general & administrative (1)

38,308

38,480

37,803

151,382

147,579

98,868

96,997

97,282

386,566

372,046

Operating income

147,083

138,286

151,466

573,154

582,036

Interest expense

(6,812

)

(6,812

)

(6,881

)

(27,314

)

(27,649

)

Amortization of debt discount(2)

(5,370

)

(5,294

)

(5,073

)

(21,029

)

(19,868

)

Acquisition related costs

(3,195

)

Interest and other income

1,020

1,004

1,067

4,070

4,586

Income before income taxes

135,921

127,184

140,579

528,881

535,910

Provision for income taxes

33,980

16,216

37,253

121,956

137,799

Net income

$

101,941

$

110,968

$

103,326

$

406,925

$

398,111

Earnings per share:

Basic

$

0.43

$

0.47

$

0.44

$

1.72

$

1.71

Diluted

$

0.43

$

0.46

$

0.44

$

1.71

$

1.70

Shares used in determining earnings per share:

Basic

237,947

237,296

234,290

236,703

233,013

Diluted

238,925

238,641

235,297

237,753

234,298

Includes the following non-cash charges:

(1) Stock-based compensation

Cost of sales

$

1,960

$

1,998

$

1,929

$

7,912

$

7,579

Research & development

9,129

9,324

9,017

36,904

35,389

Selling, general & administrative

4,714

4,812

4,649

19,049

18,257

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

5,370

5,294

5,073

21,029

19,868

LINEAR TECHNOLOGY CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)


(Unaudited)

June 30,
2013

July 1,
2012

ASSETS:

Current assets:

Cash, cash equivalents and marketable securities

$

1,524,741

$

1,203,059

Accounts receivable, net of allowance for doubtful accounts of $1,891 ($2,035 at July 1, 2012)

145,274

153,090

Inventories

87,229

79,664

Deferred tax assets and other current assets

36,646

69,597

Total current assets

1,793,890

1,505,410

Property, plant & equipment, net

288,466

320,222

Other noncurrent assets

15,985

25,436

Total assets

$

2,098,341

$

1,851,068

LIABILITIES & STOCKHOLDERS' EQUITY:

Current liabilities:

Accounts payable

$

10,258

$

11,459

Accrued income taxes, payroll & other accrued liabilities

109,426

117,789

Deferred income on shipments to distributors

44,088

41,333

Convertible senior notes- current portion

826,629

Deferred tax liabilities- current portion

35,479

Total current liabilities

1,025,880

170,581

Convertible senior notes

805,599

Deferred tax and other noncurrent liabilities

90,553

138,380

Stockholders' equity:

Common stock

1,736,729

1,588,045

Accumulated deficit

(754,555

)

(851,702

)

Accumulated other comprehensive income

(266

)

165

Total stockholders' equity

981,908

736,508

$

2,098,341

$

1,851,068

LINEAR TECHNOLOGY CORPORATION

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(In thousands, except per share amounts)

Three Months Ended

Twelve Months Ended

June 30,
2013

March 31,
2013

July 1,
2012

June 30,
2013

July 1,
2012

Reported net income

(GAAP basis)

$

101,941

$

110,968

$

103,326

$

406,925

$

398,111

Stock-based compensation

15,803

16,134

15,595

63,865

61,225

Amortization of debt discount(1)

5,370

5,294

5,073

21,029

19,868

Acquisition related costs

3,195

Income tax effect of non-GAAP adjustments

(5,293

)

(2,732

)

(5,477

)

(19,576

)

(21,673

)

Non-GAAP net income

$

117,821

$

129,664

$

118,517

$

472,243

$

460,726

Non-GAAP earnings per share

Basic

$

0.50

$

0.55

$

0.51

$

2.00

$

1.98

Diluted

$

0.49

$

0.54

$

0.50

$

1.99

$

1.97

(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 acquisition related costs. 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 and non-cash interest expenses and the related tax effects primarily because they are significant non-cash 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.

In addition, the Company believes that providing investors with these non-GAAP measurements enhances their ability to compare the Company's business against that of its many competitors who employ and disclose similar non-GAAP measures. This financial measure may be different from non-GAAP methods of accounting and reporting used by the Company's competitors to the extent their non-GAAP measures include other items. The presentation of this additional information should not be considered a substitute for net income or net income per diluted share prepared in accordance with GAAP.



Linear Technology Corporation
Paul Coghlan, 408-432-1900
Vice President, Finance, Chief Financial