Linear Technology Corporation (NASDAQ:LLTC), a leading,
independent manufacturer of high performance linear integrated
circuits, today reported financial results for the fiscal quarter
ended January 1, 2017. Quarterly revenues of $375.8 million for the
second quarter of fiscal year 2017 increased $1.9 million or 0.5%
over the previous quarter’s revenue of $373.9 million and increased
$28.7 million or 8.3% over the $347.1 million reported in the
second quarter of fiscal year 2016.
On a GAAP basis, net income of $124.0 million increased $8.9
million or 7.7% over the previous quarter’s net income of $115.1
million and increased $2.5 million or 2.0% over the second quarter
of fiscal year 2016. Diluted earnings per share of $0.50 per share
in the second quarter of fiscal year 2017 increased $0.03 per share
or 6% over the previous quarter and was unchanged from the second
quarter of fiscal year 2016.
According to Lothar Maier, CEO, “Revenue for our second fiscal
quarter of $375.8 million was slightly higher than we guided and is
up 8.3% over the second quarter of fiscal year 2016. This is a good
result in what historically has been a weaker seasonal quarter for
us. On a non-GAAP basis excluding merger-related charges totaling
$10.8 million, non-GAAP gross margin, operating margin and earnings
per share were 76.3%, 45.5% and $0.54, respectively, all increases
over the prior quarter. The increase in revenue was aided by an
increase in our Communication and Industrial markets while gross
margin was up slightly primarily due to a richer product mix.
Due to the pending merger with Analog Devices, Inc., we expect
that this will be our final earnings release as an independent
company. We would like to thank our long-term investors who trusted
our long-term market and operational strategies. Finally, we would
like to thank the employees of Linear Technology who together over
the course of 35 years helped to create a truly special
company.”
The following table summarizes the key GAAP and non-GAAP
financial results:
Non-GAAP GAAP (In thousands, Q2 Q1 Q2
Q1 Q2 except per share amounts) FY2017 FY2017 FY2017
FY2017 FY2016 Revenues $ 375,817 $ 373,895 $ 375,817
$ 373,895 $ 347,128 Gross profit $ 286,827
$ 284,069 $ 284,827 $ 282,069 $ 262,744
Gross margin 76.3 % 76.0 % 75.8 %
75.4 % 75.7 % Operating income $ 171,073 $
169,095 $ 160,245 $ 149,301 $ 149,457
Operating margin 45.5 % 45.2 % 42.6 %
39.9 % 43.1 % Net income $ 132,242 $ 130,165 $
123,986 $ 115,122 $ 121,532 Earnings per share
- Diluted $ 0.54 $ 0.53 $ 0.50 $ 0.47 $
0.50
Cash, cash equivalents and marketable securities increased by
$88.7 million over the first quarter of fiscal year 2017 to $1.61
billion. The Company's Board of Directors approved an increase in
the Company's quarterly dividend from $0.32 per share to
$0.33 per share. This marked the 25th consecutive year
the Company has increased its dividend. A cash dividend of
$0.33 per share will be paid on March 7, 2017 to stockholders of
record on February 24, 2017. During the second quarter the Company
generated positive cash flows from operations of $179.5 million or
48% of total revenues. During the second quarter of fiscal year
2017 the Company paid $78.7 million to shareholders in the form of
dividends, representing $0.32 per share. There were no open market
stock repurchases as the Analog Merger Agreement restricts the
ability of the Company to repurchase shares of its common
stock.
As a result of the pending transaction with Analog Devices, the
Company will not hold a quarterly earnings conference call.
In lieu of a conference call, additional supplemental financial
information regarding operational performance and earnings for the
fiscal second quarter of 2017, in addition to bookings by end
market and revenue by geography, has been made available under the
Investor Relations section of the Company’s website that can be
accessed through www.linear.com
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
revenue 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 year ended July 3, 2016.
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 Donald P. Zerio 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 Six Months
Ended January 1, October 2, January 3, January 1,
January 3, 2017 2016 2016 2017 2016 Revenues $
375,817 $ 373,895 $ 347,128 $ 749,712 $ 689,045 Cost of sales
(1)(2) 90,990 91,826 84,384 182,816
169,589 Gross profit 284,827 282,069
262,744 566,896 519,456 Expenses: Research and
development (1)(2) 77,030 76,359 69,884 153,389 136,486 Selling,
general and administrative (1)(2) 47,552 56,409
43,403 103,961 83,596 Total operating expenses
124,582 132,768 113,287 257,350
220,082 Operating income 160,245 149,301 149,457 309,546 299,374
Interest income and other income 2,361 2,173
1,521 4,534 2,508 Income before income taxes 162,606
151,474 150,978 314,080 301,882 Provision for income taxes
38,620 36,352 29,446 74,972 68,303 Net
income $ 123,986 $ 115,122 $ 121,532 $ 239,108 $ 233,579
Earnings per share: Basic $ 0.50 $ 0.47 $ 0.50 $ 0.97 $ 0.95
Diluted $ 0.50 $ 0.47 $ 0.50 $ 0.97 $ 0.95 Shares used in
determining earnings per share: Basic 245,804 245,271
244,591 245,561 244,831 Diluted 246,280
245,709 244,880 246,026 245,178
Includes the following non-cash charges: (1) Stock-based
compensation Cost of sales $ 2,496 $ 2,547 $ 2,557 $ 5,043 $ 4,899
Research and development 13,572 11,868 11,731 25,440 22,653
Selling, general and administrative 6,990 6,129 5,968 13,119 11,606
Includes the following pre-tax impact of items: (2) Merger-related
charges Cost of sales $ 2,000 $ 2,000 $ — $ 4,000 $ — Research and
development 5,000 5,000 — 10,000 — Selling, general and
administrative 3,828 12,794 — 16,622 — LINEAR TECHNOLOGY
CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands)
U.S. GAAP (unaudited) January 1, July 3, As of
2017 2016 Assets Cash, cash equivalents and marketable securities $
1,609,825 $ 1,448,275 Accounts receivable, net of allowances
($1,649 as of January 1, 2017) and ($1,649 as of July 3, 2016)
145,135 157,460 Inventories 98,548 97,251 Prepaid expenses and
other current assets 48,539 51,744
Total current assets 1,902,047 1,754,730
Property, plant & equipment, net 281,149 285,866
Other noncurrent assets 8,285 9,385
Total assets $ 2,191,481 $ 2,049,981
Liabilities Accounts payable $ 17,197 $ 17,465 Accrued income
taxes, payroll & other accrued liabilities 132,931 113,800
Deferred income on shipments to distributors 49,489
48,701 Total current liabilities 199,617
179,966 Deferred tax and other
noncurrent liabilities 114,052 110,840 Stockholders’ equity
Common stock and additional paid-in capital 2,192,469 2,137,150
Accumulated deficit (314,459 ) (379,210 ) Accumulated other
comprehensive (loss) income, net of tax (198 ) 1,235
Total stockholders’ equity 1,877,812
1,759,175 Total liabilities and stockholders’ equity $
2,191,481 $ 2,049,981 LINEAR TECHNOLOGY
CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In
thousands) (unaudited)
Three Months Ended
Six Months Ended January 1, October 2, January
3, January 1, January 3, 2017 2016 2016 2017 2016 Cash flow
from operating activities: Net income $ 123,986 $ 115,122 $ 121,532
$ 239,108 $ 233,579 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
13,076 13,176 12,779 26,252 26,027 Stock-based compensation 23,058
20,544 20,256 43,602 39,158 Excess tax benefit from stock-based
compensation (3,131 ) (3,783 ) (3,053 ) (6,914 ) (4,680 ) Change in
operating assets and liabilities 22,471 22,718
5,486 45,189 38,658
Cash provided by operating activities 179,460
167,777 157,000 347,237
332,742 Cash flow from investing activities:
Net proceeds from sales and maturities and (purchases) of
available-for-sale securities 22,928 (120,367 ) (104,339 ) (97,439
) (124,143 ) Purchase of property, plant and equipment
(12,104 ) (8,332 ) (10,952 ) (20,436 )
(21,112 ) Cash provided by (used in) investing activities
10,824 (128,699 ) (115,291 )
(117,875 ) (145,255 ) Cash flow from financing
activities: Excess tax benefit from stock-based compensation 3,131
3,783 3,053 6,914 4,680 Issuance of common stock under employee
stock plans 7,400 — 11,976 7,400 16,229 Purchase of common stock
(9,237 ) (10,800 ) (22,598 ) (20,037 ) (79,155 ) Payment of
cash dividends (78,707 ) (78,608 ) (73,498 )
(157,315 ) (146,810 ) Cash used in financing
activities (77,413 ) (85,625 ) (81,067 )
(163,038 ) (205,056 ) Increase (decrease) in
cash and cash equivalents 112,871 (46,547 ) (39,358 ) 66,324
(17,569 ) Cash and cash equivalents, beginning of period
217,135 263,682 217,468
263,682 195,679 Cash and cash equivalents, end
of period $ 330,006 $ 217,135 $ 178,110 $
330,006 $ 178,110 LINEAR TECHNOLOGY
CORPORATION CONSOLIDATED SUPPLEMENTAL INFORMATION (In thousands,
except per share amounts) Non-GAAP (unaudited) Three
Months Ended January 1, October 2, January 3, 2017
2016 2016 GAAP gross profit $ 284,827 $ 282,069 $ 262,744
Adjustments to
reconcile GAAP gross profit to non-GAAP gross profit
Add: Merger-related charges 2,000 2,000
— Non-GAAP gross profit 286,827 284,069
262,744 GAAP operating income 160,245 149,301
149,457
Adjustments to
reconcile GAAP operating income to non-GAAP operating
income
Add: Merger-related charges 10,828 19,794
— Non-GAAP operating income 171,073
169,095 149,457 GAAP net income 123,986
115,122 121,532
Adjustments to
reconcile GAAP net income to non-GAAP net income
Add: Merger-related charges 10,828 19,794 — Less: Income tax effect
of non-GAAP adjustments (2,572 ) (4,751 ) —
Non-GAAP net income $ 132,242 $ 130,165 $ 121,532
GAAP net income per diluted share $ 0.50 $ 0.47 $
0.50 Non-GAAP net income per diluted share $ 0.54 $ 0.53
$ 0.50
To supplement the condensed consolidated financial statements
presented in accordance with GAAP, certain non-GAAP financial
information is provided, which is adjusted from results based on
GAAP to exclude certain costs and expenses, and adjusted for their
tax effects. However, because there are no standardized or
generally accepted definitions for most non-GAAP financial metrics,
definitions of non-GAAP financial metrics (e.g., determining which
costs and expenses to exclude when calculating such a metric) are
inherently subject to judgement. The non-GAAP and supplemental
information is provided to enhance the user’s overall understanding
of operating performance and prospects in the future. The
presentation of non-GAAP and supplemental information is not meant
to be considered in isolation or as a substitute for results
prepared and presented in accordance with United States GAAP. The
following charges are presented as a non-GAAP financial metric as
they are considered to be non-recurring by nature, and therefore
are not indicative of core operating results, as they represent
costs incurred as a result of the pending merger between Linear
Technology and Analog Devices as announced on July 26, 2016:
Merger-related charges that are directly related to the pending
merger between Linear Technology and Analog Devices. Charges
primarily include costs for advisory services, appraisals, legal
services, employee-related expense and auditing services.
Management believes that it is appropriate to exclude these items
as they are not indicative of ongoing operating results and
therefore limit comparability and excluding these items helps
investors compare our operating performance with our results in
prior periods as well as with the performance of other
companies.
Income tax effect of non-GAAP adjustments. Includes the income
tax effects of the excluded item noted above. Management believes
that it is appropriate to exclude the tax effects of the items
noted above in order to present a more meaningful measure of
non-GAAP net income.
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version on businesswire.com: http://www.businesswire.com/news/home/20170117006488/en/
Linear Technology CorporationDonald P. Zerio, 408-432-1900Vice
President, Finance, Chief Financial Officer
Linear (NASDAQ:LLTC)
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