Linear Technology Reports Sequential Increases in Revenue, Net Income, and Earnings Per Share

MILPITAS, Calif. — (BUSINESS WIRE) — April 19, 2016 — Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the fiscal quarter ended April 3, 2016. Quarterly revenues of $361.1 million for the third quarter of fiscal year 2016 increased $14.0 million or 4.0% over the previous quarter's revenue of $347.1 million and decreased $10.9 million or 2.9% from $372.0 million reported in the third quarter of fiscal year 2015. Net income of $128.4 million increased $6.9 million or 5.6% over the previous quarter’s net income of $121.5 million and decreased $6.8 million or 5.0% from the third quarter of fiscal year 2015. Diluted earnings per share of $0.52 per share in the third quarter of fiscal year 2016 increased $0.02 per share or 4% over the second quarter of fiscal year 2016 and decreased $0.03 per share or 5% from the third quarter of fiscal year 2015.

Cash, cash equivalents and marketable securities increased by $55.3 million over the second quarter of fiscal year 2016 to $1.36 billion. A cash dividend of $0.32 per share will be paid on May 25, 2016 to stockholders of record on May 13, 2016. During the third quarter the Company generated positive cash flows from operations of $177.4 million or 49% of total revenues. During the third quarter of fiscal year 2016 the Company returned $110.8 million to shareholders in the form of dividends of $78.2 million, representing $0.32 per share, and stock purchases of $32.6 million totaling 0.8 million shares.

According to Lothar Maier, CEO, “We are pleased to report strong financial results for our fiscal third quarter. Revenue for the quarter came in at the upper range of our guidance, growing 4% to $361.1 million. Growth for the quarter was led by higher sales into the Industrial and Transportation markets though Communications showed improvement as well. Our industry leading gross margin improved to 76.2% and operating margin improved to 45.0%. Earnings per share were $0.52, up from $0.50 per share reported in the prior quarter.

Looking ahead, the headlines suggest that the macroeconomic climate continues to be weak overall and we continue to see some weakness in our business in certain geographies and markets. Nevertheless, we are seeing signs of improvement over our broad base of customers and the Transportation market in particular continues to fuel strong growth for us. In addition, we saw higher bookings in our two other major markets, Industrial and Communications. Assuming our bookings rate stays near the current level, we are forecasting revenue to be up 2% to 5% sequentially in our fiscal fourth quarter.”

Supplemental financial information for bookings by end market and revenue by geography is available under the Investor Relations section 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 and our expectations regarding the duration of the weak cycle 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 June 28, 2015.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, April 20, 2016 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (212) 231-2912, or toll free (800) 954-0648 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 April 20, 2016 through April 27, 2016. You may access the archive by calling (402) 977-9140 or toll free (800) 633-8284 and entering reservation #21807934. An archive of the webcast will also be available at www.linear.com and www.streetevents.com for one year following the date of this call.

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 Nine Months Ended
April 3,
2016
January 3,
2016
March 29,
2015
April 3,
2016
March 29,
2015
 
Revenues $ 361,125 $ 347,128 $ 372,021 $ 1,050,170 $ 1,095,656
Cost of sales (1)   85,960   84,384   89,147   255,549   264,880
Gross profit   275,165   262,744   282,874   794,621   830,776
Expenses:
Research and development (1) 69,645 69,884 67,100 206,131 197,801
Selling, general and administrative (1)   43,042   43,403   42,221   126,638   126,847
Total operating expenses   112,687   113,287   109,321   332,769   324,648
Operating income 162,478 149,457 173,553 461,852 506,128
Interest income and other income   1,593   1,521   881   4,101   1,715
Income before income taxes 164,071 150,978 174,434 465,953 507,843
Provision for income taxes   35,679   29,446   39,247   103,982   119,595
Net income $ 128,392 $ 121,532 $ 135,187 $ 361,971 $ 388,248
 
Earnings per share:
Basic $ 0.53 $ 0.50 $ 0.55 $ 1.48 $ 1.59
Diluted $ 0.52 $ 0.50 $ 0.55 $ 1.48 $ 1.58
 
Shares used in determining earnings per share:
Basic   244,524   244,591   244,286   244,629   244,181
Diluted   244,764   244,880   245,084   244,963   245,117
 
Includes the following non-cash charges:
(1) Stock-based compensation
Cost of sales $ 2,460 $ 2,557 $ 2,240 $ 7,359 $ 6,563
Research and development 11,477 11,731 10,447 34,130 30,588
Selling, general and administrative 5,923 5,968 5,394 17,529 15,796
   

LINEAR TECHNOLOGY CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

U.S. GAAP (unaudited)

 
As of April 3,
2016
June 28,
2015
Assets
Cash, cash equivalents and marketable securities $ 1,363,047 $ 1,202,722
Accounts receivable, net of allowances ($1,651) and ($1,651 at June 28, 2015) 152,891 179,264
Inventories 94,213 99,861
Deferred tax assets and other current assets   99,735   102,905
Total current assets   1,709,886   1,584,752
 
Property, plant and equipment, net 285,059 287,742
Other noncurrent assets   9,935   11,585
Total assets $ 2,004,880 $ 1,884,079
 
Liabilities
Accounts payable $ 22,216 $ 17,608
Accrued income taxes, payroll and other accrued liabilities 103,883 118,450
Deferred income on shipments to distributors   48,410   46,860
Total current liabilities   174,509   182,918
 
Deferred tax and other noncurrent liabilities 147,048 123,234
 
Stockholders’ equity
Common stock and additional paid-in capital 2,109,314 2,052,490
Accumulated deficit (426,697) (475,124)
Accumulated other comprehensive income, net of tax   706   561
Total stockholders’ equity   1,683,323   1,577,927
$ 2,004,880 $ 1,884,079
         

LINEAR TECHNOLOGY CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 
Three Months Ended Nine Months Ended
April 3,
2016
January 3,
2016
March 29,
2015
April 3,
2016
March 29,
2015
Cash flow from operating activities:
Net income $ 128,392 $ 121,532 $ 135,187 $ 361,971 $ 388,248
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 12,612 12,779 13,592 38,639 40,361
Stock-based compensation 19,860 20,256 18,081 59,018 52,947
Excess tax benefit from stock-based compensation (75) (3,053) (4,223) (4,755) (8,973)
Change in operating assets and liabilities 16,612 5,486 (9,416) 55,270 (35,029)
                   
Cash provided by operating activities   177,401   157,000   153,221   510,143   437,554
 
Cash flow from investing activities:
Net (purchases) and proceeds from sales and maturities of available-for-sale securities 17,837 (104,339) 8,990 (106,306) (73,068)
Purchase of property, plant and equipment (13,194) (10,952) (11,046) (34,306) (54,164)
                   
Cash provided by (used in) investing activities   4,643   (115,291)   (2,056)   (140,612)   (127,232)
 
Cash flow from financing activities:
Excess tax benefit from stock-based compensation 75 3,053 4,223 4,755 8,973
Issuance of common stock under employee stock plans 11,976 10,998 16,229 26,413
Purchase of common stock (32,578) (22,598) (23,202) (111,733) (91,997)
Payment of cash dividends (78,181) (73,498) (73,406) (224,991) (204,967)
                   
Cash used in financing activities   (110,684)   (81,067)   (81,387)   (315,740)   (261,578)
 
(Decrease) increase in cash and cash equivalents 71,360 (39,358) 69,778 53,791 48,744
Cash and cash equivalents, beginning of period   178,110   217,468   136,289   195,679   157,323
Cash and cash equivalents, end of period $ 249,470 $ 178,110 $ 206,067 $ 249,470 $ 206,067

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