Linear Tech Reports Strong Quarterly Revenues & Profits With Revenues Growing 14% Sequentially From The Prior Quarter
Linear Technology Corp. reported financial results for the quarter ended September 27, 2009. Revenue of $236.1 million for the first quarter of fiscal year 2010 increased $28.1 million or 14% compared to the previous quarter’s revenue of $208.0 million and decreased $74.2 million or 24% from $310.4 million reported in the first quarter of fiscal year 2009. Net income of $60.7 million increased $9.3 million or 18% over the fourth quarter of fiscal year 2009 and decreased $41.6 million or 41% from the first quarter of fiscal year 2009 which in addition to higher revenue had a lower tax rate of 24% compared to 28% this quarter.
Diluted earnings per share ("EPS") increased $0.04 cents per share over the adjusted fourth quarter fiscal year 2009 results. Diluted EPS of $0.27 in the first quarter of fiscal year 2010 was calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") and included $7.2 million ($0.02 per share) of non-cash interest expense related to the amortization of the debt discount on the company’s Convertible Senior Notes in accordance with Financial Accounting Standards Board ("FASB") Staff Position No. APB 14-1 ("FSP APB 14-1"), which the company adopted during the first quarter of fiscal year 2010. FSP APB 14-1 requires that issuers of debt instruments, such as the company’s Convertible Senior Notes, must separately account for the liability and equity components in a manner that reflects the entity’s nonconvertible debt borrowing rate. The resulting non-cash interest expense will never be paid by the company. All adjustments were made retrospectively as of the April 24, 2007 issuance of the Convertible Senior Notes and, therefore, all prior quarters and years have been adjusted accordingly.
In addition, during the first quarter of fiscal 2010 the company adopted EITF 03-6-1 which caused basic and diluted shares used in the Diluted EPS calculation to increase by approximately 4.0 million shares ($0.005 per share) to include non vested restricted stock grants that receive a dividend. Diluted EPS was also negatively impacted by the return of the company’s quarterly tax rate to 28% as compared to the previous quarter’s tax rate of 21%, which was favorably impacted by discrete items.
During the September quarter the company’s cash, cash equivalents and marketable securities balance increased by $40.8 million to $909.5 million. A cash dividend of $0.22 per share will be paid on November 25, 2009 to stockholders of record on November 13, 2009. Bookings for the quarter grew in all of the company’s major end-markets, except cell phones, and the largest increases were in the automotive and industrial end-markets.
According to Lothar Maier, CEO, "This was a strong quarter in both revenue and profit growth. We were pleased by the acceleration of customer orders during the latter half of the quarter as each of our end-markets except cell phone improved, in particular the automotive and industrial markets. As a result, revenues significantly improved over the previous quarter as we grew sales 14%, beating the top end of our guidance. In addition, our operating income grew by 26% and now represents 42% of sales. I would also like to recognize our dedicated employees who are helping us work successfully through these challenging times.
"Notwithstanding the high rate of growth we achieved during the first quarter, we still remain somewhat cautious looking ahead to the December quarter. The financial effects of the global recession are certainly not over and continue to impact many of our customers. Customer orders continue to call for short lead times and turns business, or bookings that are recorded and shipped during the quarter, remains at a high level. While there are some concerns that recent improvements in the overall marketplace are at least partially attributable to a replenishment of inventory stock, we continue to experience bookings improvement. Therefore, based upon the strength of our positive book to bill ratio and the recovery we appear to be witnessing in our automotive and industrial end-markets, we are forecasting revenue growth for our second fiscal quarter in the range of 2% to 5% over our first quarter."
