Linear Technology Corp. (LLTC) filed Quarterly Report for the period ended 2009-09-27.
Linear Technology products include operational instrumentation and audio amplifiers; voltage regulators power management devices DC-DC converters and voltage references; comparators; monolithic filters; communications interface circuits; one-chip data acquisition sub-systems; pulse-width modulators and sample-and-hold devices. (Company Press Release) Linear Technology Corp. has a market cap of $5.97 billion; its shares were traded at around $26.31 with a P/E ratio of 23.5 and P/S ratio of 6.2. The dividend yield of Linear Technology Corp. stocks is 3.4%. Linear Technology Corp. had an annual average earning growth of 10.7% over the past 10 years. GuruFocus rated Linear Technology Corp. the business predictability rank of 4-star.
Highlight of Business Operations:
First quarter revenue of $236.1 million increased $28.1 million or 14% over the fourth quarter of fiscal year 2009 and decreased 24% or $74.2 million 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 impacted negatively by approximately $0.025 cents per share due to the adoption of two new accounting standards. For a further discussion of the newly adopted accounting standards see Note 1 to the consolidated financial statements, included in Part 1, “Financial Information.” The Company retrospectively adopted the new accounting standards, which adjusted the first quarter of fiscal year 2009 results. The Company achieved both strong sequential quarterly revenue and profit growth; however, on a year-over-year basis the Company s results were down as the Company continues to feel the effects of the global recession.
Revenue for the quarter ended September 27, 2009 was $236.1 million, a decrease of $74.2 million or 24% from revenue of $310.4 million for the same quarter of the previous fiscal year. The decrease in revenue was due to lower domestic and international sales as a result of the global recession. The average selling price (“ASP”) of $1.49 per unit in the first quarter of fiscal year 2010 was relatively flat as compared to the first quarter of fiscal year 2009 ASP of $1.47 per unit. Geographically, international revenues were $166.9 million or 71% of revenues, a decrease of $59.3 million as compared to international revenues of $226.2 million or 73% of revenues for the same quarter of the previous fiscal year. Internationally, revenues to Rest of the World, which is primarily Asia excluding Japan, represented $94.7 million or 40% of revenues, while sales to Europe and Japan were $36.5 million or 16% of revenues and $35.7 million or 15% of revenues, respectively. Domestic revenues were $69.2 million or 29% of revenues in the first quarter of fiscal year 2010, a decrease of $15.0 million from $84.2 million or 27% of revenues in the same period in fiscal year 2009.
Research and development (“R&D”) expenses for the quarter ended September 27, 2009 were $45.3 million, a decrease of $5.5 million or 11% from R&D expenses of $50.9 million for the same period in the previous fiscal year. The decrease in R&D expenses was primarily due to a $4.0 million decrease in compensation costs related to the reduction in workforce that occurred in the second and fourth quarters of fiscal year 2009 and the 10% temporary reduction in base pay that occurred during the fourth quarter of fiscal year 2009. The decrease in R&D was also due to a $2.5 million decrease in the employee profit sharing accrual and a $0.7 million decrease in other R&D expenses such as mask costs. Partially offsetting these decreases to R&D expense was a $1.7 million increase in stock-based compensation.
Selling, general and administrative expenses (“SG&A”) for the quarter ended September 27, 2009 were $31.7 million, a decrease of $5.4 million or 15% from SG&A expenses of $37.1 million for the same period in the previous fiscal year. The decrease in SG&A expenses was primarily due to a $1.8 million decrease in the employee profit sharing accrual and a $1.8 million decrease in compensation costs related to the reduction in workforce that occurred in the second and fourth quarters of fiscal year 2009 and the 10% temporary reduction in base pay that occurred during the fourth quarter of fiscal year 2009. The decrease in SG&A expenses was also due to a $2.8 million decrease in other SG&A expenses such as advertising and legal costs. Partially offsetting these decreases to SG&A expense was a $1.0 million increase in stock-based compensation.
At September 27, 2009, the Company s cash, cash equivalents and marketable securities balances were $909.5 million in aggregate, representing an increase of $40.7 million over the June 28, 2009 balances of $868.7 million. This increase was primarily due to positive cashflow from operations of $108.1 million. Working capital as of September 27, 2009 was $993.4 million. During the first quarter of fiscal year 2010, significant cash expenditures included $11.3 million for the net purchase of available-for-sale securities; $3.4 million for capital additions; $9.8 million face value to purchase and retire a portion of the 3.125% Convertible Senior Notes; $4.2 million to purchase its common stock and $49.9 million for the payment of a cash dividend, representing $0.22 per share in the first quarter of fiscal year 2010.
Accrued payroll and related benefits decreased $3.7 million from the fourth quarter of fiscal year 2009 primarily due to the payment of profit sharing partially offset by an increase to the profit sharing accrual and increases in other payroll liabilities. The Company accrues for profit sharing on a quarterly basis while distributing payouts to employees on a semi-annual basis during the first and third quarters of each fiscal year. Income taxes payable for the first quarter of fiscal year 2010 increased $17.9 million over the fourth quarter of fiscal year 2009 primarily due to the income tax provision of $23.6 million. Other accrued liabilities of $44.4 million increased $12.0 million over the fourth quarter of fiscal year 2009 primarily due to accrued interest on the Company s Convertible Senior Notes. The Company makes semi-annual interest payments during the second and fourth quarters of each fiscal year.
LLTC is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
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