Linear Technology Reports Sequential Increases in Revenue, Net

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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