Linear Technology Reports Increases in Revenue and Net Income

Linear Technology Reports Increases in Revenue and Net Income Over the Comparable Prior Year Period but Revenue and Net Income Decreased 5% Sequentially. The Company Increases the Quarterly Dividend $0.03 to $0.30 Per Share.

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® subsystems, and wireless sensor network products. For more information, visit www.linear.com

For further information contact Paul Coghlan 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
	December 28, 2014		September 28, 2014		December 29, 2013			December 28, 2014		December 29, 2013

Revenues	$	352,575	$	371,060	$	334,595		$	723,635	$	674,952
Cost of sales ⁽¹⁾		86,726		89,007		82,521			175,733		166,522
Gross profit		265,849		282,053		252,074			547,902		508,430
Expenses:
Research and development ⁽¹⁾		65,101		65,600		62,008			130,701		123,520
Selling, general and administrative ⁽¹⁾		42,537		42,089		38,852			84,626		77,530
Total operating expenses		107,638		107,689		100,860			215,327		201,050
Operating income		158,211		174,364		151,214			332,575		307,380
Interest expense		—		—		(6,813	)		—		(13,626	)
Amortization of debt discount ⁽²⁾		—		—		(5,524	)		—		(10,970	)
Interest income and other income		253		581		791			834		1,673
Income before income taxes		158,464		174,945		139,668			333,409		284,457
Provision for income taxes		34,862		45,486		34,917			80,348		71,838
Net income	$	123,602	$	129,459	$	104,751		$	253,061	$	212,619

Earnings per share:
Basic	$	0.51	$	0.53	$	0.44		$	1.04	$	0.89
Diluted	$	0.51	$	0.53	$	0.44		$	1.03	$	0.89

Shares used in determining earnings per share:
Basic		244,033		244,145		239,206			244,067		238,857
Diluted		244,591		244,801		240,670			244,674		240,000

Includes the following non-cash charges:
⁽¹⁾ Stock-based compensation
Cost of sales	$	2,223	$	2,100	$	2,106		$	4,323	$	4,070
Research and development		10,350		9,791		9,816			20,141		18,978
Selling, general and administrative		5,346		5,056		5,069			10,402		9,799
⁽²⁾ Amortization of debt discount
(non-cash interest expense)		—		—		5,524			—		10,970


LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) U.S. GAAP (unaudited)

	December 28, 2014			June 29, 2014
ASSETS:
Current assets:
Cash, cash equivalents and marketable securities	$	1,072,866		$	1,012,787
Accounts receivable, net of allowance for doubtful accounts of $1,651 ($1,653 at June 29, 2014)		148,584			173,340
Inventories		100,141			91,310
Deferred tax assets and other current assets		99,743			87,276
Total current assets		1,421,334			1,364,713

Property, plant & equipment, net		294,529			277,080
Other noncurrent assets		12,685			13,785
Total assets	$	1,728,548		$	1,655,578

LIABILITIES & STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	20,017		$	28,221
Accrued income taxes, payroll & other accrued liabilities		102,690			141,275
Deferred income on shipments to distributors		47,083			45,619
Total current liabilities		169,790			215,115

Deferred tax and other noncurrent liabilities		120,266			109,094

Stockholders’ equity:
Common stock		1,989,563			1,948,006
Accumulated deficit		(550,813	)		(616,992	)
Accumulated other comprehensive loss		(258	)		355
Total stockholders’ equity		1,438,492			1,331,369
	$	1,728,548		$	1,655,578


LINEAR TECHNOLOGY CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (unaudited)

	Three Months Ended									Six Months Ended
	December 28, 2014			September 28, 2014			December 29, 2013			December 28, 2014			December 29, 2013
Cash flow from operating activities:
Net income	$	123,602		$	129,459		$	104,751		$	253,061		$	212,619
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,555			13,214			12,792			26,769			25,627
Stock-based compensation		17,919			16,947			16,991			34,866			32,847
Amortization of convertible senior notes discount		—			—			5,524			—			10,970
Excess tax benefit from stock-based compensation		(2,548	)		(2,202	)		(300	)		(4,750	)		(1,829	)
Change in operating assets and liabilities:		(4,571	)		(21,042	)		28,986			(25,613	)		10,708

Cash provided by operating activities		147,957			136,376			168,744			284,333			290,942

Cash flow from investing activities:
Net (purchases) and proceeds from sale and maturities of available-for-sale securities		(55,632	)		(26,426	)		9,466			(82,058	)		93,018
Purchase of property, plant and equipment		(16,201	)		(26,917	)		(4,009	)		(43,118	)		(7,897	)
Cash (used in) provided by investing activities		(71,833	)		(53,343	)		5,457			(125,176	)		85,121

Cash flow from financing activities:
Excess tax benefit from stock-based compensation		2,548			2,202			300			4,750			1,829
Issuance of common stock under employee stock plans		12,092			3,323			37,861			15,415			59,516
Purchase of common stock		(34,709	)		(34,086	)		(12,182	)		(68,795	)		(26,853	)
Payment of cash dividends		(65,822	)		(65,739	)		(62,023	)		(131,561	)		(124,082	)
Cash used in financing activities		(85,891	)		(94,300	)		(36,044	)		(180,191	)		(89,590	)

(Decrease) increase in cash and cash equivalents		(9,767	)		(11,267	)		138,157			(21,034	)		286,473
Cash and cash equivalents, beginning of period		146,056			157,323			274,966			157,323			126,650
Cash and cash equivalents, end of period	$	136,289		$	146,056		$	413,123		$	136,289		$	413,123

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