Altera reports record quarterly results; First quarter sales increase 4% annually and 12% sequentially; Net income up 8% annually and 16% sequentially

Business Wire, April 9, 1997

SAN JOSE, Calif.--(BUSINESS WIRE)--April 9, 1997--Altera Corporation (NASDAQ: ALTR) today reported record levels of sales, operating income, net income, and earnings per share for the quarter ended March 31, 1997.

First quarter sales of $142.4 million were up 4% over the same period last year, and 12% over the previous quarter.

Gross margin, as a percentage of sales for the first quarter was 62.0%, up 0.7 percentage points over the same period last year and up 0.5 percentage points over the previous quarter. Gross margin improvements are attributed to improved yields and wafer price reductions.

Net income for the first quarter was a record $34.1 million, up 8% over the first quarter of 1996 and 16% above the previous quarter. First quarter earnings per share, on a fully diluted basis, were $0.35, an increase of $0.02 from the same period last year and up $0.04 from the previous quarter.

Altera added $81.9 million of cash to its balance sheet during the quarter, after expenditures of $18.7 million toward the construction of the new San Jose headquarters facility, and $4.6 million for routine capital expenditures.

Rodney Smith, President & CEO stated, "The financial results for the March quarter are indicative of our continued success in the marketplace. The Domestic channel provided the strongest sales growth and the International business also contributed another solid increase. Although the communications marketplace continued to provide the largest component of our results, the computer sector significantly paced our growth."

Mr. Smith concluded, "Sales for new products were up significantly from the prior quarter. We believe that our aggressive price moves, especially with these products, have allowed us to maintain our design win leadership."

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation risks of dependence on third-party wafer suppliers, intellectual property rights and litigation, market acceptance of and demand for the Company's products as well as general market conditions, competition and pricing, and development of technology and manufacturing capabilities. Please refer to the Company's Securities and Exchange Commission filings, copies of which are available from the Company without charge, for further information.

Fax on Demand:

Copies of Altera's announcement are available from its fax-on-demand service. In the U.S. and Canada to request a copy call 1-800/789-ALTR. International users can dial their local International Access Code followed by 1-408/894-0466.

Altera Corporation, founded in 1983, is a world-wide leader in high-performance, high-density programmable logic devices and associated computer aided engineering (CAE) logic development tools. Programmable logic devices are semiconductor chips that offer on-site programmability to customers. The chips are programmed with tools that run on personal computers or engineering workstations. User benefits include ease of use, lower risk, and fast time-to-market. The Company offers the broadest line of CMOS programmable logic devices that address high- speed, high-density, and lower power applications. Altera products serve a broad range of market areas, including telecommunications, data communications, computers, and industrial applications. Altera common stock is traded on The Nasdaq Stock Market using the symbol ALTR. -0-

                       ALTERA CORPORATION
              CONSOLIDATED STATEMENTS OF OPERATIONS
               (Thousands, except per share data)
                          (Unaudited)

                                    THREE MONTHS ENDED
                                   Mar. 31   Mar. 31   Dec. 31
                                     1997      1996      1996

Sales                              $142,439  $137,098  $127,185

Costs & Expenses:
Cost of Sales                        54,094    53,054    48,961
Research and Development             12,315    12,523    12,339
Selling, General, and
 Administrative                      24,760    23,320    21,258

Total Costs & Expenses               91,169    88,897    82,558

Income from Operations               51,270    48,201    44,627
Interest & Other Income, Net            329       923      (215)
Income before Taxes                  51,599    49,124    44,412
Taxes                                17,543    17,684    15,100
Net Income                         $ 34,056  $ 31,440  $ 29,312
Net Income per Share:
  Primary                          $   0.37  $   0.34  $   0.32
  Fully diluted                    $   0.35  $   0.33  $   0.31
Weighted average shares and
 equivalents:
  Primary                            93,129    91,936    92,364
  Fully diluted                     102,138   100,926   101,578

Tax rate                                34%       36%       34%

% of Sales
Gross Margin                            62%       61%       62%
  Research & Development                 9%        9%       10%
  Selling, General, and
   Administrative                       17%       17%       17%
  Income from Operations                36%       35%       35%
  Net Income                            24%       23%       23%


                       ALTERA CORPORATION
                   CONSOLIDATED BALANCE SHEETS
                          (Thousands)
                          (Unaudited)

                                           Mar. 31       Dec. 31
                                             1997          1996
Assets

Current assets:
  Cash and short-term investments      $    362,771  $    280,850
  Accounts receivable, net                   72,751        68,486
  Inventories                                62,029        75,798
  Other assets                               53,360        47,853
Total current assets                        550,911       472,987
Property and equipment, net                 109,069        89,804
Investments & intangibles                   213,872       215,421
                                       ------------  ------------
                                       $    873,852  $    778,212

Liabilities and Shareholders' Equity

Current liabilities                    $    229,585  $    177,967
Long-term debt                              230,000       230,000
Shareholders' equity                        414,267       370,245
                                       ------------  ------------
                                       $    873,852  $    778,212

Key Ratios & Information

Current Assets/Current Liabilities              2:1           3:1
Liabilities/Equity                              1:1           1:1
Annualized Quarterly Return on Equity           35%           33%
Quarterly Depreciation Expense                4,080         4,147
Quarterly Capital Expenditures               23,345        18,555
Annualized Sales per Employee                   609           562