Altera Reports Record First Quarter `99 Results; Sales Increase 8% Sequentially; Net Income Up 11% Sequentially

Business Wire, April 14, 1999

SAN JOSE, Calif.--(BUSINESS WIRE)--April 14, 1999--

Altera Corporation (Nasdaq: ALTR) today reported record first quarter sales of $186.4 million, up 8% from the previous quarter and up 19% over the same period last year.

First quarter sales growth of 8% was achieved by double digit sequential gains in North America; up 13%, Japan; up 14% and Asia/Pacific; up 17%. Europe declined by 10%. New and mainstream products made up 59% of sales for the quarter. New product revenues were 22% of sales and grew 34% sequentially and 350% over the same period last year. Mainstream product revenues were 37% of sales and grew 4% sequentially and 62% over the first quarter of last year. Mature product sales showed a sequential decline of one percent.

First quarter net income of $47.0 million was a record and represented an increase of 11% from the previous quarter and an increase of 34% from the first quarter of 1998. First quarter earnings per share, on a diluted basis, were $0.46, an increase of $0.04 from the prior quarter and up $0.09 over the same period last year.

First quarter earnings included a $1.2 million charge to other income attributed to the Company's write-off of an investment. During the quarter, the Company invested $37.5 million to increase its ownership position in WaferTech (a joint venture with TSMC to manufacture wafers in a state-of-the-art facility in Camas, Washington) by five percent, bringing Altera's total equity position in WaferTech to 23 percent. First quarter earnings included after-tax charges of $2.0 million or $0.02 per share representing the Company's share in the start-up losses of WaferTech. Excluding WaferTech results, diluted earnings per share for the first quarter were $0.48.

Altera added $11.8 million of cash to its balance sheet during the quarter, after the repurchase of 260,000 shares of its common stock for $12.8 million, the increase of its equity position in WaferTech for $37.5 million, and routine capital expenditures of $5.7 million.

First quarter highlights: -0-

-    The rollout of Altera's new APEX(TM)family of devices began with
     shipments of the first family member, the EP20K400. The
     revolutionary APEX MultiCore(TM)architecture, featuring the
     unique Embedded System Block (ESB), combines look-up table logic,
     product-term logic and a variety of advanced embedded memory
     structures and I/O interfaces on a single piece of silicon for
     System-on-a-Programmable-Chip(TM)applications. The EP20K400
     features 400,000 usable gates (1 million maximum system gates)
     and provides 16,640 logic elements, 212,992 bits of embedded
     memory, and up to 1,664 product-term macrocells. The Company
     plans to introduce six APEX family members during the year with
     densities ranging from 100,000 to 1 million usable gates (4,160
     to 42,240 logic elements).

-    With the introduction of APEX, Altera started customer deliveries
     of Quartus(TM), its fourth generation design software platform.
     In a series of technical seminars that Altera hosted worldwide,
     over 2700 design engineers were introduced to the powerful
     capabilities that Quartus design software and the APEX family
     bring to high-density design. The Quartus software is a totally
     new design platform and has been specifically developed to
     address the System-on-a-Programmable-Chip designs that are
     possible with the APEX family of devices.

-    Altera continued the rollout of the 2.5-volt FLEX(TM) 10KE family
     with the introduction of the EPF10K100E, manufactured on an
     advanced 0.22-micron, five-layer-metal process. The EPF10K100E
     with 100,000 usable gates and 49,152 bits of on-chip dual-port
     RAM addresses the density "sweet spot" of many gate array
     designs. The Company plans to complete the five member FLEX 10KE
     family rollout next quarter. The FLEX 10KE family of devices is
     fully compliant with 64-bit, 66 MHz PCI specifications and
     provides densities ranging from 30,000 to 200,000 usable gates
     (1,728 to 9,984 logic elements)

-    Altera and Synopsys Inc. (NASDAQ:SNPS) put in place an exclusive
     arrangement where Synopsys will provide free of charge FPGA
     Compiler(TM) II - Altera Edition to all of its Design Compiler
     customers. FPGA Compiler II - Altera Edition utilizes the
     advanced programmable logic synthesis algorithms of Synopsys'
     FPGA Express and FPGA Compiler II to support Altera's FLEX 10K,
     FLEX 6000 and APEX programmable logic devices within the Design
     Compiler flow. This enables ASIC designers to easily target
     Altera's FLEX and APEX devices and obtain optimum speed and area
     results without modifications to their ASIC design files.

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Rodney Smith, President and CEO, stated, "We are very pleased with the record performance achieved in the quarter, with growth exceeding our expectations due directly to the market success of our new FLEX and MAX(TM) products. Moreover, APEX and Quartus are the most significant new product introductions in Altera's history. These products provide Altera customers with true System-on-a- Programmable-Chip capabilities and their introduction represents a significant milestone in Altera's pursuit of greater share in the ASIC market."