Altera Reports Record Third Quarter `99 Results; Sales Increase 9% Sequentially; Net Income Up 9% Sequentially

Business Wire, Oct 13, 1999

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 13, 1999--

Altera Corporation (Nasdaq: ALTR) today reported record third quarter sales of $215.1 million, up 9% from the previous quarter and up 31% over the same period last year. Third quarter sales growth of 9% was achieved by record sales in all geographic channels with sequential gains of 10% in North America, 12% in Europe, 10% in Asia/Pacific and 1% in Japan. New and mainstream products made up 68% of sales for the quarter. New product revenues were 33% of sales and grew 37% sequentially and 205% over the same period last year. Mainstream product revenues were 35% of sales and grew 1% sequentially and 27% over the third quarter of last year. Mature product sales declined 5% sequentially.

Third quarter net income of $55.6 million was a record and represented an increase of 9% over the previous quarter and an increase of 38% over the third quarter of 1998. Third quarter earnings per share, on a diluted basis, were $0.27, an increase of $0.02 from the prior quarter and up $0.07 from the same period last year. Third quarter earnings included after-tax charges of $2.8 million representing the Company's share in the start-up losses of WaferTech. Altera added $110.4 million of cash to its balance sheet during the quarter after the repurchase of 395,000 shares of its common stock for $14.3 million and routine capital expenditures of $8.1 million.

During the third quarter, Altera continued to enhance its leadership position in System-on-a-Programmable-Chip(TM) (SOPC(TM)) solutions: -0-

--   Altera completed the rollout of the 2.5-volt APEX(TM) 20K family
     with the introduction of the EP20K200 device, which provides
     200,000 usable gates (526,000 maximum system gates) including
     106,496 bits of embedded RAM. Additionally, an advanced systems
     integration platform for SOPC designers was announced utilizing
     the APEX EP20K400 device. The SOPC development board enables
     prototyping and debugging of designs that combine custom logic
     and standard intellectual property cores available from Altera or
     one of its AMPP(SM) (Altera Megafunction Partners Program)
     partners. Altera further expanded its System-on-a-Programmable-
     Chip capability with the addition of two new AMPP partners: ARC
     Cores Ltd. and Tensilica, Inc., each of which provide 32-bit,
     configurable RISC processors optimized for APEX devices.

--   Altera's IP (Intellectual Property) Business Unit opened the
     doors of the IP MegaStore(TM), an innovative Internet web site
     where SOPC designers use the IP MegaSearch(TM) engine to access
     over 120 IP megafunctions. The designer may then use Altera's
     OpenCore(TM) technology to download any core and perform a free,
     no-risk evaluation.

--   Altera completed the rollout of the 2.5-volt FLEX(R) 10KE family
     with the introduction of the EPF10K30E. The FLEX 10KE family,
     manufactured on a state-of-the-art 0.22-micron process, consists
     of five devices that cover densities ranging from 30,000 to
     200,000 usable gates. Each device offers embedded memory
     capabilities, full 64-bit, 66-MHz PCI compliance, and PLL
     features. In the third quarter, revenues of the FLEX 10KE family
     grew 117% sequentially to $13 million, and cumulative revenues
     since introduction have totaled $22 million.

--   As part of the exclusive arrangement between Altera and Synopsys
     Inc. (NASDAQ:SNPS), Synopsys delivered FPGA Compiler(TM) II -
     Altera Edition to its entire base of Design Compiler licensees.
     To date, over 750 users have taken advantage of the one year,
     free-of-charge offer by requesting a license from Synopsys. FPGA
     Compiler II - Altera Edition can transparently run scripts
     created by Design Compiler, a tool used by more than 80% of all
     ASIC designers. This seamless integration enables Design Compiler
     users to directly target Altera FLEX and APEX devices within a
     familiar design methodology.
-0-

Rodney Smith, President and CEO, stated, "We are very pleased with our performance in the third quarter - Altera achieved record sales results in each of our sales channels and the growth of new products surpassed our expectations. All members of the APEX 20K family are now shipping and we have delivered over 17,500 copies of the Quartus development software. This powerful combination has resulted in a significant number of Altera design wins during the quarter. Furthermore, the 2.5-volt FLEX 10KE family with 117% sequential growth and the 3.3-volt MAX(R) 7000A family with 105% sequential growth continue to demonstrate Altera's unique leadership position within the industry in both the look-up table and product-term market segments."

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.