Linear Technology Achieves Record Quarterly and Annual Revenues and Earnings Per...

Linear Technology Achieves Record Quarterly and Annual Revenues and Earnings Per Share

MILPITAS, Calif.--(Business Wire)--
Linear Technology Corporation (NASDAQ:LLTC), a leading,
independent manufacturer of high performance linear integrated
circuits, today reported financial results for the quarter and year
ended June 29, 2008. Revenue for the fourth quarter of fiscal year
2008 increased 3.1% to a quarterly record of $307.1 million compared
to the previous quarter's revenue of $297.9 million and increased
14.5% or $39.0 million over $268.1 million in the fourth quarter of
fiscal year 2007. Diluted earnings per share ("EPS") of $0.46
increased $0.02 per share or 4.5% over the third quarter of fiscal
year 2008 and increased $0.10 per share or 28% over the fourth quarter
of fiscal year 2007. Fourth quarter Generally Accepted Accounting
Principles ("GAAP") net income of $103.1 million increased $3.9
million or 3.9% over $99.2 million reported in the third quarter of
fiscal year 2008. Net income for the quarter was positively impacted
by the increase in sales, a lower tax rate as a result of a discrete
tax benefit and also by a modest gain from the sale of a strategic
investment in a private company. These gains were partially offset by
an increase in legal expenses. Net income increased $7.4 million or
7.8% over the fourth quarter of fiscal year 2007.

During the June quarter the Company's cash and short-term
investments balance increased $58.8 million net of spending $48.3
million to purchase approximately 1.3 million shares of its common
stock. A cash dividend of $0.21 per share will be paid on August 27,
2008 to stockholders of record on August 15, 2008.

Revenue for the year ended June 29, 2008 was $1.175 billion, an
increase of 8.5% or $92.1 million over revenue of $1.083 billion for
the previous fiscal year. Diluted EPS for the year ended June 29, 2008
was $1.71, an increase of 23.0% or $0.32 per share over fiscal year
2007 diluted EPS of $1.39. The Company entered into a $3.0 billion
Accelerated Stock Repurchase ("ASR") transaction at the end of fiscal
year 2007 that along with the increase in sales drove the significant
increase in EPS during fiscal 2008. The ASR transaction decreased
shares used in the calculation of diluted EPS by 83.3 million shares
or by approximately 27%. Net income in accordance with GAAP of $387.6
million for fiscal year 2008 decreased $24.1 million or 5.8% from
$411.7 million reported in the previous fiscal year. As mentioned
above, in April 2007 the Company entered into a $3.0 billion ASR
transaction funded by $1.3 billion of the Company's own cash and $1.7
billion of convertible debt. As a result, the Company's fiscal year
2008 results had both a decrease in interest income and an increase in
interest expense when compared to the prior fiscal year which resulted
in lower net income in fiscal year 2008 but higher diluted EPS.

Non-GAAP diluted EPS for the fourth quarter of fiscal year 2008
was $0.51 per share, a $0.02 per share increase over the third quarter
of fiscal year 2008 and a $0.09 per share increase over the fourth
quarter of fiscal year 2007. Fourth quarter non-GAAP net income of
$114.4 million increased $4.4 million over $110.0 million in the third
quarter of fiscal year 2008 and $4.5 million over the fourth quarter
of fiscal year 2007. The Company's non-GAAP measures set forth above
exclude charges related to stock-based compensation. The Company's
management uses non-GAAP net income and non-GAAP net income per
diluted share to evaluate the Company's current operating results and
financial results and to compare them against historical financial
results. Reconciliations of reported net income and reported net
income per diluted share to non-GAAP net income and non-GAAP net
income per diluted share, respectively, are included at the end of
this press release.

According to Lothar Maier, CEO, "We met our guidance set at the
beginning of the quarter by growing revenues 3% and EPS 5% over the
March quarter. We have now grown revenues and EPS for five consecutive
quarters. We grew annual revenues 9% and EPS 23% and outperformed our
competitors in what most people would call a tough economic
environment. Our strategy of diversification by geography and
end-markets, emphasizing more traditional Linear end-markets,
contributed to our record annual revenues and EPS.

"Looking ahead, given the concerns about economic difficulties
particularly in the USA, forecasting future results continues to be a
challenge. While we had a positive book to bill ratio for the June
quarter, the summer or September quarter is typically a slow quarter
for industrial and communication infrastructure business. However, we
expect the September quarter to have some strength in certain high-end
consumer end-markets. Consequently, we presently estimate that
revenues and income before taxes will be flat to up 2% sequentially
from the June quarter."

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 sales
and profits 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 conditions in the world economy and financial
markets and other factors described in our 10-K for the fiscal year
ended July 1, 2007.

Company officials will be discussing these results in greater
detail in a conference call tomorrow, Wednesday, July 23, 2008 at 8:30
a.m. Pacific Coast Time. Those investors wishing to listen in may call
(719) 325-4765 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 July 23, 2008 through July 29,
2008.

You may access the archive by calling (719) 457-0820 and entering
reservation #3775341. An archive of the webcast will also be available
at www.linear.com and www.streetevents.com as of July 23, 2008 until
the fourth quarter earnings release next year.

Linear Technology Corporation, a manufacturer of high performance
linear integrated circuits, was founded in 1981, became a public
company in 1986 and joined the S&P 500 index of major public companies
in 2000. Linear Technology products include high performance
amplifiers, comparators, voltage references, monolithic filters,
linear regulators, DC-DC converters, battery chargers, data
converters, communications interface circuits, RF signal conditioning
circuits, uModule(TM) products, and many other analog functions.
Applications for Linear Technology's high performance circuits include
telecommunications, cellular telephones, networking products such as
optical switches, notebook and desktop computers, computer
peripherals, video/multimedia, industrial instrumentation, security
monitoring devices, high-end consumer products such as digital cameras
and MP3 players, complex medical devices, automotive electronics,
factory automation, process control, and military and space systems.
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.

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LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
GAAP (unaudited)

Three Months Ended Twelve Months Ended
----------------------------------------------------
June 29, Mar. 30, July 1, June 29, July 1,
2008 2008 2007 2008 2007
--------- --------- -------- ----------- -----------
Revenues $307,080 $297,865 $268,116 $1,175,153 $1,083,078
Cost of sales (1) 69,793 66,939 61,338 267,005 241,513
--------- --------- -------- ----------- -----------
Gross profit 237,287 230,926 206,778 908,148 841,565
--------- --------- -------- ----------- -----------

Expenses:
Research &
development
(1) 51,897 49,613 46,713 197,089 183,557
Selling,
general &
administrative
(1) 40,634 35,423 32,861 142,395 133,690
--------- --------- -------- ----------- -----------
92,531 85,036 79,574 339,484 317,247
--------- --------- -------- ----------- -----------
Operating income 144,756 145,890 127,204 568,664 524,318
Interest expense (14,421) (14,435) (10,795) (57,792) (12,093)
Interest income 9,056 7,334 7,908 30,082 57,699
--------- --------- -------- ----------- -----------

Income before
income taxes 139,391 138,789 124,317 540,954 569,924
Provision for
income taxes 36,242 39,555 28,593 153,341 158,249
--------- --------- -------- ----------- -----------

Net income $103,149 $ 99,234 $ 95,724 $ 387,613 $ 411,675
========= ========= ======== =========== ===========

Earnings per
share:
Basic $ 0.47 $ 0.45 $ 0.37 $ 1.74 $ 1.42
========= ========= ======== =========== ===========
Diluted $ 0.46 $ 0.44 $ 0.36 $ 1.71 $ 1.39
========= ========= ======== =========== ===========

Shares used in the calculation of
earnings per share:
Basic 221,426 222,046 260,664 222,232 290,502
========= ========= ======== =========== ===========
Diluted 225,014 224,489 266,474 226,257 296,616
========= ========= ======== =========== ===========

(1) Includes stock-based compensation charges as follows:

Cost of sales $ 1,997 $ 1,996 $ 2,946 $ 7,862 $ 11,481
Research &
development 8,454 8,360 9,595 32,743 37,341
Sales, general
&
administrative 4,758 4,675 5,885 18,261 22,786
*T

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LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)

June 29, July 1,
2008 2007
(unaudited) (audited)
------------ ------------
ASSETS:
Current assets:
Cash, cash equivalents and
short-term investments $ 966,701 $ 633,307

Accounts receivable, net of
allowance for doubtful
accounts of $1,752 ($1,775
at July 1, 2007) 161,452 130,546

Inventories 56,017 51,075

Deferred tax assets and
other current assets 61,370 46,176
------------ ------------
Total current assets 1,245,540 861,104
------------ ------------

Property, plant & equipment, net 261,085 266,600

Other noncurrent assets 77,264 91,153
------------ ------------
Total assets $ 1,583,889 $ 1,218,857
============ ============

LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities:
Accounts payable $ 16,860 $ 11,161

Accrued income taxes, payroll &
other accrued liabilities 120,521 128,762

Deferred income on shipments
to distributors 37,777 39,946
------------ ------------
Total current liabilities 175,158 179,869
------------ ------------

Convertible senior notes 1,700,000 1,700,000

Deferred tax and other long-term
liabilities 142,649 46,953

Stockholders' equity:
Common stock 1,050,259 902,135

Accumulated deficit (1,485,629) (1,609,453)

Accumulated other
comprehensive income 1,452 (647)
------------ ------------
Total stockholders' deficit (433,918) (707,965)
------------ ------------
$ 1,583,889 $ 1,218,857
============ ============
*T

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LINEAR TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(In thousands, except per share amounts)

Three Months Ended
------------------------------------
June 29, Mar. 30, July 1,
2008 2008 2007
----------- ----------- ------------

Reported net income
(GAAP basis) $ 103,149 $ 99,234 $95,724

Stock-based compensation (1) 15,209 15,031 18,426

Income tax effect of non-
GAAP adjustments (3,954) (4,284) (4,238)
----------- ----------- ------------

Non-GAAP net income $ 114,404 $ 109,981 $109,912
=========== =========== ============

Non-GAAP earnings per share excluding the effects of stock-based
compensation:
Basic $ 0.52 $ 0.50 $ 0.42
=========== =========== ===========
Diluted $ 0.51 $ 0.49 $ 0.42
=========== =========== ===========

Shares used in the calculation of Non-GAAP earnings per share:
Basic 221,426 222,046 260,664
=========== =========== ===========
Diluted 223,651(2) 223,119(2) 264,842(2)
=========== =========== ===========

Twelve Months Ended
------------------------
June 29, July 1,
2008 2007
------------ -----------

Reported net income
(GAAP basis) $ 387,613 $ 411,675

Stock-based compensation (1) 58,866 71,608

Income tax effect of non-GAAP adjustments
(16,686) (19,883)
------------ -----------

Non-GAAP net income $ 429,793 $ 463,400
============ ===========

Non-GAAP earnings per share excluding the effects of
stock-based compensation:
Basic $ 1.93 $ 1.60
============ ===========
Diluted $ 1.91 $ 1.57
============ ===========

Shares used in the calculation of Non-GAAP
earnings per share:
Basic 222,232 290,502
============ ===========
Diluted 224,681(3) 294,792(3)
============ ===========
*T

1) Linear began expensing stock options in the first quarter of
fiscal year 2006.

2) Excludes 1,363, 1,370 and 1,632 shares for the three months
ended June 29, 2008, March 30, 2008 and July 1, 2007, respectively, to
conform diluted outstanding shares calculated under FAS123R to diluted
shares calculated under prior accounting standards.

3) Excludes 1,576 and 1,824 shares for the twelve months ended
June, 29, 2008 and July 1, 2007, respectively, to conform diluted
outstanding shares calculated under FAS123R to diluted shares
calculated under prior accounting standards.

The Company's non-GAAP measures set forth above exclude charges
related to stock-based compensation. The Company's management uses
non-GAAP net income and non-GAAP net income per diluted share to
evaluate the Company's current operating results and financial results
and to compare them against historical financial results. The Company
excludes stock-based compensation expenses and the related tax effects
primarily because they are significant non-cash expense estimates
which management separates for consideration when evaluating and
managing business operations.

In addition, the Company believes that providing investors with
these non-GAAP measurements enhances their ability to compare the
Company's business against that of its many competitors who employ and
disclose similar non-GAAP measures. This financial measure may be
different from non-GAAP methods of accounting and reporting used by
the Company's competitors to the extent their non-GAAP measures
include other items. The presentation of this additional information
should not be considered a substitute for net income or net income per
diluted share prepared in accordance with GAAP.

Linear Technology Corporation
Paul Coghlan, 408-432-1900
Vice President, Finance

Copyright Business Wire 2008