SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number. 0-14864
LINEAR TECHNOLOGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-2778785
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1630 McCarthy Boulevard
Milpitas, California 95035
(408) 432-1900
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES,
INCLUDING ZIP CODE AND TELEPHONE NUMBER)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Pare Value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of
the Registrant was approximately $7,388,044,304.00 as of September 9, 2002,
based upon the closing sale price on the Nasdaq National Market System reported
for such date. Shares of common stock held by each officer and director and by
each person who owns 5% or more of the outstanding common stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.
There were 314,384,864 shares of the Registrant's common stock issued
and outstanding as of September 9, 2002.
DOCUMENTS INCORPORATED BY REFERENCE:
(1) Items 1 and 2 of Part I and Items 5, 6, 7, 7A and 8 of Part II
incorporate information by reference from Exhibit 13.1 to this Form 10-K
which contains certain information included in Registrant's Annual
Report to Stockholders for the fiscal year ended June 30, 2002.
(2) Items 10, 11 and 12 of Part III incorporate information by reference
from the definitive proxy statement (the "2002 Proxy Statement") for the
Annual Meeting of Stockholders to be held on November 6, 2002.
PART I
Item 1. Business
Except for historical information contained in this annual report on Form 10-K,
certain statements set forth herein, including certain statements in this Item
1, are forward-looking statements that are dependent on certain risks and
uncertainties including such factors, among others, as the timing, volume and
pricing of new orders for the Company's products, timely ramp-up of new
facilities, the timely introduction of new processes and products, general
conditions in the world economy and financial markets and other factors
described below. Therefore, actual outcomes and results may differ materially
from what is expressed or forecast in such forward-looking statements. Words
such as "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate,"
variations of such words and similar expressions are intended to identify such
forward looking statements.
General
Linear Technology Corporation (together with its consolidated
subsidiaries, "Linear Technology" or the "Company") designs, manufactures and
markets a broad line of standard high performance linear integrated circuits.
Applications for the Company's products 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. The Company was
organized and incorporated in 1981 by a management team with significant
experience in the design, manufacture and marketing of linear circuits. During
fiscal year 2001, the Company reincorporated from California to Delaware. The
Company competes primarily on the basis of performance, functional value,
quality, reliability and service.
The linear circuit industry
Semiconductor components are the electronic building blocks used in
electronic systems and equipment. These components are classified as either
discrete devices (such as individual transistors) or integrated circuits (in
which a number of transistors and other elements are combined to form a more
complicated electronic circuit). Integrated circuits ("ICs") may be divided into
two general categories, digital and linear (or analog). Digital circuits, such
as memory devices and microprocessors, generally process on-off electrical
signals, represented by binary digits, "1" and "0." In contrast, linear circuits
monitor, condition, amplify or transform continuous analog signals associated
with physical properties, such as temperature, pressure, weight, light, sound or
speed, and play an important role in bridging between real world phenomena and a
variety of electronic systems. Linear circuits also provide voltage regulation
and power control to electronic systems, especially in hand-held battery powered
systems.
The Company believes that several factors generally distinguish the
linear integrated circuit business from the digital circuit business, including:
Importance of Individual Design Contribution. The Company
believes that the creativity of individual design engineers is of
particular importance in the linear circuit industry. The design of a
linear integrated circuit generally involves a greater variety and
less repetition of circuit elements than digital design. In addition,
the interaction of linear circuit elements is complex, and the exact
placement of these elements in the circuit is critical to the
circuit's precision and performance. Computer-aided engineering and
design tools for linear circuits are not as accurate in modeling
circuits as those tools used for designing digital circuits. As a
result, the contributions of a relatively small number of individual
design engineers are generally of greater importance in the design of
linear circuits than in the design of digital circuits.
Smaller Capital Requirements. Digital circuit design attempts
to minimize device size and maximize speed by increasing circuit
densities. The process technology necessary for increased density
requires very expensive wafer fabrication equipment. In contrast,
linear circuit design focuses on precise matching and placement of
circuit elements, and linear circuits often require large feature
sizes to achieve precision and high voltage operation. Accordingly,
the linear circuit manufacturing process generally requires smaller
initial capital expenditures, particularly for photomasking equipment
and clean room facilities, and less frequent replacement of
manufacturing equipment because the equipment has, to date, been less
vulnerable to technological obsolescence.
Market Diversity; Relative Pricing Stability. Because of the
varied applications for linear circuits, manufacturers typically
offer a greater variety of device types to a more diverse group of
customers, who typically
1
have smaller volume requirements per device. As a result, linear
circuit manufacturers are often less dependent upon particular
products or customers, linear circuit markets are generally more
fragmented, and competition within those markets tends to be more
diffused. The Company believes that competition in the linear circuit
market is particularly dependent upon performance, functional value,
quality, reliability and service. As a result, linear circuit pricing
has generally been more stable than most digital circuit pricing.
Less Japanese And Other Asian Competition. To date, Japanese
and other Asian firms have concentrated their efforts on the high
volume digital and consumer linear markets, as opposed to the high
performance end of the linear circuit market served by the Company.
Products and markets
Linear Technology produces a wide range of products for a variety of
customers and markets. The Company emphasizes standard products to address
larger markets and to reduce the risk of dependency upon a single customer's
requirements. The Company targets the high performance segment of the linear
circuit market. "High performance" is characterized by higher precision, both
high power or micropower, higher speed, more subsystem integration on a single
chip and many other special features. The Company focuses virtually all of its
design efforts on proprietary products which, at the time of introduction, are
original designs by the Company offering unique characteristics differentiating
them from those offered by competitors.
Although the types and mix of linear products vary by application, the
principal product categories are as follows:
Amplifiers - These circuits amplify the voltage or output current of a
device. The amplification represents the ratio of the output voltage or current
to the input voltage or current. The most widely used device is the operational
amplifier due to its versatility and precision.
High Speed Amplifiers - These amplifiers are used to amplify signals
above 5MHz for applications such as video, fast data acquisition and data
communication.
Voltage Regulators - Voltage regulators control the voltage of a device
or circuit at a specified level. This category of product consists primarily of
two types, the linear regulator and the switch mode regulator. Switch mode
regulators are also used to convert voltage up or down within an electronic
system for power management and battery charging.
Voltage References - These circuits serve as electronic benchmarks
providing a constant voltage for system usage. Precision references have a
constant output independent of input, temperature changes or time.
Interface - Interface circuits act as an intermediary to transfer
digital signals between or within electronic systems. These circuits are used in
computers, modems, instruments and remote data acquisition systems.
Data Converters - These circuits change linear (analog) signals into
digital signals, or vice versa, and are often referred to as data acquisition
subsystems, A/D converters and D/A converters. The accuracy and speed with which
the analog signal is converted to its digital counterpart is considered a key
characteristic for these devices.
Radio Frequency Circuits - These circuits include mixers, modulators,
demodulators, amplifiers, drivers, and power detectors and controllers. They are
used in wireless and cable infrastructure, cellphones, and wireless data
communications.
Other - Other linear circuits include buffers, battery monitors, motor
controllers, hot swap circuits, comparators, sample-and-hold devices,
modulators/demodulators, drivers and filters, both switched capacitor and
continuous time, which are used to limit and/or manipulate signals in such
applications as cellular telephones, base stations, navigation system
instrumentation and detection circuitry.
Linear circuits are used in various applications including
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. The Company focuses its product development and
marketing efforts on high performance applications where the Company believes it
can position itself competitively with respect to product performance and
functional value.
2
The following table sets forth, examples of product families by end market
application and end-market:
Market End Applications/Products Example Product Families
--
Industrial Flow or rate metering |
Position/pressure/ |
temperature sensing and control |
Robotics |
Energy management |
Process control data communication |
Network and factory automation |
Security and surveillance systems |
Curve tracers | Data acquisition products
Logic analyzers | High performance operational
Multimeters | amplifiers
Oscilloscopes | Interface (RS 485/232) products
Test equipment | Instrumentation amplifiers
Voltmeters | Line drivers
Network analyzers | Line receivers
Scales | Precision comparators
Analytic instruments | Precision voltage references
Gas chromatic graphs | Monolithic filters
EKG, CAT scanners | Switching voltage regulators
DNA analysis | Voltage references
Blood analyzers | Hot swap circuits
| DC-DC converters
Space/Military Communications |
and Automotive Satellite |
Guidance and navigation systems |
Displays |
Firing control |
Ground support equipment |
Radar systems |
Sonar systems |
Surveillance equipment |
GPS |
Entertainment |
Safety systems |
Suspension systems __|
--
Communications Cellular phones (CDMA/WCDMA/GPRS/3G) | DC - DC converters
Cellular basestations | V.35 transceiver
Pagers | High-speed amplifiers
Modems/fax machines | Line drivers
PBX switches | Line receivers
GPS systems | Low noise operational amplifiers
Optical networking | Micropower products
ADSL modems | Power management
Channel service unit/data service unit | Switched capacitor filters
Cable modems | Voltage references
Internet appliances | Voltage regulators
Servers | Data acquisition products
Routers | Hot Swap controllers
Switches | Multi-protocol circuits
| Thermal Electric Cooler
| Power Amplifier Control
| Modulators/Demodulators
| Battery Chargers
__| Multi-Phase Switching Regulators
3
--
Computer Communications/interface modems | Battery charging
Disk drives | DC - DC converters
Notebook computers | Data acquisition products
Desktop computers | Hot Swap controllers
Workstations | Line drivers
LCD displays/monitors | Line receivers
Plotters/printers | Low drop out linear regulators
Digital still cameras | Micropower products
Power supplies | Multi-Phase Switching Regulators
Handheld PCs | PCMCIA power switching
Battery chargers | Power management
Video/multimedia |
MP3 players |
PDAs |
Pet Robots __|
Marketing and customers
The Company markets its products worldwide, through a direct sales
staff, electronics distributors, and a small network of independent sales
representatives, to a broad range of customers in diverse industries. Within the
United States, in late fiscal 2001, the Company transitioned its sales effort
from a network of independent sales representatives primarily to a direct sales
staff. Additionally in fiscal 2001 the Company reduced its number of large
national distributors from two to one. The Company sells to over 15,000 Original
Equipment Manufacturer (OEM) customers directly and/or through the sales
distributor channel. Distributor and direct customers generally buy on an
individual purchase order basis, rather than pursuant to long-term agreements.
Of the Company's domestic distributors, one domestic distributor accounted for
16% of net sales and 17% of accounts receivable during fiscal 2002, and 12% of
net sales and 13% of accounts receivable during fiscal 2001, two distributors
accounted for approximately 14% and 11% of net sales in fiscal 2000.
Distributors are not end customers, but rather serve as a channel of sale to
many end users of the Company's products. No other distributor or customer
accounted for 10% or more of net sales for fiscal 2002, 2001 or 2000.
The Company's sales organization is divided into domestic and
international regions, with sales offices located in the following metropolitan
areas: Seattle, Baltimore, Denver, Philadelphia, Raleigh, Chicago, Dallas,
Austin, Houston, San Jose, Los Angeles, Irvine, San Diego, Huntsville,
Minneapolis, Cleveland, Portland, London, Stockholm, Helsinki, Ascheberg,
Munich, Stuttgart, Paris, Lyon, Tokyo, Osaka, Taipei, Singapore, Seoul, Hong
Kong, Bejing and Shanghai. The Company's products typically require a
sophisticated technical sales effort.
The Company has agreements with 4 independent sales representatives in
the United States and 2 in Canada. Commissions are paid to sales representatives
upon shipments either directly from the Company or through distributors. The
Company has agreements with 2 independent distributors in North America, 5 in
Europe, 2 in Japan, 2 each in China and Taiwan, and 1 each in Korea, Singapore,
Malaysia, Thailand, South Africa, Philippines, India, Israel, Australia, and New
Zealand. The Company's distributors purchase the Company's products for resale
to customers. Additionally, domestic distributors often sell competitors'
products. Under certain agreements, the Company's domestic distributors are
entitled to price protection on inventory if the Company lowers the prices of
its products. The agreements also generally permit distributors to exchange up
to 3% of purchases on a semi-annual basis. See Note 1 of Notes to Consolidated
Financial Statements incorporated herein by reference to Exhibit 13.1 of this
Form 10-K, which contains certain information included in the Company's 2002
Annual Report to Stockholders.
During fiscal 2002, 2001 and 2000, export sales were primarily to
Europe, Japan and Asia and represented approximately 64%, 54% and 54% of net
sales, respectively. Because most of the Company's export sales are billed and
payable in United States dollars, export sales are generally not directly
subject to fluctuating currency exchange rates. A strengthening of the dollar in
relation to other currencies may, however, create pricing pressure. Although
export sales are subject to certain control restrictions, including approval by
the Office of Export Administration of the United States Department of Commerce,
the Company has not experienced any material difficulties relating to such
restrictions.
4
The Company's backlog of released and firm orders was approximately
$46.1 million at June 30, 2002 as compared with $71.5 million at July 1, 2001.
In addition to its backlog, the Company had $28.8 million of products sold to
and held by domestic distributors at June 30, 2002 as compared to $31.8 million
at July 1, 2001. Generally, shipments to domestic distributors are not
recognized as sales until the distributor has sold the products to its
customers. The Company defines backlog as consisting of distributor stocking
orders and OEM orders for which a delivery schedule has been specified by the
OEM customer for product shipment within six months. Although the Company
receives volume purchase orders, most of these purchase orders are cancelable,
generally outside of thirty days of delivery, by the customer without
significant penalty. Lead-time for the release of purchase orders depends upon
the scheduling practices of the individual customer and the availability of
individual products, so the rate of booking new orders varies from month to
month. The ordering practices of many semiconductor customers has shifted from a
practice of placing orders with delivery dates extending over several months to
the practice of placing orders with shorter delivery dates in concert with the
Company's lead times. Also, the Company's agreements with certain distributors
provide for price protection. Consequently, the Company does not believe that
its backlog at any time is necessarily representative of actual sales for any
succeeding period.
In the operating history of the Company, seasonality of business has
not been a material factor, although the results of operations for the first
fiscal quarter of each year are impacted slightly by customary summer holidays,
particularly in Europe.
The Company warrants that its products, until they are incorporated in
other products, are free from defects in workmanship and materials and conform
to the Company's published specifications. Warranty expense has been nominal to
date.
Manufacturing
The Company's wafer fabrication and manufacturing facilities are
located in Milpitas, California ("Hillview") and Camas, Washington ("Camas").
Each facility was built to Company specifications to support a number of
sophisticated process technologies and to satisfy rigorous quality assurance and
reliability requirements of United States military specifications and major
worldwide OEM customers. All of the Company's manufacturing facilities have
received ISO 9001/ISO 9002 certification.
The Company's wafer fabrication facility located in Camas, Washington
commenced manufacturing operations in the second half of fiscal 1997, the
facility is used to produce six-inch diameter wafers for use in the production
of the Company's devices. In fiscal 1999, the Company added 40,000 square feet
to the Camas facility and during fiscal 2001 the Company purchased an additional
16.5 acres adjacent to its Camas facility for future expansion. The Company's
Hillview facility located in Milpitas, California was completed in fiscal 2001.
Production for this six-inch wafer fabrication plant commenced in the third
quarter of fiscal 2001. The Company currently uses similar manufacturing
processes in both its Hillview and Camas facilities. During fiscal 2002, the
Company discontinued production in its oldest 4-inch wafer fabrication plant
located at the Milpitas, California headquarters.
The Company's basic process technologies include high speed bipolar,
high gain, low noise bipolar, radio frequency bipolar, silicon gate
complementary metal-oxide semiconductor ("CMOS") and BiCMOS processes. The
Company also has two proprietary complementary bipolar processes. The Company's
bipolar processes are typically used in linear circuits where high voltages,
high power, high frequency, low noise or effective component matching is
necessary. The Company's proprietary silicon gate CMOS processes provide switch
characteristics required for many linear circuit functions, as well as an
efficient mechanism for combining linear and digital circuits on the same chip.
The Company's CMOS processes were developed to address the specific requirements
of linear circuit functions. The complementary bipolar processes were developed
to address higher speed analog functions. The Company's basic processes can be
combined with a number of adjunct processes to create a diversity of IC
components. A minor portion of the Company's wafer manufacturing, particularly
very small features size CMOS products, is done at an independent foundry.
The accompanying chart provides a brief overview of the Company's IC
process capabilities:
5
PROCESS CAPABILITIES
Process Families Benefit/Market Advantage Product Application
- ---------------- ------------------------ -------------------
P-Well SiGate CMOS General purpose, stability Switches, filters, data
conversion, chopper amplifiers
N-Well SiGate CMOS Speed, density, stability Switches, data conversion
BiCMOS Speed, density, stability, flexibility Data conversion
High Power Bipolar Power (100 watts), high current Linear and smart power products,
(10 amps) switching regulators
Low Noise Bipolar Precision, low current, low noise, Op amps, voltage references
high gain
High Speed Bipolar Fast, wideband, video high data Op amps, video, comparators,
rate switching regulators
JFETS Speed, precision, low current Op amps, switches, sample and
hold
Rad - Hard Total dose radiation hardened All space products
Complementary Bipolar Speed, low distortion, precision Op amps, video amps, converters
CMOS/ Thin Films Stability, precision Filters, data conversion
High Voltage CMOS High voltage general-purpose, Switches, chopper amplifiers
compatible with Bipolar
Bipolar/Thin Films Precision, stability, matching Converters, amplifiers
RF Bipolar High speed, low power RF wireless, high speed
data communications
The Company emphasizes quality and reliability from initial product
design through manufacturing, packaging and testing. The Company's design team
focuses on fault tolerant design and optimum location of circuit elements to
enhance reliability. Linear Technology's wafer fabrication facilities have been
designed to minimize wafer handling and the impact of operator error through the
use of microprocessor-controlled equipment. The Company has obtained Defense
Supply Center, Columbus (DSCC) qualification to participate in high reliability
JAN38510 (class B) military business. The Company has also received Jan Class S
Microcircuit Certification, which enables the Company to manufacture products
intended for use in space or for critical applications where replacement is
extremely difficult or impossible and where reliability is imperative.
The Company is certified to comply with the ISO 9001/9002 international
quality standard and QS 9000 automotive quality standard. This certification
covers the Company's design, manufacturing and service organizations and is an
important standard especially in the European marketplace. The Company has
received MIL-PRF-38535 Qualified Manufacturers Listing (QML) certification for
military products from DSCC.
Processed wafers are sent to either the Company's assembly facility in
Penang, Malaysia or to offshore independent assembly contractors where the
wafers are separated into individual circuits and packaged. The Penang facility
opened in October 1994 and services approximately 60% to 90% of the Company's
assembly requirements for plastic packages. The Company completed an extension
of approximately 75,000 square feet to the Penang facility in late fiscal 2000.
Significant assembly subcontractors used by the Company are Carsem(M) Sdn,
Carsem Semiconductor Sdn and Unisem(M) Sdn located in
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Malaysia. The Company also maintains domestic assembly operations to satisfy
particular customer requirements, especially those for military applications,
and to provide rapid turnaround for new product development.
After assembly, most products are sent to the Company's Singapore
facility for final testing, inspection and packaging as required. Some products
are returned to Milpitas for the same back-end processing.
Linear Technology from time to time has experienced competition from
other manufacturers seeking assembly of circuits by independent contractors. The
Company currently believes that alternative foreign assembly sources could be
obtained without significant interruption. Foreign assembly is subject to risks
normally associated with foreign operations, including changes in local
governmental policies, currency fluctuations, transportation delays and the
imposition of export controls or increased import tariffs.
From time to time certain materials, including silicon wafers and
plastic molding compounds, have been in short supply. To date the Company has
experienced no delays in obtaining raw materials which could have adversely
affected production. As is typical in the industry, the Company must allow for
significant lead times in delivery of its materials.
Manufacturing of individual products, from wafer fabrication through
final testing, may take from ten to sixteen weeks. Since the Company sells a
wide variety of device types, and customers typically expect delivery of
products within a short period of time following order, the Company maintains a
substantial work-in-process and finished goods inventory.
Based on its anticipated production requirements, the Company believes
it will have sufficient available resources and manufacturing capacity for
fiscal 2003.
Patents, licenses and trademarks
The Company has been awarded over 166 United States and International
patents, and has filed 103 additional patent applications. Although the Company
believes that these patents and patent applications may have value, the
Company's future success will depend primarily upon the technical abilities and
creative skills of its personnel, rather than on its patents.
As is common in the semiconductor industry, the Company has at times
been notified of claims that it may be infringing patents issued to others. If
it appears necessary or desirable, the Company may seek licenses under such
patents, although there can be no assurance that all necessary licenses can be
obtained by the Company on acceptable terms.
In addition, from time to time the Company may negotiate with other
companies to license patents, products or process technology for use in its
business.
Government sales
The Company currently has no material U.S. Government contracts.
Risks and Competition
In addition to the risks discussed below and elsewhere in this
"Business section", see the "Factors Affecting Future Operating Results" section
included in Exhibit 13.1-3, "Management's Discussion and Analysis," for further
discussion of other risks and uncertainties that may affect the business.
Semiconductor Industry
The semiconductor market has historically been cyclical and subject to
significant economic downturns at various times, including the recent decline in
demand experienced during fiscal 2002. Many OEM customers have significant
excess inventories in their channels thus making it difficult for the Company to
know real end user demand. The cyclical nature of the semiconductor industry may
cause the Company to experience substantial period-to-period fluctuations in
results of operations.
Typically, the Company's ability to meet its revenue goals and
projections is dependent to a large extent on the orders it receives from its
customers within the period. Historically, the Company has maintained low lead
times, which have enabled customers to place orders close to their true needs
for product. In defining its goals and projections the Company considers
inventory on hand, backlog, production cycles and expected order patterns from
customers. If the Company's estimates in these areas become inaccurate, it may
not be able to meet its revenue goals and projections. In addition, some
customers
7
require the Company to manufacture product and have it available for shipment,
even though the customer is unwilling to make a binding commitment to purchase
all, or even some, of the product.
The semiconductor industry is characterized by rapid technological
change, price erosion, occasional shortages of materials, capacity constraints,
variations in manufacturing efficiencies, and significant expenditures for
capital equipment and product development. New product introductions are a
critical factor for future sales growth and sustained profitability. Although
the Company believes that the high performance segment of the linear circuit
market is generally less affected by price erosion or by significant
expenditures for capital equipment and product development than other
semiconductor market sectors, future operating results may reflect substantial
period to period fluctuations due to these or other factors.
Manufacturing
The Company relies on its internal manufacturing facilities located in
California and Washington to fabricate most of its wafers; however, the Company
is dependent on outside silicon foundries for a small portion of its wafer
fabrication. The Company could be adversely affected in the event of a major
earthquake, which could cause temporary loss of capacity, loss of raw materials,
and damage to manufacturing equipment. Additionally the Company relies on its
internal and external assembly and testing facilities located in Singapore and
Malaysia. The Company is subject to economic and political risks inherent to
international operations, including changes in local governmental policies,
currency fluctuations, transportation delays and the imposition of export
controls or increased import tariffs. The Company could be adversely affected if
any such changes are applicable to the Company's foreign operations.
The Company's manufacturing yields are a function of product design and
process technology, both of which are developed by the Company. The manufacture
and design of integrated circuits is highly complex. To the extent the Company
does not achieve acceptable manufacturing yields or there are delays in wafer
fabrication, its results of operations could be adversely affected.
Litigation
The Company is subject to various legal proceedings arising out of a
wide range of matters, including, among others, patent suits and employment
claims. From time to time, as is typical in the semiconductor industry, the
Company receives notice from third parties alleging that the Company's products
or processes infringe such third parties' intellectual property rights. If the
Company is unable to obtain a necessary license, and one or more of its products
or processes is determined to infringe any such intellectual property rights of
others, a court might enjoin the Company from further manufacture and/or sale of
the affected products. In that case, the Company would need to reengineer the
affected products or processes in such a way as to avoid the alleged
infringement, which may or may not be possible. An adverse result in litigation
arising from such a claim could involve an injunction to prevent the sales of a
portion of the Company's products, a reduction or the elimination of the value
of related inventories, and/or the assessment of a substantial monetary award
for damages related to past sales. The Company does not believe that the current
suits will have a material impact on its business or financial condition.
However, current lawsuits and any future lawsuits will divert resources and
could result in the payment of substantial damages. See "Item 3. Legal
Proceedings."
Key Personnel
The Company's performance is substantially dependent on the performance
of the executive officers and key employees. The loss of the services of the key
officers, technical personnel or other key employees could harm the business.
The success of the Company depends on its ability to identify, hire, train,
develop and retain highly qualified technical and managerial personnel. Failure
to attract and retain the necessary technical and managerial personnel could
harm the Company.
Competition
Linear Technology competes in the high performance segment of the
linear market. The Company's competitors include Analog Devices, Inc., Maxim
Integrated Products, Inc., Motorola, Inc., Micrel Inc., National Semiconductor
Corporation and Texas Instruments, Inc. Competition among manufacturers of
linear integrated circuits is intense, and certain of the Company's competitors
may have significantly greater financial, technical, manufacturing and marketing
resources than the Company. The principal elements of competition include
product performance, functional value, quality and reliability, technical
service and support, price, diversity of product line and delivery capabilities.
The Company believes it competes
8
favorably with respect to these factors, although it may be at a disadvantage in
comparison to larger companies with broader product lines and greater technical
service and support capabilities.
Although the Company believes that it has the product lines,
manufacturing facilities and technical and financial resources for its current
operations, sales and profitability can be significantly affected by the above
and other factors. Additionally, the Company's common stock could be subject to
significant price volatility should sales and/or earnings fail to meet the
expectations of the investment community. Furthermore, stocks of high technology
companies are subject to extreme price and volume fluctuations that are often
unrelated or disproportionate to the operating performance of these companies.
Research and development
The Company's ability to compete depends in part upon its continued
introduction of technologically innovative products on a timely basis. To
facilitate this need, the Company has organized its product development efforts
into four groups: power management, signal conditioning, mixed signal and high
frequency. Linear Technology's product development strategy emphasizes a broad
line of standard products to address a diversity of customer applications. The
Company's research and development efforts are directed primarily at designing
and introducing new products and, to a lesser extent, developing new processes
and advanced packaging.
As of June 30, 2002, the Company had 681 employees involved in
research, development and engineering related functions of which 336 employees
are engaged in new product design. The Company had 214 employees engaged in new
product design at its Milpitas headquarters as well as 14 employees at its
Singapore design center, 46 employees at its Boston design center, 24 employees
at its Colorado design center, 12 employees at its New Hampshire design center,
11 employees at its Raleigh design center which opened in fiscal 2000, 7
employees at its Santa Barbara design center which opened in fiscal 2001, and 8
at its Burlington design center which opened in fiscal 2002.
For the fiscal years 2002, 2001, and 2000, the Company spent
approximately $79.8 million, $102.5 million, and $78.3 million, respectively, on
research and development. The reduction in expenses in 2002 from 2001 was due
primarily to a reduction in profit sharing expense. Headcount in total R&D
personnel increased from 670 in fiscal 2001 to 681 in fiscal 2002. Within R&D
the number of actual circuit designers increased from 139 to 161 in fiscal 2002.
Environmental regulation
Federal, state and local regulations impose various environmental
controls on the storage, use, discharge and disposal of certain chemicals and
gases used in semiconductor processing. The Company's facilities have been
designed to comply with these regulations, and the Company believes that its
activities conform to present environmental regulations. Increasing public
attention has, however, been focused on the environmental impact of electronics
manufacturing operations. While the Company to date has not experienced any
materially adverse business effects from environmental regulations, there can be
no assurance that changes in such regulations will not require the Company to
acquire costly remediation equipment or to incur substantial expenses to comply
with such regulations. Any failure by semiconductor companies, including the
Company, to control the storage, use or disposal of, or adequately restrict the
discharge of hazardous substances could also subject them to significant
liabilities.
Employees
As of June 30, 2002, the Company had 2,691 employees, including 256 in
marketing and sales, 681 in research, development and engineering related
functions, 1,664 in manufacturing and production, and 90 in management,
administration and finance. The Company's success depends upon a number of key
employees, the loss of whom could adversely impact the Company. The Company
believes that its future success will depend in large part upon its ability to
attract, retain and motivate highly skilled employees. In the San Jose/Silicon
Valley area, where the Company's principal facilities are located, competition
for such employees is intense.
The Company has never had a work stoppage, no employees are represented
by a labor organization, and the Company considers its employee relations to be
good.
9
Executive Officers of the Registrant
The executive officers of the Company, and their ages as of September
9, 2002, are as follows:
Name Age Position
- ---- --- --------
Robert H. Swanson, Jr...........64 Chairman and Chief Executive Officer
Clive B. Davies.................59 President
Paul Chantalat..................52 Vice President Quality and Reliability
Paul Coghlan....................57 Vice President of Finance and Chief Financial Officer
Robert C. Dobkin................58 Vice President of Engineering and Chief Technical Officer
Lothar Maier....................47 Vice President and Chief Operating Officer
Richard Nickson.................52 Vice President of North American Sales
David A. Quarles................36 Vice President of International Sales
David B. Bell...................46 Vice President and General Manager, Power Business Unit
William Gross...................53 Vice President and General Manager, Signal Conditioning Unit
Robert Reay.....................41 Vice President and General Manager, Mixed Signal Business Unit
Arthur F. Schneiderman..........60 Secretary
Mr. Swanson, a founder of the Company, has served as Chairman of the
Board of Directors and Chief Executive Officer since April 1999, and prior to
that time as President, Chief Executive Officer and a director of the Company
since its incorporation in September 1981. From August 1968 to July 1981, he was
employed in various positions at National Semiconductor Corporation
("National"), a manufacturer of integrated circuits, including Vice President
and General Manager of the Linear Integrated Circuit Operation and Managing
Director in Europe. Mr. Swanson has a BS degree in Industrial Engineering from
Northeastern University.
Dr. Davies has served as President since April 1999 and as Vice
President and Chief Operating Officer from January 1989 to April 1999. From July
1982 to January 1989, Dr. Davies held the position of Vice President of Quality,
Reliability and Customer Service. From April 1971 to July 1982, he was employed
in various positions at National, including Group Director for Advanced
Technology, Group Managing Director of the Singapore and Hong Kong Manufacturing
Operations and Business Director of Standard Linear Integrated Circuit
Operations. Dr. Davies received a B.Sc. (Honors) in Physics in 1964 and a Ph.D.
in Physics in 1967 from the University of Reading, England.
Mr. Chantalat has served as Vice President of Quality and Reliability
since July 1991. From January 1989 to July 1991, he held the position of
Director of Quality and Reliability. From July 1983 to January 1989 he held the
position of Manager of Quality and Reliability. From February 1976 to July 1983,
he was employed in various positions at National, where his most recent position
was Group Manager of Manufacturing Quality Engineering. Mr. Chantalat received a
BS and an MS in Electrical Engineering from Stanford University in 1970 and
1972, respectively.
Mr. Coghlan has served as Vice President of Finance and Chief Financial
Officer of the Company since December 1986. From October 1981 until joining the
Company, he was employed in various positions at GenRad, Inc., a manufacturer of
automated test equipment, including Corporate Controller, Vice President of
Corporate Quality and most recently Vice President and General Manager of the
Structural Test Products Division. Before joining GenRad, Inc., Mr. Coghlan was
associated with Price Waterhouse & Company in the United States and Paris,
France for twelve years. Mr. Coghlan received a BA from Boston College in 1966
and an MBA from Babson College in 1968.
Mr. Dobkin, a founder of the Company, has served as Vice President of
Engineering and Chief Technical Officer since April 1999, and as Vice President
of Engineering from September 1981 to April 1999. From January 1969 to July
1981, he was employed in various positions at National, where his most recent
position was Director of Advanced Circuit Development. Mr. Dobkin has extensive
experience in linear circuit design. Mr. Dobkin attended the Massachusetts
Institute of Technology.
Mr. Maier joined the Company as Chief Operating Officer in April 1999.
From 1983 to 1999, he was employed at Cypress Semiconductor Corporation in
various management positions, mostly recently as Senior Vice President and
Executive Vice President of Worldwide Operations. Mr. Maier received a BS in
Chemical Engineering in 1978 from the University of California at Berkeley.
10
Mr. Nickson has served as Vice President of North American Sales since
October 2001. From February 1998 until July 2001, he was European Sales
Director. From August 1993 until January 1998, he held the position of Northwest
Area Sales Manager. From April 1991 to August 1993, he was President and
Co-founder of Focus Technical Sales. From August 1983 to April 1991, he served
with National Semiconductor in various positions where his most recent position
was Vice President of North American Sales. Mr. Nickson was Founder and
President of Micro-Tex, Inc. from June 1980 to August 1983. Prior to 1980, Mr.
Nickson spent seven years in semiconductor sales, including four years with
Texas Instruments. He received a B.S. in Mathematics from Illinois Institute of
Technology in 1971.
Mr. Quarles has served as Vice President of International Sales since
August 2001. From October 2000 to August 2001 he held the position of Director
of Marketing. From July 1996 to September 2000 he held the position of Director
of Asia-Pacific Sales stationed in Singapore. From June 1991 to July 1996 he
worked as a Sales Engineer and later as District Sales Manager for the Bay Area
sales team. Prior to Linear, Mr. Quarles worked two years as a Sales Engineer at
National Semiconductor. Mr. Quarles received a BS in Electrical Engineering in
1988 from Cornell University.
Mr. Bell has served as Vice President and General Manager of the Power
Business Unit since January 2002 and as General Manager of the Power Business
Unit since February 1999. From June 1994 to January 1999 he held the position of
Manager of Strategic Product Development. From July 1991 to May 1994 he was
employed as Director of Electrical Engineering at IDEO Product Development.
Prior to July 1991 Mr. Bell was employed in various management and engineering
positions at Bell Associates, Inc., Sydis, Inc., and Hewlett Packard, Inc. Mr.
Bell has a BS degree in Electrical Engineering from the Massachusetts Institute
of Technology.
Mr. Gross has served as Vice President and General Manager of the
Signal Conditioning Business Unit since January 2002 and as General Manager of
the Signal Conditioning Business Unit since February 1999. He held the position
of Design Manager from July 1989 to February 1999 responsible for amplifiers,
comparators and voltage references. Previously he was Design Manager at Elantec
from January 1984 to June 1989. From January 1973 to December 1983 he held
several positions at National Semiconductor, including Design Engineer and
Design Manager of the Japan Design Center. Mr. Gross received a BS in
electronics engineering from California Polytechnic University in 1971 and a MS
in electrical engineering from University of Arizona in 1973.
Mr. Reay has served as Vice President and General Manager of the Mixed
Signal Business Unit since January 2002 and as General Manager of the Mixed
Signal Business Units since November 2000. From January 1992 to October 2000 he
was the Design Engineering Manager responsible for a variety of product families
including interface, supervisors, battery chargers and hot swap controllers. Mr.
Reay joined Linear Technology in April 1988 as a design engineer after spending
four years at GE Intersil. Mr. Reay received a B.S. and M.S. in electrical
engineering from Stanford University in 1984.
Mr. Schneiderman has served as Secretary of the Company since September
1981. He is an attorney and a member of the law firm of Wilson, Sonsini,
Goodrich & Rosati, Professional Corporation, general counsel to the Company.
Item 2. Properties
At the Company's headquarter campus in Milpitas, California, the
Company owns the land and 3 buildings of approximately 41,000, 42,000 and 70,000
square feet, respectively. These buildings are used for support services
engineering, prototype testing of new products and worldwide headquarters.
Additionally in the same campus the Company leases 60,000 and 31,000 square foot
buildings used primarily for circuit design activities and future expansion.
During fiscal 1999, the Company purchased a 96,000 square foot building near its
headquarter campus in Milpitas, California. This building was converted to a new
six-inch wafer fabrication plant completed during the first half of fiscal 2001,
with production commencing during the third quarter of fiscal 2001.
The Company occupies a 72,000 square foot manufacturing facility in
Singapore. Test and packaging operations are performed at this facility along
with certain design and product distribution activity. The Company has a 30-year
lease on the land where the plant is located that commenced in 1994, with an
option to extend for an additional 30 years. During fiscal 2001, the Company
leased 6 acres of land adjacent to its Singapore facility.
In 1994, the Company opened a 55,000 square foot assembly plant in
Penang, Malaysia. The Company has a 60-year lease on the land where the plant
was constructed. In fiscal 1999, the Company purchased a 23,400 square foot
building adjacent to its existing facility. The Company demolished the acquired
building, and built a 75,000 square foot extension to its existing facility on
the site.
11
During fiscal 1996, the Company completed construction of a 60,000
square foot facility on land it owns in Camas, Washington. This facility is used
to fabricate six-inch wafers. Manufacturing operations commenced at this
facility in the second half of fiscal 1997. In fiscal 1999, the Company added
40,000 square feet to this facility for future expansion. During fiscal 2001,
the Company purchased 16.5 acres of land adjacent to its Camas facility.
The Company leases design facilities located in: Bedford, New
Hampshire, Raleigh, North Carolina, Burlington, Vermont and Santa Barbara,
California. In fiscal 2002, the Company purchased land in Colorado Springs,
Colorado and constructed a new 20,000 square foot design center. In fiscal 1999,
the Company purchased land in the Boston metropolitan area and constructed a new
20,000 square foot design and sales office. In fiscal 2002, the Company added
10,000 square feet to this facility. The Company leases sales offices in the
areas of Bellevue, Baltimore, Denver, Milpitas, Philadelphia, Raleigh, Chicago,
Dallas, Austin, Houston, Milpitas, Los Angeles, Irvine, San Diego, Huntsville,
Minneapolis, Cleveland, Portland, London, Stockholm, Helsinki, Ascheberg,
Munich, Stuttgart, Paris, Lyon, Tokyo, Osaka, Taipei, Singapore, Seoul, Hong
Kong and Shanghai. See Note 3 of Notes to Consolidated Financial Statements
incorporated herein by reference to Exhibit 13.1 of this Form 10-K which
contains certain information included in the Company's 2002 Annual Report to
Stockholders.
Item 3. Legal Proceedings
To protect its intellectual property, and in particular its patent
rights, the Company has been the plaintiff in various patent infringement
lawsuits. The defendants' responses to litigation initiated by the Company have
in certain cases included counterclaims or separate actions alleging
infringement by the Company of unrelated patents owned by the defendant. One
such instance has arisen in which Texas Instruments, Inc. (TI) filed suit
against the Company on January 6, 2001, in federal court in Texas. This suit
alleges that certain semiconductor manufacturing equipment, purchased by the
Company from independent third party suppliers and used by the Company in its
manufacturing processes, infringed three patents owned by TI. The suit seeks
unspecified monetary damages and injunctive relief. In the course of defending
the lawsuit brought by TI, the Company has filed third-party complaints against
the manufacturers of the allegedly infringing equipment, seeking indemnity and
alleging breach of contract, breach of warranty, fraud, and unfair business
practices. While the Company believes that resolution of these actions should
not have a material effect on the Company's financial position, it can give no
assurances that it will prevail in them.
Item 4. Submission of Matter to a Vote of Security Holders
Not applicable.
12
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
The information required by the Item is incorporated herein by
reference to the section entitled "Quarterly Results and Stock Market Data" of
Exhibit 13.1 to this Form 10-K which contains certain information included in
the Registrant's 2002 Annual Report to Stockholders.
Item 6. Selected Financial Data
The information required by the Item is incorporated herein by
reference to the section entitled "Selected Financial Information/Five-Year
Trend" of Exhibit 13.1 to this Form 10-K which contains certain information
included in the Registrant's 2002 Annual Report to Stockholders.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by the Item is incorporated herein by
reference to the section entitled "Management's Discussion and Analysis of
Results of Operations and Financial Condition" of Exhibit 13.1 to this Form 10-K
which contains certain information included in the Registrant's 2002 Annual
Report to Stockholders.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The information required by the Item is incorporated herein by
reference to the section entitled "Management's Discussion and Analysis of
Results of Operations and Financial Condition" of Exhibit 13.1 to this Form 10-K
which contains certain information included in the Registrant's 2002 Annual
Report to Stockholders.
Item 8. Financial Statements and Supplementary Data
Consolidated Financial Statements of Linear Technology at June 30, 2002
and July 1, 2001 and for each of the three years in the period ended June 30,
2002, the report of Ernst & Young LLP, independent auditors, thereon and
unaudited quarterly financial data for the two year period ended June 30, 2002
are incorporated herein by reference to Exhibit 13.1 of this Form 10-K which
contains certain information included in the Registrant's 2002 Annual Report to
Stockholders.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
13
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this item for the Company's directors is
incorporated herein by reference to the 2002 Proxy Statement, under the caption
"Proposal One - Election of Directors," and for the executive officers of the
Company, the information is included in Part I hereof under the caption
"Executive Officers of the Registrant."
Item 11. Executive Compensation
Incorporated by reference to the 2002 Proxy Statement, under the
section titled "Executive Officer Compensation."
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Incorporated by reference to the 2002 Proxy Statement, under the
section titled "Beneficial Security Ownership of Directors, Executive Officers
and Certain Other Beneficial Owners" and "Securities Authorized for Issuance
Under Equity Compensation Plans."
Item 13. Certain Relationships and Related Transactions
Not applicable.
14
PART IV
Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K
(a) 1. Financial Statements
The financial statements listed in the accompanying Index to
Consolidated Financial Statements are filed as part of this Annual
Report.
2. Schedules
The financial statement schedule listed in Item 14(d) is filed
as part of this Annual Report.
All other schedules are omitted since the information required
by the schedule is not applicable, or is not present in amounts
sufficient to require submission of the schedule, or because the
information required is included in the Consolidated Financial
Statements and notes thereto.
3. Exhibits
The exhibits listed in Item 14(c) are filed as part of this
Annual Report. Each compensatory plan required to be filed has been
indicated in Item 14(c).
(b) Reports on Form 8-K.
No reports on Form 8-K were required to be filed for the three months
ended June 30, 2002.
(c) Exhibits
3.1 Certificate of Incorporation of Registrant. (9)
3.3 Bylaws of Registrant. (9)
10.1 1981 Incentive Stock Option Plan, as amended, and form of Stock Option
Agreements, as amended (including Restricted Stock Purchase
Agreement).(*)(3)
10.11 Agreement to Build and Lease dated January 8, 1986 between
Callahan-Pentz Properties, McCarthy Six and the Registrant.(1)
10.25 1986 Employee Stock Purchase Plan, as amended, and form of Subscription
Agreement.(*)(2)
10.35 1988 Stock Option Plan, as amended, form of Incentive Stock Option
Agreement, as amended, and form of Non-statutory Stock Option
Agreement, as amended.(*)(6)
10.36 Form of Indemnification Agreement. (9)
10.45 Land lease dated March 30, 1993 between the Registrant and the
Singapore Housing and Development Board.(4)
10.46 Land lease dated November 20, 1993 between the Registrant and the
Penang Development Corporation. (5)
10.47 1996 Incentive Stock Option Plan, form of Incentive Stock Option
Agreement and form of Nonstatutory Stock Option Agreement.(*) (7)
10.48 1996 Senior Executive Bonus Plan, as amended July 25, 2000.(*) (8)
10.49 2001 Nonstatutory Stock Option Plan, as amended July 23, 2002, and form
of Stock Option Agreement.(*)
10.50 Employment Agreement dated January 15, 2002 between the Registrant and
Robert H. Swanson, Jr. (*) (10)
15
10.51 Employment Agreement dated January 15, 2002 between the Registrant and
Clive B. Davies. (*) (10)
10.52 Employment Agreement dated January 15, 2002 between the Registrant and
Paul Coghlan. (*) (10)
10.53 Employment Agreement dated January 15, 2002 between the Registrant and
Robert C. Dobkin. (*) (10)
11.1 Computation of earnings per share. (see Exhibit 13.1).
13.1 Certain information included in the Registrant's Annual Report to
Stockholders for the fiscal year ended June 30, 2002.
21.1 Subsidiaries of Registrant.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney. (see page 19)
99.1 Certification of Robert H. Swanson Jr. and Paul Coghlan Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes Oxley Act of 2002.
(d) Financial Statement Schedule filed as a part of this Annual Report is
listed below:
Schedule
Number Description
- ------ -----------
II Valuation and qualifying accounts.
- --------------------------------------------------------------------------------
(Footnotes to Item 14 (c))
(*) The item listed is a compensatory plan of the Company.
(1) Incorporated by reference to identically numbered exhibits filed in
response to Item 16(a), "Exhibits," of the Registrant's Registration
Statement on Form S-1 and Amendment No. 1 and Amendment No. 2 thereto
(File No. 33-4766), which became effective on May 28, 1986.
(2) Incorporated by reference to identically numbered exhibit filed in
response to Item 6, "Exhibits and Reports on Form 8-K," of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 28, 1997.
(3) Incorporated by reference to identically numbered exhibit filed in
response to Item 6, "Exhibits and Reports on Form 8-K," of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
December 30, 1990.
(4) Incorporated by reference to identically numbered exhibit filed in
response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 27, 1993.
(5) Incorporated by reference to identically numbered exhibit filed in
response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended July 3, 1994.
(6) Incorporated by reference to identically numbered exhibit filed in
response to Item 6, "Exhibits and Reports on Form 8-K," of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
October 2, 1994.
(7) Incorporated by reference to Exhibits 4.1 and 4.2 of the Registrant's
Registration Statement on Form S-8 filed with the Commission on July
30, 1999.
(8) Incorporated by reference to identically numbered exhibit filed in
response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended July 2, 2000.
16
(9) Incorporated by reference to identically numbered exhibit filed in
response to Item 14(a)(3) "Exhibits," of the Registrant's Annual Report
on Form 10-K for the fiscal year ended July 1, 2001.
(10) Incorporated by reference to identically numbered exhibit filed in
response to Item 6 "Exhibits and reports on Form 8-K," of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 2002.
17
LINEAR TECHNOLOGY CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
(Item 14(a)1)
Page Reference
to Exhibit 13.1
Consolidated balance sheets at June 30, 2002 and July 1, 2001 E13.1-8
Consolidated statements of income for each of the three
years in the period ended June 30, 2002 E13.1-7
Consolidated statements of stockholders' equity for each of
the three years in the period ended June 30, 2002 E13.1-10
Consolidated statements of cash flows for each of the three
years in the period ended June 30, 2002 E13.1-9
Notes to consolidated financial statements E13.1-11 to
E13.1-18
Report of Ernst & Young LLP, independent auditors E13.1-19
The Consolidated Financial Statements listed in the above index are
hereby incorporated by reference to Exhibit 13.1 of this Form 10-K which
contains certain information included in the Registrant's Annual Report to
Stockholders for the year ended June 30, 2002.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LINEAR TECHNOLOGY CORPORATION
(Registrant)
By: /s/ Robert H. Swanson, Jr.
------------------------------
Robert H. Swanson, Jr.
Chairman of the Board and
Chief Executive Officer
September 18, 2002
POWER OF ATTORNEY
Know all persons by these presents, that each person whose signature
appears below constitutes and appoints Robert H. Swanson, Jr. and Paul Coghlan,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Report on Form 10-K, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Robert H. Swanson, Jr. /s/ Paul Coghlan
- -------------------------- ----------------
Robert H. Swanson, Jr. Paul Coghlan
Chairman of the Board and Vice President of Finance and Chief
Chief Executive Officer Financial Officer (Principal Financial
(Principal Executive Officer) Officer and Principal Accounting Officer)
September 18, 2002 September 18, 2002
/s/ David S. Lee /s/ Thomas S. Volpe
- ---------------- -------------------
David S. Lee Thomas S. Volpe
Director Director
September 18, 2002 September 18, 2002
/s/ Leo T. McCarthy /s/ Richard M. Moley
- ------------------- --------------------
Leo T. McCarthy Richard M. Moley
Director Director
September 18, 2002 September 18, 2002
19
CERTIFICATIONS
I, Robert H. Swanson, Jr. certify that:
1. I have reviewed this annual report on Form 10-K of Linear Technology
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report.
Date: September 18, 2002
/s/ Robert H. Swanson, Jr.
-----------------------------------
Robert H. Swanson, Jr.
Chairman of the Board and Chief
Executive Officer (Principal
Executive Officer)
I, Paul Coghlan, certify that:
1. I have reviewed this annual report on Form 10-K of Linear Technology
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report.
Date: September 18, 2002
/s/ Paul Coghlan
-----------------------------------
Paul Coghlan
Vice President of Finance and
Chief Financial Officer (Principal
Financial Officer and Principal
Accounting Officer)
20
SCHEDULE II
LINEAR TECHNOLOGY CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
Additions
Balance at Charged to Balance at
Beginning Costs and End of
of Period Expenses Deductions(1) Period
---------- ---------- ------------- ----------
Allowance for doubtful accounts:
Year ended July 2, 2000.................. $803 $ -- $ -- $803
==== ==== ==== ====
Year ended July 1, 2001.................. $803 $ -- $ -- $803
==== ==== ==== ====
Year ended June 30, 2002................. $803 $800 $301 $1,302
==== ==== ==== ======
(1) Write-offs of doubtful accounts.
21