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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 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 IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1630 McCarthy Boulevard
Milpitas, California 95035
(408) 432-1900
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE AND TELEPHONE NUMER)
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 [ ]
There were 311,993,114 shares of the Registrant's Common Stock issued
and outstanding as of October 25, 2002.
1
LINEAR TECHNOLOGY CORPORATION
FORM 10-Q
THREE MONTHS ENDED SEPTEMBER 29, 2002
INDEX
Page
----
Part I: Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the 3
three months ended September 29, 2002 and September 30, 2001
Condensed Consolidated Balance Sheets at September 29, 2002 4-5
and June 30, 2002
Condensed Consolidated Statements of Cash Flows for the 6
three months ended September 29, 2002 and September 30, 2001
Notes to Condensed Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of Financial 9-11
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
Item 4. Controls and Procedures 11
Part II: Other Information
Item 6. Exhibits and Reports on Form 8-K 12
Signatures: 13
Certification of Chief Executive Officer 14
Certification of Chief Financial Officer 15
2
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
LINEAR TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
Three Months Ended
------------------
September 29, September 30,
2002 2001
-------- --------
Net sales $142,011 $120,104
Cost of sales 36,568 37,247
-------- --------
Gross profit 105,443 82,857
-------- --------
Expenses:
Research and development 23,074 18,822
Selling, general and administrative 16,947 16,158
-------- --------
40,021 34,980
-------- --------
Operating income 65,422 47,877
Interest income 10,355 15,714
-------- --------
Income before income taxes 75,777 63,591
Provision for income taxes 21,975 18,441
-------- --------
Net income $ 53,802 $ 45,150
======== ========
Basic earnings per share $ 0.17 $ 0.14
======== ========
Shares used in the calculation of basic earnings
per share 314,190 318,191
======== ========
Diluted earnings per share $ 0.17 $ 0.14
======== ========
Shares used in the calculation of diluted
earnings per share 322,253 330,234
======== ========
Cash dividends per share $ 0.05 $ 0.04
======== ========
See accompanying notes
3
LINEAR TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
September 29, June 30,
2002 2002
----------- -----------
(unaudited) (audited)
Current assets:
Cash and cash equivalents $ 187,382 $ 211,706
Short-term investments 1,282,550 1,340,324
Accounts receivable, net of allowance for
doubtful accounts of $1,602 ($1,302 at
June 30, 2002) 93,075 81,447
Inventories:
Raw materials 3,190 2,997
Work-in-process 23,994 22,941
Finished goods 3,576 3,004
----------- -----------
Total inventories 30,760 28,942
Deferred tax assets 43,754 43,754
Prepaid expenses and other current assets 17,949 21,408
----------- -----------
Total current assets 1,655,470 1,727,581
----------- -----------
Property, plant and equipment, at cost:
Land, building and improvements 141,635 140,468
Manufacturing and test equipment 324,912 326,388
Office furniture and equipment 3,384 3,384
----------- -----------
469,931 470,240
Less accumulated depreciation and amortization (219,210) (209,388)
----------- -----------
Net property, plant and equipment 250,721 260,852
----------- -----------
Total assets $ 1,906,191 $ 1,988,433
=========== ===========
See accompanying notes
4
LINEAR TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
(In thousands)
September 29, June 30,
2002 2002
---------- ----------
(unaudited) (audited)
Current liabilities:
Accounts payable $ 6,614 $ 5,098
Accrued payroll and related benefits 27,065 36,517
Deferred income on shipments to distributors 47,364 46,168
Income taxes payable 67,833 63,354
Other accrued liabilities 17,516 17,860
---------- ----------
Total current liabilities 166,392 168,997
---------- ----------
Deferred tax liabilities 37,982 37,982
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 2,000 shares
shares authorized; none issued or outstanding -- --
Common stock, $0.001 par value, 2,000,000
shares authorized; 311,775
shares issued and outstanding at
September 29, 2002 (316,150 shares
at June 30, 2002) 312 316
Additional paid-in capital 669,566 672,600
Retained earnings 1,031,939 1,108,538
---------- ----------
Total stockholders' equity 1,701,817 1,781,454
---------- ----------
Total liabilities and stockholders' equity $1,906,191 $1,988,433
========== ==========
See accompanying notes
5
LINEAR TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(In thousands)
(unaudited)
Three Months Ended
-------------------------------
September 29, September 30,
2002 2001
--------- ---------
Cash flow from operating activities:
Net income $ 53,802 $ 45,150
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 11,570 10,611
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable (11,628) 6,945
Decrease (increase) in inventories (1,818) (2,305)
Decrease (increase) in deferred tax assets,
prepaid expenses and other current assets 3,459 (1,388)
Increase (decrease) in accounts payable,
accrued payroll, income taxes payable and
other accrued liabilities (3,801) (30,487)
Tax benefit from stock option transactions 3,613 9,466
Increase (decrease) in deferred income 1,196 (3,375)
--------- ---------
Cash provided by operating activities 56,393 34,617
--------- ---------
Cash flow from investing activities:
Purchase of short-term investments (98,539) (376,783)
Proceeds from sales and maturities of short-term
investments 156,313 279,508
Purchase of property, plant and equipment (1,439) (7,060)
--------- ---------
Cash provided by (used in) investing activities 56,335 (104,335)
--------- ---------
Cash flow from financing activities:
Issuance of common stock under employee stock plans 3,716 5,907
Stock repurchase (125,017) (114,785)
Payment of cash dividends (15,751) (12,777)
--------- ---------
Cash (used in) financing activities (137,052) (121,655)
--------- ---------
(Decrease) in cash and cash equivalents (24,324) (191,373)
Cash and cash equivalents, beginning of period 211,706 321,106
--------- ---------
Cash and cash equivalents, end of period $ 187,382 $ 129,733
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 13,825 $ 493
========= =========
See accompanying notes
6
LINEAR TECHNOLOGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Interim financial statements and information are unaudited; however, in the
opinion of management all adjustments necessary for a fair and accurate
presentation of the interim results have been made. All such adjustments
were of a normal recurring nature. The results for the three months ended
September 29, 2002 are not necessarily an indication of results to be
expected for the entire fiscal year. All information reported in this Form
10-Q should be read in conjunction with the Company's annual consolidated
financial statements for the fiscal year ended June 30, 2002 included in
the Company's Annual Report to Stockholders. The accompanying balance sheet
at June 30, 2002 has been derived from audited financial statements as of
that date. There were no material differences between comprehensive income
and net income for all periods presented. Because the Company is viewed as
a single operating segment for management purposes, no segment information
has been disclosed.
2. The Company operates on a 52/53 week year ending on the Sunday nearest June
30. Fiscal years 2003 and 2002 are 52 week years.
3. Basic earnings per share is calculated using the weighted average shares of
common stock outstanding during the period. Diluted earnings per share is
calculated using the weighted average shares of common stock outstanding,
plus the dilutive effect of stock options calculated using the treasury
stock method. The following table sets forth the reconciliation of weighted
average common shares outstanding used in the computation of basic and
diluted earnings per share:
Three Months Ended
------------------
September 29, September 30,
2002 2001
------------------ -----------------
Numerator - Net income $ 53,802 $ 45,150
-------- --------
Denominator for basic earnings per share - weighted
average shares 314,190 318,191
Effect of dilutive securities - employee stock
options 8,063 12,043
-------- --------
Denominator for diluted earnings per share 322,253 330,234
-------- --------
Basic earnings per share $ 0.17 $ 0.14
======== ========
Diluted earnings per share $ 0.17 $ 0.14
======== ========
4. Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" (SFAS 142.) SFAS 142 requires that goodwill and
indefinite lived intangible assets are no longer amortized but are reviewed
annually (or more frequently if impairment indicators arise) for
impairment. Separable intangible assets that are not deemed to have an
indefinite life will continue to be amortized over their useful lives. The
Company adopted SFAS 142 on July 1, 2002. The adoption of SFAS 142 did not
have a material impact on the Company's financial position or results of
operations.
In October 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 143 "Accounting for Asset
Retirement Obligations" (SFAS 143.) SFAS 143 requires that the fair value
of retirement obligations be recognized as a liability when they are
incurred and that the associated retirement costs be capitalized as a
long-term asset and expensed over its useful life. The Company adopted SFAS
143 on July 1, 2002. The adoption of SFAS 143 did not have a material
impact on the Company's financial position or results of operations.
In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" (SFAS 144.) SFAS 144 addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets and supersedes FAS No. 121, Accounting
7
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of, and the accounting and reporting provisions of APB No. 30,
Reporting the Results of Operations for a Disposal of a Segment of a
Business. The Company adopted SFAS 144 on July 1, 2002. The adoption of
SFAS 144 did not have a material impact on the Company's financial position
or results of operations.
In June 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS 146.) SFAS 146 addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullifies EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to
Exit an Activity (including Certain Costs Incurred in a Restructuring)" and
must be applied beginning January 1, 2003. SFAS 146 requires that a
liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred rather than when the exit or
disposal plan is approved. The Company does not expect that the adoption of
SFAS 146 will have a significant effect on its financial position or
results of operations.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Critical Accounting Policies
Management believes there have been no significant changes to the
Company's critical accounting policies during the quarter ended September 29,
2002 as compared to the previous disclosures in Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the Annual
Report on Form 10-K for the year ended June 30, 2002.
Results of Operations
The table below states the income statement items for the three months
ended September 29, 2002 and September 30, 2001 as a percentage of net sales and
provides the percentage change in absolute dollars of such items comparing the
interim period ended September 29, 2002 to the corresponding period from the
prior fiscal year:
Three Months Ended
-------------------------------------------------
September 29, September 30, Increase/
2002 2001 (Decrease)
---- ---- ----------
Net sales 100.0% 100.0% 18%
Cost of sales 25.8 31.0 (2)
----- -----
Gross profit 74.2 69.0 27
----- -----
Expenses:
Research and development 16.2 15.7 23
Selling, general, and administrative 11.9 13.4 5
----- -----
28.1 29.1 14
----- -----
Operating income 46.1 39.9 37
Interest income 7.3 13.0 (34)
----- -----
Income before income taxes 53.4% 52.9% 19
===== =====
Effective tax rates 29.0% 29.0%
===== =====
Net sales for the quarter ended September 29, 2002 were $142.0 million,
an increase of $21.9 million or 18% over net sales for the same quarter of the
previous year. The increase in sales was due to higher unit shipments and was
partially offset by a decrease in the average selling price. Sales increased in
all geographic areas, led by international growth in Asia and Europe. Domestic
sales were approximately 34% of net sales for the first quarter of fiscal 2003
compared to 39% for the first quarter of fiscal 2002. International sales were
approximately 66% of net sales for the first quarter of fiscal 2003 compared to
61% for the first quarter of fiscal 2002. For the first quarter of fiscal 2003
international geographies as a percent of worldwide net sales were Europe 21%,
Japan 14% and rest of world 31% which is primarily Asia excluding Japan. For the
first quarter of fiscal 2002 international geographies as a percent of worldwide
net sales were Europe 19%, Japan 14% and rest of world 28%. Relative to
end-market applications, sales increased over the same quarter of the previous
year in each of the Company's four major end-markets: communications, computer,
industrial, auto and military.
During the first quarter of fiscal 2002, the Company had a reduction in
workforce associated with the closing of the Company's oldest wafer fabrication
plant in Milpitas, California. Additionally, the entire Company had shutdowns of
one week per month in the first quarter of fiscal 2002, which resulted in a
reduction in labor costs throughout the cost of sales and operating expense
lines. Since net sales for the first quarter of fiscal 2003 increased over sales
for the same quarter of the prior fiscal year these shutdowns were no longer
required except for the wafer fabrication plant in Camas, Washington.
Gross profit increased $22.6 million or 27% in the first quarter of
fiscal 2003 over the corresponding period in fiscal 2002. The increase in gross
profit as a percentage of net sales was primarily due to the favorable effect of
fixed costs allocated across a higher sales base as well as a reduction in
headcount expenses from the previous fiscal year as discussed in
9
the previous paragraph. These impacts were partially offset by an increase in
profit sharing. The decrease in average selling price referred to above did not
have a commensurate effect on gross margin since most of the reduction was due
to a change in product mix as the Company has had increased sales in products
with smaller die and package types, which have a smaller average selling price
but also lower costs.
Research and development ("R&D") expenses increased by $4.3 million or
23% for the first quarter of fiscal 2003, as compared to the same period in
fiscal 2002. The increase in R&D expenses compared to the prior year period was
due to increases in labor related expenses primarily related to increases in
engineering headcount, increases in profit sharing and having no shutdowns
during the period as explained in the above paragraph. Mask costs related to new
product development also contributed to the increase.
Selling, general and administrative expenses ("SG&A") increased by $0.8
million or 5% for the first quarter of fiscal 2003, as compared to the same
period in fiscal 2002. The increase in SG&A expenses compared to the prior year
period was due primarily to an increase in compensation costs as a result of no
shutdowns during the period and an increase in commissions due to higher sales.
Interest income was $10.4 million for the first quarter of fiscal 2003,
a decrease of $5.4 million or 34% from the corresponding period of fiscal 2002.
The decrease in interest income was primarily due to the 1.4% decrease in the
average interest rate earned on the Company's cash and short term investment
balance. The decrease in the interest rate was the result of the Federal Funds
rate dropping from the mid 3.0% range in the first quarter of fiscal 2002 to
1.75% in the first quarter of fiscal 2003. Secondly, the decrease in interest
income was due to a slight decrease in the average cash and investment balance
resulting from stock repurchases since last year.
The Company's effective tax rate for the first quarter of fiscal 2003
and 2002 was 29%. The tax rate is the result of business activity in foreign
jurisdictions with lower tax rates and tax-exempt interest income.
Factors Affecting Future Operating Results
Except for historical information contained herein, the matters set
forth in this Form 10-Q, including the statements in the following paragraphs,
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 received and shipped during the quarter, the timely
introduction of new processes and products, general conditions in the world
economy and financial markets and other factors described below and in our 10-K
for the fiscal year ended June 30, 2002.
The quarter just completed had similar financial results to the
previous quarter and grew over the same quarter in the prior fiscal year. The
Company's backlog coming out of the first quarter of fiscal 2003 remained
similar to the fourth quarter of fiscal 2002, which is still low by historic
standards, but within a range that the Company has operated under in the past
year. The conditions external to the Company remain unchanged, as general global
economic and political conditions remain causes for concern. The Company is well
positioned in some new programs at customers, particularly internationally, that
are expected to ramp up in the December and following quarters. The Company
expects the progress internationally will be somewhat offset by a slowness
domestically. Consequently, when weighing all the factors of good positioning in
new programs, responsive lead times, and customer conservatism in response to
sluggish economic data, the Company estimates that sales and profits in the
current quarter will be similar to or slightly up from the September quarter.
Estimates of future performance are uncertain, and past performance of
the Company may not be a good indicator of future performance due to factors
affecting the Company, its competitors, the semiconductor industry and the
overall economy. The semiconductor industry is characterized by rapid
technological change, price erosion, cyclical market patterns, periodic
oversupply conditions, occasional shortages of materials, capacity constraints,
variations in manufacturing efficiencies and significant expenditures for
capital equipment and product development. Furthermore, new product
introductions and patent protection of existing products, as well as exposure
related to patent infringement suits brought against the Company are factors
that can influence future sales growth and sustained profitability. The
Company's headquarters and a portion of its manufacturing facilities and
research and development activities and certain other critical business
operations are located near major earthquake fault lines in California,
consequently, the Company could be adversely affected in the event of a major
earthquake.
Although the Company believes that it has the product lines,
manufacturing facilities and technical and financial resources for its current
operations, sales and profitability could 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
10
meet 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.
Liquidity and Capital Resources
At September 29, 2002, cash, cash equivalents and short-term
investments totaled $1,469.9 million, and working capital was $1,489.1 million.
Accounts receivable totaled $93.1 million at the end of the first
quarter of fiscal 2003, an increase of $11.6 million from the fourth quarter of
fiscal 2002. The Company shipped $5.0 million more to US distribution than what
was recorded in sales, as the Company does not recognize a sale on shipments to
this channel until the distributor ships out the product to its end customer.
Secondly, the shipment profile in every summer quarter involves more shipments
in September than in the vacation months of July and August. Compared with the
similar quarter in the prior fiscal year, day sales outstanding (DSO) in
accounts receivable decreased from 63 days to 60 days.
During the first three months of fiscal 2003, the Company generated
$56.4 million of cash from operating activities and $3.7 million in proceeds
from common stock issued under employee stock plans. Additionally, net proceeds
from the purchase, sale and maturity of short-term investments totaled $57.8
million.
During the first three months of fiscal 2003, significant cash
expenditures included repurchasing $125.0 million of common stock, paying $15.8
million in cash dividends to stockholders representing $0.05 per share per
quarter, and spending $1.4 million for the purchase of capital assets. The
payment of future dividends will be based on quarterly financial performance.
As of September 29, 2002, the Company had no off-balance sheet
financing arrangements or activities other than minimal levels of operating
leases for facilities and equipment.
Historically, the Company has satisfied its liquidity needs through
cash generated from operations and the placement of equity securities. Given its
strong financial condition and performance, the Company believes that current
capital resources and cash generated from operating activities will be
sufficient to meet its liquidity and capital expenditures requirements for the
foreseeable future.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For additional quantitative and qualitative disclosures about market
risk affecting the Company, see item 7A of the 10-K for the fiscal year ended
June 30, 2002. There have been no material changes in the market risk affecting
Linear since the filing of the 10-K for fiscal 2002. At September 29, 2002, the
Company's cash and cash equivalents consisted primarily of bank deposits,
commercial paper and money market funds. The Company's short-term investments
consisted of commercial paper, municipal bonds, federal agency and related
securities. The Company did not hold any derivative financial instruments. The
Company's interest income is sensitive to changes in the general level of
interest rates. In this regard, changes in interest rates can affect the
interest earned on cash and cash equivalents and short-term investments.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures
Within the 90-day period prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Rule 13a-14 of the
Securities Exchange Act of 1934 (the "Exchange Act"). Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's Exchange Act
filings.
(b) Changes in internal controls
There have been no significant changes in the Company's internal controls or in
other factors, which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.
11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 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.
b) Reports on Form 8-K:
None
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LINEAR TECHNOLOGY CORPORATION
DATE: November 13, 2002 BY /s/Paul Coghlan
-----------------------------------
Paul Coghlan
Vice President, Finance &
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
13
CERTIFICATIONS
I, Robert H. Swanson, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Linear Technology
Corporation;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 13, 2002
/s/ Robert H. Swanson, Jr.
--------------------------
Robert H. Swanson, Jr.
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
14
I, Paul Coghlan, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Linear Technology
Corporation;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 13, 2002
/s/ Paul Coghlan
----------------
Paul Coghlan
Vice President of Finance and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
15