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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 26, 2004
[ ] 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 NUMBER)
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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
There were 307,042,498 shares of the Registrant's Common Stock issued
and outstanding as of October 24, 2004.
1
LINEAR TECHNOLOGY CORPORATION
FORM 10-Q
THREE MONTHS ENDED SEPTEMBER 26, 2004
INDEX
Page
Part I: Financial Information
Item 1. Financial Statements
Consolidated Statements of Income for the three months 3
ended September 26, 2004
Consolidated Balance Sheets at September 26, 2004 and 4
June 27, 2004
Consolidated Statements of Cash Flows for the three months 5
ended September 26, 2004 and September 28, 2003
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial 8-10
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 2. Unregistered Sales of Equity Securities and Use of Proceeds 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures: 13
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
Three Months Ended
-----------------------
September 26, September 28,
2004 2003
-------- --------
Net sales $253,028 $174,077
Cost of sales 54,839 41,409
-------- --------
Gross profit 198,189 132,668
-------- --------
Expenses:
Research and development 30,634 24,335
Selling, general and administrative 23,058 17,571
-------- --------
53,692 41,906
-------- --------
Operating income 144,497 90,762
Interest income, net 5,468 7,085
-------- --------
Income before income taxes 149,965 97,847
Provision for income taxes 46,489 28,376
-------- --------
Net income $103,476 $ 69,471
======== ========
Basic earnings per share $ 0.34 $ 0.22
======== ========
Shares used in the calculation of basic
earnings per share 308,201 313,409
======== ========
Diluted earnings per share $ 0.33 $ 0.22
======== ========
Shares used in the calculation of diluted
earnings per share 316,918 322,894
======== ========
Cash dividends per share $ 0.08 $ 0.06
======== ========
See accompanying notes
3
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
September 26, June 27,
2004 2004
----------- -----------
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 281,994 $ 203,542
Short-term investments 1,422,663 1,452,998
Accounts receivable, net of allowance for
doubtful accounts of $1,762 ($1,762 at
June 27, 2004) 91,629 79,142
Inventories:
Raw materials 3,641 3,353
Work-in-process 20,944 22,217
Finished goods 6,833 7,134
----------- -----------
Total inventories 31,418 32,704
Deferred tax assets 44,912 44,912
Prepaid expenses and other current assets 19,022 18,797
----------- -----------
Total current assets 1,891,638 1,832,095
----------- -----------
Property, plant and equipment, at cost:
Land, buildings and improvements 144,461 143,077
Manufacturing and test equipment 352,036 338,208
Office furniture and equipment 3,399 3,399
----------- -----------
499,896 484,684
Accumulated depreciation and amortization (293,501) (283,604)
----------- -----------
Net property, plant and equipment 206,395 201,080
----------- -----------
Other non current assets 53,113 54,528
----------- -----------
Total assets $ 2,151,146 $ 2,087,703
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 15,161 $ 14,410
Accrued payroll and related benefits 41,449 54,339
Deferred income on shipments to distributors 43,835 41,862
Income taxes payable 98,789 71,985
Other accrued liabilities 20,678 20,018
----------- -----------
Total current liabilities 219,912 202,614
----------- -----------
Deferred tax and other long-term liabilities 74,430 74,484
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 2,000 shares
authorized; none issued or outstanding -- --
Common stock, $0.001 par value, 2,000,000
shares authorized; 307,902 shares issued and
outstanding at September 26, 2004 (308,548 shares
at June 27, 2004) 308 309
Additional paid-in capital 831,982 815,163
Accumulated other comprehensive income, net of tax (922) (2,460)
Retained earnings 1,025,436 997,593
----------- -----------
Total stockholders' equity 1,856,804 1,810,605
----------- -----------
Total liabilities and stockholders' equity $ 2,151,146 $ 2,087,703
=========== ===========
See accompanying notes
4
LINEAR TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended
--------------------------
September 26, September 28,
2004 2003
--------- ---------
Cash flow from operating activities:
Net income $ 103,476 $ 69,471
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 11,467 12,234
Tax benefit from stock option transactions 7,108 12,793
Stock-based compensation 3,249 --
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable (12,487) (15,615)
Decrease (increase) in inventories 1,286 (812)
Decrease (increase) in prepaid expenses and
other current assets and deferred tax assets (225) 403
Increase (decrease) in accounts payable,
accrued payroll and other accrued liabilities (12,494) (11,466)
Increase (decrease) in deferred income on
shipments to distributors 1,973 1,520
Increase (decrease) in income taxes payable 26,803 7,979
--------- ---------
Cash provided by operating activities 130,156 76,507
--------- ---------
Cash flow from investing activities:
Purchase of short-term investments (278,233) (282,207)
Proceeds from sales and maturities of short-
term investments 311,068 215,155
Purchase of property, plant and equipment (15,367) (1,172)
--------- ---------
Cash provided by (used in) investing activities 17,468 (68,224)
--------- ---------
Cash flow from financing activities:
Issuance of common shares under employee
stock plans 10,425 21,954
Purchase of common stock (54,614) (1,758)
Payment of cash dividends (24,983) (18,781)
--------- ---------
Cash provided by (used in) financing activities (69,172) 1,415
--------- ---------
Increase (decrease) in cash and cash equivalents 78,452 9,698
--------- ---------
Cash and cash equivalents, beginning of period 203,542 136,276
--------- ---------
Cash and cash equivalents, end of period $ 281,994 $ 145,974
========= =========
See accompanying notes
5
LINEAR TECHNOLOGY CORPORATION
NOTES TO 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 26, 2004 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 27, 2004 included in the Company's Annual Report on Form
10-K. The accompanying balance sheet at June 27, 2004 has been derived
from audited financial statements as of that date. 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 year 2004 is a 53-week year, fiscal 2003 was a 52-week
year.
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 26, September 28,
2004 2003
-------- --------
Numerator - Net income $103,476 $ 69,471
Denominator for basic earnings
per share - weighted average
shares 308,201 313,409
Effect of dilutive securities -
employee stock options 8,717 9,485
-------- --------
Denominator for diluted
earnings per share 316,918 322,894
Basic earnings per share $ 0.34 $ 0.22
======== ========
Diluted earnings per share $ 0.33 $ 0.22
======== ========
4. Stock-Based Compensation
As permitted by SFAS 148 and SFAS 123, the Company continues to apply the
accounting provisions of APB 25, and related interpretations, with regard to the
measurement of compensation cost for options granted under the Company's equity
compensation plans. Compensation expense is recorded if on the date of grant the
current fair value per share of the underlying stock exceeds the exercise price
per share.
During the first quarter of fiscal 2005, the Company issued restricted stock to
certain officers and employees who have been with the Company at least three
years to encourage employee retention. Under this program, the Company issued
1,578,440 restricted shares with an exercise price of $0.001 per share and a
grant date fair value of $37.05 per share. The right to sell the shares vests
annually at the rate of 1/3 per year based upon continued employment; upon
employee termination the Company has the right to buy back unvested shares at
the exercise price. Pursuant to APB 25, the Company records compensation expense
for the difference between the grant date fair value and the exercise price on a
straight-line basis over the vesting period.
6
Had expense been recognized for stock options granted with a grant price equal
to the current fair market value of the stock at the date of grant using the
fair value method described in SFAS 123, using the Black-Scholes option-pricing
model, the Company would have reported the following results of operations:
Three Months Ended
---------------------------------------
September 26, September 28,
2004 2003
------------------ -----------------
Net income as reported $ 103,476 $ 69,471
Add: Stock based employee
compensation expense
included in reported net
income, net of related
tax effects 2,242 --
Deduct: total stock-based
compensation expense
determined under the fair
value method, net of tax
(19,950) (18,527)
-------------- --------------
Pro forma net income $ 85,768 $ 50,944
============== ==============
Earning per share:
Basic-as reported $ 0.34 $ 0.22
============== ==============
Basic-pro forma $ 0.28 $ 0.16
============== ==============
Diluted-as reported $ 0.33 $ 0.22
============== ==============
Diluted-pro forma $ 0.27 $ 0.16
============== ==============
5. Accumulated Other Comprehensive Income
Accumulated other comprehensive income consists of unrealized gains and losses
on available-for-sale securities. The Company, in practice, primarily holds its
cash and short-term investments until maturity. The components of comprehensive
income were as follows:
Three Months Ended
---------------------------------
September 26, September 28,
2004 2003
-------------- --------------
Net income $ 103,476 $ 69,471
Increase (decrease) in
unrealized gains and losses on
available-for-sale securities 1,538 (1,969)
-------------- --------------
Total comprehensive income $ 105,014 $ 67,502
============== ==============
6. Product Warranty and Indemnification
The Company's warranty policy provides for the replacement of defective parts.
In certain large contracts, the Company has agreed to negotiate in good faith a
warranty expense in the event that an epidemic failure of its parts were to take
place. To date there have been no such occurrences. Warranty expense
historically has been negligible.
The Company provides a limited indemnification of customers against intellectual
property infringement claims related to the Company's products. In certain
cases, there are limits on and exceptions to the Company's potential liability
for indemnification relating to intellectual property infringement claims. To
date, the Company has not incurred any significant indemnification expenses
7
relating to intellectual property infringement claims. The Company cannot
estimate the amount of potential future payments, if any, that the Company might
be required to make as a result of these agreements, and accordingly, the
Company has not accrued any amounts for its indemnification obligations.
7. Recent Accounting Pronouncements
In March 2004, the Financial Accounting Standards Board (FASB) approved the
consensus reached on the Emerging Issues Task Force (EITF) Issue No. 03-1, "The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments." The objective of this Issue is to provide guidance for identifying
impaired investments. EITF 03-1 also provides new disclosure requirements for
investments that are deemed to be temporarily impaired. In October 2004, the
FASB delayed the effective date of the accounting provisions of EITF 03-1. The
disclosure requirements are effective for annual periods ending after June 15,
2004. The Company believes that the adoption of EITF 03-1 will not affect the
overall results of operations or financial position of the Company.
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 26, 2004 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 27, 2004.
Results of Operations
The table below states the income statement items for the three months ended
September 26, 2004 and September 28, 2003 as a percentage of net sales and
provides the percentage change in absolute dollars of such items comparing the
interim period ended September 26, 2004 to the corresponding period from the
prior fiscal year:
Three Months Ended
-------------------------------------------------
September 26, September 28, Increase/
2004 2003 (Decrease)
-------------- -------------- -------------
Net sales 100.0% 100.0% 45%
Cost of sales 21.7 23.8 32
-------------- --------------
Gross profit 78.3 76.2 49
-------------- --------------
Expenses:
Research and development 12.1 14.0 25
Selling, general and
administrative 9.1 10.1 31
-------------- --------------
21.2 24.1 28
-------------- --------------
Operating income 57.1 52.1 59
Interest income, net 2.1 4.1 (23)
-------------- --------------
Income before income taxes 59.2% 56.2% 53
============== ==============
Effective tax rate 31.0% 29.0%
============== ==============
Net sales for the quarter ended September 26, 2004 were $253.0 million,
an increase of $78.9 million or 45% over net sales of $174.1 million for the
same quarter of the previous fiscal year. The increase in net sales was
primarily due to the Company selling more units into a wide variety of
end-markets in response to improving overall demand. The average selling price
for the first quarter of fiscal 2005 was relatively unchanged at $1.41 per unit
as compared to $1.39 per unit in the first quarter of fiscal 2004.
Geographically, international sales were $183.1 million or 72% of net sales, an
increase of $56.5 million as compared to international sales of $126.6 million
or 73% of net sales for the same period in fiscal 2004. Internationally, sales
to Rest of the World (ROW), which is primarily Asia excluding Japan, represented
$101.9 million or 40% of net sales, while sales to Europe and Japan were $44.7
million or 18% of net sales and $36.5 million or 14% of net sales, respectively.
Domestic sales were $69.9 million or 28% of net sales in the first quarter of
fiscal 2005 compared to $47.5 million or 27% of net sales in the same period in
fiscal 2004.
Gross profit was $198.2 million for the first quarter of fiscal 2005,
an increase of $65.5 million from the corresponding period of fiscal 2004. Gross
profit as a percentage of net sales increased to 78.3% in the first quarter of
8
fiscal 2005 as compared to 76.2% for the same period in the previous fiscal
year. The increase in gross profit as a percentage of net sales was primarily
due to the favorable effect of fixed costs allocated across higher net sales as
well as an increase in factory efficiencies. In addition to the volume
efficiencies discussed above, the Company had a reduction in fixed costs related
to fully depreciated equipment at the Company's wafer fabrication facility
located in Camas, Washington. Offsetting the above improvements to gross margin
was a $4.5 million increase in employee profit sharing and compensation expense
related to restricted stock grants.
Research and development ("R&D") expenses for the quarter ended
September 26, 2004 were $30.6 million, an increase of $6.3 million or 25% over
R&D expenses of $24.3 million for the same period in the previous fiscal year.
The increase in R&D was primarily due to a $5.8 million increase in compensation
costs. Compensation costs increased as the result of increases to the profit
sharing accrual, stock based compensation, employee headcount and annual merit
increases. Since the Company had better operating results, R&D profit sharing
grew $2.6 million, compensation expense related to restricted stock grants
totaled $1.4 million and compensation related to headcount and annual merit
increases together totaled $1.8 million. In addition to compensation costs, the
Company had a $0.5 million increase in other R&D related expenses such as mask
set costs and supplies.
Selling, general and administrative expenses ("SG&A") for the quarter
ended September 26, 2004 were $23.1 million, an increase of $5.5 million or 31%
over SG&A expenses of $17.6 million for the same period in the previous fiscal
year. The increase in SG&A was primarily due to a $4.7 million increase in
compensation costs. Compensation costs grew as the result of increases to the
profit sharing accrual, stock based compensation, employee headcount, annual
merit increases and commissions. Since the Company had better operating results,
SG&A profit sharing grew $2.0 million, compensation expense related to
restricted stock grants totaled $1.3 million and compensation related to
headcount, annual merit increases and commissions together totaled $1.4 million.
In addition to compensation costs, the Company had a $0.8 million increase in
expenses related to commissions for the Company's independent sales
representatives and travel costs.
Interest income, net was $5.5 million for the first quarter of fiscal
2005, a decrease of $1.6 million from the corresponding period of fiscal 2004.
Interest income, net declined by $1.9 million due to the decrease in the average
interest rate earned on the Company's cash investment balance. Offsetting the
decreases in interest income, net was the $0.3 million increase in interest
income earned on the Company's higher average cash balance.
The Company's effective tax rate for the first quarter of fiscal 2005
was 31% as compared to 29% in the corresponding period of fiscal 2004. The tax
rate increased 2% because the Company did not take an R&D credit since the
legislation supporting this credit expired in June 2004. Next quarter the
effective tax rate is expected to drop down to 30% due to the extension of the
R&D credit signed into tax law during the second quarter of fiscal 2005. The tax
rate is lower than the federal statutory rate primarily due to business activity
in foreign jurisdictions with lower tax rates and tax-exempt interest income.
The increase in the effective tax rate from 29% in the second quarter of fiscal
2004 to 30%, expected in the second quarter of fiscal 2005 results primarily
from the diminishing percentage that tax-exempt interest income is of total
taxable 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 the
Company's 10-K for the fiscal year ended June 27, 2004.
During the quarter ended September 26, 2004, the Company met its
expectations by growing sales 6% sequentially over the June fiscal 2004 quarter.
However, during the quarter orders softened moderately. End-demand appeared to
ease as shipments from the Company's international and domestic distributors to
their end customers decreased. It is difficult to conclude whether this trend
reflects mostly tightening of inventory in these various channels combined with
minor seasonal end-demand reductions, or whether end-demand will soften more
substantially in the coming quarter. However, the Company's ending on-hand
inventory at distributors is lean, cancellations are still minimal and lead
times have remained unchanged at 4 to 6 weeks. Based upon these and other
factors, the Company believes that the moderate decrease in orders is indicative
of a tightening of inventory levels at customers rather than a substantial
decrease in end-demand as experienced in fiscal 2002. Accordingly, although
these are difficult times for the Company to forecast, the summation of the
above factors have led the Company to forecast sequential revenues for the
December quarter to range from slightly down to flat.
9
Fiscal 2005 has 53 weeks rather than the customary 52 weeks. The extra
week will occur at the end of the December quarter, which will end on January 2,
2005. The impact on revenues will be negligible since the extra week occurs
during a holiday week. The impact on expenses will be primarily concentrated in
R&D and SG&A expenses as a result of an extra week of compensation expense. The
overall impact on the income statement will be minimal.
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 if 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 factors
described 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 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 26, 2004, cash, cash equivalents and short-term
investments totaled $1,704.7 million, and working capital was $1,671.7 million.
Accounts receivable totaled $91.6 million at the end of the first
quarter of fiscal 2005, an increase of $12.5 million from the fourth quarter of
fiscal 2004. The increase is due to higher shipments. Days sales outstanding
increased slightly from 30 days to 33 days at the end of the first quarter of
fiscal 2005.
Accrued payroll and related benefits totaled $41.4 million at the end
of the first quarter of fiscal 2005, a decrease of $12.9 million from the fourth
quarter of fiscal 2004. The decrease is due to the payment of profit sharing.
The Company accrues for profit sharing on a quarterly basis while distributing
payouts to employees on a semi-annual basis during the first and third quarters.
Income taxes payable totaled $98.8 million at the end of the first quarter of
fiscal 2005, an increase of $26.8 million over the fourth quarter of fiscal
2004. The increase is due to the higher income tax expense and the timing of
payments to the taxing authorities within the year.
During the first three months of fiscal 2005, the Company generated
$130.2 million of cash from operating activities, $10.4 million in proceeds from
common stock issued under employee stock plans and $32.8 million from net sales
and maturities of short-term investments.
During the first three months of fiscal 2005, significant cash
expenditures included repurchasing $54.6 million of common stock, payments of
$25.0 million in cash dividends to stockholders, representing $0.08 per share,
and purchases of $15.4 million for capital assets. In October, the Company's
Board of Directors declared a quarterly cash dividend of $0.08 per share to be
paid during the December quarter of fiscal 2005. The payment of future dividends
will be based on quarterly financial performance.
As of September 26, 2004, the Company had no off-balance sheet
financing arrangements.
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.
10
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 Company's Form 10-K for the
fiscal year ended June 27, 2004. There have been no material changes in the
market risk affecting the Company since the filing of the Company's Form 10-K
for fiscal 2004. At September 26, 2004, 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 municipal bonds, federal
agency bonds, commercial paper, 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.
The Company's sales outside the United States are transacted in U.S.
dollars; accordingly the Company's sales are not impacted by foreign currency
rate changes. To date, fluctuations in foreign currency exchange rates have not
had a material impact on the results of operations.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures
The Company's management evaluated, with the participation of the Chief
Executive Officer and the Chief Financial Officer, the effectiveness of the
Company's disclosure controls and procedures as of the end of the period covered
by this Quarterly Report on Form 10-Q. Based on this evaluation, the Chief
Executive Officer and the Chief Financial Officer have concluded that the
Company's disclosure controls and procedures are effective to ensure that
information that the Company is required to disclose in reports that it files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.
(b) Changes in internal controls over financial reporting
There was no change in the Company's internal control over financial
reporting that occurred during the first quarter of fiscal 2005 that has
materially affected, or is reasonably likely to materially affect, its internal
control over financial reporting.
11
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
e) Stock Repurchases
- ---------------------------------------------------------------------------------------------------------------------------------
Total Number of Maximum Number of Shares
Shares Purchased as Part that May Yet be purchased
Total Number of Average Price of Publicly Announced Under the Plans or
Period Shares Purchased Paid per Share Plans or Programs Programs (1)
- ---------------------------------------------------------------------------------------------------------------------------------
Month #1 (June 28, 2004 -
July 25, 2004) -- -- -- 11,658,952
- ---------------------------------------------------------------------------------------------------------------------------------
Month #2 (July 26, 2004 -
August 22, 2004) 1,500,000 $ 36.41 1,500,000 10,158,952
- ---------------------------------------------------------------------------------------------------------------------------------
Month #3 (August 23, 2004 -
September 26, 2004) -- -- -- 10,158,952
- ---------------------------------------------------------------------------------------------------------------------------------
Total 1,500,000 $ 36.41 1,500,000 10,158,952
- ---------------------------------------------------------------------------------------------------------------------------------
(1) On July 20, 2004 the Company's Board of Directors authorized the Company to purchase up to 10,000,000 shares of
it's common stock in the open market over a two-year period.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 31.1 Certification of Chief Executive Officer
Pursuant to Exchange Act Rule 13a-14(a) or
15d-14(a), as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certification of Chief Financial Officer
Pursuant to Exchange Act Rule 13a-14(a) or
15d-14(a), as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certifications of Chief Executive Officer and
Chief Financial Officer 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:
During the quarter ended September 26, 2004, the Company
filed one report on Form 8-K as follows:
A report on Form 8-K was filed July 20, 2004, furnishing to
the Securities and Exchange Commission a press release
announcing the Company's annual and quarterly financial
results for the fiscal year ended June 27, 2004.
After the quarter ended September 26, 2004, the Company filed
one report on Form 8-K as follows:
A report on Form 8-K was filed October 6, 2004, furnishing to
the Securities and Exchange Commission a press release
announcing that the Company's current Chief Executive Officer
(CEO), Bob Swanson is moving to the Executive Chairman role
in January 2005; Lothar Maier the Company's current Chief
Operating Officer (COO) will be promoted to CEO and the
Company's current Vice President of Operations, Alex McCann
will be promoted to COO.
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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 5, 2004 BY /s/Paul Coghlan
--------------------------------
Paul Coghlan
Vice President, Finance &
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
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