ALTR » Topics » Gross Margin

This excerpt taken from the ALTR 10-Q filed Apr 27, 2009.

Gross Margin

 

     Three Months Ended  
     March 27,
2009
    March 28,
2008
    December
31, 2008
 

Gross Margin Percentage

   64.5 %   65.1 %   69.3 %

Our gross margin percentage decreased by 0.6 points to 64.5% for the three months ended March 27, 2009 compared with the same period in the prior year. Our gross margin percentage decreased by 4.8% during the three months ended March 27, 2009 from 69.3% for the three months ended December 31, 2008. Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. Our gross margin percentage in the three months ended December 31, 2008 was favorably affected by certain non-recurring beneficial manufacturing cost trends. In addition, our gross margin percentage in the three months ended March 27, 2009 was adversely affected by a disproportionate decrease in revenue from our smaller, higher margin customer base. We also experienced a more pronounced decline in our highest margin market segments. While these variables will continue to fluctuate on a quarterly basis, we continue to target a 65% gross margin over the long term. We believe the 65% gross margin target affords us the right mix of growth opportunities across all served markets.

Stock-based compensation expense included in Cost of sales during the three months ended March 27, 2009 and March 28, 2008 did not have a significant impact on our gross margin.

This excerpt taken from the ALTR 10-K filed Feb 25, 2009.

GROSS MARGIN

 

      2008    2007    2006

Gross Margin Percentage

   67.1%    64.5%    66.7%

Gross margin percentages increased in 2008 compared to 2007 primarily as a result of material cost improvements, as well as favorable market segment mix. Gross margin rates are heavily influenced by the timing and extent of both of these factors. While these variables will continue to fluctuate on a quarterly basis, we are targeting a 65% gross margin over the long term. We believe the 65% gross margin target affords us the right mix of growth opportunities across all served markets.

Gross margin percentages declined in 2007 compared to 2006 primarily as a result of market segment mix.

Stock-based compensation expense included in Cost of sales was insignificant in 2008, 2007 and 2006.

This excerpt taken from the ALTR 10-Q filed Nov 3, 2008.

Gross Margin

 

     Three Months Ended     Nine Months Ended  
     September 26,
2008
    September 28,
2007
    June 27,
2008
    September 26,
2008
    September 28,
2007
 

Gross Margin Percentage

   67.1 %   63.8 %   67.1 %   66.5 %   64.7 %

Gross margin percentages increased by 3.3 points to 67.1% for the three months ended September 26, 2008 compared to the same period in the prior year. Gross margin percentages increased by 1.8 points to 66.5% for the nine months ended September 26, 2008 compared to the same period in the prior year. Gross margin rates are heavily influenced by both market

 

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segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company is targeting a 65% gross margin over the long term. We believe the 65% gross margin target affords us the right mix of growth opportunities across all served markets.

Stock-based compensation expense recognized during the three and nine months ended September 26, 2008 and September 28, 2007 did not have a significant impact on our gross margin.

This excerpt taken from the ALTR 10-Q filed Aug 5, 2008.

Gross Margin

 

     Three Months Ended     Six Months Ended  
     June 27,
2008
    June 29,
2007
    March 28,
2008
    June 27,
2008
    June 29,
2007
 

Gross Margin Percentage

   67.1 %   64.6 %   65.1 %   66.2 %   65.2 %

Gross margin percentages increased by 2.5 points to 67.1% for the three months ended June 27, 2008 compared to the same period in the prior year. Gross margin percentages increased by 1 point to 66.2% for the six months ended June 27, 2008 compared to the same period in the prior year. Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company is targeting a 65% gross margin over the long term. We believe the 65% gross margin target affords the company the right mix of growth opportunities across all served markets.

Stock-based compensation expense recognized during the three and six months ended June 27, 2008 and June 29, 2007 did not have a significant impact on our gross margin.

This excerpt taken from the ALTR 10-Q filed May 5, 2008.

Gross Margin

 

     Three Months Ended  
     March 28,
2008
    March 30,
2007
    Dec. 28,
2007
 

Gross Margin Percentage

   65.1 %   65.7 %   64.1 %

Gross margin percentages declined by 0.6 points to 65.1% for the three months ended March 28, 2008 compared to the same period in the prior year primarily as a result of market segment mix. Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company is targeting a 65% gross margin over the long term. We believe the 65% gross margin target affords the company the right mix of growth opportunities across all served markets.

 

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Stock-based compensation expense recognized during the three months ended March 28, 2008 and March 30, 2007 had an immaterial impact on our gross margin.

These excerpts taken from the ALTR 10-K filed Feb 25, 2008.

GROSS MARGIN

 

     Years Ended
     

December 28,

2007

  

December 29,

2006

  

December 30,

2005

Gross Margin Percentage

   64.5%    66.7%    67.4%

Gross margin percentages declined in 2007 compared to 2006 primarily as a result of market segment mix. Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company is targeting a 65% gross margin over the long term. We believe the 65% gross margin target affords the company the right mix of growth opportunities across all served markets.

Gross margin percentages declined in 2006 compared to 2005 primarily due to a reduction in the amount of benefit from previously written down inventory.

Stock-based compensation expense recognized in 2007 and 2006, and included in cost of sales, had an immaterial impact on our gross margin.

 

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GROSS MARGIN

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 
































   Years Ended
    

December 28,

STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right">2007

  

December 29,

STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right">2006

  

December 30,

STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right">2005

Gross Margin Percentage

  64.5%  66.7%  67.4%

Gross margin percentages declined in 2007 compared to 2006 primarily as a result of market segment
mix. Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company is targeting a 65% gross margin over the
long term. We believe the 65% gross margin target affords the company the right mix of growth opportunities across all served markets.

SIZE="2">Gross margin percentages declined in 2006 compared to 2005 primarily due to a reduction in the amount of benefit from previously written down inventory.

FACE="Times New Roman" SIZE="2">Stock-based compensation expense recognized in 2007 and 2006, and included in cost of sales, had an immaterial impact on our gross margin.

 


30







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This excerpt taken from the ALTR 10-Q filed Nov 5, 2007.

Gross Margin

 

     Three Months Ended     Nine Months Ended  
    

September 28,

2007

   

September 29,

2006

   

June 29,

2007

   

September 28,

2007

   

September 29,

2006

 

Gross Margin Percentage

   63.8 %   67.6 %   64.6 %   64.7 %   66.8 %

Gross margin percentages declined during the three and nine months ended September 28, 2007 primarily due to market segment mix as compared to the same period last year. Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company is targeting a 65% gross margin over the long term. We believe the 65% gross margin target affords the company the right mix of growth opportunities across all served markets.

 

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Stock-based compensation expense recognized during the quarters ended September 28, 2007 and September 29, 2006 had an immaterial impact on our gross margin.

This excerpt taken from the ALTR 10-Q filed Aug 6, 2007.

Gross Margin

 

     Three Months Ended     Six Months Ended  
    

June 29,

2007

   

June 30,

2006

   

March 30,

2007

   

June 29,

2007

   

June 30,

2006

 

Gross Margin Percentage

   64.6 %   66.1 %   65.7 %   65.2 %   66.4 %

Gross margin rates are heavily influenced by both market segment mix and the timing of material cost improvements. While these variables will continue to fluctuate on a quarterly basis, the company expects to achieve a 65% gross margin over the long term. We believe the 65% gross margin target affords the company the right mix of growth opportunities across all served markets.

Stock-based compensation expense recognized during the quarters ended June 29, 2007 and June 30, 2006 had an immaterial impact on our gross margin.

This excerpt taken from the ALTR 10-Q filed May 8, 2007.

Gross Margin

 

     Three Months Ended              
    

March 30,

2007

   

March 31,

2006

    Dec. 29,
2006
             

Gross Margin Percentage

     65.7 %     66.8 %     66.3 %    

The primary reason for the year-over-year decline in gross margin was pricing on new volume opportunities and routine selling price reductions for existing customers whose programs have ramped into volume production. We will continue to pursue market expanding opportunities that may drive a lower gross margin percentage in the future.

 

Stock-based compensation expense recognized during the quarters ended March 30, 2007 and March 31, 2006 had an immaterial impact on our gross margin.

 

Research and Development

 

   

  

 

     Three Months Ended              

(Dollars in millions)

    
 
March 30,
2007
 
 
   
 
March 31,
2006
 
 
   
 
Dec. 29,
2006
 
 
  Year-
Over-Year
Change
 
 
 
  Sequential
Change
 
 

Research and Development

   $ 58.5     $ 62.9     $ 58.4     -7 %   0 %

Percentage of Net Sales

     19 %     21 %     18 %    

 

Research and development expenses include expenditures for labor and benefits, stock-based compensation expense, masks, prototype wafers, depreciation, and the impact on compensation costs of the net investment gain or loss on our Nonqualified Deferred Compensation Plan (“NQDC Plan”). Research and development expenditures were for the design of new PLD and structured ASIC families, and the development of process technologies, new packages, software to support new products and design environments, and IP cores.

Due to a decrease in stock-based compensation expense, research and development expenses decreased 7% for the three months ended March 30, 2007 compared to the same period a year ago. The stock-based compensation expense classified as research and development expense was $5.5 million for the three months ended March 30, 2007 compared to $7.9 million for the three months ended March 31, 2006. Research and development expenses also decreased year-over-year due to lower spending on masks and prototype wafers, which decrease was partially offset by higher labor costs from increased headcount.

We will continue to make significant investments in the development of new products and focus our efforts on the development of new programmable logic devices that use advanced semiconductor wafer fabrication processes, as well as related development software. We are currently investing in the development of our Stratix III, and Cyclone III families, as well as our Quartus ® II software, our library of IP cores, and other future products.

 

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This excerpt taken from the ALTR 10-K filed Feb 27, 2007.

GROSS MARGIN

 

     Years Ended
(Dollars in millions)   

December 29,

2006

  

December 30,

2005

  

December 31,

2004

Gross Margin Percentage

     66.7%      67.4%      69.6%

Included in Reported Gross Margin Percentage above:

        

Gross Margin Benefit from Sale of Inventory Written Down in 2001

   $ 2.0    $ 11.1    $ 14.7

Percentage of Net Sales

     0.2%      1.0%      1.4%

Excluding the gross margin benefit from the sale of inventory written down in 2001, gross margin remained flat in 2006 compared to 2005. Gross margin net of the gross margin benefit from the sale of inventory written down in 2001 decreased 1.8 percentage points in 2005 from 2004. The decrease was primarily due to reduced demand in certain high-margin programs and increasing success in securing high-volume design wins with discounted prices.

In 2001, we recorded total inventory provisions of $154.5 million as a result of unfavorable economic conditions and diminished demand for semiconductor products. As of December 29, 2006, substantially all of the inventory that was written-down in 2001 had been either sold or scrapped. As of December 29, 2006, the book value of the inventory written down in 2001 was zero while the cost basis was $2.4 million, which was comprised only of raw materials and work in process inventory.

Stock-based compensation expense recognized in 2006 had an immaterial impact on our gross margin.

This excerpt taken from the ALTR 10-Q filed Nov 8, 2006.

Gross Margin

 

(Dollars in millions)

   Three Months Ended

   Nine Months Ended

   Sept. 29,
2006


   Sept. 30,
2005


   June 30,
2006


   Sept. 29,
2006


   Sept. 30,
2005


Gross Margin Percentage

     67.6%      66.5%      66.1%      66.8%      67.7%

Included in Reported Gross Margin Percentage Above:

                                  

Gross Margin Benefit from Sale of Inventory Written Down in 2001

   $ 0.4    $ 2.6    $ 0.7    $ 1.9    $ 9.5

Percentage of Net Sales

     0.1%      0.9%      0.2%      0.2%      1.1%

 

The increase in gross margin for the three months ended September 29, 2006 compared to the same period a year ago was primarily due to cost reductions and customer mix.

 

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The decrease in gross margin for the nine months ended September 29, 2006 compared to the same period a year ago was primarily as a result of a reduction in the gross margin benefit resulting from the sale of inventory previously written down in 2001. The gross margin benefit resulting from the sale of inventory written down in 2001 will continue to decline and will be near zero by the end of 2006. As of September 29, 2006, the book value of the inventory written down in 2001 was zero while the cost basis was $2.5 million which was comprised only of raw materials and work in process inventory.

 

On December 31, 2005, the first day of our 2006 fiscal year, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”), which requires us to recognize compensation expense for all stock-based compensation. Compensation expense recognized during the three and nine months ended September 29, 2006 had an immaterial impact on our gross margin.

 

This excerpt taken from the ALTR 10-Q filed Oct 24, 2006.

Gross Margin

 

     Three Months Ended

(Dollars in millions)    March 31,
2006


   April 1,
2005


   Dec. 30,
2005


Gross Margin Percentage

     66.8%      68.3%      66.7%

Included in Reported Gross Margin Percentage Above:

                    

Gross Margin Benefit from Sale of Inventory Written Down in 2001

   $ 0.8    $ 3.5    $ 1.5

Percentage of Net Sales

     0.3%      1.3%      0.5%

 

The year-over-year decline in gross margin resulted primarily from a reduction in the benefit due to the sale of inventory previously written down in 2001. The gross margin benefit resulting from the sale of inventory previously written down decreased during the quarter ended March 31, 2006, and is expected to continue to decrease. As of March 31, 2006, the book value of the inventory written down in 2001 was zero while the cost basis was $3.1 million. The cost basis was comprised of $2.3 million of raw materials and work in process inventory and $0.8 million of finished goods inventory.

 

On December 31, 2005, the first day of our 2006 fiscal year, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”), which requires us to recognize compensation expense for all stock-based compensation. Compensation expense recognized during the quarter ended March 31, 2006 had an immaterial impact on our gross margin.

 

23


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This excerpt taken from the ALTR 10-Q filed Oct 24, 2006.

Gross Margin

 

     Three Months Ended

   Six Months Ended

(Dollars in millions)    June 30,
2006


   July 1,
2005


   March 31,
2006


   June 30,
2006


   July 1,
2005


Gross Margin Percentage

     66.1%      68.3%      66.8%      66.4%      68.3%

Included in Reported Gross Margin Percentage Above:

                                  

Gross Margin Benefit from Sale of Inventory Written Down in 2001

   $ 0.7    $ 3.4    $ 0.8    $ 1.5    $ 7.0

Percentage of Net Sales

     0.2%      1.2%      0.3%      0.2%      1.3%

 

The decrease in gross margin for the three and six months ended June 30, 2006 compared to same periods a year ago were primarily as a result of a reduction in the benefit due to the sale of inventory previously written down in 2001. The gross margin benefit resulting from the sale of inventory previously written down decreased during the quarter ended June 30, 2006, and is expected to continue to decrease. As of June 30, 2006, the book value of the inventory written down in 2001 was zero while the cost basis was $2.7 million which was comprised of raw materials and work in process inventory only.

 

On December 31, 2005, the first day of our 2006 fiscal year, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”), which requires us to recognize compensation expense for all stock-based compensation. Compensation expense recognized during the three and six months ended June 30, 2006 had an immaterial impact on our gross margin.

 

This excerpt taken from the ALTR 10-K filed Oct 24, 2006.

GROSS MARGIN

 

     Years Ended

(Dollars in millions)   

December 30,

2005


  

December 31,

2004

(as restated) (1)


  

January 2,

2004

(as restated) (1)


Gross Margin Percentage

     67.4%      69.6%      67.8%

Included in Reported Gross Margin Percentage Above:

                    

Gross Margin Benefit from Sale of Inventory Written down in 2001

   $ 11.1    $ 14.7    $ 29.0

Percentage of Net Sales

     1.0%      1.4%      3.5%

 

(1)   See Note 3 – “Restatement of Previously Issued Consolidated Financial Statements” to our Consolidated Financial Statements.

 

Gross margin decreased 2.2 percentage points in 2005 from 2004. The decrease was primarily due to reduced demand in certain high-margin programs and increasing success in securing high-volume design wins with discounted prices. Gross margin increased 1.8 percentage points in 2004 from 2003. The increase was primarily due to yield enhancements especially in newer products, as well as overall declines in material and subcontractor costs. The stock based compensation restatement adjustments did not result in a significant change to gross margin in the years ended 2004 and 2003.

 

In 2001, we recorded total inventory provisions of $154.5 million as a result of unfavorable economic conditions and diminished demand for semiconductor products. As of December 30, 2005, substantially all of the inventory that was written-down in 2001 had been either sold or scrapped. The gross margin benefit resulting from the sale of inventory previously written down in 2001 was $11.1 million in 2005, compared to $14.7 million in 2004 and $29.0 million in 2003. As of December 30, 2005, the book value of the inventory written down in 2001 was zero while the cost basis was $3.8 million. The cost basis was comprised of $2.2 million of raw materials and work in process inventory and $1.6 million of finished goods inventory.

 

In 2006, we will adopt Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R) which will require us to recognize compensation expense for all employee stock-based compensation beginning in the quarter ending March 31, 2006 (see “New Accounting Pronouncements”). SFAS 123R is expected to have an immaterial impact on our gross margin.

 

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This excerpt taken from the ALTR 10-K filed Mar 14, 2006.

Gross Margin

 

     Years Ended

(Dollars in millions)   

December 30,

2005


  

December 31,

2004


  

      January 2,

2004


Gross Margin Percentage

     67.4%      69.5%      67.9%

Included in Reported Gross Margin Percentage Above:

                    

Gross Margin Benefit from Sale of Inventory Written down in 2001

   $ 11.1    $ 14.7    $ 29.0

Percentage of Net Sales

     1.0%      1.4%      3.5%

 

Gross margin decreased 2.1 percentage points in 2005 from 2004. The decrease was primarily due to reduced demand in certain high-margin programs and increasing success in securing high-volume design wins with discounted prices. Gross margin increased 1.6 percentage points in 2004 from 2003. The increase was primarily due to yield enhancements especially in newer products, as well as overall declines in material and subcontractor costs.

 

In 2001, we recorded total inventory provisions of $154.5 million as a result of unfavorable economic conditions and diminished demand for semiconductor products. As of December 30, 2005, substantially all of the inventory that was written-down in 2001 had been either sold or scrapped. The gross margin benefit resulting from the sale of inventory previously written down in 2001 was $11.1 million in 2005, compared to $14.7 million in 2004 and $29.0 million in 2003. As of December 30, 2005, the book value of the inventory written down in 2001 was zero while the cost basis was $3.8 million. The cost basis was comprised of $2.2 million of raw materials and work in process inventory and $1.6 million of finished goods inventory.

 

In 2006, we will adopt Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R) which will require us to recognize compensation expense for all employee stock-based compensation beginning in the quarter ending March 31, 2006 (see “New Accounting Pronouncements”). SFAS 123R is expected to have an immaterial impact on our gross margin.

 

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