Linear Technology Reports Year Over Year Increases to Revenue and Net Income Over the First Quarter of the Previous Fiscal Year.
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Linear Technology Reports Year Over Year Increases to Revenue and Net Income Over the First Quarter of the Previous Fiscal Year.

MILPITAS, Calif., Oct. 17 /PRNewswire-FirstCall/ -- Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today announced that revenue for its quarterly period ended October 1, 2006, was $292.1 million, an increase of 14% over revenue of $256.0 million for the first quarter of the previous fiscal year. Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the first quarter of fiscal year 2007 was $112.4 million, or $0.37 diluted earnings per share, an increase of $13.2 million or 13% over GAAP net income of $99.2 million or $0.31 diluted earnings per share reported in the in the first quarter of the previous fiscal year. On a pro forma basis excluding the effects of all forms of stock-based compensation, net income was $124.2 million, or $0.41 diluted earnings per share, an increase of $15.7 million over pro forma net income of $108.5 million, or $0.35 per share reported in the first quarter of the previous fiscal year.

The Company's cash and short-term investments balance decreased $5.8 million net of spending $93.1 million to purchase 2.9 million shares of its common stock. A cash dividend of $0.15 per share will be paid on November 15, 2006 to stockholders of record on October 27, 2006.

According to Lothar Maier, CEO, "As we had forecasted, sales and profits were roughly similar to the previous quarter. However, the overall business environment was weaker than we expected and consequently, our bookings decreased slightly. Consumer bookings grew, but not to the extent we expected as customers remain cautious going into the holiday demand period.

The December quarter that we are entering is difficult to forecast. Macroeconomic trends are reasonable and our positioning in customer programs is good. However, visibility is low and customers are guarded in their forecasting and inventory management. Consequently, given the usual seasonal slowdown in non-consumer businesses that takes place in December, we currently expect sales and profits in the December quarter to be down roughly 5% to 7% from the quarter just completed."

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. In particular, the statements regarding the demand for our products, our customers' ordering patterns and the anticipated trends in our sales and profits are forward- looking statements. The forward-looking statements are dependent on certain risks and uncertainties, including such factors, among others, as the timing, volume and pricing of new orders received and shipped, the timely introduction of new processes and products, general conditions in the world economy and financial markets and other factors described in our 10-K for the fiscal year ended July 2, 2006.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, October 18, 2006 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (719) 234-0008 before 8:15 a.m. to be included in the audience. There will be a live webcast of this conference call that can be accessed through www.linear.com or www.streetevents.com . A replay of the conference call will be available from October 18 through November 3, 2006. You may access this post view by calling (719) 457-0820 and entering reservation #5471499. An archive of the webcast will also be available at www.linear.com and www.streetevents.com as of October 18, 2006 until the first quarter earnings release next year.

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

    For further information contact Paul Coghlan at Linear Technology
Corporation, 1630 McCarthy Blvd., Milpitas, California   95035-7417,
(408) 432-1900.


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

                                                       Three Months Ended
                                                           (unaudited)
                                                    October 1,     October 2,
                                                      2006           2005

    Net sales                                       $292,116       $256,013
    Cost of sales (1)                                 64,327         55,999
        Gross profit                                 227,789        200,014

    Expenses:

        Research & development (1)                    46,519         37,779
        Selling, general & administrative (1)         34,425         31,150
                                                      80,944         68,929
    Operating income                                 146,845        131,085
    Interest income, net                              16,037         11,622

    Income before income taxes                       162,882        142,707
    Provision for income taxes                        50,493         43,526

    Net income                                      $112,389       $ 99,181

    Earnings per share:
       Basic                                          $ 0.37         $ 0.32
       Diluted                                        $ 0.37         $ 0.31

    Shares used in the calculation of
     earnings per share:
       Basic                                         302,104        306,336
       Diluted                                       307,740        315,940

    Pro forma earnings per share excluding
     the effects of stock-based compensation:
       Basic                                          $ 0.41         $ 0.35
       Diluted                                        $ 0.41         $ 0.35

    Pro forma shares used in the calculation
     of pro forma earnings per share:
       Basic                                         302,104        306,336
       Diluted                                       305,826        313,429

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

    Cost of sales                                     $2,762         $1,207
    Research and development                           8,902          5,923
    Sales, general and administrative                  5,422          6,208
     Total stock-based compensation                  $17,086        $13,338


                        LINEAR TECHNOLOGY CORPORATION
             RECONCILIATION OF NET INCOME TO PRO FORMA NET INCOME
                   (In thousands, except per share amounts)

                                                       Three Months Ended
                                                          (unaudited)
                                                   October 1,     October 2,
                                                     2006            2005

    Net income                                      $112,389        $99,181

    Adjustments to reconcile net income to
     pro forma net income
        Stock-based compensation                      17,086         13,338
        Tax effect                                   (5,297)        (4,068)
    Pro forma net income                            $124,178       $108,451

    Pro forma earnings per share excluding
     the effects of stock based compensation:
       Basic                                          $ 0.41         $ 0.35
       Diluted                                        $ 0.41         $ 0.35

    Shares used in the calculation of
     pro forma earnings per share:
       Basic                                         302,104        306,336
       Diluted                                    305,826(1)     313,429(1)

    (1) Excludes 1,914 and 2,511 shares for the three months ended October 1,
        2006 and October 2, 2005, respectively, to conform diluted outstanding
        shares calculated under FAS123R to diluted shares calculated under
        prior accounting standards.

    FAS123R -- Share-Based Payment became effective and was adopted by the
    Company during the quarter ended October 2, 2005.  FAS123R requires the
    Company to estimate the cost of all forms of stock-based compensation,
    including employee stock options, and to record a commensurate expense in
    the income statement.  To supplement our consolidated financial statements
    presented in accordance with GAAP, we have shown above a non-GAAP (pro
    forma) presentation of the Company's earnings per share, which is adjusted
    to reflect the GAAP results to exclude all stock-based compensation.  This
    non-GAAP presentation of earnings per share is provided to enhance the
    user's overall understanding of the Company's historical financial
    performance and comparability between periods.  We believe the non-GAAP
    results provide useful information to investors by excluding stock-based
    compensation.


                         LINEAR TECHNOLOGY CORPORATION
                     CONSOLIDATED CONDENSED BALANCE SHEETS
                             (Dollars in thousands)

                                                  October 1,       July 2,
                                                     2006           2006
                                                 (unaudited)      (audited)
    ASSETS
     Current assets:
      Cash, cash equivalents and
       short-term investments                     $1,813,809     $1,819,587

     Accounts receivable, net of
      allowance for doubtful
      accounts of $1,797 ($1,818
      at July 2, 2006)                               154,263        154,297

    Inventories                                       42,085         39,031
    Deferred tax assets and
      Other current assets                            61,846         64,221
       Total current assets                        2,072,003      2,077,136

     Property, plant & equipment, net                261,502        247,969
     Other noncurrent assets                          65,520         65,790
    Total assets                                  $2,399,025     $2,390,895

    LIABILITIES & STOCKHOLDERS'
     EQUITY:
     Current liabilities:
      Accounts payable                               $21,520        $14,574

     Accrued income taxes, payroll &
      other accrued liabilities                      179,495        174,239

     Deferred income on shipments
      to distributors                                 41,024         48,013
       Total current liabilities                     242,039        236,826

     Deferred tax and other long-term
      liabilities                                     48,282         49,571

    Stockholders' equity:

      Common stock                                 1,080,710      1,063,446
      Retained earnings                            1,029,654      1,046,137
      Accumulated other comprehensive
       income                                        (1,660)        (5,085)
        Total stockholders' equity                 2,108,704      2,104,498
                                                  $2,399,025     $2,390,895

Web site: http://www.linear.com//


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