Linear Technology Reports Increased Revenues and Profits Over the Prior Quarter.

MILPITAS, Calif., April 18 /PRNewswire-FirstCall/ -- Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today announced that total revenues for its third quarter ended April 2, 2006, of $278,888,000, increased 5% over second quarter total revenues of $265,146,000. The Company also reported that third quarter net income of $110,555,000, or $0.35 diluted earnings per share, increased 7% over second quarter net income of $103,264,000 or $0.33 diluted earnings per share. Sequentially, the Company's cash and short-term investments increased by $74.1 million, net of spending $20.2 million to purchase 532,769 shares of common stock. A cash dividend of $0.15 per share will be paid on May 17, 2006 to stockholders of record on April 28, 2006.

On a year-over-year basis, fiscal 2006 third quarter total revenues of $278,888,000 decreased 4% from total revenues of $290,734,000 for the third quarter of the previous year. Included in last year's quarterly revenues was a royalty payment of $40,000,000, which represented past royalties under terms of a settlement and license agreement with another company. Subsequent quarterly royalty payments have been immaterial to each individual quarter's total revenues. Net income for the quarter of $110,555,000 or $0.35 diluted earnings per share, ($119,742,000 or $0.38 per share pro forma excluding stock-based compensation as noted below) decreased 9% as compared to $121,633,000 or $0.39 diluted earnings per share ($126,562,000 or $0.40 per share pro forma) reported for the third quarter of last year. Net income for the third quarter of last year was also positively affected by the $40,000,000 royalty payment.

During this fiscal year, the Company implemented Financial Accounting Standard No. 123R (FAS123R), "Share-based Payment," which requires companies to estimate the cost of all forms of stock-based compensation, including stock options, restricted stock and employee stock purchase plans, and record a commensurate expense in their income statement. For Linear Technology, the total amount of stock-based compensation during this quarter was $13,218,000. Under FAS123R calculations, there was also an increase in estimated diluted shares outstanding. Consequently, pro forma diluted earnings per share, excluding stock-based compensation accounting estimates, would have been $0.38 for the quarter ended April 2, 2006 versus $0.40 on a similar basis for the prior year's quarter.

According to Lothar Maier, CEO, "Sales and profits for the March quarter increased sequentially from the December quarter. Demand increased resulting in a positive book to bill ratio. Our return on sales was a strong 40%, or 43% on a pro forma basis prior to the impact of stock-based compensation accounting, and we continue to be cash flow positive.

As we had anticipated, strong sales for domestic and European distributors signaled a solid improvement in our broad based industrial business. Looking ahead, we currently expect this to continue into the June quarter and we are expecting sales and profits to again increase roughly 5%."

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 growth of 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 3, 2005.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, April 19, 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 or A replay of the conference call will be available from April 19 through April 25, 2006. You may access this post view by calling (719) 457-0820 and entering reservation #2022842. An archive of the webcast will also be available at and as of April 19, 2006 until the third quarter earnings release next year.

Linear Technology Corporation, a manufacturer of high performance linear integrated circuits, was founded in 1981, became a public company in 1986 and joined the S&P 500 index of major public companies in 2000. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, power supply modules, 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 more information, visit

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

                   (In thousands, except per share amounts)
                               GAAP (unaudited)

                              Three Months Ended        Nine Months Ended
                             April 2,     April 3,      April 2,    April 3,
                              2006          2005          2006        2005
    Net sales               $278,888     $250,734      $800,047    $753,883
    Royalty revenue               --       40,000            --      40,000
      Total revenue          278,888      290,734       800,047     793,883
    Cost of sales (1)         60,021       56,600       174,785     165,329
     Gross profit            218,867      234,134       625,262     628,554


     Research &
      development (1)         40,982       36,002       116,801      99,049
     Selling, general &
      administrative (1)      32,252       32,172        95,733      81,551
                                       73,234              68,174              212,534          180,600
        Operating  income                  145,633            165,960              412,728          447,954
        Interest  income,  net            13,439                7,802                37,633            20,514

        Income  before
          income  taxes                        159,072            173,762              450,361          468,468
        Provision  for
          income  taxes                          48,517              52,129              137,361          140,541

        Net  income                            $110,555          $121,633            $313,000        $327,927

        Earnings  per  share:
          Basic                                          $0.36                $0.39                  $1.02              $1.07
          Diluted                                      $0.35                $0.39                  $1.00              $1.04

        Shares  used  in  the
          calculation  of
          earnings  per  share:
          Basic                                      306,136            307,960              305,873          307,811
          Diluted                                  314,046            315,617              314,326          316,452

        Pro  forma  earnings
          per  share  excluding
          the  effects  of  stock-based
          Basic                                          $0.39                $0.41                  $1.11              $1.10
          Diluted                                      $0.38                $0.40                  $1.09              $1.07

        Pro  forma  shares  used
          in  the  calculation
          of  pro  forma  earnings
          per  share:
          Basic                                      306,136            307,960              305,873          307,811
          Diluted                                  312,088            315,617              312,383          316,452

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

        Cost  of  sales                            2,323                    720                  5,836              2,016
        Research  and  development      5,878                1,849                17,331              5,218
        Sales,  general  and
          administrative                        5,017                4,473                17,120              7,905
          Total  stock-based
            compensation                        13,218                7,042                40,287            15,139

                                                LINEAR  TECHNOLOGY  CORPORATION
                                      (In  thousands,  except  per  share  amounts)
                                                          NON-GAAP  (unaudited)

                                                          Three  Months  Ended                Nine  Months  Ended
                                                      April  2,            April  3,            April  2,      April  3,
                                                          2006                    2005                    2006              2005

        Net  income                          $110,555            $121,633            $313,000        $327,927

        Adjustments  to
          reconcile  net  income
          to  pro  forma  net  income:
            compensation                      13,218                  7,042                40,287            15,139
          Tax  effect                          (4,031)              (2,113)            (12,287)          (4,542)
        Pro  forma  net  income        119,742              126,562              341,000          338,524

        Pro  forma  earnings  per
          share  excluding
          the  effects  of
          stock-based  compensation:
          Basic                                        $0.39                  $0.41                  $1.11              $1.10
          Diluted                                    $0.38                  $0.40                  $1.09              $1.07

        Shares  used  in  the  calculation  of  pro
        forma  earnings  per  share:
          Basic                                    306,136              307,960              305,873          307,811
          Diluted                          312,088(1)              315,617        312,383(1)          316,452

          (1)  Excludes  1,958  and  1,943  shares  for  the  three  and  nine  months  ended
                  April  2,  2006,  respectively,  to  conform  diluted  outstanding  shares
                  calculated  under  FAS123R  to  diluted  shares  calculated  under  prior
                  accounting  standards

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