Linear Technology Reports Increased Revenues and Earnings Per Share Over the Prior Quarter.

MILPITAS, Calif., Oct. 16 /PRNewswire-FirstCall/ -- Linear Technology Corporation (NASDAQ: LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the quarter ended September 30, 2007. Revenue for the first quarter of fiscal year 2008 increased 5.0% to $281.5 million over the previous quarter revenue of $268.1 million and decreased 3.6% or $10.6 million from $292.1 million in the first quarter of fiscal year 2007. Diluted earnings per share ("EPS") of $0.40 increased $0.04 per share over fourth quarter diluted EPS of $0.36 per share and increased $0.03 per share over $0.37 per share reported in the first quarter of fiscal year 2007. Net income in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") for the first quarter of fiscal year 2008 of $91.5 million decreased $4.2 million or 4.4% from $95.7 million reported in the fourth quarter of fiscal year 2007 largely due to an increase in net interest expense and an increase in the provision for income taxes. Net income decreased $20.9 million or 18.6% from $112.4 million in the first quarter of fiscal year 2007.

In April 2007, the Company entered into a $3.0 billion accelerated share repurchase ("ASR") transaction funded by $1.3 billion of the Company's own cash and $1.7 billion of convertible debt. As a result, the Company's first quarter results had both a decrease in interest income and an increase in interest expense when compared to both last quarter and the first quarter of the prior fiscal year. The first quarter of fiscal year 2008 had higher interest expense than the fourth quarter of fiscal 2007 due to the fourth quarter having two months of accrued interest versus three months in the first quarter of fiscal year 2008. Shares used in the calculation of diluted EPS decreased by 37.2 million shares or 14% from the fourth quarter of fiscal year 2007. Consequently, the ASR transaction has been accretive to EPS as the impact of the reduced shares was greater than the increase in interest expense and lower interest income.

A cash dividend of $0.18 per share will be paid on November 28, 2007 to stockholders of record on November 16, 2007.

Non-GAAP diluted EPS for the first quarter of fiscal year 2008 was $0.45, a $0.03 per share increase over $0.42 per share in the fourth quarter and $0.04 per share increase over the first quarter of fiscal year 2007. First quarter non-GAAP net income of $101.4 million decreased $8.5 million from $109.9 million in the fourth quarter and decreased $22.8 million from the first quarter of fiscal year 2007. The Company's non-GAAP measures set forth above exclude charges related to stock-based compensation. The Company's management uses non-GAAP net income and non-GAAP net income per diluted share to evaluate the Company's current operating results and financial results and to compare them against historical financial results. Reconciliations of reported net income and reported net income per diluted share to non-GAAP net income and non-GAAP net income per diluted share, respectively, are included at the end of this press release.

According to Lothar Maier, CEO, "This was a good September quarter for us. Revenue, EPS and cash generated from operations all increased and we had a positive book to bill ratio for the quarter. We are pleased with the results of the ASR which was partially responsible for the 11% increase in diluted EPS over the prior quarter which follows on a 12.5% sequential increase in diluted EPS in the quarter before that.

Looking ahead to the December quarter, growth will be impacted by the usual seasonal slowdown in our businesses. Consequently, we expect revenues and diluted EPS to increase in the 1% to 4% range from the September 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 1, 2007.

Company officials will be discussing these results in greater detail in a conference call tomorrow, Wednesday, October 17, 2007 at 8:30 a.m. Pacific Coast Time. Those investors wishing to listen in may call (877) 681-3377 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 October 17 through October 23, 2007. You may access the archive by calling (719) 457-0820 and entering reservation #6421148. An archive of the webcast will also be available at and as of October 17, 2007 until the first 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, 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, global positioning systems 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)

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

                                             Three Months Ended
                               September 30,        July 1,      October 1,
                                      2007           2007            2006
    Revenues                       $281,488       $268,116        $292,116
    Cost of sales (1)                64,061         61,338          64,327
      Gross profit                  217,427        206,778         227,789

            Research  &  development
              (1)                                                      47,780                  46,713                    46,519
            Selling,  general  &
              administrative  (1)                        32,781                  32,861                    34,425
                                                                          80,561                  79,574                    80,944
        Operating  income                                136,866                127,204                  146,845
        Interest  expense                                (14,462)              (10,795)                      (443)
        Interest  income                                      6,434                    7,908                    16,480

        Income  before  income
          taxes                                                    128,838                124,317                  162,882
        Provision  for  income
          taxes                                                      37,363                  28,593                    50,493

        Net  income                                            $91,475                $95,724                $112,389

        Earnings  per  share:
            Basic                                                      $0.41                    $0.37                    $0.327
            Diluted                                                  $0.40                    $0.36                    $0.317

        Shares  used  in  the
          calculation  of  earnings
          per  share:
            Basic                                                  224,093                260,664                  302,104
            Diluted                                              229,230                266,474                  307,740

        (1)  Includes  stock-based  compensation  charges  as

        Cost  of  sales                                        $1,897                  $2,946                    $2,762
        Research  and  development                    7,747                    9,595                      8,902
        Sales,  general  and
          administrative                                      4,300                    5,885                      5,422

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

                                                                                          September  30,                      July  1,
                                                                                                      2007                              2007
                                                                                              (unaudited)                    (audited)
            Current  assets:
                Cash,  cash  equivalents  and
                  short-term  investments                                    $752,167                      $633,307

                Accounts  receivable,  net  of
                  allowance  for  doubtful
                  accounts  of  $1,770  ($1,775
                  at  July  1,  2007)                                                  134,032                        130,546

                Inventories                                                                51,413                          51,075

                Deferred  tax  assets  and
                  other  current  assets                                            42,084                          46,176
                    Total  current  assets                                        979,696                        861,104

            Property,  plant  &  equipment,  net                        261,171                        266,600

            Other  noncurrent  assets                                            93,604                          91,153
        Total  assets                                                              $1,334,471                  $1,218,857

            Current  liabilities:
                Accounts  payable                                                    $11,324                        $11,161

              Accrued  income  taxes,  payroll
                &  other  accrued  liabilities                              101,818                        128,762

              Deferred  income  on  shipments
                to  distributors                                                        39,186                          39,946
                  Total  current  liabilities                                152,328                        179,869

              Convertible  senior  notes                                  1,700,000                    1,700,000

              Deferred  tax  and  other
                long-term  liabilities                                          118,072                          46,953

            Stockholders'  equity:
                Common  stock                                                            932,624                        902,135

                Accumulated  Deficit                                        (1,569,304)                (1,609,453)

                Accumulated  other
                  comprehensive  income                                                  751                              (647)
                    Total  stockholders'  deficit                        (635,929)                    (707,965)
                                                                                              $1,334,471                  $1,218,857

                                                LINEAR  TECHNOLOGY  CORPORATION
                                      (In  thousands,  except  per  share  amounts)

                                                                                Three  Months  Ended
                                                  September  30,                July  1,                  October  1,
                                                                2007                      2007                                2006

        Reported  net
          income  (GAAP
          basis)                                    $  91,475                $95,724                        $112,389

              compensation  (1)                13,944                  18,426                            17,086

            Income  tax
              effect  of
              adjustments                          (4,044)                (4,238)                          (5,297)

        Non-GAAP  net
          income                                    $101,375              $109,912                        $124,178

        Non-GAAP  earnings  per  share  excluding  the  effects  of  stock  based
            Basic                                    $      0.45              $      0.42                        $      0.41

            Diluted                                $      0.45              $      0.42                        $      0.41

        Shares  used  in  the  calculation  of  Non-GAAP  earnings  per  share:
            Basic                                      224,093                260,664                          302,104

            Diluted                                  227,591  (2)        264,842  (2)                  305,826  (2)

        1)    Linear  began  expensing  stock  options  in  the  first  quarter  of  fiscal
                year  2006.

        2)    Excludes  1,639,  1,632  and  1,914  shares  for  the  three  months  ended
                September  30,  2007,  July  1,  2007  and  October  1,  2006,  respectively,  to
                conform  diluted  outstanding  shares  calculated  under  FAS123R  to  diluted
                shares  calculated  under  prior  accounting  standards.

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