Analog Devices, Inc. (NASDAQ: ADI), a global leader in
high-performance semiconductors for signal processing applications,
today announced financial results for its first quarter of fiscal
year 2014, which ended February 1, 2014.
“Our first quarter unfolded as we had expected,” said Vincent
Roche, President and CEO. “We tightly managed operations and
expenses, and kept factory utilizations low. Revenue from the end
markets of industrial, communications infrastructure, and
automotive totaled 88% of revenue in the aggregate.”
“In January, order rates began to improve. We ended the quarter
with a book to bill that was above one and we expect this momentum
to continue in the second quarter. We are planning for revenue
growth and solid operating leverage in the second quarter on
improving factory utilization and a good mix of business.”
ADI Increases Dividend by 9 Percent and
Share Repurchase Program to $1 BillionADI also announced
that its Board of Directors has approved a 9 percent increase in
its regular quarterly dividend,
from $0.34 to $0.37 per outstanding share of
common stock. The dividend will be paid on March 11,
2014 to all shareholders of record at the close of business
on February 28, 2014.
In addition, the Board of Directors has approved an increase to
the Company’s share repurchase authorization to $1 billion.
For additional information please visit ADI’s financial press
release page.
Results for the First Quarter of Fiscal
Year 2014
- Revenue totaled $628 million
- Gross margin was 65.1% of revenue
- Operating margin was 29% of revenue,
excluding special items, and was 28.6% on a GAAP basis
- Diluted EPS was $0.49, excluding
special items, and was $0.48 on a GAAP basis
- Cash flow from operations was $157
million, or 25% of revenue
Please refer to the schedules provided for a summary of revenue
and earnings, selected balance sheet information, and the cash flow
statement for the first quarter of fiscal year 2014, as well as the
immediately prior and year-ago quarters. Additional information on
revenue by end market and revenue by product type is provided on
Schedules D and E. A more complete table covering prior periods is
available at investor.analog.com.
Outlook for the Second Quarter of
Fiscal Year 2014The following statements are based on
current expectations. These statements are forward- looking and
actual results may differ materially, as a result of, among other
things, the important factors discussed at the end of this release.
These statements supersede all prior statements regarding our
business outlook set forth in prior ADI news releases, and ADI
disclaims any obligation to update these forward-looking
statements.
- Revenue estimated to be in the range of
$660 to $680 million
- Gross margin estimated to increase 50
to 100 bps
- Operating expenses estimated to
increase by approximately 2%
- Tax rate estimated to be approximately
13%
- Diluted EPS estimated at $0.54 to
$0.58
Conference Call Scheduled for 5:00 pm ETADI will host a
conference call to discuss the first quarter results and short-term
outlook today, beginning at 5:00 pm ET. Investors may join via
webcast, accessible at investor.analog.com, or by telephone (call
706-634-7193 ten minutes before the call begins and provide the
password "ADI.").
A replay will be available two hours after the completion of the
call. The replay may be accessed for up to two weeks by dialing
855-859-2056 (replay only) and providing the conference ID:
41217783, or by visiting investor.analog.com.
Non-GAAP Financial InformationThis release includes
non-GAAP financial measures that are not in accordance with, nor an
alternative to, generally accepted accounting principles and may be
different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles.
Schedule F of this press release provides the reconciliation of
the Company’s non-GAAP measures to its GAAP measures.
Manner in Which Management Uses the
Non-GAAP Financial MeasuresManagement uses non-GAAP
operating expenses, non-GAAP operating income, non-GAAP operating
margins, non-GAAP other (income) expense, and non-GAAP diluted
earnings per share to evaluate the Company’s operating performance
from continuing operations against past periods and to budget and
allocate resources in future periods. These non-GAAP measures also
assist management in understanding and evaluating the Company’s
operating results and trends in the Company’s business.
Economic Substance Behind Management’s
Decision to Use Non-GAAP Financial MeasuresThe items
excluded from the non-GAAP measures were excluded because they are
of a non-recurring or non-cash nature.
The following item is excluded from our non-GAAP operating
expenses, non-GAAP operating income, non-GAAP operating margin, and
non-GAAP diluted earnings per share:Restructuring-Related
Expenses. These expenses are incurred in connection with facility
closures, consolidation of manufacturing facilities, and other cost
reduction efforts. Apart from ongoing expense savings as a result
of such items, these expenses and the related tax effects have no
direct correlation to the operation of our business in the
future.
The following item is excluded from our non-GAAP other
(income) expense and non-GAAP diluted earnings per share:Gain
on Sale of Product Line. In the fourth quarter of fiscal 2013, the
Company completed the sale of its microphone product line and
recorded a gain of $85.4 million in non-operating income. We
excluded the gain and related tax effect from our non-GAAP measures
as these items have no direct correlation to the operation of our
business in the future.
The following items are excluded from our non-GAAP diluted
earnings per share:Tax-Related Items. In the first quarter of
fiscal year 2013, the Company recorded a $6.3 million tax
benefit related to the reinstatement of the R&D tax credit
in January 2013, retroactive to January 1, 2012. In the
fourth quarter of fiscal 2013, as a result of a ruling by the U.S.
Tax Court in a matter not involving the Company, the Company
recorded a potential liability for $36.5 million plus $4.6 million
of interest related to its petition with the U.S. Tax Court
regarding the beneficial tax treatment of dividends paid from
foreign owned companies under The American Jobs Creation Act. The
Company also recorded a $2.2 million tax benefit as a result of the
reversal of prior period tax liabilities. Also in the fourth
quarter of fiscal 2013, the Company completed the sale of its
microphone product line, resulting in $26.7 million of income tax
expense. We excluded these tax-related items from our non-GAAP
measures because they are not associated with the tax expense on
our current operating results.
Why Management Believes the Non-GAAP
Financial Measures Provide Useful Information to
InvestorsManagement believes that the presentation of
non-GAAP operating expenses, non-GAAP operating income, non-GAAP
operating margins, non-GAAP other (income) expense, and non-GAAP
diluted EPS is useful to investors because it provides investors
with the operating results that management uses to manage the
Company.
Material Limitations Associated with
Use of the Non-GAAP Financial MeasuresAnalog Devices
believes that non-GAAP operating expenses, non-GAAP operating
income, non-GAAP operating margins, non-GAAP other (income)
expense, and non-GAAP diluted EPS have material limitations in that
they do not reflect all of the amounts associated with our results
of operations as determined in accordance with GAAP and that these
measures should only be used to evaluate our results of operations
in conjunction with the corresponding GAAP measures. In addition,
our non-GAAP measures may not be comparable to the non-GAAP
measures reported by other companies. The Company’s use of non-GAAP
measures, and the underlying methodology when excluding certain
items, is not necessarily an indication of the results of
operations that may be expected in the future, or that the Company
will not, in fact, record such items in future periods.
Management’s Compensation for
Limitations of Non-GAAP Financial MeasuresManagement
compensates for these material limitations in non-GAAP operating
expenses, non-GAAP operating income, non-GAAP operating margins,
non-GAAP other (income) expense, and non-GAAP diluted EPS by also
evaluating our GAAP results and the reconciliations of our non-GAAP
measures to the most directly comparable GAAP measures. Investors
should consider our non-GAAP financial measures in conjunction with
the corresponding GAAP measures.
About Analog DevicesInnovation, performance, and
excellence are the cultural pillars on which Analog Devices has
built one of the longest standing, highest growth companies within
the technology sector. Acknowledged industry-wide as the world
leader in data conversion and signal conditioning technology,
Analog Devices serves over 60,000 customers, representing virtually
all types of electronic equipment. Analog Devices is headquartered
in Norwood, Massachusetts, with design and manufacturing facilities
throughout the world. Analog Devices' common stock is included in
the S&P 500 Index.
This release may be deemed to contain forward-looking statements
intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, among other things, our
statements regarding expected revenue, earnings per share,
operating expenses, gross margin, tax rate, and other financial
results, expected production and inventory levels, expected market
trends, and expected customer demand and order rates for our
products, that are based on our current expectations, beliefs,
assumptions, estimates, forecasts, and projections about our
business and the industry and markets in which Analog Devices
operates. The statements contained in this release are not
guarantees of future performance, are inherently uncertain, involve
certain risks, uncertainties, and assumptions that are difficult to
predict, and do not give effect to the potential impact of any
mergers, acquisitions, divestitures, or business combinations that
may be announced or closed after the date hereof. Therefore, actual
outcomes and results may differ materially from what is expressed
in such forward-looking statements, and such statements should not
be relied upon as representing Analog Devices’ expectations or
beliefs as of any date subsequent to the date of this press
release. We do not undertake any obligation to update
forward-looking statements made by us. Important factors that may
affect future operating results include: any faltering in global
economic conditions or the stability of credit and financial
markets, erosion of consumer confidence and declines in customer
spending, unavailability of raw materials, services, supplies or
manufacturing capacity, changes in geographic, product or customer
mix, adverse results in litigation matters, and other risk factors
described in our most recent filings with the Securities and
Exchange Commission. Our results of operations for the periods
presented in this release are not necessarily indicative of our
operating results for any future periods. Any projections in this
release are based on limited information currently available to
Analog Devices, which is subject to change. Although any such
projections and the factors influencing them will likely change, we
will not necessarily update the information, as we will only
provide guidance at certain points during the year. Such
information speaks only as of the original issuance date of this
release.
Analog Devices and the Analog Devices logo are registered
trademarks or trademarks of Analog Devices, Inc. All other
trademarks mentioned in this document are the property of their
respective owners.
Analog Devices, First Quarter, Fiscal 2014
Schedule
A
Revenue and Earnings Summary (GAAP) (In thousands, except
per-share amounts)
Three Months Ended 1Q 14 4Q 13 1Q 13
Feb. 1,2014
Nov. 2,2013
Feb. 2,2013
Revenue $ 628,238 $ 678,133 $ 622,134 Year-to-year change 1 % -2 %
-4 % Quarter-to-quarter change -7 % 1 % -10 % Cost of sales (1)
219,120 233,263
231,850 Gross margin 409,118 444,870 390,284 Gross
margin percentage 65.1 % 65.6 % 62.7 % Year-to-year change (basis
points) 240 180 -50 Quarter-to-quarter change (basis points)
-50 110 -110
Operating expenses: R&D (1) 128,646 131,034 125,164
Selling, marketing and G&A (1) 98,178 98,197 97,560 Special
charges 2,685 15,777
14,071 Total operating expenses 229,509
245,008 236,795 Total operating expenses percentage 36.5 % 36.1 %
38.1 % Year-to-year change (basis points) -160 330 320
Quarter-to-quarter change (basis points) 40
250 530 Operating income
179,609 199,862 153,489 Operating income percentage 28.6 % 29.5 %
24.7 % Year-to-year change (basis points) 390 -150 -360
Quarter-to-quarter change (basis points) -90
-140 -630 Other expense
(income) 3,718 (82,650 )
3,380 Income before income tax 175,891 282,512
150,109 Provision for income taxes 23,305 80,958 18,887 Tax rate
percentage 13.2 % 28.7 %
12.6 % Net income $ 152,586 $ 201,554
$ 131,222 Shares used for EPS - basic 312,286
311,009 303,484 Shares used for EPS - diluted 318,017 317,216
310,275 Earnings per share - basic $ 0.49 $ 0.65 $ 0.43
Earnings per share - diluted $ 0.48 $ 0.64 $ 0.42 Dividends
paid per share $ 0.34 $ 0.34 $
0.30 (1) Includes stock-based compensation expense as
follows: Cost of sales $ 1,557 $ 1,737 $ 1,667 R&D $ 4,859 $
5,721 $ 5,600 Selling, marketing and G&A $ 4,991 $ 5,664 $
5,794
Analog Devices, First Quarter, Fiscal
2014
Schedule
B
Selected Balance Sheet Information (GAAP) (In
thousands) 1Q 14 4Q 13 1Q 13
Feb. 1,2014
Nov. 2,2013
Feb. 2,2013
Cash & short-term investments $ 4,701,109 $ 4,682,912 $
3,986,979 Accounts receivable, net 328,787 325,144 329,578
Inventories (1) 289,935 283,337 307,263 Other current assets
151,128 181,032 190,115 Total
current assets 5,470,959 5,472,425 4,813,935 PP&E, net 529,010
508,171 491,431 Investments 23,363 21,180 32,720 Goodwill and
intangible assets 311,664 312,664 313,084 Other
64,472 67,310 65,638 Total assets
$ 6,399,468 $ 6,381,750 $ 5,716,808
Deferred income on shipments to distributors, net $ 245,236 $
247,428 $ 243,396 Other current liabilities 274,258 323,084 265,139
Long-term debt, non-current 872,378 872,241 759,672 Non-current
liabilities 211,961 199,421 124,804 Shareholders' equity
4,795,635 4,739,576 4,323,797
Total liabilities & equity $ 6,399,468 $
6,381,750 $ 5,716,808
(1) Includes $2,196, $2,273, and $2,381
related to stock-based compensation in 1Q14, 4Q13, and 1Q13,
respectively.
Analog Devices, First Quarter, Fiscal 2014
Schedule
C
Cash Flow Statement (GAAP) (In thousands)
Three Months Ended 1Q
14 4Q 13 1Q 13
Feb. 1,2014
Nov. 2,2013
Feb. 2,2013
Cash flows from operating activities: Net Income $ 152,586 $
201,554 $ 131,222
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation 27,335 27,515 27,755 Amortization of intangibles 55 55
55 Stock-based compensation expense 11,407 13,122 13,061 Gain on
sale of product line - (85,444 ) - Other non-cash activity 1,417
887 (1,362 ) Excess tax benefit - stock options (7,604 ) (1,098 )
(5,975 ) Deferred income taxes (2,993 ) (6,558 ) (9,635 ) Changes
in operating assets and liabilities (24,730 )
132,132 2,848 Total adjustments
4,887 80,611
26,747 Net cash provided by operating activities
157,473 282,165
157,969 Percent of total revenue 25.1 %
41.6 % 25.4 % Cash flows from
investing activities: Purchases of short-term available-for-sale
investments (2,234,996 ) (2,559,600 ) (1,653,593 ) Maturities of
short-term available-for-sale investments 2,029,319 2,199,444
1,551,147 Sales of short-term available-for-sale investments
212,819 59,903 283,164 Additions to property, plant and equipment
(48,123 ) (48,558 ) (18,269 ) Proceeds from sale of product line -
100,000 - Increase in other assets (3,342 )
(1,591 ) (2,048 ) Net cash (used for) provided
by investing activities (44,323 )
(250,402 ) 160,401 Cash flows from
financing activities: Term loan repayments - - (60,108 ) Dividend
payments to shareholders (106,024 ) (105,938 ) (90,679 ) Repurchase
of common stock (88,963 ) (42,809 ) (17,001 ) Proceeds from
employee stock plans 79,600 44,399 113,770 Excess tax benefit -
stock options 7,604 1,098 5,975 Contingent consideration payment
(1,773 ) (1,913 ) (3,752 ) Increase (decrease) in other financing
activities 22,248 4,696
(1,027 ) Net cash used for financing activities
(87,308 ) (100,467 )
(52,822 ) Effect of exchange rate changes on cash
(704 ) 725 1,416
Net increase (decrease) in cash and cash equivalents 25,138 (67,979
) 266,964 Cash and cash equivalents at beginning of period
392,089 460,068
528,833 Cash and cash equivalents at end of period $
417,227 $ 392,089 $ 795,797
Analog Devices, First Quarter, Fiscal 2014
Schedule
D
Revenue Trends by
End Market
The categorization of revenue by end market is determined using a
variety of data points including the technical characteristics of
the product, the “sold to” customer information, the "ship to"
customer information and the end customer product or application
into which our product will be incorporated. As data systems for
capturing and tracking this data evolve and improve, the
categorization of products by end market can vary over time. When
this occurs we reclassify revenue by end market for prior periods.
Such reclassifications typically do not materially change the
sizing of, or the underlying trends of results within, each end
market.
Three Months Ended
Feb. 1,2014
Nov. 2,2013
Feb. 2,2013
Revenue % Q/Q %
Y/Y % Revenue Revenue Industrial $ 290,365 46
% -7 % 3 % $ 312,451 $ 281,209 Automotive 124,157 20 % -5 % 15 %
131,105 107,760 Consumer 74,119 12 % -22 % -31 % 94,545 107,356
Communications 139,597 22 % 0 % 11 % 140,032
125,809
Total Revenue $ 628,238
100 % -7 % 1 % $
678,133 $ 622,134 Analog
Devices, First Quarter, Fiscal 2014
Schedule
E
Revenue Trends by
Product Type
The categorization of our products into broad categories is based
on the characteristics of the individual products, the
specification of the products and in some cases the specific uses
that certain products have within applications. The categorization
of products into categories is therefore subject to judgment in
some cases and can vary over time. In instances where products move
between product categories we reclassify the amounts in the product
categories for all prior periods. Such reclassifications typically
do not materially change the sizing of, or the underlying trends of
results within, each product category.
Three
Months Ended
Feb. 1,2014
Nov. 2,2013
Feb. 2,2013
Revenue % Q/Q %
Y/Y % Revenue Revenue Converters $ 290,551 46
% -5 % 5 % $ 306,187 $ 277,940 Amplifiers / Radio Frequency 164,714
26 % -7 % 4 % 176,538 157,978 Other analog 79,419 13
% -14 % -17 % 92,405 95,158 Subtotal Analog Signal
Processing 534,684 85 % -7 % 1 % 575,130
531,076 Power management & reference 38,710
6 % -12 % -2 % 44,226 39,382
Total Analog
Products $ 573,394 91 %
-7 % 1 % $ 619,356
$ 570,458 Digital Signal Processing 54,844
9 % -7 % 6 % 58,777 51,676
Total
Revenue $ 628,238 100 %
-7 % 1 % $ 678,133
$ 622,134 Analog Devices, First
Quarter, Fiscal 2014
Schedule
F
Reconciliation from Non-GAAP to GAAP Data (In thousands, except
per-share amounts) See "Non-GAAP Financial
Information" in this press release for a description of the items
excluded from our non-GAAP measures.
Three Months Ended 1Q 14 4Q 13
1Q 13
Feb. 1,2014
Nov. 2,2013
Feb. 2,2013
GAAP Operating Expenses $ 229,509
$ 245,008 $ 236,795 Percent of
Revenue 36.5 % 36.1 % 38.1
% Restructuring-Related Expense (2,685 )
(15,777 ) (14,071 )
Non-GAAP Operating
Expenses $ 226,824 $
229,231 $ 222,724
Percent of Revenue 36.1 % 33.8 %
35.8 % GAAP Operating Income/Margin
$ 179,609 $ 199,862 $
153,489 Percent of Revenue 28.6 %
29.5 % 24.7 % Restructuring-Related
Expense 2,685 15,777
14,071
Non-GAAP Operating Income/Margin
$ 182,294 $ 215,639
$ 167,560 Percent of
Revenue 29.0 % 31.8 % 26.9
% GAAP Other (Income) Expense $
3,718 $ (82,650 ) $ 3,380
Percent of Revenue 0.6 % -12.2 %
0.5 % Gain on Sale of Product Line -
85,444 -
Non-GAAP
Other (Income) Expense $ 3,718
$ 2,794 $ 3,380
Percent of Revenue 0.6 % 0.4 %
0.5 % GAAP Diluted EPS $
0.48 $ 0.64 $ 0.42 Impact of
Gain on Sale of Product Line - (0.19 ) - Restructuring-Related
Expense 0.01 0.05 0.04 Impact of the Reversal of Prior Period Tax
Liabilities - (0.01 ) - Impact of Tax Reserve - 0.13 - Impact of
the Reinstatement of the R&D Tax Credit -
- (0.02 )
Non-GAAP Diluted EPS
$ 0.49 $ 0.62
$ 0.44
Analog Devices, Inc.Mr. Ali Husain, 781-461-3282Director of
Investor Relations781-461-3491
(fax)investor.relations@analog.com
Analog Devices (NASDAQ:ADI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Analog Devices (NASDAQ:ADI)
Historical Stock Chart
From Jul 2023 to Jul 2024