Exhibit 99.1
Analog Devices Announces Financial Results for the Third Quarter of Fiscal Year 2010
NORWOOD, Mass.--(BUSINESS WIRE)--August 17, 2010--Analog Devices, Inc. (NYSE: ADI)
- 3Q10 revenue increased to $720 million
- 3Q10 diluted EPS increased to $0.65
- 3Q10 gross margin increased to 66.7% of revenue
- 3Q10 operating margin increased to 34.9% of revenue
- Board of Directors declared quarterly dividend of $0.22 per share
- Financial results and 4Q10 outlook will be discussed via conference call today at 5:00 pm
Analog Devices, Inc. (NYSE: ADI), a global leader in high-performance semiconductors for signal processing applications, today announced financial results for the third quarter of its 2010 fiscal year, which ended July 31, 2010.
“ADI had a strong third quarter, delivering sequential sales growth of 8% with the largest increases occurring in the industrial and communications infrastructure markets,” said Jerald G. Fishman, President and CEO. “Notably, it was an exceptional quarter in terms of profitability as we increased gross margin to 66.7%, increased operating margin to 34.9%, and grew EPS to $0.65. Our continued profitability gains are the result of strong revenue growth coupled with a fundamentally improved cost structure.”
Results of Operations for the Third Quarter of Fiscal 2010
- Revenue was $720 million, an increase of 8% from the immediately prior quarter and an increase of 46% from the same period one year ago. For more information regarding revenue by end market and product type for the third quarter of fiscal 2010, please see Schedules D and E of this document. In addition, a more complete table covering prior periods is available on the Analog Devices Investor Relations website at: investor.analog.com.
- Gross margin was 66.7% of revenue, compared to 65.0% of revenue in the immediately prior quarter, and 54.1% of revenue in the year-ago period. Gross margin improvements were primarily due to lower manufacturing costs, increased factory utilization, and strong sales of products sold to industrial and communications infrastructure customers.
- Operating expenses were $229 million, compared to $220 million in the immediately prior quarter, and $187 million in the same period a year ago.
- Operating income was $251 million, or 34.9% of revenue, compared to $214 million, or 32.0% of revenue, in the immediately prior quarter, and $79 million, or 16% of revenue, in the same period one year ago.
- Diluted earnings per share (EPS) was $0.65, compared to $0.55 in the immediately prior quarter, and $0.22 in the same period a year ago.
- The Board of Directors declared a cash dividend of $0.22 per outstanding share of common stock, which will be paid on September 15, 2010 to all shareholders of record at the close of business on August 27, 2010.
- Net cash provided by operating activities was $225 million, or 31% of revenue. Capital expenditures were $39 million, and cash dividends of $66 million were paid during the third quarter of fiscal 2010.
- Cash and short-term investments at the end of the third quarter of fiscal 2010 totaled approximately $2.5 billion, compared to $2.4 billion at the end of the second quarter of fiscal 2010.
- Accounts receivable in the third quarter of fiscal 2010, as measured by days sales outstanding, was 45 days, consistent with the immediately prior quarter.
- Inventory at the end of the third quarter of fiscal 2010 increased by approximately $18 million, or 7%, compared to the immediately prior quarter.
Outlook for the Fourth Quarter of Fiscal 2010
The following statements are based on current expectations. These statements are forward- looking and actual results may differ materially, including as a result of the important factors discussed at the end of this release. These statements supersede all prior statements regarding business outlook set forth in prior ADI news releases.
Regarding the outlook for the fourth quarter of fiscal 2010, Mr. Fishman stated, “Looking ahead to the fourth quarter, given our higher opening backlog, we are expecting continued revenue growth. We anticipate that revenue will be in the range of $740 million to $770 million for the fourth quarter. We are planning for our gross margin to be 66% to 67% of sales. We expect that operating expenses will grow, but well below revenue growth. As a result, we anticipate that our operating margin will be in the range of 35% to 36% of sales and earnings per share will be in the range of $0.68 to $0.72.”
Conference Call Scheduled for 5:00 pm ET
Mr. Fishman will discuss the third quarter results and short-term outlook via webcast, accessible at investor.analog.com, today, beginning at 5:00 pm ET. Investors who prefer to join by telephone may call 706-634-7193 ten minutes before the call begins and provide the password "ADI."
A replay will be available almost immediately after the call. The replay may be accessed for up to one week by dialing 800-642-1687 (replay only) and providing the conference ID: 80933163, or by visiting investor.analog.com.
About Analog Devices, Inc.
Innovation, 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. Celebrating over 40 years as a leading global manufacturer of high-performance integrated circuits used in analog and digital signal processing applications, Analog Devices is headquartered in Norwood, Massachusetts, with design and manufacturing facilities throughout the world. Analog Devices' common stock is listed on the New York Stock Exchange under the ticker “ADI” and is included in the S&P 500 Index.
This release may be deemed to contain forward-looking statements which include, among other things, our statements regarding expected revenue, earnings, earnings per share, operating expenses, inventory levels, gross margins, operating margins, and other financial results, expected customer demand for our products, and expected results of our ongoing expense management efforts, that are based on our current expectations, beliefs, assumptions, estimates, forecasts, and projections about 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 the apparent improvement of economic conditions and financial markets following the recent crisis in global credit and financial markets, erosion of consumer confidence and declines in customer spending, the effects of declines in customer demand for our products and for end products that incorporate our products, competitive pricing pressures, unavailability of raw materials or wafer fabrication, assembly and test capacity, any delay or cancellation of significant customer orders, changes in geographic, product or customer mix, inability to license third party intellectual property, inability to meet customer demand, 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, Third Quarter, Fiscal 2010 |
| | | |
Schedule A |
| Sales/Earnings Summary |
| (In thousands, except per-share amounts) |
| | | |
| | | |
| Three Months Ended |
| 3Q 10 | 2Q 10 | 3Q 09 |
| July 31,
2010 | May 1,
2010 | Aug. 1,
2009 |
| Revenue | $ | 720,290 | | $ | 668,240 | | $ | 491,991 | |
| Year-to-year change | | 46.4 | % | | 40.8 | % | | -25.3 | % |
| Quarter-to-quarter change | | 7.8 | % | | 10.8 | % | | 3.6 | % |
| Cost of sales (1) | | 240,088 | | | 233,725 | | | 225,762 | |
| Gross margin | | 480,202 | | | 434,515 | | | 266,229 | |
| Gross margin percentage | | 66.7 | % | | 65.0 | % | | 54.1 | % |
| Operating expenses: | | | |
| R&D (1) | | 126,987 | | | 122,780 | | | 107,578 | |
| Selling, marketing and G&A (1) | | 102,070 | | | 97,660 | | | 79,706 | |
| Operating income | | 251,145 | | | 214,075 | | | 78,945 | |
| Other (income) expense | | (176 | ) | | 55 | | | (1,082 | ) |
| Income before income tax | | 251,321 | | | 214,020 | | | 80,027 | |
| Provision for income taxes | | 51,830 | | | 46,880 | | | 14,567 | |
| Net income | $ | 199,491 | | $ | 167,140 | | $ | 65,460 | |
| | | |
| Shares used for EPS - basic | | 298,027 | | | 297,825 | | | 291,387 | |
| Shares used for EPS - diluted | | 306,168 | | | 305,836 | | | 293,084 | |
| | | |
| Earnings per share - basic | $ | 0.67 | | $ | 0.56 | | $ | 0.22 | |
| Earnings per share - diluted | $ | 0.65 | | $ | 0.55 | | $ | 0.22 | |
| | | |
| Dividends paid per share | $ | 0.22 | | $ | 0.20 | | $ | 0.20 | |
| | | |
| (1) Includes stock-based compensation expense as follows: | | | |
| Cost of sales | $ | 1,878 | | $ | 1,860 | | $ | 1,942 | |
| R&D | $ | 5,996 | | $ | 5,968 | | $ | 5,508 | |
| Selling, marketing and G&A | $ | 5,302 | | $ | 5,427 | | $ | 4,565 | |
| | | | | | | | | |
| | | | | | | | | |
| Analog Devices, Third Quarter, Fiscal 2010 |
| | | |
Schedule B |
| Selected Balance Sheet Information |
| (In thousands) |
| | | |
| 3Q 10 | 2Q 10 | 3Q 09 |
| | July 31,
2010 | May 1,
2010 | Aug. 1,
2009 |
| Cash & short-term investments | $ | 2,508,315 | $ | 2,386,739 | $ | 1,724,444 |
| Accounts receivable, net | | 357,479 | | 332,157 | | 244,025 |
| Inventories (1) | | 265,266 | | 247,662 | | 276,072 |
| Other current assets | | 103,478 | | 111,750 | | 115,092 |
| Total current assets | | 3,234,538 | | 3,078,308 | | 2,359,633 |
| PP&E, net | | 463,751 | | 453,344 | | 491,564 |
| Investments | | 9,138 | | 9,062 | | 8,755 |
| Goodwill and intangible assets | | 252,725 | | 258,118 | | 256,163 |
| Other | | 143,916 | | 129,265 | | 101,999 |
| Non-current assets of discontinued operations | | - | | - | | 62,037 |
| Total assets | $ | 4,104,068 | $ | 3,928,097 | $ | 3,280,151 |
| | | |
| Deferred income on shipments to distributors, net | $ | 214,727 | $ | 206,651 | $ | 123,876 |
| Current liabilities of discontinued operations | | - | | - | | 1,200 |
| Other current liabilities | | 373,652 | | 358,066 | | 228,850 |
| Non-current liabilities | | 481,214 | | 473,130 | | 467,860 |
| Stockholders' equity | | 3,034,475 | | 2,890,250 | | 2,458,365 |
| Total liabilities & equity | $ | 4,104,068 | $ | 3,928,097 | $ | 3,280,151 |
| | | |
(1) Includes $2,492, $2,354 and $2,503 related to stock-based compensation in 3Q10, 2Q10 and 3Q09, respectively. |
| | | |
| | | |
| Analog Devices, Third Quarter, Fiscal 2010 |
| | | | |
Schedule C |
| Cash Flow Statement |
| (In thousands) |
| | | | |
| | | | |
| | Three Months Ended |
| | 3Q 10 | 2Q 10 | 3Q 09 |
| | July 31,
2010 | May 1,
2010 | Aug. 1,
2009 |
| Cash flows from operating activities: | | | | |
| Net Income | | $ | 199,491 | | $ | 167,140 | | $ | 65,460 | |
| Adjustments to reconcile net income | | | | |
| to net cash provided by operations: | | | | |
| Depreciation | | | 28,582 | | | 28,913 | | | 30,300 | |
| Amortization of intangibles | | | 609 | | | 1,779 | | | 1,679 | |
| Stock-based compensation expense | | | 13,176 | | | 13,255 | | | 12,015 | |
| Excess tax benefit - stock options | | | (28 | ) | | (72 | ) | | - | |
| Other non-cash activity | | | 1,071 | | | 171 | | | 770 | |
| Deferred income taxes | | | (7,755 | ) | | (14,075 | ) | | 1,713 | |
| Changes in operating assets and liabilities: | | | | |
| Income tax payments related to gain on sale of businesses | | | - | | | - | | | (4,105 | ) |
| Changes in other operating assets and liabilities | | | (10,340 | ) | | 81,209 | | | 25,732 | |
| Total adjustments | | | 25,315 | | | 111,180 | | | 68,104 | |
| Net cash provided by operating activities | | | 224,806 | | | 278,320 | | | 133,564 | |
| Percent of revenue | | | 31.2 | % | | 41.6 | % | | 27.1 | % |
| | | | |
| Cash flows from investing activities: | | | | |
| Additions to property, plant and equipment | | | (39,125 | ) | | (17,490 | ) | | (5,425 | ) |
| Purchases of short-term available-for-sale investments | | | (766,263 | ) | | (873,970 | ) | | (1,066,845 | ) |
| Maturities of short-term available-for-sale investments | | | 629,665 | | | 760,120 | | | 583,701 | |
Payments for acquisitions | | | - | | | - | | | (8,360 | ) |
| Decrease (increase) in other assets | | | 2,827 | | | 1,248 | | | (1,481 | ) |
| Net cash used for investing activities | | | (172,896 | ) | | (130,092 | ) | | (498,410 | ) |
| | | | |
| Cash flows from financing activities: | | | | |
| Dividend payments to shareholders | | | (65,949 | ) | | (59,556 | ) | | (58,260 | ) |
| Repurchase of common stock | | | (4,047 | ) | | - | | | (182 | ) |
| Net proceeds from employee stock plans | | | 4,849 | | | 5,666 | | | 5,820 | |
| Other financing activities | | | 502 | | | - | | | - | |
| Proceeds from issuance of long-term debt | | | - | | | - | | | 370,350 | |
| Excess tax benefit - stock options | | | 28 | | | 72 | | | - | |
| Net cash (used for) provided by financing activities | | | (64,617 | ) | | (53,818 | ) | | 317,728 | |
| Effect of exchange rate changes on cash | | | (2,236 | ) | | (306 | ) | | 2,954 | |
| | | | |
| Net (decrease) increase in cash and cash equivalents | | | (14,943 | ) | | 94,104 | | | (44,164 | ) |
| Cash and cash equivalents at beginning of period | | | 1,008,372 | | | 914,268 | | | 676,879 | |
| Cash and cash equivalents at end of period | | $ | 993,429 | | $ | 1,008,372 | | $ | 632,715 | |
| | | | |
| | | | |
| Analog Devices, Third Quarter, Fiscal 2010 |
| | | | | | | | | |
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 |
| July 31,
2010 | | | May 1,
2010 | | Aug. 1,
2009 |
| Revenue | % | Q/Q % | Y/Y % | | | Revenue | | Revenue |
| Industrial | $ 340,505 | 47% | 8% | 69% | | | $ 315,912 | | $ 201,900 |
| Automotive | 83,539 | 12% | 0% | 62% | | | 83,441 | | 51,497 |
| Consumer | 128,616 | 18% | 7% | 23% | | | 120,465 | | 104,432 |
| Communications | 153,657 | 21% | 14% | 24% | | | 134,201 | | 123,550 |
| Computer | 13,973 | 2% | -2% | 32% | | | 14,221 | | 10,612 |
| Total Revenue | $ 720,290 | 100% | 8% | 46% | | | $ 668,240 | | $ 491,991 |
| | | | | | | | | |
| | | | | | | | | |
| Analog Devices, Third Quarter, Fiscal 2010 |
| | | | | | | | | | |
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 |
| | July 31,
2010 | | | May 1,
2010 | | Aug. 1,
2009 |
| | Revenue | %* | Q/Q % | Y/Y % | | | Revenue | | Revenue |
| Converters | | $ | 334,288 | 46 | % | 9 | % | 34 | % | | | $ | 305,600 | | $ | 249,162 |
| Amplifiers / Radio Frequency | | | 184,397 | 26 | % | 8 | % | 53 | % | | | | 170,542 | | | 120,288 |
| Other analog | | | 87,651 | 12 | % | 0 | % | 60 | % | | | | 87,464 | | | 54,757 |
| Subtotal Analog Signal Processing | | | 606,336 | 84 | % | 8 | % | 43 | % | | | | 563,606 | | | 424,207 |
| Power management & reference | | | 53,413 | 7 | % | 15 | % | 91 | % | | | | 46,480 | | | 27,987 |
| Total Analog Products | | $ | 659,749 | 92 | % | 8 | % | 46 | % | | | $ | 610,086 | | $ | 452,194 |
| Digital Signal Processing | | | 60,541 | 8 | % | 4 | % | 52 | % | | | | 58,154 | | | 39,797 |
| Total Revenue | | $ | 720,290 | 100 | % | 8 | % | 46 | % | | | $ | 668,240 | | $ | 491,991 |
| | | | | | | | | | |
| | | | | | | | | | |
| * The sum of the individual percentages does not equal the total due to rounding. |
CONTACT:
Analog Devices, Inc.
Mindy Kohl, 781-461-3282
Director of Investor Relations
781-461-3491 (fax)
investor.relations@analog.com
