Exhibit 99.1
FOR RELEASE: AUGUST 14, 2003
4:00 P.M. EST
ANALOG DEVICES REPORTS INCREASED REVENUE AND PROFITS FOR THIRD
QUARTER OF FISCAL YEAR 2003
Norwood, MA -- Analog Devices (NYSE: ADI), a global leader in high-performance
semiconductors for signal processing applications, today announced revenues of
$520.4 million for the third quarter of fiscal 2003, which ended August 2.
Revenues increased 17% from the third quarter of fiscal 2002 and 4% from the
second quarter of fiscal 2003. The quarter's diluted earnings per share (EPS)
under generally accepted accounting principles (GAAP) increased to $0.21, up
from $0.08 in the same period a year ago and $0.19 in the previous quarter.
Gross margins increased sequentially to 55.1% of sales, up from 54.5% of sales
in the second quarter of fiscal 2003. Operating income increased to 19.2% of
sales in the third quarter of fiscal 2003, up from 17.6% in the previous
quarter. Net income for the third quarter of fiscal 2003 was $79 million, up
from $71 million in the previous quarter.
In the third quarter of fiscal 2003, cash and short-term investment balances
increased by $128 million after spending approximately $20 million on capital
equipment. Cash and short-term investment balances at the end of the third
quarter of fiscal 2003 totaled $3.2 billion. Accounts receivable days sales
outstanding was 45 days, compared to 44 days in the previous quarter. Days cost
of sales in inventory were 116 days, compared to 117 days in the previous
quarter.
"This quarter, revenue grew 4% sequentially while net income grew 11%
sequentially, nearly three times the revenue growth rate," said Jerald G.
Fishman, president and CEO. "Revenue grew quarter-to-quarter across a broad base
of applications within the computer, communications, consumer, and industrial
markets we serve."
Mr. Fishman continued, "The book-to-bill ratio was approximately one for the
third quarter with strong order rates during July, the last month of the
quarter."
"Analog product revenues grew 4% sequentially and 14% compared to the same
period last year," said Mr. Fishman. "In addition, our DSP product revenues for
the quarter accounted for approximately 22% of company revenues and grew 4%
sequentially, 28% compared to the same period last year."
Summarizing the revenues on a geographic basis, Mr. Fishman explained, "In the
third quarter, revenues grew in every region of the world with the strongest
growth from Japan, primarily driven by consumer electronics equipment. Sales in
Japan accounted for approximately 19% of revenue, the Americas 25%, Europe 20%,
and Southeast Asia 36%."
Regarding the near-term outlook, Mr. Fishman said, "We are encouraged by the
strong order rates since early July; therefore, we are planning for revenue
growth of 3% to 5% and GAAP diluted EPS of $0.22 to $0.23 for the fourth quarter
of fiscal 2003."
Mr. Fishman will discuss the third quarter's results and the near-term outlook
via webcast, accessible from www.analog.com, today beginning at 4:30 pm EST.
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: 1588442 or by visiting the Investor Relations page on ADI's
web site.
Analog Devices, Inc. is a leading manufacturer of precision high-performance
integrated circuits used in analog and digital signal processing applications.
ADI is headquartered in Norwood, Massachusetts, and employs approximately 8,450
people worldwide. It has manufacturing facilities in Massachusetts, California,
North Carolina, Ireland, the Philippines, and the United
Kingdom. Analog Devices' common stock is listed on the New York Stock Exchange
and ADI is included in the S&P 500 Index.
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Safe harbor statement under the Private Securities Litigation Reform Act of
1995: This release contains forward-looking statements, including our statements
regarding planned revenues, earnings and operating margins, 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
and involve certain risks, uncertainties and assumptions that are difficult to
predict. 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. Important factors that may
affect future operating results include the effects of adverse changes in
overall economic conditions, currency exchange rate fluctuations, the timing and
duration of market upturns and downturns, the growth or contraction of the
markets we serve, demand for semiconductors generally and for our products in
particular, the risk that our backlog could decline significantly, our ability
to hire engineers and other qualified employees needed to meet the expected
demands of our largest customers, reversals or slowdowns in the markets or
customers served by our products, the adverse effects of building inventories to
meet planned growth that fails to materialize, the occurrence and frequency of
inventory and lead-time reduction cycles, raw material availability,
availability of both internal and external manufacturing capacity, technological
and product development risks, competitors' actions and technological
innovations and other risk factors described in our Quarterly Report on Form
10-Q for the fiscal quarter ended May 3, 2003, as filed with the Securities and
Exchange Commission.
CONTACT: Maria Tagliaferro, Director of Corporate Communications at Analog
Devices, 781-461-3282, or investor.relations@analog.com
ANALOG DEVICES SUPPLEMENTAL INFORMATION, THIRD QUARTER, FISCAL 2003
SALES/EARNINGS SUMMARY
(IN THOUSANDS OF DOLLARS, EXCEPT PER-SHARE AMOUNTS)
3Q 03 2Q 03 3Q 02
----- ----- -----
Three Months Ended Aug 2, 2003 May 3, 2003 Aug 3, 2002
------------------ ----------- ----------- -----------
Net Sales $ 520,445 $ 501,883 $ 445,448
Y/Y Growth 17% 21% -7%
Q/Q Growth 4% 7% 8%
Cost of Sales 233,846 228,423 208,182
Gross Margin 286,599 273,460 237,266
Percent of Sales 55.1% 54.5% 53.3%
--------- --------- ---------
Operating Expenses:
R&D 111,668 110,827 104,799
Selling, Marketing and G&A 72,178 71,509 67,138
Acquisition-related expenses* 2,660 2,658 16,568
Restructuring Costs 341 -- 5,634
Investment Impairment -- -- 3,779
Goodwill Impairment -- -- 3,426
--------- --------- ---------
Operating Income 99,752 88,466 35,922
Other (Income) Expense (1,474) (2,952) (3,740)
--------- --------- ---------
Income Before Tax 101,226 91,418 39,662
Provision for Taxes 22,270 20,112 8,249
Tax Rate 22% 22% 21%
--------- --------- ---------
Net Income $ 78,956 $ 71,306 $ 31,413
--------- --------- ---------
Shares used for EPS - Basic 366,025 364,267 365,065
Shares used for EPS - Diluted 384,166 379,163 380,770
Earnings per Share - Basic $ 0.22 $ 0.20 $ 0.09
Earnings per Share - Diluted $ 0.21 $ 0.19 $ 0.08
--------- --------- ---------
* Acquisition - related goodwill is no longer amortized effective November 3,
2002, in accordance with FAS 142.
Nine Months Ended Aug 2, 2003 Aug 3, 2002
----------------- ----------- -----------
Net Sales $ 1,489,751 $ 1,251,790
Y/Y Growth 19% -32%
Cost of Sales 676,555 589,896
Gross Margin 813,196 661,894
Percent of Sales 54.6% 52.9%
----------- -----------
Operating Expenses:
R&D 329,607 303,012
Selling, Marketing and G&A 213,002 187,850
Acquisition-related expenses* 8,167 54,224
Restructuring Costs 341 31,084
Investment Impairment -- 5,579
Goodwill Impairment -- 3,426
----------- -----------
Operating Income 262,079 76,719
Other (Income) Expense (7,478) (17,271)
----------- -----------
Income Before Tax 269,557 93,990
Provision for Taxes 59,303 23,461
Tax Rate 22% 25%
----------- -----------
Net Income $ 210,254 $ 70,529
----------- -----------
Shares used for EPS - Basic 364,477 364,253
Shares used for EPS - Diluted 380,509 382,565
Earnings per Share - Basic $ 0.58 $ 0.19
Earnings per Share - Diluted $ 0.55 $ 0.18
----------- -----------
* Acquisition-related goodwill is no longer amortized effective November 3,
2002, in accordance with FAS 142.
ANALOG DEVICES SUPPLEMENTAL INFORMATION, THIRD QUARTER, FISCAL 2003
SELECTED BALANCE SHEET INFORMATION
(IN THOUSANDS OF DOLLARS)
3Q 03 2Q 03 3Q 02
----- ----- -----
Aug 2, 2003 May 3, 2003 Aug 3, 2002
----------- ----------- -----------
Cash & Short-term Investments $3,229,365 $3,101,483 $2,953,855
Accounts Receivable, Net 259,134 242,767 223,308
Inventories 296,940 293,487 284,044
Other Current Assets 198,554 194,150 192,492
---------- ---------- ----------
Total Current Assets 3,983,993 3,831,887 3,653,699
PP&E, Net 697,841 726,533 814,334
Investments 297,533 286,119 274,333
Intangible Assets 172,673 173,328 188,848
Other 96,028 117,446 92,492
---------- ---------- ----------
Total Assets $5,248,068 $5,135,313 $5,023,706
---------- ---------- ----------
Current Liabilities $ 373,446 $ 367,492 $ 388,247
Deferred income-shipments to distributors 112,607 108,980 112,433
Long-term Debt 1,263,266 1,279,027 1,230,577
Non-Current Lease Obligations 191 237 1,377
Non-Current Liabilities 334,888 323,692 330,372
Stockholders' Equity 3,163,670 3,055,885 2,960,700
---------- ---------- ----------
Total Liabilities & Equity $5,248,068 $5,135,313 $5,023,706
---------- ---------- ----------
CAPITAL EXPENDITURES, DEPRECIATION & AMORTIZATION
(IN THOUSANDS OF DOLLARS)
3Q 03 2Q 03 3Q 02
THREE MONTHS ENDED Aug 2, 2003 May 3, 2003 Aug 3, 2002
------------------ ----------- ----------- -----------
Capital Expenditures $20,076 $14,348 $14,284
Depreciation $42,297 $42,503 $45,347
Amortization of Goodwill & Intangibles* $ 656 $ 656 $14,327
NINE MONTHS ENDED Aug 2, 2003 Aug 3, 2002
----------------- ----------- -----------
Capital Expenditures $ 49,377 $ 41,482
Depreciation $126,339 $132,562
Amortization of Goodwill & Intangibles* $ 1,964 $ 42,666
* Acquisition-related goodwill is no longer amortized effective November 3,
2002, in accordance with FAS 142.