- Revenue of $1.46 billion increased 11% sequentially, led by
growth in the communications and industrial markets
- Operating cash flow of $2.0 billion and free cash flow of $1.8
billion on a trailing twelve months basis
- Announced agreement to acquire Maxim Integrated Products Inc.
in the quarter, further strengthening ADI’s analog semiconductor
leadership position
Analog Devices, Inc. (Nasdaq:ADI), a leading global
high-performance analog technology company, today announced
financial results for its third quarter of fiscal 2020, which ended
August 1, 2020.
“We executed exceptionally well in this uncertain environment.
Our quarterly results came in above the midpoint of our revised
outlook, which is a testament to the dedication of our talented
global team and the resilience of our diversified business. Revenue
growth was led by strength across our industrial and communications
markets, and both gross and operating margins returned within the
range of our financial model,” said Vincent Roche, President and
CEO of Analog Devices.
Roche continued, “Our recently announced acquisition of Maxim
will further expand our technology capabilities, grow our cadre of
talented engineers, and deliver significant benefits for our
stakeholders. Together, we will continue to push the limits of
innovation and create more complete solutions for our customers,
staying ahead of what’s possible for decades to come.”
Performance for the Third Quarter of
Fiscal 2020
Results Summary(1)
(in millions, except per-share amounts and
percentages)
Three Months Ended
Aug. 1, 2020
Aug. 3, 2019
Change
Revenue
$
1,456
$
1,480
(2
)%
Gross margin
$
973
$
998
(3
)%
Gross margin percentage
66.8
%
67.4
%
(60 bps)
Operating income
$
419
$
447
(6
)%
Operating margin
28.8
%
30.2
%
(140 bps)
Diluted earnings per share
$
0.97
$
0.97
—
%
Adjusted Results
Adjusted gross margin
$
1,018
$
1,042
(2
)%
Adjusted gross margin percentage
69.9
%
70.4
%
(50 bps)
Adjusted operating income
$
616
$
604
2
%
Adjusted operating margin
42.3
%
40.8
%
150 bps
Adjusted diluted earnings per share
$
1.36
$
1.26
8
%
Three Months Ended
Trailing Twelve Months
Cash Generation
Aug. 1, 2020
Aug. 1, 2020
Net cash provided by operating
activities
$
557
$
1,994
% of revenue
38
%
36
%
Capital expenditures
$
(21
)
$
(187
)
Free cash flow
$
536
$
1,807
% of revenue
37
%
33
%
Three Months Ended
Trailing Twelve Months
Cash Return
Aug. 1, 2020
Aug. 1, 2020
Dividend paid
$
(229
)
$
(857
)
Stock repurchases
(18
)
(410
)
Total cash returned
$
(247
)
$
(1,266
)
(1) The sum and/or computation of the
individual amounts may not equal the total due to rounding.
Outlook for the Fourth Quarter of
Fiscal Year 2020
For the fourth quarter of fiscal 2020, we are forecasting
revenue of $1.44 billion, +/- $70 million. At the midpoint of this
revenue outlook, we expect reported operating margins of
approximately 31.0%, +/-140 bps, and adjusted operating margins of
approximately 42.0%, +/-100 bps. We are planning for reported EPS
to be $0.95, +/-$0.10, and adjusted EPS to be $1.32, +/-$0.10.
Our fourth quarter fiscal 2020 outlook is based on current
expectations 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.
The adjusted results and adjusted anticipated results above are
financial measures presented on a non-GAAP basis. Reconciliations
of these non-GAAP financial measures to their most directly
comparable GAAP financial measures are provided in the financial
tables included in this press release. See also “Non-GAAP Financial
Information” section for additional information.
Dividend Payment
The ADI Board of Directors has declared a quarterly cash
dividend of $0.62 per outstanding share of common stock. The
dividend will be paid on September 9, 2020 to all shareholders of
record at the close of business on August 28, 2020.
Conference Call Scheduled for Today,
Wednesday, August 19, 2020 at 10:00 am ET
ADI will host a conference call to discuss our third quarter
fiscal 2020 results and short-term outlook today, beginning at
10:00 am ET. Investors may join via webcast, accessible at
investor.analog.com, or by telephone (call 800-859-9560, or
706-634-7193 for international calls, 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:
4911219, or by visiting investor.analog.com.
Non-GAAP Financial
Information
This release includes non-GAAP financial measures that are not
in accordance with, nor an alternative to, generally accepted
accounting principles (GAAP) and may be different from non-GAAP
measures presented by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules
or principles. These non-GAAP measures have material limitations in
that they do not reflect all of the amounts associated with the
Company’s results of operations as determined in accordance with
GAAP and should not be considered in isolation from, or as a
substitute for, the Company’s financial results presented in
accordance with GAAP. The Company’s use of non-GAAP measures, and
the underlying methodology when including or 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. You are
cautioned not to place undue reliance on these non-GAAP measures.
Reconciliations of these non-GAAP measures to the most directly
comparable financial measures calculated and presented in
accordance with GAAP are provided in the financial tables included
in this release.
Management uses non-GAAP measures internally 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
evaluating the Company’s core business and trends across different
reporting periods on a consistent basis. Management also uses these
non-GAAP measures as the primary performance measurement when
communicating with analysts and investors regarding the Company’s
earnings results and outlook and believes that the presentation of
these non-GAAP measures is useful to investors because it provides
investors with the operating results that management uses to manage
the Company and enables investors and analysts to evaluate the
Company’s core business. Management also believes that the non-GAAP
liquidity measure free cash flow is useful both internally and to
investors because it provides information about the amount of cash
generated after capital expenditures that is then available to
repay debt obligations, make investments and fund acquisitions, and
for certain other activities.
The non-GAAP financial measures referenced by ADI in this
release include: adjusted gross margin, adjusted gross margin
percentage, adjusted operating expenses, adjusted operating
expenses percentage, adjusted operating income, adjusted operating
margin, adjusted income before income taxes, adjusted provision for
income taxes, adjusted tax rate, adjusted diluted earnings per
share (EPS), free cash flow, and free cash flow margin
percentage.
Adjusted gross margin is defined as gross margin, determined in
accordance with GAAP, excluding certain acquisition related
expenses1 which are described further below. Adjusted gross margin
percentage represents adjusted gross margin divided by revenue.
Adjusted operating expenses is defined as operating expenses,
determined in accordance with GAAP, excluding: certain acquisition
related expenses1; acquisition related transaction costs2;
restructuring related expense3; and charitable foundation
contribution4 which are described further below. Adjusted operating
expenses percentage represents adjusted operating expenses divided
by revenue.
Adjusted operating income is defined as operating income,
determined in accordance with GAAP, excluding: acquisition related
expenses1; acquisition related transaction costs2; restructuring
related expense3; and charitable foundation contribution4 which are
described further below. Adjusted operating margin represents
adjusted operating income divided by revenue.
Adjusted income before income taxes is defined as income before
income taxes, determined in accordance with GAAP, excluding:
acquisition related expenses1; acquisition related transaction
costs2; restructuring related expense3; and charitable foundation
contribution4 which are described further below.
Adjusted provision for income taxes is defined as provision for
income taxes, determined in accordance with GAAP, excluding tax
related items5 which are described further below. Adjusted tax rate
represents adjusted provision for income taxes divided by adjusted
income before income taxes.
Adjusted diluted EPS is defined as diluted EPS, determined in
accordance with GAAP, excluding: acquisition related expenses1;
acquisition related transaction costs2; restructuring related
expense3; charitable foundation contribution4; and tax related
items5 which are described further below.
Free cash flow is defined as net cash provided by operating
activities, determined in accordance with GAAP, less additions to
property, plant and equipment, net. Free cash flow margin
percentage represents free cash flow divided by revenue.
1Acquisition Related Expenses: Expenses
incurred as a result of current and prior period acquisitions and
primarily include expenses associated with the fair value
adjustments to inventory, property, plant and equipment and
amortization of acquisition related intangibles, which include
acquired intangibles such as purchased technology and customer
relationships. Expenses also include severance payments, equity
award accelerations, and the fair value adjustment associated with
the replacement of share-based awards related to the Linear
Technology acquisition. We excluded these costs from our non-GAAP
measures because they relate to specific transactions and are not
reflective of our ongoing financial performance.
2Acquisition Related Transaction Costs: Costs
directly related to the proposed Maxim Integrated Products, Inc.
acquisition, including legal, accounting and other professional
fees. We excluded these costs from our non-GAAP measures because
they relate to a specific transaction and are not reflective of our
ongoing financial performance.
3Restructuring Related Expense: Expenses
incurred in connection with facility closures, consolidation of
manufacturing facilities, severance, other accelerated stock-based
compensation expense and other cost reduction efforts or
reorganizational initiatives. We excluded these expenses from our
non-GAAP measures because apart from ongoing expense savings as a
result of such items, these expenses have no direct correlation to
the operation of our business in the future.
4Charitable Foundation Contribution: Expenses
incurred in connection with a one time contribution of registered
shares of common stock to the Analog Devices Foundation. We
excluded this expense from our non-GAAP measures because this
expense has no direct correlation to the operation of our business
in the future.
5Tax Related Items: Income tax effect of the
non-GAAP items discussed above and income tax from certain discrete
tax items related to the resolution of the IRS audit of Linear’s
pre-acquisition federal income tax returns for fiscal year 2015
through fiscal year 2017 and other discrete income tax benefits
upon filing of our fiscal 2019 federal income tax return, the
impact of the Tax Cuts and Jobs Act of 2017 and other deferred tax
recalibration adjustments, income tax from certain uncertain tax
positions, the impact of a voluntary accounting policy change and
income tax from prior period tax credits. 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.
About Analog Devices
Analog Devices (Nasdaq:ADI) is a leading global high-performance
analog technology company dedicated to solving the toughest
engineering challenges. We enable our customers to interpret the
world around us by intelligently bridging the physical and digital
with unmatched technologies that sense, measure, power, connect and
interpret. Visit http://www.analog.com.
Forward Looking
Statements
This press release contains forward-looking statements, which
address a variety of subjects including, for example, our
statements regarding our proposed acquisition of Maxim Integrated
Products, Inc. (“Maxim”); the impact of the COVID-19 pandemic on
our business, financial condition and results of operations;
expected revenue, operating margin, tax rate, earnings per share,
and other financial results; expected market trends, market share
gains, operating leverage, production and inventory levels;
expected customer demand and order rates for our products and
expected product offerings; product development; and marketing
position. Statements that are not historical facts, including
statements about our beliefs, plans and expectations, are
forward-looking statements. Such statements are based on our
current expectations and are subject to a number of factors and
uncertainties, which could cause actual results to differ
materially from those described in the forward-looking statements.
The following important factors and uncertainties, among others,
could cause actual results to differ materially from those
described in these forward-looking statements: the uncertainty as
to the extent of the duration, scope and impacts of the COVID-19
pandemic; political and economic uncertainty, including 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; changes in export classifications, import and
export regulations or duties and tariffs; changes in our or Maxim’s
estimates of our respective expected tax rates based on current tax
law; our ability to successfully integrate Maxim’s businesses and
technologies; the risk that the expected benefits and synergies of
the proposed transaction and growth prospects of the combined
company may not be fully achieved in a timely manner, or at all;
adverse results in litigation matters, including the potential for
litigation related to the proposed transaction; the risk that we or
Maxim will be unable to retain and hire key personnel; the risk
associated with our and Maxim’s ability to obtain the approvals of
our respective shareholders required to consummate the proposed
transaction and the timing of the closing of the proposed
transaction, including the risk that the conditions to the
transaction are not satisfied on a timely basis or at all or the
failure of the transaction to close for any other reason or to
close on the anticipated terms, including the anticipated tax
treatment; the risk that any regulatory approval, consent or
authorization that may be required for the proposed transaction is
not obtained or is obtained subject to conditions that are not
anticipated; unanticipated difficulties or expenditures relating to
the transaction, the response of business partners and retention as
a result of the announcement and pendency of the transaction;
uncertainty as to the long-term value of our common stock; the
diversion of management time on transaction-related matters; our
ability to successfully integrate acquired businesses and
technologies; and the risk that expected benefits, synergies and
growth prospects of acquisitions may not be fully achieved in a
timely manner, or at all. For additional information about factors
that could cause actual results to differ materially from those
described in the forward-looking statements, please refer to our
filings with the Securities and Exchange Commission (“SEC”),
including the risk factors contained in our most recent Quarterly
Report on Form 10-Q and Annual Report on Form 10-K. Forward-looking
statements represent management’s current expectations and are
inherently uncertain. Except as required by law, we do not
undertake any obligation to update forward-looking statements made
by us to reflect subsequent events or circumstances.
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.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
Additional Information about the Merger and Where to Find
It
In connection with the proposed transaction, on August 18, 2020,
Analog Devices, Inc. (“ADI”) filed with the SEC a registration
statement on Form S-4 that includes a preliminary joint proxy
statement of ADI and Maxim and that also constitutes a preliminary
prospectus of ADI (the “preliminary joint proxy
statement/prospectus”). If and when the registration statement
becomes effective and the preliminary joint proxy
statement/prospectus is in definitive form (the “definitive joint
proxy statement/prospectus”), the definitive joint proxy
statement/prospectus will be mailed to shareholders of ADI and
stockholders of Maxim. Each of ADI and Maxim may also file other
relevant documents with the SEC regarding the proposed transaction.
This document is not a substitute for the registration statement,
the preliminary joint proxy statement/prospectus, the definitive
joint proxy statement/prospectus, or any other document that ADI or
Maxim have or may file with the SEC. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE REGISTRATION STATEMENT, PRELIMINARY JOINT
PROXY STATEMENT/PROSPECTUS, DEFINITIVE JOINT PROXY STATEMENT AND
ANY OTHER RELEVANT DOCUMENTS THAT HAVE BEEN OR MAY BE FILED WITH
THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain free copies of the registration
statement and definitive joint proxy statement/prospectus (if and
when available) and other documents containing important
information about ADI, Maxim and the proposed transaction, once
such documents are filed with the SEC through the website
maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by ADI will be available free of
charge on ADI’s website at http://www.analog.com or by contacting
ADI’s Investor Relations Department by email at
investor.relations@analog.com or by phone at 781-461-3282. Copies
of the documents filed with the SEC by Maxim will be available free
of charge on Maxim’s website at investor.maximintegrated.com or by
contacting Maxim’s Investor Relations department by phone at
408-601-5697.
Participants in the Solicitation
ADI, Maxim and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of ADI,
including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth in ADI’s proxy
statement for its 2020 annual meeting of shareholders, which was
filed with the SEC on January 24, 2020, and ADI’s Annual Report on
Form 10-K for the fiscal year ended November 2, 2019, which was
filed with the SEC on November 26, 2019. Information about the
directors and executive officers of Maxim, including a description
of their direct or indirect interests, by security holdings or
otherwise, is set forth in Maxim’s proxy statement for its 2019
annual meeting of shareholders, which was filed with the SEC on
September 27, 2019, and Maxim’s Annual Report on Form 10-K for the
fiscal year ended June 29, 2019, which was filed with the SEC on
August 21, 2019. Other information regarding the participants in
the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, are
contained in the preliminary joint proxy statement/prospectus and
will be contained in the definitive joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the proposed transaction when such materials
become available. Investors should carefully read the preliminary
joint proxy statement/prospectus and the definitive joint proxy
statement/prospectus when it becomes available before making any
voting or investment decisions. You may obtain free copies of these
documents from ADI or Maxim using the sources indicated above.
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Nine Months Ended
Aug. 1, 2020
Aug. 3, 2019
Aug. 1, 2020
Aug. 3, 2019
Revenue
$
1,456,136
$
1,480,143
$
4,076,761
$
4,547,846
Cost of sales
483,558
482,332
1,409,367
1,476,287
Gross margin
972,578
997,811
2,667,394
3,071,559
Operating expenses:
Research & development
260,794
280,102
770,280
853,330
Selling, marketing, general and
administrative
153,753
162,825
494,808
493,295
Amortization of intangibles
107,077
107,231
321,448
321,816
Special charges
31,830
927
44,286
30,871
Total operating expenses
553,454
551,085
1,630,822
1,699,312
Operating income
419,124
446,726
1,036,572
1,372,247
Nonoperating expense (income):
Interest expense
45,914
59,871
144,712
178,300
Interest income
(504
)
(2,625
)
(3,778
)
(8,241
)
Other, net
685
(78
)
1,331
4,287
46,095
57,168
142,265
174,346
Income before income tax
373,029
389,558
894,307
1,197,901
Provision for income taxes
10,364
27,184
60,072
112,584
Net income
$
362,665
$
362,374
$
834,235
$
1,085,317
Shares used to compute earnings per common
share - basic
368,791
369,533
368,417
369,160
Shares used to compute earnings per common
share - diluted
372,003
373,077
371,857
372,967
Basic earnings per common share
$
0.98
$
0.98
$
2.26
$
2.93
Diluted earnings per common share
$
0.97
$
0.97
$
2.24
$
2.90
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands)
Aug. 1, 2020
Nov. 2, 2019
Cash & cash equivalents
$
1,090,264
$
648,322
Accounts receivable
681,728
635,136
Inventories
612,646
609,886
Other current assets
100,599
91,782
Total current assets
2,485,237
1,985,126
Net property, plant and equipment
1,134,236
1,219,989
Other investments
82,953
77,324
Goodwill
12,273,799
12,256,880
Intangible assets, net
3,796,932
4,217,224
Deferred tax assets
1,522,772
1,582,382
Other assets
303,639
53,716
Total assets
$
21,599,568
$
21,392,641
Other current liabilities
$
1,238,452
$
1,208,965
Debt, current
449,324
299,667
Long-term debt
5,143,653
5,192,252
Deferred income taxes
1,961,009
2,088,212
Other non-current liabilities
1,029,570
894,357
Shareholders' equity
11,777,560
11,709,188
Total liabilities & equity
$
21,599,568
$
21,392,641
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
Nine Months Ended
Aug. 1, 2020
Aug. 3, 2019
Aug. 1, 2020
Aug. 3, 2019
Cash flows from operating activities:
Net income
$
362,665
$
362,374
$
834,235
$
1,085,317
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation
57,598
61,606
176,722
179,041
Amortization of intangibles
143,865
142,521
431,985
427,046
Stock-based compensation expense
39,560
36,098
112,961
112,720
Non-cash portion of special charge
—
—
—
4,367
Deferred income taxes
(7,412
)
(33,601
)
(42,802
)
(55,444
)
Non-cash contribution to charitable
foundation
—
—
40,000
—
Other non-cash activity
1,874
8,272
5,675
26,701
Changes in operating assets and
liabilities
(40,950
)
(24,724
)
(222,887
)
(184,552
)
Total adjustments
194,535
190,172
501,654
509,879
Net cash provided by operating
activities
557,200
552,546
1,335,889
1,595,196
Percent of revenue
38.3
%
37.3
%
32.8
%
35.1
%
Cash flows from investing activities:
Additions to property, plant and
equipment
(20,804
)
(58,094
)
(135,804
)
(224,297
)
Payments for acquisitions, net of cash
acquired
(12,763
)
—
(12,763
)
—
Changes in other assets
70
(547
)
(1,214
)
(5,132
)
Net cash used for investing activities
(33,497
)
(58,641
)
(149,781
)
(229,429
)
Cash flows from financing activities:
Proceeds from debt
—
1,250,000
395,646
1,250,000
Early termination of debt
—
(1,250,000
)
—
(1,250,000
)
Payments on revolver
—
—
(350,000
)
(75,000
)
Proceeds from revolver
—
—
350,000
75,000
Debt repayments
—
(300,000
)
(300,000
)
(650,000
)
Dividend payments to shareholders
(228,798
)
(200,068
)
(656,558
)
(577,285
)
Repurchase of common stock
(17,651
)
(112,001
)
(237,265
)
(440,616
)
Proceeds from employee stock plans
26,853
19,228
57,750
106,135
Changes in other financing activities
436
(1,774
)
(4,015
)
(7,918
)
Net cash used for financing activities
(219,160
)
(594,615
)
(744,442
)
(1,569,684
)
Effect of exchange rate changes on
cash
784
(727
)
276
(510
)
Net increase (decrease) in cash and cash
equivalents
305,327
(101,437
)
441,942
(204,427
)
Cash and cash equivalents at beginning of
period
784,937
713,601
648,322
816,591
Cash and cash equivalents at end of
period
$
1,090,264
$
612,164
$
1,090,264
$
612,164
ANALOG DEVICES, INC. REVENUE TRENDS BY END
MARKET (Unaudited) (In thousands)
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 and our methodology 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
Aug. 1, 2020
Aug. 3, 2019
Revenue
% of revenue*
Y/Y %
Revenue
% of revenue*
Industrial
$
774,353
53%
3%
$
753,118
51%
Communications
363,613
25%
14%
319,250
22%
Automotive
162,480
11%
(29)%
228,235
15%
Consumer
155,690
11%
(13)%
179,540
12%
Total revenue
$
1,456,136
100%
(2)%
$
1,480,143
100%
Nine Months Ended
Aug. 1, 2020
Aug. 3, 2019
Revenue
% of revenue*
Y/Y %
Revenue
% of revenue*
Industrial
$
2,174,183
53%
(4)%
$
2,262,597
50%
Communications
880,921
22%
(14)%
1,030,283
23%
Automotive
551,395
14%
(22)%
708,711
16%
Consumer
470,262
12%
(14)%
546,255
12%
Total revenue
$
4,076,761
100%
(10)%
$
4,547,846
100%
*The sum of the individual percentages may
not equal the total due to rounding.
ANALOG DEVICES, INC.
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Nine Months Ended
Aug. 1, 2020
Aug. 3, 2019
Aug. 1, 2020
Aug. 3, 2019
Gross margin
$
972,578
$
997,811
$
2,667,394
$
3,071,559
Gross margin percentage
66.8
%
67.4
%
65.4
%
67.5
%
Acquisition related expenses
45,222
43,694
134,633
130,444
Adjusted gross margin
$
1,017,800
$
1,041,505
$
2,802,027
$
3,202,003
Adjusted gross margin percentage
69.9
%
70.4
%
68.7
%
70.4
%
Operating expenses
$
553,454
$
551,085
$
1,630,822
$
1,699,312
Percent of revenue
38.0
%
37.2
%
40.0
%
37.4
%
Acquisition related expenses
(110,460
)
(112,636
)
(333,298
)
(339,293
)
Acquisition related transaction costs
(9,121
)
—
(9,121
)
—
Charitable foundation contribution
—
—
(40,000
)
—
Restructuring related expense
(31,830
)
(927
)
(44,287
)
(30,871
)
Adjusted operating expenses
$
402,043
$
437,522
$
1,204,116
$
1,329,148
Adjusted operating expenses percentage
27.6
%
29.6
%
29.5
%
29.2
%
Operating income
$
419,124
$
446,726
$
1,036,572
$
1,372,247
Operating margin
28.8
%
30.2
%
25.4
%
30.2
%
Acquisition related expenses
155,682
156,330
467,931
469,737
Acquisition related transaction costs
9,121
—
9,121
—
Charitable foundation contribution
—
—
40,000
—
Restructuring related expense
31,830
927
44,287
30,871
Adjusted operating income
$
615,757
$
603,983
$
1,597,911
$
1,872,855
Adjusted operating margin
42.3
%
40.8
%
39.2
%
41.2
%
Provision for income taxes
$
10,364
$
27,184
$
60,072
$
112,584
Income tax effect of adjustments above
29,266
20,927
79,413
68,567
Income tax from certain discrete tax
items
25,951
28,365
25,951
40,925
Adjusted provision for income taxes
$
65,581
$
76,476
$
165,436
$
222,076
Income before income taxes
373,029
389,558
894,307
1,197,901
Effective tax rate
2.8
%
7.0
%
6.7
%
9.4
%
Acquisition related expenses
155,682
156,330
467,931
469,737
Acquisition related transaction costs
9,121
—
9,121
—
Charitable foundation contribution
—
—
40,000
—
Restructuring related expense
31,830
927
44,287
30,871
Adjusted income before income taxes
$
569,662
$
546,815
$
1,455,646
$
1,698,509
Adjusted tax rate
11.5
%
14.0
%
11.4
%
13.1
%
Diluted EPS
$
0.97
$
0.97
$
2.24
$
2.90
Acquisition related expenses
0.42
0.42
1.26
1.26
Acquisition related transaction costs
0.02
—
0.02
—
Charitable foundation contribution
—
—
0.11
—
Restructuring related expense
0.09
—
0.12
0.08
Income tax effect of adjustments above
(0.08
)
(0.06
)
(0.21
)
(0.18
)
Income tax from certain discrete tax
items
(0.07
)
(0.08
)
(0.07
)
(0.11
)
Adjusted diluted EPS (1)
$
1.36
$
1.26
$
3.47
$
3.96
(1) The sum of the individual per share
amounts may not equal the total due to rounding.
ANALOG DEVICES, INC.
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(Unaudited)
(In thousands)
Trailing Twelve Months
Three Months Ended
Aug. 1, 2020
Aug. 1, 2020
May 2, 2020
Feb. 1, 2020
Nov. 2, 2019
Revenue
$
5,519,980
$
1,456,136
$
1,317,060
$
1,303,565
$
1,443,219
Net cash provided by operating
activities
$
1,993,794
$
557,200
$
429,041
$
349,648
$
657,905
% of Revenue
36
%
38
%
33
%
27
%
46
%
Capital expenditures
$
(186,880
)
$
(20,804
)
$
(60,161
)
$
(54,839
)
$
(51,076
)
Free cash flow
$
1,806,914
$
536,396
$
368,880
$
294,809
$
606,829
% of Revenue
33
%
37
%
28
%
23
%
42
%
ANALOG DEVICES, INC.
RECONCILIATION OF PROJECTED
GAAP TO NON-GAAP RESULTS
(Unaudited)
Three Months Ending October
31, 2020
Reported
Adjusted
Revenue
$1.44 Billion
$1.44 Billion
(+/- $70 Million)
(+/- $70 Million)
Operating margin
31.0%
42.0% (1)
(+/-140 bps)
(+/-100 bps)
Nonoperating expense
~ $46 Million
~ $46 Million
Tax rate
12% to 13%
12% to 13% (2)
Earnings per share
$0.95
$1.32 (3)
(+/- $0.10)
(+/- $0.10)
(1) Includes $157 million of adjustments
related to acquisition related expenses as previously defined in
the Non-GAAP Financial Information section of this press
release.
(2) Includes $22 million of tax effects
associated with the adjustment for acquisition related expenses
above.
(3) Includes $0.36 of adjustments related
to the net impact of $0.42 of acquisition related expenses and
$0.06 of tax effects on those acquisition related expenses.
(ADI-WEB)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200819005137/en/
Investors: Analog Devices, Inc. Mr. Michael Lucarelli Sr.
Director of Investor Relations 781-461-3282
investor.relations@analog.com
Media: Teneo Ms. Andrea Calise 917-826-3804
andrea.calise@teneo.com
Teneo Ms. Megan Fenton 917-860-0356 megan.fenton@teneo.com
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