Analog Devices Reports Fourth Quarter and Fiscal 2019 Results

  • Revenue was $1.44 billion for the fourth quarter and $6 billion for fiscal 2019
  • Operating cash flow was $2.3 billion and free cash flow was $2 billion for fiscal 2019
  • Returned over $370 million to shareholders in the fourth quarter, and nearly $1.4 billion for fiscal 2019 or over 120% of free cash flow after debt payments

NORWOOD, Mass.--()--Analog Devices, Inc. (Nasdaq: ADI), a leading global high-performance analog technology company, today announced financial results for its fourth quarter and fiscal 2019, which ended November 2, 2019.

“ADI delivered solid fourth quarter and full-year results amidst continued trade and macro uncertainty,” said Vincent Roche, President and CEO. “Over the course of the year, we generated revenue of $6 billion and effectively managed costs, while continuing to prioritize strategic investments to drive innovation. Our strong margins and cash flow reflect the resiliency of our business model, which enabled us to return nearly $1.4 billion to shareholders, or over 120% of free cash flow after debt payments.”

“Looking ahead, the underlying fundamentals and long-term outlook for ADI are strong. Our diverse product portfolio of cutting-edge technologies is well positioned to solve customers’ challenges and aligned with attractive secular trends that will shape the industry’s future. As such, I believe we are in a superior competitive position as demand returns to deliver our next chapter of growth.”

Performance for the Fourth Quarter of Fiscal 2019

 

Results Summary

 

 

 

 

 

(in millions, except per-share amounts and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nov 2, 2019

 

Nov 3, 2018 (1)

 

Change

Revenue

$

1,443

 

$

1,536

 

(6)%

Gross margin

$

942

 

$

1,046

 

(10)%

Gross margin percentage

65.3%

(2)

68.1%

 

(280 bps)

Operating income

$

338

 

$

465

 

(27)%

Operating margin percentage

23.4%

 

30.3%

 

(690 bps)

Diluted earnings per share

$

0.74

 

$

1.08

 

(31)%

 

 

 

 

 

 

Adjusted Results

 

 

 

 

 

Adjusted gross margin

$

987

 

$

1,089

 

(9)%

Adjusted gross margin percentage

68.4%

(2)

70.9%

 

(250 bps)

Adjusted operating income

$

560

 

$

638

 

(12)%

Adjusted operating margin percentage

38.8%

 

41.5%

 

(270 bps)

Adjusted diluted earnings per share

$

1.19

 

$

1.48

 

(20)%

 

 

 

 

 

 

 

 

 

Three Months
Ended

 

Trailing Twelve
Months

Cash Generation

 

 

Nov 2, 2019

 

Nov 2, 2019

Net cash provided by operating activities

 

 

$

658

 

$

2,253

% of revenue

 

 

46%

 

38%

Capital expenditures

 

 

$

(51)

 

$

(275)

Free cash flow

 

 

$

607

 

$

1,978

% of revenue

 

 

42%

 

33%

 

 

 

 

 

 

 

 

 

Three Months
Ended

 

Trailing Twelve
Months

Cash Return

 

 

Nov 2, 2019

 

Nov 2, 2019

Dividend paid

 

 

$

(200)

 

$

(777)

Stock repurchases

 

 

(172)

 

(613)

Total cash returned (3)

 

 

$

(373)

 

$

(1,390)

 

 

 

 

 

 

(1) Prior year balances have been restated to reflect the adoption of the new revenue recognition standard in the first quarter of fiscal 2019.

(2) Includes approximately 140 basis points of impact from a write-down of inventory associated with a customer within our Communications end market.

(3) The sum of the individual amounts may not equal the total due to rounding.

 

Outlook for the First Quarter of Fiscal Year 2020

For the first quarter of fiscal 2020, we are forecasting revenue of $1.30 billion, +/- $50 million. At the midpoint of this revenue outlook, we expect reported operating margins of approximately 23.7%, and adjusted operating margins of approximately 36.7%. We are planning for reported EPS to be $0.61, +/- $0.07, and adjusted EPS to be $1.00, +/- $0.07.

Our first 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 $0.54 per outstanding share of common stock. The dividend will be paid on December 17, 2019 to all shareholders of record at the close of business on December 6, 2019.

Conference Call Scheduled for Today, Tuesday, November 26, 2019 at 10:00 am ET

ADI will host a conference call to discuss our fourth quarter fiscal 2019 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 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: 9099003, 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; accelerated stock-based compensation expense3; and restructuring related expense4 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; accelerated stock-based compensation expense3; and restructuring related expense4 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; accelerated stock-based compensation expense3; and restructuring related expense4 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 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; accelerated stock-based compensation expense3; restructuring related expense4; 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 Linear Technology acquisition, including legal, accounting and other professional fees, as well as integration-related costs. 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.

3Accelerated Stock-Based Compensation Expense: Stock-based compensation expense for one former executive officer due to the accelerated vesting of restricted stock units and stock options resulting from a reduction in the requisite service period for each in accordance with the terms of the applicable agreements. We excluded these costs because accelerated stock-based compensation expense and the related tax effect have no direct correlation to the operation of our business in the future.

4Restructuring-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. 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.

5Tax-Related Items: Tax adjustments associated with the non-GAAP items discussed above, discrete tax items including tax expense or benefit related to prior periods, income tax from prior period tax credits, income tax on certain inventory intra-entity transfers, tax expense or benefit related to the impact of the Tax Cuts and Jobs Act of 2017 and other deferred tax recalibration adjustments, income tax from state valuation allowance adjustments, income tax from certain uncertain tax positions, and the impact of a voluntary accounting policy change. 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 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, and expected customer demand and order rates for our products, 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: 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 estimates of our expected tax rate based on current tax law; our ability to successfully integrate acquired businesses and technologies; the risk that expected benefits, synergies and growth prospects of acquisitions may not be fully achieved in a timely manner, or at all; adverse results in litigation matters; and the risk that we will be unable to retain and hire key personnel. 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.

(ADI-WEB)

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

 

Three Months Ended

 

Twelve Months Ended

 

Nov 2, 2019

 

Nov 3, 2018
(1)

 

Nov 2, 2019

 

Nov 3, 2018
(1)

Revenue

$

1,443,219

 

$

1,536,128

 

$

5,991,065

 

$

6,224,689

Cost of sales

501,028

 

490,585

 

1,977,315

 

1,974,293

Gross margin

942,191

 

1,045,543

 

4,013,750

 

4,250,396

Operating expenses:

 

 

 

 

 

 

 

Research & development

277,018

 

295,609

 

1,130,348

 

1,165,047

Selling, marketing, general and administrative

154,799

 

175,296

 

648,094

 

695,540

Amortization of intangibles

107,225

 

107,345

 

429,041

 

428,902

Special charges

64,788

 

1,842

 

95,659

 

61,318

Total operating expenses

603,830

 

580,092

 

2,303,142

 

2,350,807

Operating income

338,361

 

465,451

 

1,710,608

 

1,899,589

Nonoperating expenses (income):

 

 

 

 

 

 

 

Interest expense

50,775

 

59,102

 

229,075

 

253,589

Interest income

(1,988)

 

(2,791)

 

(10,229)

 

(9,383)

Other, net

1,747

 

(196)

 

6,034

 

69

 

50,534

 

56,115

 

224,880

 

244,275

Income before income tax

287,827

 

409,336

 

1,485,728

 

1,655,314

Provision for income taxes

10,133

 

4,481

 

122,717

 

148,334

Net income

$

277,694

 

$

404,855

 

$

1,363,011

 

$

1,506,980

 

 

 

 

 

 

 

 

Shares used to compute earnings per share - basic

369,051

 

371,074

 

369,133

 

370,430

Shares used to compute earnings per share - diluted

372,584

 

375,116

 

372,871

 

374,938

Basic earnings per common share

$

0.75

 

$

1.09

 

$

3.68

 

$

4.05

Diluted earnings per common share

$

0.74

 

$

1.08

 

$

3.65

 

$

4.00

 

 

 

 

 

 

 

 

(1) Balances have been restated to reflect the adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

November 2, 2019

 

November 3, 2018 (1)

Cash & cash equivalents

$

648,322

 

$

816,591

Accounts receivable

635,136

 

639,717

Inventories

609,886

 

586,760

Other current assets

91,782

 

69,058

Total current assets

1,985,126

 

2,112,126

Net property, plant and equipment

1,219,989

 

1,154,328

Investments

77,324

 

68,583

Goodwill

12,256,880

 

12,252,604

Intangible assets, net

4,217,224

 

4,778,192

Deferred tax assets

1,582,382

 

9,665

Other

53,716

 

62,868

Total assets

$

21,392,641

 

$

20,438,366

 

 

 

 

Other current liabilities

$

1,208,965

 

$

984,748

Debt, current

299,667

 

67,000

Long-term debt

5,192,252

 

6,265,674

Deferred income taxes

2,088,212

 

990,409

Other non-current liabilities

894,357

 

862,362

Shareholders' equity

11,709,188

 

11,268,173

Total liabilities & equity

$

21,392,641

 

$

20,438,366

 

 

 

 

(1) Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Three Months Ended

 

Twelve Months Ended

 

Nov 2, 2019

 

Nov 3, 2018
(1)

 

Nov 2, 2019

 

Nov 3, 2018
(1)

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

277,694

 

$

404,855

 

$

1,363,011

 

$

1,506,980

Adjustments to reconcile net income to net cash provided by operations:

 

 

 

 

 

 

 

Depreciation

 

61,636

 

 

58,874

 

 

240,677

 

 

228,525

Amortization of intangibles

 

143,528

 

 

142,316

 

 

570,574

 

 

570,538

Stock-based compensation expense

 

37,580

 

 

37,454

 

 

150,300

 

 

151,165

Non-cash portion of special charge

 

9,800

 

 

 

14,167

 

Deferred income taxes

 

(35,809)

 

 

(18,892)

 

 

(91,253)

 

 

(730,376)

Other non-cash activity

 

14,206

 

 

14,550

 

 

40,907

 

 

36,569

Changes in operating assets and liabilities

 

149,270

 

 

75,284

 

 

(35,283)

 

 

678,960

Total adjustments

 

380,211

 

 

309,586

 

 

890,089

 

 

935,381

Net cash provided by operating activities

 

657,905

 

 

714,441

 

 

2,253,100

 

 

2,442,361

Percent of revenue

 

45.6%

 

 

46.5%

 

 

37.6%

 

 

39.2%

Cash flows from investing activities:

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(51,076)

 

 

(86,004)

 

 

(275,372)

 

 

(254,876)

Payments for acquisitions, net of cash acquired

 

(11,170)

 

 

 

(11,170)

 

 

(52,839)

Change in other assets

 

(1,512)

 

 

(3,015)

 

 

(6,644)

 

 

(6,283)

Net cash used for investing activities

 

(63,758)

 

 

(89,019)

 

 

(293,186)

 

 

(313,998)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from debt

 

 

 

1,250,000

 

 

743,778

Early termination of debt

 

 

 

(1,250,000)

 

Proceeds from revolver

 

 

 

75,000

 

Payments on revolver

 

 

 

(75,000)

 

Debt repayments

 

(200,000)

 

 

(225,000)

 

 

(850,000)

 

 

(2,275,000)

Dividend payments to shareholders

 

(200,196)

 

 

(179,416)

 

 

(777,481)

 

 

(703,307)

Repurchase of common stock

 

(172,389)

 

 

(184,116)

 

 

(613,005)

 

 

(225,977)

Proceeds from employee stock plans

 

10,388

 

 

10,668

 

 

116,523

 

 

99,027

Change in other financing activities

 

5,087

 

 

(2,882)

 

 

(2,831)

 

 

3,437

Net cash used for financing activities

 

(557,110)

 

 

(580,746)

 

 

(2,126,794)

 

 

(2,358,042)

Effect of exchange rate changes on cash

 

(879)

 

 

(660)

 

 

(1,389)

 

 

(1,568)

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

36,158

 

 

44,016

 

 

(168,269)

 

 

(231,247)

Cash and cash equivalents at beginning of period

 

612,164

 

 

772,575

 

 

816,591

 

 

1,047,838

Cash and cash equivalents at end of period

$

648,322

 

$

816,591

 

$

648,322

 

$

816,591

 

 

 

 

 

 

 

 

(1) Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

 

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 evolves and improves, 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

 

Nov 2, 2019

 

Nov 3, 2018 (1)

 

Revenue

 

% of revenue
(2)

 

Y/Y %

 

Revenue

 

% of revenue
(2)

Industrial

$

744,137

 

52%

 

—%

 

$

742,549

 

48%

Communications

 

260,128

 

18%

 

(19)%

 

 

320,827

 

21%

Automotive

 

226,124

 

16%

 

(8)%

 

 

244,759

 

16%

Consumer

 

212,830

 

15%

 

(7)%

 

 

227,993

 

15%

Total revenue

$

1,443,219

 

100%

 

(6)%

 

$

1,536,128

 

100%

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

Nov 2, 2019

 

Nov 3, 2018 (1)

 

Revenue

 

% of revenue
(2)

 

Y/Y %

 

Revenue

 

% of revenue
(2)

Industrial

$

3,003,927

 

50%

 

(4)%

 

$

3,129,569

 

50%

Communications

 

1,284,087

 

21%

 

12%

 

 

1,151,359

 

18%

Automotive

 

933,143

 

16%

 

(8)%

 

 

1,009,927

 

16%

Consumer

 

769,908

 

13%

 

(18)%

 

 

933,834

 

15%

Total revenue

$

5,991,065

 

100%

 

(4)%

 

$

6,224,689

 

100%

 

 

 

 

 

 

 

 

 

 

(1) Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

(2) 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

 

Twelve Months Ended

 

Nov 2, 2019

 

Nov 3, 2018 (1)

 

Nov 2, 2019

 

Nov 3, 2018 (1)

 

 

 

 

 

 

 

 

Gross margin

$

942,191

 

$

1,045,543

 

$

4,013,750

 

$

4,250,396

Gross margin percentage

 

65.3%

 

 

68.1%

 

 

67.0%

 

 

68.3%

Acquisition related expenses

 

44,822

 

 

43,896

 

 

175,266

 

 

180,903

Adjusted gross margin

$

987,013

 

$

1,089,439

 

$

4,189,016

 

$

4,431,299

Adjusted gross margin percentage

 

68.4%

 

 

70.9%

 

 

69.9%

 

 

71.2%

 

 

 

 

 

 

 

 

Operating expenses

$

603,830

 

$

580,092

 

$

2,303,142

 

$

2,350,807

Percent of revenue

 

41.8%

 

 

37.8%

 

 

38.4%

 

 

37.8%

Acquisition related expenses

 

(112,219)

 

 

(117,651)

 

 

(451,511)

 

 

(477,132)

Acquisition related transaction costs

 

 

(5,628)

 

 

 

(22,197)

Accelerated stock-based compensation expense

 

 

(3,402)

 

 

 

(3,402)

Restructuring related expense

 

(64,788)

 

 

(1,842)

 

 

(95,659)

 

 

(61,318)

Adjusted operating expenses

$

426,823

 

$

451,569

 

$

1,755,972

 

$

1,786,758

Adjusted operating expenses percentage

 

29.6%

 

 

29.4%

 

 

29.3%

 

 

28.7%

 

 

 

 

 

 

 

 

Operating income

$

338,361

 

$

465,451

 

$

1,710,608

 

$

1,899,589

Operating margin

 

23.4%

 

 

30.3%

 

 

28.6%

 

 

30.5%

Acquisition related expenses

 

157,041

 

 

161,547

 

 

626,777

 

 

658,035

Acquisition related transaction costs

 

 

5,628

 

 

 

22,197

Accelerated stock-based compensation expense

 

 

3,402

 

 

 

3,402

Restructuring related expense

 

64,788

 

 

1,842

 

 

95,659

 

 

61,318

Adjusted operating income

$

560,190

 

$

637,870

 

$

2,433,044

 

$

2,644,541

Adjusted operating margin

 

38.8%

 

 

41.5%

 

 

40.6%

 

 

42.5%

 

 

 

 

 

 

 

 

Provision for income taxes

$

10,133

 

$

4,481

 

$

122,717

 

$

148,334

Income tax on non discrete tax items above

 

35,903

 

 

7,285

 

 

104,470

 

 

32,260

Income tax from prior period tax liabilities

 

7,622

 

 

(10,333)

 

 

7,622

 

 

(12,289)

Income tax on certain inventory intra-entity transfers

 

14,500

 

 

 

14,500

 

Income tax from state tax valuation allowance adjustment

 

(13,435)

 

 

11,311

 

 

(13,435)

 

 

11,311

Income tax from prior period tax credits

 

 

 

11,210

 

Income tax on voluntary accounting policy change

 

 

 

17,155

 

Income tax from uncertain tax positions

 

 

25,676

 

 

 

32,832

Income tax from one time transitional tax

 

 

(3,904)

 

 

7,500

 

 

(690,965)

Income tax from deferred tax recalibration

 

11,615

 

 

(6,125)

 

 

16,675

 

 

633,573

Adjusted provision for income taxes

$

66,338

 

$

28,391

 

$

288,414

 

$

155,056

 

 

 

 

 

 

 

 

Income before income taxes

$

287,827

 

$

409,336

 

$

1,485,728

 

$

1,655,314

Effective tax rate

 

3.5%

 

 

1.1%

 

 

8.3%

 

 

9.0%

Acquisition related expenses

 

157,041

 

 

161,547

 

 

626,777

 

 

658,035

Acquisition related transaction costs

 

 

5,628

 

 

 

22,197

Accelerated stock-based compensation expense

 

 

3,402

 

 

 

3,402

Restructuring related expense

 

64,788

 

 

1,842

 

 

95,659

 

 

61,318

Adjusted income before income taxes

$

509,656

 

$

581,755

 

$

2,208,164

 

$

2,400,266

Adjusted tax rate

 

13.0%

 

 

4.9%

 

 

13.1%

 

 

6.5%

 

 

 

 

 

 

 

 

Diluted EPS

$

0.74

 

$

1.08

 

$

3.65

 

$

4.00

Acquisition related expenses

 

0.42

 

 

0.43

 

 

1.68

 

 

1.76

Acquisition related transaction costs

 

 

0.02

 

 

 

0.06

Accelerated stock-based compensation expense

 

 

0.01

 

 

 

0.01

Restructuring related expense

 

0.17

 

 

0.00

 

 

0.26

 

 

0.16

Income tax on non discrete tax items above

 

(0.10)

 

 

(0.02)

 

 

(0.28)

 

 

(0.09)

Income from prior period tax liabilities

 

(0.02)

 

 

0.03

 

 

(0.02)

 

 

0.03

Income tax on certain inventory intra-entity transfers

 

(0.04)

 

 

 

(0.04)

 

Income tax from state tax valuation allowance adjustment

 

0.04

 

 

(0.03)

 

 

0.04

 

 

(0.03)

Income tax from prior period tax credits

 

 

 

(0.03)

 

Income tax on voluntary accounting policy change

 

 

 

(0.05)

 

Income tax from uncertain tax positions

 

 

(0.07)

 

 

 

(0.09)

Income tax from one time transitional tax

 

 

0.01

 

 

(0.02)

 

 

1.84

Income tax from deferred tax recalibration

 

(0.03)

 

 

0.02

 

 

(0.04)

 

 

(1.69)

Adjusted diluted EPS (2)

$

1.19

 

$

1.48

 

$

5.15

 

$

5.97

 

(1) Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers.

(2) 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

 

Nov 2, 2019

 

Nov 2, 2019

 

Aug 3, 2019

 

May 4, 2019

 

Feb 2, 2019

Revenue

$

5,991,065

 

$

1,443,219

 

$

1,480,143

 

$

1,526,602

 

$

1,541,101

Net cash provided by operating activities

$

2,253,100

 

$

657,905

 

$

552,546

 

$

670,882

 

$

371,767

% of Revenue

 

38%

 

 

46%

 

 

37%

 

 

44%

 

 

24%

Capital expenditures

$

(275,372)

 

$

(51,076)

 

$

(58,094)

 

$

(75,209)

 

$

(90,993)

Free cash flow

$

1,977,728

 

$

606,829

 

$

494,452

 

$

595,673

 

$

280,774

% of Revenue

 

33%

 

 

42%

 

 

33%

 

 

39%

 

 

18%

 
 

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

 

 

Three Months Ending Feb 1, 2020

 

Reported

 

Adjusted

Revenue

$1.30 Billion

 

$1.30 Billion

 

(+/- $50 Million)

 

(+/- $50 Million)

Operating margin

23.7%

 

36.7% (1)

 

(+/-150 bps)

 

(+/-100 bps)

Nonoperating expenses

~ $49 Million

 

~ $49 Million

Tax rate

12% to 15%

 

12% to 15% (2)

Earnings per share

$0.61

 

$1.00 (3)

 

(+/- $0.07)

 

(+/- $0.07)

 

(1) Includes $158 million of adjustments related to acquisition related expenses and approximately $10 million of restructuring related expenses, as previously defined in the Non-GAAP Financial Information section of this press release.

(2) Includes $23 million of tax effects associated with the adjustment for acquisition and restructuring related expenses noted above.

(3) Includes $0.39 of adjustments related to the net impact of $0.42 of acquisition related expenses, $0.03 of restructuring related expenses and $0.06 of tax effects on those items.

 

Contacts

Investor Contact:
Analog Devices, Inc.
Mr. Michael Lucarelli, 781-461-3282
Director of Investor Relations
investor.relations@analog.com

Media Contacts:
Teneo
Andrea Calise, 917-826-3804
andrea.calise@teneo.com

Teneo
Megan Fenton, 917-860-0356
megan.fenton@teneo.com 

Contacts

Investor Contact:
Analog Devices, Inc.
Mr. Michael Lucarelli, 781-461-3282
Director of Investor Relations
investor.relations@analog.com

Media Contacts:
Teneo
Andrea Calise, 917-826-3804
andrea.calise@teneo.com

Teneo
Megan Fenton, 917-860-0356
megan.fenton@teneo.com