View:
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 12, 2004
Analog Devices, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Massachusetts 1-7819 04-2348234
- --------------------------------------------------------------------------------
(State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification No.)
One Technology Way, Norwood, MA 02062
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 329-4700
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 12. Results of Operations and Financial Condition
On August 12, 2004, Analog Devices, Inc. announced its financial
results for the quarter ended July 31, 2004. The full text of the press release
issued in connection with the announcement is attached as Exhibit 99.1 to this
Current Report on Form 8-K.
The information in this Form 8-K and the exhibit attached hereto shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 or the Exchange Act, except as expressly set forth by
specific reference in such a filing.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 12, 2004 ANALOG DEVICES, INC.
By: /s/ Joseph E. McDonough
-----------------------
Joseph E. McDonough
Vice President-Finance and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press release dated August 12, 2004
EXHIBIT 99.1
Analog Devices Announces Results for Fiscal Third Quarter 2004
NORWOOD, Mass.--(BUSINESS WIRE)--Aug. 12, 2004--Analog Devices, Inc. (NYSE:
ADI), a global leader in high-performance semiconductors for signal processing
applications, today reported revenue of $717.8 million for the third quarter of
fiscal 2004, which ended on July 31, 2004. Revenue increased 38% compared to the
same period one year ago and 6% compared to the previous quarter. Net income for
the third quarter was $169 million, more than double the $79 million reported
for the same period in the prior year and 11% above the $152.6 million reported
in the immediately prior quarter. The third quarter's diluted earnings per share
(EPS) under generally accepted accounting principles (GAAP) was $0.43, up from
$0.21 for the same period one year ago and up from $0.39 for the immediately
prior quarter.
ADI also announced that the company's Board of Directors declared a cash
dividend of $0.06 per outstanding share of common stock, payable on September
15, 2004 to all stockholders of record at the close of business on August 27,
2004.
"Our results in the third quarter were mixed, as margins improved and the
balance sheet remained strong, but declining order rates led to slower than
expected revenue growth," said Mr. Jerald G. Fishman, president and CEO. "As a
result, earnings came in at the low end of the guidance we provided on May 13,
but earnings still grew at nearly twice the revenue growth rate for the quarter.
"In the third quarter, we saw revenue growth across each of the major end
markets we serve. The highest growth came from communications applications which
span wireless, broadband, and a range of other telecommunications equipment.
"On a geographic basis, revenue grew in most regions, led by 10% sequential
growth in North America. Revenue in Europe and Southeast Asia also grew, while
revenue in Japan was approximately flat.
"Gross margins rose to 60% of sales, a new peak for ADI. In addition,
operating expenses as a percent of sales decreased to 31%, versus 31.5% in the
immediately prior quarter. As a result, operating margins rose sequentially by
130 basis points to 29.0%, after rising 360 basis points last quarter."
Turning to the balance sheet, Mr. Fishman explained, "Cash and short-term
investments increased by $147 million to $2.69 billion. Days cost of sales in
inventory was 104 days in the third quarter, up from 102 days in the second
quarter, and well within our desired range of 100 to 110 days. Days sales in
accounts receivable increased to 45 days compared to 44 days in the previous
quarter."
Commenting on order patterns, Mr. Fishman said, "Over the past three
quarters, customers were ordering well ahead of consumption and the book-to-bill
ratio was above 1.15. In the third quarter, the economy became more uncertain
and since lead times shortened, customer and distributor order rates slowed.
While our new orders during the third quarter were approximately equal to our
sales, an unusually high level of cancellations resulted in a book-to-bill ratio
of approximately 0.8 for the third quarter.
Regarding the near-term outlook, Mr. Fishman said, "Our customers appear
somewhat more cautious in the short term and therefore, we are planning for
fourth quarter revenue that is approximately flat compared to third quarter
revenue. We also expect gross margins and EPS for the fourth quarter to be about
the same as for the third quarter."
In closing, Mr. Fishman stated, "The rebalancing that took place in the
third quarter between order rates and consumption does nothing to change our
mid- to long-term view. The electronics industry continues to grow and signal
processing content within electronics equipment continues to grow. We believe
these trends are likely to continue into the future and provide an opportunity
for ADI to grow revenue and profits for 2005 and beyond."
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: 9078600 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 9,000 people worldwide. It has manufacturing facilities in
Massachusetts, California, North Carolina, Ireland, and the Philippines. Analog
Devices' common stock is listed on the New York Stock Exchange and ADI is
included in the S&P 500 Index.
Safe harbor statement under the Private Securities Litigation Reform Act of
1995: This press release contains forward-looking statements, including our
statements regarding planned revenue, 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 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 most recent Form 10-Q for the second fiscal quarter ended May
1, 2004, as filed with the Securities and Exchange Commission.
Analog Devices Supplemental Information, Third Quarter, Fiscal 2004
Sales/Earnings Summary
(In thousands of dollars, except per-share amounts)
3Q 04 2Q 04 3Q 03
- ----------------------------------------------------------------------
Three Months Ended July 31, 2004 May 1, 2004 August 2, 2003
- ----------------------------------------------------------------------
Net Sales $717,793 $678,530 $520,445
Y/Y Growth 38% 35% 17%
Q/Q Growth 6% 12% 4%
Cost of Sales 287,271 277,008 233,846
Gross Margin 430,522 401,522 286,599
Percent of Sales 60.0% 59.2% 55.1%
- ----------------------------------------------------------------------
Operating Expenses:
R&D 131,328 126,274 111,668
Selling, Marketing and G&A 89,162 85,282 72,178
Acquisition-related
expenses 2,208 2,204 2,660
Restructuring Costs - - 341
- ----------------------------------------------------------------------
Operating Income 207,824 187,762 99,752
Percent of Sales 29.0% 27.7% 19.2%
- ----------------------------------------------------------------------
Other (Income) Expense (8,907) (7,232) (1,474)
- ----------------------------------------------------------------------
Income Before Tax 216,731 194,994 101,226
Provision for Taxes 47,681 42,411 22,270
Tax Rate 22% 22% 22%
- ----------------------------------------------------------------------
Net Income $169,050 $152,583 $78,956
Percent of Sales 24% 22% 15%
- ----------------------------------------------------------------------
Shares used for EPS - Basic 377,144 374,864 366,025
Shares used for EPS - Diluted 394,203 395,052 384,166
Earnings per Share - Basic $0.45 $0.41 $0.22
Earnings per Share - Diluted $0.43 $0.39 $0.21
Dividends declared per share $0.06 $0.06 $-
- ----------------------------------------------------------------------
3Q 04 3Q 03
- ------------------------------------------------- --------------
Nine Months Ended July 31, 2004 August 2, 2003
- ------------------------------------------------- --------------------
Net Sales $2,001,676 $1,489,751
Y/Y Growth 34% 19%
Cost of Sales 824,167 676,555
Gross Margin 1,177,509 813,196
Percent of Sales 58.8% 54.6%
- ------------------------------------------------- --------------
Operating Expenses:
R&D 375,839 329,607
Selling, Marketing and G&A 253,682 213,002
Acquisition-related expenses 6,805 8,167
Restructuring Costs - 341
- ------------------------------------------------- --------------
Operating Income 541,183 262,079
Percent of Sales 27.0% 17.6%
- ------------------------------------------------- --------------
Other (Income) Expense (20,336) (7,478)
- ------------------------------------------------- --------------
Income Before Tax 561,519 269,557
Provision for Taxes 123,047 59,303
Tax Rate 22% 22%
- ------------------------------------------------- --------------
Net Income $438,472 $210,254
Percent of Sales 22% 14%
- ------------------------------------------------- --------------
Shares used for EPS - Basic 374,687 364,477
Shares used for EPS - Diluted 394,053 380,509
Earnings per Share - Basic $1.17 $0.58
Earnings per Share - Diluted $1.11 $0.55
Dividends declared per share $0.16 $-
- ------------------------------------------------- --------------
Analog Devices Supplemental Information, Third Quarter, Fiscal 2004
Selected Balance Sheet Information
(In thousands of dollars)
3Q 04 2Q 04 3Q 03
- ----------------------------------------------------------------------
July 31, 2004 May 1, 2004 August 2, 2003
- ----------------------------------------------------------------------
Cash & Short-term Investments $2,688,506 $2,541,582 $3,229,365
Accounts Receivable, Net 354,897 328,318 259,134
Inventories 326,301 308,539 296,940
Other Current Assets 168,833 171,815 198,554
- ----------------------------------------------------------------------
Total Current Assets 3,538,537 3,350,254 3,983,993
PP&E, Net 667,028 666,826 697,841
Investments 313,608 307,638 297,533
Intangible Assets 170,041 170,700 172,673
Other 23,033 22,902 96,028
- ----------------------------------------------------------------------
Total Assets $4,712,247 $4,518,320 $5,248,068
- ----------------------------------------------------------------------
Deferred income-shipments to
distributors $166,356 $150,429 $112,607
Other Current Liabilities 415,555 429,437 373,446
Long-term Debt - - 1,263,266
Non-Current Lease Obligations - - 191
Non-Current Liabilities 349,952 339,559 334,888
Stockholders' Equity 3,780,384 3,598,895 3,163,670
- ----------------------------------------------------------------------
Total Liabilities & Equity $4,712,247 $4,518,320 $5,248,068
- ----------------------------------------------------------------------
Capital Expenditures, Depreciation & Amortization
(In thousands of dollars)
3Q 04 2Q 04 3Q 03
Three Months Ended July 31, 2004 May 1, 2004 August 2, 2003
- ----------------------------------------------------------------------
Capital Expenditures $37,523 $43,353 $20,076
Depreciation $37,326 $37,272 $42,297
Amortization of Intangibles $680 $676 $656
Nine Months Ended July 31, 2004 August 2, 2003
- -------------------------------------------------------
Capital Expenditures $107,949 $49,377
Depreciation $112,163 $126,339
Amortization of Intangibles $2,033 $1,964
CONTACT: Analog Devices
Maria Tagliaferro, 781-461-3282
Director of Corporate Communications
investor.relations@analog.com