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UNITED STATES
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): November 23, 2004
Analog Devices, Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 1-7819 04-2348234
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(State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification No.)
One Technology Way, Norwood, MA 02062
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 329-4700
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On November 23, 2004, Analog Devices, Inc. announced its financial results
for the quarter ended October 30, 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.
Item 9.01. Financial Statements and Exhibits
(c) The following are filed as exhibits to this report:
99.1 Press release dated November 23, 2004
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: November 23, 2004 ANALOG DEVICES, INC.
By: /s/ Joseph E. McDonough
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Joseph E. McDonough
Vice President-Finance and Chief
Financial Officer
(Principal Financial and Accounting
Officer)
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release dated November 23, 2004
Exhibit 99.1
Analog Devices Reports Results for the Fourth
Quarter and Fiscal Year 2004
NORWOOD, Mass.--(BUSINESS WIRE)--Nov. 23, 2004--Analog Devices,
Inc. (NYSE: ADI), a global leader in high-performance semiconductors
for signal processing applications, today announced revenue of $632
million for the fourth quarter of fiscal 2004, which ended October 30,
2004. Revenue increased 13% compared to the same quarter one year ago
and decreased 12% compared to the immediately prior quarter.
Diluted earnings per share (EPS) under generally accepted
accounting principles (GAAP) was $0.34 for the fourth quarter, up from
$0.23 for the same period one year ago and down from $0.43 for the
third quarter of fiscal 2004.
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 December 22, 2004 to all stockholders of record at the
close of business on December 3, 2004.
Revenue for the fiscal year 2004 was $2.63 billion, up 29%
year-over-year. Fiscal 2004 diluted EPS increased to $1.45, up from
the fiscal 2003 diluted EPS of $0.78.
"Fiscal year 2004 turned out to be a record sales year for ADI,
despite the fourth quarter's sequential revenue decline," said Mr.
Jerald G. Fishman, President and CEO. "Annual revenue increased 29%
compared to fiscal 2003. For the past two-year period, our revenue
growth averaged approximately 25% per year."
Gross margins for the fourth quarter were 59.5%, up 370 basis
points from the same quarter last year and down 50 basis points from
the immediately prior quarter. For fiscal year 2004, gross margins
increased to 59%, up from 54.9% for fiscal year 2003.
Mr. Fishman continued, "Operating expenses for the fourth quarter
declined 2% sequentially and were up 9% compared to the same period
last year. Operating expenses for the fiscal year 2004 rose by 14%
compared to fiscal 2003, less than half the growth rate of revenue
over the same period.
"Operating profits for the fourth quarter totaled $158 million or
25% of sales. For the fiscal year 2004, operating profit grew by 87%,
three times the revenue growth rate for the same period."
During fiscal year 2004, net cash from operations was $778
million, or 29.5% of sales, an increase of $345 million from the $433
million recorded in the prior year. The company repurchased
approximately 3.9 million shares of common stock for approximately
$137 million. Additions to property, plant, and equipment were $146
million and the company paid dividends of $75 million in fiscal 2004.
Cash, cash equivalents, and short-term investments increased $568
million during fiscal 2004 to $2,685 million on October 30, 2004.
In the fourth quarter, inventory rose sequentially by
approximately $20 million, resulting in days cost of sales in
inventory increasing to 123 days as compared to 104 days in the
immediately prior quarter. Regarding the change in inventory, Mr.
Fishman commented, "Although above ADI's goal of 100 to 110 days,
these inventory levels remain within typical fluctuations given the
current business volatility.
"Accounts receivable balances remained under good control. Days
sales in accounts receivable at 48 days for the fourth quarter was up
from 45 days in the immediately prior quarter but flat compared to the
same period one year ago."
Turning to the end markets, Mr. Fishman explained, "The wireless
communications and automatic test equipment (ATE) end markets were
weakest during the fourth quarter, declining by $62 million in
aggregate compared to the third quarter. However, for the fiscal year
2004, revenue from each of these end markets was up significantly.
"Revenue from our broad base of industrial customers, representing
many diverse end markets, grew by approximately 32% year-over-year and
totaled approximately 36% of sales in fiscal year 2004. The breadth
and performance of our product portfolio and our leading brand
continue to differentiate ADI from our competition. In 2004, we
further strengthened our position with the introduction of a multitude
of converter, amplifier, power management, MEMS, and DSP products for
a wide range of applications across the industrial markets.
"For the fiscal year 2004, revenue from products sold to
communications customers grew approximately 30% year-over-year and
represented approximately 37% of sales. We experienced strong growth
from a variety of communications applications, including cellular base
stations, wireless handsets, and many types of networking equipment.
"Consumer electronics products are increasingly integrating
high-performance audio, video, and imaging technology from ADI and, in
fiscal year 2004, revenue from consumer customers increased
approximately 34% year-over-year. Consumer applications represented
approximately 13% of sales for the year.
"For the fiscal year 2004, revenue from computer customers grew
approximately 14% year-over-year and represented approximately 14% of
sales. We have continued to diversify our power management products
toward notebook and other portable systems and our CPU temperature
monitoring technology is increasingly important in PC motherboard
design.
"On a geographic basis, approximately one third of the fourth
quarter revenue decline was attributed to China, one third to Japan,
and one third throughout the rest of the world.
"For the fiscal year 2004, revenue increased in all regions.
Comparing fiscal year 2004 to fiscal year 2003, revenue from North
America increased approximately 24%, Europe increased approximately
20%, Japan increased approximately 36%, China increased approximately
73%, and the rest of Asia increased approximately 16%," said Mr.
Fishman.
In the fourth quarter, analog product revenue grew 14% compared to
the same period one year ago, and declined 13% from the immediately
prior quarter. DSP product revenue for the fourth quarter grew 10%
compared to the same period one year ago, and declined 9% from the
immediately prior quarter. For the fiscal year 2004, revenue from
analog products grew 31% year-over-year and represented approximately
79% of sales while DSP product revenue grew 21% year-over-year and
totaled approximately 21% of sales.
Regarding the near-term outlook, Mr. Fishman said, "As we outlined
in our October 21, 2004 release, there remain many mixed-signals
surrounding the outlook for the first quarter of fiscal year 2005.
Order volatility has abated, cancellations have returned to more
normal levels, and customers tell us their end demand continues to
grow. However, in the short term, ADI is shipping below end market
consumption as customers continue to reduce their inventory. As a
result, our backlog entering first quarter is low, and we will be
dependent on high turns orders during a quarter with fewer business
days due to the holiday season. Therefore, we remain cautious
regarding ADI's guidance for the first quarter of fiscal 2005.
"We are currently planning for first quarter fiscal 2005 revenue
to be approximately $575 million to $600 million, gross margins to
remain strong at 58% to 59%, and operating expenses to decline
sequentially 3% to 4%. Based on these assumptions, we expect diluted
EPS to be approximately $0.28 to $0.31.
"Aggregating a number of factors, we expect ADI revenue growth to
resume in the second quarter of fiscal year 2005." Mr. Fishman went on
to explain, "Most importantly, much of the inventory build-up that has
caused recent volatility is likely to be absorbed by the end of the
first quarter. This should result in order rates and sales patterns in
the second quarter that are more in-line with actual consumption of
our products.
"We also believe that the first quarter will represent the
cyclical low of shipments to ATE customers.
"Our market share in China, while currently a drag to revenue,
should be a positive factor for the second quarter and beyond as
government economic restrictions dissipate and growth returns to above
average levels. In China, our revenue grew approximately 75% per year
for the last two years and represented approximately 14% of sales for
fiscal year 2004.
"In addition, order rates from end customers to our distributors
were well ahead of distributor order rates on ADI during the fourth
quarter, indicating distribution order rates are also below end
consumption rates of our products.
"Lastly, our second quarter is typically a stronger seasonal
quarter for ADI as we benefit from our broad base of customers serving
the industrial end markets."
Regarding the long-term outlook Mr. Fishman commented, "We remain
optimistic that 2005 will be another good year for ADI. The breadth of
applications we serve continues to expand and the content we deliver
per application continues to increase. We begin fiscal 2005 with a
strong product portfolio across an ever widening range of applications
from digital cameras, advanced digital televisions, and wireless
communications, to automobiles, Internet set-top boxes, medical
imaging, and security monitoring systems. Our high-performance analog,
DSP, and MEMS core technology is well-positioned to capture these and
many more opportunities for continued growth in our future."
Mr. Fishman will discuss the fourth 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 800-645-9291
(replay only) and providing the conference ID: 1690028 or by visiting
the Investor Relations page on ADI's web site.
Analog Devices, Inc. is a leading manufacturer of high-performance
integrated circuits used in analog and digital signal processing
applications. ADI is headquartered in Norwood, Massachusetts, and
employs approximately 8,900 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 Quarterly Report on Form 10-Q for the fiscal
quarter ended July 31, 2004, as filed with the Securities and Exchange
Commission.
Analog Devices Supplemental Information, Fourth Quarter, Fiscal 2004
Sales/Earnings Summary
(In thousands of dollars, except per-share amounts)
4Q 04 3Q 04 4Q 03
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Three Months Ended October 30, July 31, Nov 1,
2004 2004 2003
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Net Sales $632,124 $717,793 $557,517
Y/Y Growth 13% 38% 22%
Q/Q Growth -12% 6% 7%
Cost of Sales 255,832 287,271 246,605
Gross Margin 376,292 430,522 310,912
Percent of Sales 59.5% 60.0% 55.8%
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Operating Expenses:
R&D 129,592 131,328 112,418
Selling, Marketing and G&A 86,354 89,162 75,007
Acquisition-related expenses 2,206 2,208 2,664
Restructuring Costs - - 9,193
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Operating Income 158,140 207,824 111,630
Percent of Sales 25.0% 29.0% 20.0%
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Other (Income) Expense (13,077) (8,907) (649)
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Income Before Tax 171,217 216,731 112,279
Provision for Taxes 38,951 47,681 24,252
Tax Rate 23% 22% 22%
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Net Income $132,266 $169,050 $88,027
Percent of Sales 21% 24% 16%
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Shares used for EPS - Basic 376,064 377,144 $368,511
Shares used for EPS - Diluted 389,257 394,203 387,381
Earnings per Share - Basic $0.35 $0.45 $0.24
Earnings per Share - Diluted $0.34 $0.43 $0.23
Dividends declared per share $0.06 $0.06 $-
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Twelve Months Ended October 30, November 1,
2004 2003
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Net Sales $2,633,800 $2,047,268
Y/Y Growth 29% 20%
Cost of Sales 1,079,999 923,160
Gross Margin 1,553,801 1,124,108
Percent of Sales 59.0% 54.9%
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Operating Expenses:
R&D 505,431 442,025
Selling, Marketing and G&A 340,036 288,009
Acquisition-related expenses 9,011 10,831
Restructuring Costs - 9,534
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Operating Income 699,323 373,709
Percent of Sales 26.6% 18.3%
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Other (Income) Expense (33,413) (8,127)
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Income Before Tax 732,736 381,836
Provision for Taxes 161,998 83,555
Tax Rate 22% 22%
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Net Income $570,738 $298,281
Percent of Sales 22% 15%
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Shares used for EPS - Basic 375,031 365,485
Shares used for EPS - Diluted 392,854 382,227
Earnings per Share - Basic $1.52 $0.82
Earnings per Share - Diluted $1.45 $0.78
Dividends declared per share $0.20 $ -
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Analog Devices Supplemental Information, Fourth Quarter, Fiscal 2004
Selected Balance Sheet Information
(In thousands of dollars)
4Q 04 3Q 04 4Q 03
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October 30, July 31, November 1,
2004 2004 2003
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Cash & Short-term Investments $2,684,970 $2,688,506 $2,116,743
Accounts Receivable, Net 329,499 354,897 294,781
Inventories 345,903 326,301 287,502
Other Current Assets 168,239 168,833 186,690
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Total Current Assets 3,528,611 3,538,537 2,885,716
PP&E, Net 667,779 667,028 671,140
Investments 322,405 313,608 341,573
Intangible Assets 169,382 170,041 172,019
Other 31,906 23,033 22,429
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Total Assets $4,720,083 $4,712,247 $4,092,877
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Deferred income-shipments to
distributors $157,951 $166,356 $121,345
Other Current Liabilities 409,051 415,555 342,132
Non-Current Liabilities 353,509 349,952 341,326
Stockholders' Equity 3,799,572 3,780,384 3,288,074
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Total Liabilities & Equity $4,720,083 $4,712,247 $4,092,877
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Capital Expenditures, Depreciation & Amortization
(In thousands of dollars)
4Q 04 3Q 04 4Q 03
Three Months Ended October 30, July 31, Nov 1,
2004 2004 2003
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Capital Expenditures $38,296 $37,523 $18,358
Depreciation $37,757 $37,326 $39,320
Amortization of Intangibles $677 $680 $660
Twelve Months Ended October 30, November 1,
2004 2003
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Capital Expenditures $146,245 $67,735
Depreciation $149,920 $165,659
Amortization of Intangibles $2,710 $2,624
CONTACT: Analog Devices
Maria Tagliaferro, 781-461-3282
Director of Corporate Communications
investor.relations@analog.com