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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): February 10, 2005
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 February 10, 2005, Analog Devices, Inc. announced its financial
results for the quarter ended January 29, 2005. 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 February 10, 2005
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: February 10, 2005 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 February 10, 2005
Exhibit 99.1
Analog Devices Reports Results for the
First Quarter of Fiscal Year 2005
NORWOOD, Mass.--(BUSINESS WIRE)--Feb. 10, 2005--Analog Devices,
Inc. (NYSE:ADI), a global leader in high-performance semiconductors
for signal processing applications, today announced financial results
for the first quarter of fiscal 2005, which ended January 29, 2005.
For the first quarter, revenue was $580.5 million, diluted earnings
per share (EPS) was $0.28, and net income totaled $107.4 million, or
approximately 19% of sales.
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 March 16, 2005 to all stockholders of record at the close
of business on February 25, 2005.
"Our revenue in the first quarter declined 4% compared to the same
period one year ago and 8% compared to the immediately prior quarter,"
said Mr. Jerald G. Fishman, President and CEO. "The majority of the
sequential revenue decline was isolated to semiconductor automatic
test equipment (ATE) and wireless handset applications. The ATE
revenue decline parallels the cyclical decline in the semiconductor
industry. In wireless handsets, it appears clear that the rapid growth
of the Chinese manufacturers in the first half of 2004 led to excess
inventory which customers reduced over the past two quarters."
Gross margins for the first quarter were 57.8%, up 70 basis points
from the same quarter last year and down 170 basis points from the
immediately prior quarter. Adjustments made to factory utilization and
the impact of factory shutdowns during the holiday period impacted
gross margins in the first quarter.
Mr. Fishman explained, "However, these adjustments to factory
utilization coupled with reductions in external wafer purchases
allowed us to constrain the inventory growth to levels well below what
we planned at the beginning of the quarter.
"We also constrained spending during the first quarter, reducing
operating expenses by 3.3% sequentially. As a result, operating
profits for the first quarter remained strong at $124.7 million or
21.5% of sales."
Turning to the balance sheet, Mr. Fishman explained, "Free cash
flow for the quarter was $93 million as a result of cash flow from
operations of $117 million, or 20% of sales, offset by capital
expenditures of $24 million. During the first quarter, we also
repurchased approximately 4.5 million shares of our common stock for
approximately $161 million. The total common stock repurchased under
the $500 million program approved by the board in August of 2004 now
stands at 8.4 million shares for approximately $298 million. The
number of shares repurchased to date under this program represents
approximately 2% of shares outstanding."
The company also paid dividends of $23 million during the first
quarter of fiscal 2005. Cash, cash equivalents, and short-term
investments totaled $2.6 billion at the end of the first quarter.
"Order patterns improved during the first quarter compared to the
prior two quarters. In addition, we believe that the application areas
which drove most of our revenue decline in the past two quarters are
now at revenue levels that are unlikely to decline further this year.
End customer demand improved to slightly above revenue for the first
quarter, which was a significant improvement over the prior two
quarters. Additionally, order rates increased in January and this
momentum has continued into early February. These combined factors
support our plan for sequential revenue growth in the second quarter.
Regarding the near-term outlook, Mr. Fishman said, "We believe
that the first quarter of fiscal 2005 will represent the trough for
our quarterly revenue and we are currently planning for second quarter
fiscal 2005 revenue to increase sequentially by 2% to 6%.
"At these revenue levels, we expect gross margin to decline
slightly during the second quarter because factory utilization will
remain low as our plan is for inventory to be flat in dollars and down
in days compared to the first quarter. Actual gross margins are
dependent on the mix of business and utilization rates of our
factories, but we expect gross margins to remain strong and above 57%
during this cycle. As demand increases and utilization rates of our
factories improve, we expect to realize gross margin leverage.
"We are also planning for operating expenses to be approximately
flat for the second quarter versus the first quarter. Based on these
assumptions, we expect diluted EPS to be approximately $0.29 to $0.31
for the second quarter of fiscal 2005.
Despite the revenue decline of the past two quarters, we continued
to invest in new product programs, winning customers across a wide
range of applications. Based on a relatively stable global economic
climate and forecasts that predict 2005 will be a good year for most
economies around the world, we believe our investments in new product
development will generate continued revenue and profit growth for ADI
as the year unfolds."
Mr. Fishman will discuss the first 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: 3648526 or by visiting
the Investor Relations page on ADI's web site.
About Analog Devices
Innovation, performance, and excellence are the cultural pillars
on which Analog Devices has built one of the longest standing, highest
growth companies within the technology sector. Acknowledged
industry-wide as the world leader in data conversion and signal
conditioning technology, Analog Devices serves over 60,000 customers,
representing virtually all types of electronic equipment. Celebrating
40 years as a leading global manufacturer of high-performance
integrated circuits used in analog and digital signal processing
applications, Analog Devices is headquartered in Norwood,
Massachusetts, with design and manufacturing facilities throughout the
world. Analog Devices' common stock is listed on the New York Stock
Exchange under the ticker "ADI" and is included in the S&P 500 Index.
For more information, visit our web site at www.analog.com.
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 Annual Report on Form 10-K for the fiscal
year ended October 30, 2004, as filed with the Securities and Exchange
Commission.
Analog Devices Supplemental Information, First Quarter, Fiscal 2005
Sales/Earnings Summary
(In thousands of dollars, except per-share amounts)
1Q 05 4Q 04 1Q 04
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Three Months Ended January 29, October 30, Jan 31,
2005 2004 2004
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Net Sales $ 580,536 $ 632,124 $ 605,353
Y/Y Growth -4% 13% 30%
Q/Q Growth -8% -12% 9%
Cost of Sales 245,008 255,832 259,888
Gross Margin 335,528 376,292 345,465
Percent of Sales 57.8% 59.5% 57.1%
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Operating Expenses:
R&D 127,534 131,798 120,630
Selling, Marketing and G&A 83,341 86,354 79,238
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Operating Income 124,653 158,140 145,597
Percent of Sales 21.5% 25.0% 24.1%
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Other (Income) Expense (13,983) (13,077) (4,197)
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Income Before Tax 138,636 171,217 149,794
Provision for Taxes 31,193 38,951 32,955
Tax Rate 22% 23% 22%
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Net Income $ 107,443 $ 132,266 $ 116,839
Percent of Sales 19% 21% 19%
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Shares used for EPS - Basic 375,561 376,064 372,052
Shares used for EPS - Diluted 388,107 389,257 392,904
Earnings per Share - Basic $ 0.29 $ 0.35 $ 0.31
Earnings per Share - Diluted $ 0.28 $ 0.34 $ 0.30
Dividends declared per share $ 0.06 $ 0.06 $ 0.04
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Analog Devices Supplemental Information, First Quarter, Fiscal 2005
Selected Balance Sheet Information
(In thousands of dollars)
1Q 05 4Q 04 1Q 04
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January 29, October 30, Jan 31,
2005 2004 2004
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Cash & Short-term Investments $2,598,372 $2,684,970 $2,306,525
Accounts Receivable, Net 324,033 329,499 315,900
Inventories 353,291 345,903 292,626
Other Current Assets 164,796 168,239 175,131
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Total Current Assets 3,440,492 3,528,611 3,090,182
PP&E, Net 653,608 667,779 660,891
Investments 318,813 322,405 356,535
Intangible Assets 168,723 169,382 171,360
Other 30,499 31,906 23,269
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Total Assets $4,612,135 $4,720,083 $4,302,237
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Deferred Income-Shipments to
Distributors $ 152,112 $ 157,951 $ 138,266
Other Current Liabilities 381,018 409,051 372,220
Non-Current Liabilities 344,575 353,509 353,760
Stockholders' Equity 3,734,430 3,799,572 3,437,991
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Total Liabilities & Equity $4,612,135 $4,720,083 $4,302,237
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Capital Expenditures, Depreciation & Amortization
(In thousands of dollars)
1Q 05 4Q 04 1Q 04
Three Months Ended January 29, October 30, Jan 31,
2005 2004 2004
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Capital Expenditures $ 23,884 $ 38,296 $ 27,073
Depreciation $ 38,313 $ 37,757 $ 37,565
Amortization of Intangibles $ 684 $ 677 $ 677
CONTACT: Analog Devices
Maria Tagliaferro, 781-461-3282
Director of Corporate Communications
investor.relations@analog.com