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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): May 12, 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 May 12, 2005, Analog Devices, Inc. announced its financial results for
the quarter ended April 30, 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 May 12, 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: May 12, 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 May 12, 2005
Exhibit 99.1
Analog Devices Reports Increased Revenue and Profits for the Second Quarter of
Fiscal Year 2005; Board raises cash dividend to $0.10 from $0.06 per share and
increases share repurchase program by $500 million.
NORWOOD, Mass.--(BUSINESS WIRE)--May 12, 2005--Analog Devices,
Inc. (NYSE: ADI), a global leader in high-performance semiconductors
for signal processing applications, today announced financial results
for the second quarter of fiscal 2005, which ended April 30, 2005. For
the second quarter, revenue was $604 million, diluted earnings per
share (EPS) was $0.31, and net income totaled $118 million, or 19% of
sales.
ADI also announced that the company's Board of Directors declared
a cash dividend of $0.10 per outstanding share of common stock for the
second quarter, up from $0.06 in the first quarter. The dividend is
payable on June 15, 2005 to all stockholders of record at the close of
business on May 27, 2005. The Board also approved a $500 million
increase to the company's share repurchase program.
"Our second quarter turned out to be a good quarter for ADI.
Revenue increased 4% sequentially and diluted EPS increased 11% to
$0.31," said Mr. Jerald G. Fishman, President and CEO. "Revenue
increased sequentially in every geographic region, except China, as
customer inventory declines appear to be completed after a six-month
correction. Revenue increased sequentially in both the OEM and
distributor channels.
"Looking at the end markets, the highest growth on a dollar basis
came from the industrial end markets, which grew 11% sequentially,
driven by growth from our instrumentation and automotive customers and
the resumption of growth from some automatic test equipment (ATE)
customers. Sales to consumer customers grew 16% sequentially,
primarily as a result of increased market share in digital cameras and
advanced digital TVs. Computer product revenue was down sequentially.
Revenue from communications applications was approximately flat
sequentially, as strong gains in wireless infrastructure were offset
by continuing weakness in wireless handsets, particularly among
customers in China," Mr. Fishman explained.
By end market, approximately 41% of second quarter revenue was
from industrial applications, which span a broad range of medical,
security, automotive, instrumentation, and defense electronics
applications, 31% from communications applications, 15% from consumer
applications, and 13% from computer applications.
According to Mr. Fishman, "Revenue from analog products increased
by 6% compared to the immediately prior quarter and totaled 81% of
sales. Most noteworthy was 12% sequential revenue growth in converters
and 10% sequential revenue growth in amplifiers -- two product areas
at the heart of ADI's franchise and where our market share is very
high. Sales of other analog products, including power management,
declined sequentially.
DSP revenue, which was 19% of sales in the second quarter,
declined 4% sequentially, as strong sequential growth in
general-purpose DSP products was offset primarily by sequential
declines in wireless handsets and broadband products.
Gross margins for the second quarter were 57.4%, down 40 basis
points from the immediately prior quarter as a result of lower factory
utilization.
"Operating expenses were approximately flat for the second quarter
compared to both the immediately prior quarter and the same quarter
last year. We kept tight control of expenses, despite absorbing the
effect of annual salary increases and higher employee bonus accruals,"
said Mr. Fishman. "As a result, operating profits for the second
quarter increased to approximately $134 million or 22% of sales."
Turning to the balance sheet, Mr. Fishman explained, "Our balance
sheet continued to strengthen in the second quarter. Inventories
declined sequentially by $5 million. Days cost of sales in inventory
was 124 days in the second quarter, down from 132 days in the first
quarter. Days sales in accounts receivable decreased to 48 days
compared to 51 days in the immediately prior quarter.
"Cash flow from operations totaled $175 million or 29% of sales.
In the second quarter, we spent $22 million on capital expenditures
and we returned $146 million to shareholders by repurchasing
approximately 3.4 million shares of ADI common stock for $124 million
and by paying $22 million in dividends. As a result, cash, cash
equivalents, and short-term investments increased slightly to $2.62
billion at the end of the second quarter.
"For the past three quarters, since we announced the share
repurchase program in August of 2004, ADI has generated approximately
$474 million of cash flow from operations. We have spent $84 million
on capital expenditures and returned $489 million to our shareholders
through dividends and share repurchases. The total number of shares
repurchased to date under this program represents approximately 3% of
shares outstanding. We are planning for cash flow to remain strong for
the foreseeable future.
"Orders increased sequentially during the second quarter and were
particularly strong in April. Cancellations declined in the second
quarter to the lowest levels in the most recent four quarters. At the
end of the second quarter, our backlog of products requested for
shipment during the third quarter increased by 4% compared to the
backlog at the end of first quarter."
Regarding the near-term outlook, Mr. Fishman said, "We continue to
believe we are in the early stages of a gradual recovery after six
months of inventory corrections at many of our customers worldwide.
Demand in many of our end markets is good, with particular strength in
the consumer market and across the industrial end markets, which
represent tens of thousands of customers worldwide. Our converter,
amplifier, and general-purpose DSP products have resumed growth.
Wireless handset and ATE products, which were responsible for a large
portion of our sales decline for the past few quarters, appear to be
stabilizing. Our lead times are short and we intend to keep them short
to minimize order volatility throughout the cycle.
"While it is difficult to plan at this stage of the business
cycle, based on our opening backlog, our turns order estimates, and
assuming normal seasonality, we are planning for third quarter revenue
to be flat to up 3% sequentially.
"We are planning for third quarter gross margins to improve toward
58%, depending on product mix. We are planning for inventory to remain
approximately flat in the third quarter. We are also planning to hold
operating expenses in the third quarter relatively flat to the second
quarter levels. This should produce diluted EPS in the range of $0.31
to $ 0.33 for the third quarter of fiscal year 2005."
Mr. Fishman will discuss the second 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: 5738082 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 most recent Form 10-Q for the fiscal quarter
ended January 29, 2005, as filed with the Securities and Exchange
Commission.
Analog Devices Supplemental Information, Second Quarter, Fiscal 2005
Sales/Earnings Summary
(In thousands, except per-share amounts)
2Q 05 1Q 05 2Q 04
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April 30, January 29, May 1,
Three Months Ended 2005 2005 2004
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Net Sales $ 603,726 $ 580,536 $ 678,530
Y/Y Growth -11% -4% 35%
Q/Q Growth 4% -8% 12%
Cost of Sales 257,327 245,008 277,008
Gross Margin 346,399 335,528 401,522
Percent of Sales 57.4% 57.8% 59.2%
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Operating Expenses:
R&D 126,642 127,534 128,478
Selling, Marketing and G&A 85,813 83,341 85,282
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Operating Income 133,944 124,653 187,762
Percent of Sales 22.2% 21.5% 27.7%
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Other (Income) Expense (16,768) (13,983) (7,232)
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Income Before Tax 150,712 138,636 194,994
Provision for Taxes 33,113 31,193 42,411
Tax Rate 22% 22% 22%
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Net Income $ 117,599 $ 107,443 $ 152,583
Percent of Sales 19% 19% 22%
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Shares used for EPS - Basic 370,674 375,561 374,864
Shares used for EPS - Diluted 382,337 388,107 395,052
Earnings per Share - Basic $ 0.32 $ 0.29 $ 0.41
Earnings per Share - Diluted $ 0.31 $ 0.28 $ 0.39
Dividends declared per share $ 0.06 $ 0.06 $ 0.04
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Six Months Ended April 30, 2005 May 1, 2004
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Net Sales $ 1,184,262 $ 1,283,883
Y/Y Growth -8% 32%
Cost of Sales 502,335 536,896
Gross Margin 681,927 746,987
Percent of Sales 57.6% 58.2%
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Operating Expenses:
R&D 254,176 249,108
Selling, Marketing and G&A 169,154 164,520
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Operating Income 258,597 333,359
Percent of Sales 21.8% 26.0%
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Other (Income) Expense (30,751) (11,429)
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Income Before Tax 289,348 344,788
Provision for Taxes 64,306 75,366
Tax Rate 22% 22%
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Net Income $ 225,042 $ 269,422
Percent of Sales 19% 21%
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Shares used for EPS - Basic 373,117 373,458
Shares used for EPS - Diluted 385,222 393,978
Earnings per Share - Basic $ 0.60 $ 0.72
Earnings per Share - Diluted $ 0.58 $ 0.68
Dividends declared per share $ 0.12 $ 0.08
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Analog Devices Supplemental Information, Second Quarter, Fiscal 2005
Selected Balance Sheet Information
(In thousands)
2Q 05 1Q 05 2Q 04
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April 30, January 29, May 1,
2005 2005 2004
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Cash & Short-term Investments $2,617,259 $2,598,372 $2,541,582
Accounts Receivable, Net 320,366 324,033 328,318
Inventories 348,446 353,291 308,539
Other Current Assets 160,611 164,796 171,815
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Total Current Assets 3,446,682 3,440,492 3,350,254
PP&E, Net 636,249 653,608 666,826
Investments 303,806 318,813 307,638
Intangible Assets 168,063 168,723 170,700
Other 30,470 30,499 22,902
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Total Assets $4,585,270 $4,612,135 $4,518,320
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Deferred Income-Shipments to
Distributors $128,957 $152,112 $150,429
Other Current Liabilities 407,410 381,018 429,437
Non-Current Liabilities 333,035 344,575 339,559
Stockholders' Equity 3,715,868 3,734,430 3,598,895
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Total Liabilities & Equity $4,585,270 $4,612,135 $4,518,320
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Capital Expenditures, Depreciation & Amortization
(In thousands)
2Q 05 1Q 05 2Q 04
April 30, January 29, May 1,
Three Months Ended 2005 2005 2004
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Capital Expenditures $21,632 $23,884 $43,353
Depreciation $39,013 $38,313 $37,272
Amortization of Intangibles $685 $684 $676
April 30, May 1,
Six Months Ended 2005 2004
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Capital Expenditures $45,516 $70,426
Depreciation $77,326 $74,837
Amortization of Intangibles $1,369 $1,353
CONTACT: Analog Devices
Maria Tagliaferro, 781-461-3282
investor.relations@analog.com