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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 15, 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 November 15, 2005, Analog Devices, Inc. announced its financial
results for the quarter ended October 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
(d) Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be
furnished, and not filed:
99.1 Press release dated November 15, 2005 issued by Analog Devices, Inc.
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 15, 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 November 15, 2005 issued by
Analog Devices, Inc.
EXHIBIT 99.1
Analog Devices Reports Results for the
Fourth Quarter and Fiscal Year 2005; Board of Directors increases
dividend to $0.12 per share for the quarter
Business Editors/Technology Editors
NORWOOD, Mass.--(BUSINESS WIRE)--Nov. 15, 2005--Analog Devices,
Inc. (NYSE: ADI), a global leader in high-performance semiconductors
for signal processing applications, today announced revenue of $622
million for the fourth quarter of fiscal 2005, 7% above the
immediately prior quarter and a decrease of 2% compared to the same
quarter one year ago.
Diluted earnings per share (EPS) under generally accepted
accounting principles (GAAP) was $0.18 for the fourth quarter,
compared to $0.34 for the same period one year ago and $0.32 for the
third quarter of fiscal 2005. The fourth quarter results were reduced
by $0.18 associated with the previously announced restructuring
charges and the repatriation of foreign earnings. The restructuring
charge of $31.5 million impacted EPS by $0.05 and the additional tax
expense of $49 million impacted EPS by $0.13.
The Board of Directors declared a cash dividend for the fourth
quarter of fiscal 2005 of $0.12 per outstanding share of common stock,
compared to $0.10 declared in the previous quarter. The dividend will
be paid on December 14, 2005 to all shareholders of record at the
close of business on November 25, 2005.
Revenue for fiscal year 2005, which ended October 29, 2005,
totaled $2.39 billion, a decline of 9% compared to fiscal year 2004.
Compared to fiscal 2004 diluted EPS of $1.45, fiscal 2005 diluted EPS
was $1.08, which was reduced by $0.18 due to the restructuring charges
and the additional tax expense recorded in the fourth quarter of
fiscal 2005.
"The fourth quarter of fiscal 2005 turned out to be a very strong
quarter for ADI, with revenue growing 7% sequentially, well above the
level planned for the quarter," said Jerald G. Fishman, president and
CEO of Analog Devices, Inc. "Our strongest sequential revenue growth
came from the communications market, and in particular, from cellular
telephones and from networking applications. In the fourth quarter,
communications applications grew approximately 18% compared to the
immediately prior quarter and represented 30% of sales.
"We also enjoyed continuing strength from sales to consumer
customers in applications areas such as digital cameras and advanced
televisions, both areas where we are well-positioned with the market
share leaders. In the fourth quarter, 16% of sales were to consumer
customers and revenue from this end market grew 10% compared to the
third quarter of fiscal 2005.
"Revenue from computer customers increased by 3% in the fourth
quarter compared to the immediately prior quarter. Computer customers
represented approximately 15% of sales in the fourth quarter.
"Revenue from our broad base of industrial customers, representing
factory automation, medical instrumentation, defense and security
systems, as well as automotive electronics, was approximately flat for
the fourth quarter compared to the immediately prior quarter and
totaled approximately 39% of sales."
In the fourth quarter, analog product revenue increased 3% from
the immediately prior quarter, increased 1% compared to the same
period one year ago, and represented 81% of total sales. For the
fiscal year 2005, revenue from analog products declined 7%
year-over-year, after growing 31% in fiscal year 2004 and 16% in
fiscal year 2003.
Converter products, ADI's largest analog product category,
represented 44% of total ADI sales in the fourth quarter as revenue
increased 4% compared to the immediately prior quarter and 9% compared
to the same period one year ago. For the fiscal year 2005, revenue
from converter products was slightly lower than the previous year,
after growing 31% in fiscal year 2004 and 25% in fiscal year 2003.
DSP product revenue for the fourth quarter increased 26% from the
immediately prior quarter, declined 11% compared to the same period
one year ago, and represented 19% of sales. Revenue from
general-purpose DSP products, which are included in DSP product
revenue, represented approximately 7% of total ADI sales in the fourth
quarter. General-purpose DSP product revenue, which is derived from a
broad base of customers across many diverse applications, grew 2% in
the fourth quarter compared to the immediately prior quarter and 13%
compared to the same period one year ago. For fiscal year 2005,
revenue from all DSP products declined 18% year-over-year, after
growing 21% in fiscal year 2004 and 35% in fiscal year 2003.
Gross margins for the fourth quarter were 58.3%, compared to 58.1%
in the immediately prior quarter. Operating profits for the fourth
quarter totaled $123 million or approximately 20% of sales, after
including $31.5 million of restructuring-related expense, which is
equivalent to approximately 5% of sales.
"Cash flow was very strong in the fourth quarter, with cash flow
from operations totaling $200 million or approximately 32% of sales,"
said Mr. Fishman. "During the quarter, we spent $21 million on capital
expenditures and we returned $278 million to shareholders by
repurchasing approximately 6.7 million shares of ADI common stock for
$241 million and by paying $37 million in cash dividends."
In the fourth quarter, inventory declined sequentially by
approximately $20 million, resulting in days cost of sales in
inventory declining to 115 days.
Accounts receivable balances remained under good control. Days
sales in accounts receivable were 47 days for the fourth quarter.
According to Mr. Fishman, "Orders were strong in the fourth
quarter in every region of the world with the exception of Europe
where orders declined sequentially. Turns orders (orders booked and
shipped during the quarter) remained high and comprised approximately
50% of sales for the fourth quarter. Inventory levels declined in
distribution. This is all consistent with our continuing short lead
times and the high turns environment in which we are still operating."
Regarding the near-term outlook, Mr. Fishman said, "As we enter
2006, we are planning for a good year. Our 13-week backlog at the
beginning of the first quarter is 4% higher than last quarter. Due to
the normal seasonality in the consumer and industrial markets, we are
planning for first quarter revenue to be approximately equal to fourth
quarter levels and for first quarter EPS to be approximately $0.31,
which is reduced by approximately $0.05 of previously announced
restructuring-related expense and stock-based compensation expense.
The planned $7.7 million of restructuring-related expense is estimated
to impact EPS by $0.01 and the estimated $20 million of stock-based
compensation expense is expected to impact EPS by $0.04."
ADI will begin expensing stock-based compensation in the first
quarter of 2006. The company has provided a table at
http://phx.corporate-ir.net/phoenix.zhtml?c=95455&p=irol-irHome which
includes estimates of the impact of stock-based compensation and the
impact of previously announced restructuring-related expenses on the
company's 2006 quarterly financial statements.
Regarding the balance of fiscal year 2006, Mr. Fishman said, "We
are planning for sequential revenue growth to resume in the second
quarter and for gross margins to continue to improve throughout the
year as we increase the utilization of our internal wafer fabs. We
intend to keep expenses tightly constrained, with most increases tied
directly to improving financial performance. In aggregate, we are
planning to hold the rate of expense growth well below the rate of
sales growth and thereby continue to increase operating profits by a
high percentage of the planned sales growth. We believe that
throughout 2006 the breadth of our high performance analog and DSP
technology and the diversity of applications where this technology
helps differentiate our customers' end systems will continue to
produce excellent results for our shareholders."
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 800-642-1687
(replay only) and providing the conference ID: 1856227 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.
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 July 30, 2005, as
filed with the Securities and Exchange Commission.
Analog Devices Supplemental Information, Fourth Quarter, Fiscal 2005
Sales/Earnings Summary
(In thousands, except per-share amounts)
4Q 05 3Q 05 4Q 04
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Three Months Ended October 29, July 30, October 30,
2005 2005 2004
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Net Sales $ 622,130 $ 582,416 $ 632,124
Y/Y Growth -2% -19% 13%
Q/Q Growth 7% -4% -12%
Cost of Sales 259,455 244,178 255,832
Gross Margin 362,675 338,238 376,292
Percent of Sales 58.3% 58.1% 59.5%
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Operating Expenses:
R&D 123,704 119,217 131,798
Selling, Marketing and G&A 84,715 84,407 86,354
Special charges 31,480 - -
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Operating Income 122,776 134,614 158,140
Percent of Sales 19.7% 23.1% 25.0%
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Other (Income) Expense (21,890) (19,062) (13,077)
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Income Before Tax 144,666 153,676 171,217
Provision for Taxes 76,325 32,272 38,951
Tax Rate 53% 21% 23%
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Net Income $ 68,341 $ 121,404 $ 132,266
Percent of Sales 11% 21% 21%
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Shares used for EPS - Basic 369,945 370,985 376,064
Shares used for EPS - Diluted 380,607 382,830 389,257
Earnings per Share - Basic $ 0.18 $ 0.33 $ 0.35
Earnings per Share - Diluted $ 0.18 $ 0.32 $ 0.34
Dividends declared per share $ 0.10 $ 0.10 $ 0.06
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Twelve Months Ended October 29, October 30,
2005 2004
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Net Sales $2,388,808 $2,633,800
Y/Y Growth -9% 29%
Cost of Sales 1,005,968 1,079,999
Gross Margin 1,382,840 1,553,801
Percent of Sales 57.9% 59.0%
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Operating Expenses:
R&D 497,097 514,442
Selling, Marketing and G&A 338,276 340,036
Special charges 31,480 -
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Operating Income 515,987 699,323
Percent of Sales 21.6% 26.6%
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Other (Income) Expense (71,703) (33,413)
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Income Before Tax 587,690 732,736
Provision for Taxes 172,903 161,998
Tax Rate 29% 22%
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Net Income $ 414,787 $ 570,738
Percent of Sales 17% 22%
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Shares used for EPS - Basic 371,791 375,031
Shares used for EPS - Diluted 383,474 392,854
Earnings per Share - Basic $ 1.12 $ 1.52
Earnings per Share - Diluted $ 1.08 $ 1.45
Dividends declared per share $ 0.32 $ 0.20
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Analog Devices Supplemental Information, Fourth Quarter, Fiscal 2005
Selected Balance Sheet Information
(In thousands)
4Q 05 3Q 05 4Q 04
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October 29, July 30, October 30,
2005 2005 2004
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Cash & Short-term Investments $2,705,942 $2,783,886 $2,684,970
Accounts Receivable, Net 320,523 302,375 330,183
Inventories 325,605 345,949 348,407
Other Current Assets 380,386 135,564 132,385
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Total Current Assets 3,732,456 3,567,774 3,495,945
PP&E, Net 599,906 617,038 667,779
Investments 45,365 280,110 317,017
Intangible Assets 167,576 167,404 169,382
Other 37,908 67,735 73,148
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Total Assets $4,583,211 $4,700,061 $4,723,271
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Deferred Income-Shipments to
Distributors $ 121,802 $ 131,031 $ 157,951
Other Current Liabilities 700,624 423,361 417,627
Non-Current Liabilities 69,284 310,950 348,121
Stockholders' Equity 3,691,501 3,834,719 3,799,572
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Total Liabilities & Equity $4,583,211 $4,700,061 $4,723,271
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Capital Expenditures, Depreciation & Amortization
(In thousands)
4Q 05 3Q 05 4Q 04
Three Months Ended October 29, July 30, October 30,
2005 2005 2004
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Capital Expenditures $ 21,029 $ 18,912 $ 38,296
Depreciation $ 38,054 $ 37,801 $ 37,757
Amortization of Intangibles $ 342 $ 672 $ 677
Twelve Months Ended October 29, October 30,
2005 2004
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Capital Expenditures $ 85,457 $ 146,245
Depreciation $ 153,181 $ 149,920
Amortization of Intangibles $ 2,383 $ 2,710
CONTACT: Analog Devices, Inc.
Maria Tagliaferro, 781-461-3282
Director of Corporate Communications
fax: 781-461-3491
investor.relations@analog.com