Analog Devices, Inc. (NASDAQ: ADI),
a global leader in high-performance semiconductors for signal processing
applications, today announced financial results for its first quarter of
fiscal year 2014, which ended February 1, 2014.
"Our first quarter unfolded as we had expected," said Vincent Roche,
President and CEO. "We tightly managed operations and expenses, and kept
factory utilizations low. Revenue from the end markets of industrial,
communications infrastructure, and automotive totaled 88% of revenue in
"In January, order rates began to improve. We ended the quarter with a
book to bill that was above one and we expect this momentum to continue
in the second quarter. We are planning for revenue growth and solid
operating leverage in the second quarter on improving factory
utilization and a good mix of business."
ADI Increases Dividend by 9 Percent and Share
Repurchase Program to $1 BillionADI also announced that
its Board of Directors has approved a 9 percent increase in its regular
quarterly dividend, from $0.34 to $0.37 per outstanding share of common
stock. The dividend will be paid on March 11, 2014 to all shareholders
of record at the close of business on February 28, 2014.
In addition, the Board of Directors has approved an increase to the
Company's share repurchase authorization to $1 billion.
For additional information please visit ADI's
financial press release page.
Results for the First Quarter of Fiscal Year
Please refer to the schedules provided for a summary of revenue and
earnings, selected balance sheet information, and the cash flow
statement for the first quarter of fiscal year 2014, as well as the
immediately prior and year-ago quarters. Additional information on
revenue by end market and revenue by product type is provided on
Schedules D and E. A more complete table covering prior periods is
available at investor.analog.com.
Outlook for the Second Quarter of Fiscal Year
2014The following statements are based on current
expectations. These statements are forward- looking and actual results
may differ materially, as a result of, among other things, the important
factors discussed at the end of this release. These statements supersede
all prior statements regarding our business outlook set forth in prior
ADI news releases, and ADI disclaims any obligation to update these
Conference Call Scheduled for 5:00 pm ETADI will host a
conference call to discuss the first quarter results and short-term
outlook today, beginning at 5:00 pm ET. Investors may join via webcast,
accessible at investor.analog.com,
or by telephone (call 706-634-7193 ten minutes before the call begins
and provide the password "ADI.").
A replay will be available two hours after the completion of the call.
The replay may be accessed for up to two weeks by dialing 855-859-2056
(replay only) and providing the conference ID: 41217783, or by visiting investor.analog.com.
Non-GAAP Financial InformationThis release includes
non-GAAP financial measures that are not in accordance with, nor an
alternative to, generally accepted accounting principles and may be
different from non-GAAP measures used by other companies. In addition,
these non-GAAP measures are not based on any comprehensive set of
accounting rules or principles.
Schedule F of this press release provides the reconciliation of the
Company's non-GAAP measures to its GAAP measures.
Manner in Which Management Uses the Non-GAAP
Financial MeasuresManagement uses non-GAAP operating
expenses, non-GAAP operating income, non-GAAP operating margins,
non-GAAP other (income) expense, and non-GAAP diluted earnings per share
to evaluate the Company's operating performance from continuing
operations against past periods and to budget and allocate resources in
future periods. These non-GAAP measures also assist management in
understanding and evaluating the Company's operating results and trends
in the Company's business.
Economic Substance Behind Management's Decision
to Use Non-GAAP Financial MeasuresThe items excluded
from the non-GAAP measures were excluded because they are of a
non-recurring or non-cash nature.
The following item is excluded from our non-GAAP operating expenses,
non-GAAP operating income, non-GAAP operating margin, and non-GAAP
diluted earnings per share:Restructuring-Related Expenses.
These expenses are incurred in connection with facility closures,
consolidation of manufacturing facilities, and other cost reduction
efforts. Apart from ongoing expense savings as a result of such items,
these expenses and the related tax effects have no direct correlation to
the operation of our business in the future.
The following item is excluded from our non-GAAP other (income)
expense and non-GAAP diluted earnings per share:Gain on
Sale of Product Line. In the fourth quarter of fiscal 2013, the
Company completed the sale of its microphone product line and recorded a
gain of $85.4 million in non-operating income. We excluded the gain and
related tax effect from our non-GAAP measures as these items have no
direct correlation to the operation of our business in the future.
The following items are excluded from our non-GAAP diluted earnings
per share:Tax-Related Items. In the first quarter of
fiscal year 2013, the Company recorded a $6.3 million tax benefit
related to the reinstatement of the R&D tax credit in January 2013,
retroactive to January 1, 2012. In the fourth quarter of fiscal 2013, as
a result of a ruling by the U.S. Tax Court in a matter not involving the
Company, the Company recorded a potential liability for $36.5 million
plus $4.6 million of interest related to its petition with the U.S. Tax
Court regarding the beneficial tax treatment of dividends paid from
foreign owned companies under The American Jobs Creation Act. The
Company also recorded a $2.2 million tax benefit as a result of the
reversal of prior period tax liabilities. Also in the fourth quarter of
fiscal 2013, the Company completed the sale of its microphone product
line, resulting in $26.7 million of income tax expense. We excluded
these tax-related items from our non-GAAP measures because they are not
associated with the tax expense on our current operating results.
Why Management Believes the Non-GAAP Financial
Measures Provide Useful Information to InvestorsManagement
believes that the presentation of non-GAAP operating expenses, non-GAAP
operating income, non-GAAP operating margins, non-GAAP other (income)
expense, and non-GAAP diluted EPS is useful to investors because it
provides investors with the operating results that management uses to
manage the Company.
Material Limitations Associated with Use of the
Non-GAAP Financial MeasuresAnalog Devices believes that
non-GAAP operating expenses, non-GAAP operating income, non-GAAP
operating margins, non-GAAP other (income) expense, and non-GAAP diluted
EPS have material limitations in that they do not reflect all of the
amounts associated with our results of operations as determined in
accordance with GAAP and that these measures should only be used to
evaluate our results of operations in conjunction with the corresponding
GAAP measures. In addition, our non-GAAP measures may not be comparable
to the non-GAAP measures reported by other companies. The Company's use
of non-GAAP measures, and the underlying methodology when excluding
certain items, is not necessarily an indication of the results of
operations that may be expected in the future, or that the Company will
not, in fact, record such items in future periods.
Management's Compensation for Limitations of
Non-GAAP Financial MeasuresManagement compensates for
these material limitations in non-GAAP operating expenses, non-GAAP
operating income, non-GAAP operating margins, non-GAAP other (income)
expense, and non-GAAP diluted EPS by also evaluating our GAAP results
and the reconciliations of our non-GAAP measures to the most directly
comparable GAAP measures. Investors should consider our non-GAAP
financial measures in conjunction with the corresponding GAAP measures.
About Analog DevicesInnovation, 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.
Analog Devices is headquartered in Norwood, Massachusetts, with design
and manufacturing facilities throughout the world. Analog Devices'
common stock is included in the S&P 500 Index.
This release may be deemed to contain forward-looking statements
intended to qualify for the safe harbor from liability established by
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, among other things, our statements
regarding expected revenue, earnings per share, operating
expenses, gross margin, tax rate, and other financial results, expected
production and inventory levels, expected market trends, and expected
customer demand and order rates for our products, that are based
on our current expectations, beliefs, assumptions, estimates, forecasts,
and projections about our business and the industry and markets in which
Analog Devices operates. The statements contained in this release are
not guarantees of future performance, are inherently uncertain, involve
certain risks, uncertainties, and assumptions that are difficult to
predict, and do not give effect to the potential impact of any mergers,
acquisitions, divestitures, or business combinations that may be
announced or closed after the date hereof. 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. We do not undertake
any obligation to update forward-looking statements made by us.
Important factors that may affect future operating results include: any
faltering in global economic conditions or the stability of credit and
financial markets, erosion of consumer confidence and declines in
customer spending, unavailability of raw materials, services, supplies
or manufacturing capacity, changes in geographic, product or customer
mix, adverse results in litigation matters, and other risk factors
described in our most recent filings with the Securities and Exchange
Commission. Our results of operations for the periods presented
in this release are not necessarily indicative of our operating results
for any future periods. Any projections in this release are based on
limited information currently available to Analog Devices, which is
subject to change. Although any such projections and the factors
influencing them will likely change, we will not necessarily update the
information, as we will only provide guidance at certain points during
the year. Such information speaks only as of the original issuance date
of this release.
Analog Devices and the Analog Devices logo are registered trademarks or
trademarks of Analog Devices, Inc. All other trademarks mentioned in
this document are the property of their respective owners.
(1) Includes $2,196, $2,273, and $2,381 related to stock-based
compensation in 1Q14, 4Q13, and 1Q13, respectively.
Adjustments to reconcile net income to net cash provided by
Revenue Trends by End Market
Revenue Trends by Product Type
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