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Analog Devices Reports First Quarter Fiscal Year 2013 Results; Increases Dividend by $0.04 to $0.34 Per Share



  Analog Devices Reports First Quarter Fiscal Year 2013 Results; Increases
  Dividend by $0.04 to $0.34 Per Share

Business Wire

NORWOOD, Mass. -- February 19, 2013

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 2013, which ended February 2,
2013.

Results for the First Quarter of Fiscal 2013

  * Revenue totaled $622.1 million
  * Gross margin was 62.7% of revenue
  * Operating margin was 26.9% of revenue, excluding special items, and was
    24.7% on a GAAP basis
  * Diluted EPS was $0.44, excluding special items, and was $0.42 on a GAAP
    basis
  * Cash flow from operations was $158 million, or 25.4% of revenue

“Results for the first quarter were within the range we communicated and
represented a generally weak macroeconomic environment exacerbated by year-end
inventory reductions at many customers. Nevertheless, our operating
performance remained strong, as we carefully managed our business to balance
the long term opportunities for ADI with the realities of current market
conditions,” said Jerald G. Fishman, CEO. “In January, order rates began to
improve across most markets and geographies and have remained strong so far
this quarter. As a result, we are planning for solid revenue growth in our
second quarter, in the range of 4-8% sequentially with significant operating
leverage.”

ADI also announced that its Board of Directors has approved a 13 percent
increase in its regular quarterly dividend, from $0.30 to $0.34 per
outstanding share of common stock. The dividend will be paid on March 12, 2013
to all shareholders of record at the close of business on March 1, 2013.

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 2013, as well as the immediately prior and year-ago
quarters. The first quarter of fiscal year 2012 was a 14-week period.
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 2013

The 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 forward-looking statements.

  * Revenue estimated to increase in the range of 4% to 8% sequentially
  * Gross margin estimated to be approximately 64%
  * Operating expenses estimated to be approximately $224 million
  * Tax rate estimated to be approximately 17%
  * Diluted EPS estimated at $0.49 to $0.55

Conference Call Scheduled for 5:00 pm ET

ADI 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: 92068413, or by visiting
investor.analog.com.

Non-GAAP Financial Information

This 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 Measures

Management uses non-GAAP operating expenses, non-GAAP operating income,
non-GAAP operating margins, 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
Measures

The 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 diluted earnings per share:

Tax-Related Item. 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. We excluded this
tax-related item from our non-GAAP measures because it is not associated with
the tax expense on our current operating results.

Why Management Believes the Non-GAAP Financial Measures Provide Useful
Information to Investors

Management believes that the presentation of non-GAAP operating expenses,
non-GAAP operating income, non-GAAP operating margins, 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 Measures

Analog Devices believes that non-GAAP operating expenses, non-GAAP operating
income, non-GAAP operating margins, 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 Measures

Management compensates for these material limitations in non-GAAP operating
expenses, non-GAAP operating income, non-GAAP operating margins, 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 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. 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: sovereign
debt issues globally, 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.

 
Analog Devices, First Quarter, Fiscal 2013
 
Schedule A
Revenue and Earnings Summary (GAAP)
(In thousands, except per-share amounts)
                                                                 
                                                                   
                                    Three Months Ended
                                    1Q 13          4Q 12          1Q 12
                                    Feb. 2, 2013   Nov. 3, 2012   Feb. 4, 2012
Revenue                             $  622,134     $  694,964     $  648,058
Year-to-year change                    -4      %      -3      %      -11     %
Quarter-to-quarter change              -10     %      2       %      -10     %
Cost of sales (1)                      231,850        251,682        238,668  
Gross margin                           390,284        443,282        409,390
Gross margin percentage                62.7    %      63.8    %      63.2    %
Year-to-year change (basis             -50            -50            -300
points)
Quarter-to-quarter change(basis        -110           -180           -110     
points)
Operating expenses:
R&D (1)                                125,164        130,394        124,378
Selling, marketing and G&A (1)         97,560         97,609         99,045
Special charges                        14,071         -              2,595    
Total operating expenses               236,795        228,003        226,018
Total operating expenses               38.1    %      32.8    %      34.9    %
percentage
Year-to-year change (basis             320            140            430
points)
Quarter-to-quarter change (basis       530            -170           350      
points)
Operating income                       153,489        215,279        183,372
Operating income percentage            24.7    %      31.0    %      28.3    %
Year-to-year change (basis             -360           -190           -730
points)
Quarter-to-quarter change (basis       -630           -10            -460     
points)
Other expense                          3,380          2,755          3,286    
Income before income tax               150,109        212,524        180,086
Provision for income taxes             18,887         33,337         40,704
Tax rate percentage                    12.6    %      15.7    %      22.6    %
Net income                          $  131,222     $  179,187     $  139,382  
                                                                   
Shares used for EPS - basic            303,484        300,679        297,788
Shares used for EPS - diluted          310,275        307,954        305,531
                                                                   
Earnings per share - basic          $  0.43        $  0.60        $  0.47
Earnings per share - diluted        $  0.42        $  0.58        $  0.46
                                                                   
Dividends paid per share            $  0.30        $  0.30        $  0.25     
                                                                   
(1) Includes stock-based
compensation expense as follows:
Cost of sales                       $  1,667       $  1,905       $  1,807
R&D                                 $  5,600       $  6,124       $  5,885
Selling, marketing and G&A          $  5,794       $  6,248       $  5,640

 
Analog Devices, First Quarter, Fiscal 2013
 
Schedule B
Selected Balance Sheet Information (GAAP)
(In thousands)
                                                               
                          1Q 13               4Q 12              1Q 12
                          Feb. 2, 2013        Nov. 3, 2012       Feb. 4, 2012
Cash & short-term         $   3,986,979       $   3,900,378      $  3,667,398
investments
Accounts receivable,          329,578             339,881           301,999
net
Inventories (1)               307,263             313,723           297,160
Other current assets          190,115             142,203           128,611
Total current assets          4,813,935           4,696,185         4,395,168
PP&E, net                     491,431             500,867           475,689
Investments                   32,720              30,242            30,954
Goodwill and                  313,084             312,605           286,339
intangible assets
Other                         65,638              80,448            89,684
Total assets              $   5,716,808       $   5,620,347      $  5,277,834
                                                                  
Deferred income on
shipments to              $   243,396         $   238,541        $  227,261
distributors, net
Other current                 265,139             286,538           270,794
liabilities
Long-term debt,               759,672             807,098           855,662
non-current
Non-current                   124,804             122,811           81,682
liabilities
Shareholders' equity          4,323,797           4,165,359         3,842,435
Total liabilities &       $   5,716,808       $   5,620,347      $  5,277,834
equity
                                                                  
(1) Includes $2,381, $2,517, and $2,428 related to stock-based compensation in
1Q13, 4Q12, and 1Q12, respectively.
 

 
Analog Devices, First Quarter, Fiscal 2013
 
Schedule C
Cash Flow Statement (GAAP)
(In thousands)
                                                               
                                                                 
                              Three Months Ended
                              1Q 13            4Q 12            1Q 12
                              Feb. 2, 2013     Nov. 3, 2012     Feb. 4, 2012
Cash flows from operating
activities:
Net Income                    $ 131,222        $ 179,187        $ 139,382
Adjustments to reconcile
net income
to net cash provided by
operations:
Depreciation                    27,755           27,484           28,243
Amortization of intangibles     55               54               -
Stock-based compensation        13,061           14,277           13,332
expense
Excess tax benefit - stock      (5,975     )     (2,678     )     (1,896     )
options
Other non-cash activity         (1,362     )     (1,417     )     591
Deferred income taxes           (9,635     )     (5,696     )     3,623
Changes in operating assets     2,848            24,836           31,545      
and liabilities
Total adjustments               26,747           56,860           75,438      
Net cash provided by            157,969          236,047          214,820     
operating activities
Percent of total revenue        25.4       %     34.0       %     33.1       %
                                                                 
Cash flows from investing
activities:
Additions to property,          (18,269    )     (37,511    )     (25,289    )
plant and equipment
Purchases of short-term
available-for-sale              (1,653,593 )     (1,882,319 )     (2,192,874 )
investments
Maturities of short-term
available-for-sale              1,551,147        1,713,973        1,659,792
investments
Sales of short-term
available-for-sale              283,164          99,843           151,841
investments
(Increase) decrease in          (2,048     )     (447       )     327         
other assets
Net cash provided by (used      160,401          (106,461   )     (406,203   )
for) investing activities
                                                                 
Cash flows from financing
activities:
Term loan repayments            (60,108    )     (33,625    )     (15,625    )
Dividend payments to            (90,679    )     (91,372    )     (74,416    )
shareholders
Repurchase of common stock      (17,001    )     (20,830    )     (78,591    )
Proceeds from employee          113,770          80,527           48,858
stock plans
Contingent consideration        (3,752     )     -                (1,991     )
payment
(Decrease) increase in          (1,027     )     (1,125     )     5,166
other financing activities
Excess tax benefit - stock      5,975            2,678            1,896       
options
Net cash used for financing     (52,822    )     (63,747    )     (114,703   )
activities
Effect of exchange rate         1,416            845              (1,572     )
changes on cash
                                                                 
Net increase (decrease) in      266,964          66,684           (307,658   )
cash and cash equivalents
Cash and cash equivalents       528,833          462,149          1,405,100   
at beginning of period
Cash and cash equivalents     $ 795,797        $ 528,833        $ 1,097,442   
at end of period
                                                                              

 
Analog Devices, First Quarter, Fiscal 2013
 
Schedule D
Revenue Trends by End Market
The categorization of revenue by end market is determined using a variety of
data points including the technical characteristics of the product, the “sold
to” customer information, the "ship to" customer information and the end
customer product or application into which our product will be incorporated.
As data systems for capturing and tracking this data evolve and improve, the
categorization of products by end market can vary over time. When this occurs
we reclassify revenue by end market for prior periods. Such reclassifications
typically do not materially change the sizing of, or the underlying trends of
results within, each end market.
                                                                      
                   Three Months Ended
                   Feb. 2, 2013                          Nov. 3,     Feb. 4,
                                                         2012        2012
                   Revenue     %*      Q/Q %   Y/Y %     Revenue     Revenue
Industrial         $ 282,654   45  %   -8  %   -3  %     $ 306,042   $ 290,660
Automotive           107,581   17  %   -3  %   -11 %       110,401     120,588
Consumer             106,929   17  %   -22 %   -6  %       136,379     114,261
Communications       124,970   20  %   -12 %   2   %       142,142     122,549
Total Revenue      $ 622,134   100 %   -10 %   -4  %     $ 694,964   $ 648,058
                                                                      
* The sum of the individual percentages does not equal the total due to
rounding
 

 
Analog Devices, First Quarter, Fiscal 2013
 
Schedule E
Revenue Trends by Product Type
The categorization of our products into broad categories is based on the
characteristics of the individual products, the specification of the products
and in some cases the specific uses that certain products have within
applications. The categorization of products into categories is therefore
subject to judgment in some cases and can vary over time. In instances where
products move between product categories we reclassify the amounts in the
product categories for all prior periods. Such reclassifications typically do
not materially change the sizing of, or the underlying trends of results
within, each product category.
                                                                      
               Three Months Ended
               Feb. 2, 2013                              Nov. 3,     Feb. 4,
                                                         2012        2012
               Revenue        %*       Q/Q %   Y/Y %     Revenue     Revenue
Converters     $  277,637     45   %   -10 %   -3  %     $ 307,252   $ 285,135
Amplifiers
/ Radio           157,853     25   %   -10 %   -4  %       174,521     164,454
Frequency
Other             95,693      15   %   -15 %   -1  %       112,083     96,238
analog
Subtotal
Analog            531,183     85   %   -11 %   -3  %       593,856     545,827
Signal
Processing
Power
management        39,460      6    %   -14 %   -12 %       45,808      44,865
& reference
Total
Analog         $  570,643     92   %   -11 %   -3  %     $ 639,664   $ 590,692
Products
Digital
Signal            51,491      8    %   -7  %   -10 %       55,300      57,366
Processing
Total          $  622,134     100  %   -10 %   -4  %     $ 694,964   $ 648,058
Revenue
                                                                      
* The sum of the individual percentages does not equal the total due to
rounding
 

 
Analog Devices, First Quarter, Fiscal 2013
 
Schedule F
Reconciliation from Non-GAAP to GAAP Data (In thousands, except per-share
amounts)
                                                              
See "Non-GAAP Financial Information" in this press release for a description
of the items excluded from our non-GAAP measures.
                                                                 
                            Three Months Ended
                            1Q 13             4Q 12             1Q 12
                            Feb. 2, 2013      Nov. 3, 2012      Feb. 4, 2012
                                                                 
GAAP Operating Expenses     $  236,795        $  228,003        $  226,018
Percent of Revenue             38.1     %        32.8     %        34.9     %
Restructuring-Related          (14,071  )        -                 -         
Expense
Non-GAAP Operating          $  222,724        $  228,003        $  226,018   
Expenses
Percent of Revenue             35.8     %        32.8     %        34.9     %
                                                                 
GAAP Operating              $  153,489        $  215,279        $  183,372
Income/Margin
Percent of Revenue             24.7     %        31.0     %        28.3     %
Restructuring-Related          14,071            -                 -         
Expense
Non-GAAP Operating          $  167,560        $  215,279        $  183,372   
Income/Margin
Percent of Revenue             26.9     %        31.0     %        28.3     %
                                                                 
GAAP Diluted EPS            $  0.42           $  0.58           $  0.46
Impact of the
Reinstatement of the R&D       (0.02    )        -                 -
Tax Credit
Restructuring-Related          0.04              -                 -         
Expense
Non-GAAP Diluted EPS        $  0.44           $  0.58           $  0.46      

Contact:

Analog Devices, Inc.
Mr. Ali Husain, 781-461-3282
Director of Investor Relations
Fax: 781-461-3491
investor.relations@analog.com
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