Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital, and software technologies into solutions that help drive advancements in digitized factories, mobility, and digital healthcare, combat climate change, and reliably connect humans and the world. With revenue of more than $12 billion in FY22 and approximately 25,000 people globally working alongside 125,000 global customers, ADI ensures today’s innovators stay Ahead of What’s Possible. Learn more at www.analog.com and on LinkedIn and Twitter.
Forward Looking Statements
This press release contains forward-looking statements, which address a variety of subjects including, for example, our statements regarding financial performance; economic uncertainty, business cycles, and demand and supply chains; capital expenditures; expected revenue, operating margin, tax rate, earnings per share, and other financial results; expected market trends and acceleration of those trends, market share gains, and growth opportunities; expected product solutions, offerings, capabilities, and applications and the importance of our product offerings and technologies to our customers; market position; and other future events. Statements that are not historical facts, including statements about our beliefs, plans and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: political and economic uncertainty, including any faltering in global economic conditions or the stability of credit and financial markets; erosion of consumer confidence and declines in customer spending or cancellations of orders for our products; unavailability of raw materials, services, supplies or manufacturing capacity; disruptions to our manufacturing operations or our ability to execute our business strategy; changes in geographic, product or customer mix; changes in export classifications, import and export regulations or duties and tariffs; changes in our estimates of our expected tax rates based on current tax law; adverse results in litigation matters, including the potential for litigation related to the Maxim acquisition; the risk that we will be unable to retain and hire key personnel including as a result of labor shortages; changes in demand for semiconductors; attempted or actual security breaches and other cybersecurity incidents that disrupt our operations; unanticipated difficulties or expenditures relating to integrating Maxim; uncertainty as to the long-term value of our common stock; the discretion of our Board of Directors to declare dividends and our ability to pay dividends in the future; factors impacting our ability to repurchase shares; the diversion of management time on integrating Maxim's business and operations; our ability to successfully integrate acquired businesses and technologies, including Maxim; and the risk that expected benefits, synergies and growth prospects of acquisitions, including our acquisition of Maxim, may not be fully achieved in a timely manner, or at all. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission (“SEC”), including the risk factors contained in our most recent Annual Report on Form 10-K. Forward-looking statements represent management’s current expectations and are inherently uncertain. Except as required by law, we do not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.
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, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
Jul. 29, 2023 |
|
Jul. 30, 2022 |
|
Jul. 29, 2023 |
|
Jul. 30, 2022 |
|||||||||
Revenue |
$ |
3,076,495 |
|
|
$ |
3,109,880 |
|
|
$ |
9,589,055 |
|
|
$ |
8,766,237 |
|
|
Cost of sales |
|
1,114,880 |
|
|
|
1,066,738 |
|
|
|
3,358,553 |
|
|
|
3,376,578 |
|
|
Gross margin |
|
1,961,615 |
|
|
|
2,043,142 |
|
|
|
6,230,502 |
|
|
|
5,389,659 |
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|||||||||
| Research and development |
|
423,751 |
|
|
|
431,829 |
|
|
|
1,253,600 |
|
|
|
1,279,510 |
|
|
| Selling, marketing, general and administrative |
|
334,113 |
|
|
|
326,942 |
|
|
|
984,648 |
|
|
|
929,615 |
|
|
| Amortization of intangibles |
|
250,719 |
|
|
|
252,864 |
|
|
|
756,882 |
|
|
|
759,707 |
|
|
| Special charges, net |
|
23,539 |
|
|
|
138,201 |
|
|
|
46,675 |
|
|
|
244,603 |
|
|
| Total operating expenses |
|
1,032,122 |
|
|
|
1,149,836 |
|
|
|
3,041,805 |
|
|
|
3,213,435 |
|
|
| Operating income |
|
929,493 |
|
|
|
893,306 |
|
|
|
3,188,697 |
|
|
|
2,176,224 |
|
|
| Nonoperating expense (income): |
|
|
|
|
|
|
|
|||||||||
| Interest expense |
|
69,346 |
|
|
|
51,189 |
|
|
|
193,051 |
|
|
$ |
152,701 |
|
|
| Interest income |
|
(8,794 |
) |
|
|
(1,797 |
) |
|
|
(32,198 |
) |
|
$ |
(2,578 |
) |
|
| Other, net |
|
(5,880 |
) |
|
|
(4,023 |
) |
|
|
(8,373 |
) |
|
$ |
(24,636 |
) |
|
| Total nonoperating expense (income) |
|
54,672 |
|
|
|
45,369 |
|
|
|
152,480 |
|
|
|
125,487 |
|
|
| Income before income taxes |
|
874,821 |
|
|
|
847,937 |
|
|
|
3,036,217 |
|
|
|
2,050,737 |
|
|
| (Benefit from) provision for income taxes |
|
(2,198 |
) |
|
|
98,952 |
|
|
|
220,068 |
|
|
|
238,402 |
|
|
| Net income |
$ |
877,019 |
|
|
$ |
748,985 |
|
|
$ |
2,816,149 |
|
|
$ |
1,812,335 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| Shares used to compute earnings per common share - basic |
|
500,018 |
|
|
|
517,011 |
|
|
|
503,951 |
|
|
|
521,557 |
|
|
| Shares used to compute earnings per common share - diluted |
|
503,503 |
|
|
|
520,550 |
|
|
|
507,804 |
|
|
|
525,652 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
| Basic earnings per common share |
$ |
1.75 |
|
|
$ |
1.45 |
|
|
$ |
5.59 |
|
|
$ |
3.47 |
|
|
| Diluted earnings per common share |
$ |
1.74 |
|
|
$ |
1.44 |
|
|
$ |
5.55 |
|
|
$ |
3.45 |
|
|
| ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) |
||||||
|
|
Jul. 29, 2023 |
|
Oct. 29, 2022 |
|||
| Cash & cash equivalents |
$ |
1,149,246 |
|
$ |
1,470,572 |
|
| Accounts receivable |
|
1,616,243 |
|
|
1,800,462 |
|
| Inventories |
|
1,709,313 |
|
|
1,399,914 |
|
| Other current assets |
|
360,383 |
|
|
267,044 |
|
| Total current assets |
|
4,835,185 |
|
|
4,937,992 |
|
| Net property, plant and equipment |
|
2,922,781 |
|
|
2,401,304 |
|
| Goodwill |
|
26,913,134 |
|
|
26,913,134 |
|
| Intangible assets, net |
|
11,762,655 |
|
|
13,265,406 |
|
| Deferred tax assets |
|
2,224,880 |
|
|
2,264,888 |
|
| Other assets |
|
688,104 |
|
|
519,626 |
|
| Total assets |
$ |
49,346,739 |
|
$ |
50,302,350 |
|
|
|
|
|
|
|||
| Current liabilities |
$ |
2,831,018 |
|
$ |
2,442,655 |
|
| Long-term debt |
|
6,437,650 |
|
|
6,548,625 |
|
| Deferred income taxes |
|
3,150,748 |
|
|
3,622,538 |
|
| Other non-current liabilities |
|
1,023,577 |
|
|
1,223,209 |
|
| Shareholders' equity |
|
35,903,746 |
|
|
36,465,323 |
|
| Total liabilities & shareholders' equity |
$ |
49,346,739 |
|
$ |
50,302,350 |
|
| ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
|||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||
|
|
Jul. 29, 2023 |
|
Jul. 30, 2022 |
|
Jul. 29, 2023 |
|
|
Jul. 30, 2022 |
|||||||||
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ |
877,019 |
|
|
$ |
748,985 |
|
|
$ |
2,816,149 |
|
|
|
$ |
1,812,335 |
|
|
| Adjustments to reconcile net income to net cash provided by operations: |
|
|
|
|
|
|
|
|
|||||||||
| Depreciation |
|
86,204 |
|
|
|
75,619 |
|
|
|
251,785 |
|
|
|
|
212,635 |
|
|
| Amortization of intangibles |
|
501,488 |
|
|
|
503,350 |
|
|
|
1,505,201 |
|
|
|
|
1,512,250 |
|
|
| Stock-based compensation expense |
|
82,970 |
|
|
|
84,874 |
|
|
|
227,113 |
|
|
|
|
242,809 |
|
|
| Gain on sale of property, plant, and equipment |
|
— |
|
|
|
(4,352 |
) |
|
|
— |
|
|
|
|
(4,352 |
) |
|
| Non-cash impairment charge |
|
— |
|
|
|
91,953 |
|
|
|
— |
|
|
|
|
91,953 |
|
|
| Cost of goods sold for inventory acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
271,396 |
|
|
| Deferred income taxes |
|
(151,283 |
) |
|
|
(82,136 |
) |
|
|
(431,393 |
) |
|
|
|
(205,128 |
) |
|
| Operating lease assets and liabilities |
|
11,847 |
|
|
|
9,739 |
|
|
|
4,945 |
|
|
|
|
(17,958 |
) |
|
| Other |
|
4,515 |
|
|
|
3,164 |
|
|
|
14,185 |
|
|
|
|
(7,061 |
) |
|
| Changes in operating assets and liabilities |
|
(270,306 |
) |
|
|
(183,350 |
) |
|
|
(757,645 |
) |
|
|
|
(582,813 |
) |
|
| Total adjustments |
|
265,435 |
|
|
|
498,861 |
|
|
|
814,191 |
|
|
|
|
1,513,731 |
|
|
| Net cash provided by operating activities |
|
1,142,454 |
|
|
|
1,247,846 |
|
|
|
3,630,340 |
|
|
|
|
3,326,066 |
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|||||||||
| Additions to property, plant and equipment |
|
(324,574 |
) |
|
|
(164,884 |
) |
|
|
(785,070 |
) |
|
|
|
(394,796 |
) |
|
| Other |
|
(2,173 |
) |
|
|
30,751 |
|
|
|
(2,254 |
) |
|
|
|
43,761 |
|
|
| Net cash used for investing activities |
|
(326,747 |
) |
|
|
(134,133 |
) |
|
|
(787,324 |
) |
|
|
|
(351,035 |
) |
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|||||||||
| Proceeds from revolver |
|
— |
|
|
|
400,000 |
|
|
|
— |
|
|
|
|
400,000 |
|
|
| Payments on revolver |
|
— |
|
|
|
(400,000 |
) |
|
|
— |
|
|
|
|
(400,000 |
) |
|
| Early termination of debt |
|
— |
|
|
|
— |
|
|
|
(65,688 |
) |
|
|
|
(519,116 |
) |
|
| Proceeds from commercial paper notes |
|
2,392,874 |
|
|
|
— |
|
|
|
2,646,509 |
|
|
|
|
— |
|
|
| Payments of commercial paper notes |
|
(2,101,799 |
) |
|
|
— |
|
|
|
(2,101,799 |
) |
|
|
|
— |
|
|
| Repurchase of common stock |
|
(686,510 |
) |
|
|
(905,973 |
) |
|
|
(2,494,018 |
) |
|
|
|
(1,758,832 |
) |
|
| Dividend payments to shareholders |
|
(430,467 |
) |
|
|
(394,018 |
) |
|
|
(1,251,121 |
) |
|
|
|
(1,154,207 |
) |
|
| Proceeds from employee stock plans |
|
45,990 |
|
|
|
9,960 |
|
|
|
113,002 |
|
|
|
|
30,013 |
|
|
| Other |
|
(64,158 |
) |
|
|
(28,376 |
) |
|
|
(11,227 |
) |
|
|
|
(1,718 |
) |
|
| Net cash used for financing activities |
|
(844,070 |
) |
|
|
(1,318,407 |
) |
|
|
(3,164,342 |
) |
|
|
|
(3,403,860 |
) |
|
| Effect of exchange rate changes on cash |
|
— |
|
|
|
(8,080 |
) |
|
|
— |
|
|
|
|
(24,175 |
) |
|
| Net decrease in cash and cash equivalents |
|
(28,363 |
) |
|
|
(212,774 |
) |
|
|
(321,326 |
) |
|
|
|
(453,004 |
) |
|
| Cash and cash equivalents at beginning of period |
|
1,177,609 |
|
|
|
1,737,734 |
|
|
|
1,470,572 |
|
|
|
|
1,977,964 |
|
|
| Cash and cash equivalents at end of period |
$ |
1,149,246 |
|
|
$ |
1,524,960 |
|
|
$ |
1,149,246 |
|
|
|
$ |
1,524,960 |
|
|
ANALOG DEVICES, INC.
