Analog Devices, Inc. (Nasdaq: ADI), today announced financial
results for its fourth quarter and fiscal year 2017, which ended
October 28, 2017.
“The fourth quarter of 2017 drove a strong finish to the fiscal
year, with high-quality revenue growth and operational execution
that expanded gross and operating margins, and delivered stellar
earnings per share growth,” said Vincent Roche, President and
CEO.
“Looking ahead to the seasonally-slower first quarter of fiscal
2018, we are planning for revenue to be in the range of $1.44
billion to $1.54 billion, which includes the benefit of a 14th week
in the quarter. At the mid-point of this guidance range, we expect
revenue to increase year-over-year, led by the highly diverse
industrial market.”
ADI also announced that the Board of Directors has declared a
quarterly cash dividend of $0.45 per outstanding share of
common stock, representing an annual dividend per share of $1.80.
The dividend will be paid on December 12, 2017 to all
shareholders of record at the close of business on December 1,
2017.
Supplemental schedules relating to our fourth quarter fiscal
2017 financial results are also available on our investor site at
investor.analog.com.
Results for the Fourth Quarter of
Fiscal Year 2017
- Revenue totaled $1.54 billion, up 8%
sequentially and up 54% year-over-year on a GAAP basis and up 6%
sequentially on a non-GAAP basis
- GAAP gross margin of 65.3% of revenue;
Non-GAAP gross margin of 70.9% of revenue
- GAAP operating margin of 29.1% of
revenue; Non-GAAP operating margin of 42.6% of revenue
- GAAP diluted EPS of $0.93; Non-GAAP
diluted EPS of $1.45
Results for the Fiscal Year
2017
- GAAP Revenue totaled $5.1 billion, up
49% year-over-year, and non-GAAP revenue totaled $5.2 billion, up
52% year-over-year
- GAAP gross margin of 59.9% of revenue;
Non-GAAP gross margin of 69.5% of revenue
- GAAP operating margin of 20.7% of
revenue; Non-GAAP operating margin of 39.5% of revenue
- GAAP diluted EPS of $2.07; Non-GAAP
diluted EPS of $4.72
Please refer to the schedules provided for a summary of revenue
and earnings, selected balance sheet information, and the cash flow
statement for the fourth quarter and full year of fiscal 2017, as
well as the immediately prior and year-ago quarters and year.
Additional information on revenue by end market is provided on
Schedule D.
Outlook for the 14-week First Quarter
of Fiscal Year 2018The following statements are based on
current expectations, and as indicated, are presented on a GAAP and
non-GAAP basis. 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.
GAAP
Non-GAAP Adjustments
Non-GAAP Revenue
$1.44B to $1.54B -
$1.44B to $1.54B Gross Margin
67.5% to 68% $44 million (1)
70.5% to 71.0% Operating Expenses $565
million to $575 million $125 million (2)
$440 million to $450 million Operating Margin
Approx. 28% to 31% $169
million (1), (2) Approx. 40% to 42% Interest
& Other Expense Approx. $65 million
- Approx. $65 million Tax
Rate Approx. 13% $16
million to $17 million (3) Approx. 12%
Earnings per Share* $0.79 to
$0.95 $0.41 (4)
$1.20 to $1.36
* The sum of the individual per share amounts may not equal the
total due to rounding.
(1) Non-GAAP gross margin excludes $44
million of costs comprised of the following:
- $35 million of recurring amortization
of purchased intangible assets
- $8 million of recurring depreciation of
step up value on purchased fixed assets
- $1 million of recurring fair value
adjustment associated with the replacement of share-based awards in
ADI’s acquisition of Linear Technology
(2) Non-GAAP operating expenses
exclude $125 million of costs comprised of the
following:
- $107 million of recurring amortization
of purchased intangible assets
- $8 million of recurring fair value
adjustment associated with the replacement of share-based awards in
ADI’s acquisition of Linear Technology
- $10 million of transaction and
integration related costs associated with ADI’s acquisition of
Linear Technology
(3) Non-GAAP tax rate excludes the tax
effects of the reconciling adjustments noted in the two footnotes
above.
(4) Non-GAAP earnings per share includes
$0.41, which represents the net impact of the non-GAAP adjustments
noted above on a per share basis consisting of:
- acquisition-related expenses including
amortization of purchased intangible assets, depreciation of step
up value on purchased fixed assets, and the fair value adjustment
associated with the replacement of share-based awards in ADI’s
acquisition of Linear Technology ($0.43)
- acquisition-related transaction costs
($0.03)
- the effect on income tax of the prior
items (-$0.05)
Conference Call Scheduled for Today, Tuesday, November 21,
2017 at 10:00 am ETADI will host a conference call to discuss
fourth quarter and fiscal 2017 results and short-term outlook
today, beginning at 10:00 am 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:
83006584, 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.
Schedules E and F of this press release provides the
reconciliation of the Company’s historical non-GAAP measures to
their most comparable GAAP measures.
Management uses non-GAAP measures internally 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
evaluating the Company’s core business and trends across different
reporting periods on a consistent basis. Management also uses
these non-GAAP measures as the primary performance measurement when
communicating with analysts and investors regarding the Company’s
earnings results and outlook and believes that the presentation of
these non-GAAP measures is useful to investors because it provides
investors with the operating results that management uses to manage
the Company and enables investors and analysts to evaluate the
Company’s core business. Management also believes that the non-GAAP
liquidity measure free cash flow is useful both internally and to
investors because it provides information about the amount of cash
generated after capital expenditures that is then available to
repay debt obligations, make investments and fund acquisitions, and
for certain other activities.
The following items are included in our Non-GAAP revenue,
non-GAAP gross margin, non-GAAP operating income, non-GAAP
operating margin, and non-GAAP diluted earnings per share:
Acquisition-Related Deferred Revenue: Deferred revenue related
to shipments of Linear Technology products by distributors to end
customers that were received by the distributors prior to the
Company’s acquisition of Linear Technology. Business combination
accounting principles require the write down of deferred revenue in
conjunction with the acquisition. We included these revenues in our
non-GAAP measures because they relate to a specific transaction and
are reflective of our ongoing financial performance.
The following items are excluded from our non-GAAP gross
margin, non-GAAP operating expenses, non-GAAP operating income,
non-GAAP operating margin, and non-GAAP diluted earnings per
share:
Acquisition-Related Expenses: Expenses incurred as a result of
current and prior period acquisitions and primarily include
expenses associated with the fair value adjustments to inventory,
property, plant and equipment and amortization of acquisition
related intangibles, which include acquired intangibles such as
purchased technology and customer relationships. Expenses also
include severance payments, equity award accelerations and the fair
value adjustment associated with the replacement of share-based
awards related to the Linear Technology acquisition. We excluded
these costs from our non-GAAP measures because they relate to
specific transactions and are not reflective of our ongoing
financial performance.
The following items are excluded from our non-GAAP operating
expenses, non-GAAP operating income, non-GAAP operating margin, and
non-GAAP diluted earnings per share:
Acquisition-Related Transaction Costs: Costs directly related to
the Linear Technology acquisition, including legal, accounting and
other professional fees, as well as integration-related costs. We
excluded these costs from our non-GAAP measures because they relate
to a specific transaction and are not reflective of our ongoing
financial performance.
Restructuring-Related Expenses: These expenses are incurred in
connection with facility closures, consolidation of manufacturing
facilities, severance, and other cost reduction efforts. We
excluded these expenses from our non-GAAP measures because 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 items are excluded from our non-GAAP other
expense and non-GAAP diluted earnings per share:
Loss on Extinguishment of Debt: In the first quarter of fiscal
2016, the Company redeemed its outstanding 3.0% senior unsecured
notes due April 15, 2016. The Company recognized a net loss on debt
extinguishment of approximately $3.3 million, which was comprised
of a make-whole premium and the write off of unamortized debt
issuance and discount costs. We excluded these costs from our
non-GAAP measures because they are not reflective of our ongoing
financial performance.
Amortization of Deferred Financing Costs: In the third quarter
of fiscal 2016, in connection with the Linear Technology
acquisition, the Company obtained bridge financing commitments and
incurred financing fees which will be amortized into interest
expense over the term of the bridge financing commitments. In the
first quarter of fiscal 2017, the Company replaced a portion of the
bridge financing commitments with proceeds from the issuance of
$2.1 billion of senior unsecured notes. As a result, the Company
accelerated $7.2 million of the unamortized bridge financing
commitment fees into interest expense. In the fourth quarter of
2016, the Company replaced a portion of the bridge financing
commitments with a 3-year and 5-year unsecured term loan facility.
As a result, the Company accelerated $13.7 million of the
unamortized bridge financing commitment fees into interest expense.
We excluded these costs from our non-GAAP measures because they are
not reflective of our ongoing financial performance.
The following items are excluded from our non-GAAP diluted
earnings per share:
Tax-Related Items: Tax adjustments associated with the non-GAAP
items discussed above. In the fourth quarter of 2017, the Company
recorded a $10 million tax expense associated with a prior period
tax liability. In addition, in the third quarter of fiscal 2017,
the Company released $50 million of reserves associated with a
favorable ruling on its petition with the U.S. Tax Court regarding
the beneficial treatment of dividends paid from foreign owned
companies under The American Jobs Creation Act. Also, in the third
quarter of fiscal 2017, the Company recorded $98 million of tax
expense associated with the remittance of cash held outside of the
United States related to the post-acquisition integration of Linear
Technology. In the second quarter of 2017, the Company also
recorded a discrete tax item related to the release of a state tax
credit valuation allowance resulting from the Company’s acquisition
of Linear Technology. Finally, in the first quarter of 2016, the
Company recorded a $7.5 million tax benefit related to the
reinstatement of the R&D tax credit in December 2015,
retroactive to January 1, 2015. 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.
The following items are excluded from our calculation of
non-GAAP free cash flow:
Federal Income Tax Payments: In the third quarter of fiscal
2017, the Company paid $750 million in income taxes associated with
the acquisition of Linear. These payments were principally related
to pre-acquisition liabilities but also included $98 million
associated with the remittance of cash held outside of the United
States related to the post-acquisition integration of Linear
Technology. We excluded these payments from our non-GAAP free cash
flow measure because they relate to a specific transaction and are
not reflective of our ongoing financial performance.
These non-GAAP measures have material limitations in that they
do not reflect all of the amounts associated with the Company’s
results of operations as determined in accordance with GAAP and
should not be considered in isolation from, or as a substitute for,
the Company’s financial results presented in accordance with GAAP.
In addition, the Company’s 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
including or 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.
About Analog DevicesAnalog Devices (Nasdaq: ADI) is the
leading global high-performance analog technology company dedicated
to solving the toughest engineering challenges. We enable our
customers to interpret the world around us by intelligently
bridging the physical and digital with unmatched technologies that
sense, measure, power, connect and interpret. Visit
http://www.analog.com.
Forward Looking StatementsThis press release contains
forward-looking statements, which address a variety of subjects
including, for example, our statements regarding expected revenue,
earnings per share, gross margin, operating expenses, interest and
other expense, tax rate, and other financial results, expected
operating leverage, production and inventory levels, expected
market trends, and expected customer demand and order rates for our
products and expected benefits and synergies of the acquisition of
Linear Technology Corporation (“Linear Technology”), including
expected growth rates of the combined companies, expected product
offerings, product development, marketing position and technical
advances resulting from the transaction. 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: 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, higher than expected or unexpected costs
associated with or relating to the acquisition of Linear Technology
and the integration of the businesses; the risk that expected
benefits, synergies and growth prospects of the acquisition may not
be fully achieved in a timely manner, or at all; the risk that
Linear Technology’s business may not be successfully integrated
with Analog Devices’; the risk that we will be unable to retain and
hire key personnel; and the risk that disruption resulting from the
acquisition may adversely affect our business and relationships
with our customers, suppliers or employees. 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 Quarterly Report on Form 10-Q and 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.
(ADI-WEB)
Analog Devices, Fourth Quarter, Fiscal
2017
Schedule
A
Revenue and Earnings Summary
(Unaudited)
(In thousands, except per-share
amounts)
Three Months Ended Twelve Months Ended
4Q 17 3Q 17
4Q 16 FY 17 FY 16
Oct. 28,2017
July 29,2017 Oct.
29,2016 Oct. 28,2017
Oct. 29,2016 Revenue $ 1,541,170 $ 1,433,902 $
1,003,623 $ 5,107,503 $ 3,421,409 Year-to-year change 53.6 % 64.9 %
3.0 % 49.3 % — % Quarter-to-quarter change 7.5 % 24.9 % 15.0 % Cost
of sales (1) 535,145
667,278 336,926 2,045,907
1,194,236 Gross margin 1,006,025
766,624 666,687 3,061,596 2,227,173 Gross margin percentage 65.3 %
53.5 % 66.4 % 59.9 % 65.1 % Year-to-year change (basis points) (110
) (1,230 ) 80 (520 ) (70 ) Quarter-to-quarter change (basis points)
1,180 (230 )
60
Operating expenses: R&D (1) 273,746 275,670 172,926 968,602
653,816 Selling, marketing and G&A (1) 185,721 183,980 118,881
691,046 461,438 Amortization of intangibles 98,348 112,153 17,899
297,351 70,123 Special charges —
— — 49,463
13,684 Total operating expenses 557,815
571,803 309,706 2,006,462 1,199,061 Total operating expenses
percentage 36.2 % 39.9 % 30.9 % 39.3 % 35.0 % Year-to-year change
(basis points) 530 500 (2,360 ) 430 (660 ) Quarter-to-quarter
change (basis points) (370 )
(320 ) (400 )
Operating income 448,210 194,821 356,981 1,055,134
1,028,112 Operating income percentage 29.1 % 13.6 % 35.6 % 20.7 %
30.0 % Year-to-year change (basis points) (650 ) (1,730 ) 2,450
(930 ) 580 Quarter-to-quarter change (basis points)
1,550 90
470 Other expense
66,546 68,023
33,547 226,649
71,191 Income before income tax 381,664
126,798 323,434 828,485 956,921 Provision for income taxes 34,014
57,882 27,277 101,226 95,257 Tax rate percentage
8.9 % 45.6 % 8.4 %
12.2 % 10.0 % Net income (2)
$ 347,650 $ 68,916
$ 296,157 $ 727,259
$ 861,664 Shares used for EPS - basic 368,043 367,315
307,854 346,371 308,736 Shares used for EPS - diluted 372,053
371,159 311,633 350,484 312,308 Earnings per common share -
basic $ 0.94 $ 0.18 $ 0.96 $ 2.09 $ 2.79 Earnings per common share
- diluted $ 0.93 $ 0.18 $ 0.95 $ 2.07 $ 2.76 Dividends paid
per share $ 0.45 $
0.45 $ 0.42 $ 1.77
$ 1.66 (1) Includes stock-based compensation
expense as follows: Cost of sales $ 3,684 $ 4,375 $ 1,886 $ 12,569
$ 7,808 R&D $ 16,546 $ 15,781 $ 7,007 $ 51,258 $ 27,039
Selling, marketing and G&A $ 12,119 $ 12,668 $ 6,341 $ 40,361 $
28,574
(2) Under the two-class method, earnings per share is calculated
using net earnings allocable to common shares, which is derived by
reducing net income by the income allocable to participating
securities. Net income allocable to common shares used in the basic
and diluted earnings per share calculation was $346,982 and $67,935
for the three months ended October 28, 2017 and July 29, 2017 and
was $725,429 for the twelve months ended October 28, 2017. There
was no net income allocated to participating securities in the
three months or twelve months ended October 29, 2016.
Analog Devices, Fourth Quarter, Fiscal
2017
Schedule
B
Selected Balance Sheet Information
(Unaudited)
(In thousands)
4Q 17 3Q 17 4Q 16
Oct. 28,2017 July
29,2017 Oct. 29,2016
Cash & short-term investments $ 1,047,838 $ 908,569 $ 4,055,793
Accounts receivable, net 688,953 692,552 477,609 Inventories (1)
550,816 519,695 376,555 Other current assets
63,731 67,827
64,906 Total current assets 2,351,338 2,188,643 4,974,863
PP&E, net 1,107,304 1,098,848 636,116 Investments 57,410 60,464
48,089 Goodwill 12,217,455 12,241,815 1,679,116 Intangible assets,
net 5,319,425 5,440,692 549,368 Other 88,362
84,533
82,726 Total assets $ 21,141,294
$ 21,114,995 $ 7,970,278
Deferred income on shipments to distributors, net $ 473,972
$ 449,663 $ 351,538 Other current liabilities 822,360 651,414
431,396 Debt, current 300,000 — — Long-term debt 7,551,084
8,199,230 1,732,177 Deferred income taxes 1,674,683 1,730,253
109,931 Non-current liabilities 157,655 161,535 179,618
Shareholders' equity 10,161,540
9,922,900 5,165,618 Total
liabilities & equity $ 21,141,294
$ 21,114,995 $
7,970,278
(1) Includes $5,373, $4,628, and $2,486 related to stock-based
compensation in 4Q17, 3Q17, and 4Q16, respectively.
Analog Devices, Fourth Quarter, Fiscal
2017
Schedule
C
Cash Flow Statement (Unaudited)
(In thousands)
Three Months Ended Twelve Months Ended
4Q 17 3Q 17
4Q 16 FY 17 FY 16 Oct.
28,2017 July 29,2017
Oct. 29,2016 Oct.
28,2017 Oct. 29,2016
Cash flows from operating activities: Net Income $ 347,650 $ 68,916
$ 296,157 $ 727,259 $ 861,664 Adjustments to reconcile net income
to net cash provided by operations: Depreciation 56,298 55,217
34,116 194,666 134,540 Amortization of intangibles 133,438 147,238
19,547 389,393 75,250 Stock-based compensation expense 32,349
32,824 15,234 104,188 63,421 Loss on extinguishment of debt — — — —
3,290 Cost of goods sold for inventory acquired 42,040 195,565 —
358,718 — Other non-cash activity 7,748 (42,762 ) 22,199 (10,865 )
24,570 Excess tax benefit - equity based awards (11,538 ) (4,282 )
(3,273 ) (41,773 ) (10,453 ) Deferred income taxes (62,344 )
(676,490
)
(12,941 )
(825,869
) 8,124 Changes in operating assets and liabilities
150,173
(140,509
) 115,945
216,875
120,489 Total adjustments
348,164 (433,199 )
190,827 385,333 419,231
Net cash provided by operating activities
695,814 (364,283 )
486,984 1,112,592
1,280,895 Percent of revenue 45.1 %
(25.4 )% 48.5 % 21.8 %
37.4 % Cash flows from investing
activities: Purchases of short-term available-for-sale investments
— (37 ) (1,841,330 ) (705,485 ) (7,697,260 ) Maturities of
short-term available-for-sale investments 1 270,918 1,364,419
3,362,792 6,375,361 Sales of short-term available-for-sale
investments — 219,799 42,645 577,187 332,716 Additions to property,
plant and equipment (65,215 ) (63,617 ) (41,224 ) (204,098 )
(127,397 ) Payments for acquisitions, net of cash acquired — 70
(80,967 ) (9,632,568 ) (83,170 ) Change in other assets
(2,717 ) (1,062 )
(472 ) (15,842 ) (18,520 ) Net cash
(used for) provided by investing activities
(67,931 ) 426,071
(556,929 ) (6,618,014 ) (1,218,270 )
Cash flows from financing activities: Early Termination of debt — —
— — (378,156 ) Debt repayment (350,000 ) (4,700,000 ) — (5,050,000
) — Proceeds from (payments of) derivative instruments — — — 3,904
(33,430 ) Proceeds from debt — — — 11,156,164 1,235,331 Payments of
deferred financing fees — — (4,375 ) (5,625 ) (26,583 ) Dividend
payments to shareholders (166,857 ) (166,265 ) (129,643 ) (602,119
) (513,180 ) Repurchase of common stock (10,598 ) (8,955 ) (1,412 )
(46,533 ) (370,061 ) Proceeds from employee stock plans 28,058
17,971 22,154 133,302 61,496 Excess tax benefit - equity based
awards 11,538 4,282 3,273 41,773 10,453 Contingent consideration
payment (1,764 ) — (1,409 ) (1,764 ) (1,409 ) Change in other
financing activities (517 )
9 45 (524 )
(7,378 ) Net cash (used for) provided by financing
activities (490,140 )
(4,852,958 ) (111,367 ) 5,628,578
(22,917 ) Effect of exchange rate changes on
cash 1,526 1,996
(1,226 ) 3,550
(2,929 ) Net (decrease) increase in cash and cash
equivalents 139,269 (4,789,174 ) (182,538 ) 126,706 36,779 Cash and
cash equivalents at beginning of period
908,569 5,697,743
1,103,670 921,132 884,353
Cash and cash equivalents at end of period
$ 1,047,838 $ 908,569
$ 921,132 $ 1,047,838
$ 921,132
Analog Devices, Fourth Quarter, Fiscal
2017
Schedule
DRevenue Trends by End Market
(Unaudited)(In
thousands)
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 Oct.
28,2017 July 29,2017
Oct. 29,2016 Revenue
% Q/Q
% Y/Y % Revenue
Revenue Industrial $ 720,258 47 %
3 % 82 % $ 698,442 $
395,433 Automotive 235,190 15 % 3 % 66 % 227,526 141,756 Consumer
313,374 20 % 24 % 6 % 252,646 294,373 Communications 272,348
18 % 7 % 58 % 255,288 172,061
Total
Revenue $ 1,541,170
100 % 7 % 54 % $
1,433,902 $ 1,003,623
Twelve Months Ended Oct. 28,2017
Oct. 29,2016
Revenue %
Y/Y % Revenue Industrial $ 2,361,549
46% 58% $ 1,497,070 Automotive 782,961
15% 45% 541,774 Consumer 1,047,606 21% 52% 687,697 Communications
915,387 18% 32% 694,868
Total
Revenue $ 5,107,503
100% 49% $ 3,421,409
Analog Devices, Fourth Quarter, Fiscal
2017
Schedule
E
Reconciliation from GAAP to Non-GAAP
Revenue and Earnings Measures (In thousands, except per-share
amounts)(Unaudited)
See "Non-GAAP Financial Information" in
this press release for a description of the items excluded from our
non-GAAPmeasures.
Three Months Ended Twelve Months Ended
4Q 17 3Q 17
4Q 16 FY 17 FY 16 Oct.
28,2017 July 29,2017
Oct. 29,2016 Oct.
28,2017 Oct. 29,2016
GAAP Revenue $ 1,541,170 $
1,433,902 $ 1,003,623 $
5,107,503 $ 3,421,409 Y/Y Revenue growth
% 53.6 % 64.9 %
3.0
% 49.3 % — % Q/Q Revenue
growth % 7.5 % 24.9 % 15.0
% Acquisition-Related Deferred Revenues —
24,576 —
85,334 —
Non-GAAP Revenue $ 1,541,170
$ 1,458,478
$ 1,003,623 $
5,192,837 $
3,421,409 Y/Y Revenue growth % 53.6
% 67.7 % 3.0 % 51.8
% — % Q/Q Revenue growth % 5.7
% 20.7 % 15.0 % GAAP
Gross Margin $ 1,006,025 $ 766,624
$ 666,687 $ 3,061,596 $
2,227,173 Gross Margin Percentage 65.3
% 53.5 % 66.4 % 59.9
% 65.1 % Acquisition-Related Deferred Revenues
— 19,782 — 66,261 — Acquisition-Related Expenses 85,974
241,554 2,040
480,438 6,849
Non-GAAP
Gross Margin $ 1,091,999
$ 1,027,960
$ 668,727 $ 3,608,295
$ 2,234,022 Gross
Margin Percentage 70.9 % 70.5 %
66.6 % 69.5 % 65.3 %
GAAP Operating Expenses $ 557,815
$ 571,803 $ 309,706 $
2,006,462 $ 1,199,061 Percent of
Revenue 36.2 % 39.9 % 30.9
% 39.3 % 35.0 %
Acquisition-Related Expenses (107,736 ) (126,732 ) (17,999 )
(328,059 ) (70,555 ) Acquisition-Related Transaction Costs (15,108
) (8,017 ) (5,210 ) (70,401 ) (13,519 ) Restructuring-Related
Expense — —
— (49,463 ) (13,684 )
Non-GAAP
Operating Expenses $ 434,971
$ 437,054 $
286,497 $ 1,558,539
$ 1,101,303 Percent of
Revenue 28.2 % 30.0 % 28.5
% 30.0 % 32.2 % GAAP
Operating Income/Margin $ 448,210 $
194,821 $ 356,981 $ 1,055,134
$ 1,028,112 Percent of Revenue 29.1
% 13.6 % 35.6 % 20.7
% 30.0 % Acquisition-Related Deferred Revenues
— 19,782 — 66,261 — Acquisition-Related Expenses 193,710 368,286
20,039 808,497 77,404 Acquisition-Related Transaction Costs 15,108
8,017 5,210 70,401 13,519 Restructuring-Related Expense —
— — 49,463
13,684
Non-GAAP Operating
Income/Margin $ 657,028
$ 590,906 $
382,230 $ 2,049,756
$ 1,132,719 Percent of
Revenue 42.6 % 40.5 % 38.1
% 39.5 % 33.1 % GAAP
Other Expense $ 66,546 $ 68,023
$ 33,547 $ 226,649 $
71,191 Percent of Revenue 4.3 %
4.7 % 3.3 % 4.4 %
2.1 % Loss on Extinguishment of Debt — — — — (3,290 )
Amortization of Deferred Financing Costs —
— (13,655 ) (7,214 )
(13,665 )
Non-GAAP Other Expense $
66,546 $ 68,023
$ 19,982
$ 219,435
$ 54,236 Percent of Revenue 4.3
% 4.7 % 2.0 % 4.2
% 1.6 % GAAP Diluted EPS
$ 0.93 $
0.18 $ 0.95
$ 2.07 $
2.76 Impact of Loss on Extinguishment of Debt — — — — 0.01
Acquisition-Related Deferred Revenue — 0.05 — 0.19 —
Acquisition-Related Expenses 0.52 0.99 0.06 2.31 0.25
Acquisition-Related Transaction Costs 0.04 0.02 0.02 0.20 0.04
Amortization of Deferred Financing Costs — — 0.04 0.02 0.04
Restructuring-Related Expense — — — 0.14 0.04 Income Tax Effect of
Above Items (0.08 ) (0.10 ) (0.02 ) (0.33 ) (0.06 ) Impact of State
Tax Valuation Release — — — (0.04 ) — Impact of Adjustments to
Prior Period Tax Liabilities 0.03 (0.14 ) — (0.11 ) — Impact of the
Reinstatement of the R&D Tax Credit — — — — (0.02 ) Impact of
Tax Remittance for Linear Integration —
0.26 — 0.28
—
Non-GAAP Diluted EPS (1) $
1.45 $ 1.26
$ 1.05 $
4.72 $ 3.07
(1) The sum of the individual per share amounts may not equal
the total due to rounding.
Analog Devices, Fourth Quarter, Fiscal
2017
Schedule
F
Reconciliation of Net Cash Flows
Provided by Operating Activities to Free Cash Flows
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
4Q 17 3Q 17
4Q 16 FY 17 FY 16 Oct.
28,2017 July 29,2017
Oct. 29,2016 Oct.
28,2017 Oct. 29,2016
Net cash provided by operating activities $ 695,814 $ (364,283 ) $
486,984 $ 1,112,592 $ 1,280,895 % of revenue 45.1 % (25.4 )% 48.5 %
21.8 % 37.4 % Non-GAAP adjustments: Federal income tax payments —
750,000 —
750,000 —
Adjusted cash flows from operations $ 695,814 $ 385,717 $
486,984 $ 1,862,592 $ 1,280,895 Capital expenditures (65,215 )
(63,617 ) (41,224 )
(204,098 ) (127,397 ) Adjusted free cash flow
$ 630,599 $ 322,100
$ 445,760 $ 1,658,494
$ 1,153,498 % of non-GAAP revenue 40.9 % 22.1 % 44.4
% 31.9 % 33.7 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171121005467/en/
Analog Devices, Inc.Mr. Ali Husain, 781-461-3282781-461-3491
(fax)Treasurer and Head of Investor
Relationsinvestor.relations@analog.com
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