- Revenues were approximately $1.6
billion for the fourth quarter and approximately $6.2 billion for
fiscal 2018
- B2B revenues increased double digits
year-over-year in both the fourth quarter and for fiscal year 2018;
growth was led by the industrial and communications sectors
- Operating Cash Flow of $2.4 billion and
Free Cash Flow of $2.2 billion on a trailing twelve months
basis
- $1.53 billion of debt reduction
lowering the leverage ratio from 2.6x to 1.9x during fiscal
2018
- Returned $364 million to shareholders
in the fourth quarter through dividends and share repurchases
Analog Devices, Inc. (Nasdaq: ADI), a leading global
high-performance analog technology company, today announced
financial results for its fourth quarter and fiscal year 2018,
which ended November 3, 2018.
“We delivered very strong financial results in our fourth
quarter, achieving record revenue and earnings per share to cap off
a successful year,” said Vincent Roche, President and CEO. “Revenue
growth was once again led by strength in our B2B markets, with
particular strength in the industrial and communications sectors.
Our portfolio of innovative solutions, customer-centric approach,
and disciplined operational execution drove high profitability and
strong cash generation, allowing us to return more than $360
million to shareholders in the quarter.”
“Our diverse business model, combined with a comprehensive,
market-leading portfolio that is strategically pointed at secular
growth trends across our B2B markets, enables us to navigate the
current macro climate. I am pleased that we continue to execute
exceptionally well thanks in large part to the thousands of
talented people across ADI who are dedicated to delivering quality
and value for our customers every day.”
The ADI Board of Directors has also declared a quarterly cash
dividend of $0.48 per outstanding share of common stock.
The dividend will be paid on December 10, 2018 to all
shareholders of record at the close of business on November
29, 2018.
Supplemental schedules relating to our fourth quarter and fiscal
year 2018 financial results are also available on our investor site
at investor.analog.com.
Results for the Fourth Quarter of
Fiscal Year 2018
- Revenue totaled $1.6 billion, up 2%
sequentially and up 4% year-over-year
- GAAP gross margin of 68.5% of revenue;
Non-GAAP gross margin of 71.2% of revenue
- GAAP operating margin of 32.2% of
revenue; Non-GAAP operating margin of 43.0% of revenue
- GAAP diluted EPS of $1.15; Non-GAAP
diluted EPS of $1.55
Results for the Fiscal Year
2018
- Revenue totaled $6.2 billion, up
21% year-over-year on a GAAP basis and 19% on a non-GAAP basis
- GAAP gross margin of 68.3% of revenue;
Non-GAAP gross margin of 71.2% of revenue
- GAAP operating margin of 30.3% of
revenue; Non-GAAP operating margin of 42.4% of revenue
- GAAP diluted EPS of $3.97;
Non-GAAP diluted EPS of $5.94
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 of fiscal 2018, as well as the
immediately prior and year-ago quarters. Additional information on
revenue by end market is provided on Schedule D.
Outlook for the First Quarter of Fiscal
Year 2019The 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-GAAPAdjustments
Non-GAAP Revenue
$1.51 billion(+/- $50 million)
-
$1.51 billion(+/- $50 million)
Gross Margin
68.0%(+/- 20bp)
$44 million (1)
70.8%(+/- 20bp)
Operating Expenses
$565 million(+/- $10 million)
$115 million (2)
$450 million(+/- $10 million)
Operating Margin
30.5%(+/- 100bp)
$159 million (1), (2)
41.0%(+/- 50bp)
Interest & Other Expense ~$56 million
- ~$56 million Tax Rate
14% to 16% $24 million (3) 14% to 16%
Earnings per Share*
$0.92(+/- $0.07)
$0.36 (4)
$1.28(+/- $0.07)
* The sum of the individual per share amounts may not equal the
total due to rounding.
(1) Excludes $44 million of costs comprised of the
following:
- $35 million of recurring amortization
of purchased intangible assets
- $7 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
- $1 million of retention-related
expenses
(2) Excludes $115 million of costs comprised of the
following:
- $108 million of recurring amortization
of purchased intangible assets
- $6 million of recurring fair value
adjustment associated with the replacement of share-based awards in
ADI’s acquisition of Linear Technology
- $1 million of restructuring-related
expenses
(3) Excludes the tax effects of the reconciling adjustments
noted in the two footnotes above.
(4) Includes $0.36, 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 ($0.42)
- the effect on income tax of the prior
items (-$0.06)
Conference Call Scheduled for Today, Tuesday, November 20,
2018 at 10:00 am ETADI will host a conference call to discuss
fourth quarter and full year fiscal 2018 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:
4671569, 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 provide 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 item is 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 Revenues: 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 item is 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 Expense: 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.
Accelerated Stock-Based Compensation Expense: In the fourth
quarter of fiscal 2018, the Company recorded $3.4 million of
stock-based compensation expense for one of its former executive
officers due to the accelerated vesting of restricted stock units
and stock options resulting from a reduction in the requisite
service period for each in accordance with the terms of the
applicable agreements. This stock-based compensation expense and
the related tax effect have no direct correlation to the operation
of our business in the future.
The following item is excluded from our non-GAAP other
expense and non-GAAP diluted earnings per share:
Amortization of Deferred Financing Costs: In the first quarter
of fiscal 2017, the Company replaced a portion of the bridge
financing commitments obtained in connection with the Linear
Technology acquisition 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. 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 provision
for income taxes and non-GAAP diluted earnings per share:
Tax-Related Items: Tax adjustments associated with the non-GAAP
items discussed above. Discrete tax items including tax expense or
benefit related to prior periods; tax benefits related to the
release of a tax reserves for an expired tax years; the release of
reserves associated with a favorable ruling on petitions with the
U.S. Tax Court; tax expense or benefit from changes to state tax
valuation allowances; tax expense associated with the remittance of
cash held outside of the United States related to the
post-acquisition integration of Linear Technology and tax expense
related to the impact of the Tax Cuts and Jobs Act of 2017. 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 item is excluded from our calculation of
adjusted free cash flow for fiscal 2017:
One Time Tax Payment: In the third quarter of fiscal 2017, the
Company paid $750 million in income taxes associated with the
acquisition of Linear Technology. 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 adjusted 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 a
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
market share gains, 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; changes in our estimates of our expected tax rate based on
current tax law, including current interpretations of the Tax Cuts
and Jobs Act of 2017; 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 2018
Schedule
A
Revenue and Earnings Summary (Unaudited) (In thousands,
except per-share amounts)
Three Months Ended
Twelve Months Ended 4Q 18 3Q 18
4Q 17 FY 18 FY 17
Nov. 3,2018
Aug. 4,2018
Oct. 28,2017
Nov. 3,2018 Oct. 28,2017
Revenue $ 1,596,586 $ 1,572,679 $ 1,541,170 $ 6,200,942 $ 5,107,503
Year-to-year change 3.6 % 9.7 % 53.6 % 21.4 % 49.3 %
Quarter-to-quarter change 1.5 % 3.9 % 7.5 % Cost of sales (1)
502,932 502,033
535,145 1,967,640 2,045,907
Gross margin 1,093,654 1,070,646 1,006,025 4,233,302
3,061,596 Gross margin percentage 68.5 % 68.1 % 65.3 % 68.3 % 59.9
% Year-to-year change (basis points) 320 1,460 (110 ) 840 (520 )
Quarter-to-quarter change (basis points) 40
(20 ) 1,180
Operating expenses: R&D (1) 295,699 291,642 273,746
1,165,410 968,602 Selling, marketing and G&A (1) 175,396
171,487 185,721 695,937 691,046 Amortization of intangibles 107,345
107,409 98,348 428,902 297,351 Special charges 1,842
1,069 — 61,318
49,463 Total operating expenses 580,282
571,607 557,815 2,351,567 2,006,462 Total operating expenses
percentage 36.3 % 36.3 % 36.2 % 37.9 % 39.3 % Year-to-year change
(basis points) 10 (360 ) 530 (140 ) 430 Quarter-to-quarter change
(basis points) — (140 )
(370 ) Operating income 513,372
499,039 448,210 1,881,735 1,055,134 Operating income percentage
32.2 % 31.7 % 29.1 % 30.3 % 20.7 % Year-to-year change (basis
points) 310 1,810 (650 ) 960 (930 ) Quarter-to-quarter change
(basis points) 50 100
1,550 Other
expense 55,850 58,445
66,546 243,218 226,649
Income before income tax 457,522 440,594 381,664 1,638,517
828,485 Provision for income taxes 24,557 26,130 34,014 143,085
101,226 Tax rate percentage 5.4 % 5.9 %
8.9 % 8.7 % 12.2 % Net income (2)
$ 432,965 $ 414,464
$ 347,650 $ 1,495,432 $
727,259 Shares used for EPS - basic 371,074 371,315 368,043
370,430 346,371 Shares used for EPS - diluted 375,116 375,815
372,053 374,938 350,484 Earnings per common share - basic $
1.16 $ 1.11 $ 0.94 $ 4.02 $ 2.09 Earnings per common share -
diluted $ 1.15 $ 1.10 $ 0.93 $ 3.97 $ 2.07 Dividends paid
per share $ 0.48 $ 0.48
$ 0.45 $ 1.89 $ 1.77
(1) Includes stock-based compensation expense as follows:
Cost of sales $ 4,958 $ 5,734 $ 3,684 $ 18,733 $ 12,569 R&D $
21,680 $ 18,018 $ 16,546 $ 81,444 $ 51,258 Selling, marketing and
G&A $ 10,816 $ 13,143 $ 12,119 $ 50,988 $ 40,361
(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 $431,621, $412,938
and $345,876 for the three months ended November 3, 2018, August 4,
2018 and October 28, 2017, respectively. Net income was $1,489,523
and $725,016 for the twelve months ended November 3, 2018 and
October 28, 2017, respectively.
Analog Devices, Fourth Quarter, Fiscal 2018
Schedule
B
Selected Balance Sheet Information (Unaudited) (In
thousands) 4Q
18 3Q 18 4Q 17
Nov. 3,2018
Aug. 4,2018 Oct.
28,2017 Cash & cash equivalents $ 816,591 $ 772,575
$ 1,047,838 Accounts receivable, net 639,717 710,753 688,953
Inventories (1) 586,760 563,645 550,816 Other current assets
69,058 69,584
63,731 Total current assets 2,112,126 2,116,557 2,351,338 PP&E,
net 1,154,328 1,107,991 1,107,304 Investments 68,583 69,500 57,410
Goodwill 12,252,604 12,254,161 12,217,455 Intangible assets, net
4,778,192 4,920,739 5,319,425 Other 83,946
79,668 88,362 Total assets
$ 20,449,779 $ 20,548,616
$ 21,141,294 Deferred income on shipments to
distributors, net $ 487,417 $ 547,279 $ 473,972 Other current
liabilities 851,721 769,104 822,360 Debt, current 67,000 22,500
300,000 Long-term debt 6,265,674 6,532,746 7,551,084 Deferred
income taxes 927,065 932,813 1,674,683 Other Non-current
liabilities (2) 862,362 887,957 157,655 Shareholders' equity
10,988,540 10,856,217
10,161,540 Total liabilities & equity $
20,449,779 $ 20,548,616 $
21,141,294
(1) Includes $7,128, $6,370, and $5,373 related to stock-based
compensation in 4Q18, 3Q18, and 4Q17, respectively.(2) Includes
$693,404 and $691,038 related to the one-time transition tax
related to the Tax Cuts and Jobs Act of 2017 in 4Q18 and 3Q18,
respectively.
Analog Devices, Fourth Quarter, Fiscal 2018
Schedule
C
Cash Flow Statement (Unaudited)
(In thousands)
Three Months
Ended Twelve Months Ended 4Q 18
3Q 18 4Q 17 FY 18
FY 17
Nov. 3,2018
Aug. 4,2018 Oct.
28,2017 Nov. 3,2018 Oct.
28,2017 Cash flows from operating activities: Net Income
$ 432,965 $ 414,464 $ 347,650 $ 1,495,432 $ 727,259 Adjustments to
reconcile net income to net cash provided by operations:
Depreciation 58,874 56,647 56,298 228,525 194,666 Amortization of
intangibles 142,316 143,218 133,438 570,538 389,393 Stock-based
compensation expense 37,454 36,895 32,349 151,165 104,188 Cost of
goods sold for inventory acquired — — 42,040 — 358,718 Other
non-cash activity 14,550 7,103 7,748 36,569 (10,865 ) Deferred
income taxes (526 ) (2,019 ) (62,344 ) (736,759 ) (825,869 )
Changes in operating assets and liabilities 28,808
(35,570 ) 150,173 696,891
216,875 Total adjustments
281,476 206,274 359,702
946,929 427,106 Net cash
provided by operating activities 714,441
620,738 707,352 2,442,361
1,154,365 Percent of revenue
44.7 % 39.5 % 45.9 % 39.4 %
22.6 % Cash flows from investing activities:
Purchases of short-term available-for-sale investments — — — —
(705,485 ) Maturities of short-term available-for-sale investments
— — 1 — 3,362,792 Sales of short-term available-for-sale
investments — — — — 577,187 Additions to property, plant and
equipment (86,004 ) (51,750 ) (65,215 ) (254,876 ) (204,098 )
Payments for acquisitions, net of cash acquired — (500 ) — (52,839
) (9,632,568 ) Change in other assets (3,015 )
(2,239 ) (2,717 ) (6,283 )
(15,842 ) Net cash used for investing activities
(89,019 ) (54,489 ) (67,931 ) (313,998
) (6,618,014 ) Cash flows from financing
activities: Debt repayment (225,000 ) (430,000 ) (350,000 )
(2,275,000 ) (5,050,000 ) Proceeds from derivative instruments — —
— — 3,904 Proceeds from debt — — — 743,778 11,156,164 Payments of
deferred financing fees — — — — (5,625 ) Dividend payments to
shareholders (179,416 ) (178,890 ) (166,857 ) (703,307 ) (602,119 )
Repurchase of common stock (184,116 ) (11,953 ) (10,598 ) (225,977
) (46,533 ) Proceeds from employee stock plans 10,668 22,801 28,058
99,026 133,302 Contingent consideration payment (618 ) (1,730 )
(1,764 ) (2,890 ) (1,764 ) Change in other financing activities
(2,264 ) 647 (517
) 6,328 (524 ) Net cash (used for) provided by
financing activities (580,746 )
(599,125 ) (501,678 ) (2,358,042 ) 5,586,805
Effect of exchange rate changes on cash (660 )
(1,066 ) 1,526 (1,568 )
3,550 Net increase (decrease) in cash and cash
equivalents 44,016 (33,942 ) 139,269 (231,247 ) 126,706 Cash and
cash equivalents at beginning of period 772,575
806,517 908,569
1,047,838 921,132 Cash and cash
equivalents at end of period $ 816,591
$ 772,575 $ 1,047,838 $ 816,591
$ 1,047,838
Analog Devices, Fourth Quarter, Fiscal
2018
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 Nov.
3,2018 Aug 4,2018
Oct. 28,2017 Revenue %
* Q/Q % Y/Y %
Revenue Revenue Industrial $ 788,358
49% —% 10% $ 789,896 $ 713,580
Automotive 245,350 15% (1)% 2% 248,835 241,450 Consumer 210,677 13%
1% (33)% 208,554 313,401 Communications 352,201
22% 8% 29% 325,394 272,739
Total Revenue
$ 1,596,586 100%
2% 4% $ 1,572,679 $
1,541,170
____________
* The sum of the individual percentages does not equal the total
due to rounding.
Twelve Months Ended Nov.
3,2018 Oct.
28,2017 Revenue %
Y/Y % Revenue Industrial $ 3,102,508
50% 32% $ 2,342,404 Automotive 988,741 16% 23%
803,211 Consumer 856,778 14% (18)% 1,044,697 Communications
1,252,915 20% 37% 917,191
Total Revenue
$ 6,200,942 100%
21% $ 5,107,503
Analog Devices, Fourth Quarter, Fiscal
2018
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 18 3Q 18
4Q 17 FY 18 FY 17
Nov. 3,2018 Aug. 4,2018
Oct. 28,2017 Nov. 3,2018
Oct. 28,2017 GAAP Revenue
$ 1,596,586 $ 1,572,679 $
1,541,170 $ 6,200,942 $
5,107,503 Y/Y Revenue growth % 3.6 %
9.7 % 53.6 % 21.4 %
49.3 % Q/Q Revenue growth % 1.5
% 3.9 % 7.5 %
Acquisition-Related Deferred Revenues — —
— — 85,334
Non-GAAP Revenue $ 1,596,586
$ 1,572,679 $
1,541,170 $ 6,200,942
$ 5,192,837 Y/Y Revenue growth %
3.6 % 7.8 % 53.6 %
19.4 % 51.8 % Q/Q Revenue growth
% 1.5 % 3.9 % 5.7 %
GAAP Gross Margin $ 1,093,654 $
1,070,646 $ 1,006,025 $
4,233,302 $ 3,061,596 Gross Margin
Percentage 68.5 % 68.1 %
65.3 % 68.3 % 59.9 %
Acquisition-Related Deferred Revenues — — — — 66,261
Acquisition-Related Expenses 43,896 48,488
85,974 180,903
480,438
Non-GAAP Gross Margin $
1,137,550 $ 1,119,134
$ 1,091,999 $
4,414,205 $ 3,608,295
Gross Margin Percentage 71.2 %
71.2 % 70.9 % 71.2 %
69.5 % GAAP Operating Expenses $
580,282 $ 571,607 $ 557,815
$ 2,351,567 $ 2,006,462 Percent of
Revenue 36.3 % 36.3 % 36.2
% 37.9 % 39.3 %
Acquisition-Related Expenses (117,651 ) (118,308 ) (107,736 )
(477,132 ) (328,059 ) Acquisition-Related Transaction Costs (5,628
) (3,962 ) (15,108 ) (22,197 ) (70,401 ) Accelerated Stock-Based
Compensation Expense (3,402 ) — — (3,402 ) — Restructuring-Related
Expense (1,842 ) (1,069 ) —
(61,318 ) (49,463 )
Non-GAAP Operating
Expenses $ 451,759 $
448,268 $ 434,971
$ 1,787,518 $
1,558,539 Percent of Non-GAAP Revenue
28.3 % 28.5 % 28.2 %
28.8 % 30.0 % GAAP Operating
Income/Margin $ 513,372 $ 499,039
$ 448,210 $ 1,881,735 $
1,055,134 Percent of Revenue 32.2 %
31.7 % 29.1 % 30.3 %
20.7 % Acquisition-Related Deferred Revenues — — — —
66,261 Acquisition-Related Expenses 161,547 166,796 193,710 658,035
808,497 Acquisition-Related Transaction Costs 5,628 3,962 15,108
22,197 70,401 Accelerated Stock-Based Compensation Expense 3,402 —
— 3,402 — Restructuring-Related Expense 1,842
1,069 — 61,318
49,463
Non-GAAP Operating Income/Margin $
685,791 $ 670,866
$ 657,028 $
2,626,687 $ 2,049,756
Percent of Non-GAAP Revenue 43.0 %
42.7 % 42.6 % 42.4 %
39.5 % GAAP Other Expense $
55,850 $ 58,445 $ 66,546
$ 243,218 $ 226,649 Percent of
Revenue 3.5 % 3.7 % 4.3
% 3.9 % 4.4 % Amortization of
Deferred Financing Costs — —
— — (7,214 )
Non-GAAP Other
Expense $ 55,850 $
58,445 $ 66,546
$ 243,218 $
219,435 Percent of Non-GAAP Revenue 3.5
% 3.7 % 4.3 % 3.9
% 4.2 % GAAP Provision for Income
Taxes $ 24,557 $ 26,130 $
34,014 $ 143,085 $ 101,226
Tax rate % 5.4 % 5.9 %
8.9 % 8.7 % 12.2 % Income
Tax on Non-Discrete Tax Items Above 7,285 6,673 28,619 32,260
116,883 Income Tax of State Tax Valuation Release 11,311 — — 11,311
16,518 Income Tax of Prior Period Tax Liabilities (10,333 ) (961 )
(10,148 ) (12,289 ) (12,526 ) Income Tax of Uncertain Tax Positions
25,676 4,195 — 32,832 (47,127 ) Income Tax of Toll Tax (3,904 ) — —
(690,965 ) — Income Tax of Deferred Tax Recalibration (6,125 )
— — 633,573
—
Non-GAAP Provision for Income Taxes $
48,467 $ 36,037
$ 52,485 $ 149,807
$ 174,974 Non-GAAP Tax
rate % 7.7 % 5.9 % 8.9
% 6.3 % 9.6 % GAAP
Diluted EPS $ 1.15 $ 1.10 $
0.93 $ 3.97 $ 2.07
Acquisition-Related Deferred Revenue — — — — 0.19
Acquisition-Related Expenses 0.43 0.44 0.52 1.76 2.31
Acquisition-Related Transaction Costs 0.02 0.01 0.04 0.06 0.20
Accelerated Stock-Based Compensation Expense 0.01 — — 0.01 —
Amortization of Deferred Financing Costs — — — — 0.02
Restructuring-Related Expense
0.00
0.00 — 0.16 0.14 Income Tax Effect of Above Items (0.02 ) (0.02 )
(0.08 ) (0.09 ) (0.33 ) Impact of State Tax Valuation Release (0.03
) — — (0.03 ) (0.05 ) Impact of Prior Period Tax Liabilities 0.03 —
0.03 0.03 0.04 Impact of Uncertain Tax Positions (0.07 ) (0.01 ) —
(0.09 ) 0.13 Impact of Toll Tax 0.01 — — 1.84 — Impact of Deferred
Tax Recalibration 0.02 —
— (1.69 ) —
Non-GAAP Diluted EPS
(1) $ 1.55 $
1.53 $ 1.45
$ 5.94 $ 4.72
(1) The sum of the individual per share amounts may not equal
the total due to rounding.
Analog Devices, Fourth Quarter, Fiscal 2018
Schedule
F
Reconciliation of Net Cash Provided by Operating Activities to
Adjusted Free Cash Flow (In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended 4Q 18
3Q 18 4Q 17 FY 18
FY 17 Nov. 3,2018
Aug. 4,2018 Oct. 28,2017
Nov. 3,2018 Oct. 28,2017
Net cash provided by operating activities $ 714,441 $ 620,738 $
707,352 $ 2,442,361 $ 1,154,365 % of revenue 44.7 % 39.5 % 45.9 %
39.4 % 22.6 % Non-GAAP adjustments: Federal income tax payments —
— —
— 750,000 Adjusted cash flows from
operations $ 714,441 $ 620,738 $ 707,352 $ 2,442,361 $ 1,904,365
Capital expenditures (86,004 ) (51,750 )
(65,215 ) (254,876 ) (204,098 ) Adjusted free
cash flow $ 628,437 $ 568,988
$ 642,137 $ 2,187,485 $
1,700,267 % of non-GAAP revenue 39.4 % 36.2 % 41.7 % 35.3 %
32.7 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181120005176/en/
Mr. Michael Lucarelli, Director of Investor Relations, Analog
Devices, Inc. 781-461-3282 (phone); investor.relations@analog.com
(email)
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