Analog Devices Reports Results for the First Quarter of Fiscal Year 2003.Business Editors/High-Tech Writers NORWOOD, Mass.--(BUSINESS WIRE)--Feb. 13, 2003 Analog Devices Analog Devices (NYSE: ADI) is an American multinational producer of semiconductor devices. Analog specializes in ADC, DAC, MEMS, and DSP chips for consumer and industrial goods. Analog is presently designing circuits in the 65 nanometer to 3 µm process feature sizes range. (NYSE NYSE See: New York Stock Exchange : ADI) today announced revenues of $467.4 million for the first quarter of fiscal 2003, which ended February 1. Revenues increased 19% from the first quarter of fiscal 2002 and 3% from the immediately prior quarter. The quarter's diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) were $0.16, up from $0.06 in the same period a year ago and $0.09 in the prior quarter. As discussed in the earnings press release for the fourth quarter of fiscal 2002, during the first quarter of fiscal 2003, ADI adopted the new goodwill accounting rules (FAS142). As a result, ADI no longer has charges related to the amortization of goodwill. Expenses under GAAP for the first quarter of fiscal 2003 continue to include $2.8 million of acquisition-related expenses. Excluding these charges, first quarter non-GAAP diluted EPS were $0.17 and non-GAAP operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. before tax was 16.4% of sales. In future quarters, ADI expects to continue to incur acquisition-related expenses of approximately $2.8 million per quarter in its GAAP financial statements. ADI is no longer including separate pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma financial schedules as a supplement to the financial statements. Gross margins were 54.2% of sales in the first quarter of fiscal 2003 while inventories declined $12 million sequentially and days cost in inventory declined to 125 days from 135 days last quarter. Inventories at distributors also declined in the first quarter of 2003. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). declined to 45 days from 46 days last quarter. In the first quarter of fiscal 2003 the cash balance increased by $102 million after spending $15 million on capital equipment. ADI's cash balance at the end of the first quarter of fiscal 2003 was $3 billion. "Both revenue and earnings were slightly better than we expected when we provided guidance on November 19, 2002, primarily as a result of stronger sales of our wireless analog and DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive products," said Jerald G. Fishman Jerald G. Fishman has served as Chief Executive Officer and President of Analog Devices since November 1996. He is a 35 year veteran of Analog Devices and also serves on the Board of Directors of Cognex Corporation and Xilinx Inc. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We have now seen four consecutive quarters of slow but steady sequential revenue growth, which is a good result in a difficult economic environment. "In the first quarter, both analog and DSP sales grew sequentially, with higher growth from DSP products," continued Mr. Fishman. "Geographically, growth was the strongest in Southeast Asia and in Europe and weaker in North America and Japan. "In the first quarter orders for shipment in the next 13 weeks grew by approximately 9% from the prior quarter. Orders grew sequentially in both the OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and distributor channels and the book to bill ratio was slightly above one for the first quarter. Orders customers placed on our distributors also grew sequentially. Overall, we are encouraged by our order patterns in a seasonally tough period." Regarding the near-term outlook, Mr. Fishman said, "We currently anticipate that the second quarter will continue the recovery that began four quarters ago. With somewhat higher opening backlog and a seasonally stronger period in the second quarter, we are planning for revenues to grow 3-5% sequentially. If order strength that we have seen in January continues, we could be at the high end of that range. We continue to be mindful of the uncertain economic environment and note that a large percentage of our orders are still being placed for very short-term delivery, which limits our visibility. "In addition, we are planning to continue holding operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. relatively flat. This should allow us to generate good operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. on increased sales with continued strong cash flow. We are planning to hold inventories relatively flat and to continue constraining capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. . As a result, GAAP diluted EPS are estimated at $0.17 to $0.18." Taking a longer view, he concluded, "We are proud of what we have accomplished during this very difficult cycle. Through the peaks and valleys, we have never lost confidence in our people and our products. We believe we have made many of the right decisions to increase market share, reduce costs and deliver strong cash flow. Despite the continuing unsettled environment, we remain enthusiastic about what we can achieve over the next few years. We continue to believe that high-performance analog and DSP are the bricks and mortar A store (shop, supermarket, department store, etc.) in the real world. Contrast with clicks and mortar. of the new era of signal processing that should drive solid growth and profits." Mr. Fishman will discuss the first quarter's results and the near-term outlook via webcast, accessible from www.analog.com, today beginning at 4:30pm EST EST electroshock therapy. EST abbr. electroshock therapy . Investors who prefer to join by telephone may call 706-634-7193 ten minutes before the call begins and provide the password "ADI." A replay will be available almost immediately after the call. The replay may be accessed for up to one week by dialing 800-642-1687 (replay only) and providing the conference ID: 7655434 or by visiting the Investor Relations Investor relations The process by which the corporation communicates with its investors. page on ADI's web site. Analog Devices, Inc. is a leading manufacturer of precision high-performance integrated circuits used in analog and digital signal processing See DSP. Digital Signal Processing - (DSP) Computer manipulation of analog signals (commonly sound or image) which have been converted to digital form (sampled). applications. ADI is headquartered in Norwood, Massachusetts and employs approximately 8,600 people worldwide. It has manufacturing facilities in Massachusetts, California, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Ireland, the Philippines, Taiwan and the United Kingdom. Analog Devices' common stock is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and ADI is included in the S&P 500 Index. Safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: This release contains forward-looking statements, including our statements regarding planned revenues, earnings and operating margins, that are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections about the industry and markets in which Analog Devices operates. The statements contained in this release are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors that may affect future operating results include the effects of adverse changes in overall economic conditions, the timing and duration of market upturns and downturns, the growth or contraction of the markets we serve, demand for semiconductors generally and for our products in particular, the risk that our backlog could decline significantly, our ability to hire engineers and other qualified employees needed to meet the expected demands of our largest customers, reversals or slowdowns in the markets or customers served by our products, the adverse effects of building inventories to meet planned growth that fails to materialize, the occurrence and frequency of inventory and lead-time reduction cycles, raw material availability, availability of both internal and external manufacturing capacity, technological and product development risks, competitors' actions and technological innovations and other risk factors described in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended November 2, 2002.
Analog Devices Supplemental Information, First Quarter, Fiscal 2003
Sales/Earnings Summary
(In thousands of dollars, except per-share amounts)
1Q 03 4Q 02 1Q 02
Three Months Ended February 1, November 2, February 2,
2003 2002 2002
Net Sales $467,423 $455,718 $392,974
Y/Y Growth 19% 8% (49%)
Q/Q Growth 3% 2% (7%)
Cost of Sales 214,286 213,084 189,177
Gross Margin 253,137 242,634 203,797
Percent of Sales 54.2% 53.2% 51.9%
Operating Expenses:
R&D 107,112 107,104 98,450
Selling, Marketing
and G&A 69,315 69,204 58,358
Acquisition-related
expenses(a) 2,849 16,402 20,364
Restructuring Costs - 6,315 -
Investment Impairment - 2,090 -
Operating Income 73,861 41,519 26,625
Other (Income) Expense (3,052) (4,841) (7,667)
Income Before Tax 76,913 46,360 34,292
Provision for Taxes 16,921 11,590 9,602
Tax Rate 22% 25% 28%
Net Income $59,992 $34,770 $24,690
Shares used for EPS - Basic 363,138 364,019 363,147
Shares used for EPS - Diluted 378,197 377,285 383,471
Earnings per Share - Basic $0.17 $0.10 $0.07
Earnings per Share - Diluted $0.16 $0.09 $0.06
(a) Acquisition-related goodwill is no longer amortized effective
November 3, 2002, in accordance with FAS 142.
Analog Devices Supplemental Information, First Quarter, Fiscal 2003
Selected Balance Sheet Information
(In thousands of dollars)
1Q 03 4Q 02 1Q 02
Three Months Ended February 1, November 2, February 2,
2003 2002 2002
Cash & Short-term
Investments $2,999,732 $2,898,023 $2,894,622
Accounts Receivable, Net 231,422 228,338 197,596
Inventories 294,478 306,391 241,107
Other Current Assets 185,433 191,473 164,003
Total Current Assets 3,711,065 3,624,225 3,497,328
PP&E, Net 754,571 780,904 876,840
Investments 276,595 279,605 259,774
Intangible Assets 173,985 174,637 217,817
Other 116,086 120,820 63,639
Total Assets $5,032,302 $4,980,191 $4,915,398
Current Liabilities $360,611 $373,364 $387,988
Deferred income-
shipments to distributors 106,686 110,271 122,337
Long-term Debt 1,275,269 1,274,020 1,197,458
Non-Current Lease Obligations 247 467 3,786
Non-Current Liabilities 316,424 322,053 320,765
Stockholders' Equity 2,973,065 2,900,016 2,883,064
Total Liabilities & Equity $5,032,302 $4,980,191 $4,915,398
Capital Expenditures, Depreciation & Amortization
(In thousands of dollars)
1Q 03 4Q 02 1Q 02
Three Months Ended February 1, November 2, February 2,
2003 2002 2002
Capital Expenditures $14,953 $15,930 $11,519
Depreciation $41,539 $48,567 $42,497
Amortization of Goodwill
& Intangibles(a) $652 $14,207 $14,105
(a) Acquisition-related goodwill is no longer amortized effective
November 3, 2002, in accordance with FAS 142.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion