CORRECTING and REPLACING Analog Devices' Second-Quarter Revenue Increases 35% Year-over-Year and Earnings Per Share More Than Double.Business Editors/High-Tech Writers CORRECTION...by 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. NORWOOD, Mass.--(BUSINESS WIRE)--May 14, 2004 In BW5691 issued May 13, 2004: In the last table of the release, the header (1) In a disk or tape file, a set of data that resides permanently at the beginning. It may be used for identification only (type of file, date of last update, etc.), or it may describe the structural layout of the contents, as is common with many document and database formats. of the second column should read: May 3, 2003 (sted May 2, 1999). The corrected release reads: ANALOG DEVICES' SECOND-QUARTER REVENUE INCREASES 35% YEAR-OVER-YEAR AND EARNINGS PER SHARE MORE THAN DOUBLE Analog Devices, Inc. (NYSE NYSE See: New York Stock Exchange : ADI), a global leader in high-performance semiconductors for signal processing See DSP. applications, today reported revenue of $678.5 million for the second quarter of fiscal 2004, which ended on May 1. Revenue increased 35% compared to the same period one year ago and 12% compared to the previous quarter. Net income for the second quarter was $152.6 million, more than double the $71.3 million for the same period in the prior year and 31% above the $116.8 million in the immediately prior quarter. The second 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). ) was $0.39, up from $0.19 for the same period one year ago and up from $0.30 for the immediately prior quarter. ADI also announced that the company's Board of Directors declared a cash dividend of $0.06 per outstanding share of common stock, payable on June 16, 2004 to all stockholders of record at the close of business on May 28, 2004. "We had an excellent quarter with revenue, margins, and EPS all well above our expectations when the quarter began," said Mr. 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. . "Demand continued to accelerate during the second quarter, driven by the widespread adoption of our high-performance 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 core technology." "In the second quarter, we saw growth across each of the major end markets we serve. The highest growth came from consumer electronics and from the industrial market which represents a wide range of customers designing factory automation systems, test equipment, medical electronics, and scientific instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. . We also saw good revenue growth from the communications and computer markets. "On a geographic basis, the strongest revenue growth was from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Europe, Japan, and the rest of Asia also had good growth within the quarter. "Gross margins rose to 59.2% of sales, a new peak for ADI and a 210 basis point improvement over the 57.1% we achieved in the immediately prior quarter. In addition, 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. as a percent of sales decreased to 31.5%, a sequential improvement of 150 basis points. As a result, operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: rose sequentially by 360 basis points to 27.7% of sales. "Our balance sheet also continued to strengthen in the second quarter. Cash and short-term investments grew by $235 million to $2.5 billion. Days cost of sales in inventory declined to 102 days in the second quarter compared to 103 days in the previous quarter, while days sales in 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 declined to 44 days compared to 48 days in the previous quarter." Regarding the near-term outlook, Mr. Fishman said, "The 13-week backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. continues to grow, reaching $571 million at the close of the second quarter, a 20% sequential increase. We are planning for revenue to grow sequentially by approximately 7% to 10% during the third quarter of fiscal 2004 to approximately $725 to $745 million, with continuing strong 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. . As a result, we estimate EPS to be in the range of $0.43 to $0.45." Mr. Fishman will discuss the second quarter's results and the near-term outlook via webcast, accessible from www.analog.com, today beginning at 4:30 pm 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 706-645-9291 (replay only) and providing the conference ID: 7264235 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 Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. 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 Norwood is a town and census-designated place in Norfolk County, Massachusetts, USA. As of the 2000 census, the population was 28,587. The community was named after Norwood, England. , and employs approximately 8,700 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, and the Philippines. 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 press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including our statements regarding planned revenue, 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, 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. Important factors that may affect future operating results include the effects of adverse changes in overall economic conditions, currency exchange rate fluctuations, the timing and duration of market upturns and downturns, the growth or contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction 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 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 ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , 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 most recent Form 10-Q Form 10-Q See 10-Q. for the first fiscal quarter ended January 31, 2004, as filed with the Securities and Exchange Commission.
Analog Devices Supplemental Information, Second Quarter,
Fiscal 2004
Sales/Earnings Summary
(In thousands of dollars, except per-share amounts)
2Q 04 1Q 04 2Q 03
---------------------------------------------------------------------
Three Months Ended May 1, 2004 Jan 31, 2004 May 3, 2003
---------------------------------------------------------------------
Net Sales $678,530 $605,353 $501,883
Y/Y Growth 35% 30% 21%
Q/Q Growth 12% 9% 7%
Cost of Sales 277,008 259,888 228,423
Gross Margin 401,522 345,465 273,460
Percent of Sales 59.2% 57.1% 54.5%
---------------------------------------------------------------------
Operating Expenses:
R&D 126,274 118,237 110,827
Selling, Marketing and G&A 85,282 79,238 71,509
Acquisition-related
expenses 2,204 2,393 2,658
---------------------------------------------------------------------
Operating Income 187,762 145,597 88,466
Percent of Sales 27.7% 24.1% 17.6%
---------------------------------------------------------------------
Other (Income) Expense (7,232) (4,197) (2,952)
---------------------------------------------------------------------
Income Before Tax 194,994 149,794 91,418
Provision for Taxes 42,411 32,955 20,112
Tax Rate 22% 22% 22%
---------------------------------------------------------------------
Net Income $152,583 $116,839 $71,306
Percent of Sales 22% 19% 14%
---------------------------------------------------------------------
Shares used for EPS - Basic 374,864 372,052 364,267
Shares used for EPS - Diluted 395,052 392,904 379,163
Earnings per Share - Basic $0.41 $0.31 $0.20
Earnings per Share - Diluted $0.39 $0.30 $0.19
Dividends declared per share $0.06 $0.04 $-
---------------------------------------------------------------------
2Q 04 2Q 03
--------------------------------------------------------
Six Months Ended May 1, 2004 May 3, 2003
--------------------------------------------------------
Net Sales $1,283,883 $969,306
Y/Y Growth 32% 20%
Cost of Sales 536,896 442,709
Gross Margin 746,987 526,597
Percent of Sales 58.2% 54.3%
--------------------------------------------------------
Operating Expenses:
R&D 244,511 217,939
Selling, Marketing and G&A 164,520 140,824
Acquisition-related
expenses 4,597 5,507
--------------------------------------------------------
Operating Income 333,359 162,327
Percent of Sales 26.0% 16.7%
--------------------------------------------------------
Other (Income) Expense (11,429) (6,004)
--------------------------------------------------------
Income Before Tax 344,788 168,331
Provision for Taxes 75,366 37,033
Tax Rate 22% 22%
--------------------------------------------------------
Net Income $269,422 $131,298
Percent of Sales 21% 14%
--------------------------------------------------------
Shares used for EPS - Basic 373,458 363,703
Shares used for EPS - Diluted 393,978 378,680
Earnings per Share - Basic $0.72 $0.36
Earnings per Share - Diluted $0.68 $0.35
Dividends declared per share $0.10 $-
--------------------------------------------------------
Analog Devices Supplemental Information, Second Quarter,
Fiscal 2004
Selected Balance Sheet Information
(In thousands of dollars)
2Q 04 1Q 04 2Q 03
---------------------------------------------------------------------
May 1, 2004 Jan 31, 2004 May 3, 2003
---------------------------------------------------------------------
Cash & Short-term Investments $2,541,582 $2,306,525 $3,101,483
Accounts Receivable, Net 328,318 315,900 242,767
Inventories 308,539 292,626 293,487
Other Current Assets 171,815 175,131 194,150
---------------------------------------------------------------------
Total Current Assets 3,350,254 3,090,182 3,831,887
PP&E, Net 666,826 660,891 726,533
Investments 307,638 356,535 286,119
Intangible Assets 170,700 171,360 173,328
Other 22,902 23,269 117,446
---------------------------------------------------------------------
Total Assets $4,518,320 $4,302,237 $5,135,313
---------------------------------------------------------------------
Deferred income-shipments to
distributors $150,429 $138,266 $108,980
Other Current Liabilities 429,437 372,220 367,492
Long-term Debt - - 1,279,027
Non-Current Lease Obligations - - 237
Non-Current Liabilities 339,559 353,760 323,692
Stockholders' Equity 3,598,895 3,437,991 3,055,885
---------------------------------------------------------------------
Total Liabilities & Equity $4,518,320 $4,302,237 $5,135,313
---------------------------------------------------------------------
Capital Expenditures, Depreciation & Amortization
(In thousands of dollars)
2Q 04 1Q 04 2Q 03
Three Months Ended May 1, 2004 Jan 31, 2004 May 3, 2003
---------------------------------------------------------------------
Capital Expenditures $43,353 $27,073 $14,348
Depreciation $37,272 $37,565 $42,503
Amortization of Intangibles $676 $677 $656
Six Months Ended May 1, 2004 May 3, 2003
--------------------------------------------------------
Capital Expenditures $70,426 $29,301
Depreciation $74,837 $84,042
Amortization of Intangibles $1,353 $1,308
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