Analog Devices Reports Fourth Quarter and Fiscal Year 2016 Results

Record quarterly revenue of $1 billion, up 3% year-over-year and up 15% sequentially
Record quarterly operating cash flow margin of 49%, record quarterly free cash flow margin of 44%
Revenue and earnings per share exceed high end of guidance range

NORWOOD, Mass. — (BUSINESS WIRE) — November 22, 2016 — Analog Devices, Inc. (NASDAQ: ADI), today announced financial results for its fourth quarter and fiscal year 2016, which ended October 29, 2016.

“ADI had another excellent quarter, with both revenue and earnings per share exceeding the high end of our guidance range,” said Vincent Roche, President and CEO. “Revenue increased to a record $1 billion on broad strength across all of our markets, and our focus on sustainable and differentiated innovation, combined with strong operational execution, helped drive profitability and cash flow generation to record levels.”

“In addition, we are pleased with the progress we are making to close the acquisition of Linear Technology, a combination that, we believe, will create an analog industry powerhouse, capable of creating significant value for our customers, employees, and shareholders.”

“Looking ahead, order rates are stable entering the seasonally slower first quarter. As a result, we are planning for revenue to decrease sequentially, but to increase 9% to 17% over the prior year, which would represent the third consecutive quarter of year-over-year revenue growth for ADI.”

ADI also announced that the Board of Directors has declared a cash dividend of $0.42 per outstanding share of common stock. The dividend will be paid on December 13, 2016 to all shareholders of record at the close of business on December 2, 2016.

Results for the Fourth Quarter of Fiscal Year 2016

Revenue totaled $1.0 billion, up 15% sequentially, and up 3% year-over-year
Revenue in ADI’s B2B markets of industrial, automotive, and communications infrastructure totaled $710 million, up 4% sequentially, and up 7% year-over-year
GAAP gross margin of 66.4% of revenue; Non-GAAP gross margin of 66.6% of revenue
GAAP operating margin of 35.6% of revenue; Non-GAAP operating margin of 38.1% of revenue
GAAP diluted EPS of $0.95; Non-GAAP diluted EPS of $1.05
Operating Cash Flow of $487 million, or 48.5% of revenue; Free Cash Flow of $446 million, or 44.4% of revenue

Results for Fiscal Year 2016

Revenue totaled $3.4 billion, stable year-over-year
GAAP gross margin of 65.1% of revenue; Non-GAAP gross margin of 65.3% of revenue
GAAP operating margin of 30.0% of revenue; Non-GAAP operating margin of 33.1% of revenue
GAAP diluted EPS of $2.76 per share; Non-GAAP diluted EPS of $3.07 per share
Operating Cash Flow of $1.3 billion, or 37.4% of revenue; Free Cash Flow of $1.2 billion, or 33.7% of revenue
Share repurchases and dividend payments to shareholders totaled $883 million

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 fiscal year 2016, 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 2017
The following statements are based on current expectations, and as indicated, and further explained below, are presented on a non-GAAP basis where the Company is unable without unreasonable efforts to forecast items that will be included in reported GAAP results. 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.

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