Analog Devices Reports Strong Start to Fiscal Year 2017

Important Additional Information Will Be Filed With The SEC
In connection with the proposed transaction, Analog Devices and Linear Technology have filed and will file relevant information with the SEC, including a registration statement of Analog Devices on Form S-4 (the “registration statement”) that includes a prospectus of Analog Devices and a proxy statement of Linear Technology (the “proxy statement/prospectus”). INVESTORS AND SECURITY HOLDERS OF LINEAR TECHNOLOGY ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT ANALOG DEVICES, LINEAR TECHNOLOGY AND THE PROPOSED TRANSACTION. A definitive proxy statement/prospectus has been sent to Linear Technology’s shareholders. The registration statement, proxy statement/prospectus and other documents filed by Analog Devices with the SEC may be obtained free of charge at Analog Devices’ website at www.analog.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Analog Devices by requesting them by mail at Analog Devices, Inc., One Technology Way, P.O. Box 9106, Norwood, MA 02062-9106, Attention: Investor Relations, or by telephone at (781) 461-3282. The documents filed by Linear Technology with the SEC may be obtained free of charge at Linear Technology’s website at www.linear.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Linear Technology by requesting them by mail at Linear Technology Corporation, 1630 McCarthy Blvd., Milpitas, CA, 95035-7417, Attention: Investor Relations, or by telephone at (408) 432-2407.

Non-Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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Analog Devices, First Quarter, Fiscal 2017
 

Schedule A

Revenue and Earnings Summary (Unaudited)
(In thousands, except per-share amounts)
 
    Three Months Ended
1Q 17       4Q 16       1Q 16
        Jan. 28,
2017
      Oct. 29,
2016
      Jan. 30,
2016
Revenue $ 984,449 $ 1,003,623 $ 769,429
Year-to-year change 28 % 3 % %
Quarter-to-quarter change (2 )% 15 % (21 )%
Cost of sales (1)       335,945         336,936         292,136  
Gross margin 648,504 666,687 477,293
Gross margin percentage 65.9 % 66.4 % 62.0 %
Year-to-year change (basis points) 390 80 (320 )
Quarter-to-quarter change (basis points)       (50 )       60         (360 )
Operating expenses:
R&D (1) 183,954 172,926 157,428
Selling, marketing and G&A (1) 130,659 118,881 107,462
Amortization of intangibles 18,160 17,899 17,358
Special charges       49,463                  
Total operating expenses 382,236 309,706 282,248
Total operating expenses percentage 38.8 % 30.9 % 36.7 %
Year-to-year change (basis points) 210 (2,360 ) (160 )
Quarter-to-quarter change (basis points)       790         (400 )       (1,780 )
Operating income 266,268 356,981 195,045
Operating income percentage 27.0 % 35.6 % 25.3 %
Year-to-year change (basis points) 170 2,450 (160 )
Quarter-to-quarter change (basis points)       (860 )       470         1,420  
Other expense       32,959         33,547         12,868  
Income before income tax 233,309 323,434 182,177
Provision for income taxes 16,180 27,277 17,673
Tax rate percentage       6.9 %       8.4 %       9.7 %
Net income       $ 217,129         $ 296,157         $ 164,504  
 
Shares used for EPS - basic 308,786 307,854 311,166
Shares used for EPS - diluted 313,076 311,633 314,793
 
Earnings per share - basic $ 0.70 $ 0.96 $ 0.53
Earnings per share - diluted $ 0.69 $ 0.95 $ 0.52
 
Dividends paid per share       $ 0.42         $ 0.42         $ 0.40  
 
(1) Includes stock-based compensation expense as follows:
Cost of sales $ 1,944 $ 1,886 $ 2,092
R&D $ 7,021 $ 7,007 $ 6,704
Selling, marketing and G&A $ 7,564 $ 6,341 $ 6,813
 

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