Analog Devices Reports Record Fourth Quarter and Fiscal 2021 Results

4Charitable Foundation Contribution: Expenses incurred in connection with a one time contribution of registered shares of common stock to the Analog Devices Foundation. We excluded this expense from our non-GAAP measures because this expense has no direct correlation to the operation of our business in the future.

5Loss on Extinguishment of Debt: Expenses incurred related to the extinguishment of debt including make-whole premiums and other related fees, as well as the acceleration of unamortized debt costs and previously deferred derivative hedge losses. We excluded these costs from our non-GAAP measures because they are not reflective of our ongoing financial performance.

6Tax Related Items: Income tax effect of the non-GAAP items discussed above and income tax from certain discrete tax items related to an intra-entity transfer of intangible assets, the resolution of the IRS audit of Linear’s pre-acquisition federal income tax returns for fiscal year 2015 through fiscal year 2017, other discrete income tax benefits upon filing of our fiscal 2019 federal income tax return and income tax from prior period tax credits. 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.

About Analog Devices

Analog Devices, Inc. (NASDAQ: ADI) operates at the center of the modern digital economy, converting real-world phenomena into actionable insight with its comprehensive suite of analog and mixed signal, power management, radio frequency (RF), and digital and sensor technologies. ADI serves 125,000 customers worldwide with more than 75,000 products in the industrial, communications, automotive, and consumer markets. ADI is headquartered in Wilmington, MA. Visit https://www.analog.com.

Forward Looking Statements

This press release contains forward-looking statements, which address a variety of subjects including, for example, our statements regarding our acquisition of Maxim Integrated Products, Inc. (“Maxim”); the impact of the COVID-19 pandemic on our business, financial condition and results of operations; expected revenue, operating margin, tax rate, earnings per share, and other financial results; expected market trends, market share gains, operating leverage, production and inventory levels; expected customer demand and order rates for our products and expected product offerings; product development; and marketing position. 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: the uncertainty as to the extent of the duration, scope and impacts of the COVID-19 pandemic; political and economic uncertainty, including 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 export classifications, import and export regulations or duties and tariffs; changes in our estimates of our expected tax rates based on current tax law; adverse results in litigation matters, including the potential for litigation related to the Maxim acquisition; the risk that we will be unable to retain and hire key personnel; unanticipated difficulties or expenditures relating to integrating Maxim; uncertainty as to the long-term value of our common stock; the diversion of management time on integrating Maxim's business and operations; our ability to successfully integrate acquired businesses and technologies, including Maxim; and the risk that expected benefits, synergies and growth prospects of acquisitions, including our acquisition of Maxim, may not be fully achieved in a timely manner, or at all. 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.

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

 

Three Months Ended

 

Twelve Months Ended

 

Oct 30, 2021

 

Oct 31, 2020

 

Oct 30, 2021

 

Oct 31, 2020

Revenue

$

2,339,568

 

 

$

1,526,295

 

 

$

7,318,286

 

 

$

5,603,056

 

Cost of sales

1,217,748

 

 

503,211

 

 

2,793,274

 

 

1,912,578

 

Gross margin

1,121,820

 

 

1,023,084

 

 

4,525,012

 

 

3,690,478

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

399,121

 

 

280,239

 

 

1,296,126

 

 

1,050,519

 

Selling, marketing, general and administrative

317,455

 

 

165,115

 

 

915,418

 

 

659,923

 

Amortization of intangibles

213,594

 

 

108,007

 

 

536,811

 

 

429,455

 

Special charges, net

92,645

 

 

8,051

 

 

84,456

 

 

52,337

 

Total operating expenses

1,022,815

 

 

561,412

 

 

2,832,811

 

 

2,192,234

 

Operating income

99,005

 

 

461,672

 

 

1,692,201

 

 

1,498,244

 

Nonoperating expense (income):

 

 

 

 

 

 

 

Interest expense

54,621

 

 

48,593

 

 

184,825

 

 

193,305

 

Loss on extinguishment of debt

215,150

 

 

 

 

215,150

 

 

 

Interest income

(421)

 

 

(527)

 

 

(1,220)

 

 

(4,305)

 

Other, net

(14,178)

 

 

(3,704)

 

 

(35,268)

 

 

(2,373)

 

Total nonoperating expense

255,172

 

 

44,362

 

 

363,487

 

 

186,627

 

(Loss) income before income taxes

(156,167)

 

 

417,310

 

 

1,328,714

 

 

1,311,617

 

(Benefit from) provision for income taxes

(231,854)

 

 

30,784

 

 

(61,708)

 

 

90,856

 

Net income

$

75,687

 

 

$

386,526

 

 

$

1,390,422

 

 

$

1,220,761

 

 

 

 

 

 

 

 

 

Shares used to compute earnings per share - basic

483,345

 

 

369,284

 

 

397,462

 

 

368,633

 

Shares used to compute earnings per share - diluted

487,781

 

 

372,322

 

 

401,288

 

 

371,973

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.16

 

 

$

1.05

 

 

$

3.50

 

 

$

3.31

 

Diluted earnings per common share

$

0.16

 

 

$

1.04

 

 

$

3.46

 

 

$

3.28

 

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

October 30, 2021

 

October 31, 2020

Cash & cash equivalents

$

1,977,964

 

 

$

1,055,860

 

Accounts receivable

1,459,056

 

 

737,536

 

Inventories

1,200,610

 

 

608,260

 

Other current assets

740,687

 

 

116,032

 

Total current assets

5,378,317

 

 

2,517,688

 

Net property, plant and equipment

1,979,051

 

 

1,120,561

 

Other investments

127,856

 

 

86,729

 

Goodwill

26,918,470

 

 

12,278,425

 

Intangible assets, net

15,267,170

 

 

3,650,280

 

Deferred tax assets

2,267,269

 

 

1,503,064

 

Other assets

383,938

 

 

311,856

 

Total assets

$

52,322,071

 

 

$

21,468,603

 

 

 

 

 

Other current liabilities

$

2,253,649

 

 

$

1,364,986

 

Debt, current

516,663

 

 

 

Long-term debt

6,253,212

 

 

5,145,102

 

Deferred income taxes

3,938,830

 

 

1,919,595

 

Other non-current liabilities

1,367,175

 

 

1,040,975

 

Shareholders' equity

37,992,542

 

 

11,997,945

 

Total liabilities & equity

$

52,322,071

 

 

$

21,468,603

 

 

 

 

 

 

ANALOG DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Three Months Ended

 

Twelve Months Ended

 

Oct 30, 2021

 

Oct 31, 2020

 

Oct 30, 2021

 

Oct 31, 2020

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

75,687

 

 

$

386,526

 

 

$

1,390,422

 

 

$

1,220,761

 

Adjustments to reconcile net income to net cash provided by operations:

 

 

 

 

 

 

 

Depreciation

72,338

 

 

57,053

 

 

231,275

 

 

233,775

 

Amortization of intangibles

406,625

 

 

145,163

 

 

843,359

 

 

577,148

 

Cost of goods sold for inventory acquired

331,083

 

 

 

 

331,083

 

 

 

Stock-based compensation expense

124,928

 

 

36,557

 

 

243,611

 

 

149,518

 

Gain on sale of property, plant and equipment

 

 

 

 

(13,557)

 

 

 

Non-cash contribution to charitable foundation

 

 

 

 

 

 

40,000

 

Loss on extinguishment of debt

215,150

 

 

 

 

215,150

 

 

 

Non-cash portion of special charges

2,538

 

 

 

 

2,538

 

 

 

Deferred income taxes

(334,429)

 

 

(71,146)

 

 

(406,922)

 

 

(113,948)

 

Other

4,275

 

 

(257)

 

 

(15,524)

 

 

5,418

 

Changes in operating assets and liabilities

42,531

 

 

118,702

 

 

(86,366)

 

 

(104,185)

 

Total adjustments

865,039

 

 

286,072

 

 

1,344,647

 

 

787,726

 

Net cash provided by operating activities

940,726

 

 

672,598

 

 

2,735,069

 

 

2,008,487

 

Percent of revenue

40.2

%

 

44.1

%

 

37.4

%

 

35.8

%

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Proceeds from other investments

7,910

 

 

 

 

30,125

 

 

 

Additions to property, plant and equipment, net

(130,777)

 

 

(29,888)

 

 

(343,676)

 

 

(165,692)

 

Cash received from acquisition of Maxim, net of cash paid

2,450,550

 

 

 

 

2,450,550

 

 

 

Proceeds from sale of property, plant and equipment

 

 

 

 

35,714

 

 

 

Payments for acquisitions, net of cash acquired

 

 

(1,433)

 

 

(24,950)

 

 

(14,196)

 

Change in other assets

(878)

 

 

579

 

 

(4,238)

 

 

(635)

 

Net cash provided by (used for) investing activities

2,326,805

 

 

(30,742)

 

 

2,143,525

 

 

(180,523)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from debt

3,939,640

 

 

 

 

3,939,640

 

 

395,646

 

Early termination of debt

(3,591,982)

 

 

 

 

(3,591,982)

 

 

 

Debt repayments

 

 

(450,000)

 

 

 

 

(750,000)

 

Payments on revolver

(400,000)

 

 

 

 

(400,000)

 

 

(350,000)

 

Proceeds from revolver

400,000

 

 

 

 

400,000

 

 

350,000

 

Payment on derivative instrument

(153,161)

 

 

 

 

(153,161)

 

 

 

Prepayment for stock repurchases

(500,000)

 

 

 

 

(500,000)

 

 

 

Dividend payments to shareholders

(371,230)

 

 

(229,597)

 

 

(1,109,344)

 

 

(886,155)

 

Repurchase of common stock

(2,095,992)

 

 

(7,222)

 

 

(2,605,144)

 

 

(244,487)

 

Proceeds from employee stock plans

7,757

 

 

10,653

 

 

63,105

 

 

68,403

 

Change in other financing activities

(4,730)

 

 

 

 

(2,778)

 

 

(4,015)

 

Net cash used for financing activities

(2,769,698)

 

 

(676,166)

 

 

(3,959,664)

 

 

(1,420,608)

 

Effect of exchange rate changes on cash

(570)

 

 

(94)

 

 

3,174

 

 

182

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

497,263

 

 

(34,404)

 

 

922,104

 

 

407,538

 

Cash and cash equivalents at beginning of period

1,480,701

 

 

1,090,264

 

 

$

1,055,860

 

 

648,322

 

Cash and cash equivalents at end of period

$

1,977,964

 

 

$

1,055,860

 

 

$

1,977,964

 

 

$

1,055,860

 

 

 

 

 

 

 

 

 

ANALOG DEVICES, INC.

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