Analog Devices, Inc. (NASDAQ: ADI), a global leader in high-performance semiconductors for signal processing applications, today announced financial results for its third quarter of fiscal year 2014, which ended August 2, 2014.
“ADI had another good quarter of revenue growth led by the industrial and communications infrastructure markets,” said Vincent Roche, President and CEO. “Profitability and cash flow continued to be strong and we returned $173 million to shareholders through cash dividends and share repurchases.”
“Near the end of our third quarter, we completed the acquisition of Hittite Microwave Corporation which adds critical radio frequency, microwave and millimeter wave technology to our product portfolio. This helps ADI bring more complete solutions to our industrial, aerospace and defense, communications, and automotive customers, where ever-increasing design challenges are creating significant growth opportunities for ADI,” Mr. Roche continued. “With the addition of Hittite, we are planning for revenue in the fourth quarter to be in the range of $790 million to $820 million.”
Results for the Third Quarter of Fiscal Year 2014
The non-GAAP results below exclude Hittite operations and acquisition-related items.
- GAAP revenue totaled $728 million; Non-GAAP revenue totaled $722.4, up 4% sequentially
- GAAP gross margin of 65.4% of revenue; Non-GAAP gross margin of 66.5% of revenue
- GAAP operating margin of 27.8%; Non-GAAP operating margin of 32.5% of revenue
- GAAP Diluted EPS of $0.57; Non-GAAP diluted EPS of $0.63
Please refer to the schedules provided for a summary of revenue and earnings, selected balance sheet information, and the cash flow statement for the third quarter of fiscal year 2014, as well as the immediately prior and year-ago quarters. Additional information on revenue by end market and revenue by product type is provided on Schedules D and E. A more complete table covering prior periods is available at investor.analog.com.
ADI also announced that the Board of Directors has declared a cash dividend of $0.37 per outstanding share of common stock. The dividend will be paid on September 17, 2014 to all shareholders of record at the close of business on September 5, 2014.
Outlook for the Fourth Quarter of Fiscal Year 2014
The following statements are based on current expectations, and as indicated, are presented on a non-GAAP basis. 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.
- Revenue estimated to increase in the range of $790 million to $820 million
- Non-GAAP gross margin expected to be approximately 66.2%
- Non-GAAP operating expenses expected to be between $268 million to $271 million
- Non-GAAP interest and other expense expected to be approximately $6 million
- Non-GAAP tax rate expected to be 15.5% to 16%
- Non-GAAP diluted EPS estimated to be $0.66 to $0.70/share
With respect to the forward-looking information presented on a non-GAAP basis, the Company is unable to provide a quantitative reconciliation to GAAP because the items that would be included or excluded, other than those described below, are difficult to predict and estimate and are primarily dependent on future events. Known reconciling items are:
- Non-GAAP gross margin excludes $8 million of amortization of intangible assets and $48 million of inventory and fixed asset step-up charges to record Hittite inventory and fixed assets at fair value, as part of the purchase accounting for the Hittite acquisition;
- Non-GAAP operating expenses exclude $5 million of amortization of intangible assets and $15 million of acquisition-related costs, primarily for bank and other advisory fees related to the Hittite acquisition;
- Non-GAAP interest and other expense excludes $5 million of debt financing costs; and
- Non-GAAP tax rate excludes $18-$19 million provision for income taxes which represents the tax effects of the reconciling items noted in the three bullets above.