01—Abstract
Summary
Summary of the 10-K filed November 24, 2009. Cited figures are marked; the original filing is the authoritative source.
Analog Devices Inc. (ADI) reported for the fiscal year ending October 30, 2009, a period significantly impacted by the global economic downturn.
Revenue declined by 22% year-over-year to $2.01 billiona, reflecting cautious customer spending across key markets like Industrial, Communications, and Consumer. Despite the revenue drop and a 52% decrease in diluted EPS from continuing operations to $0.85, the company maintained a solid gross margin of 55.5% and generated $432.1 million in cash flow from operations.
ADI ended the fiscal year with a robust cash position of $1.816 billionb, demonstrating resilience amidst challenging economic conditions. The company also continued its strategic focus on innovation, investing substantially in R&D, and initiated cost-reduction measures including facility consolidation.
02—Key points
Key Highlights
- Revenue decreased by 22% to $2.01 billion in fiscal year 2009 compared to fiscal year 2008, primarily due to the global economic downturn impacting customer spending.
- Diluted EPS from continuing operations fell by 52% to $0.85 in fiscal year 2009, reflecting the adverse economic conditions.
- Gross margin remained strong at 55.5% in fiscal year 2009, though down from 61.1% in fiscal year 2008, impacted by lower sales and utilization variances.
- Generated $432.1 million in cash flow from operations, indicating operational efficiency and strong cash generation capabilities.
- Ended the fiscal year with $1.816 billion in cash, cash equivalents, and short-term investments, providing significant liquidity.
- The Industrial segment remained the largest revenue contributor at 52% of total revenue, demonstrating its importance to ADI's business.
- The company actively managed costs, including a decrease in R&D expenses by 16% and SMG&A expenses by 20% year-over-year, and initiated special charges related to facility consolidations and workforce reductions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Analog Devices kept $0.12.
- Revenue$2.01B100.0%
- Cost of revenue−$896.3M44.5%
- Gross profit$1.12B55.5%
- Operating costs−$833.8M41.4%
- Operating income$284.8M14.1%
- Interest, other & tax−$37.0M1.8%
- Net income$247.8M12.3%
Where FY2009 revenue went
$2.01B- Cost of revenue: $896.3M, 44% of revenue
- R&D: $447.0M, 22% of revenue
- SG&A: $333.2M, 17% of revenue
- Net income: $247.8M, 12% of revenue
- Other operating costs: $53.7M, 2.7% of revenue
- Interest, other & tax: $37.0M, 1.8% of revenue
Kept 12% as net incomeNet income $247.8M · 12%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed November 24, 2009Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $2.01B$2.58B | −22.0% |
| Cost of Revenue | $896.27M$1.01B | −10.9% |
| Gross Profit | $1.12B$1.58B | −29.1% |
| R&D Expenses | $446.98M$533.48M | −16.2% |
| SG&A Expenses | $333.18M$415.68M | −19.8% |
| Operating Expenses | $833.82M$952.25M | −12.4% |
| Operating Income | $284.82M$625.02M | −54.4% |
| Interest Expense | $4.09M$0 | — |
| Net Income | $247.77M$786.28M | −68.5% |
| EPS (Basic) | $0.85$2.69 | −68.4% |
| EPS (Diluted) | $0.85$2.65 | −67.9% |
| Shares Outstanding (Basic) | 291.38M292.69M | −0.4% |
| Shares Outstanding (Diluted) | 292.70M297.11M | −1.5% |
05—Questions
Frequently Asked Questions
How did the global economic crisis affect Analog Devices' financial performance in fiscal year 2009?
The global economic crisis significantly impacted Analog Devices, leading to a 22% year-over-year decrease in revenue to $2.01 billion. This was driven by a broad-based decline in demand across all end markets, particularly Industrial and Consumer, as customers reduced spending. Consequently, the company saw a substantial drop in profitability, with diluted EPS from continuing operations falling by 52% to $0.85.
What was Analog Devices' cash position and liquidity at the end of fiscal year 2009?
Analog Devices ended fiscal year 2009 with a strong liquidity position, reporting $1.816 billion in cash, cash equivalents, and short-term investments. This robust cash balance, supported by $432.1 million in cash flow from operations and net proceeds of $370.4 million from the issuance of senior unsecured notes, provided significant financial flexibility during the economic downturn.
Which end markets were the primary drivers of revenue for Analog Devices in fiscal year 2009?
The Industrial segment remained the largest contributor to revenue, accounting for 52% of the total in fiscal year 2009. The Communications segment represented 25% of revenue, and the Consumer segment accounted for 20%. The Computer segment contributed a smaller 3%. Despite the overall revenue decline, the Industrial segment's significant share highlights its continued importance to ADI's business.
What steps did Analog Devices take to manage its operations and costs during fiscal year 2009?
In response to the challenging economic environment, Analog Devices implemented several cost management measures. These included a reduction in Research and Development expenses by 16% and Selling, Marketing, General, and Administrative (SMG&A) expenses by 20% year-over-year. The company also incurred special charges related to facility consolidations, including the closure of its Cambridge wafer fabrication facility, and workforce reductions aimed at optimizing its cost structure and improving operational leverage.
06—Continue