Business Wire | Nov 23, 2021 07:00AM EST

Analog Devices Reports Record Fourth Quarter and Fiscal 2021 Results

Nov. 23, 2021

WILMINGTON, Mass.--(BUSINESS WIRE)--Nov. 23, 2021--Analog Devices, Inc. (Nasdaq: ADI), a leading global high-performance semiconductor company, today announced financial results for its fourth quarter and full year fiscal 2021, which ended October 30, 2021.

"ADI delivered another quarter of record revenue and profits, marking a strong end to the fiscal year. Our Industrial and Automotive markets reached all-time highs and our Consumer business returned to solid growth in fiscal 2021," said Vincent Roche, President and CEO, "As we enter fiscal 2022, our backlog and bookings remain robust, and we continue to invest in capacity, setting us up for continued growth in the years ahead."

Roche continued, "The past year truly demonstrated the vital importance of semiconductors to the modern digital age and we're now better positioned than ever to capture value with our acquisition of Maxim Integrated. This combination has expanded our global team of talented employees and best-in-class technologies, and together, we will develop even more complete, high-performance solutions that define the edge of possible. I'm confident in our ability to drive the next waves of analog semiconductor innovation, while delivering strong returns for shareholders."

Performance for the Fourth Quarter and Fiscal 2021

Results Summary ^(1)

(in millions, except per-share amounts and percentages)



Three Months Ended Twelve Months Ended

Oct 30, Oct 31, Change Oct 30, Oct 31, Change 2021 2020 2021 2020

Revenue $ 2,340 $ 1,526 53 % $ 7,318 $ 5,603 31 %

Gross margin $ 1,122 $ 1,023 10 % $ 4,525 $ 3,690 23 %

Gross margin 47.9 % 67.0 % (1,910 61.8 % 65.9 % (410percentage bps) bps)

Operating $ 99 $ 462 (79) % $ 1,692 $ 1,498 13 %income

Operating 4.2 % 30.2 % (2,600 23.1 % 26.7 % (360margin bps) bps)

Dilutedearnings per $ 0.16 $ 1.04 (85) % $ 3.46 $ 3.28 5 %share



Adjusted Results

Adjusted gross $ 1,660 $ 1,068 55 % $ 5,186 $ 3,870 34 %margin

Adjusted gross 180margin 70.9 % 70.0 % 90 bps 70.9 % 69.1 % bpspercentage

Adjustedoperating $ 1,009 $ 636 59 % $ 3,104 $ 2,234 39 %income

Adjusted 140 250operating 43.1 % 41.7 % bps 42.4 % 39.9 % bpsmargin

Adjusteddiluted $ 1.73 $ 1.44 20 % $ 6.46 $ 4.91 32 %earnings pershare



Three Months Ended Trailing Twelve Months

Cash Generation Oct 30, 2021 Oct 30, 2021

Net cashprovided by $ 941 $ 2,735 operatingactivities

% of revenue 40 % 37 %

Capital $ (131) $ (344) expenditures

Free cash flow $ 810 $ 2,391

% of revenue 35 % 33 %



Three Months Ended Trailing Twelve Months

Cash Return Oct 30, 2021 Oct 30, 2021

Dividend paid $ (371) $ (1,109)

Stock (2,096) (2,605) repurchases

Total cash $ (2,467) $ (3,714) returned



(1) The sum and/or computation of the individual amounts may not equal thetotal due to rounding.

Outlook for the First Quarter of Fiscal Year 2022

For the first quarter of fiscal 2022, we are forecasting revenue of $2.60 Billion , +/- $100 Million. At the midpoint of this revenue outlook, we expect reported operating margin of approximately 12.0%, +/- 200 bps, and adjusted operating margin of approximately 43.3%, +/- 70 bps. We are planning for reported EPS to be $0.43, +/- $0.10, and adjusted EPS to be $1.78, +/- $0.10.

Our first quarter fiscal 2022 outlook is based on current expectations 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.

The adjusted results and adjusted anticipated results above are financial measures presented on a non-GAAP basis. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided in the financial tables included in this press release. See also "Non-GAAP Financial Information" section for additional information.

Dividend Payment

The ADI Board of Directors has declared a quarterly cash dividend of $0.69 per outstanding share of common stock. The dividend will be paid on December 14, 2021 to all shareholders of record at the close of business on December 3, 2021.

Conference Call Scheduled for Today, Tuesday, November 23, 2021 at 10:00 am ET

ADI will host a conference call to discuss our fourth quarter and fiscal year 2021 results and short-term outlook today, beginning at 10:00 am ET. Investors may join via webcast, accessible at investor.analog.com, or by telephone. The participant dial-in for both domestic and international callers will be available ten minutes before the call begins by calling 833-423-0297. International participants may provide the passcode 8334230297.

A replay of the conference call will be available approximately two hours after the call concludes and may be accessed for up to two weeks, by dialing 855-859-2056 (replay only) and entering the conference ID: 5047545, or by visiting investor.analog.com.

Non-GAAP Financial Information

This release includes non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have material limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and should not be considered in isolation from, or as a substitute for, the Company's financial results presented in accordance with GAAP. The Company's use of non-GAAP measures, and the underlying methodology when including or excluding certain items, is not necessarily an indication of the results of operations that may be expected in the future, or that the Company will not, in fact, record such items in future periods. You are cautioned not to place undue reliance on these non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

Management uses non-GAAP measures internally to evaluate the Company's operating performance from continuing operations against past periods and to budget and allocate resources in future periods. These non-GAAP measures also assist management in evaluating the Company's core business and trends across different reporting periods on a consistent basis. Management also uses these non-GAAP measures as the primary performance measurement when communicating with analysts and investors regarding the Company's earnings results and outlook and believes that the presentation of these non-GAAP measures is useful to investors because it provides investors with the operating results that management uses to manage the Company and enables investors and analysts to evaluate the Company's core business. Management also believes that the non-GAAP liquidity measure free cash flow is useful both internally and to investors because it provides information about the amount of cash generated after capital expenditures that is then available to repay debt obligations, make investments and fund acquisitions, and for certain other activities.

The non-GAAP financial measures referenced by ADI in this release include: adjusted gross margin, adjusted gross margin percentage, adjusted operating expenses, adjusted operating expenses percentage, adjusted operating income, adjusted operating margin, adjusted income before income taxes, adjusted provision for income taxes, adjusted tax rate, adjusted diluted earnings per share (EPS), free cash flow, and free cash flow margin percentage.

Adjusted gross margin is defined as gross margin, determined in accordance with GAAP, excluding certain acquisition related expenses1 which are described further below. Adjusted gross margin percentage represents adjusted gross margin divided by revenue.

Adjusted operating expenses is defined as operating expenses, determined in accordance with GAAP, excluding: certain acquisition related expenses1, acquisition related transaction costs2, special charges, net3 and charitable foundation contribution4which are described further below. Adjusted operating expenses percentage represents adjusted operating expenses divided by revenue.

Adjusted operating income is defined as operating income, determined in accordance with GAAP, excluding: acquisition related expenses1, acquisition related transaction costs2, special charges, net3 and charitable foundation contribution4 which are described further below. Adjusted operating margin represents adjusted operating income divided by revenue.

Adjusted nonoperating expense (income) is defined as nonoperating expense (income), determined in accordance with GAAP, excluding: acquisition related expenses1 and loss on extinguishment of debt5 which are described further below.

Adjusted income before income taxes is defined as (loss) income before income taxes, determined in accordance with GAAP, excluding: acquisition related expenses1, acquisition related transaction costs2, special charges, net3, charitable foundation contribution4 and loss on extinguishment of debt5which are described further below.

Adjusted provision for income taxes is defined as (benefit from) provision for income taxes, determined in accordance with GAAP, excluding tax related items6which are described further below. Adjusted tax rate represents adjusted provision for income taxes divided by adjusted income before income taxes.

Adjusted diluted EPS is defined as diluted EPS, determined in accordance with GAAP, excluding: acquisition related expenses1, acquisition related transaction costs2, special charges, net3, charitable foundation contribution4, loss on extinguishment of debt5 and tax related items6 which are described further below.

Free cash flow is defined as net cash provided by operating activities, determined in accordance with GAAP, less additions to property, plant and equipment, net. Free cash flow margin percentage represents free cash flow divided by revenue.

1Acquisition Related Expenses Expenses incurred as a result of current and prior period acquisitions and primarily include expenses associated with the fair value adjustments to debt, inventory, property, plant and equipment and amortization of acquisition related intangibles, which include acquired intangibles such as purchased technology and customer relationships. Expenses also include fair value adjustments associated with the replacement of share-based awards related to the Maxim Integrated Products, Inc. (Maxim) and Linear Technology Corporation (Linear) acquisitions. We excluded these costs from our non-GAAP measures because they relate to specific transactions and are not reflective of our ongoing financial performance.

2Acquisition Related Transaction Costs Costs directly related to the proposed Maxim Integrated Products, Inc. acquisition, including legal, accounting and other professional fees as well as integration-related costs. We excluded these costs from our non-GAAP measures because they relate to a specific transaction and are not reflective of our ongoing financial performance.

3Special Charges, net Expenses, net, incurred in connection with facility closures, consolidation of manufacturing facilities, severance, other accelerated stock-based compensation expense and other cost reduction efforts or reorganizational initiatives. We excluded these expenses from our non-GAAP measures because apart from ongoing expense savings as a result of such items, these expenses have no direct correlation to the operation of our business in the future.

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 399,121 280,239 1,296,126 1,050,519 development

Selling,marketing, 317,455 165,115 915,418 659,923 general andadministrative

Amortization of 213,594 108,007 536,811 429,455 intangibles

Special charges, 92,645 8,051 84,456 52,337 net

Total operating 1,022,815 561,412 2,832,811 2,192,234 expenses

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 onextinguishment of 215,150 - 215,150 - debt

Interest income (421) (527) (1,220) (4,305)

Other, net (14,178) (3,704) (35,268) (2,373)

Totalnonoperating 255,172 44,362 363,487 186,627 expense

(Loss) incomebefore income (156,167) 417,310 1,328,714 1,311,617 taxes

(Benefit from)provision for (231,854) 30,784 (61,708) 90,856 income taxes

Net income $ 75,687 $ 386,526 $ 1,390,422 $ 1,220,761



Shares used tocompute earnings 483,345 369,284 397,462 368,633 per share - basic

Shares used tocompute earnings 487,781 372,322 401,288 371,973 per share -diluted



Basic earnings $ 0.16 $ 1.05 $ 3.50 $ 3.31 per common share

Diluted earnings $ 0.16 $ 1.04 $ 3.46 $ 3.28 per common share

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 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. REVENUE TRENDS BY END MARKET (Unaudited) (In thousands)

The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the "sold to" customer information, the "ship to" customer information and the end customer product or application into which our product will be incorporated. As data systems for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.

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 fromoperating activities:

Net income $ 75,687 $ 386,526 $ 1,390,422 $ 1,220,761

Adjustments toreconcile netincome to net cash provided byoperations:

Depreciation 72,338 57,053 231,275 233,775

Amortization of 406,625 145,163 843,359 577,148 intangibles

Cost of goodssold for 331,083 - 331,083 - inventoryacquired

Stock-basedcompensation 124,928 36,557 243,611 149,518 expense

Gain on sale ofproperty, plant - - (13,557) - and equipment

Non-cashcontribution to - - - 40,000 charitablefoundation

Loss onextinguishment of 215,150 - 215,150 - debt

Non-cash portionof special 2,538 - 2,538 - charges

Deferred income (334,429) (71,146) (406,922) (113,948) taxes

Other 4,275 (257) (15,524) 5,418

Changes inoperating assets 42,531 118,702 (86,366) (104,185) and liabilities

Total adjustments 865,039 286,072 1,344,647 787,726

Net cash providedby operating 940,726 672,598 2,735,069 2,008,487 activities

Percent of 40.2 % 44.1 % 37.4 % 35.8 %revenue



Cash flows frominvesting activities:

Proceeds from 7,910 - 30,125 - other investments

Additions toproperty, plant (130,777) (29,888) (343,676) (165,692) and equipment,net

Cash receivedfrom acquisition 2,450,550 - 2,450,550 - of Maxim, net ofcash paid

Proceeds fromsale of property, - - 35,714 - plant andequipment

Payments foracquisitions, net - (1,433) (24,950) (14,196) of cash acquired

Change in other (878) 579 (4,238) (635) assets

Net cash providedby (used for) 2,326,805 (30,742) 2,143,525 (180,523) investingactivities



Cash flows fromfinancing activities:

Proceeds from 3,939,640 - 3,939,640 395,646 debt

Early termination (3,591,982) - (3,591,982) - of debt

Debt repayments - (450,000) - (750,000)

Payments on (400,000) - (400,000) (350,000) revolver

Proceeds from 400,000 - 400,000 350,000 revolver

Payment onderivative (153,161) - (153,161) - instrument

Prepayment for (500,000) - (500,000) - stock repurchases

Dividend payments (371,230) (229,597) (1,109,344) (886,155) to shareholders

Repurchase of (2,095,992) (7,222) (2,605,144) (244,487) common stock

Proceeds fromemployee stock 7,757 10,653 63,105 68,403 plans

Change in otherfinancing (4,730) - (2,778) (4,015) activities

Net cash used forfinancing (2,769,698) (676,166) (3,959,664) (1,420,608) activities

Effect ofexchange rate (570) (94) 3,174 182 changes on cash



Net increase(decrease) in 497,263 (34,404) 922,104 407,538 cash and cashequivalents

Cash and cashequivalents at 1,480,701 1,090,264 $ 1,055,860 648,322 beginning ofperiod

Cash and cashequivalents at $ 1,977,964 $ 1,055,860 $ 1,977,964 $ 1,055,860 end of period



ANALOG DEVICES, INC. REVENUE TRENDS BY END MARKET (Unaudited) (In thousands)

The categorization of revenue by end market is determined using a variety of data points including the technical characteristics of the product, the "sold to" customer information, the "ship to" customer information and the end customer product or application into which our product will be incorporated. As data systems for capturing and tracking this data and our methodology evolves and improves, the categorization of products by end market can vary over time. When this occurs, we reclassify revenue by end market for prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each end market.

Three Months Ended

Oct 30, 2021 Oct 31, 2020

Revenue % of Y/Y Revenue % of revenue* % revenue*

Industrial $ 1,178,476 50% 45% $ 812,729 53%

Automotive 452,589 19% 97% 229,916 15%

Communications 351,568 15% 13% 311,039 20%

Consumer 356,935 15% 107% 172,611 11%

Total revenue $ 2,339,568 100% 53% $ 1,526,295 100%



Twelve Months Ended

Oct 30, 2021 Oct 31, 2020

Revenue % of Y/Y Revenue % of revenue* % revenue*

Industrial $ 4,011,485 55% 34% $ 2,998,259 54%

Automotive 1,248,635 17% 60% 778,297 14%

Communications 1,198,461 16% 1% 1,191,169 21%

Consumer 859,705 12% 35% 635,331 11%

Total revenue $ 7,318,286 100% 31% $ 5,603,056 100%



*The sum of the individual percentages may not equal the total due to rounding.

ANALOG DEVICES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(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

Gross margin

$

1,121,820

$

1,023,084

$

4,525,012

$

3,690,478

Gross margin percentage

47.9

%

67.0

%

61.8

%

65.9

%

Acquisition related expenses

537,784

44,741

661,438

179,374

Adjusted gross margin

$

1,659,604

$

1,067,825

$

5,186,450

$

3,869,852

Adjusted gross margin percentage

70.9

%

70.0

%

70.9

%

69.1

%

Operating expenses

$

1,022,815

$

561,412

$

2,832,811

$

2,192,234

Percent of revenue

43.7

%

36.8

%

38.7

%

39.1

%

Acquisition related expenses

(223,151)

(110,963)

(552,789)

(444,261)

Acquisition related transaction costs

(56,289)

(10,977)

(112,859)

(20,098)

Charitable foundation contribution

-

-

-

(40,000)

Special charges, net

(92,645)

(8,050)

(84,458)

(52,337)

Adjusted operating expenses

$

650,730

$

431,422

$

2,082,705

$

1,635,538

Adjusted operating expenses percentage

27.8

%

28.3

%

28.5

%

29.2

%

Operating income

$

99,005

$

461,672

$

1,692,201

$

1,498,244

Operating margin

4.2

%

30.2

%

23.1

%

26.7

%

Acquisition related expenses

760,935

155,704

1,214,227

623,635

Acquisition related transaction costs

56,289

10,977

112,859

20,098

Charitable foundation contribution

-

-

-

40,000

Special charges, net

92,645

8,050

84,458

52,337

Adjusted operating income

$

1,008,874

$

636,403

$

3,103,745

$

2,234,314

Adjusted operating margin

43.1

%

41.7

%

42.4

%

39.9

%

Nonoperating expense (income)

255,172

$

44,362

363,487

186,627

Acquisition related expenses

3,842

-

3,842

-

Loss on extinguishment of debt

(215,150)

-

(215,150)

-

Adjusted nonoperating expense (income)

$

43,864

$

44,362

152,179

$

186,627

(Loss) income before income taxes

$

(156,167)

$

417,310

$

1,328,714

$

1,311,617

Acquisition related expenses

757,093

155,704

1,210,385

623,635

Acquisition related transaction costs

56,289

10,977

112,859

20,098

Charitable foundation contribution

-

-

-

40,000

Special charges, net

92,645

8,050

84,458

52,337

Loss on extinguishment of debt

$

215,150

$

-

$

215,150

$

-

Adjusted income before income taxes

$

965,010

$

592,041

$

2,951,566

$

2,047,687

(Benefit from) provision for income taxes

$

(231,854)

$

30,784

$

(61,708)

$

90,856

Effective tax rate

(148.5)

%

7.4

%

(4.6)

%

6.9

%

Income tax effect of adjustments above

165,505

26,878

231,972

106,291

Income tax from certain discrete tax items

188,872

-

188,872

25,951

Adjusted provision for income taxes

$

122,524

$

57,662

$

359,136

$

223,098

Adjusted tax rate

12.7

%

9.7

%

12.2

%

10.9

%

Diluted EPS

$

0.16

$

1.04

$

3.46

$

3.28

Acquisition related expenses

1.55

0.42

3.02

1.68

Acquisition related transaction costs

0.12

0.03

0.28

0.05

Charitable foundation contribution

-

-

-

0.11

Special charges, net

0.19

0.02

0.21

0.14

Loss on extinguishment of debt

0.44

-

0.54

-

Income tax effect of adjustments above

(0.34)

(0.07)

(0.58)

(0.29)

Income tax from certain discrete tax items

(0.39)

-

(0.47)

(0.07)

Adjusted diluted EPS*

$

1.73

$

1.44

$

6.46

$

4.91

* The sum of the individual per share amounts may not equal the total due to rounding.

ANALOG DEVICES, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(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



Gross margin $ 1,121,820 $ 1,023,084 $ 4,525,012 $ 3,690,478

Gross margin 47.9 % 67.0 % 61.8 % 65.9 %percentage

Acquisition 537,784 44,741 661,438 179,374 related expenses

Adjusted gross $ 1,659,604 $ 1,067,825 $ 5,186,450 $ 3,869,852 margin

Adjusted gross 70.9 % 70.0 % 70.9 % 69.1 %margin percentage



Operating $ 1,022,815 $ 561,412 $ 2,832,811 $ 2,192,234 expenses

Percent of 43.7 % 36.8 % 38.7 % 39.1 %revenue

Acquisition (223,151) (110,963) (552,789) (444,261) related expenses

Acquisitionrelated (56,289) (10,977) (112,859) (20,098) transaction costs

Charitablefoundation - - - (40,000) contribution

Special charges, (92,645) (8,050) (84,458) (52,337) net

Adjustedoperating $ 650,730 $ 431,422 $ 2,082,705 $ 1,635,538 expenses

Adjustedoperating 27.8 % 28.3 % 28.5 % 29.2 %expensespercentage



Operating income $ 99,005 $ 461,672 $ 1,692,201 $ 1,498,244

Operating margin 4.2 % 30.2 % 23.1 % 26.7 %

Acquisition 760,935 155,704 1,214,227 623,635 related expenses

Acquisitionrelated 56,289 10,977 112,859 20,098 transaction costs

Charitablefoundation - - - 40,000 contribution

Special charges, 92,645 8,050 84,458 52,337 net

Adjusted $ 1,008,874 $ 636,403 $ 3,103,745 $ 2,234,314 operating income

Adjusted 43.1 % 41.7 % 42.4 % 39.9 %operating margin



Nonoperating 255,172 $ 44,362 363,487 186,627 expense (income)

Acquisition 3,842 - 3,842 - related expenses

Loss onextinguishment of (215,150) - (215,150) - debt

Adjustednonoperating $ 43,864 $ 44,362 152,179 $ 186,627 expense (income)



(Loss) incomebefore income $ (156,167) $ 417,310 $ 1,328,714 $ 1,311,617 taxes

Acquisition 757,093 155,704 1,210,385 623,635 related expenses

Acquisitionrelated 56,289 10,977 112,859 20,098 transaction costs

Charitablefoundation - - - 40,000 contribution

Special charges, 92,645 8,050 84,458 52,337 net

Loss onextinguishment of $ 215,150 $ - $ 215,150 $ - debt

Adjusted incomebefore income $ 965,010 $ 592,041 $ 2,951,566 $ 2,047,687 taxes



(Benefit from)provision for $ (231,854) $ 30,784 $ (61,708) $ 90,856 income taxes

Effective tax (148.5) % 7.4 % (4.6) % 6.9 %rate

Income tax effectof adjustments 165,505 26,878 231,972 106,291 above

Income tax fromcertain discrete 188,872 - 188,872 25,951 tax items

Adjustedprovision for $ 122,524 $ 57,662 $ 359,136 $ 223,098 income taxes

Adjusted tax rate 12.7 % 9.7 % 12.2 % 10.9 %



Diluted EPS $ 0.16 $ 1.04 $ 3.46 $ 3.28

Acquisition 1.55 0.42 3.02 1.68 related expenses

Acquisitionrelated 0.12 0.03 0.28 0.05 transaction costs

Charitablefoundation - - - 0.11 contribution

Special charges, 0.19 0.02 0.21 0.14 net

Loss onextinguishment of 0.44 - 0.54 - debt

Income tax effectof adjustments (0.34) (0.07) (0.58) (0.29) above

Income tax fromcertain discrete (0.39) - (0.47) (0.07) tax items

Adjusted diluted $ 1.73 $ 1.44 $ 6.46 $ 4.91 EPS*

* The sum of the individual per share amounts may not equal the total due torounding.

ANALOG DEVICES, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(Unaudited)

(In thousands)

Trailing

Twelve

Months

Three Months Ended

Oct 30, 2021

Oct 30, 2021

Jul. 31, 2021

May 1, 2021

Jan. 30, 2021

Revenue

$

7,318,286

2,339,568

$

1,758,853

$

1,661,407

$

1,558,458

Net cash provided by operating activities

$

2,735,069

$

940,726

$

630,041

$

736,361

$

427,941

% of Revenue

37

%

40

%

36

%

44

%

27

%

Capital expenditures

$

(343,676)

$

(130,777)

$

(86,341)

$

(59,170)

$

(67,388)

Free cash flow

$

2,391,393

$

809,949

$

543,700

$

677,191

$

360,553

% of Revenue

33

%

35

%

31

%

41

%

23

%

ANALOG DEVICES, INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(Unaudited)

(In thousands)

Trailing

Twelve Three Months Ended

Months

Oct 30, 2021 Oct 30, 2021 Jul. 31, 2021 May 1, 2021 Jan. 30, 2021

Revenue $ 7,318,286 2,339,568 $ 1,758,853 $ 1,661,407 $ 1,558,458

Net cashprovided by $ 2,735,069 $ 940,726 $ 630,041 $ 736,361 $ 427,941 operatingactivities

% of Revenue 37 % 40 % 36 % 44 % 27 %

Capital $ (343,676) $ (130,777) $ (86,341) $ (59,170) $ (67,388) expenditures

Free cash $ 2,391,393 $ 809,949 $ 543,700 $ 677,191 $ 360,553 flow

% of Revenue 33 % 35 % 31 % 41 % 23 %

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

Three Months Ending January 29, 2022

Reported

Adjusted

Revenue

$2.60 Billion

$2.60 Billion

(+/- $100 Million)

(+/- $100 Million)

Operating margin

12.0%

43.3% (1)

(+/-200 bps)

(+/-70 bps)

Nonoperating expenses

~ $50 Million

~ $50 Million

Tax rate

12.5%

12.5% (2)

(+/-100 bps)

(+/-100 bps)

Diluted shares

~ 530 Million

~ 530 Million

Earnings per share

$0.43

$1.78 (3)

(+/- $0.10)

(+/- $0.10)

ANALOG DEVICES, INC.

RECONCILIATION OF PROJECTED GAAP TO NON-GAAP RESULTS

(Unaudited)

Three Months Ending January 29, 2022

Reported Adjusted

Revenue $2.60 Billion $2.60 Billion

(+/- $100 Million) (+/- $100 Million)

Operating margin 12.0% 43.3% (1)

(+/-200 bps) (+/-70 bps)

Nonoperating expenses ~ $50 Million ~ $50 Million

Tax rate 12.5% 12.5% (2)

(+/-100 bps) (+/-100 bps)

Diluted shares ~ 530 Million ~ 530 Million

Earnings per share $0.43 $1.78 (3)

(+/- $0.10) (+/- $0.10)

(1) Includes $815 million of adjustments related to acquisition related expenses and acquisition related transaction costs as previously defined in the Non-GAAP Financial Information section of this press release.

(2) Includes $102 million of tax effects associated with the adjustments for acquisition related expenses and acquisition related transaction costs noted above.

(3) Includes $1.35 of adjustments related to the net impact of acquisition related expenses and acquisition related transaction costs, as well as the tax effects on those items.

(ADI WEB)

View source version on businesswire.com: https://www.businesswire.com/news/home/20211123005603/en/

CONTACT: For more information: Investor: Analog Devices, Inc. Mr. Michael Lucarelli Vice President of Investor Relations and FP&A 781-461-3282 investor.relations@analog.com

CONTACT: Media: Teneo Ms. Andrea Calise 917-826-3804 andrea.calise@teneo.com

CONTACT: Teneo Ms. Megan Fenton 917-860-0356 megan.fenton@teneo.com