Analog Devices Inc. is a semiconductor manufacturer headquartered in Norwood near Boston, Massachusetts. The company has offices worldwide and it's production sites are located in Wilmington (USA), Cavite (Philippines) and Limerick (Ireland).
1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 3, 1996 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from to -------------- -------------- Commission File No. 1-7819 Analog Devices, Inc. (Exact name of registrant as specified in its charter) Massachusetts 04-2348234 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Technology Way, Norwood, MA 02062-9106 (Address of principal executive offices) (Zip Code) (617) 329-4700 (Registrant's telephone number, including area code) ---------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO The number of shares outstanding of each of the issuer's classes of Common Stock as of March 1, 1996 was 115,249,442 shares of Common Stock.
2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS <TABLE> ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (thousands except per share amounts) <CAPTION> Three Months Ended ------------------ February 3, 1996 January 28, 1995 ---------------- ---------------- <S> <C> <C> Net sales $280,769 $208,005 Cost of sales 138,219 103,145 -------- -------- Gross margin 142,550 104,860 Operating expenses: Research and development 40,857 30,250 Selling, marketing, general and administrative 48,803 43,671 -------- -------- 89,660 73,921 -------- -------- Operating income 52,890 30,939 Nonoperating expenses (income): Interest expense 1,828 1,282 Interest income (3,899) (2,191) Other 783 732 -------- -------- (1,288) (177) -------- -------- Income before income taxes 54,178 31,116 Provision for income taxes 14,086 7,468 -------- -------- Net income $ 40,092 $ 23,648 ======== ======== Shares used to compute earnings per share 124,185 117,647 ======== ======== Earnings per share of common stock $0.33 $0.20 ======== ======== </TABLE> See accompanying notes. 2
3 <TABLE> ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (thousands except share amounts) <CAPTION> Assets February 3, 1996 October 28, 1995 January 28, 1995 ---------------- ---------------- ---------------- <S> <C> <C> <C> Cash and cash equivalents $ 195,549 $ 69,303 $101,133 Short-term investments 174,355 81,810 57,548 Accounts receivable, net 190,400 181,327 169,752 Inventories: Finished goods 48,839 44,109 40,448 Work in process 84,398 77,526 68,055 Raw materials 24,531 22,327 18,184 ---------- ---------- -------- 157,768 143,962 126,687 Prepaid income taxes 41,700 39,650 25,000 Prepaid expenses 12,926 9,966 6,424 ---------- ---------- -------- Total current assets 772,698 526,018 486,544 ---------- ---------- -------- Property, plant and equipment, at cost: Land and buildings 139,658 139,718 122,040 Machinery and equipment 686,776 633,124 510,608 Office equipment 43,855 41,260 34,040 Leasehold improvements 45,164 42,165 37,620 ---------- ---------- -------- 915,453 856,267 704,308 Less accumulated depreciation and amortization 438,930 424,305 382,567 ---------- ---------- -------- Net property, plant and equipment 476,523 431,962 321,741 ---------- ---------- -------- Intangible assets, net 16,722 17,230 18,754 Deferred charges and other assets 43,434 26,438 9,381 ---------- ---------- -------- Total other assets 60,156 43,668 28,135 ---------- ---------- -------- $1,309,377 $1,001,648 $836,420 ========== ========== ======== </TABLE> See accompanying notes. 3
4 <TABLE> ANALOG DEVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (thousands except share amounts) <CAPTION> Liabilities and Stockholders' Equity February 3, 1996 October 28, 1995 January 28, 1995 ---------------- ---------------- ---------------- <S> <C> <C> <C> Short-term borrowings and current portion of long-term debt $ 2,193 $ 2,299 $ 3,938 Obligations under capital leases 7,024 60 191 Accounts payable 96,243 100,217 86,655 Deferred income on shipments to domestic distributors 34,182 27,588 21,450 Income taxes payable 35,717 50,086 32,171 Accrued liabilities 82,101 74,138 57,072 ---------- ---------- -------- Total current liabilities 257,460 254,388 201,477 ---------- ---------- -------- Long-term debt 310,000 80,000 80,000 Noncurrent obligations under capital leases 26,248 - 24 Deferred income taxes 6,000 5,039 3,250 Other noncurrent liabilities 8,516 6,255 4,746 ---------- ---------- -------- Total noncurrent liabilities 350,764 91,294 88,020 ---------- ---------- -------- Commitments and Contingencies Stockholders' equity: Preferred stock, $1.00 par value, 500,000 shares authorized, none outstanding - - - Common stock, $.16 2/3 par value, 450,000,000 shares authorized, 114,990,492 shares issued (114,583,932 in October 1995, 75,438,343 in January 1995) 19,165 19,098 12,573 Capital in excess of par value 155,173 149,775 142,621 Retained earnings 521,556 481,464 385,842 Cumulative translation adjustment 5,574 5,870 5,964 --------- ---------- -------- 701,468 656,207 547,000 Less 50,713 shares in treasury, at cost (51,876 in October 1995, and 3,433 in January 1995) 315 241 77 ---------- ---------- -------- Total stockholders' equity 701,153 655,966 546,923 ---------- ---------- -------- $1,309,377 $1,001,648 $836,420 ========== ========== ======== </TABLE> See accompanying notes. 4
5 <TABLE> ANALOG DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) <CAPTION> (thousands) Three Months Ended ------------------ February 3, 1996 January 28, 1995 ---------------- ---------------- <S> <C> <C> OPERATIONS Cash flows from operations: Net income $ 40,092 $ 23,648 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 17,263 15,023 Deferred income taxes 992 43 Other noncash expenses 25 402 Changes in operating assets and liabilities (25,143) 10,953 -------- -------- Total adjustments (6,863) 26,421 -------- -------- Net cash provided by operations 33,229 50,069 -------- -------- INVESTMENTS Cash flows from investments: Additions to property, plant and equipment, net (62,059) (54,764) Purchase of short-term investments available for sale (139,627) (35,088) Maturities of short-term investments available for sale 47,082 50,192 Increase in other assets (11,797) (85) -------- --------- Net cash used for investments (166,401) (39,745) -------- -------- FINANCING ACTIVITIES Cash flows from financing activities: Net proceeds from issuance of long-term debt 224,385 - Proceeds from equipment financing 35,000 - Net increase in variable rate borrowings 12 1,035 Payments on capital lease obligations (1,788) (82) Proceeds from employee stock plans 684 685 Payments on long-term debt - (20,000) -------- -------- Net cash provided by (used for) financing activities 258,293 (18,362) -------- -------- Effect of exchange rate changes on cash 1,125 58 -------- -------- Net increase (decrease) in cash and cash equivalents 126,246 (7,980) Cash and cash equivalents at beginning of period 69,303 109,113 -------- -------- Cash and cash equivalents at end of period $195,549 $101,133 ======== ======== SUPPLEMENTAL INFORMATION Cash paid during the period for: Income taxes $ 24,122 $ 2,954 ======== ======== Interest $ 170 $ 135 ======== ======== </TABLE> See accompanying notes. 5
6 Analog Devices, Inc. Notes to Condensed Consolidated Financial Statements February 3, 1996 Note 1 - In the opinion of management, the information furnished in the accompanying financial statements reflects all adjustments, consisting only of normal recurring adjustments, which are necessary to a fair statement of the results for this interim period and should be read in conjunction with the most recent Annual Report to Stockholders. Note 2 - Certain amounts reported in the previous year have been reclassified to conform to the 1996 presentation. Note 3 - Debt On December 18, 1995 the Company completed a public offering of $230,000,000 of five-year 3 1/2% Convertible Subordinated Notes due December 1, 2000 with semiannual interest payments on June 1 and December 1 of each year, commencing June 1, 1996. The Notes are convertible, at the option of the holder, into the Company's common stock at any time after 60 days following the date of original issuance, unless previously redeemed, at a conversion price of $27.917 per share, subject to adjustment in certain events. The net proceeds of the offering were approximately $224 million after payment of the underwriting discount and expenses of the offering which will be amortized over the term of the Notes. As of February 3, 1996, the Company's total long-term debt was $310,000,000, comprised of the $230,000,000 of 3 1/2% Convertible Subordinated Notes and $80,000,000 of 6 5/8% Notes. Note 4 - Commitments and Contingencies As previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended October 28, 1995, the Company is engaged in an enforcement proceeding brought by the International Trade Commission related to patent infringement litigation with Texas Instruments, Inc., and antitrust litigation with Maxim Integrated Products, Inc. Although the Company believes it should prevail in these matters, the Company is unable to determine their ultimate outcome or estimate the ultimate amount of liability, if any, at this time. An adverse resolution of these matters could have a material adverse effect on the Company's consolidated financial position or on its consolidated results of operations or cash flows in the period in which the matters are resolved. 6
7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations First Quarter of Fiscal 1996 Compared to the First Quarter of Fiscal 1995 Net sales for the 14-week first quarter of 1996 increased 35% to $280.8 million, as compared to net sales of $208.0 million for the 13-week first quarter of fiscal 1995. The sales increase was principally attributable to significant increases in sales volumes of both standard linear IC and system-level IC products as the Company continued to benefit from strong worldwide demand for its IC products. Sales of the Company's standard linear IC products, the largest and most profitable part of the Company's business, increased approximately 32% from last year's first quarter. Excluding sales of hard disk drive products, revenues from system level IC products, including both general-purpose digital signal processing and mixed signal ICs, grew approximately 71% year over year. Revenues from disk drive manufacturers declined $3.1 million from the prior year. Assembled product sales remained relatively flat in comparison to the first quarter of fiscal 1995. Demand for standard linear IC products was particularly strong in the industrial and instrumentation markets and in high-growth applications in the communications market. Sales of system-level IC products were strongest in wireless communications, pin electronics for automatic test equipment, and both fixed-point and floating-point general-purpose DSPs. The distributor channel continued to have a very positive effect on sales growth, as worldwide sales through distribution increased approximately 47% from the same period last year to comprise approximately 41% of total sales in the first quarter of fiscal 1996. Geographically the largest year over year sales gains were registered in North American distribution, Europe and Japan. The Company's manufacturing capacity continued to be constrained throughout the first quarter of fiscal 1996. See "Liquidity and Capital Resources" below for a discussion of the Company's efforts to address its capacity issues. Gross margin improved slightly to 50.8% of sales from 50.4% in the first quarter of 1995, despite a continuing mix shift to higher volume, lower-margin system-level products. Research and development expense for the first quarter of 1996 grew 35% over the same quarter last year to 14.6% of sales as the Company continued to increase its R&D investment in opportunities in communications, computers, digital signal processing, accelerometer and linear ICs. Selling, marketing, general and administrative (SMG&A) expense grew only 11.8%, a rate significantly below the sales growth rate. As a result, SMG&A as a percentage of sales decreased for the first quarter to 17.4% from 21.0% for the year ago period. The operating income ratio rose to 18.8% of sales compared to 14.9% for the first quarter of fiscal 1995. This performance gain resulted primarily from maintaining the gross margin ratio on increased sales while lowering the SMG&A expense-to-sales ratio. 7
8 Nonoperating income increased $1.1 million, benefiting from increased interest income on a higher level of cash, cash equivalents and short-term investments. Interest income increased from $2.2 million in the first quarter of fiscal 1995 to $3.9 million in the first quarter of fiscal 1996. The increase in interest income was partly offset by an increase in interest expense of $0.5 million, both resulting from the sale of $230,000,000 of 3 1/2% Convertible Subordinated Notes during the first quarter of 1996. The effective income tax rate increased from 24.0% of sales for the year ago quarter to 26.0% for the first quarter of fiscal 1996 due to a shift in the mix of worldwide profits. The growth in sales, improved operating performance and lower nonoperating expenses led to a 70% increase in net income to $40.1 million for the first quarter of fiscal 1996. Earnings per share increased to $.33 from $.20 for last year's first quarter. First Quarter of Fiscal 1996 Compared to the Fourth Quarter of Fiscal 1995 Continued strength in orders coupled with a strong backlog led to an increase in net sales from $257.2 million for the previous 13-week quarter to $280.8 million for the 14-week first quarter, an increase of 9%. The first quarter sales increase resulted largely from greater sales volumes of both standard linear IC and system-level IC products. Sales growth was particularly strong for communications and digital signal processing products, along with continued strong sales of high-speed standard linear ICs. The largest sales increases occurred in Europe and Japan. The gross margin-to-sales ratio remained flat compared to the fourth quarter's 50.8%. R&D expenses increased $5.1 million over the preceding quarter as the funding of new product development continued. As a percentage of sales, R&D expenses increased to 14.6% compared to 13.9% for the fourth quarter. SMG&A expenses were relatively flat compared to the prior quarter in dollars and as a percentage of sales decreased from 18.8% to 17.4%. The higher sales and tight control over operating expenses generated a sequential gain in operating income of 13.5% with operating income reaching 18.8% of sales compared to 18.1% in the previous quarter. Nonoperating income increased slightly from $1.0 million in the fourth quarter to $1.3 million in the first quarter of fiscal 1996 as increased interest income was only partially offset by increased interest expense. The sale of $230,000,000 of 3 1/2% Convertible Subordinated Notes during December 1995 created both additional interest income from the investment of the proceeds and additional interest expense. The effective income tax rate for the first quarter was approximately 26%, the same as for the prior quarter. Net income grew 14.1%, increasing from $35.1 million or $.29 per share for the fourth quarter of fiscal 1995 to $40.1 million or $.33 per share for the first quarter of fiscal 1996. As a percentage of sales, net income improved to 14.3% from 13.7% for the fourth quarter. 8
9 Liquidity and Capital Resources At February 3, 1996, cash, cash equivalents and short-term investments totaled $369.9 million, an increase of $218.8 million from the fourth quarter of fiscal 1995 and an increase of $211.2 million from the first quarter of fiscal 1995. The increase in cash, cash equivalents and short-term investments from the first and fourth quarters of fiscal 1995 was a result of the sale of $230,000,000 of 3 1/2% Convertible Subordinated Notes during the first quarter of 1996. The net proceeds from the offering were approximately $224 million. Cash provided by operating activities was $33.2 million or 11.8% of sales in the first quarter of 1996 compared to $50.1 million or 24.1% of sales in the first quarter of 1995. The decrease in operating cash flows from the year earlier period was principally due to an increase in working capital requirements. Accounts receivable of $190.4 million at the end of the first quarter of fiscal 1996 increased $9.1 million or 5% and $20.6 million or 12.2% from the end of the fourth and first quarters of fiscal 1995, respectively. These increases reflected the higher sales levels. As a percentage of annualized quarterly sales, accounts receivable was reduced to 17.0% from 17.6% and 20.4% for the previous quarter and the first quarter of fiscal 1995, respectively. Inventories rose $13.8 million or 9.6% to $157.8 million as compared to the fourth quarter of fiscal 1995, and $31.1 million or 24.5% compared to the first quarter of fiscal 1995. This growth resulted primarily from a build in inventory levels to service increasing sales volumes. Inventories as a percentage of annualized quarterly sales remained flat compared to the fourth quarter of fiscal 1995 at 14.0% and decreased from 15.2% for the first quarter of fiscal 1995. As additional manufacturing capacity becomes available, the Company intends to further increase inventory levels in order to improve customer response times. As previously discussed above and in the Company's "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in its Form 10-K for the fiscal year ended October 28, 1995, the Company's revenue and order growth has been capacity constrained. The Company has several capacity expansion programs underway that should provide substantially greater capacity during the remainder of fiscal 1996. Net additions to property, plant and equipment of $62.1 million for the first quarter of fiscal 1996 were funded with a combination of internally generated cash flow from operations and cash on hand. A large portion of these expenditures in the first quarter related to adding six-inch capacity to the Company's existing wafer fabrication facilities in Wilmington, Massachusetts and Limerick, Ireland. The additional capacity from these projects is expected to become available during fiscal 1996. During fiscal 1995 the Company also purchased an existing six-inch wafer fabrication module located close to its Santa Clara, California site. This facility is still in the process of being upgraded and modernized to produce advanced linear technology ICs, and is expected to go into production during the latter half of fiscal 1996. In January 1996, in accordance with a previous agreement, the Company made an additional $7.0 million equity investment in Chartered Semiconductor Manufacturing Pte., Ltd. ("CSM") for a total equity investment of $21.0 million, in exchange for a less than 5% ownership interest. This investment is structured to provide access to CSM's new eight-inch 0.5 micron wafer fabrication facility through wafer supply and 9
10 pricing commitments beginning in 1996. The investment in CSM is classified in the balance sheet line item, "Deferred Charges and Other Assets." The Company entered into an additional agreement with CSM during January 1996, whereby the Company will provide a total deposit of approximately $20.0 million to be paid in several installments in 1996 and 1997. Under the terms of this agreement, the deposit will guarantee access to certain quantities of sub-micron wafers through fiscal 2000. During the first quarter of fiscal 1996 the Company entered into a five year operating lease agreement for additional manufacturing space in Cambridge, Massachusetts. The Company intends to use this additional capacity for the manufacture of its accelerometer products. The Company currently plans to make capital expenditures of approximately $275 million during fiscal 1996, primarily in connection with the continued expansion of its manufacturing facilities. In addition, the Company is continuing to explore various options for increasing its manufacturing capacity, including joint ventures, acquisitions, equity investments in, or loans to, wafer suppliers and construction of additional facilities. On December 18, 1995 the Company completed a public offering of $230,000,000 of five-year 3 1/2% Convertible Subordinated Notes due December 1, 2000 with semiannual interest payments on June 1 and December 1 of each year, commencing June 1, 1996. The Notes are convertible, at the option of the holder, into the Company's common stock at any time after 60 days following the date of original issuance, unless previously redeemed, at a conversion price of $27.917 per share, subject to adjustment in certain events. The net proceeds of the offering were approximately $224 million after payment of the underwriting discount and expenses of the offering which will be amortized over the term of the Notes. As of February 3, 1996, the Company's total long-term debt was $310,000,000, comprised of the $230,000,000 of 3 1/2% Convertible Subordinated Notes and $80,000,000 of 6 5/8% Notes. At February 3, 1996, substantially all of the Company's lines of credit were unused, including its $60 million credit facility which expires in 1998. The Company believes that its existing sources of liquidity and cash expected to be generated from future operations, together with current and anticipated available long-term financing, will be sufficient to fund operations, capital expenditures and research and development efforts for the foreseeable future. Litigation As set forth in Note 4 to the Condensed Consolidated Financial Statements contained in this Form 10-Q for the fiscal quarter ended February 3, 1996, the Company is engaged in an enforcement proceeding brought by the International Trade Commission related to patent infringement litigation with Texas Instruments, Inc., and antitrust litigation with Maxim Integrated Products, Inc. Although the Company believes it should prevail in these matters, the Company is unable to determine their ultimate outcome or estimate the ultimate amount of liability, if any, at this time. An adverse resolution of these matters could have a material adverse effect on the Company's consolidated financial position or on its consolidated results of operations or cash flows in the period in which the matters are resolved. 10
11 Factors Affecting Future Results The Company's future operating results are difficult to predict and may be affected by a number of factors including the timing of new product announcements or introductions by the Company and its competitors, competitive pricing pressures, fluctuations in manufacturing yields, adequate availability of wafers and manufacturing capacity, changes in product mix and economic conditions in the United States and international markets. In addition, the semiconductor market has historically been cyclical and subject to significant economic downturns at various times. While the Company and other semiconductor companies in recent periods have experienced increased demand and production capacity constraints, it is uncertain how long these conditions will continue. As a result of these and other factors, there can be no assurance that the Company will not experience material fluctuations in future operating results on a quarterly or annual basis. The Company's success depends in part on its continued ability to develop and market new products. There can be no assurance that the Company will be able to develop and introduce new products in a timely manner or that such products, if developed, will achieve market acceptance. In addition, the Company's growth is dependent on its continued ability to penetrate new markets such as the communications, computer and automotive segments of the electronics market, where the Company has limited experience and competition is intense. There can be no assurance that the markets being served by the Company will continue to grow; that the Company's existing and new products will meet the requirements of such markets; that the Company's products will achieve customer acceptance in such markets; that competitors will not force prices to an unacceptably low level or take market share from the Company; or that the Company can achieve or maintain profits in these markets. Also, some of the customers in these markets are less well established which could subject the Company to increased credit risk. The semiconductor industry is intensely competitive. Certain of the Company's competitors have greater technical, marketing, manufacturing and financial resources than the Company. The Company's competitors also include emerging companies attempting to sell products to specialized markets such as those served by the Company. Competitors of the Company have, in some cases, developed and marketed products having similar design and functionality as the Company's products. There can be no assurance that the Company will be able to compete successfully in the future against existing or new competitors or that the Company's operating results will not be adversely affected by increased price competition. The Company's manufacturing facilities are operating at full capacity, and therefore the Company's business is currently constrained. While the Company is planning in fiscal 1996 to increase substantially its manufacturing capacity through both expansion of its production facilities and increased access to third-party foundries; there can be no assurance that the Company will complete the expansion of its production facilities or secure increased access to third party foundries in a timely manner; that the Company will not encounter unanticipated production problems at either its own facilities or at third-party foundries; or that the increased capacity will be sufficient to satisfy demand for its products. The Company relies, and plans to continue to rely, on third-party wafer fabricators to supply most of its wafers that can be manufactured using industry-standard digital processes, and such reliance involves several risks, including the absence of adequate guaranteed capacity and reduced control over delivery schedules, manufacturing yields and costs. Continued manufacturing capacity constraints could adversely affect the business of the 11
12 Company's customers and cause them to seek alternative sources for the products currently obtained from the Company. In addition, the Company's capacity additions will result in a significant increase in operating expenses, and if revenue levels do not increase to offset these additional expense levels, the Company's future operating results could be adversely affected. The Company also believes that other semiconductor manufacturers are also expanding or planning to expand their production capacity over the next several years, and there can be no assurance that the expansion by the Company and its competitors will not lead to overcapacity in the Company's target markets, which could lead to price erosion that would adversely affect the Company's operating results. For the first quarter of fiscal 1996, 57% of the Company's revenues were derived from customers in international markets. The Company has manufacturing facilities in Ireland, the Philippines and Taiwan. The Company is therefore subject to the economic and political risks inherent in international operations, including expropriation, air transportation disruptions, currency controls and changes in currency exchange rates, tax and tariff rates and freight rates. Although the Company engages in certain hedging transactions to reduce its exposure to currency exchange rate fluctuations, there can be no assurance that the Company's competitive position will not be adversely affected by changes in the exchange rate of the U.S. dollar against other currencies. The semiconductor industry is characterized by frequent claims and litigation involving patent and other intellectual property rights. The Company has from time to time received, and may in the future receive, claims from third parties asserting that the Company's products or processes infringe their patents or other intellectual property rights. In the event a third party makes a valid intellectual property claim and a license is not available on commercially reasonable terms, the Company's operating results could be materially and adversely affected. Litigation may be necessary to enforce patents or other intellectual property rights of the Company or to defend the Company against claims of infringement, and such litigation can be costly and divert the attention of key personnel. See Item 3 - "Legal Proceedings" for information concerning pending litigation involving the Company. An adverse resolution of such litigation, may, in certain cases, have a material adverse effect on the Company's consolidated financial position or on its consolidated results of operations or cash flows in the period in which the litigation is resolved. Because of these and other factors, past financial performance should not be considered an indicator of future performance. Investors should not use historical trends to anticipate future results and should be aware that the trading price of the Company's common stock may be subject to wide fluctuations in response to quarter-to-quarter variations in operating results, general conditions in the semiconductor industry, changes in earnings estimates and recommendations by analysts or other events. 12
13 PART II - OTHER INFORMATION ANALOG DEVICES, INC. Item 4. Submission of Matters to a Vote of Security Holders <TABLE> At the Annual Meeting of Stockholders held on March 12, 1996, the stockholders of the Company elected Messers. John L. Doyle, Samuel H. Fuller and Ray Stata to serve as Class III Directors for a term of three years by the following votes: <CAPTION> Nominee Votes for Votes Withheld Broker Non Votes - ------- --------- -------------- ---------------- <S> <C> <C> <C> John L. Doyle 103,414,548 1,262,126 -0- Samuel H. Fuller 103,370,756 1,305,918 -0- Ray Stata 103,313,270 1,363,404 -0- </TABLE> The terms of office of Messrs. Jerald G. Fishman, Philip L. Lowe, Gordon C. McKeague, Joel Moses and Lester C. Thurow continued after the meeting. At the same meeting, the stockholders approved an amendment to the Company's Articles of Organization increasing the number of authorized shares of Common Stock from 300,000,000 shares to 450,000,000 shares, by a vote of 100,526,641 in favor, 3,697,912 opposed and 452,121 abstaining. In addition, the stockholders ratified and approved an amendment to the Company's 1988 Stock Option Plan to increase the number of shares available for issuance under the plan from 15,525,000 to 22,425,000, by a vote of 70,936,839 in favor, 24,257,957 opposing and 544,111 abstaining. There were 8,937,767 broker non votes on the proposal. The stockholders also ratified and approved an amendment to the Company's 1991 Restricted Stock Plan to increase the number of shares available for issuance under the plan from 1,575,000 to 2,025,000, by a vote of 69,903,955 in favor, 25,285,474 opposing and 549,479 abstaining. There were 8,937,767 broker non votes on the proposal. Item 6. Exhibits and reports on Form 8-K (a) See Exhibit Index (b) There were no reports on Form 8-K filed for the three months ended February 3, 1996. 13
14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Analog Devices, Inc. -------------------- (Registrant) Date: March 18, 1996 By:/s/ Ray Stata ---------------------- Ray Stata Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Date: March 18, 1996 By:/s/ Joseph E. McDonough ---------------------- Joseph E. McDonough Vice President-Finance and Chief Financial Officer (Principal Financial and Accounting Officer) 14
15 <TABLE> EXHIBIT INDEX Analog Devices, Inc. <CAPTION> Item <S> <C> *10-1 Manufacturing Agreement dated as of March 17, 1995 between Chartered Semiconductor Manufacturing Pte. Ltd. and Analog Devices B.V. *10-2 Deposit Agreement dated January 30, 1996 between Chartered Semiconductor Manufacturing Pte. Ltd. and Analog Devices B.V. 10-3 Lease Agreement dated February 8, 1996 between Analog Devices, Inc. and Massachusetts Institute of Technology, relating to premises located at 21 Osborn Street, Cambridge, Massachusetts. 11-1 Computation of Earnings per share 27 Financial Data Schedule <FN> * Confidential treatment has been requested as to certain portions of these exhibits. </TABLE> 15