Analog Devices, Inc. · NASDAQ:ADI
Analog Devices — Debt Investor Presentation (June 2009)
31 slides from Analog Devices's debt investor presentation, Jun 25, 2009
Slide 1: Analog Devices, Inc. $375 million Senior Notes Offering June 2009
Analog Devices, Inc. $375 million Senior Notes Offering June 2009
Slide 2: Safe Harbor Statement
1 Safe Harbor Statement This presentation contains forward-looking statements, including with respect to expected financial results, sales growth and customer demand, market share, and expected market conditions. Such forward-looking statements are based on our current expectations, beliefs, assumpt
Slide 3: Today's presenters
2 Today's presenters David Zinsner Chief Financial Officer of ADI since January 12, 2009 Chief Financial Officer at Intersil 2005 - 2008 Bill Martin Treasurer and Director of Mergers and Acquisitions since 1993 Assistant Treasurer from October 1991 - March 1993 Manager of Treasury Finance from March
Slide 4: Offering summary
3 Offering summary Issuer: Analog Devices, Inc. Securities: Senior Unsecured Notes Size: $375 million Form of Offering: SEC Registered Maturity: 5 years Ratings: Moody's: A3 (Stable) S&P: BBB+ (Stable) Covenants: Limitations on Liens Limitations on Sales and Leasebacks Limitation on Mergers and Othe
Slide 5: Key investment highlights
4 Key investment highlights Highly diversified business model with broad exposure to products, customers, end markets and geographies Leading market position with attractive growth prospects Highly-proprietary products with long product life cycles and high margin profile Efficient cost structure an
Slide 6: What does Analog Devices do?
5 What does Analog Devices do? Global leader in real world signal processing Analog semiconductors enable everything from traditional industrial and electronic systems to cutting edge, next-generation medical and communication applications
Slide 7: Analog Is Everywhere
eal th Ae AST Analog Is Everywhere
Slide 8: Attractive market opportunity
7 Attractive market opportunity Worldwide Standard Linear Analog Integrated Circuits Consumption by End Market 2004-2013E Long product life cycles Proprietary products Large customer base Strong customer loyalty High fragmentation Stable ASPs ($ in billions) Source: iSuppli - 2009 (Q1 Update). 2009
Slide 9: With superior market characteristics
8 ....With superior market characteristics The analog market is materially less volatile than the digital market Average digital downturn (16%) Average analog downturn (8%) Worldwide semiconductor industry revenue ($ In millions) Digital ? More Volatile Analog ? Less Volatile Source: SIA, World Semi
Slide 10: Highly Fragmented Competitive Landscape
9 Highly Fragmented Competitive Landscape 2008 Global Standard Linear Analog IC Market Share Source: iSuppli - 2009 (Q1 Update). Analog Devices
Slide 11: ADI's business model
10 ADI's business model Long product lifecycles Proprietary products - even in "common use" applications Broad and diversified attractive customer base Leadership in highly attractive markets Leading position in converters and high-performance amplifiers Strong customer loyalty and collaborative rel
Slide 12: Long product lifecycles
11 Long product lifecycles ADI's analog products Source: Company data.
Slide 13: Product and customer diversification
12 Product and customer diversification Greater than 60% of product revenue is proprietary Over 10,000 parts limiting reliance on any specific product ? ? Source: Company data. Product diversification Customer diversification FY 2008 revenue by product type Over 60,000 total customers No customer re
Slide 14: Leadership position in multiple product segments
13 Leadership position in multiple product segments Product Category Position Share Market Size Converters 49% $2.7bn Amplifiers 23% $2.9bn Total Standard Linear Analog 12% $15.3bn General-purpose DSP 7% $1.1bn #1 #2 #2 #2 Source: Standard Linear Analog data based on Databeans estimates - April 2009
Slide 15: Brand strength affords growth opportunities in power management
14 The strength of ADI's brand affords growth opportunities, particularly in power management Power management is a large, highly fragmented and high-margin market that represents growth opportunities for Analog Devices Customers rank ADI as one of their preferred power management vendors based on A
Slide 16: End market diversification
15 End market diversification Factory Automation Instrumentation Motor Control Process Control Automatic Test Equipment Aerospace/Defense Energy Management And More Industrial & Instrumentation Computer HDTV Home Theater Audio/Video Systems Digital Cameras Video Games And More Consumer Wireless Infr
Slide 17: Manufacturing strategy
16 Manufacturing strategy Results in low capital expenditure requirements Diversified manufacturing strategy utilizing internal and external capabilities Internal capacity where process technology matters and product life cycles are long; external capacity for everything else Analog chip manufacturi
Slide 18: ADI's financial model
17 ADI's financial model Stable, consistent revenue growth High margins Low capital spending High cash flow conversion Strong operating leverage Positioned effectively for recovery or continued recessionary environment Emphasis on organic growth and a conservative acquisition strategy ? ? ? ? ? ? ?
Slide 19: 15-years of consistent revenue growth
18 15-years of consistent revenue growth... 1994 to 2008 Revenue CAGR: 9% Source: Company data. Note: FY05-FY08 numbers represent revenue from continuing operations.
Slide 20: And significant cashflow generation
19 ....and significant cashflow generation Source: Company data. (1) FY05 - FY08 operating cashflow includes operating cashflow from discontinued operations. (2) FY05 - FY08 operating cashflow as a % of revenue calculated as operating cashflow divided by total revenue, including revenue provided by
Slide 21: High margin profile
20 High margin profile Source: Company data. Note: FY05-FY08 metrics are calculated as a percentage of revenue from continuing operations. ADI has been able to leverage its stable and attractive gross margins into a 20%+ operating margin business over the last 5 years
Slide 22: Low capital spending requirements
21 Low capital spending requirements Note: FY09 Capital expenditures based on Company's guidance as of Q2 2009. FY05-FY08 metrics are calculated as a percentage of revenue from continuing operations. Having completed the necessary investments needed to consolidate its manufacturing facilities ADI is
Slide 23: High cash flow conversion
22 High cash flow conversion Source: Company data. Note: FY05-FY08 metrics are calculated using total revenue including revenue provided by discontinued operations. (1) Free Cash Flow defined as Net cash provided by operations minus capital expenditures. (1)
Slide 24: Pro forma capitalization
Pro forma capitalization (Sin mations) ‘Actual Adjustments Pro forma Q209A Q209A___ Capitalization ‘Cash, cash equivalents and short-term investments $1,285.5 $3727 '$1,658.2 Unsecured revolving credit facility ® c : ‘Senior unsecured notes - 375.0 375.0 13.4% Total debt S00 $375.0 ‘Shareholders equ
Slide 25: Key investment highlights
24 Key investment highlights Highly diversified business model with broad exposure to products, customers, end markets and geographies Leading market position with attractive growth prospects Highly-proprietary products with long product life cycles and high margin profile Efficient cost structure a
Slide 26: Appendix
4 The World Lead, in Hi ice Signal Processi \ ee Appendix
Slide 27: Historical Income Statement
26 Historical Income Statement
Slide 28: Historical Balance Sheet
Historical Balance Sheet FYo8” $1,310 315 315 567 247 337 $3,091 $13 540 $671 2,420 FY04 Cash & ST Investments $2,685 Trade Receivables 330 Inventory 348 Net PP&E 668 Goodwill & intangibles 169 Other assets 523 Total Assets $4723 ‘Accounts Payable 8127 Debt - Other liabilities 797 Total Liabilities
Slide 29: Historical Cash Flow
Historical Cash Flow Net income Depreciation & amortization ‘Stock-based comp net of tax benefit ‘Working capital & other (inc)/dec (Gainyoss on sale of business Cash from Operations 1% Sales (ine. dise ops) Capital expenditures Free cash flow FYO5: FY06: FYO7 FY08 ‘$871 ‘Sata ‘$549 ‘S497 ‘$786 153
Slide 30: Reconciliation of Non-GAAP financial information
29 Reconciliation of Non-GAAP financial information Table of reconciliation of GAAP Net Income (from continuing operations) to Non-GAAP EBITDA (in millions) (unaudited)
Slide 31: The World Leader in High Performance Signal Processing Solutions
‘The World Leader in High Performance Signal Processing Solutions ‘ANALOG | DEVICES!
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