Last March, we began a journey together to leverage the best of both of our companies and create an industry powerhouse that is greater than the sum of our individual parts. It has now been a full year since we joined together – and I would like to take this opportunity to thank all of you for the great progress we have made.

Understandably at first, both legacy organizations were anxious, wondering if and how our combination would work. But with the focus and dedication from every employee in our first year together, we were able to achieve a record $5.2 billion in revenues, industry-leading gross margins of 70.9%, and stellar operating margins of 42.6% in 2017 – and we just recorded another very strong financial performance in the first quarter of FY2018.

This past year we learned from – and about – each other. As I visit sites around the globe, employees from both legacy companies continually tell me how much respect and admiration they have for one another. There is no doubt that our companies were very different, but the foundation that binds us is our people – smart, dedicated employees who are driven to solve our customers’ greatest challenges. We also learned we could work together, leveraging one another’s strengths, compromising at times, but always recognizing that our potential is greater together than apart.

This final edition of our Integration Digest highlights the progress we have made together this past year and provides a glimpse at what’s still to come to make our organization even more collaborative, effective, and efficient in the future.

My personal thanks for the many contributions from all of you who have served on our integration teams and supported our integration efforts. Your hard work and sacrifices in our first year together have helped make this a successful transition for our customers and employees … and have positioned ADI for sustained, profitable growth in the future.

Vince

This will be our final edition of the Integration Digest, which we created to keep employees informed about the steps we’re taking to bring our two organizations together structurally and culturally. In its place, we’ll now begin sharing integration activities and milestones through our ongoing ADI channels – including The Circuit, leadership meetings and other communication opportunities, such as manager-led communications. We hope you’ve found the Integration Digest a valuable resource and we look forward to updating you through our daily business channels. As always, if you have comments or suggestions to share on the content of our communications, please contact Employee Communications at employee.questions@analog.com.

• Leadership selection – Shortly after the close, we announced changes to the organizational structure and leadership team to drive the execution of our company’s strategy and advance our business together.
• Organizational structure changes – We now have a new structure in place that encompasses our dual market and technology focus. Two of our business units – the Automotive, Communications, and Aerospace & Defense Group, led by SVP Greg Henderson, and the Industrial, Healthcare, Consumer, and IoT Solutions and Security Group, led by SVP Yusuf Jamal, are market-defined. Our Power Products Group, led by SVP Steve Pietkiewicz, is a technology-defined group that brings together both legacy Power businesses to maximize our efforts and align on investment priorities.
• Operations changes – In January we announced our plan for our combined manufacturing footprint that will continue moving us along the path to a highly flexible, agile global operation.
• Sales organization – We’re now cross-selling products from both legacy LTC and ADI to customers of both … expanding our opportunity at many customers and increasing our growth potential for ADI - not only by selling what we have, but also by offering more complete solutions. We hosted our first combined global sales conference in January … further aligning our sales team, our processes and our cross-selling opportunities.
• IT infrastructure – the backbone of our processes and systems – We have made good progress integrating our core IT infrastructure. We are continuing to work to deploy PCs to legacy LTC employees, with more than 70% of employees covered at this point in time, including all U.S. employees and managers.  In addition, all legacy LTC employees now have access to ADI’s intranet, The Circuit. Work has been underway to combine the systems and business processes we expect to use to support our customers, such as the company’s external web presence and order processes – some of these combined systems will begin to roll out this spring (2018).
• Business unit changes – We’ve now connected all of our design centers … expanding our innovation opportunities. And we have just recently rolled out our new product development process, which captures best practices from both legacy organizations.
• Our support functions – We‘ve completed the integration of our HR, Finance, Legal and IT functions to serve ADI across the globe.
• Compensation alignment – In January we introduced a plan to move all employees to common compensation structures, including new bonus and sales incentive plans, and equity award grant practices based on our collective performance results – revenue growth and profitability.
• Simplicity – We’re placing a priority on finding ways to simplify our processes and systems, drawing from the best practices and thinking from both organizations.

Below is a sample of quotes from leaders about the power of the combination of our two companies taken from video segments and articles posted to The Circuit.

Vince Roche, President & CEO: I’ve been very heartened by the positive attitude and spirit with which people are taking on the challenge of integrating two strong, storied companies. We’re working together, shoulder to shoulder, to tackle our customers’ toughest problems in new, ever more innovative ways and focusing our energies on driving profitable growth.

Jeff Witt, General Manager, Monolithic Buck Regulators, Power Products (legacy LTC): “(Working together in the ADI lab) we no longer had to design a controller from scratch, saving between a year or two years of development time.”

Martin Cotter, Senior Vice President, Worldwide Sales & Digital Marketing: With the 1+1>2 campaign, the response that we’ve gotten is very specific and very real. These are cases where the combination of both organizations come together and generate something that couldn’t be done before.

Wayne Zhou, Sales Director, China Communication Account Group: Huawei definitely values the combination of ADI and Linear Tech. They definitely want to give us more chance to explore into different areas and broader technology. We are working closely within the company and also with Huawei to define and also try to convert the opportunities into our business.

Joe Buxton, Director of Design, Monolithic Buck Regulators, Power Products (legacy ADI): As we’ve talked to our new LT colleagues, both teams are really excited about what the other team has been working on. I think that synergy between our teams is going to be great moving forward and I think we’ll have a lot of new and interesting technologies to work on.

• SAP implementation – We will integrate our business processes from customer orders through shipping and invoicing into one system, beginning in June. We have nearly 100 people working on 18 “Quote to Cash” initiatives today. This work includes converting customers, orders, scheduling, performance, pricing and warehousing … and combining distribution into one system, as well.

  In the fall time frame, we will combine our planning processes in the system. And after the completion of our fiscal year, we will integrate our finance systems, including our Concur expense reporting in the U.S.

  When fully implemented, our SAP system will capture business information from across all of ADI to streamline our financial reporting.

  Click here for the SAP integration roadmap.

• Compensation and benefits alignment – As announced in January, our compensation and bonus plans will be integrated in May. We plan to provide information later this year on our 401(K) and benefits plan integration for 2019.  Benefits enrollment will begin in Q4-18 for 2019.
• Human Resources – Legacy LTC employees will migrate to ADI’s HR SuccessFactors platform and associated processes in March, creating a single system of record for all ADI employees globally.  Later this spring – and following the implementation period - managers and employees will be provided with additional online capabilities, enabling them to easily manage personal and organizational data online.
• ADI GetIT Catalog – Legacy LTC can now utilize basic features of ADI’s GetIT catalog for IT-related needs such as system access requests, IT support requests, and free software downloads.  Purchases such as Hardware and Software will be available later in FY18.
• Our culture – We will continue to advance our culture, drawing from the best facets of both ADI and LTC to help ensure our sustained growth and profitability.

Our integration efforts are making us stronger and more competitive – the goal of our acquisition.

With a more comprehensive product portfolio, expanded competencies and an even greater pool of talent, ADI is better positioned than ever to understand and respond quickly to our customer needs and provide differentiated solutions to their toughest challenges.

Together, we’ll change more than the industry … we’ll change the world. We’re just beginning to uncover our full potential to move ADI ahead of what’s possible.

In the coming months, we will continue to update you on our progress, as well as what you can expect and when on The Circuit and through our other communications channels. Please send your questions or comments to employee.questions@analog.com.

© 2017 ANALOG DEVICES, INC. ALL RIGHTS RESERVED.