MAXIM INTEGRATED PRODUCTS, INC. SAN JOSE, Calif., July 23, 2015 /PRNewswire/ -- Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $583 million for its fourth quarter of fiscal 2015 ended June 27, 2015, a 1% increase from the $577 million revenue recorded in the prior quarter, and a 9% decrease from the same quarter of last year.
http://photos.prnewswire.com/prnvar/20120912/SF71654LOGO
Tunc Doluca, President and Chief Executive Officer, commented, "In our June quarter, although revenue was slightly below our expectations, we exceeded our EPS guidance due to strong execution on our cost initiatives." Mr. Doluca continued, "This is a pivotal time for Maxim. We are transforming our manufacturing footprint to improve flexibility and profitability, and optimizing R&D and Sales to drive growth. Based on these initiatives, we now expect to achieve $180 million in annual, long-term savings compared to our fiscal fourth quarter 2015 run rate."
Fiscal Year 2015 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.34. The results were affected by pre-tax special items which primarily consisted of $46 million in charges related to restructuring activities, $22 million in charges related to acquisitions and $36 million in other income related to the gain on a divestiture. GAAP earnings per share, excluding special items was $0.43. An analysis of GAAP versus GAAP excluding special items is provided in the last table of this press release.
Cash Flow Items
At the end of the fourth quarter of fiscal 2015, total cash, cash equivalents and short term investments were $1.63 billion, an increase of $159 million from the prior quarter. Notable items included:
-- Cash flow from operations: $222 million
-- Net capital additions: $13 million
-- Dividends: $80 million ($0.28 per share)
-- Stock repurchases: $36 million
Business Outlook
The Company's 90-day backlog at the beginning of the first fiscal quarter of 2016 was $366 million. Based on the beginning backlog and expected turns, results for the September 2015 quarter are expected to be as follows:
-- Revenue: $545 million to $585 million
-- Gross Margin: 51% to 54% GAAP (60% to 63% excluding special items)
-- EPS: $0.22 to $0.28 GAAP ($0.38 to $0.44 excluding special items)
Maxim Integrated's business outlook does not include the potential impact of any restructuring activity, acquisitions, or other business combinations that may be completed during the quarter.
Dividend
A cash dividend of $0.30 per share will be paid on September 3, 2015, to stockholders of record on August 20, 2015. This represents a 7% increase in the dividend compared to the prior quarter.
Conference Call
Maxim Integrated has scheduled a conference call on July 23, 2015, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter of fiscal 2015 and its business outlook. To listen via telephone, dial (866) 804-3547 (toll free) or (703) 639-1328. This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com/company/investor.
A presentation summarizing financial information to be discussed on the conference call is posted at www.maximintegrated.com/company/investor.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
June 27, March 28, June 28, June 27, June 28,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
(in thousands, except per share data)
Net revenues $582,517 $577,263 $642,467 $2,306,864 $2,453,663
Cost of goods sold (1) 278,816 261,995 273,507 1,034,997 1,068,898
Gross margin 303,701 315,268 368,960 1,271,867 1,384,765
------- ------- ------- --------- ---------
Operating expenses:
Research and development 121,552 123,913 143,802 521,772 558,168
Selling, general and administrative 72,532 75,766 83,153 308,065 324,734
Intangible asset amortization 3,618 3,977 4,423 16,077 17,690
Impairment of long-lived assets
(2) 549 5,522 6,447 67,042 11,644
Impairment of goodwill and
intangible assets (3) - - - 93,010 2,580
Severance and restructuring
expenses (4) 12,798 2,824 5,790 30,642 24,902
Acquisition-related costs - - - - 6,983
Other operating expenses (income),
net (5) (2,296) (2,184) 8,795 (2,021) 15,773
Total operating expenses 208,753 209,818 252,410 1,034,587 962,474
------- ------- ------- --------- -------
Operating income 94,948 105,450 116,550 237,280 422,291
Interest and other income
(expense), net (6) 28,500 (5,534) (8,943) 8,890 (13,065)
------ ------ ------ ----- -------
Income before provision for income
taxes 123,448 99,916 107,607 246,170 409,226
Provision (benefit) for income
taxes 24,789 20,483 22,814 40,132 54,416
------ ------ ------ ------ ------
Net income $98,659 $79,433 $84,793 $206,038 $354,810
======= ======= ======= ======== ========
Earnings per share:
Basic $0.35 $0.28 $0.30 $0.73 $1.25
===== ===== ===== ===== =====
Diluted $0.34 $0.28 $0.29 $0.71 $1.23
===== ===== ===== ===== =====
Shares used in the calculation of
earnings per share:
Basic 284,202 283,418 283,431 283,675 283,344
======= ======= ======= ======= =======
Diluted 289,346 288,840 289,487 288,949 289,108
======= ======= ======= ======= =======
Dividends paid per share $0.28 $0.28 $0.26 $1.12 $1.04
===== ===== ===== ===== =====
SCHEDULE OF SPECIAL ITEMS
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
June 27, March 28, June 28, June 27, June 28,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
(in thousands)
Cost of goods sold:
Intangible asset amortization $18,116 $18,750 $18,750 $74,366 $64,483
Accelerated Depreciation (1) 32,765 9,834 - 51,494 -
Acquisition-related inventory
write-up - - 371 - 18,955
Total $50,881 $28,584 $19,121 $125,860 $83,438
======= ======= ======= ======== =======
Operating expenses:
Intangible asset amortization $3,618 $3,977 $4,423 $16,077 $17,690
Impairment of long-lived assets
(2) 549 5,522 6,447 67,042 11,644
Impairment of goodwill and
intangible assets (3) - - - 93,010 2,580
Severance and restructuring (4) 12,798 2,824 5,790 30,642 24,902
Acquisition-related costs - - - - 6,983
Other operating expenses (income),
net (5) (2,296) (2,184) 8,795 (2,021) 15,773
Total $14,669 $10,139 $25,455 $204,750 $79,572
======= ======= ======= ======== =======
Interest and other expense
(income), net (6) $(35,849) $ - $2,432 $(36,066) $6,155
Total $(35,849) $ - $2,432 $(36,066) $6,155
======== ==================== ====== ======== ======
Provision (benefit) for income
taxes:
Fixed assets tax basis adjustment
(7) $ - $ - $(1,041) $ - $(35,603)
Reversal of tax reserves (8) - - - (21,747) -
Fiscal year 2014 research &
development tax credits - - - (2,863) -
Total $ - $ - $(1,041) $(24,610) $(35,603)
==================== ==================== ======= ======== ========
(1) Includes accelerated depreciation related to San Jose wafer manufacturing building and equipment.
(2) Includes impairment charges relating to wafer manufacturing equipment, end of line test equipment, and
software.
(3) Impairment of goodwill and write-off of in-process research and development primarily related to MEMS
business.
(4) Includes severance charges primarily associated with the reorganization of various business units and
manufacturing operations.
(5) Other operating expenses (income), net are primarily for legal settlements, loss (gain) relating to
sale of assets, and expected loss on lease abandonment.
(6) Includes sale of a business and impairment of investment in privately-held companies.
(7) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense.
(8) Reversal of tax reserves related to the favorable settlement of a foreign tax issue.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 27, March 28, June 28,
2015 2015 2014
---- ---- ----
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $1,550,965 $1,392,197 $1,322,472
Short-term investments 75,154 75,142 49,953
------ ------ ------
Total cash, cash equivalents and short-
term investments 1,626,119 1,467,339 1,372,425
Accounts receivable, net 278,844 278,427 295,828
Inventories 288,474 297,270 289,292
Deferred tax assets 77,306 71,354 74,597
Other current assets 49,838 66,298 54,560
------ ------ ------
Total current assets 2,320,581 2,180,688 2,086,702
Property, plant and equipment, net 1,090,739 1,155,589 1,331,519
Intangible assets, net 261,652 283,385 360,994
Goodwill 511,647 511,824 596,637
Other assets 43,765 36,231 29,766
TOTAL ASSETS $4,228,384 $4,167,717 $4,405,618
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $88,322 $85,361 $102,076
Income taxes payable 34,779 20,102 20,065
Accrued salary and related expenses 181,360 163,354 186,732
Accrued expenses 48,389 55,967 64,028
Deferred income on shipments to
distributors 30,327 30,550 25,734
------ ------ ------
Total current liabilities 383,177 355,334 398,635
Long-term debt 1,000,000 1,000,000 1,001,026
Income taxes payable 410,378 385,838 362,802
Deferred tax liabilities 90,588 116,284 159,879
Other liabilities 54,221 56,412 53,365
Total liabilities 1,938,364 1,913,868 1,975,707
--------- --------- ---------
Stockholders' equity:
Common stock par value 283 12,359 285
Additional paid-in capital 27,859 - 23,005
Retained earnings 2,279,112 2,260,011 2,423,794
Accumulated other comprehensive loss (17,234) (18,521) (17,173)
Total stockholders' equity 2,290,020 2,253,849 2,429,911
--------- --------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $4,228,384 $4,167,717 $4,405,618
========== ========== ==========
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Year Ended
June 27, March 28, June 28, June 27, June 28,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
(in thousands)
Cash flows from operating
activities:
Net income $98,659 $79,433 $84,793 $206,038 $354,810
Adjustments to reconcile net income
to net cash provided by operating
activities:
Stock-based compensation 17,709 18,586 21,786 79,491 85,452
Depreciation and amortization 92,639 71,439 64,391 299,396 244,593
Deferred taxes (32,207) (15,658) (9,501) (72,507) (32,159)
Loss (gain) from sale of property,
plant and equipment (1,228) (441) 1,068 419 2,187
Tax benefit (shortfall) related to
stock-based compensation (861) 7,635 942 8,155 (68)
Impairment of long-lived assets 517 5,522 6,447 67,010 11,644
Impairment of investments in
privately-held companies 94 - 6,537 94 10,260
In-process research and
development written-off - - - 8,900 2,580
Loss (gain) on sale of business (35,849) - - (35,849) -
Impairment of goodwill - - - 84,110 -
Excess tax benefit from stock-
based compensation (2,372) (5,997) (4,897) (12,549) (14,192)
Changes in assets and liabilities:
Accounts receivable (417) (19,921) 8,300 16,984 13,340
Inventories 10,105 9,194 1,226 2,163 20,672
Other current assets 15,338 (156) 26,579 (8,783) 45,557
Accounts payable 2,874 477 5,203 (4,201) (11,255)
Income taxes payable 39,217 22,587 9,853 62,350 54,492
Deferred revenue on shipments to
distributors (223) 3,447 1,475 4,593 (823)
All other accrued liabilities 17,793 5,917 9,882 (12,110) (10,983)
Net cash provided by (used in)
operating activities 221,788 182,064 234,084 693,704 776,107
------- ------- ------- ------- -------
Cash flows from investing
activities:
Purchase of property, plant and
equipment (15,360) (10,185) (23,654) (75,816) (132,523)
Proceeds from sales of property,
plant and equipment 2,741 1,615 1,627 29,035 5,293
Proceeds from sale of business 35,550 - - 35,550 -
Proceeds from maturity of
available-for-sale securities - - - - 27,000
Purchases of available-for-sale
securities - - (49,953) (25,142) (49,953)
Purchases of privately-held
companies securities - (200) - (200) -
Payments in connection to
acquisitions - - - - (459,256)
Proceeds from sale of investments
in privately-held companies - 500 - 500 -
Net cash provided by (used in)
investing activities 22,931 (8,270) (71,980) (36,073) (609,439)
------ ------ ------- ------- --------
Cash flows from financing
activities:
Excess tax benefit from stock-
based compensation 2,372 5,997 4,897 12,549 14,192
Contingent consideration paid - - - - (4,705)
Dividends paid (79,558) (79,419) (73,626) (317,909) (294,175)
Repayment of notes payable - - (2,430) (437) (4,708)
Issuance of debt - - - - 497,895
Debt issuance cost - - - - (3,431)
Repurchase of common stock (35,963) (36,774) (40,744) (195,088) (305,314)
Issuance of ESPP shares under
employee stock purchase program 22,298 - 23,713 40,951 42,809
Net issuance of restricted stock
units (7,428) (8,369) (8,922) (30,657) (31,384)
Proceeds from stock options
exercised 12,328 31,098 26,232 61,453 69,639
Net cash provided by (used in)
financing activities (85,951) (87,467) (70,880) (429,138) (19,182)
------- ------- ------- -------- -------
Net increase (decrease) in cash and
cash equivalents 158,768 86,327 91,224 228,493 147,486
Cash and cash equivalents:
Beginning of period 1,392,197 1,305,870 1,231,248 1,322,472 1,174,986
End of period $1,550,965 $1,392,197 $1,322,472 $1,550,965 $1,322,472
========== ========== ========== ========== ==========
Total cash, cash equivalents and
short-term investments $1,626,119 $1,467,339 $1,372,425 $1,626,119 $1,372,425
========== ========== ========== ========== ==========
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES
(Unaudited)
Three Months Ended Year Ended
------------------ ----------
June 27, March 28, June 28, June 27, June 28,
2015 2015 2014 2015 2014
---- ---- ---- ---- ----
(in thousands, except per share data)
Reconciliation of GAAP gross profit to
GAAP gross profit excluding special
items:
--------------------------------------
GAAP gross profit $303,701 $315,268 $368,960 $1,271,867 $1,384,765
GAAP gross profit % 52.1% 54.6% 57.4% 55.1% 56.4%
Special items:
Intangible asset amortization 18,116 18,750 18,750 74,366 64,483
Accelerated depreciation (1) 32,765 9,834 - 51,494 -
Acquisition-related inventory write-
up - - 371 - 18,955
Total special items 50,881 28,584 19,121 125,860 83,438
------ ------ ------ ------- ------
GAAP gross profit excluding special
items $354,582 $343,852 $388,081 $1,397,727 $1,468,203
GAAP gross profit % excluding special
items 60.9% 59.6% 60.4% 60.6% 59.8%
Reconciliation of GAAP operating
expenses to GAAP operating expenses
excluding special items:
------------------------------------
GAAP operating expenses $208,753 $209,818 $252,410 $1,034,587 $962,474
Special items:
Intangible asset amortization 3,618 3,977 4,423 16,077 17,690
Impairment of long-lived assets (2) 549 5,522 6,447 67,042 11,644
Impairment of goodwill and intangible
assets (3) - - - 93,010 2,580
Severance and restructuring (4) 12,798 2,824 5,790 30,642 24,902
Acquisition-related costs - - - - 6,983
Other operating expenses (income), net
(5) (2,296) (2,184) 8,795 (2,021) 15,773
Total special items 14,669 10,139 25,455 204,750 79,572
------ ------ ------ ------- ------
GAAP operating expenses excluding
special items $194,084 $199,679 $226,955 $829,837 $882,902
======== ======== ======== ======== ========
Reconciliation of GAAP net income to
GAAP net income excluding special
items:
-------------------------------------
GAAP net income $98,659 $79,433 $84,793 $206,038 $354,810
Special items:
Intangible asset amortization 21,734 22,727 23,173 90,443 82,173
Accelerated depreciation (1) 32,765 9,834 - 51,494 -
Acquisition-related inventory write-
up - - 371 - 18,955
Impairment of long-lived assets (2) 549 5,522 6,447 67,042 11,644
Impairment of goodwill and intangible
assets (3) - - - 93,010 2,580
Severance and restructuring (4) 12,798 2,824 5,790 30,642 24,902
Acquisition-related costs - - - - 6,983
Other operating expenses (income), net
(5) (2,296) (2,184) 8,795 (2,021) 15,773
Interest and other expense, net (6) (35,849) - 2,432 (36,066) 6,155
------- --- ----- ------- -----
Pre-tax total special items 29,701 38,723 47,008 294,544 169,165
Tax effect of special items (4,267) (3,910) (6,850) (35,333) (19,383)
Fixed asset tax basis adjustment (7) - - (1,041) - (35,603)
Reversal of tax reserves (8) - - - (21,747) -
Fiscal year 2014 research &
development tax credits - - - (2,863) -
GAAP net income excluding special
items $124,093 $114,246 $123,910 $440,639 $468,989
======== ======== ======== ======== ========
GAAP net income per share excluding
special items:
Basic $0.44 $0.40 $0.44 $1.55 $1.66
===== ===== ===== ===== =====
Diluted $0.43 $0.40 $0.43 $1.52 $1.62
===== ===== ===== ===== =====
Shares used in the calculation of
earnings per share excluding special
items:
Basic 284,202 283,418 283,431 283,675 283,344
======= ======= ======= ======= =======
Diluted 289,346 288,840 289,487 288,949 289,108
======= ======= ======= ======= =======
(1) Includes accelerated depreciation related to San Jose wafer manufacturing building and equipment.
(2) Includes impairment charges relating to wafer manufacturing equipment, end of line test equipment, and software.
(3) Impairment of goodwill and write-off of in-process research and development primarily related to MEMS business.
(4) Includes severance charges primarily associated with the reorganization of various business units and manufacturing
operations.
(5) Other operating expenses (income), net are primarily for legal settlements, loss (gain) relating to sale of assets,
and expected loss on lease abandonment.
(6) Includes sale of a business and impairment of investment in privately-held companies.
(7) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense.
(8) Reversal of tax reserves related to the favorable settlement of a foreign tax issue.
Non-GAAP Measures
To supplement the consolidated financial results prepared under GAAP, Maxim Integrated uses non-GAAP measures which are adjusted from the most directly comparable GAAP results to exclude special items related to intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; legal settlements, loss (gain) relating to sale of assets, and expected loss on lease abandonment; sale of a business and impairment of investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense; reversal of tax reserves related to favorable settlement of a foreign tax issue. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate Maxim Integrated's current performance. Many analysts covering Maxim Integrated use the non-GAAP measures as well. Given management's use of these non-GAAP measures, Maxim Integrated believes these measures are important to investors in understanding Maxim Integrated's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in Maxim Integrated's core business across different time periods. These non-GAAP measures are not in accordance with or an alternative to GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. The non-GAAP measures displayed in the table above include the following:
GAAP Gross Profit Excluding Special Items
The use of GAAP gross profit excluding special items allows management to evaluate the gross margin of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization, accelerated depreciation and acquisition-related inventory write-up. In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP gross profit excluding special items to enable investors and analysts to evaluate our revenue generation performance relative to the direct costs of revenue of Maxim Integrated's core businesses.
GAAP Operating Expenses Excluding Special Items
The use of GAAP operating expenses excluding special items allows management to evaluate the operating expenses of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; legal settlements, loss (gain) relating to sale of assets, and expected loss on lease abandonment. In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP operating expenses excluding special items to enable investors and analysts to evaluate our core business and its direct operating expenses.
GAAP Net Income and GAAP Net Income per Share Excluding Special Items
The use of GAAP net income and GAAP net income per share excluding special items allow management to evaluate the operating results of Maxim Integrated's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; legal settlements, loss (gain) relating to sale of assets, and expected loss on lease abandonment; sale of a business and impairment of investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense; reversal of tax reserves related to favorable settlement of a foreign tax issue. In addition, they are important components of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP net income and GAAP net income per share excluding special items to enable investors and analysts to understand the results of operations of Maxim Integrated's core businesses and to compare our results of operations on a more consistent basis against that of other companies in our industry.
"Safe Harbor" Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include the Company's business outlook and financial projections for its first quarter of fiscal 2016 ending in September 2015, which includes revenue, gross margin and earnings per share, as well as the belief that the Company expects to achieve $180 million in annual, long-term savings compared to its fiscal fourth quarter 2015 run rate as the Company transforms its manufacturing footprint to improve flexibility and profitability, and optimizing R&D and Sales to drive growth. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted, based upon, among other things, general market and economic conditions, market developments that could adversely affect the growth of the mixed-signal analog market, product mix shifts, the loss of all or a substantial portion of our sales to one of our large customers, customer cancellations and price competition, as well as other risks described in the Company's Annual Report on Form 10-K for the fiscal year ended June 28, 2014 (the "10-K") and Quarterly Reports on Form 10-Q filed after the 10-K.
All forward-looking statements included in this news release are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement except as required by law.
About Maxim Integrated
Maxim is the leader in analog integration. From mobile to industrial solutions, we're making analog smaller, smarter and more energy efficient. Learn more at www.maximintegrated.com.
Contact
Kathy Ta
Managing Director, Investor Relations
(408) 601-5697
Logo - http://photos.prnewswire.com/prnh/20120912/SF71654LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/maxim-integrated-reports-results-for-the-fourth-quarter-of-fiscal-2015-increases-dividend-by-7-300118056.html
SOURCE Maxim Integrated Products, Inc.
