SAN JOSE, Calif., Jan. 24, 2013 /PRNewswire/ -- Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $605 million for its second quarter of fiscal 2013 ended December 29, 2012, a 3% decrease from $623 million revenue recorded in the prior quarter.
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Tunc Doluca, President and Chief Executive Officer, commented, "We are pleased that the breadth of our businesses allowed us to achieve revenues near the midpoint of our guidance range despite ongoing uncertainty. We have an attractive product portfolio with design wins for new model launches in the mobility market and we are also well positioned to benefit from a recovery in the industrial and communications markets."
Fiscal Year 2013 Second Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the December quarter was $0.26. The results were affected by special items which primarily consisted of:
-- $13 million pre-tax charge for acquisition related items -- $22 million pre-tax charge for impairment of long-lived assets -- $19 million tax charge for international restructuring
GAAP earnings per share, excluding special items, was $0.42. 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 our second quarter of fiscal 2013, total cash, cash equivalents and short term investments was $1.03 billion, an increase of $105 million from the prior quarter. Notable items include:
-- Cash flow from operations: $255 million -- Net capital expenditures: $58 million -- Dividends: $70 million ($0.24 per share) -- Stock repurchases: $50 million
Business Outlook
The Company's 90 day backlog at the beginning of the third fiscal quarter of 2013 was $353 million. Based on our beginning backlog and expected turns, results for the March 2013 quarter are expected to be:
-- Revenue: $580 million to $610 million -- Gross Margin: 58% to 61% GAAP (60% to 63% excluding special expense items) -- EPS: $0.39 to $0.43 GAAP ($0.39 to $0.43 excluding special expense items)
Maxim Integrated's business outlook does not include the potential impact of any restructuring activity or mergers, acquisitions, divestitures, or other business combinations that may be completed during the quarter.
Dividend
A cash dividend of $0.24 per share will be paid on March 6, 2013, to stockholders of record on February 20, 2013.
Conference Call
Maxim Integrated has scheduled a conference call on January 24, 2013, at 2:00 p.m. Pacific Time to discuss its financial results for the second quarter of fiscal 2013 and its business outlook. To listen via telephone, dial (866) 206-6154 (toll free) or (703) 639-1107. This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com.
Contact
Venk Nathamuni
Managing Director, Investor Relations
(408) 601-5293
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended ------------------ December 29, September 29, December 31, 2012 2012 2011 ---- ---- ---- (in thousands, except per share data) Net revenues $605,306 $623,075 $591,359 Cost of goods sold 241,931 237,384 243,399 ------- ------- ------- Gross margin 363,375 385,691 347,960 ------- ------- ------- Operating expenses: Research and development 135,742 132,930 142,084 Selling, general and administrative 80,058 80,187 80,826 Intangible asset amortization 3,903 4,049 4,338 Impairment of long-lived assets (1) 22,222 2,707 - Severance and restructuring 2,236 - 6,047 Other operating expenses (income), net (2) 1,666 415 155 Total operating expenses 245,827 220,288 233,450 ------- ------- ------- Operating income 117,548 165,403 114,510 Interest and other income (expense), net (3) (2,798) (5,742) 2,374 ------ ------ ----- Income before provision for income taxes 114,750 159,661 116,884 Provision for income taxes (4) 38,128 31,773 28,754 ------ ------ ------ Net income $76,622 $127,888 $88,130 ======= ======== ======= Earnings per share: Basic $0.26 $0.44 $0.30 ===== ===== ===== Diluted $0.26 $0.43 $0.29 ===== ===== ===== Shares used in the calculation of earnings per share: Basic 292,075 292,213 291,824 ======= ======= ======= Diluted 298,759 298,782 299,290 ======= ======= ======= Dividends paid per share $0.24 $0.24 $0.22 ===== ===== ===== SCHEDULE OF SPECIAL EXPENSE ITEMS (Unaudited) Three Months Ended ------------------ December 29, September 29, December 31, 2012 2012 2011 ---- ---- ---- (in thousands) Cost of goods sold: Intangible asset amortization $8,986 $9,454 $8,080 Acquisition related inventory write up - - 1,801 Total $8,986 $9,454 $9,881 ====== ====== ====== Operating expenses: Intangible asset amortization $3,903 $4,049 $4,338 Impairment of long-lived assets (1) 22,222 2,707 - Severance and restructuring 2,236 - 6,047 Other operating expenses (income) , net (2) 1,666 415 155 Total $30,027 $7,171 $10,540 ======= ====== ======= Interest and other expenses (income) , net (3) $ - $ - $(1,776) Total $ - $ - $(1,776) ========================= ============================ ======= Provision for income taxes: International restructuring implementation (4) $18,726 $ - $ - Total $18,726 $ - $ - ======= =========================== ======================= (1) Includes impairment charges relating to land and buildings held for sale, wafer fab and end of line manufacturing equipment. ----------------------------------------------------------------------------------- (2) Other operating expenses (income), net are primarily for contingent consideration adjustments related to certain acquisitions, certain payroll taxes, interest and penalties and loss relating to sale of land and building. ---------------------------------------------------------------------------------- (3) Includes gain on sale of privately-held companies. ------------------------------------------------------ (4) Includes impact due to international restructuring. -------------------------------------------------------
STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands) (Unaudited) Three Months Ended December 29, 2012 Stock Options Restricted Stock Units Employee Stock Purchase Plan Total ------------- ---------------------- ---------------------------- ----- Cost of goods sold $477 $2,572 $634 $3,683 Research and development expense 2,288 8,401 1,451 12,140 Selling, general and administrative expense 1,286 5,152 584 7,022 Total $4,051 $16,125 $2,669 $22,845 ====== ======= ====== ======= Three Months Ended September 29, 2012 Cost of goods sold $398 $2,171 $419 $2,988 Research and development expense 1,829 9,210 1,284 12,323 Selling, general and administrative expense 1,555 5,119 512 7,186 Total $3,782 $16,500 $2,215 $22,497 ====== ======= ====== ======= Three Months Ended December 31, 2011 Cost of goods sold $565 $2,657 $470 $3,692 Research and development expense 2,440 9,207 1,262 12,909 Selling, general and administrative expense 1,704 4,778 391 6,873 Total $4,709 $16,642 $2,123 $23,474 ====== ======= ====== =======
CONSOLIDATED BALANCE SHEETS (Unaudited) December 29, September 29, December 31, 2012 2012 2011 ---- ---- ---- (in thousands) ASSETS Current assets: Cash and cash equivalents $955,107 $849,850 $741,160 Short-term investments 75,192 75,283 75,375 ------ ------ ------ Total cash, cash equivalents and short-term investments 1,030,299 925,133 816,535 Accounts receivable, net 264,545 316,538 246,229 Inventories 257,690 258,689 233,404 Deferred tax assets 80,991 71,561 87,636 Other current assets 90,470 94,875 81,396 ------ ------ ------ Total current assets 1,723,995 1,666,796 1,465,200 Property, plant and equipment, net 1,359,014 1,359,882 1,365,815 Intangible assets, net 182,521 195,410 237,776 Goodwill 422,083 422,083 432,809 Other assets 50,940 60,403 19,055 TOTAL ASSETS $3,738,553 $3,704,574 $3,520,655 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $110,495 $127,306 $118,427 Income taxes payable 22,146 19,437 7,866 Accrued salary and related expenses 152,122 132,847 159,651 Accrued expenses 58,900 72,510 62,579 Current portion of long term debt 304,794 303,272 - Deferred income on shipments to distributors 25,362 27,025 31,136 ------ ------ ------ Total current liabilities 673,819 682,397 379,659 Long term debt 3,997 5,592 308,700 Income taxes payable 260,770 226,001 108,462 Deferred tax liabilities 192,434 195,893 197,839 Other liabilities 26,321 26,254 21,529 Total liabilities 1,157,341 1,136,137 1,016,189 --------- --------- --------- Stockholders' equity: Common stock 7,040 292 292 Retained earnings 2,589,619 2,583,060 2,517,166 Accumulated other comprehensive loss (15,447) (14,915) (12,992) Total stockholders' equity 2,581,212 2,568,437 2,504,466 --------- --------- --------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $3,738,553 $3,704,574 $3,520,655 ========== ========== ==========
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended ------------------ December 29, September 29, December 31, 2012 2012 2011 ---- ---- ---- (in thousands) Cash flows from operating activities: Net income $76,622 $127,888 $88,130 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 22,845 22,497 23,474 Depreciation and amortization 51,880 53,674 51,995 Deferred taxes (12,979) 22,772 (368) Loss (Gain) from sale of property, plant and equipment (88) (51) 124 Loss (Gain) from sale of investments in privately-held companies - - (1,811) Tax benefit (shortfall) related to stock-based compensation 5,187 1,335 (2,581) Impairment of long-lived assets 22,222 2,707 - Excess tax benefit from stock-based compensation (6,615) (5,219) (4,242) Changes in assets and liabilities: Accounts receivable 51,993 923 82,760 Inventories 570 (16,015) 19,045 Other current assets 4,091 (7,839) (1,615) Accounts payable (9,536) (26,466) (18,397) Income taxes payable 37,477 10,461 12,619 Deferred income on shipments to distributors (1,663) 745 (3,444) All other accrued liabilities 13,091 (50,667) 3,631 Net cash provided by operating activities 255,097 136,745 249,320 ------- ------- ------- Cash flows from investing activities: Payments for property, plant and equipment (62,102) (50,703) (68,361) Proceeds from sales of property, plant and equipment 4,115 344 1,709 Acquisitions - - (12,018) Purchases of available-for-sale securities - - (25,108) Proceeds from sales of investments in privately-held companies - - 3,225 Net cash used in investing activities (57,987) (50,359) (100,553) ------- ------- -------- Cash flows from financing activities: Excess tax benefit from stock-based compensation 6,615 5,219 4,242 Dividends paid (70,063) (70,199) (64,158) Repayment of notes payable (74) (224) (4,189) Contingent consideration paid (7,476) - - Repurchase of common stock (50,435) (65,149) (72,486) Issuance of ESPP 16,768 - 14,906 Net issuance of restricted stock units (6,538) (7,107) (7,976) Proceeds from stock options exercised 19,350 19,864 12,013 Net cash used in financing activities (91,853) (117,596) (117,648) ------- -------- -------- Net increase (decrease) in cash and cash equivalents 105,257 (31,210) 31,119 Cash and cash equivalents: Beginning of period 849,850 881,060 710,041 ------- ------- ------- End of period $955,107 $849,850 $741,160 ======== ======== ======== Total cash, cash equivalents, and short-term investments $1,030,299 $925,133 $816,535 ========== ======== ========
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL EXPENSE ITEMS DISCLOSURES (Unaudited) Three Months Ended ------------------ December 29, September 29, December 31, 2012 2012 2011 ---- ---- ---- (in thousands, except per share data) Reconciliation of GAAP gross profit to GAAP gross profit excluding special expense items: -------------------------------------------------- GAAP gross profit $363,375 $385,691 $347,960 GAAP gross profit % 60.0% 61.9% 58.8% Special expense items: Intangible asset amortization 8,986 9,454 8,080 Acquisition related inventory write up - - 1,801 Total special expense items 8,986 9,454 9,881 ----- ----- ----- GAAP gross profit excluding special expense items $372,361 $395,145 $357,841 GAAP gross profit % excluding special expense items 61.5% 63.4% 60.5% Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special expense items: -------------------------------------------------- GAAP operating expenses $245,827 $220,288 $233,450 Special expense (income) items: Intangible asset amortization 3,903 4,049 4,338 Impairment of long-lived assets (1) 22,222 2,707 - Severance and restructuring 2,236 - 6,047 Other operating expenses (income), net (2) 1,666 415 155 Total special expense items 30,027 7,171 10,540 ------ ----- ------ GAAP operating expenses excluding special expense items $215,800 $213,117 $222,910 ======== ======== ======== Reconciliation of GAAP net income to GAAP net income excluding special expense items: ---------------------------------------------- GAAP net income $76,622 $127,888 $88,130 Special expense (income) items: Intangible asset amortization 12,889 13,503 12,418 Acquisition related inventory write up - - 1,801 Impairment of long-lived assets (1) 22,222 2,707 - Severance and restructuring 2,236 - 6,047 Other operating expenses (income) , net (2) 1,666 415 155 Interest and other expenses (income), net (3) - - (1,776) --- --- ------ Pre-tax total special expense items 39,013 16,625 18,645 Tax effect of special items (9,555) (5,371) (6,102) International restructuring implementation (4) 18,726 - - GAAP net income excluding special expense items $124,806 $139,142 $100,673 ======== ======== ======== GAAP net income per share excluding special expense items: Basic $0.43 $0.48 $0.34 ===== ===== ===== Diluted $0.42 $0.47 $0.34 ===== ===== ===== Shares used in the calculation of earnings per share excluding special expense items: Basic 292,075 292,213 291,824 ======= ======= ======= Diluted 298,759 298,782 299,290 ======= ======= ======= (1) Includes impairment charges relating to land and buildings held for sale, wafer fab and end of line manufacturing equipment. (2) Other operating expenses (income), net are primarily for contingent consideration adjustments related to certain acquisitions, certain payroll taxes, interest and penalties and loss relating to sale of land and building. (3) Includes gain on sale of privately-held companies. (4) Includes impact due to international restructuring. -------------------------------------------------------
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; acquisition related inventory write up to fair value; impairment of long-lived assets; severance and restructuring; contingent consideration adjustments relating to certain acquisitions; certain payroll taxes, interest and penalties; gain on sale of privately-held companies; and the tax provision impacts due to implementation of international restructuring. 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 expense items
The use of GAAP gross profit excluding special expense 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 expense items including intangible asset amortization and acquisition related inventory write up to fair value. 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 expense 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 expense items
The use of GAAP operating expenses excluding special expense 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 expense items including intangible asset amortization; acquisition related inventory write up to fair value; impairment of long-lived assets; severance and restructuring; contingent consideration adjustments relating to certain acquisitions; and certain payroll taxes, interest and penalties. 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 expense 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; acquisition related inventory write up to fair value; impairment of long-lived assets; severance and restructuring; contingent consideration adjustments relating to certain acquisitions; certain payroll taxes, interest and penalties; gain on sale of privately-held companies; and the tax provision impacts due to implementation of international restructuring. 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 third quarter of fiscal 2013 ending in March 2013, which includes revenue, gross margin and earnings per share, as well as the Company's belief that it has an attractive product portfolio with design wins for new model launches in the mobility market and it is also well positioned to benefit from a recovery in the industrial and communications markets. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted based upon, among other things, general market and economic conditions and 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 30, 2012 (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
At Maxim Integrated, we put analog together in a way that sets our customers apart. In Fiscal 2012, we reported revenues of $2.4 billion. For more information, go to www.maximintegrated.com.
SOURCE Maxim Integrated Products, Inc.