Exhibit 99.1
Press Information
FOR IMMEDIATE RELEASE
NASDAQ SYMBOL MXIM
| Contact: | John F. Gifford, Chairman, President and Chief Executive Officer (408) 737-7600 |
MAXIM REPORTS REVENUES AND EARNINGS
FOR THE THIRD QUARTER OF FISCAL 2003
AND DOUBLES QUARTERLY DIVIDEND
SUNNYVALE, CA–April 29, 2003–Maxim Integrated Products, Inc., (MXIM) reported net revenues of $286.2 million for its fiscal third quarter ending March 29, 2003, a 10.7% increase over the $258.5 million reported for the third quarter of fiscal 2002 and unchanged from reported revenues for the second quarter of fiscal 2003. Net income for the quarter was $77.6 million, a 16.3% increase over the $66.7 million reported last year and a 0.7% increase over the $77.1 million reported for the previous quarter. Diluted earnings per share (which measure the cost of employee stock options and include the Company's average outstanding common stock for the quarter, or 322.9 million shares, increased by 19.0 million shares using the Treasury Stock Method) were $0.23 for the third quarter, a 21.1% increase over the $0.19 reported for the same period a year ago and unchanged from reported second quarter fiscal 2003 results.
During the quarter, cash and short-term investments increased $111.0 million after the Company repurchased 650,000 shares of its common stock for $20.0 million, paid dividends of $6.5 million, and acquired a total of $8.6 million of capital equipment. Inventories decreased $4.2 million during the quarter to $123.8 million.
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Gross margin for the third quarter increased to 69.9%, after increasing inventory reserves $3.1 million, compared to 69.7% reported for the second quarter. Third quarter operating expenses of $87.9 million decreased from the second quarter’s level of $88.4 million.
Third quarter bookings were approximately $308 million, a 14% increase over the second quarter’s level of $271 million. Turns orders received during the third quarter were $165 million, a 19% increase over the $139 million received in the prior quarter (turns orders are customer orders that are for delivery within the same quarter and may result in revenue within the same quarter if the Company has available inventory that matches those orders). This is the highest level of turns orders that the Company has received since the first quarter of its 2001 fiscal year. Order cancellations were $4.6 million, a decrease of 41% from the prior quarter. Bookings increased over the second quarter’s level in all major geographic regions except Japan, where bookings were down 5% sequentially. Twelve of the Company’s 14 business units had improved bookings in the third quarter. Eleven of those 14 business units had a bookings increase of at least 10% over the previous quarter.
Third quarter ending backlog shippable within the next 12 months was approximately $219 million, including $196 million requested for shipment in the fourth quarter of fiscal 2003. Second quarter ending backlog shippable within the next 12 months was approximately $201 million, including $177 million requested for shipment in the third quarter of fiscal 2003.
Jack Gifford, Chairman, President, and Chief Executive Officer, commented on the quarter: “We were encouraged to see the increase in orders this quarter, particularly the improvement in bookings by Dallas Semiconductor. Orders improved not only for our power management and communications products, but also for our standard products that have very broad-based markets and applications. The continued increase in turns orders in the third quarter may indicate that our customers are getting increased demand for their products quarter over quarter. We see no signs of inventory build-up either at our distributors or at
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our end customers and believe that the current shipping level is close to or slightly below the current consumption level for our products.”
Mr. Gifford continued: “Based on the Company’s profitability, strong cash position, and business outlook, the Company’s Board of Directors has increased this quarter’s dividend from $0.02 per share to $0.04 per share. Payment will be made on May 30, 2003 to stockholders of record on May 12, 2003.”
Mr. Gifford concluded: “Maxim is opposed to expensing employee stock options, as we believe that this concept is bad accounting. We believe that the Treasury Stock Method both rigorously and accurately defines the cost and resulting dilutive effect of stock options on reported earnings. We fear that requiring U.S. corporations to expense stock options could seriously damage our country’s leadership position in technology innovation and our ability to effectively compete with other countries. Our nation’s technology leadership over the past 15 years has caused some to forget the economic effect during the 1970s of our country’s losing our technology leadership to Japan. Entrepreneurial individuals and companies, given incentive by stock options, reversed this situation. This impact on the U.S. economy and its people in the 1970s has been too easily forgotten. The potential damaging long-term effect on our nation’s economy and lifestyle resulting from the forced expensing of stock options should be taken very seriously.”
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Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risk and uncertainty. They include the Company’s expectations regarding future inventory levels at the Company, at our distributors and at our end customers, demand for the Company’s products and the products of our customers, visibility at the Company’s customers as to future demand for their products, the Company’s profitability and business outlook, and that the Company’s current shipping level is close to or slightly below the current consumption level of the Company’s products, and the Company’s statements
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regarding the effect of requiring U.S. corporations to expense stock options. Actual results could differ materially from those forecasted based upon, among other things, the Company’s incorrectly assessing customer end-user demand, order cancellation levels, inventory levels, consumption levels for the Company’s products and general market conditions; market developments that could adversely affect the growth of the mixed-signal analog market, such as further declines in customer forecasts or greater than expected cyclical downturns within the mixed-signal analog segment of the semiconductor market; the Company’s incorrectly assessing the effect of requiring U.S. corporations to expense stock options; and the Company’s being unable to sustain its successes in the markets its products are introduced in, as well as other risks described in the Company’s Form 10K for the fiscal year ended June 29, 2002.
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.
Maxim Integrated Products is a leading international supplier of quality analog and mixed-signal products for applications that require real world signal processing.
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| Consolidated Balance Sheets | ||||||||||||||
| (In thousands) | 3/29/03 | 6/29/02 | ||||||||||||
| (unaudited) | (audited) | |||||||||||||
| Assets | Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 235,033 | $ | 173,807 | ||||||||||
| Short-term investments | 821,687 | 591,694 | ||||||||||||
| Total cash, cash equivalents and short-term investments | 1,056,720 | 765,501 | ||||||||||||
| Accounts receivable, net | 123,864 | 129,812 | ||||||||||||
| Inventories | 123,752 | 139,206 | ||||||||||||
| Deferred tax assets and other current assets | 189,953 | 201,145 | ||||||||||||
| Total current assets | 1,494,289 | 1,235,664 | ||||||||||||
| Property, plant and equipment, at cost | 1,479,654 | 1,432,184 | ||||||||||||
| Less accumulated depreciation | (723,605 | ) | (686,023 | ) | ||||||||||
| Net property, plant and equipment | 756,049 | 746,161 | ||||||||||||
| Other assets | 33,595 | 28,987 | ||||||||||||
| Total assets | $ | 2,283,933 | $ | 2,010,812 | ||||||||||
| Liabilities and | Current liabilities: | |||||||||||||
| Stockholders' | Accounts payable | $ | 37,768 | $ | 45,284 | |||||||||
| Equity | Accrued expenses | 137,472 | 145,927 | |||||||||||
| Deferred income on shipments to distributors | 21,729 | 27,183 | ||||||||||||
| Income taxes payable | 18,348 | 10,633 | ||||||||||||
| Total current liabilities | 215,317 | 229,027 | ||||||||||||
| Deferred tax liabilities | 73,720 | 36,634 | ||||||||||||
| Other liabilities | 4,000 | 4,000 | ||||||||||||
| Total liabilities | 293,037 | 269,661 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Common stock | 103,365 | 55,255 | ||||||||||||
| Retained earnings | 1,887,758 | 1,686,816 | ||||||||||||
| Accumulated other comprehensive loss | (227 | ) | (920 | ) | ||||||||||
| Total stockholders’ equity | 1,990,896 | 1,741,151 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,283,933 | $ | 2,010,812 | ||||||||||
| Consolidated Statements of Income | ||||||||||||||||||
| (In thousands | Three Months Ending | Nine Months Ending | ||||||||||||||||
| except per share data) | 3/29/03 | 3/30/02 | 3/29/03 | 3/30/02 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
| Net revenues | $ | 286,232 | $ | 258,481 | $ | 858,190 | $ | 745,015 | ||||||||||
| Cost of goods sold | 86,146 | 76,989 | 259,810 | 222,795 | ||||||||||||||
| Gross margin | 200,086 | 181,492 | 598,380 | 522,220 | ||||||||||||||
| 69.9 | % | 70.2 | % | 69.7 | % | 70.1 | % | |||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | 66,805 | 68,974 | 205,112 | 203,515 | ||||||||||||||
| Selling, general and administrative | 21,065 | 21,951 | 64,606 | 69,899 | ||||||||||||||
| Operating income | 112,216 | 90,567 | 328,662 | 248,806 | ||||||||||||||
| 39.2 | % | 35.0 | % | 38.3 | % | 33.4 | % | |||||||||||
| Interest income, net | 3,611 | 9,026 | 11,424 | 35,634 | ||||||||||||||
| Income before provision for income taxes | 115,827 | 99,593 | 340,086 | 284,440 | ||||||||||||||
| Provision for income taxes | 38,223 | 32,866 | 112,228 | 93,865 | ||||||||||||||
| Net income | $ | 77,604 | $ | 66,727 | $ | 227,858 | $ | 190,575 | ||||||||||
| Basic earnings per share | $ | 0.24 | $ | 0.20 | $ | 0.71 | $ | 0.58 | ||||||||||
| Shares used in the calculation of basic earnings per share | 322,905 | 326,228 | 321,201 | 326,945 | ||||||||||||||
| Diluted earnings per share | $ | 0.23 | $ | 0.19 | $ | 0.67 | $ | 0.53 | ||||||||||
| Shares used in the calculation of diluted earnings per share | 341,863 | 358,598 | 340,044 | 357,965 | ||||||||||||||
| Dividends declared per share | $ | 0.02 | $ | — | $ | 0.04 | $ | — | ||||||||||
Maxim Integrated Products, Incorporated
Company Profile
| NASDAQ Symbol: MXIM | • | Founded 1983 | • | Public since: February 29, 1988 |
| OPERATIONS | ||
| Corporate Offices: | 120 San Gabriel Drive, Sunnyvale, California 94086 | |
| U.S. Sales Offices: | Sunnyvale and Costa Mesa, CA; Wheeling, IL; Roswell, GA; Chelmsford, MA; Austin and Dallas, TX; Beaverton, OR; Horsham, PA | |
| Foreign Offices: | Munich, Germany; Tokyo, Japan; London, UK; Paris, France; Taipei, Taiwan; Seoul, South Korea; Hong Kong; Singapore; Milan, Italy; Beijing, China; Stockholm, Sweden; Zurich, Switzerland; Viborg, Denmark; Helsinki, Finland |
PRODUCTS
Maxim designs, develops, manufactures and markets a broad range of linear and mixed-signal integrated circuits for use in a variety of electronic products. Maxim circuits “connect” the real world and the digital world by detecting, measuring, amplifying, and converting real world and communication signals, such as temperature, pressure, sound, voice, or light into the digital signals necessary for computer and DSP processing.
| • | Maxim serves approximately 35,000 customers worldwide. | |
| • | Maxim has developed more products than any other analog company in the past 18 years. | |
| • | Maxim is recognized as the leader in CMOS analog and bipolar high-frequency technologies. | |
| • | 67% international sales for Q3 FY03. |
FINANCIAL HIGHLIGHTS (In thousands, except EPS)
| FY1999 | FY2000 | FY2001 | FY2002 | Q3 FY2003 | ||||||||||||||||
| Net Revenues | $ | 1,002,849 | $ | 1,376,085 | $ | 1,576,613 | $ | 1,025,104 | $ | 286,232 | ||||||||||
| Net Income | $ | 265,281 | $ | 373,083 | $ | 334,939 | $ | 259,183 | $ | 77,604 | ||||||||||
| Shares | 344,360 | 359,548 | 361,620 | 355,821 | 341,863 | |||||||||||||||
| Diluted EPS | $ | 0.77 | $ | 1.04 | $ | 0.93 | $ | 0.73 | $ | 0.23 | ||||||||||
| Cash and Short-Term Investments | $ | 710,074 | $ | 896,936 | $ | 1,220,352 | $ | 765,501 | $ | 1,056,720 | ||||||||||
| Total Assets | $ | 1,603,122 | $ | 2,087,438 | $ | 2,430,531 | $ | 2,010,812 | $ | 2,283,933 | ||||||||||
| Stockholders’ Equity | $ | 1,369,449 | $ | 1,719,939 | $ | 2,101,154 | $ | 1,741,151 | $ | 1,990,896 | ||||||||||
| ROE | 22.1 | % | 24.2 | % | 17.5 | % | 13.5 | % | 16.0 | % | ||||||||||
| Market Cap | $ | 11,026,352 | $ | 25,276,091 | $ | 14,535,766 | $ | 13,391,992 | $ | 12,956,601 | ||||||||||
RESEARCH COVERAGE
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