Press Release
Contact
Paresh Maniar
Executive Director, Investor Relations
(408) 470-5348
MAXIM REPORTS $449.2 MILLION REVENUE FOR THE FIRST
QUARTER OF FISCAL 2010
- Revenue: $449.2 million
- Gross Margin: 56.0%
- GAAP earnings per share: $0.13 (after $0.03 special expense items)
- Cash flow from operations: $138.5 million
- Cash, cash equivalents, and short term investments: $937.6 million
- Inventory: $192.3 million, representing 89 days of inventory
- Dividend per share: $0.20
SUNNYVALE, CA - October 29, 2009 - Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $449.2 million for its fiscal 2010 first quarter ended September 26, 2009, a 14% increase over the $394.5 million revenue recorded in the previous quarter.
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share was $0.13. The results include certain pre-tax and tax related special items which primarily consist of:
- $16.9 million pre-tax net benefit primarily for stock option related settlement & litigation and certain payroll taxes, interest and penalties
- $8.3 million pre-tax expense for the write down to fair value of assets to be sold
- $16.8 million additional tax provision due to international restructuring
Special expense items reduced earnings per share by $0.03. In the prior quarter special expense items reduced earnings per share by $0.08.
Cash Flow Items
Total cash, cash equivalents and short term investments was $937.6 million as of September 26, 2009, an increase of $24.2 million during the first quarter. Key items include:
- $138.5 million cash flow from operations, 30.8% of revenue
- $26.5 million in net payments for property and equipment
- $61.4 million for cash dividends
- $17.6 million for share repurchase
Business Outlook
Maxim's fiscal first quarter bookings increased by 10% compared to the fourth quarter of fiscal 2009 and the Company's 90 day backlog increased by 4% to $288 million. Results for the December quarter are expected to be:
- Revenue: $450 million - $465 million
- Gross Margin: 57% - 59%
- Operating expenses: $175 - $178 million
Tunc Doluca, President and Chief Executive Officer, commented, "Maxim had a strong September quarter. Revenue grew double digits for the second consecutive quarter and has held up relatively well year over year during which our industry experienced a severe downturn. Quarter over quarter, we achieved operating leverage with significant improvements in gross and operating margins."
Dividend
A cash dividend for the first quarter of fiscal 2010 of $0.20 per share will be paid on December 4, 2009, to stockholders of record on November 20, 2009.
Conference Call
Maxim has scheduled a conference call on October 29, 2009, at 2:00 p.m. Pacific Time to discuss its financial results for the first quarter of fiscal year 2010 and its business outlook. To listen via telephone, dial (866) 802-4321 (toll free) or (703) 639-1318. This call will be webcast by Shareholder.com and can be accessed at Maxim's website atwww.maxim-ic.com/Investor.
- more -
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| | Three Months Ended
|
| | September 26, | | June 27, | | September 27, |
| | 2009
| | 2009
| | 2008
|
| | (in thousands, except per share data) |
| Net revenues | $ 449,246 | | $ 394,471 | | $ 501,204 |
| Cost of goods sold (1,2) | 197,619
| | 203,934
| | 209,654
|
| Gross profit | 251,627 | | 190,537 | | 291,550 |
| Operating expenses: | | | | | |
| Research and development (1) | 116,693 | | 117,456 | | 138,915 |
| Selling, general and administrative (1) | 54,990 | | 50,643 | | 40,243 |
| Impairment of long-lived assets (3) | 8,291 | | - | | 7,343 |
| Severance and restructuring (4) | (1,561) | | (535) | | 4,106 |
| Other operating (income) expenses, net (5) | (16,885)
| | 1,386
| | 7,358
|
| Total operating expenses | 161,528
| | 168,950
| | 197,965
|
| Operating income | 90,099 | | 21,587 | | 93,585 |
| Interest income and other income, net | 1,901
| | 983
| | 9,101
|
| Income before provision for income taxes | 92,000 | | 22,570 | | 102,686 |
| Provision for income taxes | 50,048
| | 14,472
| | 35,119
|
| Net income | $ 41,952
| | $ 8,098
| | $ 67,567
|
| | | | | | |
| Earnings per share: | | | | | |
| Basic | $ 0.14
| | $ 0.03
| | $ 0.21
|
| Diluted | $ 0.13
| | $ 0.03
| | $ 0.21
|
| | | | | | |
| Shares used in the calculation of earnings per share: | | | | | |
| Basic | 306,276
| | 305,347
| | 320,553
|
| Diluted | 312,162
| | 308,442
| | 323,815
|
| | | | | | |
| Dividends declared per share | $ 0.200
| | $ 0.200
| | $ 0.200
|
| | | | | | |
| | | | | | |
| SCHEDULE OF STOCK BASED COMPENSATION EXPENSES |
| (Unaudited) |
| | Three Months Ended
|
| | September 26, | | June 27, | | September 27, |
| | 2009
| | 2009
| | 2008
|
| | (in thousands) |
| Cost of goods sold | $ 5,461 | | $ 6,772 | | $ 11,920 |
| Research and development | 16,741 | | 22,783 | | 19,419 |
| Selling, general and administrative | 4,263
| | 5,442
| | 6,222
|
| Total | $ 26,465
| | $ 34,997
| | $ 37,561
|
| | | | | | |
| | | | | | |
| SCHEDULE OF SPECIAL EXPENSE ITEMS |
| (Unaudited) |
| | Three Months Ended
|
| | September 26, | | June 27, | | September 27, |
| | 2009
| | 2009
| | 2008
|
| | (in thousands) |
| Cost of goods sold: | | | | | |
| Accelerated depreciation (2) | $ -
| | $ 18,932
| | $ 11,329
|
| | | | | | |
| Operating expenses: | | | | | |
| Impairment of long-lived assets (3) | $ 8,291 | | $ - | | $ 7,343 |
| Severance and restructuring (4) | (1,561) | | (535) | | 4,106 |
| Other operating (income) expenses, net (5) | (16,885)
| | 1,386
| | 7,358
|
| Total | $ (10,155)
| | $ 851
| | $ 18,807
|
| | | | | | |
| Provision for income taxes: | | | | | |
| International restructuring (6) | $ 16,843
| | $ 15,500
| | $ -
|
| | | | | | |
| (1)Includes stock-based compensation charges as shown in the Schedule of Stock Based Compensation Expenses. | | | | | |
| (2) Includes accelerated depreciation primarily related to long-lived assets resulting from the closure of the Dallas fab facility. |
| (3) Write down of assets to be sold to fair value and impairment of long-lived assets recorded in connection with reduced demand and transfer of production from the San Jose fab facility. |
| (4) Primarily severance and benefit expenses and associated accrual adjustments related to Business Unit; Selling, General & Administrative; and Manufacturing organizations. |
| (5) (Income) expenses, net, primarily for stock option related settlement & litigation and certain payroll taxes, interest and penalties. |
| (6) Tax provision impact due to international restructuring. |
| STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands) | | | | | | | |
| (Unaudited) | | | | | | | |
| | Stock Options
| | Restricted Stock
Units
| | Employee Stock
Purchase Plan
| | Total
|
| Three Months Ended September 26, 2009 | | | | | | | |
| Cost of goods sold | $ 2,015 | | $ 3,078 | | $ 368 | | $ 5,461 |
| Research and development expense | 4,131 | | 11,197 | | 1,413 | | 16,741 |
| Selling, general and administrative expense | 1,749
| | 2,378
| | 136
| | 4,263
|
| Total | $ 7,895
| | $ 16,653
| | $ 1,917
| | $ 26,465
|
| | | | | | | | |
| Three Months Ended June 27, 2009 | | | | | | | |
| Cost of goods sold | $ 1,599 | | $ 4,917 | | $ 256 | | $ 6,772 |
| Research and development expense | 4,751 | | 17,036 | | 996 | | 22,783 |
| Selling, general and administrative expense | 1,737
| | 3,618
| | 87
| | 5,442
|
| Total | $ 8,087
| | $ 25,571
| | $ 1,339
| | $ 34,997
|
| | | | | | | | |
| Three Months Ended September 27, 2008 | | | | | | | |
| Cost of goods sold | $ 6,115 | | $ 5,805 | | $ - | | $ 11,920 |
| Research and development expense | 7,735 | | 11,684 | | - | | 19,419 |
| Selling, general and administrative expense | 2,410
| | 3,812
| | -
| | 6,222
|
| Total | $ 16,260
| | $ 21,301
| | $ -
| | $ 37,561
|
- more -
| CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| | September 26, | | June 27, |
| | 2009
| | 2009
|
| | (in thousands) |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ 836,029 | | $ 709,348 |
| Short-term investments | 101,551
| | 204,055
|
| Total cash, cash equivalents and short-term investments | 937,580
| | 913,403
|
| | | | |
| Accounts receivable, net | 228,843 | | 207,807 |
| Inventories | 192,277 | | 217,847 |
| Income tax refund receivable | 1,260 | | 13,072 |
| Deferred tax assets | 194,373 | | 211,879 |
| Other current assets | 24,078
| | 20,943
|
| Total current assets | 1,578,411 | | 1,584,951 |
| Property, plant and equipment, net | 1,352,857 | | 1,366,052 |
| Other assets | 130,039
| | 130,772
|
| TOTAL ASSETS | $ 3,061,307
| | $ 3,081,775
|
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: | | | |
| Accounts payable | $ 57,966 | | $ 70,087 |
| Income taxes payable | 26,333 | | 2,140 |
| Accrued salary and related expenses | 125,821 | | 141,334 |
| Accrued expenses | 40,059 | | 38,455 |
| Deferred income on shipments to distributors | 18,764
| | 16,760
|
| Total current liabilities | 268,943 | | 268,776 |
| Other liabilities | 26,210 | | 26,398 |
| Income taxes payable | 126,055 | | 124,863 |
| Deferred tax liabilities | 67,760
| | 67,273
|
| Total liabilities | 488,968
| | 487,310
|
| | | | |
| Stockholders' equity: | | | |
| Common stock | 19,499 | | 21,511 |
| Retained earnings | 2,561,185 | | 2,580,610 |
| Accumulated other comprehensive loss | (8,345)
| | (7,656)
|
| Total stockholders' equity | 2,572,339
| | 2,594,465
|
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 3,061,307
| | $ 3,081,775
|
- more -
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| | Three Months Ended |
| | September 26, | | June 27, | | September 27, |
| | 2009
| | 2009
| | 2008
|
| | (in thousands) |
| Cash flows from operating activities: | | | | | |
| Net income | $ 41,952 | | $ 8,098 | | $ 67,567 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
| Stock-based compensation | 26,465 | | 34,997 | | 37,561 |
| Depreciation and amortization | 36,496 | | 56,513 | | 46,781 |
| Deferred taxes | 17,809 | | (7,277) | | (924) |
| Tax (detriment) benefit related to stock-based compensation | (4,347) | | (12,493) | | 1,062 |
| Impairment of long-lived assets | 8,291 | | - | | 7,343 |
| Other | (1,135) | | 194 | | 648 |
| Changes in assets and liabilities: | | | | | |
| Accounts receivable | (21,036) | | (11,463) | | 3,460 |
| Inventories | 24,525 | | 21,624 | | 6,429 |
| Other current assets | 10,595 | | 28,728 | | 11,146 |
| Accounts payable | (14,891) | | 2,042 | | 15,471 |
| Income taxes payable | 24,490 | | 11,872 | | 21,503 |
| Deferred income on shipments to distributors | 2,004 | | (1,250) | | (138) |
| Accrued liabilities - goodwill and tender offer payments above fair value | (453) | | (2,346) | | (8,948) |
| All other accrued liabilities | (12,250)
| | (18,888)
| | (51,897)
|
| Net cash provided by operating activities | 138,515
| | 110,351
| | 157,064
|
| | | | | | |
| Cash flows from investing activities: | | | | | |
| Payments for property, plant and equipment | (26,463) | | (31,897) | | (37,995) |
| Acquisition | (4,000) | | - | | - |
| Proceeds from sales/maturities of available-for-sale securities | 100,233 | | 1,313 | | 2,438 |
| Other | 1,293
| | (1,392)
| | (4,254)
|
| Net cash provided by (used in) investing activities | 71,063
| | (31,976)
| | (39,811)
|
| | | | | | |
| Cash flows from financing activities: | | | | | |
| Dividends paid | (61,377) | | (61,126) | | (64,111) |
| Repurchase of common stock | (17,569) | | - | | - |
| Equity proceeds from derivative litigation settlement | 2,460 | | - | | - |
| Issuance of common stock | (8,175) | | (637) | | - |
| Equity settlements and payouts | - | | - | | (15,109) |
| Other | 1,764
| | (89)
| | 42
|
| Net cash used in financing activities | (82,897)
| | (61,852)
| | (79,178)
|
| | | | | | |
| Net increase in cash and cash equivalents | 126,681 | | 16,523 | | 38,075 |
| Cash and cash equivalents: | | | | | |
| Beginning of period | 709,348
| | 692,825
| | 1,013,119
|
| End of period | $ 836,029
| | $ 709,348
| | $ 1,051,194
|
| | | | | | |
| Total cash, cash equivalents, and short-term investments | $ 937,580
| | $ 913,403
| | $ 1,256,456
|
"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 financial projections for its second quarter of fiscal 2010 ending in December 2009, which includes revenue, gross margin and operating expenses projections. 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, 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 27, 2009.
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.
About Maxim
Maxim Integrated Products is a publicly traded company that designs, manufactures, and sells high-performance semiconductor products. The Company was founded over 25 years ago with the mission to deliver innovative analog and mixed-signal engineering solutions that add value to its customers' products. To date, it has developed over 6100 products serving the industrial, communications, consumer, and computing markets.
Maxim reported revenue in excess of $1.6 billion for fiscal 2009. A Fortune 1000 company, Maxim is included in the Nasdaq 100, the Russell 1000, and the MSCI USA indices. For more information, go towww.maxim-ic.com.
# # #
