Press Release
Contact
Paresh Maniar
Executive Director, Investor Relations
(408) 470-5348
MAXIM REPORTS $473.5 MILLION REVENUE FOR THE SECOND
QUARTER OF FISCAL 2010
- Revenue: $473.5 million
- Gross Margin: 61.6%
- GAAP earnings per share: $0.19 (after $0.05 special expense items)
- Cash, cash equivalents, and short term investments: $838.6 million
- Dividend per share: $0.20
- Fiscal third quarter revenue outlook: $500 million - $520 million
SUNNYVALE, CA - January 28, 2010 - Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $473.5 million for its fiscal 2010 second quarter ended December 26, 2009, a 5% increase over the $449.2 million revenue recorded in the previous quarter.
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share was $0.19. The results include certain pre-tax and tax related special items which primarily consist of:
- $13.8 million additional tax provision due to international restructuring
- $3.0 million pre-tax expense, primarily for severance due to our international restructuring and for ongoing stock option litigation
Special expense items reduced earnings per share by $0.05. In the prior quarter special expense items reduced earnings per share by $0.03.
Cash Flow Items
Cash flow from operations was $31.0 million. Total cash, cash equivalents and short term investments was $838.6 million as of December 26, 2009, a decrease of $99.0 million during the second quarter. Key items include:
- $101.1 million in income taxes
- $52.3 million increase in accounts receivable
- $28.3 million in net payments for property and equipment
- $61.0 million for cash dividends
- $46.9 million for share repurchase
Business Outlook
Maxim's second quarter bookings increased by 12% compared to the first quarter of fiscal 2010 and the Company's 90 day backlog increased by 16% to $335 million. Results for the March quarter are expected to be:
- Revenue: $500 million - $520 million
- Gross Margin: 60% - 61%
- Operating expenses: $180 - $183 million
Tunc Doluca, President and Chief Executive Officer, commented, "Revenue grew for the third consecutive quarter. Higher utilization of our factories, a more favorable product mix and lower inventory reserves increased gross margins to our target range. The Company made significant improvements in a challenging 2009. We shortened time to market, qualified a new platform process technology, expanded our customer reach, reduced inventory, upgraded our ERP system, and paid cash dividends of $0.80 to our shareholders. We will continue to invest in research and development to innovate relentlessly and integrate many functions on a single chip
to add value to our customers' products. Our goal is to deliver long term profitable growth."
Dividend
A cash dividend for the second quarter of fiscal 2010 of $0.20 per share will be paid on March 5, 2010, to stockholders of record on February 19, 2010.
Conference Call
Maxim has scheduled a conference call on January 28, 2010, at 2:00 p.m. Pacific Time to discuss its financial results for the second 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 | |||||
| December 26, | September 26, | December 27, | |||
| 2009 | 2009 | 2008 | |||
| (in thousands, except per share data) | |||||
| Net revenues | $ 473,515 | $ 449,246 | $ 410,675 | ||
| Cost of goods sold (1,2) | 181,727 | 197,619 | 211,590 | ||
| Gross profit | 291,788 | 251,627 | 199,085 | ||
| Operating expenses: | |||||
| Research and development (1) | 118,367 | 116,693 | 144,283 | ||
| Selling, general and administrative (1) | 61,308 | 54,990 | 64,124 | ||
| In process research & development (4) | - | - | 3,900 | ||
| Impairment of long-lived assets (5) | - | 8,291 | 43,769 | ||
| Severance and restructuring | 2,063 | (1,561) | 13,597 | ||
| Other operating (income) expenses, net (6) | 921 | (16,885) | 10,252 | ||
| Total operating expenses | 182,659 | 161,528 | 279,925 | ||
| Operating income (loss) | 109,129 | 90,099 | (80,840) | ||
| Interest income and other income, net | 3,630 | 1,901 | 7,385 | ||
| Income (loss) before provision for income taxes | 112,759 | 92,000 | (73,455) | ||
| Provision (benefit) for income taxes | 54,124 | 50,048 | (34,671) | ||
| Net income (loss) | $ 58,635 | $ 41,952 | $ (38,784) | ||
| Earnings (loss) per share: | |||||
| Basic | $ 0.19 | $ 0.14 | $ (0.12) | ||
| Diluted | $ 0.19 | $ 0.13 | $ (0.12) | ||
| Shares used in the calculation of earnings (loss) per share: | |||||
| Basic | 305,324 | 306,276 | 312,718 | ||
| Diluted | 310,090 | 312,162 | 312,718 | ||
| Dividends declared per share | $ 0.200 | $ 0.200 | $ 0.200 | ||
| SCHEDULE OF STOCK-BASED COMPENSATION EXPENSES | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| December 26, | September 26, | December 27, | |||
| 2009 | 2009 | 2008 | |||
| (in thousands) | |||||
| Cost of goods sold | $ 5,265 | $ 5,461 | $ 30,834 | ||
| Research and development | 14,650 | 16,741 | 33,431 | ||
| Selling, general and administrative | 7,018 | 4,263 | 19,672 | ||
| Total | $ 26,933 | $ 26,465 | $ 83,937 | ||
| Total excluding $42,315 for settlement of expiring options and tender offer (3) | $ 26,933 | $ 26,465 | $ 41,622 | ||
| SCHEDULE OF SPECIAL EXPENSE ITEMS | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| December 26, | September 26, | December 27, | |||
| 2009 | 2009 | 2008 | |||
| (in thousands) | |||||
| Cost of goods sold: | |||||
| Accelerated depreciation (2) | $ - | $ - | $ 12,024 | ||
| Stock-based compensation (3) | - | - | 15,433 | ||
| Total | $ - | $ - | $ 27,457 | ||
| Operating expenses: | |||||
| In-process research and development (4) | $ - | $ - | $ 3,900 | ||
| Impairment of long-lived assets (5) | - | 8,291 | 43,769 | ||
| Severance and restructuring | 2,063 | (1,561) | 13,597 | ||
| Other operating (income) expenses, net (6) | 921 | (16,885) | 10,252 | ||
| Stock-based compensation (3) | - | - | 26,882 | ||
| Total | $ 2,984 | $ (10,155) | $ 98,400 | ||
| Provision for income taxes: | |||||
| International restructuring (7) | $ 13,758 | $ 16,843 | $ - | ||
| Interest income and other income, net | |||||
| Other income (8) | $ 1,220 | $ - | $ - | ||
| (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) Stock-based compensation related to cash settlement of options expiring in October 2008 and tender offer. | |||||
| (4) In-process research and development related to acquisition of Mobilygen Corp. | |||||
| (5) 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. | |||||
| (6) (Income) expenses, net, primarily for stock option related settlement & litigation and certain payroll taxes, interest and penalties. | |||||
| (7) Tax provision impact due to international restructuring. | |||||
| (8) Impact of investments obtained in exchange for intellectual property. | |||||
-more-
| STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands) | |||||||
| (Unaudited) | |||||||
| Three Months Ended December 26, 2009 | Stock Options | Restricted Stock Units | Employee Stock Purchase Plan | Total | |||
| Cost of goods sold | $ 401 | $ 4,730 | $ 134 | $ 5,265 | |||
| Research and development expense | 3,625 | 9,821 | 1,204 | 14,650 | |||
| Selling, general and administrative expense | 2,273 | 4,454 | 291 | 7,018 | |||
| Total | $ 6,299 | $ 19,005 | $ 1,629 | $ 26,933 | |||
| 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 December 27, 2008 (1) | |||||||
| Cost of goods sold | $ 23,785 | $ 7,049 | $ - | $ 30,834 | |||
| Research and development expense | 21,977 | 11,454 | - | 33,431 | |||
| Selling, general and administrative expense | 15,336 | 4,336 | - | 19,672 | |||
| Total | $ 61,098 | $ 22,839 | $ - | $ 83,937 | |||
| (1) Total excluding $42,315 for settlement of expiring options and tender offer | $ 18,783 | $ 22,839 | $ - | $ 41,622 | |||
- more -
| CONSOLIDATED BALANCE SHEETS | |||
| (Unaudited) | |||
| December 26, | June 27, | ||
| 2009 | 2009 | ||
| (in thousands) | |||
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $ 737,522 | $ 709,348 | |
| Short-term investments | 101,038 | 204,055 | |
| Total cash, cash equivalents and short-term investments | 838,560 | 913,403 | |
| Accounts receivable, net | 281,122 | 207,807 | |
| Inventories | 196,044 | 217,847 | |
| Income tax refund receivable | 432 | 13,072 | |
| Deferred tax assets | 188,867 | 211,879 | |
| Other current assets | 26,535 | 20,943 | |
| Total current assets | 1,531,560 | 1,584,951 | |
| Property, plant and equipment, net | 1,341,832 | 1,366,052 | |
| Other assets | 125,060 | 130,772 | |
| TOTAL ASSETS | $ 2,998,452 | $ 3,081,775 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Accounts payable | $ 69,255 | $ 70,087 | |
| Income taxes payable | 2,501 | 2,140 | |
| Accrued salary and related expenses | 129,366 | 141,334 | |
| Accrued expenses | 38,043 | 38,455 | |
| Deferred income on shipments to distributors | 18,227 | 16,760 | |
| Total current liabilities | 257,392 | 268,776 | |
| Other liabilities | 25,544 | 26,398 | |
| Income taxes payable | 99,322 | 124,863 | |
| Deferred tax liabilities | 71,061 | 67,273 | |
| Total liabilities | 453,319 | 487,310 | |
| Stockholders' equity: | |||
| Common stock | 305 | 21,511 | |
| Retained earnings | 2,553,889 | 2,580,610 | |
| Accumulated other comprehensive loss | (9,061) | (7,656) | |
| Total stockholders' equity | 2,545,133 | 2,594,465 | |
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 2,998,452 | $ 3,081,775 | |
- more -
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| December 26, | September 26, | December 27, | |||
| 2009 | 2009 | 2008 | |||
| (in thousands) | |||||
| Cash flows from operating activities: | |||||
| Net income (loss) | $ 58,635 | $ 41,952 | $ (38,784) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
| Stock-based compensation | 26,933 | 26,465 | 83,937 | ||
| Depreciation and amortization | 39,832 | 36,496 | 50,893 | ||
| Deferred taxes | 8,594 | 17,809 | 169,498 | ||
| Tax (detriment) benefit related to stock-based compensation | (5,796) | (4,347) | (150,144) | ||
| In-process research and development | - | - | 3,900 | ||
| Impairment of long-lived assets | - | 8,291 | 43,769 | ||
| Other | (1,522) | (1,135) | 249 | ||
| Changes in assets and liabilities: | |||||
| Accounts receivable | (52,279) | (21,036) | 55,476 | ||
| Inventories | (5,522) | 24,525 | 7,780 | ||
| Other current assets | (1,700) | 10,595 | (71,872) | ||
| Accounts payable | 14,248 | (14,891) | (15,595) | ||
| Income taxes payable | (50,565) | 24,490 | (19,022) | ||
| Deferred income on shipments to distributors | (537) | 2,004 | (712) | ||
| Accrued liabilities - goodwill and tender offer payments above fair value | (540) | (453) | (28,093) | ||
| All other accrued liabilities | 1,180 | (12,250) | (18,865) | ||
| Net cash provided by operating activities | 30,961 | 138,515 | 72,415 | ||
| Cash flows from investing activities: | |||||
| Payments for property, plant and equipment | (28,289) | (26,463) | (29,540) | ||
| Acquisition | - | (4,000) | (30,310) | ||
| Proceeds from sales/maturities of available-for-sale securities | - | 100,233 | 2,237 | ||
| Other | 1,109 | 1,293 | 1,215 | ||
| Net cash (used in) provided by investing activities | (27,180) | 71,063 | (56,398) | ||
| Cash flows from financing activities: | |||||
| Dividends paid | (61,017) | (61,377) | (62,303) | ||
| Repayment of notes payable | - | - | (2,673) | ||
| Repurchase of common stock | (46,901) | (17,569) | (235,131) | ||
| Issuance of ESPP | 10,703 | - | - | ||
| Equity proceeds from derivative litigation settlement | - | 2,460 | - | ||
| Issuance of common stock | (6,795) | (8,175) | (15,174) | ||
| Equity settlements and payouts | - | - | (34,129) | ||
| Other | 1,722 | 1,764 | 399 | ||
| Net cash used in financing activities | (102,288) | (82,897) | (349,011) | ||
| Net (decrease) increase in cash and cash equivalents | (98,507) | 126,681 | (332,994) | ||
| Cash and cash equivalents: | |||||
| Beginning of period | 836,029 | 709,348 | 1,051,194 | ||
| End of period | $ 737,522 | $ 836,029 | $ 718,200 | ||
| Total cash, cash equivalents, and short-term investments | $ 838,560 | $ 937,580 | $ 925,459 | ||
"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 third quarter of fiscal 2010 ending in March 2010, which includes revenue, gross margin and operating expenses projections, as well as the Company's intention to continue to invest in research and development to innovate relentlessly and integrate many functions on a single chip to add value
to our customers' products. 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 and Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 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.
# # #