MXIM
$44.51
Maxim Integrated
($.59)
(1.31%)
Earnings Details
4th Quarter June 2017
Thursday, July 20, 2017 4:05:00 PM
Tweet Share Watch
Summary

Maxim Integrated Reports In-line

Maxim Integrated (MXIM) reported 4th Quarter June 2017 earnings of $0.63 per share on revenue of $602.0 million. The consensus earnings estimate was $0.62 per share on revenue of $608.3 million. The Earnings Whisper number was $0.63 per share. Revenue grew 6.3% on a year-over-year basis.

The company said it expects first quarter non-GAAP earnings of $0.52 to $0.58 per share on revenue of $555.0 million to $595.0 million. The current consensus earnings estimate is $0.58 per share on revenue of $595.6 million for the quarter ending September 30, 2017.

Maxim Integrated Products Inc designs, develops, manufactures and markets a range of linear and mixed-signal integrated circuits, commonly referred to as analog circuits, for number of customers in diverse geographical locations.

Results
Reported Earnings
$0.63
Earnings Whisper
$0.63
Consensus Estimate
$0.62
Reported Revenue
$602.0 Mil
Revenue Estimate
$608.3 Mil
Growth
Earnings Growth
Revenue Growth
Guidance
Power Rating
Grade
Earnings Release

Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2017, Increases Dividend By 9%

Maxim Integrated Products, Inc. (MXIM) reported net revenue of $602 million for its fourth quarter of fiscal 2017 ended June 24, 2017, a 4% increase from the $581 million revenue recorded in the prior quarter, and a 6% increase from the same quarter of last year.

https://mma.prnewswire.com/media/149839/maxim_integrated_products__inc__logo.jpg

Tunc Doluca, President and Chief Executive Officer, commented, "The June quarter marked the third consecutive quarter in our return to year-over-year growth, led by double-digit increases in Industrial and Automotive. Through solid execution in our manufacturing strategy, we exceeded our profitability targets and demonstrated strong earnings power and cash flow growth." Mr. Doluca continued, "Today, we are announcing a 9% increase in our dividend, reflecting our continued commitment to return cash to shareholders and confidence in our long-term outlook."

Fiscal Year 2017 Fourth Quarter Results Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.57. The results were affected by pre-tax special items which primarily consisted of $13 million in charges related to acquisitions and $3 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.63. 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 2017, total cash, cash equivalents and short term investments were $2.74 billion, an increase of $589 million from the prior quarter.

Notable items included:

-- Cash flow from operations: $237 million

-- Gross capital expenditures: $13 million

-- Bond offering: $496 million

-- Dividends: $93 million ($0.33 per share)

-- Stock repurchases: $76 million

Business Outlook The Company’s 90-day backlog at the beginning of the September 2017 quarter was $389 million. Based on the beginning backlog and expected turns, our results for the September 2017 quarter are forecasted to be as follows:

-- Revenue: $555 to $595 million

-- Gross Margin: 63% to 66% GAAP (65% to 68% excluding special items)

-- EPS: $0.48 to $0.54 GAAP ($0.52 to $0.58 excluding special items)

Maxim Integrated’s business outlook does not include the potential impact of any special items related to restructuring activity, acquisitions, or other business combinations that may be completed during the quarter.

Dividend and Share Repurchase Our Board of Directors approved a 9% increase in the quarterly dividend and a new share repurchase authorization of $1 billion. A cash dividend of $0.36 per share will be paid on September 14, 2017, to stockholders of record on August 31, 2017.

Conference Call Maxim Integrated has scheduled a conference call on July 20 at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter of fiscal 2017 and its business outlook. This call will be webcast by Shareholder.com and can be accessed at the Company’s website at investor.maximintegrated.com.

A presentation summarizing financial information to be discussed on the conference call is posted at investor.maximintegrated.com.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
Year Ended
June 24,
March 25,
June 25,
June 24,
June 25,
2017
2017
2016
2017
2016
(in thousands, except per share data)
Net revenues
$
602,005
$
581,216
$
566,126
$
2,295,615
$
2,194,719
Cost of goods sold (1) (2)
208,339
214,312
219,099
849,135
950,331
Gross margin
393,666
366,904
347,027
1,446,480
1,244,388
Operating expenses:
Research and development
114,011
113,163
113,491
453,977
467,161
Selling, general and administrative
75,129
73,987
71,483
291,511
288,899
Intangible asset amortization
2,050
2,348
2,538
9,189
12,205
Impairment of long-lived assets (3)
--
1,000
429
7,517
160,582
Impairment of goodwill and intangible assets
--
--
27,602
--
27,602
Severance and restructuring expenses
1,175
450
4,149
12,453
24,479
Other operating expenses (income), net (4)
1,923
1,704
4,962
(22,944)
(50,389)
Total operating expenses (income), net
194,288
192,652
224,654
751,703
930,539
Operating income (loss)
199,378
174,252
122,373
694,777
313,849
Interest and other income (expense), net (5)
(3,798)
(3,884)
(6,427)
(15,188)
(28,795)
Income (loss) before provision for income taxes
195,580
170,368
115,946
679,589
285,054
Income tax provision (benefit)
32,271
30,155
23,607
107,976
57,579
Net income (loss)
$
163,309
$
140,213
$
92,339
$
571,613
$
227,475
Earnings (loss) per share:
Basic
$
0.58
$
0.50
$
0.32
$
2.02
$
0.80
Diluted
$
0.57
$
0.49
$
0.32
$
1.98
$
0.79
Shares used in the calculation of earnings (loss) per share:
Basic
282,747
282,903
285,354
283,147
285,081
Diluted
287,494
287,882
288,544
287,974
289,479
Dividends paid per share
$
0.33
$
0.33
$
0.30
$
1.32
$
1.20
SCHEDULE OF SPECIAL ITEMS
(Unaudited)
Three Months Ended
Year Ended
June 24,
March 25,
June 25,
June 24,
June 25,
2017
2017
2016
2017
2016
(in thousands)
Cost of goods sold:
Intangible asset amortization
$
11,064
$
11,064
$
11,829
$
46,485
$
55,030
Accelerated depreciation (1)
--
1,103
4,098
3,459
53,827
Other cost of goods sold (2)
--
--
--
--
6,123
Total
$
11,064
$
12,167
$
15,927
$
49,944
$
114,980
Operating expenses:
Intangible asset amortization
$
2,050
$
2,348
$
2,538
$
9,189
$12,205
Impairment of long-lived assets (3)
--
1,000
429
7,517
160,582
Impairment of goodwill and intangible assets
--
--
27,602
--
27,602
Severance and restructuring
1,175
450
4,149
12,453
24,479
Other operating expenses (income), net (4)
1,923
1,704
4,962
(22,944)
(50,389)
Total
$
5,148
$
5,502
$
39,680
$
6,215
$
174,479
Interest and other expense (income), net (5)
$
(90)
$
(48)
$
(247)
$
(5,661)
$
194
Total
$
(90)
$
(48)
$
(247)
$
(5,661)
$
194
Income tax provision (benefit)
Fiscal year 2015 & 2014 research & development tax credits
--
--
--
--
(2,475)
Total
$
-
$
-
$
-
$
-
$
(2,475)
(1) Includes building and equipment accelerated depreciation related to the San Jose and Dallas manufacturing facilities.
(2) Includes expense related to a patent license settlement.
(3) Includes impairment of investments in privately-held companies and other equipment impairment charges relating to the San Antonio wafer manufacturing facility.
(4) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of fiscal year 2017, gain on sale of energy metering business during the third quarter of fiscal year 2016, loss (gain) relating to sale of assets, and expected loss on lease abandonment.
(5) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio, Texas.
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
June 24,
March 25,
June 25,
2017
2017
2016
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents
$2,246,121
$1,656,727
$2,105,229
Short-term investments
498,718
499,154
125,439
Total cash, cash equivalents and short-term investments 2,744,839
2,155,881
2,230,668
Accounts receivable, net
256,454
257,592
256,531
Inventories
247,242
241,439
227,929
Other current assets
57,059
60,195
91,920
Total current assets
3,305,594
2,715,107
2,807,048
Property, plant and equipment, net
606,581
636,835
692,551
Intangible assets, net
90,867
103,981
146,540
Goodwill
491,015
491,015
490,648
Other assets
72,974
69,689
84,100
Assets held for sale
3,202
1,156
13,729
TOTAL ASSETS
$4,570,233
$4,017,783
$4,234,616
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
77,373
$
82,938
$
82,535
Income taxes payable
3,688
4,538
21,153
Accrued salary and related expenses
145,299
135,702
166,698
Accrued expenses
37,663
35,208
50,521
Deferred revenue on shipments to distributors
14,974
35,724
38,779
Short term debt
--
--
249,717
Total current liabilities
278,997
294,110
609,403
Long-term debt
1,487,678
991,877
990,090
Income taxes payable
557,498
534,028
480,645
Other liabilities
43,366
37,459
46,664
Total liabilities
2,367,539
1,857,474
2,126,802
Stockholders’ equity:
Common stock and capital in excess of par value
283
284
284
Retained earnings
2,212,301
2,169,760
2,121,749
Accumulated other comprehensive loss
(9,890)
(9,735)
(14,219)
Total stockholders’ equity
2,202,694
2,160,309
2,107,814
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
$4,570,233
$4,017,783
$4,234,616
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
Year Ended
June 24,
March 25,
June 25,
June 24,
June 25,
2017
2017
2016
2017
2016
(in thousands)
Cash flows from operating activities:
Net income (loss)
$
163,309
$
140,213
$
92,339
$
571,613
$
227,475
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation
17,624
18,300
16,444
71,117
69,701
Depreciation and amortization
38,194
40,473
46,414
164,292
244,637
Deferred taxes
1,697
(16,967)
(13,510)
(7,895)
(48,138)
In Process Research & Development written-off
--
--
27,602
--
27,602
Loss (gain) from sale of property, plant and equipment
7,006
4,809
5,048
16,365
2,283
Loss (gain) on sale of business
--
--
--
(26,620)
(58,944)
Tax benefit (shortfall) related to stock-based compensation
--
--
3,657
--
7,375
Impairment of long-lived assets
665
--
--
1,462
160,153
Impairment of investments in privately-held companies
--
1,000
--
6,720
--
Excess tax benefit from stock-based compensation
--
--
(1,890)
--
(9,550)
Changes in assets and liabilities:
Accounts receivable
1,138
(33,249)
21,971
78
22,313
Inventories
(5,715)
(5,505)
7,657
(21,215)
44,086
Other current assets
(727)
16,862
8,012
(3,547)
2,943
Accounts payable
(5,235)
11,887
5,076
(6,205)
(3,676)
Income taxes payable
22,619
20,931
19,792
60,798
56,641
Deferred revenue on shipments to distributors
(20,751)
(412)
4,322
(23,805)
8,452
Accrued salary and related expenses
9,597
26,227
--
(21,399)
--
All other accrued liabilities
7,507
(3,872)
11,137
(8,102)
(31,468)
Net cash provided by (used in) operating activities
236,928
220,697
254,071
773,657
721,885
Cash flows from investing activities:
Purchase of property, plant and equipment
(13,050)
(8,286)
(22,488)
(51,421)
(69,369)
Proceeds from sales of property, plant and equipment
7,576
787
34,691
10,792
85,142
Proceeds from sale of available-for-sale securities
--
--
--
50,994
--
Proceeds from maturity of available-for-sale securities
50,000
--
50,000
75,000
50,000
Proceeds from sale of business
--
--
--
42,199
105,000
Purchases of available-for-sale securities
(49,891)
(99,398)
(25,000)
(450,135)
(99,948)
Purchases of privately-held companies’ securities
--
(162)
(1,554)
(2,825)
(10,483)
Proceeds from other investing activities
--
--
--
--
2,380
Net cash provided by (used in) investing activities
(5,365)
(107,059)
35,649
(325,396)
62,722
Cash flows from financing activities:
Excess tax benefit from stock-based compensation
--
--
1,890
--
9,550
Repayment of notes payable
--
--
--
(250,000)
--
Issuance of debt
500,000
--
250,000
500,000
250,000
Debt issuance cost
(3,688)
--
(283)
(3,688)
(283)
Net issuance of restricted stock units
(7,471)
(8,268)
(2,687)
(25,183)
(24,084)
Proceeds from stock options exercised
18,434
17,502
12,272
63,003
79,608
Issuance of common stock under employee stock purchase program
19,805
(3,194)
19,625
34,269
33,975
Repurchase of common stock
(75,853)
(56,999)
(90,438)
(251,799)
(237,086)
Dividends paid
(93,396)
(93,387)
(85,210)
(373,971)
(342,023)
Net cash provided by (used in) financing activities
357,831
(144,346)
105,169
(307,369)
(230,343)
Net increase (decrease) in cash and cash equivalents
589,394
(30,708)
394,889
140,892
554,264
Cash and cash equivalents:
Beginning of period
1,656,727
1,687,435
1,710,340
2,105,229
1,550,965
End of period
$
2,246,121
$
1,656,727
$
2,105,229
$
2,246,121
$
2,105,229
Total cash, cash equivalents, and short-term investments
$
2,744,839
$
2,155,881
$
2,230,668
$
2,744,839
$
2,230,668
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES
(Unaudited)
Three Months Ended
Year Ended
June 24,
March 25,
June 25,
June 24,
June 25,
2017
2017
2016
2017
2016
(in thousands, except per share data)
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:
GAAP gross profit
$
393,666
$
366,904
$
347,027
$
1,446,480
$
1,244,388
GAAP gross profit %
65.4%
63.1%
61.3%
63.0%
56.7%
Special items:
Intangible asset amortization
11,064
11,064
11,829
46,485
55,030
Accelerated depreciation (1)
--
1,103
4,098
3,459
53,827
Other cost of goods sold (2)
--
--
--
--
6,123
Total special items
11,064
12,167
15,927
49,944
114,980
GAAP gross profit excluding special items
$
404,730
$
379,071
$
362,954
$
1,496,424
$
1,359,368
GAAP gross profit % excluding special items
67.2%
65.2%
64.1%
65.2%
61.9%
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items:
GAAP operating expenses
$
194,288
$
192,652
$
224,654
$
751,703
$
930,539
Special items:
Intangible asset amortization
2,050
2,348
2,538
9,189
12,205
Impairment of long-lived assets (3)
--
1,000
429
7,517
160,582
Impairment of goodwill and intangible assets
--
--
27,602
--
27,602
Severance and restructuring
1,175
450
4,149
12,453
24,479
Other operating expenses (income), net (4)
1,923
1,704
4,962
(22,944)
(50,389)
Total special items
5,148
5,502
39,680
6,215
174,479
GAAP operating expenses excluding special items
$
189,140
$
187,150
$
184,974
$
745,488
$
756,060
Reconciliation of GAAP net income (loss) to GAAP net income excluding special items:
GAAP net income (loss)
$
163,309
$
140,213
$
92,339
$
571,613
$
227,475
Special items:
Intangible asset amortization
13,114
13,412
14,367
55,674
67,235
Accelerated depreciation (1)
--
1,103
4,098
3,459
53,827
Other cost of goods sold (2)
--
--
--
--
6,123
Impairment of long-lived assets (3)
--
1,000
429
7,517
160,582
Impairment of goodwill and intangible assets
--
--
27,602
--
27,602
Severance and restructuring
1,175
450
4,149
12,453
24,479
Other operating expenses (income), net (4)
1,923
1,704
4,962
(22,944)
(50,389)
Interest and other expense (income), net (5)
(90)
(48)
(247)
(5,661)
194
Pre-tax total special items
16,122
17,621
55,360
50,498
289,653
Fiscal year 2015 & 2014 research & development tax credits
--
--
--
--
(2,475)
Other income tax effects and adjustments (6)
499
1,957
(7,228)
(11,465)
(43,392)
GAAP net income excluding special items
$
179,930
$
159,791
$
140,471
$
610,646
$
471,261
GAAP net income per share excluding special items:
Basic
$
0.64
$
0.56
$
0.49
$
2.16
$
1.65
Diluted
$
0.63
$
0.56
$
0.49
$
2.12
$
1.63
Shares used in the calculation of earnings per share excluding special items:
Basic
282,747
282,903
285,354
283,147
285,081
Diluted
287,494
287,882
288,544
287,974
289,479
(1) Includes building and equipment accelerated depreciation related to the San Jose and Dallas manufacturing facilities.
(2) Includes expense related to a patent license settlement.
(3) Includes impairment of investments in privately-held companies and other equipment impairment charges relating to the San Antonio wafer manufacturing facility.
(4) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of fiscal year 2017, gain on sale of energy metering business during the third quarter of fiscal year 2016, loss (gain) relating to sale of assets, and expected loss on lease abandonment.
(5) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio, Texas.
(6) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.

Non-GAAP MeasuresTo 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; other costs of goods sold; impairment of long-lived assets; impairment of goodwill and other intangible assets; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net; fiscal year 2016 research and development tax credits, and other income tax effects and adjustments. 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 ItemsThe 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 other costs of goods sold. 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 ItemsThe 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 other intangible assets; severance and restructuring, and other operating expenses (income), net. 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 Provision for Income Taxes Excluding Special ItemsThe use of a GAAP provision for income taxes excluding special items allows management to evaluate the provision for income taxes across different reporting periods on a consistent basis, independent of special items including the tax provision impact of pre-tax special items. In fiscal year 2016, we began using a long-term tax rate to compute the GAAP provision for income taxes excluding special items. This long-term tax rate considers the income tax impact of pre-tax special items and eliminates the effects of significant non-recurring and period specific tax items which vary in size and frequency. In the first and second quarter of fiscal year 2017, we used a long-term tax rate of 18%, which was our forecast of the weighted average of our normalized fiscal year GAAP tax rate excluding special items over a four-year period, that includes the past three fiscal years plus the current fiscal year projection at the beginning of fiscal year 2017. We review the long-term tax rate on an annual basis and more frequently whenever events occur that may materially affect the long-term tax rate such as tax law changes; significant changes in our geographic earnings mix; or changes in our corporate structure. Starting in the third quarter of fiscal year 2017, we transitioned to a long-term tax rate of 15%, which reflects the impact of changes in our manufacturing structure and focused research and development expenditures, resulting in improved projections for fiscal year 2017 and future periods.

GAAP Net Income and GAAP Net Income per Share Excluding Special ItemsThe 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; other costs of goods sold; impairment of long-lived assets; impairment of goodwill and other intangible assets; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net; fiscal year 2016 research and development tax credits, and other income tax effects and adjustments. 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" StatementThis 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 2018 ending in September 2017, which includes revenue, gross margin and earnings per share. 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 or more 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 25, 2016 (the "Form 10-K"). The Form 10-K may be found at https://www.sec.gov/Archives/edgar/data/743316/000074331616000081/maxim10-kfy2016.htm.

All forward-looking statements included in this news release are made as of the date hereof and based on the information available to the Company as of the date hereof. The Company assumes no obligation to update any forward-looking statement except as required by law.

About Maxim IntegratedMaxim Integrated develops innovative analog and mixed-signal products and technologies to make systems smaller and smarter, with enhanced security and increased energy efficiency. We are empowering design innovation for our automotive, industrial, healthcare, mobile consumer, and cloud data center customers to deliver industry-leading solutions that help change the world. Learn more at http://www.maximintegrated.com.

ContactKathy TaManaging Director, Investor Relations (408) 601-5697

View original content with multimedia:http://www.prnewswire.com/news-releases/maxim-integrated-reports-results-for-the-fourth-quarter-of-f

SOURCE Maxim Integrated Investor Relations

https://rt.prnewswire.com/rt.gif?NewsItemId=SF47281&Transmission_Id=201707201605PR_NEWS_USPR_____SF47281&DateId=20170720