Maxim Integrated Reports Results For The Second Quarter Of Fiscal 2013

-- Revenue: $605 million

(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.

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.




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