Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2014; Increases Dividend By 8%

- Revenue: $642 million

(PRNewswire) —  Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $642 million for its fourth quarter of fiscal 2014 ended June 28, 2014, a 6% increase from the $606 million revenue recorded in the prior quarter.

Logo for Maxim Integrated Products Inc.

Tunc Doluca, President and Chief Executive Officer, commented, "While we experienced softness in our mobility business, our revenue performance in the quarter reflected the overall strength of Maxim's balanced portfolio, with growth in every one of our other major businesses." Mr. Doluca continued, "Although our near-term outlook for mobility remains cautious, we are executing on our strategy to bring new integrated designs to the Industrial, Automotive, Communications and Data Center markets, and to diversify our customer base in mobility." 

Fiscal Year 2014 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.29. The results were affected by special items which primarily consisted of $24 million in pre-tax charges related to acquisitions and $23 million in pre-tax charges related to restructuring and other items.  GAAP earnings per share, excluding special items was $0.43. 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 2014, total cash, cash equivalents and short term investments was $1.37 billion, an increase of $141 million from the prior quarter. Notable items included:

  • Cash flow from operations: $234 million
  • Net capital expenditures: $22 million
  • Dividends: $74 million ($0.26 per share)
  • Stock repurchases: $41 million

Business Outlook
The Company's 90-day backlog at the beginning of the first fiscal quarter of 2015 was $377 million. Based on :the beginning backlog and expected turns, results for the September 2014 quarter are expected to be as follows:

  • Revenue $580 million to $620 million
  • Gross Margin: 56% to 59% GAAP (59% to 62% excluding special items)
  • EPS: $0.27 to $0.33 GAAP ($0.34 to $0.40 excluding special items)

Maxim Integrated's business outlook does not include the potential impact of any restructuring activity or mergers, acquisitions, or other business combinations that may be completed during the quarter.

Dividend
A cash dividend of $0.28 per share will be paid on September 4, 2014, to stockholders of record on August 21, 2014.   This represents an 8% increase in the dividend compared to the prior quarter.

Conference Call
Maxim Integrated has scheduled a conference call on July 24, 2014, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter of fiscal 2014 and its business outlook. To listen via telephone, dial (866) 804-3547 (toll free) or (703) 639-1328.  This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com/company/investor.

 

 

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


Three Months Ended


Year Ended


June 28,


March 29,


June 29,


June 28,


June 29,


2014


2014


2013


2014


2013


(in thousands, except per share data)

Net revenues

$ 642,467


$ 605,681


$ 608,194


$ 2,453,663


$ 2,441,459

Cost of goods sold 

273,507


265,744


236,795


1,068,898


944,892

        Gross margin

368,960


339,937


371,399


1,384,765


1,496,567

Operating expenses:










    Research and development 

143,802


141,493


132,009


558,168


534,819

    Selling, general and administrative 

83,153


80,680


82,083


324,734


324,282

    Intangible asset amortization 

4,423


4,863


3,670


17,690


15,525

    Impairment of long-lived assets (1)

6,447


-


-


11,644


24,929

    Severance and restructuring expenses

5,790


3,338


442


24,902


2,829

   Acquisition-related costs

-


(88)


-


6,983


-

    Other operating expenses (income), net (2)

8,795


2,913


2,105


18,353


5,864

       Total operating expenses 

252,410


233,199


220,309


962,474


908,248

          Operating income

116,550


106,738


151,090


422,291


588,319

Interest and other income (expense), net (3)

(8,943)


5,174


(6,830)


(13,065)


(18,040)

Income before provision for income taxes

107,607


111,912


144,260


409,226


570,279

Provision (benefit) for income taxes (4)

22,814


(10,632)


25,246


54,416


117,970

       Income from continuing operations 

84,793


122,544


119,014


354,810


452,309

       Income from discontinued operations, net of tax (5)

-


-


-


-


2,603

      Net income

$   84,793


$ 122,544


$ 119,014


$    354,810


$    454,912











Earnings per share: Basic










    From continuing operations 

$       0.30


$       0.43


$       0.41


$          1.25


$          1.55

    From discontinued operations, net of tax 

-


-


-


-


0.01

    Basic

$       0.30


$       0.43


$       0.41


$          1.25


$          1.56











Earnings per share: Diluted










    From continuing operations 

$       0.29


$       0.42


$       0.40


$          1.23


$          1.51

    From discontinued operations, net of tax

-


-


-


-


0.01

    Diluted

$       0.29


$       0.42


$       0.40


$          1.23


$          1.52











Shares used in the calculation of earnings per share: 










    Basic

283,431


282,627


290,146


283,344


291,835

    Diluted 

289,487


288,575


296,756


289,108


298,596











Dividends paid per share 

$       0.26


$       0.26


$       0.24


$          1.04


$          0.96





















SCHEDULE OF SPECIAL ITEMS

(Unaudited)


Three Months Ended


Year Ended


June 28,


March 29,


June 29,


June 28,


June 29,


2014


2014


2013


2014


2013


(in thousands)

Cost of goods sold:










      Intangible asset amortization 

$   18,750


$   18,542


$     7,777


$      64,483


$      33,994

      Acquisition-related inventory write-up 

371


5,518


-


18,955


-

 Total 

$   19,121


$   24,060


$     7,777


$      83,438


$      33,994











 Operating expenses: 










      Intangible asset amortization

$     4,423


$     4,863


$     3,670


$      17,690


$      15,525

      Impairment of long-lived assets (1)

6,447


-


-


11,644


24,929

     Severance and restructuring 

5,790


3,338


442


24,902


2,829

     Acquisition-related costs 

-


(88)


-


6,983


-

     Other operating expenses (income), net (2)

8,795


2,913


2,105


18,353


5,864

 Total 

$   25,455


$   11,026


$     6,217


$      79,572


$      49,147











      Interest and other expense (income), net (3) 

$     2,432


$     3,723


$        700


$        6,155


$           700

 Total 

$     2,432


$     3,723


$        700


$        6,155


$           700











Provision (benefit) for income taxes: 










     Fixed assets tax basis adjustment (4) 

$   (1,041)


$ (34,562)


$           -


$    (35,603)


$              -

     International restructuring implementation 

-


-


-


-


18,726

     Fiscal year 2012 research & development tax credits 

-


-


-


-


(3,899)

 Total 

$   (1,041)


$ (34,562)


$           -


$    (35,603)


$      14,827











 Discontinued operations: 










     Income from discontinued operations, net of tax (5)

$           -


$           -


$           -


$              -


$      (2,603)

Total

$           -


$           -


$           -


$              -


$      (2,603)

(1) Includes impairment charges relating to EDA software, wafer fab tools, land and buildings held-for-sale, and end of line manufacturing equipment.

(2) Other operating expenses (income), net are primarily for legal settlement, legal expenses related to Volterra acquisition, reserve for uncollectible note related to a divestiture, contingent consideration adjustments related to certain acquisitions, in-process research and development abandoned, loss (gain) relating to sale of land and buildings,expected loss on lease abandonment,and certain payroll taxes.

(3) Includes impairment of investment in privately-held companies.

(4) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense.

(5) Includes gain on sale, net of tax relating to certain business divested.



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