Maxim Integrated Reports Results For The First Quarter Of Fiscal 2016

-- Revenue: $563 million

(PRNewswire) —  Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $563 million for its first quarter of fiscal 2016 ended September 26, 2015, a 3% decrease from the $583 million revenue recorded in the prior quarter, and a 3% decrease from the same quarter of last year.

Logo for Maxim Integrated Products Inc.

Tunc Doluca, President and Chief Executive Officer, commented, "Our first quarter financial performance was in line with our expectations." Mr. Doluca continued, "Our soft outlook for the December quarter reflects an unusually high decline in Consumer revenue due to product cycle timing, continued weakness in communications infrastructure, and a seasonally down industrial market. Looking ahead to the March quarter, we expect a rebound of our business, driven by product cycles in Consumer, and continued momentum and visibility in Automotive. We are also on track to reduce costs by $180 million annually. "

Fiscal Year 2016 First Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), basic earnings per share in the September quarter was a $0.25 loss. The results were affected by pre-tax special items which primarily consisted of a $158 million write down of our San Antonio wafer manufacturing facility, $51 million in charges related to other restructuring activities, and $20 million in charges related to acquisitions. 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 the first quarter of fiscal 2016, total cash, cash equivalents and short term investments were $1.61 billion, a decrease of $17 million from the prior quarter. Notable items included:

  • Cash flow from operations: $117 million
  • Net capital additions: $15 million
  • Dividends: $85 million ($0.30 per share)
  • Stock repurchases: $40 million

Business Outlook
The Company's 90-day backlog at the beginning of the second fiscal quarter of 2016 was $329 million. Based on the beginning backlog and expected turns, results for the December 2015 quarter are expected to be as follows:

  • Revenue: $490 million to $520 million
  • Gross Margin: 56% to 60% GAAP (60% to 63% excluding special items)
  • EPS: $0.23 to $0.29 GAAP ($0.29 to $0.35 excluding special items)

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

Dividend 
A cash dividend of $0.30 per share will be paid on December 3, 2015, to stockholders of record on November 19, 2015.

Conference Call
Maxim Integrated has scheduled a conference call on October 22nd, at 2:00 p.m. Pacific Time to discuss its financial results for the first quarter of fiscal 2016 and its business outlook. To listen via telephone, dial (866) 802-4322 (toll free) or (703) 639-1319. This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com/company/investor.

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

 











CONSOLIDATED STATEMENTS OF INCOME



(Unaudited)





Three Months Ended





September 26,


June 27, 


September 27,





2015


2015


2014





(in thousands, except per share data)



Net revenues


$             562,510


$             582,517


$             580,275



Cost of goods sold (1)


276,159


278,816


241,454



Gross margin


286,351


303,701


338,821



Operating expenses:









Research and development


121,392


121,552


140,362



Selling, general and administrative


71,995


72,532


79,989



Intangible asset amortization


3,591


3,618


4,327



Impairment of long-lived assets (2)


157,697


549


10,226



Severance and restructuring expenses (3)


7,126


12,798


1,385



Other operating expenses (income), net (4) 


315


(2,296)


1,574



Total operating expenses (income), net


362,116


208,753


237,863



Operating income (loss)


(75,765)


94,948


100,958



Interest and other income (expense), net (5)


(6,402)


28,500


(6,477)



Income (loss) before provision for income taxes (6)


(82,167)


123,448


94,481



Provision (benefit) for income taxes (6)


(10,024)


24,789


(5,499)



Net income (loss)


$             (72,143)


$               98,659


$               99,980












Earnings (loss) per share:









Basic


$                 (0.25)


$                   0.35


$                   0.35



Diluted


$                 (0.25)


$                   0.34


$                   0.35












Shares used in the calculation of earnings (loss) per share: 









Basic


284,588


284,202


284,086



Diluted 


284,588


289,346


289,430












Dividends paid per share 


$                  0.30


$                   0.28


$                   0.28





















SCHEDULE OF SPECIAL ITEMS



(Unaudited)





Three Months Ended





September 26,


June 27, 


September 27,





2015


2015


2014





(in thousands)



Cost of goods sold:









Intangible asset amortization


$               16,638


$               18,116


$               18,750



Accelerated depreciation (1)


43,631


32,765


-



  Total 


$               60,269


$               50,881


$               18,750












 Operating expenses: 









Intangible asset amortization


$                 3,591


$                 3,618


$                 4,327



Impairment of long-lived assets (2)


157,697


549


10,226



 Severance and restructuring (3) 


7,126


12,798


1,385



Other operating expenses (income), net (4)


315


(2,296)


1,574



  Total 


$            168,729


$               14,669


$               17,512












 Interest and other expense (income), net (5) 


$                  (109)


$             (35,849)


$                       -



 Total 


$                  (109)


$             (35,849)


$                       -












Provision (benefit) for income taxes:









 Reversal of tax reserves (6) 


$                        -


$                       -


$           (21,747)



  Total 


$                        -


$                       -


$           (21,747)











(1)

Building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities.


(2)

Includes impairment charges related to the San Antonio wafer manufacturing facility, and other impairment of wafer manufacturing equipment, end of line test equipment, and software.


(3)

Includes severance charges associated with several reorganizations, primarily various business units and manufacturing operations.


(4)

Other operating expenses (income), net are primarily for loss (gain) relating to sale of assets, and expected loss on lease abandonment.


(5)

Includes sale of a business and impairment of investments in privately-held companies.


(6)

Includes reversal of tax reserves related to the favorable settlement of a foreign tax issue.






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