Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2016, Increases Dividend By 10%

- Revenue: $566 million

(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $566 million for its fourth quarter of fiscal 2016 ended June 25, 2016, a 2% increase from the $555 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, "In our June quarter, we surpassed the $100 million dollar quarterly revenue mark in Automotive, and the business grew 30% over the same quarter last year. Through solid execution on our manufacturing transformation, we achieved 64% gross margin and met a key milestone by exceeding 30% operating margin in the quarter." Mr. Doluca continued, "We are confident in our ability to continue improving profitability, drive free cash flow growth, and maintain leadership in the return of cash to shareholders.  As a result, we announced a 10% increase in our dividend."

Fiscal Year 2016 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was a $0.32 profit. The results were affected by pre-tax special items which primarily consisted of $42 million in charges related to acquisitions, and $14 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.49. 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 2016, total cash, cash equivalents and short term investments were $2.23 billion, an increase of $370 million from the prior quarter. Notable items included:

  • Cash flow from operations: $254 million
  • Proceeds from term loan: $250 million
  • Capital expenditures: $22 million
  • Proceeds from asset sales: $35 million
  • Dividends: $85 million ($0.30 per share)
  • Stock repurchases: $90 million

Business Outlook
The Company's 90-day backlog at the beginning of the September 2016 quarter was $363 million. Based on the beginning backlog and expected turns, results for the September 2016 quarter are expected to be as follows:

  • Revenue: $540 million to $580 million
  • Gross Margin: 61% to 63% GAAP (63% to 65% excluding special items)
  • EPS: $0.40 to $0.46 GAAP ($0.44 to $0.50 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
A cash dividend of $0.33 per share will be paid on September 1, 2016, to stockholders of record on August 18, 2016. This represents a 10% increase in the dividend compared to the prior quarter.

Conference Call
Maxim Integrated has scheduled a conference call on July 21 at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter of fiscal 2016 and its business outlook. To listen via telephone, dial (866) 802-4305 (toll free) or (703) 639-1317. 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 25,


March 26,


June 27,


June 25,


June 27,




2016


2016


2015


2016


2015




(in thousands, except per share data)



Net revenues

$      566,126


$      555,252


$      582,517


$       2,194,719


$       2,306,864



Cost of goods sold (1) (2)

219,099


236,411


278,816


950,331


1,034,997



Gross margin

347,027


318,841


303,701


1,244,388


1,271,867



Operating expenses:












Research and development 

113,491


119,178


121,552


467,161


521,772



Selling, general and administrative 

71,483


71,778


72,532


288,899


308,065



Intangible asset amortization 

2,538


2,538


3,618


12,205


16,077



Impairment of long-lived assets (3)

429


506


549


160,582


67,042



Impairment of goodwill and intangible assets

27,602


-


-


27,602


93,010



Severance and restructuring expenses 

4,149


2,552


12,798


24,479


30,642



Other operating expenses (income), net (4)

4,962


(55,419)


(2,296)


(50,389)


(2,021)



Total operating expenses (income), net

224,654


141,133


208,753


930,539


1,034,587



Operating income (loss)

122,373


177,708


94,948


313,849


237,280



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

(6,427)


(6,373)


28,500


(28,795)


8,890



Income (loss) before provision for income taxes

115,946


171,335


123,448


285,054


246,170



Income tax provision (benefit)

23,607


31,525


24,789


57,579


40,132



Net income (loss)

$        92,339


$      139,810


$        98,659


$          227,475


$          206,038















Earnings (loss) per share:












Basic

$            0.32


$            0.49


$            0.35


$                0.80


$                0.73



Diluted

$            0.32


$            0.48


$            0.34


$                0.79


$                0.71















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












Basic

284,354


285,854


284,202


285,081


283,675



Diluted 

288,544


289,783


289,346


289,479


288,949















Dividends paid per share 

$            0.30


$            0.30


$            0.28


$                1.20


$                1.12



























SCHEDULE OF SPECIAL ITEMS



(Unaudited)




Three Months Ended


Year Ended




June 25,


March 26,


June 27,


June 25,


June 27,




2016


2016


2015


2016


2015




(in thousands)



Cost of goods sold:












Intangible asset amortization 

$        11,829


$        11,829


$        18,116


$            55,030


$            74,366



Accelerated depreciation (1)

4,098


4,066


32,765


53,827


51,494



Other cost of goods sold (2)

-


6,123


-


6,123


-



 Total 

$        15,927


$        22,018


$        50,881


$          114,980


$          125,860















 Operating expenses: 












Intangible asset amortization

$          2,538


$          2,538


$          3,618


$            12,205


$            16,077



Impairment of long-lived assets (3)

429


506


549


160,582


67,042



Impairment of goodwill and intangible assets 

27,602


-


-


27,602


93,010



Servance and restructuring

4,149


2,552


12,798


24,479


30,642



Other operating expenses (income), net (4)

4,962


(55,419)


(2,296)


(50,389)


(2,021)



 Total 

$        39,680


$      (49,823)


$        14,669


$          174,479


$          204,750















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

$           (247)


$             (45)


$      (35,849)


$                 194


$          (36,066)



 Total 

$           (247)


$             (45)


$      (35,849)


$                 194


$          (36,066)















Income tax provision (benefit)












 Reversal of tax reserves (6) 

$                  -


$                  -


$                  -


$                     -


$          (21,747)



 Fiscal year 2015 & 2014 research & development tax credits 

-


-


-


(2,475)


(2,863)



 Total 

$                -


$                -


$                -


$            (2,475)


$          (24,610)



























(1) Includes building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities.



(2) Includes expense related to patent license settlement.



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



(4) Includes 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 sale of a business and impairment of investment in privately-held companies.



(6) Reversal of tax reserves related to the favorable settlement of a foreign tax issue.






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