Maxim Integrated Reports Results For The First Quarter Of Fiscal 2018

- Revenue: $576 million

(PRNewswire) —  Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $576 million for its first quarter of fiscal 2018 ended September 23, 2017, a 4% decrease from the $602 million revenue recorded in the prior quarter, and a 3% increase from the same quarter of last year.

Logo for Maxim Integrated Products Inc. (PRNewsFoto/Maxim Integrated Products, Inc.)

Tunc Doluca, President and Chief Executive Officer, commented, "We are pleased with our performance in the September quarter. Revenue growth was led by double-digit increases in Industrial and Automotive from the same quarter last year." Mr. Doluca continued, "Looking forward, we expect strong growth in Automotive, Industrial and Data Center in the December quarter with continued solid profitability."

Fiscal Year 2018 First Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the September quarter was $0.54. The results were affected by pre-tax special items which primarily consisted of $13 million in charges related to acquisitions and $5 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.60. 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 2018, total cash, cash equivalents and short term investments were $2.77 billion, an increase of $29 million from the prior quarter.

Notable items included:

  • Cash flow from operations: $220 million
  • Gross capital expenditures: $14 million
  • Dividends paid: $101 million ($0.36 per share)
  • Stock repurchases: $75 million

Trailing twelve months free cash flow was $819 million. Free cash flow is a non-GAAP measure and is defined by net cash flow from operations less gross capital expenditures.

Business Outlook
The Company's 90-day backlog at the beginning of the December 2017 quarter was $426 million. Based on the beginning backlog and expected turns, the final transition to sell-in revenue accounting for distribution, and a 14-week quarter, our results for the December 2017 quarter are forecasted to be as follows:

  • Revenue: $600 to $640 million (including $18 to $22 million for sell-in transition)
  • Gross Margin: 64% to 66% GAAP (66% to 68% excluding special items)
  • EPS: $0.57 to $0.63 GAAP ($0.61 to $0.67 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.

A cash dividend of $0.36 per share will be paid on December 14, 2017, to stockholders of record on November 30, 2017.

Conference Call
Maxim Integrated has scheduled a conference call on October 19 at 2:00 p.m. Pacific Time to discuss its financial results for the first quarter of fiscal 2018 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




September 23, 


June 24, 


September 24, 




2017


2017


2016




(in thousands, except per share data)



Net revenues

$               575,676


$     602,005


$               561,396



Cost of goods sold (1) 

201,845


208,339


215,664



Gross margin

373,831


393,666


345,732



Operating expenses:








Research and development

108,601


114,011


112,746



Selling, general and administrative

73,681


75,129


70,852



Intangible asset amortization

1,752


2,050


2,443



Impairment of long-lived assets (2)

42



6,134



Severance and restructuring expenses 

5,433


1,175


9,965



Other operating expenses (income), net (3)

(844)


1,923


(28,481)



Total operating expenses (income), net

188,665


194,288


173,659



Operating income (loss)

185,166


199,378


172,073



Interest and other income (expense), net 

(4,214)


(3,798)


(6,870)



Income (loss) before provision for income taxes 

180,952


195,580


165,203



Income tax provision (benefit)

26,419


32,271


27,589



Net income (loss)

$               154,533


$     163,309


$               137,614



















Earnings (loss) per share:








Basic

$                     0.55


$           0.58


$                     0.49



Diluted

$                     0.54


$           0.57


$                     0.48











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








Basic

282,170


282,747


283,633



Diluted

286,437


287,494


288,574











Dividends paid per share

$                     0.36


$           0.33


$                     0.33



















SCHEDULE OF SPECIAL ITEMS



(Unaudited)




Three Months Ended




September 23, 


June 24, 


September 24, 




2017


2017


2016




(in thousands)



Cost of goods sold:








Intangible asset amortization 

$                 11,064


$       11,064


$                 12,602



Accelerated depreciation (1)



1,178



  Total 

$                 11,064


$       11,064


$                 13,780











 Operating expenses: 








Intangible asset amortization

$                   1,752


$         2,050


$                   2,443



Impairment of long-lived assets (2)

42



6,134



Severance and restructuring

5,433


1,175


9,965



Other operating expenses (income), net (3)

(844)


1,923


(28,481)



  Total 

$                   6,383


$         5,148


$                  (9,939)



















Interest and other expense (income), net

$                       (84)


$             (90)


$                     (471)



 Total 

$                       (84)


$             (90)


$                     (471)











(1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility.



(2) Includes impairment of investments in privately-held companies and other equipment impairment charges.



(3) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of fiscal year 2017.






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