- Revenue: $580 million
(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $580 million for its first quarter of fiscal 2015 ended September 27, 2014, a 10% decrease from the $642 million revenue recorded in the prior quarter, and a 1% decrease year over year.
Tunc Doluca, President and Chief Executive Officer, commented, "Our September quarter revenue performance was at the low end of our expectations, driven by weakness in smartphone revenue. This continued weakness was the catalyst for our decision to lower operating spending and reduce our manufacturing cost structure. These actions will enable us to improve Maxim's profitability and focus our investment in opportunities with higher returns." Mr. Doluca continued, "I am confident in our strategy in mixed-signal and analog integration, which is bearing fruit, as evidenced by the strong year-over-year revenue growth performance of every one of our segments outside of Consumer."
Fiscal Year 2015 First Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the September quarter was $0.35. The results were affected by special items which primarily consisted of $24 million in pre-tax charges related to acquisitions, $13 million in pre-tax charges related to impairment of long-lived assets and other items, and a $22 million benefit for income taxes. GAAP earnings per share, excluding special items was $0.38. 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 2015, total cash, cash equivalents and short term investments was $1.32 billion, a decrease of $53 million from the prior quarter. Notable items included:
- Cash flow from operations: $117 million
- Net capital expenditures: $31 million
- Dividends: $80 million ($0.28 per share)
- Stock repurchases: $63 million
Business Outlook
The Company's 90-day backlog at the beginning of the second fiscal quarter of 2015 was $379 million. Based on the beginning backlog and expected turns, results for the December 2014 quarter are expected to be as follows:
- Revenue: $540 million to $580 million
- Gross Margin: 55% to 59% GAAP (58% to 62% excluding special items)
- EPS: $0.19 to $0.25 GAAP ($0.26 to $0.32 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 $0.28 per share will be paid on December 4, 2014, to stockholders of record on November 20, 2014.
Conference Call
Maxim Integrated has scheduled a conference call on October 23, 2014, at 2:00 p.m. Pacific Time to discuss its financial results for the first quarter of fiscal 2015 and its business outlook. To listen via telephone, dial (866) 804-3547 (toll free) or (703) 639-1328. This call will be webcast by Shareholder.com and can be accessed at the Company's website at
www.maximintegrated.com/company/investor.
A presentation summarizing financial information to be discussed on the conference call is posted at www.maximintegrated.com/company/investor.
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three Months Ended |
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September 27, |
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June 28, |
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September 28, |
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2014 |
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2014 |
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2013 |
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(in thousands, except per share data) |
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Net revenues |
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$ 580,275 |
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$ 642,467 |
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$ 585,241 |
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Cost of goods sold |
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241,454 |
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273,507 |
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238,045 |
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Gross margin |
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338,821 |
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368,960 |
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347,196 |
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Operating expenses: |
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Research and development |
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140,362 |
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143,802 |
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129,902 |
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Selling, general and administrative |
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79,989 |
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83,153 |
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77,430 |
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Intangible asset amortization |
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4,327 |
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4,423 |
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3,436 |
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Impairment of long-lived assets (1) |
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10,226 |
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6,447 |
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- |
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Severance and restructuring expenses (2) |
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1,385 |
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5,790 |
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5,547 |
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Other operating expenses (income), net (3) |
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1,574 |
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8,795 |
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2,272 |
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Total operating expenses |
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237,863 |
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252,410 |
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218,587 |
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Operating income |
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100,958 |
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116,550 |
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128,609 |
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Interest and other income (expense), net (4) |
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(6,477) |
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(8,943) |
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(3,463) |
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Income before provision for income taxes |
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94,481 |
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107,607 |
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125,146 |
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Provision (benefit) for income taxes (5,6) |
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(5,499) |
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22,814 |
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22,026 |
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Net Income |
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$ 99,980 |
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$ 84,793 |
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$ 103,120 |
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Earnings per share: |
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Basic |
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$ 0.35 |
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$ 0.30 |
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$ 0.36 |
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Diluted |
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$ 0.35 |
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$ 0.29 |
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$ 0.36 |
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Shares used in the calculation of earnings per share: |
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Basic |
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284,086 |
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283,431 |
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284,654 |
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Diluted |
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289,430 |
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289,487 |
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290,260 |
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Dividends paid per share |
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$ 0.28 |
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$ 0.26 |
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$ 0.26 |
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SCHEDULE OF SPECIAL ITEMS |
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(Unaudited) |
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Three Months Ended |
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September 27, |
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June 28, |
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September 28, |
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2014 |
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2014 |
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2013 |
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(in thousands) |
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Cost of goods sold: |
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Intangible asset amortization |
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$ 18,750 |
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$ 18,750 |
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$ 8,092 |
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Acquisition-related inventory write-up |
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- |
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371 |
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- |
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Total |
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$ 18,750 |
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$ 19,121 |
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$ 8,092 |
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Operating expenses: |
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Intangible asset amortization |
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$ 4,327 |
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$ 4,423 |
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$ 3,436 |
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Impairment of long-lived assets (1) |
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10,226 |
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6,447 |
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- |
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Severance and restructuring (2) |
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1,385 |
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5,790 |
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5,547 |
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Other operating expenses (income), net (3) |
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1,574 |
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8,795 |
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2,272 |
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Total |
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$ 17,512 |
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$ 25,455 |
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$ 11,255 |
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Interest and other expense (income), net (4) |
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$ - |
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$ 2,432 |
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$ - |
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Total |
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$ - |
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$ 2,432 |
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$ - |
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Provision (benefit) for income taxes: |
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Fixed assets tax basis adjustment (5) |
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$ - |
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$ (1,041) |
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$ - |
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Reversal of tax reserves (6) |
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(21,747) |
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- |
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- |
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Total |
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$ (21,747) |
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$ (1,041) |
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$ - |
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(1) Includes impairment charges relating to EDA software, wafer fab tools, land and buildings held-for-sale, and end of line manufacturing equipment. |
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(2) include severance charges associated with the reorganizaton of various business units and manufacturing operations. |
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(3) Other operating expenses (income), net are primarily for loss (gain) relating to sale of land and buildings, reserve for uncollectible note related to a divestiture, expected loss on rent expense, and contingent consideration adjustments related to certain acquisitions. |
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(4) Includes impairment of investment in a privately-held company. |
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(5) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense. |
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(6) Reversal of tax reserves related to the favorable settlement of a foreign tax issue. |
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