- Revenue: $623 million
SAN JOSE, Calif., Jan. 25, 2018 — (PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $623 million for its second quarter of fiscal 2018 ended December 30, 2017, an 8% increase from the $576 million revenue recorded in the prior quarter, and a 13% increase from the same quarter of last year.
Tunc Doluca, President and Chief Executive Officer, commented, "We are pleased with our performance in the December quarter. Compared to the same quarter last year, revenue growth was led by double-digit increases in Industrial and Automotive with continued solid company profitability." Mr. Doluca continued, "Looking forward, we expect another strong revenue quarter in our March quarter with significant growth in Automotive, Industrial and Consumer compared to the same quarter last year. Our profitability and revenue growth are enabling exceptionally strong earnings performance and cash flow, giving us confidence to increase our return of capital to shareholders."
Fiscal Year 2018 Second Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), loss per share in the December quarter was $0.27. The results were affected by pre-tax special items which primarily consisted of $12 million in charges related to acquisitions and $6 million in charges related to restructuring activities as well as tax special items consisting of $244 million in charges due to corporate tax reform. GAAP earnings per share, excluding special items was $0.65. 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 second quarter of fiscal 2018, total cash, cash equivalents and short term investments were $2.82 billion, an increase of $49 million from the prior quarter.
Notable items included:
- Cash flow from operations: $230 million
- Capital expenditures: $22 million
- Dividends paid: $101 million ($0.36 per share)
- Stock repurchases: $77 million
Trailing twelve months free cash flow was $849 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 March 2018 quarter was $446 million. Based on the beginning backlog and expected turns, our results for the March 2018 quarter are forecasted to be as follows:
- Revenue: $620 to $660 million
- Gross Margin: 64% to 66% GAAP (66% to 68% excluding special items)
- EPS: $0.63 to $0.69 GAAP ($0.66 to $0.72 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
Our Board of Directors approved a 17% increase in the quarterly dividend. A cash dividend of $0.42 per share will be paid on March 15, 2018, to stockholders of record on March 1, 2018.
Conference Call
Maxim Integrated has scheduled a conference call on January 25 at 2:00 p.m. Pacific Time to discuss its financial results for the second 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.
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three Months Ended |
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December 30, |
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September 23, |
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December 24, |
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2017 |
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2017 |
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2016 |
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(in thousands, except per share data) |
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Net revenues |
$ 622,637 |
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$ 575,676 |
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$ 550,998 |
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Cost of goods sold (1) |
212,961 |
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201,845 |
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210,820 |
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Gross margin |
409,676 |
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373,831 |
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340,178 |
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Operating expenses: |
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Research and development |
115,896 |
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108,601 |
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114,057 |
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Selling, general and administrative |
85,323 |
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73,681 |
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71,543 |
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Intangible asset amortization |
995 |
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1,752 |
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2,348 |
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Impairment of long-lived assets (2) |
850 |
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42 |
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383 |
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Severance and restructuring expenses |
6,523 |
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5,433 |
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864 |
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Other operating expenses (income), net |
(959) |
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(844) |
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1,909 |
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Total operating expenses (income), net |
208,628 |
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188,665 |
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191,104 |
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Operating income (loss) |
201,048 |
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185,166 |
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149,074 |
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Interest and other income (expense), net |
(3,121) |
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(4,214) |
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(636) |
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Income (loss) before provision for income taxes |
197,927 |
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180,952 |
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148,438 |
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Income tax provision (benefit) |
272,942 |
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26,419 |
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17,961 |
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Net income (loss) |
$ (75,015) |
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$ 154,533 |
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$ 130,477 |
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Earnings (loss) per share: |
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Basic |
$ (0.27) |
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$ 0.55 |
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$ 0.46 |
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Diluted |
$ (0.27) |
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$ 0.54 |
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$ 0.45 |
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Shares used in the calculation of earnings (loss) per share: |
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Basic |
281,560 |
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282,170 |
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283,294 |
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Diluted |
281,560 |
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286,437 |
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288,106 |
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Dividends paid per share |
$ 0.36 |
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$ 0.36 |
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$ 0.33 |
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SCHEDULE OF SPECIAL ITEMS |
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(Unaudited) |
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Three Months Ended |
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December 30, |
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September 23, |
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December 24, |
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2017 |
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2017 |
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2016 |
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(in thousands) |
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Cost of goods sold: |
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Intangible asset amortization |
$ 11,139 |
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$ 11,064 |
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$ 11,755 |
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Accelerated depreciation (1) |
— |
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— |
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1,178 |
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Total |
$ 11,139 |
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$ 11,064 |
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$ 12,933 |
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Operating expenses: |
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Intangible asset amortization |
$ 995 |
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$ 1,752 |
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$ 2,348 |
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Impairment of long-lived assets (2) |
850 |
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42 |
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383 |
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Severance and restructuring |
6,523 |
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5,433 |
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864 |
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Other operating expenses (income), net |
(959) |
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(844) |
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1,909 |
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Total |
$ 7,409 |
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$ 6,383 |
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$ 5,504 |
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Interest and other expense (income), net |
$ (119) |
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$ (84) |
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$ (5,052) |
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Total |
$ (119) |
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$ (84) |
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$ (5,052) |
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Provision (benefit) for income taxes: |
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Impact of U.S. tax legislation (3) |
$ 243,550 |
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— |
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— |
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Total |
$ 243,550 |
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$ — |
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$ — |
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(1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility during the second quarter of fiscal year 2017. |
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(2) Includes impairment of investments in privately-held companies and other equipment impairment charges. |
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(3) Includes effect of U.S. tax legislation enacted on December 22, 2017. |
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