Maxim Integrated Reports Results For The Third Quarter Of Fiscal

Maxim Integrated Reports Results For The Third Quarter Of Fiscal 2020

- Revenue: $562 million

SAN JOSE, Calif., April 28, 2020 — (PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $562 million for its third quarter of fiscal 2020 ended March 28, 2020, a 2% increase from the $551 million revenue recorded in the prior quarter, and a 4% increase from the same quarter of last year.

"Our test operations were impacted in the last two weeks of the March quarter as precautionary measures were implemented to protect employees against the spread of COVID-19. However, solid execution by our manufacturing resulted in March quarter financials within the range of our guidance," said Tunc Doluca, President and Chief Executive Officer. "Looking ahead to the June quarter, we expect our manufacturing operations will run at less than full capacity as we continue to safeguard employee health and expedite product shipments for our Medical customers. We anticipate revenue declines in Automotive and Consumer products, and sequential growth in Industrial as well as Communications and Data Center."

Fiscal Year 2020 Third Quarter Results

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the March quarter was $0.59. The results were affected by $7 million in pre-tax special items which primarily consisted of charges related to acquisitions and expenses related to COVID-19 response programs. GAAP earnings per share, excluding special items was $0.61. An analysis of GAAP versus GAAP excluding special items is provided in this press release.

Cash Flow Items

At the end of the third quarter of fiscal 2020, total cash, cash equivalents and short-term investments were $1.7 billion, down $97 million from the prior quarter.

Notable items included:

Cash flow from operations: $210 million
Capital expenditures: $17 million
Dividends paid: $129 million ($0.48 per share)
Stock repurchases: $157 million

Trailing twelve months free cash flow was $744 million. Free cash flow is a non-GAAP measure and is defined by cash flow from operations less capital expenditures.

Business Outlook

The Company's 90-day backlog at the beginning of the June 2020 quarter was $509 million. Based on the beginning backlog, expected turns and constraints on our manufacturing operations, our results for the June 2020 quarter are forecasted to be as follows:

Revenue: $480 to $540 million
Gross Margin: 64.5% to 66.5% GAAP (65.5% to 67.5% excluding special items)
EPS: $0.40 to $0.54 GAAP ($0.43 to $0.57 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 $0.48 per share will be paid on June 12, 2020, to stockholders of record on May 28, 2020.

Conference Call

Maxim Integrated has scheduled a conference call on April 28 at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter of fiscal 2020 and its business outlook. An audio webcast of this call 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
	March 28, 2020			December 28, 2019		March 30, 2019
	(in thousands, except per share data)
Net revenues	$	561,916		$	551,070	$	542,383
Cost of goods sold	195,479			190,546		201,552
Gross margin	366,437			360,524		340,831
Operating expenses:
Research and development	109,091			111,914		107,075
Selling, general and administrative	71,643			76,071		74,116
Intangible asset amortization	756			756		756
Severance and restructuring expenses	523			2,728		1,744
Other operating expenses (income), net	1,077			(1)		—
Total operating expenses (income), net	183,090			191,468		183,691
Operating income (loss)	183,347			169,056		157,140
Interest and other income (expense), net	(1,622)			(17)		3,318
Income (loss) before provision for income taxes	181,725			169,039		160,458
Income tax provision (benefit)	20,535			22,989		29,845
Net income	$	161,190		$	146,050	$	130,613
Earnings per share:
Basic	$	0.60		$	0.54	$	0.48
Diluted	$	0.59		$	0.53	$	0.47
Shares used in the calculation of earnings per share:
Basic	269,003			270,330		273,221
Diluted	271,579			273,269		276,610

Dividends paid per share	$	0.48		$	0.48	$	0.46

SCHEDULE OF SPECIAL ITEMS
(Unaudited)
	Three Months Ended
	March 28, 2020			December 28, 2019		March 30, 2019
	(in thousands)
Cost of goods sold:
Intangible asset amortization	$	3,111		$	3,111	$	5,008
Cost of COVID-19 response programs	2,025			—		—
Total	$	5,136		$	3,111	$	5,008
Operating expenses:
Intangible asset amortization	$	756		$	756	$	756
Severance and restructuring	523			2,728		1,744
Other operating expenses (income), net	1,077		⁽¹⁾	(1)		—
Total	$	2,356		$	3,483	$	2,500
Interest and other expense (income), net	$	(587)		$	(1,230)	$	(857)
Total	$	(587)		$	(1,230)	$	(857)
Income tax provision (benefit):
Impact of U.S. tax legislation ⁽²⁾	$	—		$	—	$	(1,056)
Total	$	—		$	—	$	(1,056)

(1) Includes approximately $0.5 million of acquisition-related costs and $0.5 million of cost related to COVID-19 response programs.
(2) Includes effect of U.S. tax legislation enacted on December 22, 2017.

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