Maxim Integrated Reports Results For The First Quarter Of Fiscal

Maxim Integrated Reports Results For The First Quarter Of Fiscal 2021

- Revenue: $619 million

SAN JOSE, Calif., Oct. 27, 2020 — (PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $619 million for its first quarter of fiscal 2021 ended September 26, 2020, a 14% increase from the $545 million revenue recorded in the prior quarter, and a 16% increase from the same quarter of last year.

"Revenue in the September quarter increased strongly in Consumer and Automotive on a sequential basis. The robust uptick was driven by infotainment, driver assistance and electric vehicle content in Automotive, and across smartphones, gaming, wearables, tablets and broad-based personal electronics in Consumer. Revenue also grew across all of our major end markets compared to the same quarter a year ago, with double-digit growth in Communications and Data Center, Industrial and Automotive. Additionally, we are progressing per plan towards closure of our merger with Analog Devices," said Tunc Doluca, President and Chief Executive Officer.

Fiscal Year 2021 First Quarter Results

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the September quarter was $0.63. The results were affected by $30 million in pre-tax special items which primarily consisted of $15 million in charges related to the upcoming combination with Analog Devices, $9 million in restructuring costs unrelated to the merger, and $5 million of expenses related to prior acquisitions. GAAP earnings per share, excluding special items was $0.72. An analysis of GAAP versus GAAP excluding special items is provided in this press release.

Cash Flow Items

At the end of the first quarter of fiscal 2021, total cash, cash equivalents and short-term investments were $1.6 billion, down $2 million from the prior quarter.

Notable items included:

Cash flow from operations: $163 million
Capital expenditures: $13 million
Dividends paid: $128 million ($0.48 per share)
Stock repurchases: $9 million

Trailing twelve months free cash flow was $763 million. Free cash flow is a non-GAAP measure and is defined by cash flow from operations less capital expenditures.

Dividend and Stock Repurchase

Per the terms of the Merger Agreement between the Company and Analog Devices, we will not declare dividends that would have been paid in the upcoming months of December, March, June and September and have suspended our open market stock repurchase program.

Due to the pending merger with Analog Devices, Maxim Integrated will not be hosting a quarterly earnings conference call and has suspended the practice of providing forward-looking guidance. Investors are requested to review our Investor Relations website for the quarterly financial highlights and SEC filings for the latest updates on the pending transaction.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three Months Ended
	September 26, 2020	June 27, 2020	September 28, 2019
	(in thousands, except per share data)
Net revenues	$ 619,357	$ 545,369	$ 533,040
Cost of goods sold	202,343	183,001	189,717
Gross margin	417,014	362,368	343,323
Operating expenses:
Research and development	115,466	110,173	108,989
Selling, general and administrative	82,954	72,893	76,115
Intangible asset amortization	919	810	756
Severance and restructuring expenses	8,813	678	1,434
Other operating expenses (income), net	7,428	(173)	25
Total operating expenses	215,580	184,381	187,319
Operating income	201,434	177,987	156,004
Interest and other income (expense), net	(7,037)	(8,488)	1,829
Income before taxes	194,397	169,499	157,833
Provision for (benefit from) income taxes ⁽¹⁾⁽²⁾	24,883	(37,799)	17,677
Net income	$ 169,514	$ 207,298	$ 140,156

Earnings per share:
Basic	$ 0.64	$ 0.78	$ 0.52
Diluted	$ 0.63	$ 0.77	$ 0.51

Shares used in the calculation of earnings per share:
Basic	266,831	266,639	271,388
Diluted	269,529	268,777	274,436

Dividends paid per share	$ 0.48	$ 0.48	$ 0.48

SCHEDULE OF SPECIAL ITEMS
(Unaudited)
	Three Months Ended
	September 26, 2020	June 27, 2020	September 28, 2019
	(in thousands)
Cost of goods sold:
Intangible asset amortization	$ 4,363	$ 3,528	$ 3,111
Merger related expenses ⁽³⁾	1,335	—	—
Cost of COVID-19 response programs	938	1,591	—
Total	$ 6,636	$ 5,119	$ 3,111

Operating expenses:
Merger related expenses ⁽³⁾	$ 6,607	$ —	$ —
Intangible asset amortization	918	810	756
Severance and restructuring	8,813	678	1,434
Other operating expenses (income), net ⁽³⁾	7,428	(173)	25
Total	$ 23,766	$ 1,315	$ 2,215

Interest and other expense (income), net	$ (535)	$ 1,484	$ 207
Total	$ (535)	$ 1,484	$ 207

Provision for (benefit from) for income taxes:
Impact of U.S. tax legislation ⁽¹⁾	$ —	$ 6,486	$ —
Impact of income tax audit settlements ⁽²⁾	—	(51,197)	—
Total	$ —	$ (44,711)	$ —

(1) Includes effect of U.S. tax legislation enacted on December 22, 2017.
(2) Includes effect of income tax audit settlements.
(3) Includes ADI merger related expenses such as accelerated stock-based compensation expense resulting from the acceleration of certain RSAs for tax withholding purposes, as well as other legal and professional services.

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