Maxim Integrated Reports Results For The Third Quarter Of Fiscal 2013 -- Revenue: $605 million

-- Gross Margin: 62.2% GAAP (63.5% excluding special items)

-- EPS: $0.44 GAAP ($0.45 excluding special items)

-- Cash, cash equivalents, and short term investments: $1.57 billion

-- Fiscal fourth quarter revenue outlook: $610 million to $640 million

SAN JOSE, Calif., April 25, 2013 /PRNewswire/ -- Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $605 million for its third quarter of fiscal 2013 ended March 30, 2013, unchanged from the prior quarter.

(Logo: http://photos.prnewswire.com/prnh/20120912/SF71654LOGO)

Tunc Doluca, President and Chief Executive Officer, commented, "While Maxim's Mobility business has driven our revenue growth for several quarters, it is good to see strength in orders for our Industrial business. Our diverse business model has positioned Maxim to participate in growth across multiple end markets."

Fiscal Year 2013 Third Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the March quarter was $0.44. The results were affected by special items which primarily consisted of:

  • $14 million pre-tax charge for acquisition related items
  • $4 million tax benefit  for  re-instatement of R&D tax credit for fiscal year 2012

GAAP earnings per share, excluding special items, was $0.45. 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 our third quarter of fiscal 2013, total cash, cash equivalents and short term investments was $1.57 billion, an increase of $543 million from the prior quarter. Notable items include:

  • Cash flow from operations: $212 million
  • Net capital expenditures: $45 million
  • Dividends:  $70 million ($0.24 per share)
  • Stock repurchases: $66 million
  • Cash from issuance of debt: $491 million

Business Outlook
The Company's 90 day backlog at the beginning of the fourth fiscal quarter of 2013 was $386 million. Based on our beginning backlog and expected turns, results for the June 2013 quarter are expected to be:

  • Revenue: $610 million to $640 million
  • Gross Margin: 60% to 63% GAAP (61% to 64% excluding special items)
  • EPS: $0.42 to $0.46 GAAP ($0.45 to $0.49 excluding special items)

Maxim Integrated's business outlook does not include the potential impact of any restructuring activity or mergers, acquisitions, divestitures, or other business combinations that may be completed during the quarter.

Dividend
A cash dividend of $0.24 per share will be paid on June 5, 2013, to stockholders of record on May 22, 2013.

Conference Call
Maxim Integrated has scheduled a conference call on April 25, 2013, at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter of fiscal 2013 and its business outlook. To listen via telephone, dial (866) 804-3545 (toll free) or (703) 639-1326.  This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com.

Contact
Venk Nathamuni
Managing Director, Investor Relations
(408) 601-5293

 


CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)




Three Months Ended





March 30,


December 29,


March 31,





2013


2012


2012





(in thousands, except per share data)



Net revenues


$   604,884


$   605,306


$       571,212



Cost of goods sold


228,782


241,931


235,782



        Gross margin


376,102


363,375


335,430



Operating expenses:









    Research and development


134,138


135,742


136,075



    Selling, general and administrative


81,954


80,058


78,011



    Intangible asset amortization


3,903


3,903


4,029



    Impairment of long-lived assets (1)


-


22,222


7,712



    Severance and restructuring expenses


151


2,236


228



    Other operating expenses (income), net (2)


1,678


1,666


(2,511)



       Total operating expenses 


221,824


245,827


223,544



          Operating income


154,278


117,548


111,886



Interest and other income (expense), net 


(2,669)


(2,798)


(230)



Income before provision for income taxes


151,609


114,750


111,656



Provision for income taxes (3)


22,824


38,128


88,948



       Income from continuing operations 


128,785


76,622


22,708



       Income from discontinued operations, net of tax (4)


2,603


-


31,809



      Net income


$   131,388


$     76,622


$         54,517












Earnings per share: basic









    From continuing operations 


$         0.44


$         0.26


$             0.08



    From discontinued operations, net of tax 


0.01


-


0.11



    Basic


$         0.45


$         0.26


$             0.19












Earnings per share: diluted









    From continuing operations 


$         0.43


$         0.26


$             0.07



    From discontinued operations, net of tax


0.01


-


0.11



    Diluted


$         0.44


$         0.26


$             0.18












Shares used in the calculation of earnings per share: 









    Basic


292,888


292,075


292,276



    Diluted 


300,082


298,759


300,221












Dividends paid per share 


$         0.24


$         0.24


$             0.22





















SCHEDULE OF SPECIAL ITEMS


(Unaudited)




Three Months Ended





March 30,


December 29,


March 31,





2013


2012


2012





(in thousands)



Cost of goods sold:









      Intangible asset amortization


$           7,777


$           8,986


$               9,787



 Total 


$           7,777


$           8,986


$               9,787












 Operating expenses: 









     Intangible asset amortization


$           3,903


$           3,903


$               4,029



     Impairment of long-lived assets (1)


-


22,222


7,712



     Severance and restructuring 


151


2,236


228



     Other operating expenses (income) , net (2)


1,678


1,666


(2,511)



 Total 


$           5,732


$         30,027


$               9,458












Provision for income taxes:









     Reversal of tax reserves


$                    -


$                     -


$             (2,272)



     International restructuring implementation (3) 


-


18,726


65,293



     Fiscal year 2012 research & development tax credits 


(3,899)


-


-



 Total 


$         (3,899)


$         18,726


$             63,021












 Discontinued operations: 









     Income from discontinued operations, net of tax (4)


$         (2,603)


$                   -


$           (31,809)



Total


$         (2,603)


$                   -


$           (31,809)












(1) Includes impairment charges relating to wafer fab and end of line manufacturing equipment and land & building held for sale.



(2) Other operating expenses (income), net are primarily for in-process research and development, contingent consideration adjustments related to certain acquisitions, gain relating to sale of land and buildings, and stock option related litigation.


(3) Includes impact due to international restructuring.



(4) Includes gain on sale, net of tax relating to certain businesses divested.


 


STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands)


(Unaudited)












Three Months Ended March 30, 2013

  Stock Options


  Restricted Stock Units


  Employee Stock Purchase Plan


  Total



Cost of goods sold 

$                  337


$               2,120


$                  598


$               3,055



Research and development expense

1,440


7,116


1,480


10,036



Selling, general and administrative expense

1,157


4,764


601


6,522



       Total

$               2,934


$             14,000


$               2,679


$             19,613













Three Months Ended December 29, 2012










Cost of goods sold 

$                  477


$               2,572


$                  634


$               3,683



Research and development expense

2,288


8,401


1,451


12,140



Selling, general and administrative expense

1,286


5,152


584


7,022



       Total

$               4,051


$             16,125


$               2,669


$             22,845













Three Months Ended March 31, 2012










Cost of goods sold 

$                  470


$               2,217


$                  412


$               3,099



Research and development expense

1,742


8,203


1,602


11,547



Selling, general and administrative expense

1,836


5,072


484


7,392



       Total

$               4,048


$             15,492


$               2,498


$             22,038












 










CONSOLIDATED  BALANCE SHEETS


(Unaudited)



March 30,


December 29,


March 31,



2013


2012


2012



(in thousands) 


ASSETS







Current assets:







    Cash and cash equivalents

$        1,547,980


$           955,107


$           860,551


    Short-term investments

25,095


75,192


75,405


        Total cash, cash equivalents and short-term investments

1,573,075


1,030,299


935,956


    Accounts receivable, net 

300,046


264,545


296,255


    Inventories

268,018


257,690


220,153


    Deferred tax assets

81,809


80,991


105,298


    Other current assets

113,010


90,470


79,584


        Total current assets

2,335,958


1,723,995


1,637,246


Property, plant and equipment, net

1,368,905


1,359,014


1,361,300


Intangible assets, net

165,591


182,521


222,354


Goodwill

422,004


422,083


423,073


Other assets

41,660


50,940


26,264


              TOTAL ASSETS

$        4,334,118


$        3,738,553


$        3,670,237









LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:







    Accounts payable 

$           114,629


$           110,495


$           132,906


    Income taxes payable

20,200


22,146


21,807


    Accrued salary and related expenses

182,894


152,122


181,943


    Accrued expenses 

59,075


58,900


72,242


    Current portion of long term debt

304,314


304,794


-


    Deferred income on shipments to distributors

25,851


25,362


28,729


        Total current liabilities

706,963


673,819


437,627


Long term debt

503,573


3,997


308,700


Income taxes payable

271,815


260,770


192,842


Deferred tax liabilities

213,138


192,434


205,727


Other liabilities

26,063


26,321


22,143


        Total liabilities 

1,721,552


1,157,341


1,167,039









Stockholders' equity:







    Common stock

292


7,040


9,125


    Retained earnings 

2,629,895


2,589,619


2,507,298


    Accumulated other comprehensive loss

(17,621)


(15,447)


(13,225)


        Total stockholders' equity

2,612,566


2,581,212


2,503,198


              TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 

$        4,334,118


$        3,738,553


$        3,670,237








 


CONSOLIDATED STATEMENTS OF CASH FLOWS



(Unaudited)




Three Months Ended




March 30,


December 29,


March 31,




2013


2012


2012




(in thousands)



Cash flows from operating activities: 








Net income

$      131,388


$        76,622


$        54,517



Adjustments to reconcile net income to net cash provided by operating activities: 








      Stock-based compensation 

19,613


22,845


22,038



      Depreciation and amortization 

50,391


51,880


53,476



      Deferred taxes 

18,392


(12,979)


(9,942)



      Loss (gain) from sale of property, plant and equipment

(2,397)


(88)


(6,487)



      Tax benefit (shortfall) related to stock-based compensation 

1,317


5,187


2,957



      Impairment of long-lived assets

-


22,222


7,712



      Excess tax benefit from stock-based compensation

(4,297)


(6,615)


(5,172)



      In-process research and development written-off

2,800


-


1,600



      Loss (gain) on sale of discontinued operations

(3,285)


-


(45,372)



      Changes in assets and liabilities: 








          Accounts receivable 

(35,501)


51,993


(50,026)



          Inventories 

(12,143)


570


12,412



          Other current assets 

(14,653)


4,091


2,332



          Accounts payable 

10,453


(9,536)


27,228



          Income taxes payable 

9,100


37,477


98,321



          Deferred revenue on shipments to distributors 

489


(1,663)


(2,407)



          All other accrued liabilities 

40,026


13,091


33,312



Net cash provided by (used in) operating activities 

211,693


255,097


196,499











Cash flows from investing activities: 








          Payments for property, plant and equipment

(54,945)


(62,102)


(70,053)



          Proceeds from sales of property, plant and equipment

10,199


4,115


13,774



          Proceeds from sale of discontinued operations

-


-


56,607



          Purchases of available-for-sale securities

-


-


(1,980)



          Proceeds from maturity of available-for-sale securities

50,000


-


-



Net cash provided by (used in) investing activities 

5,254


(57,987)


(1,652)











Cash flows from financing activities: 








         Excess tax benefit from stock-based compensation

4,297


6,615


5,172



         Dividends paid

(70,421)


(70,063)


(64,384)



         Repayment of notes payable

(903)


(74)


-



         Issuance of debt, net of issuance costs

491,145


-


-



         Contingent consideration paid

-


(7,476)


-



         Repurchase of common stock

(66,330)


(50,435)


(28,970)



         Issuance of ESPP

-


16,768


-



         Net issuance of restricted stock units

(7,941)


(6,538)


(7,669)



         Proceeds from stock options exercised

26,079


19,350


20,395



Net cash provided by (used in) financing activities 

375,926


(91,853)


(75,456)











Net increase (decrease) in cash and cash equivalents 

592,873


105,257


119,391



Cash and cash equivalents: 








          Beginning of period

955,107


849,850


741,160



          End of period

$   1,547,980


$      955,107


$      860,551











Total cash, cash equivalents, and short-term investments

$   1,573,075


$   1,030,299


$      935,956










 


ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES


(Unaudited)




Three Months Ended





March 30,


December 29,


March 31,





2013


2012


2012





(in thousands, except per share data)



Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:









GAAP gross profit


$           376,102


$              363,375


$           335,430



GAAP gross profit %


62.2%


60.0%


58.7%












Special expense items:









      Intangible asset amortization


7,777


8,986


9,787



 Total special expense items 


7,777


8,986


9,787



 GAAP gross profit excluding special expense items 


$           383,879


$              372,361


$           345,217



 GAAP gross profit % excluding special expense items 


63.5%


61.5%


60.4%












Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items:









GAAP operating expenses


$           221,824


$              245,827


$           223,544












Special expense (income) items:









      Intangible asset amortization


3,903


3,903


4,029



      Impairment of long-lived assets (1)


-


22,222


7,712



     Severance and restructuring 


151


2,236


228



     Other operating expenses (income), net (2) 


1,678


1,666


(2,511)



 Total special expense items 


5,732


30,027


9,458



 GAAP operating expenses excluding special expense items 


$           216,092


$              215,800


$           214,086












Reconciliation of GAAP net income to GAAP net income excluding special items:









GAAP net income


$           131,388


$                76,622


$             54,517












Special expense (income) items:









      Intangible asset amortization


11,680


12,889


13,816



      Impairment of long-lived assets (1)


-


22,222


7,712



     Severance and restructuring 


151


2,236


228



     Other operating expenses (income) , net (2) 


1,678


1,666


(2,511)



                     Pre-tax total special expense items 


13,509


39,013


19,245



     Tax effect of special items 


(3,806)


(9,555)


(5,445)



     Reversal of tax reserves 


-


-


(2,272)



     International restructuring implementation (3) 


-


18,726


65,293



     Fiscal year 2012 research & development tax credits 


(3,899)


-


-



     Discontinued operations, net of tax (4) 


(2,603)


-


(31,809)



 GAAP net income excluding special expense items 


$           134,589


$              124,806


$             99,529












 GAAP net income per share excluding special expense items: 









    Basic 


$             0.46


$                0.43


$             0.34



    Diluted 


$             0.45


$                0.42


$             0.33












Shares used in the calculation of earnings per share excluding special expense items: 








    Basic


292,888


292,075


292,276



    Diluted 


300,082


298,759


300,221












(1) Includes impairment charges relating to wafer fab and end of line manufacturing equipment and land and building held for sale.



(2) Other operating expenses (income), net are primarily for in-process research and development, contingent consideration adjustments related to certain acquisitions, gain relating to sale of land and buildings, and stock option related litigation.


(3) Includes impact due to international restructuring.



(4) Includes gain on sale, net of tax relating to certain businesses divested.


 

Non-GAAP Measures
To supplement the consolidated financial results prepared under GAAP, Maxim Integrated uses non-GAAP measures which are adjusted from the most directly comparable GAAP results to exclude special items related to intangible asset amortization; impairment of long-lived assets; severance and restructuring; in-process research and development; contingent consideration adjustments relating to certain acquisitions; gain related to the sale of land and buildings; stock option related litigation; the tax provision impacts due to international restructuring implementation; reversal of tax reserves; fiscal year 2012 research and development tax credits; and gain on sale, net of tax relating to certain business divested. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate Maxim Integrated's current performance. Many analysts covering Maxim Integrated use the non-GAAP measures as well. Given management's use of these non-GAAP measures, Maxim Integrated believes these measures are important to investors in understanding Maxim Integrated's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in Maxim Integrated's core business across different time periods. These non-GAAP measures are not in accordance with or an alternative to GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. The non-GAAP measures displayed in the table above include the following:

GAAP gross profit excluding special items
The use of GAAP gross profit excluding special items allows management to evaluate the gross margin of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization.  In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP gross profit excluding special items to enable investors and analysts to evaluate our revenue generation performance relative to the direct costs of revenue of Maxim Integrated's core businesses.

GAAP operating expenses excluding special items
The use of GAAP operating expenses excluding special items allows management to evaluate the operating expenses of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; impairment of long-lived assets; severance and restructuring; in-process research and development; contingent consideration adjustments relating to certain acquisitions; gain related to the sale of land and buildings; and stock option related litigation.  In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP operating expenses excluding special items to enable investors and analysts to evaluate our core business and its direct operating expenses.   

GAAP net income and GAAP net income per share excluding special items
The use of GAAP net income and GAAP net income per share excluding special items allow management to evaluate the operating results of Maxim Integrated's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; impairment of long-lived assets; severance and restructuring; in-process research and development; contingent consideration adjustments relating to certain acquisitions; gain related to the sale of land and buildings; stock option related litigation; the tax provision impacts due to international restructuring implementation; reversal of tax reserves; fiscal year 2012 research and development tax credits; and gain on sale, net of tax relating to certain business divested. In addition, they are important components of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP net income and GAAP net income per share excluding special items to enable investors and analysts to understand the results of operations of Maxim Integrated's core businesses and to compare our results of operations on a more consistent basis against that of other companies in our industry.

"Safe Harbor" Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include the Company's business outlook and financial projections for its fourth quarter of fiscal 2013 ending in June 2013, which includes revenue, gross margin and earnings per share, as well as the Company's belief that its diverse business model has positioned the Company to participate in growth across multiple end markets. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted based upon, among other things, general market and economic conditions and market developments that could adversely affect the growth of the mixed-signal analog market, product mix shifts, the loss of all or a substantial portion of our sales to one of our large customers,  customer cancellations and price competition, as well as other risks described in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012 (the "10-K") and Quarterly Reports on Form 10-Q filed after the 10-K.

All forward-looking statements included in this news release are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement except as required by law.

About Maxim Integrated
At Maxim Integrated, we put analog together in a way that sets our customers apart. In Fiscal 2012, we reported revenues of $2.4 billion. For more information, go to www.maximintegrated.com.

SOURCE Maxim Integrated Products, Inc.



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