SAN JOSE, Calif., April 20, 2017 /PRNewswire/ -- Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $581 million for its third quarter of fiscal 2017 ended March 25, 2017, a 5% increase from the $551 million revenue recorded in the prior quarter, and a 5% increase from the same quarter of last year.
Tunc Doluca, President and Chief Executive Officer, commented, "Our strong growth in the March quarter enabled us to exceed our revenue and profitability targets. This momentum was led by Automotive and Industrial growth relative to the March quarter of last year." Mr. Doluca continued, "Our return to growth and strong profitability confirms that our R&D investment strategy and manufacturing transformation are on track and delivering great results."
Fiscal Year 2017 Third Quarter ResultsBased on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the March quarter was $0.49. The results were affected by pre-tax special items which primarily consisted of $13 million in charges related to acquisitions and $3 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.56. An analysis of GAAP versus GAAP excluding special items is provided in the last table of this press release.
Cash Flow ItemsAt the end of the third quarter of fiscal 2017, total cash, cash equivalents and short term investments were $2.16 billion, an increase of $69 million from the prior quarter.
Notable items included:
Business OutlookThe Company's 90-day backlog at the beginning of the June 2017 quarter was $382 million. Based on the beginning backlog, expected turns, and the start of the transition to sell-in revenue accounting for distribution, our results for the June 2017 quarter are expected to be as follows:
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 $0.33 per share will be paid on June 15, 2017, to stockholders of record on June 1, 2017.
Conference CallMaxim Integrated has scheduled a conference call on April 20 at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter of fiscal 2017 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.
ContactKathy TaManaging Director, Investor Relations (408) 601-5697
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(in thousands, except per share data)
Cost of goods sold (1) (2)
Research and development
Selling, general and administrative
Intangible asset amortization
Impairment of long-lived assets (3)
Severance and restructuring expenses
Other operating expenses (income), net
Total operating expenses (income), net
Operating income (loss)
Interest and other income (expense), net (4)
Income (loss) before provision for income taxes
Income tax provision (benefit)
Net income (loss)
Earnings (loss) per share:
Shares used in the calculation of earnings (loss) per share:
Dividends paid per share
SCHEDULE OF SPECIAL ITEMS
Cost of goods sold:
Intangible asset amortization
Accelerated depreciation (1)
Other cost of goods sold (2)
Severance and restructuring
Interest and other expense (income), net (4)
(1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility.
(2) Includes expense related to patent license settlement.
(3) Includes impairment of investments in privately-held companies and other equipment impairment charges.
(4) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio, Texas.
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Total cash, cash equivalents and short-term investments
Accounts receivable, net
Other current assets
Total current assets
Property, plant and equipment, net
Intangible assets, net
Assets held for sale
LIABILITIES AND STOCKHOLDERS' EQUITY
Income taxes payable
Accrued salary and related expenses
Deferred revenue on shipments to distributors
Total current liabilities
Common stock and capital in excess of par value
Accumulated other comprehensive loss
Total stockholders' equity
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
Loss (gain) from sale of property, plant and equipment
Loss (gain) on sale of business
Tax benefit (shortfall) related to stock-based compensation
Impairment of long-lived assets
Impairment of investments in privately-held companies
Excess tax benefit from stock-based compensation
Changes in assets and liabilities:
All other accrued liabilities
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Proceeds from sale of available-for-sale securities
Proceeds from sale of business
Purchases of available-for-sale securities
Purchases of privately-held companies' securities
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Excess tax benefit from stock-based compensation
Repayment of notes payable
Net issuance of restricted stock units
Proceeds from stock options exercised
Issuance of common stock under employee stock purchase program
Repurchase of common stock
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents:
Beginning of period
End of period
Total cash, cash equivalents, and short-term investments
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:
GAAP gross profit
GAAP gross profit %
Total special items
GAAP gross profit excluding special items
GAAP gross profit % excluding special items
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items:
GAAP operating expenses
Severance and restructuring
Total special items
GAAP operating expenses excluding special items
Reconciliation of GAAP net income (loss) to GAAP net income excluding special items:
GAAP net income (loss)
Pre-tax total special items
Other income tax effects and adjustments (5)
GAAP net income excluding special items
GAAP net income per share excluding special items:
Shares used in the calculation of earnings per share excluding special items:
(5) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.
Non-GAAP MeasuresTo 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; accelerated depreciation; other costs of goods sold; impairment of long-lived assets; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net, and other income tax effects and adjustments. 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 ItemsThe 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, accelerated depreciation, and other costs of goods sold. 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 ItemsThe 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, and other operating expenses (income), net. 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 Provision for Income Taxes Excluding Special ItemsThe use of a GAAP provision for income taxes excluding special items allows management to evaluate the provision for income taxes across different reporting periods on a consistent basis, independent of special items including the tax provision impact of pre-tax special items. In fiscal year 2016, we began using a long-term tax rate to compute the GAAP provision for income taxes excluding special items. This long-term tax rate considers the income tax impact of pre-tax special items and eliminates the effects of significant non-recurring and period specific tax items which vary in size and frequency. In the first and second quarter of fiscal year 2017, we used a long-term tax rate of 18%, which was our forecast of the weighted average of our normalized fiscal year GAAP tax rate excluding special items over a four-year period, that includes the past three fiscal years plus the current fiscal year projection at the beginning of fiscal year 2017. We review the long-term tax rate on an annual basis and more frequently whenever events occur that may materially affect the long-term tax rate such as tax law changes; significant changes in our geographic earnings mix; or changes in our corporate structure. Starting in the third quarter of fiscal year 2017, we transitioned to a long-term tax rate of 15%, which reflects the impact of changes in our manufacturing structure and focused research and development expenditures, resulting in improved projections for fiscal year 2017 and future periods.
GAAP Net Income and GAAP Net Income per Share Excluding Special ItemsThe 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; accelerated depreciation; other costs of goods sold; impairment of long-lived assets; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net, and other income tax effects and adjustments. 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" StatementThis 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 third quarter of fiscal 2017 ending in March 2017, which includes revenue, gross margin and earnings per share. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted, based upon, among other things, general market and economic conditions, 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 or more 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 25, 2016 (the "Form 10-K"). The Form 10-K may be found at https://www.sec.gov/Archives/edgar/data/743316/000074331616000081/maxim10-kfy2016.htm.
All forward-looking statements included in this news release are made as of the date hereof and based on the information available to the Company as of the date hereof. The Company assumes no obligation to update any forward-looking statement except as required by law.
About Maxim IntegratedMaxim Integrated develops innovative analog and mixed-signal products and technologies to make systems smaller and smarter, with enhanced security and increased energy efficiency. We are empowering design innovation for our automotive, industrial, healthcare, mobile consumer, and cloud data center customers to deliver industry-leading solutions that help change the world. Learn more at http://www.maximintegrated.com.
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SOURCE Maxim Integrated Investor Relations
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