- Revenue: $567 million
(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $567 million for its second quarter of fiscal 2015 ended December 27, 2014, a 2% decrease from the $580 million revenue recorded in the prior quarter, and a 9% decrease year over year.
Tunc Doluca, President and Chief Executive Officer, commented, "We are pleased with our December quarter revenue performance, driven by our diversification in Consumer and continued strength in our Automotive business." Mr. Doluca continued, "We are on track to achieve our previously announced cost reduction plans, which will enable us to reduce spending while we focus investment in our growth businesses. We also decided to stop investment in Consumer MEMS and Touch technology."
Fiscal Year 2015 Second Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the December quarter was a $0.25 loss. The results were affected by pre-tax special items which primarily consisted of $138 million in charges related to impairment of goodwill and other assets related to our MEMS business, $28 million in charges related to restructuring activities and $23 million in charges related to acquisitions. GAAP earnings per share, excluding special items was $0.33. 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 2015, total cash, cash equivalents and short term investments was $1.38 billion, an increase of $62 million from the prior quarter. Notable items included:
- Cash flow from operations: $173 million
- Capital additions: $17 million
- Proceeds from property sales: $24 million
- Dividends: $79 million ($0.28 per share)
- Stock repurchases: $60 million
Business Outlook
The Company's 90-day backlog at the beginning of the third fiscal quarter of 2015 was $378 million. Based on the beginning backlog and expected turns, results for the March 2015 quarter are expected to be as follows:
- Revenue: $565 million to $605 million
- Gross Margin: 52% to 56% GAAP (58% to 62% excluding special items)
- EPS: $0.20 to $0.26 GAAP ($0.32 to $0.38 excluding special items)
Maxim Integrated's business outlook does not include the potential impact of any restructuring activity, acquisitions, or other business combinations that may be completed during the quarter.
Dividend
A cash dividend of $0.28 per share will be paid on March 5, 2015, to stockholders of record on February 19, 2015.
Conference Call
Maxim Integrated has scheduled a conference call on January 22, 2015, at 2:00 p.m. Pacific Time to discuss its financial results for the second quarter of fiscal 2015 and its business outlook. To listen via telephone, dial (866) 804-3547 (toll free) or (703) 639-1328. This call will be webcast by Shareholder.com and can be accessed at the Company's website at
www.maximintegrated.com/company/investor.
A presentation summarizing financial information to be discussed on the conference call is posted at www.maximintegrated.com/company/investor.
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three Months Ended |
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December 27, |
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September 27, |
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December 28, |
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2014 |
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2014 |
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2013 |
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(in thousands, except per share data) |
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Net revenues |
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$ 566,809 |
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$ 580,275 |
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$ 620,274 |
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Cost of goods sold (1) |
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252,732 |
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241,454 |
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291,602 |
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Gross margin |
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314,077 |
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338,821 |
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328,672 |
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Operating expenses: |
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Research and development |
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135,945 |
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140,362 |
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142,971 |
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Selling, general and administrative |
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79,778 |
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79,989 |
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83,471 |
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Intangible asset amortization |
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4,155 |
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4,327 |
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4,968 |
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Impairment of long-lived assets (2) |
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50,745 |
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10,226 |
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5,197 |
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Impairment of goodwill and intangible assets (3) |
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93,010 |
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- |
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- |
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Severance and restructuring expenses (4) |
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13,635 |
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1,385 |
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10,227 |
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Acquisition-related costs |
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- |
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- |
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4,137 |
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Other operating expenses (income), net (5) |
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885 |
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1,574 |
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7,307 |
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Total operating expenses |
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378,153 |
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237,863 |
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258,278 |
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Operating income (loss) |
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(64,076) |
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100,958 |
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70,394 |
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Interest and other income (expense), net |
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(7,599) |
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(6,477) |
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(5,833) |
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Income (loss) before provision for income taxes |
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(71,675) |
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94,481 |
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64,561 |
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Provision (benefit) for income taxes (6) |
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359 |
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(5,499) |
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20,208 |
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Net Income (loss) |
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$ (72,034) |
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$ 99,980 |
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$ 44,353 |
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Earnings (loss) per share: |
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Basic |
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$ (0.25) |
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$ 0.35 |
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$ 0.16 |
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Diluted |
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$ (0.25) |
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$ 0.35 |
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$ 0.15 |
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Shares used in the calculation of earnings (loss) per share: |
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Basic |
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282,992 |
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284,086 |
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282,664 |
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Diluted |
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282,992 |
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289,430 |
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288,565 |
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Dividends paid per share |
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$ 0.28 |
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$ 0.28 |
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$ 0.26 |
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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 27, |
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September 27, |
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December 28, |
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2014 |
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2014 |
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2013 |
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(in thousands) |
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Cost of goods sold: |
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Intangible asset amortization |
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$ 18,750 |
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$ 18,750 |
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$ 19,098 |
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Accelerated depreciation (1) |
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8,895 |
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- |
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- |
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Acquisition-related inventory write-up |
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- |
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- |
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13,066 |
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Total |
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$ 27,645 |
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$ 18,750 |
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$ 32,164 |
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Operating expenses: |
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Intangible asset amortization |
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$ 4,155 |
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$ 4,327 |
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$ 4,968 |
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Impairment of long-lived assets (2) |
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50,745 |
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10,226 |
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5,197 |
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Impairment of goodwill and intangible assets (3) |
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93,010 |
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- |
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- |
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Severance and restructuring (4) |
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13,635 |
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1,385 |
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10,227 |
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Acquisition-related costs |
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- |
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- |
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4,137 |
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Other operating expenses (income), net (5) |
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885 |
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1,574 |
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7,307 |
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Total |
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$ 162,430 |
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$ 17,512 |
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$ 31,836 |
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Interest and other expense (income), net |
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$ (217) |
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$ - |
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$ - |
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Total |
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$ (217) |
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$ - |
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$ - |
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Provision (benefit) for income taxes: |
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Reversal of tax reserves (6) |
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$ - |
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$ (21,747) |
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$ - |
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Fiscal year 2014 research & development tax credits |
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(2,863) |
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- |
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- |
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Total |
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$ (2,863) |
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$ (21,747) |
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$ - |
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(1) Accelerated depreciation related to San Jose wafer manufacturing building and equipment. |
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(2) Includes impairment charges related to MEMS and non-MEMS wafer manufacturing equipment and end of line test equipment. |
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(3) Includes impairment of goodwill and write-off of in-process research and development related to MEMS business unit. |
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(4) Includes severance charges associated with closure of San Jose wafer manufacturing facility and reorganization of various business units, and severance & retention and lease abandonment charges related to Volterra acquisition. |
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(5) Includes loss related to sale of land & buildings, expected loss on rent expense for vacated office space, legal settlement, and contingent consideration adjustments related to certain acquisitions. |
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(6) Includes reversal of tax reserves related to a favorable settlement of a foreign tax issue. |
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