-- Revenue: $563 million
(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $563 million for its first quarter of fiscal 2016 ended September 26, 2015, a 3% decrease from the $583 million revenue recorded in the prior quarter, and a 3% decrease from the same quarter of last year.
Tunc Doluca, President and Chief Executive Officer, commented, "Our first quarter financial performance was in line with our expectations." Mr. Doluca continued, "Our soft outlook for the December quarter reflects an unusually high decline in Consumer revenue due to product cycle timing, continued weakness in communications infrastructure, and a seasonally down industrial market. Looking ahead to the March quarter, we expect a rebound of our business, driven by product cycles in Consumer, and continued momentum and visibility in Automotive. We are also on track to reduce costs by $180 million annually. "
Fiscal Year 2016 First Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), basic earnings per share in the September quarter was a $0.25 loss. The results were affected by pre-tax special items which primarily consisted of a $158 million write down of our San Antonio wafer manufacturing facility, $51 million in charges related to other restructuring activities, and $20 million in charges related to acquisitions. GAAP earnings per share, excluding special items was $0.42. 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 first quarter of fiscal 2016, total cash, cash equivalents and short term investments were $1.61 billion, a decrease of $17 million from the prior quarter. Notable items included:
- Cash flow from operations: $117 million
- Net capital additions: $15 million
- Dividends: $85 million ($0.30 per share)
- Stock repurchases: $40 million
Business Outlook
The Company's 90-day backlog at the beginning of the second fiscal quarter of 2016 was $329 million. Based on the beginning backlog and expected turns, results for the December 2015 quarter are expected to be as follows:
- Revenue: $490 million to $520 million
- Gross Margin: 56% to 60% GAAP (60% to 63% excluding special items)
- EPS: $0.23 to $0.29 GAAP ($0.29 to $0.35 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 $0.30 per share will be paid on December 3, 2015, to stockholders of record on November 19, 2015.
Conference Call
Maxim Integrated has scheduled a conference call on October 22nd, at 2:00 p.m. Pacific Time to discuss its financial results for the first quarter of fiscal 2016 and its business outlook. To listen via telephone, dial (866) 802-4322 (toll free) or (703) 639-1319. This call will be webcast by Shareholder.com and can be accessed at the Company's website at
www.maximintegrated.com/company/investor.
A presentation summarizing financial information to be discussed on the conference call is posted at www.maximintegrated.com/company/investor.
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three Months Ended |
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September 26, |
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June 27, |
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September 27, |
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2015 |
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2015 |
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2014 |
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(in thousands, except per share data) |
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Net revenues |
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$ 562,510 |
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$ 582,517 |
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$ 580,275 |
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Cost of goods sold (1) |
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276,159 |
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278,816 |
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241,454 |
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Gross margin |
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286,351 |
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303,701 |
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338,821 |
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Operating expenses: |
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Research and development |
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121,392 |
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121,552 |
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140,362 |
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Selling, general and administrative |
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71,995 |
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72,532 |
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79,989 |
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Intangible asset amortization |
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3,591 |
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3,618 |
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4,327 |
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Impairment of long-lived assets (2) |
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157,697 |
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549 |
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10,226 |
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Severance and restructuring expenses (3) |
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7,126 |
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12,798 |
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1,385 |
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Other operating expenses (income), net (4) |
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315 |
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(2,296) |
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1,574 |
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Total operating expenses (income), net |
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362,116 |
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208,753 |
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237,863 |
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Operating income (loss) |
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(75,765) |
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94,948 |
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100,958 |
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Interest and other income (expense), net (5) |
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(6,402) |
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28,500 |
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(6,477) |
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Income (loss) before provision for income taxes (6) |
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(82,167) |
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123,448 |
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94,481 |
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Provision (benefit) for income taxes (6) |
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(10,024) |
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24,789 |
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(5,499) |
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Net income (loss) |
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$ (72,143) |
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$ 98,659 |
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$ 99,980 |
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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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$ 0.35 |
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Diluted |
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$ (0.25) |
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$ 0.34 |
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$ 0.35 |
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Shares used in the calculation of earnings (loss) per share: |
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Basic |
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284,588 |
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284,202 |
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284,086 |
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Diluted |
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284,588 |
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289,346 |
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289,430 |
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Dividends paid per share |
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$ 0.30 |
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$ 0.28 |
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$ 0.28 |
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SCHEDULE OF SPECIAL ITEMS |
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(Unaudited) |
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Three Months Ended |
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September 26, |
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June 27, |
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September 27, |
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2015 |
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2015 |
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2014 |
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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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$ 16,638 |
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$ 18,116 |
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$ 18,750 |
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Accelerated depreciation (1) |
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43,631 |
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32,765 |
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- |
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Total |
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$ 60,269 |
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$ 50,881 |
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$ 18,750 |
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Operating expenses: |
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Intangible asset amortization |
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$ 3,591 |
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$ 3,618 |
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$ 4,327 |
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Impairment of long-lived assets (2) |
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157,697 |
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549 |
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10,226 |
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Severance and restructuring (3) |
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7,126 |
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12,798 |
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1,385 |
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Other operating expenses (income), net (4) |
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315 |
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(2,296) |
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1,574 |
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Total |
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$ 168,729 |
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$ 14,669 |
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$ 17,512 |
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Interest and other expense (income), net (5) |
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$ (109) |
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$ (35,849) |
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$ - |
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Total |
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$ (109) |
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$ (35,849) |
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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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$ - |
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$ (21,747) |
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Total |
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$ - |
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$ - |
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$ (21,747) |
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(1) |
Building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities. |
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(2) |
Includes impairment charges related to the San Antonio wafer manufacturing facility, and other impairment of wafer manufacturing equipment, end of line test equipment, and software. |
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(3) |
Includes severance charges associated with several reorganizations, primarily various business units and manufacturing operations. |
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(4) |
Other operating expenses (income), net are primarily for loss (gain) relating to sale of assets, and expected loss on lease abandonment. |
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(5) |
Includes sale of a business and impairment of investments in privately-held companies. |
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(6) |
Includes reversal of tax reserves related to the favorable settlement of a foreign tax issue. |
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