- Revenue: $511 million
(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $511 million for its second quarter of fiscal 2016 ended December 26, 2015, a 9% decrease from the $563 million revenue recorded in the prior quarter, and a 10% decrease from the same quarter of last year.
Tunc Doluca, President and Chief Executive Officer, commented, "Our second quarter financial performance was in line with our expectations, and we achieved several milestones in our $180 million cost reduction plan. " Mr. Doluca continued, "In our March quarter, we expect continued growth in Automotive, a sequential increase in our Communications & Data Center and Consumer businesses and a seasonal uptick in Industrial. Long term, Maxim's strong technology franchise in power management positions us well for growth."
Fiscal Year 2016 Second Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the December quarter was a $0.23 profit. The results were affected by pre-tax special items which primarily consisted of $18 million in charges related to acquisitions and $13 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.32. 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 2016, total cash, cash equivalents and short term investments were $1.77 billion, an increase of $165 million from the prior quarter. Notable items included:
- Cash flow from operations: $182 million
- Capital expenditures: $14 million
- Proceeds from asset sales: $50 million
- Dividends: $86 million ($0.30 per share)
- Stock repurchases: $23 million
Business Outlook
The Company's 90-day backlog at the beginning of the third fiscal quarter of 2016 was $329 million. Based on the beginning backlog and expected turns, results for the March 2016 quarter are expected to be as follows:
- Revenue: $535 million to $575 million
- Gross Margin: 57% to 60% GAAP (60% to 63% excluding special items)
- EPS: $0.35 to $0.41 GAAP ($0.38 to $0.44 excluding special items)
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 $0.30 per share will be paid on March 3, 2016, to stockholders of record on February 18, 2016.
Conference Call
Maxim Integrated has scheduled a conference call on January 21st, at 2:00 p.m. Pacific Time to discuss its financial results for the second quarter of fiscal 2016 and its business outlook. To listen via telephone, dial (866) 802-4305 (toll free) or (703) 639-1317. This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com/company/investor.
A presentation summarizing financial information to be discussed on the conference call is posted at www.maximintegrated.com/company/investor.
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three Months Ended |
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December 26, |
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September 26, |
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December 27, |
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2015 |
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2015 |
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2014 |
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(in thousands, except per share data) |
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Net revenues |
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$ 510,831 |
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$ 562,510 |
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$ 566,809 |
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Cost of goods sold (1) |
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218,662 |
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276,159 |
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252,732 |
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Gross margin |
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292,169 |
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286,351 |
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314,077 |
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Operating expenses: |
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Research and development |
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113,100 |
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121,392 |
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135,945 |
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Selling, general and administrative |
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73,643 |
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71,995 |
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79,778 |
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Intangible asset amortization |
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3,538 |
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3,591 |
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4,155 |
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Impairment of long-lived assets (2) |
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1,950 |
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157,697 |
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50,745 |
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Impairment of goodwill and intangible assets (3) |
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- |
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- |
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93,010 |
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Severance and restructuring expenses (4) |
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10,652 |
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7,126 |
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13,635 |
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Other operating expenses (income), net |
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(247) |
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315 |
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885 |
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Total operating expenses (income), net |
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202,636 |
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362,116 |
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378,153 |
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Operating income (loss) |
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89,533 |
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(75,765) |
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(64,076) |
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Interest and other income (expense), net |
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(9,593) |
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(6,402) |
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(7,599) |
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Income (loss) before provision for income taxes |
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79,940 |
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(82,167) |
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(71,675) |
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Income tax provision (benefit) |
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12,471 |
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(10,024) |
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359 |
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Net income (loss) |
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$ 67,469 |
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$ (72,143) |
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$ (72,034) |
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Earnings (loss) per share: |
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Basic |
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$ 0.24 |
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$ (0.25) |
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$ (0.25) |
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Diluted |
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$ 0.23 |
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$ (0.25) |
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$ (0.25) |
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Shares used in the calculation of earnings (loss) per share: |
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Basic |
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285,526 |
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284,588 |
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282,992 |
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Diluted |
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290,521 |
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284,588 |
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282,992 |
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Dividends paid per share |
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$ 0.30 |
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$ 0.30 |
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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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December 26, |
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September 26, |
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December 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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$ 14,734 |
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$ 16,638 |
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$ 18,750 |
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Accelerated depreciation (1) |
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2,032 |
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43,631 |
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8,895 |
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Total |
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$ 16,766 |
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$ 60,269 |
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$ 27,645 |
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Operating expenses: |
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Intangible asset amortization |
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$ 3,538 |
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$ 3,591 |
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$ 4,155 |
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Impairment of long-lived assets (2) |
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1,950 |
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157,697 |
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50,745 |
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Impairment of goodwill and intangible assets (3) |
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- |
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- |
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93,010 |
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Severance and restructuring (4) |
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10,652 |
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7,126 |
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13,635 |
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Other operating expenses (income), net |
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(247) |
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315 |
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885 |
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Total |
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$ 15,893 |
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$ 168,729 |
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$ 162,430 |
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Interest and other expense (income), net |
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$ 595 |
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$ (109) |
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$ (217) |
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Total |
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$ 595 |
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$ (109) |
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$ (217) |
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Income tax provision (benefit) : |
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Fiscal year 2015 & 2014 research & development tax credits |
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$ (2,475) |
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$ - |
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$ (2,863) |
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Total |
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$ (2,475) |
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$ - |
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$ (2,863) |
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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, MEMS wafer manufacturing equipment, end of line test equipment and certain research and development 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 several reorganizations, primarily various business units and manufacturing operations. |
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