Maxim Integrated Reports Results For The Second Quarter Of Fiscal 2016

- 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.

Logo for Maxim Integrated Products Inc.

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.











CONSOLIDATED STATEMENTS OF INCOME



(Unaudited)





Three Months Ended





December 26, 


September 26, 


December 27, 





2015


2015


2014





(in thousands, except per share data)



Net revenues


$        510,831


$         562,510


$        566,809



Cost of goods sold (1)


218,662


276,159


252,732



Gross margin


292,169


286,351


314,077



Operating expenses:









Research and development


113,100


121,392


135,945



Selling, general and administrative


73,643


71,995


79,778



Intangible asset amortization


3,538


3,591


4,155



Impairment of long-lived assets (2)


1,950


157,697


50,745



Impairment of goodwill and intangible assets (3)


-


-


93,010



Severance and restructuring expenses (4)


10,652


7,126


13,635



Other operating expenses (income), net


(247)


315


885



Total operating expenses (income), net


202,636


362,116


378,153



Operating income (loss)


89,533


(75,765)


(64,076)



Interest and other income (expense), net 


(9,593)


(6,402)


(7,599)



Income (loss) before provision for income taxes


79,940


(82,167)


(71,675)



Income tax provision (benefit) 


12,471


(10,024)


359



Net income (loss)


$          67,469


$         (72,143)


$        (72,034)












Earnings (loss) per share:









Basic


$              0.24


$             (0.25)


$            (0.25)



Diluted


$              0.23


$             (0.25)


$            (0.25)












Shares used in the calculation of earnings (loss) per share:









Basic


285,526


284,588


282,992



Diluted


290,521


284,588


282,992












Dividends paid per share


$              0.30


$               0.30


$              0.28





















SCHEDULE OF SPECIAL ITEMS



(Unaudited)





Three Months Ended





December 26, 


September 26, 


December 27, 





2015


2015


2014





(in thousands)



Cost of goods sold:









Intangible asset amortization


$          14,734


$           16,638


$          18,750



Accelerated depreciation (1)


2,032


43,631


8,895



  Total 


$          16,766


$           60,269


$          27,645












 Operating expenses: 









Intangible asset amortization


$            3,538


$             3,591


$            4,155



Impairment of long-lived assets (2)


1,950


157,697


50,745



Impairment of goodwill and intangible assets (3)


-


-


93,010



Severance and restructuring (4)


10,652


7,126


13,635



Other operating expenses (income), net 


(247)


315


885



  Total 


$          15,893


$         168,729


$        162,430












Interest and other expense (income), net 


$               595


$              (109)


$             (217)



 Total 


$               595


$              (109)


$             (217)












Income tax provision (benefit) :









 Fiscal year 2015 & 2014 research & development tax credits 


$          (2,475)


$                   -


$          (2,863)



  Total 


$          (2,475)


$                   -


$          (2,863)












(1) Building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities.



(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.



(3) Includes impairment of goodwill and write-off of in-process research and development related to MEMS business unit.



(4) Includes severance charges associated with several reorganizations, primarily various business units and manufacturing operations.






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