Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2015; Increases Dividend By 7%

- Revenue: $583 million

(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $583 million for its fourth quarter of fiscal 2015 ended June 27, 2015, a 1% increase from the $577 million revenue recorded in the prior quarter, and a 9% decrease from the same quarter of last year.

Logo for Maxim Integrated Products Inc.

Tunc Doluca, President and Chief Executive Officer, commented, "In our June quarter, although revenue was slightly below our expectations, we exceeded our EPS guidance due to strong execution on our cost initiatives." Mr. Doluca continued, "This is a pivotal time for Maxim. We are transforming our manufacturing footprint to improve flexibility and profitability, and optimizing R&D and Sales to drive growth. Based on these initiatives, we now expect to achieve $180 million in annual, long-term savings compared to our fiscal fourth quarter 2015 run rate."

Fiscal Year 2015 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.34. The results were affected by pre-tax special items which primarily consisted of $46 million in charges related to restructuring activities, $22 million in charges related to acquisitions and $36 million in other income related to the gain on a divestiture. GAAP earnings per share, excluding special items was $0.43. 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 fourth quarter of fiscal 2015, total cash, cash equivalents and short term investments were $1.63 billion, an increase of $159 million from the prior quarter. Notable items included:

  • Cash flow from operations: $222 million
  • Net capital additions: $13 million
  • Dividends: $80 million ($0.28 per share)
  • Stock repurchases: $36 million

Business Outlook

The Company's 90-day backlog at the beginning of the first fiscal quarter of 2016 was $366 million. Based on the beginning backlog and expected turns, results for the September 2015 quarter are expected to be as follows:

  • Revenue: $545 million to $585 million
  • Gross Margin: 51% to 54% GAAP (60% to 63% excluding special items)
  • EPS: $0.22 to $0.28 GAAP ($0.38 to $0.44 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 September 3, 2015, to stockholders of record on August 20, 2015. This represents a 7% increase in the dividend compared to the prior quarter.

Conference Call
Maxim Integrated has scheduled a conference call on July 23, 2015, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth 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.

 















CONSOLIDATED STATEMENTS OF INCOME



(Unaudited)





Three Months Ended


Year Ended





June 27,


March 28,


June 28,


June 27,


June 28,





2015


2015


2014


2015


2014





(in thousands, except per share data)



Net revenues


$       582,517


$       577,263


$       642,467


$       2,306,864


$       2,453,663



Cost of goods sold (1)


278,816


261,995


273,507


1,034,997


1,068,898



        Gross margin


303,701


315,268


368,960


1,271,867


1,384,765



Operating expenses:













    Research and development 


121,552


123,913


143,802


521,772


558,168



    Selling, general and administrative 


72,532


75,766


83,153


308,065


324,734



    Intangible asset amortization 


3,618


3,977


4,423


16,077


17,690



    Impairment of long-lived assets (2)


549


5,522


6,447


67,042


11,644



    Impairment of goodwill and intangible assets (3)


-


-


-


93,010


2,580



    Severance and restructuring expenses (4)


12,798


2,824


5,790


30,642


24,902



    Acquisition-related costs


-


-


-


-


6,983



    Other operating expenses (income), net (5)


(2,296)


(2,184)


8,795


(2,021)


15,773



       Total operating expenses 


208,753


209,818


252,410


1,034,587


962,474



         Operating income


94,948


105,450


116,550


237,280


422,291



Interest and other income (expense), net (6)


28,500


(5,534)


(8,943)


8,890


(13,065)



Income before provision for income taxes


123,448


99,916


107,607


246,170


409,226



Provision (benefit) for income taxes


24,789


20,483


22,814


40,132


54,416



      Net income


$         98,659


$         79,433


$         84,793


$          206,038


$          354,810
















Earnings per share:













    Basic


$             0.35


$             0.28


$             0.30


$                0.73


$                1.25



    Diluted


$             0.34


$             0.28


$             0.29


$                0.71


$                1.23
















Shares used in the calculation of earnings per share: 













    Basic


284,202


283,418


283,431


283,675


283,344



    Diluted 


289,346


288,840


289,487


288,949


289,108
















Dividends paid per share 


$             0.28


$             0.28


$             0.26


$                1.12


$                1.04





























SCHEDULE OF SPECIAL ITEMS



(Unaudited)





Three Months Ended


Year Ended





June 27,


March 28,


June 28,


June 27,


June 28,





2015


2015


2014


2015


2014





(in thousands)



Cost of goods sold:













      Intangible asset amortization 


$         18,116


$         18,750


$         18,750


$            74,366


$            64,483



      Accelerated Depreciation (1)


32,765


9,834


-


51,494


-



      Acquisition-related inventory write-up 


-


-


371


-


18,955



 Total 


$         50,881


$         28,584


$         19,121


$          125,860


$            83,438
















 Operating expenses: 













      Intangible asset amortization


$           3,618


$           3,977


$           4,423


$            16,077


$            17,690



      Impairment of long-lived assets (2)


549


5,522


6,447


67,042


11,644



      Impairment of goodwill and intangible assets (3)


-


-


-


93,010


2,580



     Severance and restructuring (4) 


12,798


2,824


5,790


30,642


24,902



     Acquisition-related costs 


-


-


-


-


6,983



     Other operating expenses (income), net (5)


(2,296)


(2,184)


8,795


(2,021)


15,773



 Total 


$         14,669


$         10,139


$         25,455


$          204,750


$            79,572
















      Interest and other expense (income), net (6) 


$       (35,849)


$                  -


$           2,432


$          (36,066)


$              6,155



 Total 


$       (35,849)


$                  -


$           2,432


$          (36,066)


$              6,155
















Provision (benefit) for income taxes: 













     Fixed assets tax basis adjustment (7) 


$                  -


$                  -


$         (1,041)


$                      -


$          (35,603)



     Reversal of tax reserves (8) 


-


-


-


(21,747)


-



     Fiscal year 2014 research & development tax credits 


-


-


-


(2,863)


-



 Total 


$                  -


$                  -


$         (1,041)


$          (24,610)


$          (35,603)





























(1) Includes accelerated depreciation related to San Jose wafer manufacturing building and equipment.



(2) Includes impairment charges relating to wafer manufacturing equipment, end of line test equipment, and software.



(3) Impairment of goodwill and write-off of in-process research and development primarily related to MEMS business.



(4) Includes severance charges primarily associated with the reorganization of various business units and manufacturing operations.



(5) Other operating expenses (income), net are primarily for legal settlements, loss (gain) relating to sale of assets, and expected loss on lease abandonment.



(6) Includes sale of a business and impairment of investment in privately-held companies.



(7) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense.



(8) Reversal of tax reserves related to the favorable settlement of a foreign tax issue.






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