* Revenue: $410.7 million * GAAP Loss per share: $0.12 (including special expense items) * Special expense items reduced GAAP EPS by $0.26 * Special expense items: $125.9 million pre-tax * Cash flow from operations: $71.5 million * Share repurchase: $235.1 million * Dividend per share: $0.20
SUNNYVALE, Calif., Jan. 29, 2009 (GLOBE NEWSWIRE) -- Maxim Integrated Products, Inc. (Nasdaq:MXIM) reported net revenue of $410.7 million for its fiscal 2009 second quarter ending December 27, 2008, an 18% decline from the $501.2 million revenue recorded in the previous quarter.
Based on Generally Accepted Accounting Principles (GAAP), diluted loss per share was $0.12. The results include $125.9 million in special expense items which primarily consist of the following pre-tax expenses:
* $42.3 million for stock based compensation related to tendered and expiring options * $43.8 million for the impairment of end of line manufacturing assets * $13.6 million for severance and restructuring * $12.0 million for the accelerated depreciation related to the closure of Dallas wafer fabrication facilities
Balance Sheet Items
Cash flow from operations was $71.5 million after $28.1 million in payments for tendered and expiring options. Total cash, cash equivalents, and short-term investments decreased by $331.0 million during the second quarter to $925.5 million due to:
* $235.1 million to repurchase of 18.1 million shares of Maxim stock * $62.3 million for cash dividends * $42.6 million for tax payments for restricted stock units that vested during the restatement period and the second quarter of 2009. * $33.0 million for the acquisition of Mobilygen * $28.6 million in payments for property and equipment
Business Outlook
Maxim's fiscal second quarter net realizable bookings decreased by 34% compared to the first quarter of fiscal 2009 and the Company's 90 day backlog declined by 30% to $206 million. Results for the March quarter are projected to be:
In millions except
per share amounts Included in GAAP estimates:
---------------------------------------------------------------------
GAAP Special Expenses Stock Based Comp.
---------------------------------------------------------------------
Revenue $290 - $330
---------------------------------------------------------------------
Gross Margin 46% - 49% 4% 3%
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Operating Expenses $170 - $173 $3 - $4 $26 - $28
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Tunc Doluca, President and Chief Executive Officer, commented, "We finished our December quarter with a very cautious view of the global economy. Revenue as well as customer orders were weak across the board. While our recent review of our markets and customers indicates that bookings pace should improve this quarter, we nevertheless continue to manage expenses prudently. We are on schedule to complete our wafer fab consolidation project. This will improve our manufacturing efficiencies next fiscal year. Additionally, we took several measures to reduce our operating expenses."
"We have been investing in new technology, in our core product lines, and in new product lines both internally and through strategic acquisitions. We believe these investments will pay off in the long term. We expect to weather this storm with our cash flow from operations and strong balance sheet. This combination of cost controls and strategic investments will allow us to emerge from this slowdown stronger than we entered it."
Dividend
A cash dividend for the second quarter of fiscal 2009 of $0.20 per share will be paid on March 6, 2009, to stockholders of record on February 20, 2009.
Conference Call
Maxim has scheduled a conference call on January 29, 2009, at 2:00 p.m. Pacific Time to discuss its financial results for the second quarter of fiscal year 2009 and business outlook. To listen via telephone, dial (866) 814-8470 (toll free) or (703) 639-1369. This call will be webcast by Shareholder.com and can be accessed at Maxim's website at www.maxim-ic.com/Investor.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
-------------------------------
Dec. 27, Sept. 27, Dec. 29,
2008 2008 2007
-------- -------- --------
(in thousands,
except per share data)
Net revenues $410,675 $501,204 $540,025
Cost of goods sold (1) 211,590 209,654 204,320
-------- -------- --------
Gross profit 199,085 291,550 335,705
Operating expenses:
Research and development (1) 144,283 138,915 138,347
Selling, general and
administrative (1) 64,124 40,243 41,636
In-process research and
development (4) 3,900 -- --
Impairment of long-lived assets (5) 43,769 7,343 --
Severance and restructuring (6) 13,597 4,106 --
Other operating expenses, net (7) 10,252 7,358 15,145
-------- -------- --------
Total operating expenses 279,925 197,965 195,128
-------- -------- --------
Operating (loss) income (80,840) 93,585 140,577
Interest income and other, net 7,385 9,101 21,926
-------- -------- --------
(Loss) income before (benefit)
provision for income taxes (73,455) 102,686 162,503
(Benefit) provision for income taxes (34,671) 35,119 55,483
-------- -------- --------
Net (loss) income $(38,784) $ 67,567 $107,020
======== ======== ========
(Loss) earnings per share:
Basic $ (0.12) $ 0.21 $ 0.33
======== ======== ========
Diluted $ (0.12) $ 0.21 $ 0.33
======== ======== ========
Shares used in the calculation of
(loss) earnings per share:
Basic 312,718 320,553 320,553
======== ======== ========
Diluted 312,718 323,815 326,284
======== ======== ========
Dividends declared per share $ 0.200 $ 0.200 $ 0.188
======== ======== ========
(1) Includes stock-based compensation
charges as follows:
Three Months Ended
-------------------------------
Dec. 27, Sept. 27, Dec. 29,
2008 2008 2007
-------- -------- --------
(in thousands)
Cost of goods sold $ 30,834 $ 11,920 $ 11,668
Research and development 33,431 19,419 22,799
Selling, general and administrative 19,672 6,222 7,249
-------- -------- --------
Total $ 83,937 $ 37,561 $ 41,716
======== ======== ========
Total excluding $42,315 for
settlement of expiring options and
tender offer (3) $ 41,622 $ 37,561 $ 41,716
======== ======== ========
SCHEDULE OF SPECIAL EXPENSE ITEMS
Three Months Ended
-------------------------------
Dec. 27, Sept. 27, Dec. 29,
2008 2008 2007
-------- -------- --------
(in thousands)
Cost of Goods Sold:
Accelerated depreciation (2) $ 12,024 $ 11,329 $ --
Stock-based compensation (3) 15,433 -- --
-------- -------- --------
Total $ 27,457 $ 11,329 $ --
======== ======== ========
Operating Expenses:
In process research and
development (4) $ 3,900 $ -- $ --
Impairment of long-lived assets (5) 43,769 7,343 --
Severance and restructuring (6) 13,597 4,106 --
Other operating expenses, net (7) 10,252 7,358 15,145
Stock-based compensation (3) 26,882 -- --
-------- -------- --------
Total $ 98,400 $ 18,807 $ 15,145
======== ======== ========
(2) Accelerated depreciation primarily related to long-lived assets
resulting from the anticipated closure of the Dallas fab
facility.
(3) Stock-based compensation related to cash settlement of options
expiring in October 2008 and tender offer.
(4) In process research and development related to acquisition of
Mobilygen Corp.
(5) Impairment of long-lived assets related to end of line test
equipment recorded in connection with reduced demand.
(6) Severance and benefit expenses primarily related to the Business
Unit and Dallas Fab organizations.
(7) Expenses, net, primarily associated with the restatement of our
previously filed financial statements, private litigation and
other associated activities and certain payroll taxes, interest
and penalties.
CONSOLIDATED BALANCE SHEETS
December 27, June 28,
2008 2008
---------- ----------
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 718,200 $1,013,119
Short-term investments 207,259 205,079
---------- ----------
Total cash, cash equivalents and
short-term investments 925,459 1,218,198
---------- ----------
Accounts receivable, net 213,370 272,029
Inventories 251,661 272,421
Income tax refund receivable 73,096 14,411
Deferred tax assets 214,430 253,490
Other current assets 17,681 16,012
---------- ----------
Total current assets 1,695,697 2,046,561
Property, plant and equipment, net 1,404,233 1,485,200
Other assets 110,052 176,629
---------- ----------
TOTAL ASSETS $3,209,982 $3,708,390
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 81,657 $ 79,673
Income taxes payable 832 825
Accrued salary and related expenses 146,584 249,079
Accrued expenses 43,697 68,131
Deferred income on shipments
to distributors 20,597 21,447
---------- ----------
Total current liabilities 293,367 419,155
Other liabilities 27,625 30,791
Income taxes payable 113,107 110,633
Deferred tax liabilities 34,793 --
---------- ----------
Total liabilities 468,892 560,579
---------- ----------
Stockholders' equity:
Common stock 304 251,799
Retained earnings 2,742,567 2,901,139
Accumulated other comprehensive loss (1,781) (5,127)
---------- ----------
Total stockholders' equity 2,741,090 3,147,811
---------- ----------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $3,209,982 $3,708,390
========== ==========
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
----------------------------------
Dec. 27, Sept. 27, Dec. 29,
2008 2008 2007
---------- ---------- ----------
(in thousands)
Cash flows from operating
activities:
Net (loss) income $ (38,784) $ 67,567 $ 107,020
Adjustments to reconcile
net (loss) income to net cash
provided by operating activities:
Stock-based compensation 83,937 37,561 41,716
Depreciation and amortization 49,992 46,781 34,479
Deferred taxes 169,498 (924) 26,721
Tax benefit related to
stock-based compensation (150,144) 1,062 (3,621)
Excess tax benefit related to
stock-based compensation (409) (52) (464)
In-process research and
development 3,900 -- --
Impairment of long-lived assets 43,769 7,343 --
Loss (gain) from sale of property,
plant and equipment 1,187 700 (9,558)
Gain from sale of equity
investments (529) -- --
Changes in assets and liabilities:
Accounts receivable 55,476 3,460 (11,292)
Inventories 7,780 6,429 5,811
Other current assets (71,872) 11,146 (26,760)
Accounts payable (15,595) 15,471 (6,003)
Income taxes payable (19,022) 21,503 (49,457)
Deferred income on shipments
to distributors (712) (138) 523
Accrued liabilities - goodwill
and tender offer payments
above fair value (28,093) (8,948) (23,753)
All other accrued liabilities (18,865) (51,897) (20,045)
---------- ---------- ----------
Net cash provided by
operating activities 71,514 157,064 65,317
---------- ---------- ----------
Cash flows from investing
activities:
Payments for property, plant
and equipment (28,639) (37,995) (76,730)
Proceeds from sale of property,
plant, and equipment 625 322 14,158
Restricted cash -- -- (14,158)
Other non-current assets 1,960 (3,206) 17,096
Acquisition (30,310) -- (63,369)
Purchases of available-for-sale
securities (1,370) (1,370) (3,898)
Proceeds from sales/maturities
of available-for-sale securities 2,237 2,438 391,885
---------- ---------- ----------
Net cash (used in) provided by
investing activities (55,497) (39,811) 264,984
---------- ---------- ----------
Cash flows from financing
activities:
Excess tax benefit related to
stock-based compensation 409 52 464
Mortgage liability (10) (10) (10)
Goodwill payments on expiring
options and tender offer
payments (6,753) (4,997) (70,363)
Cash settlement of vested
restricted stock units -- (1,910) (835)
Payouts under the RSU
loan program (27,376) (8,202) (5,701)
Dividends paid (62,303) (64,111) (60,103)
Repayment of notes payable (2,673) -- --
Issuance of common stock (15,174) -- --
Common stock repurchases (235,131) -- --
---------- ---------- ----------
Net cash used in financing
activities (349,011) (79,178) (136,548)
---------- ---------- ----------
Net (decrease) increase in cash
and cash equivalents (332,994) 38,075 193,753
Cash and cash equivalents:
Beginning of period 1,051,194 1,013,119 813,673
---------- ---------- ----------
End of period $ 718,200 $1,051,194 $1,007,426
========== ========== ==========
Total cash, cash equivalents, and
short-term investments $ 925,459 $1,218,198 $1,154,801
========== ========== ==========
"Safe Harbor" Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include the Company's financial projections for its third quarter of fiscal 2009 ending in March, which includes revenue, gross margin, and operating expense projections; indications that bookings should improve in the current quarter based on the Company's recent review of its markets and customers; the Company's belief that its manufacturing efficiencies will continue to improve in the next fiscal year based upon the completion of its wafer fab consolidation project; the Company's belief that its investments in new technology, in its core product lines, and in new product lines both internally and through strategic acquisitions will pay off in the long term; the Company's expectation that it will weather the current economic storm with its cash flow from operations and strong balance sheet; and the Company's belief that the combination of cost controls and strategic investments will allow the Company to emerge from the current slowdown stronger than it entered it. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted based upon, among other things, general market and economic conditions and market developments that could adversely affect the growth of the mixed-signal analog market, product mix shifts, customer cancellations and price competition, as well as other risks described in the Company's Annual Report on Form 10-K for the fiscal year ended June 28, 2008.
All forward-looking statements included in this news release are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.
About Maxim
Maxim Integrated Products is a publicly traded company that designs, manufactures, and sells high-performance semiconductor products. The Company reported revenue in excess of $2 billion for fiscal 2008. Maxim was founded over 25 years ago with the mission to deliver innovative analog and mixed-signal engineering solutions that add value to its customers' products. To date, it has developed over 5900 products serving the industrial, communications, consumer, and computing markets. For more information, go to www.maxim-ic.com.
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