- Q3 Revenue: $509 million
- Gross Margin: 60.7%
- GAAP earnings per share: $0.21 (after $0.06 special expense items)
- Cash flow from operations: $164 million
- Cash, cash equivalents, and short term investments: $859 million
- Dividend per share: $0.20
- Fiscal fourth quarter revenue outlook: $550 million - $570 million
- Agreed to acquire Teridian, a leading Smart Meter system-on-chip supplier
SUNNYVALE, Calif., April 29, 2010 (GLOBE NEWSWIRE) -- Maxim Integrated Products, Inc. (Nasdaq:MXIM) reported net revenue of $508.9million for its fiscal 2010 third quarter ended March 27, 2010, a 7.5% increase over the $473.5 million revenue recorded in the prior quarter.
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share was $0.21. The results were reduced by certain pre-tax and tax related special items which primarily consist of:
- $14.0 million additional tax provision due to international restructuring
- $3.9 million pre-tax expense, primarily for ongoing stock option litigation
Special expense items reduced earnings per share by $0.06. In the prior quarter special expense items reduced earnings per share by $0.05.
Cash Flow Items
Cash flow from operations was $164.5 million. Total cash, cash equivalents and short term investments was $858.9 million as of March 27, 2010, an increase of $20.3 million during the third quarter. Key items include:
- $58.2 million in income taxes
- $25.5 million in net payments for property and equipment
- $60.9 million for cash dividends
- $49.1 million for share repurchases
Business Outlook
Maxim's third quarter bookings increased by 43% compared to the second quarter of fiscal 2010. The increase is partly due to customers placing orders with longer lead times. Excluding the effect of lead time extension, sequential bookings would have increased by 21% in the March quarter. The Company's 90 day backlog increased by 44% to $480 million. Results for the June quarter, excluding the Teridian acquisition, are expected to be:
- Revenue: $550 million - $570 million
- Gross Margin: 60% - 62%
- Operating expenses: $188 - $192 million
Tunc Doluca, President and Chief Executive Officer, commented, "During the March quarter, we had solid demand growth from all four major markets and, in fact, from all 22 equipment segments. Our customers' confidence firmed up, rebounding from last year's uncertainty. As a result of our emphasis on innovative products as well as our highly-integrated solutions, we secured many new design wins during the past year. Consequently, we are projecting record revenues in the June quarter."
Mr. Doluca continued, "The Teridian acquisition will firmly position Maxim as a market leader in the secular growth of Smart Meter and Smart Grid deployment worldwide. We are excited to add Teridian's world class employees, innovative products, and strong customer relationships."
Dividend
A cash dividend for the third quarter of fiscal 2010 of $0.20 per share will be paid on June 4, 2010, to stockholders of record on May 21, 2010.
Conference Call
Maxim has scheduled a conference call on April 29, 2010, at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter of fiscal year 2010 and its business outlook. To listen via telephone, dial (866) 802-4364 (toll free) or (703) 639-1325. 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 | |||
| (Unaudited) | |||
| Three Months Ended | |||
| March 27, | December 26, | March 28, | |
| 2010 | 2009 | 2009 | |
| (in thousands, except per share data) | |||
| Net revenues | $ 508,880 | $ 473,515 | $ 339,665 |
| Cost of goods sold (1,2) | 200,177 | 181,727 | 171,960 |
| Gross margin | 308,703 | 291,788 | 167,705 |
| Operating expenses: | |||
| Research and development (1) | 117,100 | 118,367 | 120,974 |
| Selling, general and administrative (1) | 62,943 | 61,308 | 48,760 |
| Severance and restructuring | (625) | 2,063 | 10,956 |
| Other operating expense, net (3) | 4,546 | 921 | 3,969 |
| Total operating expenses | 183,964 | 182,659 | 184,659 |
| Operating income (loss) | 124,739 | 109,129 | (16,954) |
| Interest income and other, net | 644 | 3,630 | (228) |
| Income (loss) before provision for income taxes | 125,383 | 112,759 | (17,182) |
| Provision for income taxes (4) | 59,626 | 54,124 | 9,244 |
| Net income (loss) | $ 65,757 | $ 58,635 | $ (26,426) |
| Earnings (loss) per share: | |||
| Basic | $ 0.22 | $ 0.19 | $ (0.09) |
| Diluted | $ 0.21 | $ 0.19 | $ (0.09) |
| Shares used in the calculation of earnings (loss) per share: | |||
| Basic | 304,518 | 305,324 | 304,415 |
| Diluted | 309,445 | 310,090 | 304,415 |
| Dividends declared per share | $ 0.200 | $ 0.200 | $ 0.200 |
| SCHEDULE OF STOCK BASED COMPENSATION EXPENSES | |||
| (Unaudited) | |||
| Three Months Ended | |||
| March 27, | December 26, | March 28, | |
| 2010 | 2009 | 2009 | |
| (in thousands) | |||
| Cost of goods sold | $ 1,071 | $ 5,265 | $ 7,574 |
| Research and development | 8,691 | 14,650 | 25,194 |
| Selling, general and administrative | 5,517 | 7,018 | 6,845 |
| Total | $ 15,279 | $ 26,933 | $ 39,613 |
| SCHEDULE OF SPECIAL EXPENSE ITEMS | |||
| (Unaudited) | |||
| Three Months Ended | |||
| March 27, | December 26, | March 28, | |
| 2010 | 2009 | 2009 | |
| (in thousands) | |||
| Cost of goods sold: | |||
| Accelerated depreciation (2) | $ -- | $ -- | $ 12,372 |
| Total | $ -- | $ -- | $ 12,372 |
| Operating expenses: | |||
| Severance and restructuring | $ (625) | $ 2,063 | $ 10,956 |
| Other operating expense, net (3) | 4,546 | 921 | 3,969 |
| Total | $ 3,921 | $ 2,984 | $ 14,925 |
| Provision for income taxes: | |||
| International restructuring (4) | $ 14,021 | $ 13,758 | $ 9,200 |
| Interest income and other, net | |||
| Other income (5) | $ -- | $ 1,220 | $ -- |
| (1) Includes stock-based compensation charges as shown in the Schedule of Stock Based Compensation Expenses. | |||
| (2) Includes accelerated depreciation primarily related to long-lived assets resulting from the closure of the Dallas fab facility. | |||
| (3) (Income) expenses, net, primarily for stock option related litigation and certain payroll taxes, interest and penalties. | |||
| (4) Provision for income taxes includes tax provision impact due to international restructuring. | |||
| (5) Impact of investments obtained in exchange for intellectual property. | |||
| STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands) | ||||
| (Unaudited) | ||||
| Three Months Ended March 27, 2010 | Stock Options | Restricted Stock Units | Employee Stock Purchase Plan | Total |
| Cost of goods sold | $ 232 | $ 586 | $ 253 | $ 1,071 |
| Research and development expense | 1,318 | 6,038 | 1,335 | 8,691 |
| Selling, general and administrative expense | 1,194 | 3,993 | 330 | 5,517 |
| Total | $ 2,744 | $ 10,617 | $ 1,918 | $ 15,279 |
| Three Months Ended December 26, 2009 | Stock Options | Restricted Stock Units | Employee Stock Purchase Plan | Total |
| Cost of goods sold | $ 401 | $ 4,730 | $ 134 | $ 5,265 |
| Research and development expense | 3,625 | 9,821 | 1,204 | 14,650 |
| Selling, general and administrative expense | 2,273 | 4,454 | 291 | 7,018 |
| Total | $ 6,299 | $ 19,005 | $ 1,629 | $ 26,933 |
| Three Months Ended March 28, 2009 | Stock Options | Restricted Stock Units | Employee Stock Purchase Plan | Total |
| Cost of goods sold | $ 1,881 | $ 5,579 | $ 114 | $ 7,574 |
| Research and development expense | 3,773 | 20,975 | 446 | 25,194 |
| Selling, general and administrative expense | 1,910 | 4,899 | 36 | 6,845 |
| Total | $ 7,564 | $ 31,453 | $ 596 | $ 39,613 |
| CONSOLIDATED BALANCE SHEETS | ||
| (Unaudited) | ||
| March 27, | June 27, | |
| 2010 | 2009 | |
| (in thousands) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 758,436 | $ 709,348 |
| Short-term investments | 100,425 | 204,055 |
| Total cash, cash equivalents and short-term investments | 858,861 | 913,403 |
| Accounts receivable, net | 297,352 | 207,807 |
| Inventories | 190,589 | 217,847 |
| Income tax refund receivable | 5,247 | 13,072 |
| Deferred tax assets | 184,277 | 211,879 |
| Other current assets | 23,091 | 20,943 |
| Total current assets | 1,559,417 | 1,584,951 |
| Property, plant and equipment, net | 1,325,348 | 1,366,052 |
| Other assets | 120,575 | 130,772 |
| TOTAL ASSETS | $ 3,005,340 | $ 3,081,775 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 79,351 | $ 70,087 |
| Income taxes payable | 921 | 2,140 |
| Accrued salary and related expenses | 163,661 | 141,334 |
| Accrued expenses | 34,572 | 38,455 |
| Deferred income on shipments to distributors | 21,105 | 16,760 |
| Total current liabilities | 299,610 | 268,776 |
| Other liabilities | 24,591 | 26,398 |
| Income taxes payable | 100,184 | 124,863 |
| Deferred tax liabilities | 76,173 | 67,273 |
| Total liabilities | 500,558 | 487,310 |
| Stockholders' equity: | ||
| Common stock | 303 | 21,511 |
| Retained earnings | 2,514,832 | 2,580,610 |
| Accumulated other comprehensive loss | (10,353) | (7,656) |
| Total stockholders' equity | 2,504,782 | 2,594,465 |
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 3,005,340 | $ 3,081,775 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
| (Unaudited) | |||
| Three Months Ended | |||
| March 27, | December 26, | March 28, | |
| 2010 | 2009 | 2009 | |
| (in thousands) | |||
| Cash flows from operating activities: | |||
| Net income (loss) | $ 65,757 | $ 58,635 | $ (26,426) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
| Stock-based compensation | 15,279 | 26,933 | 39,613 |
| Depreciation and amortization | 40,810 | 39,832 | 51,236 |
| Deferred taxes | 9,041 | 8,594 | 41,055 |
| Tax shortfall related to stock-based compensation | (2,040) | (5,796) | (55,260) |
| Other | (2,067) | (1,522) | 405 |
| Changes in assets and liabilities: | |||
| Accounts receivable | (16,257) | (52,279) | 17,815 |
| Inventories | 5,208 | (5,522) | 13,291 |
| Other current assets | 896 | (1,700) | 35,224 |
| Accounts payable | 15,388 | 14,248 | (7,906) |
| Income taxes payable | (718) | (50,565) | 1,192 |
| Deferred income on shipments to distributors | 2,878 | (537) | (2,587) |
| Accrued liabilities - goodwill and tender offer payments above fair value | (171) | (540) | (1,294) |
| All other accrued liabilities | 30,473 | 1,180 | (393) |
| Net cash provided by operating activities | 164,477 | 30,961 | 105,965 |
| Cash flows from investing activities: | |||
| Payments for property, plant and equipment | (25,482) | (28,289) | (35,997) |
| Acquisition | -- | -- | (30,700) |
| Proceeds from sales/maturities of available-for-sale securities | -- | -- | 2,438 |
| Other | (1,485) | 1,109 | 727 |
| Net cash used in investing activities | (26,967) | (27,180) | (63,532) |
| Cash flows from financing activities: | |||
| Dividends paid | (60,949) | (61,017) | (60,961) |
| Repayment of notes payable | -- | -- | (1,154) |
| Repurchase of common stock | (49,146) | (46,901) | -- |
| Issuance of ESPP | -- | 10,703 | -- |
| Issuance of common stock | (7,860) | (6,795) | (4,777) |
| Other | 1,359 | 1,722 | (916) |
| Net cash used in financing activities | (116,596) | (102,288) | (67,808) |
| Net increase (decrease) in cash and cash equivalents | 20,914 | (98,507) | (25,375) |
| Cash and cash equivalents: | |||
| Beginning of period | 737,522 | 836,029 | 718,200 |
| End of period | $ 758,436 | $ 737,522 | $ 692,825 |
| Total cash, cash equivalents, and short-term investments | $ 858,861 | $ 838,560 | $ 898,299 |
"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 fourth quarter of fiscal 2010 ending in June 2010, which includes revenue, gross margin and operating expenses projections, as well as the Company's projection for record revenues in June quarter. 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 27, 2009 and Quarterly Report on Form 10-Q for the fiscal quarter ended December 26, 2009.
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 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 6,300 products serving the industrial, communications, consumer, and computing markets.
Maxim reported revenue in excess of $1.6 billion for fiscal 2009. A Fortune 1000 company, Maxim is included in the Nasdaq 100, the Russell 1000, and the MSCI USA indices. For more information, go to www.maxim-ic.com.
The Maxim Integrated Products, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5753