- Revenue: $566 million
(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $566 million for its fourth quarter of fiscal 2016 ended June 25, 2016, a 2% increase from the $555 million revenue recorded in the prior quarter, and a 3% decrease from the same quarter of last year.
Tunc Doluca, President and Chief Executive Officer, commented, "In our June quarter, we surpassed the $100 million dollar quarterly revenue mark in Automotive, and the business grew 30% over the same quarter last year. Through solid execution on our manufacturing transformation, we achieved 64% gross margin and met a key milestone by exceeding 30% operating margin in the quarter." Mr. Doluca continued, "We are confident in our ability to continue improving profitability, drive free cash flow growth, and maintain leadership in the return of cash to shareholders. As a result, we announced a 10% increase in our dividend."
Fiscal Year 2016 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was a $0.32 profit. The results were affected by pre-tax special items which primarily consisted of $42 million in charges related to acquisitions, and $14 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.49. 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 2016, total cash, cash equivalents and short term investments were $2.23 billion, an increase of $370 million from the prior quarter. Notable items included:
- Cash flow from operations: $254 million
- Proceeds from term loan: $250 million
- Capital expenditures: $22 million
- Proceeds from asset sales: $35 million
- Dividends: $85 million ($0.30 per share)
- Stock repurchases: $90 million
Business Outlook
The Company's 90-day backlog at the beginning of the September 2016 quarter was $363 million. Based on the beginning backlog and expected turns, results for the September 2016 quarter are expected to be as follows:
- Revenue: $540 million to $580 million
- Gross Margin: 61% to 63% GAAP (63% to 65% excluding special items)
- EPS: $0.40 to $0.46 GAAP ($0.44 to $0.50 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 $0.33 per share will be paid on September 1, 2016, to stockholders of record on August 18, 2016. This represents a 10% increase in the dividend compared to the prior quarter.
Conference Call
Maxim Integrated has scheduled a conference call on July 21 at 2:00 p.m. Pacific Time to discuss its financial results for the fourth 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
investor.maximintegrated.com.
A presentation summarizing financial information to be discussed on the conference call is posted at investor.maximintegrated.com.
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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Three Months Ended |
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Year Ended |
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June 25, |
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March 26, |
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June 27, |
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June 25, |
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June 27, |
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2016 |
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2016 |
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2015 |
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2016 |
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2015 |
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(in thousands, except per share data) |
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Net revenues |
$ 566,126 |
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$ 555,252 |
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$ 582,517 |
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$ 2,194,719 |
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$ 2,306,864 |
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Cost of goods sold (1) (2) |
219,099 |
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236,411 |
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278,816 |
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950,331 |
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1,034,997 |
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Gross margin |
347,027 |
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318,841 |
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303,701 |
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1,244,388 |
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1,271,867 |
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Operating expenses: |
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Research and development |
113,491 |
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119,178 |
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121,552 |
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467,161 |
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521,772 |
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Selling, general and administrative |
71,483 |
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71,778 |
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72,532 |
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288,899 |
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308,065 |
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Intangible asset amortization |
2,538 |
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2,538 |
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3,618 |
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12,205 |
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16,077 |
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Impairment of long-lived assets (3) |
429 |
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506 |
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549 |
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160,582 |
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67,042 |
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Impairment of goodwill and intangible assets |
27,602 |
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- |
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- |
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27,602 |
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93,010 |
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Severance and restructuring expenses |
4,149 |
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2,552 |
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12,798 |
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24,479 |
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30,642 |
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Other operating expenses (income), net (4) |
4,962 |
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(55,419) |
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(2,296) |
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(50,389) |
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(2,021) |
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Total operating expenses (income), net |
224,654 |
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141,133 |
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208,753 |
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930,539 |
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1,034,587 |
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Operating income (loss) |
122,373 |
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177,708 |
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94,948 |
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313,849 |
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237,280 |
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Interest and other income (expense), net (5) |
(6,427) |
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(6,373) |
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28,500 |
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(28,795) |
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8,890 |
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Income (loss) before provision for income taxes |
115,946 |
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171,335 |
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123,448 |
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285,054 |
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246,170 |
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Income tax provision (benefit) |
23,607 |
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31,525 |
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24,789 |
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57,579 |
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40,132 |
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Net income (loss) |
$ 92,339 |
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$ 139,810 |
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$ 98,659 |
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$ 227,475 |
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$ 206,038 |
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Earnings (loss) per share: |
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Basic |
$ 0.32 |
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$ 0.49 |
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$ 0.35 |
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$ 0.80 |
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$ 0.73 |
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Diluted |
$ 0.32 |
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$ 0.48 |
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$ 0.34 |
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$ 0.79 |
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$ 0.71 |
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Shares used in the calculation of earnings (loss) per share: |
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Basic |
284,354 |
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285,854 |
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284,202 |
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285,081 |
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283,675 |
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Diluted |
288,544 |
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289,783 |
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289,346 |
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289,479 |
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288,949 |
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Dividends paid per share |
$ 0.30 |
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$ 0.30 |
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$ 0.28 |
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$ 1.20 |
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$ 1.12 |
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SCHEDULE OF SPECIAL ITEMS |
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(Unaudited) |
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Three Months Ended |
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Year Ended |
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June 25, |
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March 26, |
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June 27, |
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June 25, |
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June 27, |
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2016 |
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2016 |
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2015 |
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2016 |
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2015 |
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(in thousands) |
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Cost of goods sold: |
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Intangible asset amortization |
$ 11,829 |
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$ 11,829 |
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$ 18,116 |
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$ 55,030 |
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$ 74,366 |
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Accelerated depreciation (1) |
4,098 |
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4,066 |
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32,765 |
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53,827 |
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51,494 |
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Other cost of goods sold (2) |
- |
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6,123 |
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- |
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6,123 |
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- |
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Total |
$ 15,927 |
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$ 22,018 |
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$ 50,881 |
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$ 114,980 |
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$ 125,860 |
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Operating expenses: |
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Intangible asset amortization |
$ 2,538 |
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$ 2,538 |
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$ 3,618 |
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$ 12,205 |
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$ 16,077 |
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Impairment of long-lived assets (3) |
429 |
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506 |
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549 |
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160,582 |
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67,042 |
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Impairment of goodwill and intangible assets |
27,602 |
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- |
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- |
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27,602 |
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93,010 |
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Servance and restructuring |
4,149 |
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2,552 |
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12,798 |
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24,479 |
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30,642 |
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Other operating expenses (income), net (4) |
4,962 |
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(55,419) |
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(2,296) |
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(50,389) |
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(2,021) |
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Total |
$ 39,680 |
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$ (49,823) |
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$ 14,669 |
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$ 174,479 |
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$ 204,750 |
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Interest and other expense (income), net (5) |
$ (247) |
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$ (45) |
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$ (35,849) |
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$ 194 |
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$ (36,066) |
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Total |
$ (247) |
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$ (45) |
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$ (35,849) |
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$ 194 |
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$ (36,066) |
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Income tax provision (benefit) |
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Reversal of tax reserves (6) |
$ - |
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$ - |
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$ - |
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$ - |
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$ (21,747) |
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Fiscal year 2015 & 2014 research & development tax credits |
- |
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- |
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- |
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(2,475) |
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(2,863) |
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Total |
$ - |
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$ - |
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$ - |
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$ (2,475) |
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$ (24,610) |
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(1) Includes building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities. |
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(2) Includes expense related to patent license settlement. |
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(3) Includes impairment charges relating to the San Antonio wafer manufacturing facility and other wafer manufacturing equipment, end of line test equipment, and software. |
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(4) Includes gain on sale of energy metering business during the third quarter of fiscal year 2016, loss (gain) relating to sale of assets, and expected loss on lease abandonment. |
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(5) Includes sale of a business and impairment of investment in privately-held companies. |
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(6) Reversal of tax reserves related to the favorable settlement of a foreign tax issue. |
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