Maxim Integrated Reports Results For The Third Quarter Of Fiscal

Maxim Integrated Reports Results For The Third Quarter Of Fiscal 2019

- Revenue: $542 million

SAN JOSE, Calif., April 30, 2019 — (PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $542 million for its third quarter of fiscal 2019 ended March 30, 2019, a 6% decrease from the $577 million revenue recorded in the prior quarter, and a 16% decrease from the same quarter of last year.

Logo for Maxim Integrated Products Inc. (PRNewsfoto/Maxim Integrated)

Tunc Doluca, President and Chief Executive Officer, commented, "Our March quarter results met our expectations and end market demand appears to have stabilized. Looking ahead to the June quarter, we expect a return to seasonality in Industrial and Automotive, with both end markets trending up sequentially from the soft March quarter. Our profitability remains at industry-leading levels in this cycle due to our flexible manufacturing structure and overall business model."

Fiscal Year 2019 Third Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the March quarter was $0.47. The results were affected by $7 million in pre-tax special items which primarily consisted of charges related to acquisitions. GAAP earnings per share, excluding special items was $0.52. An analysis of GAAP versus GAAP excluding special items is provided in this press release.

Cash Flow Items
At the end of the third quarter of fiscal 2019, total cash, cash equivalents and short-term investments were $1.90 billion, a decrease of $62 million from the prior quarter.

Notable items included:

Cash flow from operations: $207 million
Capital expenditures: $21 million
Dividends paid: $126 million ($0.46 per share)
Stock repurchases: $117 million

Adjusted trailing twelve months free cash flow was $899 million, which excludes a one-time tax payment of $178 million in the fourth quarter of fiscal 2018. Free cash flow is a non-GAAP measure and is defined by cash flow from operations less capital expenditures.

Business Outlook
The Company's 90-day backlog at the beginning of the June 2019 quarter was $399 million. Based on the beginning backlog and expected turns, our results for the June 2019 quarter are forecasted to be as follows:

Revenue: $540 to $580 million
Gross Margin: 63% to 66% GAAP (64% to 67% excluding special items)
EPS: $0.53 to $0.59 GAAP ($0.54 to $0.60 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 $0.46 per share will be paid on June 14, 2019, to stockholders of record on May 30, 2019.

Conference Call
Maxim Integrated has scheduled a conference call on April 30 at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter of fiscal 2019 and its business outlook. 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.

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three Months Ended
	March 30, 2019		December 29, 2018		March 31, 2018
	(in thousands, except per share data)
Net revenues	$	542,383	$	576,906	$	648,599
Cost of goods sold	201,552		203,858		224,653
Gross margin	340,831		373,048		423,946
Operating expenses:
Research and development	107,075		110,303		114,390
Selling, general and administrative	74,116		77,853		81,304
Intangible asset amortization	756		756		876
Impairment of long-lived assets	—		753		—
Severance and restructuring expenses	1,744		1,179		2,272
Other operating expenses (income), net	—		—		266
Total operating expenses (income), net	183,691		190,844		199,108
Operating income (loss)	157,140		182,204		224,838
Interest and other income (expense), net	3,318		472		(2,534)
Income (loss) before provision for income taxes	160,458		182,676		222,304
Income tax provision (benefit)	29,845		50,784		28,677
Net income (loss)	$	130,613	$	131,892	$	193,627
Earnings (loss) per share:
Basic	$	0.48	$	0.48	$	0.69
Diluted	$	0.47	$	0.47	$	0.68
Shares used in the calculation of earnings (loss) per share:
Basic	273,221		276,252		280,850
Diluted	276,610		280,008		285,881
Dividends paid per share	$	0.46	$	0.46	$	0.42

SCHEDULE OF SPECIAL ITEMS
(Unaudited)
	Three Months Ended
	March 30, 2019		December 29, 2018		March 31, 2018
	(in thousands)
Cost of goods sold:
Intangible asset amortization	$	5,008	$	6,868	$	12,101
Total	$	5,008	$	6,868	$	12,101
Operating expenses:
Intangible asset amortization	756		$	756	$	876
Impairment of long-lived assets ⁽¹⁾	—		753		—
Severance and restructuring	1,744		1,179		2,272
Other operating expenses (income), net	—		—		266
Total	$	2,500	$	2,688	$	3,414
Interest and other expense (income), net	$	(857)	$	(351)	$	(97)
Total	$	(857)	$	(351)	$	(97)
Income tax provision (benefit):
Impact of U.S. tax legislation ⁽²⁾	$	(1,056)	$	22,082	$	—
Total	$	(1,056)	$	22,082	$	—

(1) Includes impairment of investments in privately-held companies and other equipment charges.
(2) Includes effect of U.S. tax legislation enacted on December 22, 2017.

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