Investor Relations

Maxim Integrated Reports Results for the Third Quarter of Fiscal 2015

April 23, 2015
  • Revenue: $577 million
  • Gross Margin: 54.6% GAAP (59.6% excluding special items)
  • EPS: $0.28 GAAP ($0.40 excluding special items)
  • Cash, cash equivalents, and short term investments: $1.47 billion
  • Fiscal fourth quarter revenue outlook: $570 million to $610 million

SAN JOSE, CA—April 23, 2015—Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $577 million for its third quarter of fiscal 2015 ended March 28, 2015, a 2% increase from the $567 million revenue recorded in the prior quarter, and a 5% decrease from the same quarter of last year.

Tunç Doluca, President and Chief Executive Officer, commented, "Our March quarter revenue performance was stronger than seasonal levels, but slightly below the midpoint of our expectations. During the quarter, we diversified our revenue base in Consumer and continued to strongly grow our Automotive business." Mr. Doluca continued, "We are exceeding our cost-saving goals, improving profitability while investing in growth areas for the future."

Fiscal Year 2015 Third Quarter Results

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the March quarter was $0.28. The results were affected by pre-tax special items which primarily consisted of $23 million in charges related to acquisitions and $17 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.40. 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 third quarter of fiscal 2015, total cash, cash equivalents and short term investments were $1.47 billion, an increase of $86 million from the prior quarter. Notable items included:

  • Cash flow from operations: $182 million
  • Net capital additions: $9 million
  • Dividends: $79 million ($0.28 per share)
  • Stock repurchases: $37 million

Business Outlook

The Company's 90-day backlog at the beginning of the fourth fiscal quarter of 2015 was $387 million. Based on the beginning backlog and expected turns, results for the June 2015 quarter are expected to be as follows:

  • Revenue: $570 million to $610 million
  • Gross Margin: 53% to 56% GAAP (58% to 61% excluding special items)
  • EPS: $0.24 to $0.30 GAAP ($0.35 to $0.41 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 $0.28 per share will be paid on June 4, 2015, to stockholders of record on May 21, 2015.

Conference Call

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

Non-GAAP Measures

To supplement the consolidated financial results prepared under GAAP, Maxim Integrated uses non-GAAP measures which are adjusted from the most directly comparable GAAP results to exclude special items related to intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; contingent consideration adjustments relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings; impairment of investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate Maxim Integrated's current performance. Many analysts covering Maxim Integrated use the non-GAAP measures as well. Given management's use of these non-GAAP measures, Maxim Integrated believes these measures are important to investors in understanding Maxim Integrated's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in Maxim Integrated's core business across different time periods. These non-GAAP measures are not in accordance with or an alternative to GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. The non-GAAP measures displayed in the table above include the following:

GAAP Gross Profit Excluding Special Items

The use of GAAP gross profit excluding special items allows management to evaluate the gross margin of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization, accelerated depreciation and acquisition-related inventory write-up. In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP gross profit excluding special items to enable investors and analysts to evaluate our revenue generation performance relative to the direct costs of revenue of Maxim Integrated's core businesses.

GAAP Operating Expenses Excluding Special Items

The use of GAAP operating expenses excluding special items allows management to evaluate the operating expenses of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related inventory write-up; impairment of long-lived assets; severance and restructuring; contingent consideration adjustments relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings. In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP operating expenses excluding special items to enable investors and analysts to evaluate our core business and its direct operating expenses.

GAAP Net Income and GAAP Net Income per Share Excluding Special Items

The use of GAAP net income and GAAP net income per share excluding special items allow management to evaluate the operating results of Maxim Integrated's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; contingent consideration adjustments relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings; impairment of investments in privately-held companies and tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense. In addition, they are important components of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP net income and GAAP net income per share excluding special items to enable investors and analysts to understand the results of operations of Maxim Integrated's core businesses and to compare our results of operations on a more consistent basis against that of other companies in our industry.

"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 business outlook and financial projections for its fourth quarter of fiscal 2015 ending in June 2015, which includes revenue, gross margin and earnings per share, as well as the belief that the Company is exceeding its cost-saving goals, improving profitability while investing in growth areas for the future. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted, based upon, among other things, general market and economic conditions, market developments that could adversely affect the growth of the mixed-signal analog market, product mix shifts, the loss of all or a substantial portion of our sales to one of our large customers, 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, 2014 (the "10-K") and Quarterly Reports on Form 10-Q filed after the 10-K.

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 except as required by law.

About Maxim Integrated

Maxim is the leader in analog integration. From mobile to industrial solutions, we're making analog smaller, smarter and more energy efficient. Learn more at www.maximintegrated.com.

Contact: Kathy Ta
Managing Director, Investor Relations
(408) 601-5697

Contact Investor Relations

Kathy Ta Vice President, Investor Relations 408-601-5697 Kathy.Ta@maximintegrated.com
Mike Chu Director, Investor Relations 408-601-3370 Michael.Chu@maximintegrated.com

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