Investor Relations

Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2021

July 27, 2021
- Revenue: $720 million
- Gross Margin: 67.2% GAAP (67.7% excluding special items)
- EPS: $0.93 GAAP ($0.91 excluding special items)

SAN JOSE, Calif., July 27, 2021 /PRNewswire/ -- Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $720 million for its fourth quarter of fiscal 2021 ended June 26, 2021, an 8% increase from the $665 million revenue recorded in the prior quarter, and a 32% increase from the same quarter of last year.

"Maxim delivered record revenue in the June quarter, with sequential growth in all end markets, led by Industrial, Automotive, and Comms & Data Center. On the merger front, we are seeking final regulatory clearance for our combination with Analog Devices," said Tunc Doluca, President and Chief Executive Officer.

Fiscal Year 2021 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.93, which benefited from a $13 million tax reserve release. The results were affected by $6 million in pre-tax special items which primarily consisted of $4 million of expenses related to prior acquisitions and $2 million in charges related to our upcoming combination with Analog Devices. GAAP earnings per share, excluding special items was $0.91. An analysis of GAAP versus GAAP excluding special items is provided in this press release.

Cash Flow Items
At the end of the fourth quarter of fiscal 2021, total cash, cash equivalents and short-term investments were $2.3 billion, up $257 million from the prior quarter.

Notable items included:

  • Cash flow from operations: $280 million
  • Capital expenditures: $20 million

Trailing twelve months free cash flow was $859 million. Free cash flow is a non-GAAP measure and is defined by cash flow from operations less capital expenditures.

Dividend and Stock Repurchase
Per the terms of the Merger Agreement between the Company and Analog Devices, we will not declare a dividend that would have been paid in September 2021 and our stock repurchase program remains suspended.

Due to the pending merger with Analog Devices, Maxim Integrated will not be hosting a quarterly earnings conference call and has suspended the practice of providing forward-looking guidance. Investors are requested to review our Investor Relations website for the quarterly financial highlights and SEC filings for the latest updates on the pending transaction with Analog Devices. 














CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)















Three Months Ended


Year Ended




June 26, 2021


March 27, 2021


June 27, 2020


June 26, 2021


June 27, 2020




(in thousands, except per share data)



Net revenues

$         719,855


$             665,029


$         545,369


$      2,632,529


$      2,191,395



Cost of goods sold

235,830


222,144


183,001


872,183


758,743



Gross margin

484,025


442,885


362,368


1,760,346


1,432,652



Operating expenses:












Research and development

114,834


109,228


110,173


454,330


440,166



Selling, general and administrative

81,071


76,544


72,893


320,722


296,722



Intangible asset amortization

846


846


810


3,554


3,078



Severance and restructuring expenses

1,139


155


678


13,434


5,363



Other operating expenses (income), net

2,798


8,848


(173)


22,606


929



Total operating expenses

200,688


195,621


184,381


814,646


746,258



Operating income

283,337


247,264


177,987


945,700


686,394



Interest and other income (expense), net

(5,723)


(2)


(8,488)


(15,964)


(8,298)



Income before taxes

277,614


247,262


169,499


929,736


678,096



Provision for (benefit from) income taxes (1)(2)

23,875


27,199


(37,799)


102,475


23,402



Net income

$         253,739


$             220,063


$         207,298


$         827,261


$         654,694















Earnings per share:












Basic

$               0.95


$                   0.82


$               0.78


$               3.09


$               2.43



Diluted

$               0.93


$                   0.81


$               0.77


$               3.05


$               2.41















Shares used in the calculation of earnings per share:












Basic

268,160


267,892


266,639


267,546


269,341



Diluted

271,445


271,396


268,777


270,872


272,028















Dividends paid per share

$                   -


$                      -


$               0.48


$               0.48


$               1.92



























SCHEDULE OF SPECIAL ITEMS



(Unaudited)















Three Months Ended


Year Ended




June 26, 2021


March 27, 2021


June 27, 2020


June 26, 2021


June 27, 2020




(in thousands)



Cost of goods sold:












Intangible asset amortization

$             3,047


$                 4,430


$             3,528


$           17,408


$           12,860



Merger-related expenses(3)

-


-


-


2,394


-



Cost of COVID-19 response programs

609


638


1,591


2,750


3,616



 Total 

$             3,656


$                 5,068


$             5,119


$           22,552


$           16,476















 Operating expenses: 












Merger-related expenses(3)

$             2,058


$                 2,546


$                   -


$           26,617


$                   -



Intangible asset amortization

846


846


810


3,553


3,078



Severance and restructuring

1,139


155


678


13,434


5,363



Other operating expenses (income), net

831


6,302


(173)


7,436


928



 Total 

$             4,874


$                 9,849


$             1,315


$           51,040


$             9,369















Interest and other expense (income), net

$            (2,878)


$               (7,359)


$             1,484


$          (15,903)


$               (541)



 Total 

$            (2,878)


$               (7,359)


$             1,484


$          (15,903)


$               (541)















Provision for (benefit from) for income taxes:












Impact of U.S. tax legislation (1)

$                   -


$                      -


$             6,486


$                   -


$             6,486



Impact of income tax audit settlements (2)

-


-


(51,197)


-


(51,197)



 Total 

$                   -


$                      -


$          (44,711)


$                   -


$          (44,711)















(1) Includes effect of U.S. tax legislation enacted on December 22, 2017.



(2) Includes effect of income tax audit settlements.



(3) Includes ADI merger related expenses such as accelerated stock-based compensation expense resulting from the acceleration of certain RSAs and RSUs, and other legal and professional services.


 










CONSOLIDATED  BALANCE SHEETS



(Unaudited)




June 26, 2021


March 27, 2021


June 27, 2020




(in thousands)



ASSETS



Current assets:








Cash and cash equivalents

$      2,291,399


$          2,033,973


$      1,578,670



Short-term investments

-


-


35,536



Total cash, cash equivalents and short-term investments

2,291,399


2,033,973


1,614,206



Accounts receivable, net

658,829


571,042


404,778



Inventories

237,414


242,343


259,626



Other current assets

30,643


27,440


39,219



Total current assets

3,218,285


2,874,798


2,317,829



Property, plant and equipment, net

554,339


543,848


550,406



Intangible assets, net

66,998


70,891


87,959



Goodwill

562,540


562,541


562,540



Other assets

120,937


120,149


110,569



TOTAL ASSETS

$      4,523,099


$          4,172,227


$      3,629,303











LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:








Accounts payable

$         129,710


$             102,263


$           91,982



Price adjustment and other revenue reserves

259,411


214,366


148,916



Income taxes payable

49,568


53,694


43,457



Accrued salary and related expenses

150,656


128,553


126,751



Accrued expenses

47,967


35,627


42,228



Total current liabilities

637,312


534,503


453,334



Long-term debt

995,460


995,100


994,022



Income taxes payable

343,964


351,738


385,072



Other liabilities

130,423


141,721


139,418



Total liabilities

2,107,159


2,023,062


1,971,846











Stockholders' equity:








Common stock and capital in excess of par value

269


268


266



Additional paid-in capital

58,055


47,801


-



Retained earnings

2,370,900


2,117,161


1,671,786



Accumulated other comprehensive loss

(13,284)


(16,065)


(14,595)



Total stockholders' equity

2,415,940


2,149,165


1,657,457



TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$      4,523,099


$          4,172,227


$      3,629,303










 


CONSOLIDATED STATEMENTS OF CASH FLOWS



(Unaudited)




Three Months Ended


Year Ended




June 26, 2021


March 27, 2021


June 27, 2020


June 26, 2021


June 27, 2020




(in thousands, except per share data)



Cash flows from operating activities:












Net income

$         253,739


$             220,063


$         207,298


$         827,261


$         654,694



Adjustments to reconcile net income to net cash provided by operating activities:












Stock-based compensation

20,176


20,878


23,290


107,993


95,431



Depreciation and amortization

23,564


24,552


36,384


96,456


108,533



Deferred taxes

(4,047)


1,601


14,386


(5,331)


8,994



In Process Research and Development written-off

-


-


-


1,220


-



Loss from sale or disposal of property, plant and equipment

(611)


124


557


(260)


1,191



Fair value contingent consideration

-


5,835


-


5,835


-



Other adjustments

(95)


2,413


2,127


1,745


11,353



Changes in assets and liabilities:












Accounts receivable

(87,794)


(85,236)


(24,078)


(254,229)


(42,335)



Inventories

4,890


18,950


(34,562)


21,896


(8,671)



Other assets

(6,759)


(4,875)


(25,769)


(17,343)


(86,299)



Accounts payable

17,384


(719)


5,405


22,187


7,594



Price adjustment and other revenue reserves

45,052


34,118


37,681


110,673


48,426



Income taxes payable

(11,900)


8,021


(45,855)


(34,997)


(74,814)



All other accrued liabilities

26,211


25,715


15,465


41,154


76,758



Net cash provided by operating activities

279,810


271,440


212,329


924,260


800,855



Cash flows from investing activities:












Purchases of property, plant and equipment

(19,500)


(16,229)


(15,680)


(64,942)


(67,049)



Proceeds from sales of property, plant and equipment

11


16


124


94


392



Proceeds from sales of available-for-sale securities

-


-


1,290


1,500


1,290



Proceeds from maturity of available-for-sale securities

-


8,876


10,734


33,901


104,286



Payment in connection with business acquisition, net of cash acquired

-


-


(69,270)


-


(69,270)



Purchases of investments in privately-held companies

-


(1,235)


(1,840)


(1,345)


(1,960)



Proceeds from sale of investments in privately-held companies

242


-


205


281


378



Other investing activities

-


-


2


-


(116)



Net cash provided by (used in) investing activities

(19,247)


(8,572)


(74,435)


(30,511)


(32,049)



Cash flows from financing activities:












Contingent consideration paid

-


(10,000)


-


(10,000)


(8,000)



Net issuance of restricted stock units

(9,964)


(15,932)


(6,741)


(61,880)


(35,877)



Proceeds from stock options exercised

82


76


2,240


2,965


18,870



Issuance of common stock under employee stock purchase program

-


-


23,725


18,498


42,260



Repurchase of common stock

-


-


(82,299)


(9,201)


(440,811)



Dividends paid

-


-


(128,058)


(128,147)


(517,162)



Net cash used in financing activities

(9,882)


(25,856)


(191,133)


(187,765)


(940,720)



Net increase (decrease) in cash, cash equivalents and restricted cash 

250,681


237,012


(53,239)


705,984


(171,914)



Cash, cash equivalents and restricted cash 












Beginning of period

$      2,040,731


$          1,803,719


$      1,638,667


$      1,585,428


$      1,757,342



End of period

$      2,291,412


$          2,040,731


$      1,585,428


$      2,291,412


$      1,585,428















Total cash, cash equivalents, and short-term investments

$      2,291,399


$          2,033,973


$      1,614,206


$      2,291,399


$      1,614,206















Cash, cash equivalents and restricted cash:












Cash and cash equivalents

$      2,291,399


$          2,033,973


$      1,578,670


$      2,291,399


$      1,578,670



Restricted cash in Other assets

13


6,758


6,758


13


6,758



Total cash, cash equivalents and restricted cash

$      2,291,412


$          2,040,731


$      1,585,428


$      2,291,412


$      1,585,428














 


ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES



(Unaudited)





Three Months Ended


Year Ended





June 26, 2021


March 27, 2021


June 27, 2020


June 26, 2021


June 27, 2020





(in thousands, except per share data)



Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:













GAAP gross profit


$         484,025


$             442,885


$         362,368


$      1,760,346


$      1,432,652



GAAP gross profit %


67.2%


66.6%


66.4%


66.9%


65.4%



Special items:













Intangible asset amortization


3,047


4,430


3,528


17,408


12,860



Merger-related expenses(1)


-


-


-


2,381


-



Cost of COVID-19 response programs


609


638


1,591


2,750


3,616



Severance and restructuring


-


-


-


13


-



 Total special items 


3,656


5,068


5,119


22,552


16,476



 GAAP gross profit excluding special items 


$         487,681


$             447,953


$         367,487


$      1,782,898


$      1,449,128



 GAAP gross profit % excluding special items 


67.7%


67.4%


67.4%


67.7%


66.1%
















Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items:













GAAP operating expenses


$         200,688


$             195,621


$         184,381


$         814,646


$         746,258



Special items:













Merger-related expenses(1)


2,058


2,546


-


26,617


-



Intangible asset amortization


846


846


810


3,553


3,078



Severance and restructuring


1,139


155


678


13,434


5,363



Other operating expenses (income), net


831


6,302


(173)


7,436


928



 Total special items 


4,874


9,849


1,315


51,040


9,369



 GAAP operating expenses excluding special items 


$         195,814


$             185,772


$         183,066


$         763,606


$         736,889
















Reconciliation of GAAP net income to GAAP net income excluding special items:













GAAP net income


$         253,739


$             220,063


$         207,298


$         827,261


$         654,694
















Special items:













Intangible asset amortization


3,893


5,276


4,338


20,961


15,938



Merger-related expenses(1)


2,058


2,546


-


29,011


-



Cost of COVID-19 response programs


609


638


1,591


2,750


3,616



Severance and restructuring


1,139


155


678


13,434


5,363



Other operating expenses (income), net


831


6,302


(173)


7,436


928



Interest and other expense (income), net


(2,878)


(7,359)


1,484


(15,903)


(541)



 Pre-tax total special items 


5,652


7,558


7,918


57,689


25,304



Other income tax effects and adjustments (2)


(12,950)


(5,928)


(14,378)


(24,765)


(19,668)



Impact of U.S. tax legislation (3)


-


-


6,486


-


6,486



Impact of income tax audit settlements (4)


-


-


(51,197)


-


(51,197)



 GAAP net income excluding special items 


$         246,441


$             221,693


$         156,127


$         860,185


$         615,619
















 GAAP net income per share excluding special items: 













Basic


$               0.92


$                   0.83


$               0.59


$               3.22


$               2.29



Diluted


$               0.91


$                   0.82


$               0.58


$               3.18


$               2.26
















Shares used in the calculation of earnings per share excluding special items:













Basic


268,160


267,892


266,639


267,546


269,341



Diluted


271,445


271,396


268,777


270,872


272,028
















(1) Includes ADI merger related expenses such as accelerated stock-based compensation expense resulting from the acceleration of certain RSAs and RSUs, and other legal and professional services.



(2) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.



(3) Includes effect of U.S. tax legislation enacted on December 22, 2017.



(4) Includes effect of income tax audit settlements.









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 the cost of COVID-19 response programs; ADI merger-related expenses; intangible asset amortization; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net; and other income tax effects and adjustments. We defined free cash flow as net cash provided from operations less gross capital expenditures. 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 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, ADI merger-related expenses and cost of COVID-19 response programs. 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; ADI merger-related expenses severance and restructuring, and other operating expenses (income), net. 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 Provision for Income Taxes Excluding Special Items
The use of a GAAP provision for income taxes excluding special items allows management to evaluate the provision for income taxes across different reporting periods on a consistent basis, independent of special items. Special items include the tax impact of pre-tax special items, significant tax audit settlements, significant prior year tax reserve adjustments, significant tax legislation, and significant non-recurring and period specific tax items, which vary in size and frequency.

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; ADI merger-related expenses; cost of COVID-19 response programs; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net; and other income tax effects and adjustments. 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
Except for historical information, this press release may contain 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 involve risk and uncertainty. Actual results could differ materially from those forecasted, based upon, among other things, general market and economic conditions, regulatory approvals, supply constraints, 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 or more 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 27, 2020 (the "Form 10-K"). The Form 10-K may be found at https://www.sec.gov/Archives/edgar/data/743316/000074331620000025/0000743316-20-000025-index.htm.

All forward-looking statements included in this news release are made as of the date hereof and based on the information available to the Company as of the date hereof. The Company assumes no obligation to update any forward-looking statement except as required by law.

About Maxim Integrated
Maxim Integrated, an engineer's engineering company, exists to solve the designer's toughest problems in order to empower design innovation. Our broad portfolio of high-performance semiconductors, combined with world-class tools and support, delivers essential analog solutions including efficient power, precision measurement, reliable connectivity and robust protection along with intelligent processing. Designers in application areas such as automotive, communications, consumer, data center, healthcare, industrial and IoT trust Maxim to help them quickly develop smaller, smarter and more secure designs. Learn more at https://www.maximintegrated.com.

Contact
Kathy Ta
Vice President, Investor Relations
(408) 601-5697

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/maxim-integrated-reports-results-for-the-fourth-quarter-of-fiscal-2021-301342480.html

SOURCE Maxim Integrated Investor Relations

Contact Investor Relations

Kathy Ta Vice President, Investor Relations 408-601-5697 kathy.ta@maximintegrated.com
Evan Wang Senior Manager, Investor Relations 408-601-5451 evan.wang@maximintegrated.com
Eric Chow Senior Manager, Investor Relations 408-601-3982 eric.chow@maximintegrated.com

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