Maxim Integrated Reports Results For The Second Quarter Of Fiscal 2019

- Revenue: $577 million

SAN JOSE, Calif., Jan. 29, 2019 — (PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $577 million for its second quarter of fiscal 2019 ended December 29, 2018, a 10% decrease from the $638 million revenue recorded in the prior quarter, and a 7% decrease from the same quarter of last year. The same quarter of last year was a 14-week quarter and included revenue from the transition to sell-in accounting.

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

Tunc Doluca, President and Chief Executive Officer, commented, "Our December quarter results came in below expectations, due to the soft environment.  However, we are encouraged to see bookings return to normal levels in recent weeks. We believe our business model enables us to be successful in any environment, and we continue to generate strong free cash flow despite current conditions."

Fiscal Year 2019 Second Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the December quarter was $0.47. The results were affected by $22 million in charges due to the impact of U.S. tax legislation and $9 million in pre-tax special items which primarily consisted of charges related to acquisitions. GAAP earnings per share, excluding special items was $0.60. An analysis of GAAP versus GAAP excluding special items is provided in this press release.

Cash Flow Items
At the end of the second quarter of fiscal 2019, total cash, cash equivalents and short-term investments were $1.96 billion, a decrease of $603 million from the prior quarter.
Notable items included:

  • Cash flow from operations: $224 million
  • Capital expenditures: $13 million
  • Bond payment: $500 million
  • Dividends paid: $127 million ($0.46 per share)
  • Stock repurchases: $208 million

Adjusted trailing twelve months free cash flow was $919 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 March 2019 quarter was $372 million. Based on the beginning backlog and expected turns, our results for the March 2019 quarter are forecasted to be as follows:

  • Revenue: $520 to $560 million
  • Gross Margin: 63% to 65% GAAP (64% to 66% excluding special items)
  • EPS: $0.44 to $0.50 GAAP ($0.49 to $0.55 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 March 14, 2019, to stockholders of record on February 28, 2019. 

Conference Call
Maxim Integrated has scheduled a conference call on January 29 at 2:00 p.m. Pacific Time to discuss its financial results for the second 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.

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


CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)



Three Months Ended




December 29,
 2018


September 29,
 2018


December 30,
 2017




(in thousands, except per share data)



Net revenues

$

576,906



$

638,495



$

622,637




Cost of goods sold

203,858



208,259



212,961




Gross margin

373,048



430,236



409,676




Operating expenses:








Research and development

110,303



112,708



115,896




Selling, general and administrative

77,853



81,518



85,323




Intangible asset amortization

756



773



995




Impairment of long-lived assets

753





850




Severance and restructuring expenses

1,179



994



6,523




Other operating expenses (income), net



60



(959)




Total operating expenses (income), net

190,844



196,053



208,628




Operating income (loss)

182,204



234,183



201,048




Interest and other income (expense), net

472



(546)



(3,121)




Income (loss) before provision for income taxes

182,676



233,637



197,927




Income tax provision (benefit)

50,784



36,214



272,942




Net income (loss)

$

131,892



$

197,423



$

(75,015)




Earnings (loss) per share:








Basic

$

0.48



$

0.71



$

(0.27)




Diluted

$

0.47



$

0.70



$

(0.27)




Shares used in the calculation of earnings (loss) per share:








Basic

276,252



278,045



281,560




Diluted

280,008



282,454



281,560




Dividends paid per share

$

0.46



$

0.46



$

0.36












SCHEDULE OF SPECIAL ITEMS



(Unaudited)




Three Months Ended




December 29,
 2018


September 29,
 2018


December 30,
 2017




(in thousands)



Cost of goods sold:








Intangible asset amortization

$

6,868



$

6,915



$

11,139




 Total

$

6,868



$

6,915



$

11,139




Operating expenses:








Intangible asset amortization

756



$

773



$

995




Impairment of long-lived assets (1)

753





850




Severance and restructuring

1,179



994



6,523




Other operating expenses (income), net



60



(959)




 Total

$

2,688



$

1,827



$

7,409




Interest and other expense (income), net

$

(351)



$

(378)



$

(119)




Total

$

(351)



$

(378)



$

(119)




Income tax provision (benefit):

 








Impact of U.S. tax legislation (2)

$

22,082



$



$

243,550




Total

$

22,082



$



$

243,550












(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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