-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HXrLt8yGab6OejK7r985jup3h5QibVHQqaEzfXfRpcX4gF2Wmta4+h1i5oRhlLV4 fHdVZovpZNAWmbQVzHdJnw== 0000743316-97-000003.txt : 19970515 0000743316-97-000003.hdr.sgml : 19970515 ACCESSION NUMBER: 0000743316-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAXIM INTEGRATED PRODUCTS INC CENTRAL INDEX KEY: 0000743316 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942896096 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16538 FILM NUMBER: 97603374 BUSINESS ADDRESS: STREET 1: 120 SAN GABRIEL DR CITY: SUNNYVALE STATE: CA ZIP: 94086 BUSINESS PHONE: 4087377600 MAIL ADDRESS: STREET 1: 120 SAN GABRIEL DR CITY: SUNNYVALE STATE: CA ZIP: 94086 10-Q 1 FORM 10Q FOR THE PERIOD ENDED 03/31/97 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 Or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period from _________ to_________ COMMISSION FILE NO. 0-16538 MAXIM INTEGRATED PRODUCTS, INC. (Exact name of registrant as specified in its charter) DELAWARE 94-2896096 (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) Incorporation or Organization) 120 SAN GABRIEL DRIVE, SUNNYVALE, CA 94086 (Address of Principal Executives Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (408) 737-7600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days: Yes [x] No[ ] Class:Common Stock, Outstanding at May 9, 1997 $.001 par value 64,514,447 shares 2 MAXIM INTEGRATED PRODUCTS, INC. INDEX
PART I. FINANCIAL INFORMATION Page ---- ITEM 1. Financial Statements Consolidated Balance Sheets 3 As of June 30, 1996 and March 31, 1997 Consolidated Statements of Income 4 for the three and nine months ended March 31, 1996 and 1997 Consolidated Statements of Cash Flows 5 for the nine months ended March 31, 1996 and 1997 Notes to Consolidated Financial Statements 6-7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 11-12 SIGNATURES 13
2 3 CONSOLIDATED BALANCE SHEETS MAXIM INTEGRATED PRODUCTS, INC.
- ------------------------------------------------------------------- ------------- June 30, March 31, 1996 1997 (Amounts in thousands) (Audited) (Unaudited) (Unaudited) =================================================================== ASSETS - ------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 60,283 $ 11,536 Short-term investments 68,970 191,274 - ------------------------------------------------------------------- Total cash, cash equivalents and short- term investments 129,253 202,810 - ------------------------------------------------------------------- Accounts receivable, net 80,664 83,301 Inventories 30,471 36,463 Prepaid taxes and other current assets 24,163 28,274 - ------------------------------------------------------------------- Total current assets 264,551 350,848 - ------------------------------------------------------------------- Property, plant and equipment, at cost, less accumulated depreciation 147,068 166,965 Other assets 6,175 6,493 - ------------------------------------------------------------------- TOTAL ASSETS $ 417,794 $ 524,306 =================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 29,738 $ 22,087 Income taxes payable 19,323 10,727 Accrued salaries 12,897 14,757 Accrued expenses 11,880 14,040 Deferred income on shipments to distributors 14,531 14,830 - ------------------------------------------------------------------- Total current liabilities 88,369 76,441 - ------------------------------------------------------------------- Other liabilities 4,000 4,000 Commitments and contingencies - ------------------------------------------------------------------- Stockholders' equity: Common stock 62 64 Additional paid-in capital 89,939 108,235 Retained earnings 236,796 336,905 Translation adjustment (1,372) (1,339) - ------------------------------------------------------------------- Total stockholders' equity 325,425 443,865 - ------------------------------------------------------------------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 417,794 $ 524,306 ===================================================================
See accompanying notes. 3 4 CONSOLIDATED STATEMENTS OF INCOME MAXIM INTEGRATED PRODUCTS, INC.
- ----------------------------------------------------------------------------- (Amounts in thousands, except Three Months Ended Nine Months Ended per share data) March 31, March 31, - ----------------------------------------------------------------------------- (Unaudited) 1996 1997 1996 1997 ============================================================================= Net revenues $ 109,001 $ 111,005 $ 311,626 $ 316,691 Cost of goods sold 35,356 37,437 110,283 105,994 - ----------------------------------------------------------------------------- Gross margin 73,645 73,568 201,343 210,697 - ----------------------------------------------------------------------------- Operating expenses: Research and development 11,233 13,092 35,735 36,459 Selling, general and administrative 10,971 9,298 31,501 28,285 - ----------------------------------------------------------------------------- 22,204 22,390 67,236 64,744 - ----------------------------------------------------------------------------- Operating income 51,441 51,178 134,107 145,953 Interest income, net 1,147 2,462 3,367 5,726 - ----------------------------------------------------------------------------- Income before provision for income taxes 52,588 53,640 137,474 151,679 Provision for income taxes 18,406 18,237 48,833 51,570 - ----------------------------------------------------------------------------- Net income $ 34,182 $ 35,403 $ 88,641 $ 100,109 - ----------------------------------------------------------------------------- Income per share $ 0.48 $ 0.48 $ 1.25 $ 1.38 - ----------------------------------------------------------------------------- Common and common equivalent shares 71,212 74,375 70,863 72,394 =============================================================================
See accompanying notes. 4 5 CONSOLIDATED STATEMENTS OF CASH FLOWS MAXIM INTEGRATED PRODUCTS, INC.
- ----------------------------------------------------------------------------- For the nine months ended March 31, Increase (decrease) in cash and cash equivalents (Amounts in thousands)(unaudited) 1996 1997 ============================================================================= Cash flows provided by operating activities: Net income $ 88,641 $ 100,109 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and translation adjustment 9,725 12,702 Reduction of equipment value 1,344 0 Changes in assets and liabilities: Accounts receivable (51,411) (2,637) Inventories (9,306) (5,992) Prepaid taxes and other current assets (2,674) (4,111) Accounts payable 25,206 (7,651) Income taxes payable 28,044 30,635 Deferred income taxes (4,450) 0 Deferred income on shipments to distributors 5,831 299 All other accrued liabilities (6,205) 4,020 - ----------------------------------------------------------------------------- Net cash provided by operating activities 84,745 127,374 - ----------------------------------------------------------------------------- Cash flows provided by investing activities: Additions to property, plant and equipment (55,664) (32,566) Deposits and other non-current assets 4,255 (318) Purchases of held-to-maturity securities (91,701) (24,313) Purchases of available-for-sale securities - (168,547) Proceeds from maturities of held-to-maturity securities 80,193 58,688 Proceeds from sales/maturities of available- for-sale securities - 11,868 - ----------------------------------------------------------------------------- Net cash used in investing activities (62,917) (155,188) - ----------------------------------------------------------------------------- Cash flows provided by financing activities: Issuance of common stock 14,227 25,202 Repurchase of common stock (27,371) (46,135) - ----------------------------------------------------------------------------- Net cash used in financing activities (13,144) (20,933) - ----------------------------------------------------------------------------- Net increase (decrease) in cash and cash 8,684 (48,747) equivalents Cash and cash equivalents: Beginning of year 54,966 60,283 - ----------------------------------------------------------------------------- End of period $ 63,650 $ 11,536 =============================================================================
See accompanying notes. 5 6 MAXIM INTEGRATED PRODUCTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF PRESENTATION The unaudited consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 1997 are not necessarily indicative of the results to be expected for the entire year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 1996. NOTE 2: INVENTORIES Inventories consist of (in thousands):
June 30, March 31, 1996 1997 ---- ---- (audited) (unaudited) Raw materials $ 3,720 $ 5,414 Work in process 16,908 20,026 Finished goods 9,843 11,023 -------- -------- $ 30,471 $ 36,463 ======== ========
NOTE 3: INCOME PER SHARE Net income per share is calculated based on the weighted average number of common and dilutive common equivalent shares outstanding during each respective period. The number of common equivalent shares which became issuable pursuant to the grant of stock options has been calculated using the treasury stock method. Fully diluted income per share is substantially the same as reported income per share. 6 7 MAXIM INTEGRATED PRODUCTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont'd) NOTE 4: INVESTMENT SECURITIES At March 31, 1997, all debt securities consist of U.S. Treasury securities maturing within one year. Securities designated as held-to-maturity are carried at amortized cost which approximates market value. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other-than-temporary on held-to-maturity securities are included in investment income. Securities identified as available-for-sale are carried at fair market value. Unrealized gains and losses, net of tax, on securities in this category are reportable as a separate component of stockholders' equity. Because of the short term to maturity and relative price insensitivity to changes in market interest rates, amortized cost approximates fair market value and no unrealized gains or losses have been recorded at March 31, 1997. The cost of securities sold is based on the specific identification method. Interest earned on securities is included in investment income. All securities are included in short-term investments at March 31, 1997. There were no gross realized gains or losses for the nine months ended March 31, 1997. NOTE 5: RECENT PRONOUNCEMENT In February 1997, Financial Accounting Standard No. 128 (FAS 128) Earnings Per Share was issued. The Company will be required to adopt this new pronouncement in the quarter ended December 31, 1997. Under the new pronouncement the Company is required to present on the face of the income statement both the net income per common share outstanding and net income per common and common equivalent shares outstanding. All prior periods will be restated to reflect this change. Had the Company applied this change to the period ending March 31, 1997 the pro forma amounts would be as follows.
Three Months Nine Months ended March 31, ended March 31, 1996 1997 1996 1997 ---- ---- ---- ---- Pro forma earnings per share: Net income per common share outstanding .57 .56 1.48 1.61 ==== ==== ==== ==== Net income per common and common equivalent share outstanding .48 .48 1.25 1.38 ==== ==== ==== ====
Prior to this pronouncement the Company was required to present only the net income per common and common equivalent shares outstanding (see note 3). 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net revenues for the three months and the nine months ended March 31, 1997 were essentially unchanged compared to the same periods a year ago. The Company believes that the most significant single factor constraining revenue growth in fiscal 1997 to date was a buildup in Maxim's customers' inventories that occurred in the latter half of fiscal 1996. During the quarter, 55% of net revenues were derived from customers outside of the United States. While the majority of these sales are denominated in US dollars, the Company does place foreign currency forward contracts to mitigate its risks on its backlog and assets denominated in foreign currencies, and as a result, the net impact associated with changes in foreign currency on the Company's operating results for the quarter was minimal. Gross margin was 66.3% and 66.5% in the three and nine months ended March 31, 1997, compared to 67.6% and 64.6% for the three and nine months ended March 31, 1996. The increase in gross margin for the nine months period ended March 31, 1997 was due to increased manufacturing efficiencies in the later half of 1996 continuing through all of fiscal 1997. Research and development expenses were 11.8% and 11.5% of net revenues in the three and nine months ended March 31, 1997, compared to 10.3% and 11.5% in the three and nine months ended March 31, 1996. Research and development in absolute dollars increased $1,859 and $724 for the three and nine months in period ended March 31, 1997 over the same period a year ago, respectively. The increase is attributable to continued investments in product development efforts. Selling, general and administrative expenses were 8.4% and 8.9% of net revenues in the three and nine months ended March 31, 1997, compared to 10.1% for both the three and nine months ended March 31, 1996. This decline was a result of the Company's cost control measures and savings realized through the establishment of a direct sales force in the United States during the latter half of fiscal 1996. The Company's operating income decreased slightly to 46.1% of net revenues in the three months ended March 31, 1997, compared to 47.2% in the three months ended March 31, 1996 and increased to 46.1% of net revenues in the nine months ended March 31, 1997, compared to 43.0% for the nine months ended March 31, 1996, as a result of all the factors cited above. Net interest income increased to $2.5 million in the three months and $5.7 million in the nine months ended March 31, 1997 compared to $1.1 million and $3.4 million in the same periods a year ago, as a result of higher invested cash balances at higher average interest rates. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D) The decrease in the effective tax rate to 34% in the three months and the nine months ended March 31, 1997, was primarily attributable to the restoration of the Federal research and development tax credit. OUTLOOK At the end of Q397, backlog shipable within the next twelve months was $124 million as compared to $103 million reported at the end of Q297. Orders requested for delivery in Q497 remained high, representing 76% of the beginning Q497 backlog. Turns orders received in Q397 increased by more than 17% over those received in Q297 to a record $45.4 million. (Turns orders are customer orders that are for delivery within the same quarter and may result in revenue within the quarter if the Company has inventory available that matches those orders.) Net bookings were up 30% from Q297 levels. The Company experienced sequential quarter over quarter growth in net bookings across all geographic regions and across all of Maxim's business units. Customer cancellations were $12.5 million, continuing the decline experienced over the last three quarters. If these positive trends continue, the Company anticipates that it should be able to record modest sequential revenue growth in the current quarter and increase its quarter-ending backlog. 9 10 ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D) LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of funds for the first nine months of fiscal year 1997 have been the net cash generated from operating activities of $127,374,000 and the issuance of common stock of $25,202,000 associated with the Company's stock option programs. The principal uses of funds have been the repurchase of $46,135,000 of common stock, net purchases of $122,304,000 in short-term investments, and the purchase of $32,566,000 in property, plant and equipment. The Company anticipates that it will spend up to $50 million for capital equipment in fiscal 1997 and believes that it possesses sufficient liquidity and capital resources to fund these purchases and its operations for the foreseeable future. FORWARD LOOKING INFORMATION Safe harbor statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this management's discussion and analysis section are, explicitly or implicitly, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In particular, the Outlook section includes forward-looking statements regarding backlog, turns orders, bookings, customer cancellations and revenue growth. These statements and all other forward-looking statements are made based on information available to the Company as of the date hereof, and the Company assumes no duty to update any forward- looking statements. Forward-looking statements in this document involve risk and uncertainty. Important factors, including the fact that the Company's backlog of orders is generally not based on legally binding customer contracts and further including overall economic conditions, demand for electronic products and semiconductors generally, demand for the Company's products in particular, availability of raw material, equipment, supplies and services, unanticipated manufacturing problems, technological and product development risks, competitors' actions and other risk factors described in the Company's filings with the Securities and Exchange Commission, could cause actual results to differ materially from those stated in the forward-looking statements. 10 11 ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K (a)The following exhibit has been filed with this report: 11.1 Computation of Income per Share (b) No Reports on Form 8-K were filed during the quarter ended March 31, 1997 ITEMS 1, 2, 3, 4 AND 5 HAVE BEEN OMITTED AS THEY ARE NOT APPLICABLE. 11 12
EXHIBIT 11.1 Three Months Nine Months Ended March 31, Ended March 31, 1996 1997 1996 1997 ---- ---- ---- ---- Weight average common shares outstanding 60,276 63,737 59,775 62,363 Add weighted average shares from asssumed excersise of options and warrants when treasury shares are reacquired at average stock market price 16,708 16,075 17,186 15,260 Less weighted average shares assumed repurchased from tax benefit from the assumed exercise of non-qualified stock options (5,772) (5,437) (6,098) (5,229) ------- ------- ------- -------- Common and common equivalent shares used in computing net income per share 71,212 74,375 70,863 72,394 ====== ====== ====== ======= Net income applicable to computation of income per share $34,182 $35,403 $88,641 $100,109 ======= ======= ======= ========
12 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MAY 12, 1997 MAXIM INTEGRATED PRODUCTS,INC. (Date) (Registrant) /s/ Michael J. Byrd -------------------- MICHAEL J. BYRD Vice President and Chief Financial Officer (For the Registrant and Principal Financial Officer) /s/ Richard E. Slater ---------------------- RICHARD E. SLATER Vice President and Chief Accounting Officer (Principal Accounting Officer) 13 EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 9-MOS JUN-30-1997 JUL-01-1996 MAR-31-1997 1 202,810 0 84,637 (1,337) 36,463 350,848 229,988 (63,023) 524,306 76,441 0 0 0 64 445,140 524,306 316,691 316,691 105,994 105,994 64,744 0 17 151,679 51,570 100,109 0 0 0 100,109 1.38 1.38
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