FORM 8-K |
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 94-2896096 (I.R.S. Employer I. D. No.) |
Exhibit | Description | |
99.1 | Press release, dated January 23, 2014 announcing the Company's preliminary financial results for the second quarter of fiscal year 2014. |
Maxim Integrated Products, Inc. | |
By:/s/ Bruce Kiddoo | |
Bruce E. Kiddoo Senior Vice President and Chief Financial Officer |
Exhibit | Description | |
99.1 | Press release, dated January 23, 2014 announcing the Company's preliminary financial results for the second quarter of fiscal year 2014. Also provided in PDF format as a courtesy. |
• | Revenue: $620 million |
• | Gross Margin: 53.0% GAAP (58.2% excluding special items, after a 2.9 percentage point reduction due to warranty expense) |
• | EPS: $0.17 GAAP ($0.36 excluding special items, after a $0.05 reduction due to warranty expense) |
• | Cash, cash equivalents, and short term investments: $1.15 billion |
• | Fiscal third quarter revenue outlook: $590 million to $620 million |
• | $40 million for Volterra acquisition-related items |
• | $13 million for items related to prior acquisitions |
• | $5 million for impairment of long-lived assets |
• | $18 million for warranty expense |
• | Cash flow from operations: $234 million |
• | Net capital expenditures: $46 million |
• | Dividends: $73 million ($0.26 per share) |
• | Stock repurchases: $59 million |
• | Volterra acquisition: $454 million |
• | Proceeds from debt issuance: $494 million |
• | Revenue: $590 million to $620 million |
• | Gross Margin: 56% to 58% GAAP (60% to 62% excluding special items) |
• | EPS: $0.28 to $0.32 GAAP ($0.37 to $0.41 excluding special items) |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 28, 2013 | September 28, 2013 | December 29, 2012 | |||||||||||
(in thousands, except per share data) | |||||||||||||
Net revenues | $ | 620,274 | $ | 585,241 | $ | 605,306 | |||||||
Cost of goods sold | 291,602 | 238,045 | 241,931 | ||||||||||
Gross margin | 328,672 | 347,196 | 363,375 | ||||||||||
Operating expenses: | |||||||||||||
Research and development | 142,971 | 129,902 | 135,742 | ||||||||||
Selling, general and administrative | 83,471 | 77,430 | 80,058 | ||||||||||
Intangible asset amortization | 4,968 | 3,436 | 3,903 | ||||||||||
Impairment of long-lived assets (1) | 5,197 | — | 22,222 | ||||||||||
Severance and restructuring expenses (2) | 10,227 | 5,547 | 2,236 | ||||||||||
Acquisition-related costs | 4,137 | 2,934 | — | ||||||||||
Other operating expenses (income), net (3) | 1,306 | (662 | ) | 1,666 | |||||||||
Total operating expenses | 252,277 | 218,587 | 245,827 | ||||||||||
Operating income | 76,395 | 128,609 | 117,548 | ||||||||||
Interest and other income (expense), net | (5,833 | ) | (3,463 | ) | (2,798 | ) | |||||||
Income before provision for income taxes | 70,562 | 125,146 | 114,750 | ||||||||||
Provision for income taxes | 21,240 | 22,026 | 38,128 | ||||||||||
Net income | $ | 49,322 | $ | 103,120 | $ | 76,622 | |||||||
Earnings per share: | |||||||||||||
Basic | $ | 0.17 | $ | 0.36 | $ | 0.26 | |||||||
Diluted | $ | 0.17 | $ | 0.36 | $ | 0.26 | |||||||
Shares used in the calculation of earnings per share: | |||||||||||||
Basic | 282,664 | 284,654 | 292,075 | ||||||||||
Diluted | 288,565 | 290,260 | 298,759 | ||||||||||
Dividends paid per share | $ | 0.26 | $ | 0.26 | $ | 0.24 | |||||||
SCHEDULE OF SPECIAL EXPENSE ITEMS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 28, 2013 | September 28, 2013 | December 29, 2012 | |||||||||||
(in thousands) | |||||||||||||
Cost of goods sold: | |||||||||||||
Intangible asset amortization | $ | 19,098 | $ | 8,092 | $ | 8,986 | |||||||
Acquisition-related inventory write-up | 13,066 | — | — | ||||||||||
Total | $ | 32,164 | $ | 8,092 | $ | 8,986 | |||||||
Operating expenses: | |||||||||||||
Intangible asset amortization | $ | 4,968 | $ | 3,436 | $ | 3,903 | |||||||
Impairment of long-lived assets (1) | 5,197 | — | 22,222 | ||||||||||
Severance and restructuring (2) | 10,227 | 5,547 | 2,236 | ||||||||||
Acquisition-related costs | 4,137 | 2,934 | — | ||||||||||
Other operating expenses (income), net (3) | 1,306 | (662 | ) | 1,666 | |||||||||
Total | $ | 25,835 | $ | 11,255 | $ | 30,027 | |||||||
Provision for income taxes: | |||||||||||||
International restructuring implementation | $ | — | $ | — | $ | 18,726 | |||||||
Total | $ | — | $ | — | $ | 18,726 | |||||||
(1) Includes impairment charges relating to fab tools, land and buildings held-for-sale, and end of line manufacturing equipment. | |||||||||||||
(2) Includes severance & retention charges and lease abandonment charges related to the Volterra acquisition, and severance charges related to the reorganization of various business units and manufacturing operations. | |||||||||||||
(3) Other operating expenses (income), net are primarily for contingent consideration adjustments related to certain acquisitions and certain payroll taxes. | |||||||||||||
STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended December 28, 2013 | Stock Options | Restricted Stock Units | Employee Stock Purchase Plan | Total | |||||||||||||
Cost of goods sold | $ | 438 | $ | 2,395 | $ | 533 | $ | 3,366 | |||||||||
Research and development expense | 2,616 | 8,728 | 1,153 | 12,497 | |||||||||||||
Selling, general and administrative expense | 1,476 | 4,996 | 534 | 7,006 | |||||||||||||
Total | $ | 4,530 | $ | 16,119 | $ | 2,220 | $ | 22,869 | |||||||||
Three Months Ended September 28, 2013 | |||||||||||||||||
Cost of goods sold | $ | 349 | $ | 1,918 | $ | 475 | $ | 2,742 | |||||||||
Research and development expense | 1,836 | 6,440 | 1,322 | 9,598 | |||||||||||||
Selling, general and administrative expense | 1,264 | 4,527 | 609 | 6,400 | |||||||||||||
Total | $ | 3,449 | $ | 12,885 | $ | 2,406 | $ | 18,740 | |||||||||
Three Months Ended December 29, 2012 | |||||||||||||||||
Cost of goods sold | $ | 477 | $ | 2,572 | $ | 634 | $ | 3,683 | |||||||||
Research and development expense | 2,288 | 8,401 | 1,451 | 12,140 | |||||||||||||
Selling, general and administrative expense | 1,286 | 5,152 | 584 | 7,022 | |||||||||||||
Total | $ | 4,051 | $ | 16,125 | $ | 2,669 | $ | 22,845 | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||
(Unaudited) | |||||||||||||
December 28, 2013 | September 28, 2013 | December 29, 2012 | |||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 1,149,909 | $ | 1,009,547 | $ | 955,107 | |||||||
Short-term investments | — | 25,036 | 75,192 | ||||||||||
Total cash, cash equivalents and short-term investments | 1,149,909 | 1,034,583 | 1,030,299 | ||||||||||
Accounts receivable, net | 288,285 | 297,888 | 264,545 | ||||||||||
Inventories | 297,234 | 278,218 | 257,690 | ||||||||||
Deferred tax assets | 69,154 | 54,854 | 80,991 | ||||||||||
Other current assets | 84,522 | 116,225 | 90,470 | ||||||||||
Total current assets | 1,889,104 | 1,781,768 | 1,723,995 | ||||||||||
Property, plant and equipment, net | 1,372,393 | 1,374,544 | 1,359,014 | ||||||||||
Intangible assets, net | 404,652 | 145,618 | 182,521 | ||||||||||
Goodwill | 596,898 | 422,004 | 422,083 | ||||||||||
Other assets | 42,803 | 40,063 | 50,940 | ||||||||||
TOTAL ASSETS | $ | 4,305,850 | $ | 3,763,997 | $ | 3,738,553 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 99,009 | $ | 101,060 | $ | 110,495 | |||||||
Income taxes payable | 21,717 | 21,799 | 22,146 | ||||||||||
Accrued salary and related expenses | 140,738 | 124,954 | 152,122 | ||||||||||
Accrued expenses | 85,145 | 55,561 | 58,900 | ||||||||||
Current portion of long-term debt | 2,965 | 4,804 | 304,794 | ||||||||||
Deferred income on shipments to distributors | 25,542 | 27,179 | 25,362 | ||||||||||
Total current liabilities | 375,116 | 335,357 | 673,819 | ||||||||||
Long-term debt | 1,000,871 | 500,955 | 3,997 | ||||||||||
Income taxes payable | 337,053 | 294,728 | 260,770 | ||||||||||
Deferred tax liabilities | 202,435 | 205,221 | 192,434 | ||||||||||
Other liabilities | 29,343 | 29,300 | 26,321 | ||||||||||
Total liabilities | 1,944,818 | 1,365,561 | 1,157,341 | ||||||||||
Stockholders' equity: | |||||||||||||
Common stock | 283 | 283 | 7,040 | ||||||||||
Retained earnings | 2,373,318 | 2,412,262 | 2,589,619 | ||||||||||
Accumulated other comprehensive loss | (12,569 | ) | (14,109 | ) | (15,447 | ) | |||||||
Total stockholders' equity | 2,361,032 | 2,398,436 | 2,581,212 | ||||||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 4,305,850 | $ | 3,763,997 | $ | 3,738,553 | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 28, 2013 | September 28, 2013 | December 29, 2012 | |||||||||||
(in thousands) | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income | $ | 49,322 | $ | 103,120 | $ | 76,622 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
Stock-based compensation | 22,869 | 18,740 | 22,845 | ||||||||||
Depreciation and amortization | 64,404 | 51,133 | 51,880 | ||||||||||
Deferred taxes | (11,705 | ) | 25,529 | (12,979 | ) | ||||||||
Loss (gain) from sale of property, plant and equipment | 265 | 36 | (88 | ) | |||||||||
Tax benefit (shortfall) related to stock-based compensation | (726 | ) | (3,488 | ) | 5,187 | ||||||||
Impairment of long-lived assets | 5,197 | — | 22,222 | ||||||||||
Excess tax benefit from stock-based compensation | (2,459 | ) | (1,697 | ) | (6,615 | ) | |||||||
Changes in assets and liabilities: | |||||||||||||
Accounts receivable | 33,056 | (12,450 | ) | 51,993 | |||||||||
Inventories | 14,030 | (2,301 | ) | 570 | |||||||||
Other current assets | 31,362 | (18,546 | ) | 4,091 | |||||||||
Accounts payable | (3,252 | ) | (9,162 | ) | (9,536 | ) | |||||||
Income taxes payable | 19,002 | 11,393 | 37,477 | ||||||||||
Deferred revenue on shipments to distributors | (1,637 | ) | 622 | (1,663 | ) | ||||||||
All other accrued liabilities | 14,704 | (67,035 | ) | 13,091 | |||||||||
Net cash provided by (used in) operating activities | 234,432 | 95,894 | 255,097 | ||||||||||
Cash flows from investing activities: | |||||||||||||
Purchase of property, plant and equipment | (46,133 | ) | (36,329 | ) | (62,102 | ) | |||||||
Proceeds from sales of property, plant and equipment | — | 3,048 | 4,115 | ||||||||||
Payments in connection with business acquisition, net of cash acquired | (453,506 | ) | — | — | |||||||||
Proceeds from maturity of available-for-sale securities | 27,000 | — | — | ||||||||||
Net cash provided by (used in) investing activities | (472,639 | ) | (33,281 | ) | (57,987 | ) | |||||||
Cash flows from financing activities: | |||||||||||||
Excess tax benefit from stock-based compensation | 2,459 | 1,697 | 6,615 | ||||||||||
Contingent consideration paid | (4,601 | ) | — | (7,476 | ) | ||||||||
Dividends paid | (73,325 | ) | (73,744 | ) | (70,063 | ) | |||||||
Repayment of notes payable | (1,839 | ) | — | (74 | ) | ||||||||
Issuance of debt | 497,795 | 100 | — | ||||||||||
Debt issuance cost | (3,431 | ) | — | — | |||||||||
Repurchase of common stock | (59,101 | ) | (154,386 | ) | (50,435 | ) | |||||||
Issuance of ESPP shares under employee stock purchase program | 19,096 | — | 16,768 | ||||||||||
Net issuance of restricted stock units | (7,106 | ) | (6,966 | ) | (6,538 | ) | |||||||
Proceeds from stock options exercised | 8,622 | 5,247 | 19,350 | ||||||||||
Net cash provided by (used in) financing activities | 378,569 | (228,052 | ) | (91,853 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 140,362 | (165,439 | ) | 105,257 | |||||||||
Cash and cash equivalents: | |||||||||||||
Beginning of period | 1,009,547 | 1,174,986 | 849,850 | ||||||||||
End of period | $ | 1,149,909 | $ | 1,009,547 | $ | 955,107 | |||||||
Total cash, cash equivalents, and short-term investments | $ | 1,149,909 | $ | 1,034,583 | $ | 1,030,299 | |||||||
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
December 28, 2013 | June 29, 2013 | December 29, 2012 | ||||||||||||
(in thousands, except per share data) | ||||||||||||||
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items: | ||||||||||||||
GAAP gross profit | $ | 328,672 | $ | 347,196 | $ | 363,375 | ||||||||
GAAP gross profit % | 53.0 | % | 59.3 | % | 60.0 | % | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 19,098 | 8,092 | 8,986 | |||||||||||
Acquisition-related inventory write-up | 13,066 | — | — | |||||||||||
Total special items | 32,164 | 8,092 | 8,986 | |||||||||||
GAAP gross profit excluding special items | $ | 360,836 | $ | 355,288 | $ | 372,361 | ||||||||
GAAP gross profit % excluding special items | 58.2 | % | 60.7 | % | 61.5 | % | ||||||||
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items: | ||||||||||||||
GAAP operating expenses | $ | 252,277 | $ | 218,587 | $ | 245,827 | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 4,968 | 3,436 | 3,903 | |||||||||||
Impairment of long-lived assets (1) | 5,197 | — | 22,222 | |||||||||||
Severance and restructuring (2) | 10,227 | 5,547 | 2,236 | |||||||||||
Acquisition-related costs | 4,137 | 2,934 | — | |||||||||||
Other operating expenses (income), net (3) | 1,306 | (662 | ) | 1,666 | ||||||||||
Total special items | 25,835 | 11,255 | 30,027 | |||||||||||
GAAP operating expenses excluding special items | $ | 226,442 | $ | 207,332 | $ | 215,800 | ||||||||
Reconciliation of GAAP net income to GAAP net income excluding special items: | ||||||||||||||
GAAP net income | $ | 49,322 | $ | 103,120 | $ | 76,622 | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 24,066 | 11,528 | 12,889 | |||||||||||
Acquisition-related inventory write-up | 13,066 | — | — | |||||||||||
Impairment of long-lived assets (1) | 5,197 | — | 22,222 | |||||||||||
Severance and restructuring (2) | 10,227 | 5,547 | 2,236 | |||||||||||
Acquisition-related costs | 4,137 | 2,934 | — | |||||||||||
Other operating expenses (income), net (3) | 1,306 | (662 | ) | 1,666 | ||||||||||
Pre-tax total special items | 57,999 | 19,347 | 39,013 | |||||||||||
Tax effect of special items | (4,862 | ) | (2,981 | ) | (9,555 | ) | ||||||||
International restructuring implementation | — | — | 18,726 | |||||||||||
GAAP net income excluding special items | $ | 102,459 | $ | 119,486 | $ | 124,806 | ||||||||
GAAP net income per share excluding special items: | ||||||||||||||
Basic | $ | 0.36 | $ | 0.42 | $ | 0.43 | ||||||||
Diluted | $ | 0.36 | $ | 0.41 | $ | 0.42 | ||||||||
Shares used in the calculation of earnings per share excluding special items: | ||||||||||||||
Basic | 282,664 | 284,654 | 292,075 | |||||||||||
Diluted | 288,565 | 290,260 | 298,759 | |||||||||||
(1) Includes impairment charges relating to fab tools, land and buildings held-for-sale, and end of line manufacturing equipment. | ||||||||||||||
(2) Includes severance & retention charges and lease abandonment charges related to the Volterra acquisition, and severance charges related to the reorganization of various business units and manufacturing operations. | ||||||||||||||
(3) Other operating expenses (income), net are primarily for contingent consideration adjustments related to certain acquisitions and certain payroll taxes. | ||||||||||||||