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 April 24, 2014 announcing the Company's preliminary financial results for the third 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 April 24, 2014 announcing the Company's preliminary financial results for the third quarter of fiscal year 2014. Also provided in PDF format as a courtesy. |
• | Revenue: $606 million |
• | Gross Margin: 56.1% GAAP (60.1% excluding special items) |
• | EPS: $0.42 GAAP ($0.43 excluding special items) |
• | Cash, cash equivalents, and short term investments: $1.23 billion |
• | Fiscal fourth quarter revenue outlook: $635 million to $665 million |
• | Cash flow from operations: $212 million |
• | Net capital expenditures: $26 million |
• | Dividends: $73 million ($0.26 per share) |
• | Stock repurchases: $51 million |
• | Revenue: $635 million to $665 million |
• | Gross Margin: 58% to 60% GAAP (61% to 63% excluding special items) |
• | EPS: $0.38 to $0.42 GAAP ($0.45 to $0.49 excluding special items) |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
March 29, 2014 | December 28, 2013 | March 30, 2013 | |||||||||||
(in thousands, except per share data) | |||||||||||||
Net revenues | $ | 605,681 | $ | 620,274 | $ | 604,884 | |||||||
Cost of goods sold | 265,744 | 291,602 | 228,782 | ||||||||||
Gross margin | 339,937 | 328,672 | 376,102 | ||||||||||
Operating expenses: | |||||||||||||
Research and development | 141,493 | 142,971 | 134,138 | ||||||||||
Selling, general and administrative | 80,680 | 83,471 | 81,954 | ||||||||||
Intangible asset amortization | 4,863 | 4,968 | 3,903 | ||||||||||
Impairment of long-lived assets | — | 5,197 | — | ||||||||||
Severance and restructuring expenses (1) | 3,338 | 10,227 | 151 | ||||||||||
Acquisition-related costs | (88 | ) | 4,137 | — | |||||||||
Other operating expenses (income), net (2) | 2,913 | 7,307 | 1,678 | ||||||||||
Total operating expenses | 233,199 | 258,278 | 221,824 | ||||||||||
Operating income | 106,738 | 70,394 | 154,278 | ||||||||||
Interest and other income (expense), net (3) | 5,174 | (5,833 | ) | (2,669 | ) | ||||||||
Income before provision for income taxes | 111,912 | 64,561 | 151,609 | ||||||||||
Provision (benefit) for income taxes (4) | (10,632 | ) | 20,208 | 22,824 | |||||||||
Income from continuing operations | 122,544 | 44,353 | 128,785 | ||||||||||
Income from discontinued operations, net of tax | — | — | 2,603 | ||||||||||
Net income | $ | 122,544 | $ | 44,353 | $ | 131,388 | |||||||
Earnings per share: Basic | |||||||||||||
From continuing operations | $ | 0.43 | $ | 0.16 | $ | 0.44 | |||||||
From discontinued operations, net of tax | — | — | 0.01 | ||||||||||
Basic | $ | 0.43 | $ | 0.16 | $ | 0.45 | |||||||
Earnings per share: Diluted | |||||||||||||
From continuing operations | $ | 0.42 | $ | 0.15 | $ | 0.43 | |||||||
From discontinued operations, net of tax | — | — | 0.01 | ||||||||||
Diluted | $ | 0.42 | $ | 0.15 | $ | 0.44 | |||||||
Shares used in the calculation of earnings per share: | |||||||||||||
Basic | 282,627 | 282,664 | 292,888 | ||||||||||
Diluted | 288,575 | 288,565 | 300,082 | ||||||||||
Dividends paid per share | $ | 0.26 | $ | 0.26 | $ | 0.24 | |||||||
(1) Includes severance, retention and lease abandonment charges related to acquisitions, and severance charges related to the reorganization of various business units and manufacturing operations. | |||||||||||||
(2) Other operating expenses (income), net are primarily for legal settlement, in-process research and development abandoned, contingent consideration adjustments related to certain acquisitions and legal expenses related to Volterra acquisition. | |||||||||||||
(3) Includes impairment of investments in privately-held companies. | |||||||||||||
(4) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense. | |||||||||||||
SCHEDULE OF SPECIAL EXPENSE ITEMS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
March 29, 2014 | December 28, 2013 | March 30, 2013 | |||||||||||
(in thousands) | |||||||||||||
Cost of goods sold: | |||||||||||||
Intangible asset amortization | $ | 18,542 | $ | 19,098 | $ | 7,777 | |||||||
Acquisition-related inventory write-up | 5,518 | 13,066 | — | ||||||||||
Total | $ | 24,060 | $ | 32,164 | $ | 7,777 | |||||||
Operating expenses: | |||||||||||||
Intangible asset amortization | $ | 4,863 | $ | 4,968 | $ | 3,903 | |||||||
Impairment of long-lived assets | — | 5,197 | — | ||||||||||
Severance and restructuring (1) | 3,338 | 10,227 | 151 | ||||||||||
Acquisition-related costs | (88 | ) | 4,137 | — | |||||||||
Other operating expenses (income), net (2) | 2,913 | 7,307 | 1,678 | ||||||||||
Total | $ | 11,026 | $ | 31,836 | $ | 5,732 | |||||||
Interest and other expense (income), net (3) | $ | 3,723 | $ | — | $ | — | |||||||
Total | $ | 3,723 | $ | — | $ | — | |||||||
Provision (benefit) for income taxes: | |||||||||||||
Fixed assets tax basis adjustment (4) | $ | (34,562 | ) | $ | — | $ | — | ||||||
Research & development tax credits | — | — | (3,899 | ) | |||||||||
Total | $ | (34,562 | ) | $ | — | $ | (3,899 | ) | |||||
Discontinued operations: | |||||||||||||
Income from discontinued operations, net of tax | $ | — | $ | — | $ | (2,603 | ) | ||||||
Total | $ | — | $ | — | $ | (2,603 | ) | ||||||
(1) Includes severance, retention and lease abandonment charges related to acquisitions, and severance charges related to the reorganization of various business units and manufacturing operations. | |||||||||||||
(2) Other operating expenses (income), net are primarily for legal settlement, in-process research and development abandoned, contingent consideration adjustments related to certain acquisitions and legal expenses related to Volterra acquisition. | |||||||||||||
(3) Includes impairment of investments in privately-held companies. | |||||||||||||
(4) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense. | |||||||||||||
STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended March 29, 2014 | Stock Options | Restricted Stock Units | Employee Stock Purchase Plan | Total | |||||||||||||
Cost of goods sold | $ | 451 | $ | 2,108 | $ | 594 | $ | 3,153 | |||||||||
Research and development expense | 2,124 | 7,917 | 1,623 | 11,664 | |||||||||||||
Selling, general and administrative expense | 1,391 | 5,186 | 663 | 7,240 | |||||||||||||
Total | $ | 3,966 | $ | 15,211 | $ | 2,880 | $ | 22,057 | |||||||||
Three Months Ended December 28, 2013 | |||||||||||||||||
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 March 30, 2013 | |||||||||||||||||
Cost of goods sold | $ | 337 | $ | 2,120 | $ | 598 | $ | 3,055 | |||||||||
Research and development expense | 1,440 | 7,116 | 1,480 | 10,036 | |||||||||||||
Selling, general and administrative expense | 1,157 | 4,764 | 601 | 6,522 | |||||||||||||
Total | $ | 2,934 | $ | 14,000 | $ | 2,679 | $ | 19,613 | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||
(Unaudited) | |||||||||||||
March 29, 2014 | December 28, 2013 | March 30, 2013 | |||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 1,231,248 | $ | 1,149,909 | $ | 1,547,980 | |||||||
Short-term investments | — | — | 25,095 | ||||||||||
Total cash, cash equivalents and short-term investments | 1,231,248 | 1,149,909 | 1,573,075 | ||||||||||
Accounts receivable, net | 304,128 | 288,285 | 300,046 | ||||||||||
Inventories | 290,518 | 297,234 | 268,018 | ||||||||||
Deferred tax assets | 74,038 | 69,154 | 81,809 | ||||||||||
Other current assets | 79,346 | 85,554 | 113,010 | ||||||||||
Total current assets | 1,979,278 | 1,890,136 | 2,335,958 | ||||||||||
Property, plant and equipment, net | 1,355,268 | 1,372,393 | 1,368,905 | ||||||||||
Intangible assets, net | 384,167 | 404,652 | 165,591 | ||||||||||
Goodwill | 597,676 | 596,898 | 422,004 | ||||||||||
Other assets | 38,176 | 42,803 | 41,660 | ||||||||||
TOTAL ASSETS | $ | 4,354,565 | $ | 4,306,882 | $ | 4,334,118 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 94,315 | $ | 99,009 | $ | 114,629 | |||||||
Income taxes payable | 20,720 | 21,717 | 20,200 | ||||||||||
Accrued salary and related expenses | 168,336 | 140,738 | 182,894 | ||||||||||
Accrued expenses | 81,232 | 91,145 | 59,075 | ||||||||||
Current portion of long-term debt | 2,526 | 2,965 | 304,314 | ||||||||||
Deferred income on shipments to distributors | 24,259 | 25,542 | 25,851 | ||||||||||
Total current liabilities | 391,388 | 381,116 | 706,963 | ||||||||||
Long-term debt | 1,000,871 | 1,000,871 | 503,573 | ||||||||||
Income taxes payable | 352,294 | 337,053 | 271,815 | ||||||||||
Deferred tax liabilities | 171,431 | 202,435 | 213,138 | ||||||||||
Other liabilities | 37,977 | 29,343 | 26,063 | ||||||||||
Total liabilities | 1,953,961 | 1,950,818 | 1,721,552 | ||||||||||
Stockholders' equity: | |||||||||||||
Common stock and capital in excess of par value | 283 | 283 | 292 | ||||||||||
Retained earnings | 2,412,627 | 2,368,350 | 2,629,895 | ||||||||||
Accumulated other comprehensive loss | (12,306 | ) | (12,569 | ) | (17,621 | ) | |||||||
Total stockholders' equity | 2,400,604 | 2,356,064 | 2,612,566 | ||||||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 4,354,565 | $ | 4,306,882 | $ | 4,334,118 | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
March 29, 2014 | December 28, 2013 | March 30, 2013 | |||||||||||
(in thousands) | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income | $ | 122,544 | $ | 44,353 | $ | 131,388 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
Stock-based compensation | 22,057 | 22,869 | 19,613 | ||||||||||
Depreciation and amortization | 64,665 | 64,404 | 50,391 | ||||||||||
Deferred taxes | (36,482 | ) | (11,705 | ) | 18,392 | ||||||||
In-process research and development written-off | 2,580 | — | 2,800 | ||||||||||
Loss (gain) from sale of property, plant and equipment | 818 | 265 | (2,397 | ) | |||||||||
Tax benefit (shortfall) related to stock-based compensation | 3,204 | (726 | ) | 1,317 | |||||||||
Impairment of long-lived assets | — | 5,197 | — | ||||||||||
Impairment of investments in privately-held companies | 3,723 | — | — | ||||||||||
Excess tax benefit from stock-based compensation | (5,139 | ) | (2,459 | ) | (4,297 | ) | |||||||
Loss(gain) on sale of discontinued operations | — | — | (3,285 | ) | |||||||||
Changes in assets and liabilities: | |||||||||||||
Accounts receivable | (15,566 | ) | 33,056 | (35,501 | ) | ||||||||
Inventories | 7,717 | 14,030 | (12,143 | ) | |||||||||
Other current assets | 7,194 | 30,330 | (14,653 | ) | |||||||||
Accounts payable | (4,044 | ) | (3,252 | ) | 10,453 | ||||||||
Income taxes payable | 14,244 | 19,002 | 9,100 | ||||||||||
Deferred revenue on shipments to distributors | (1,283 | ) | (1,637 | ) | 489 | ||||||||
All other accrued liabilities | 25,466 | 20,704 | 40,026 | ||||||||||
Net cash provided by (used in) operating activities | 211,698 | 234,431 | 211,693 | ||||||||||
Cash flows from investing activities: | |||||||||||||
Purchase of property, plant and equipment | (26,407 | ) | (46,133 | ) | (54,945 | ) | |||||||
Proceeds from sales of property, plant and equipment | 618 | — | 10,199 | ||||||||||
Payments in connection with business acquisition, net of cash acquired | (5,750 | ) | (453,506 | ) | — | ||||||||
Proceeds from maturity of available-for-sale securities | — | 27,000 | 50,000 | ||||||||||
Net cash provided by (used in) investing activities | (31,539 | ) | (472,639 | ) | 5,254 | ||||||||
Cash flows from financing activities: | |||||||||||||
Excess tax benefit from stock-based compensation | 5,139 | 2,459 | 4,297 | ||||||||||
Contingent consideration paid | (104 | ) | (4,601 | ) | — | ||||||||
Dividends paid | (73,481 | ) | (73,324 | ) | (70,421 | ) | |||||||
Repayment of notes payable | (439 | ) | (1,839 | ) | (903 | ) | |||||||
Issuance of debt | — | 497,795 | 491,145 | ||||||||||
Debt issuance cost | — | (3,431 | ) | — | |||||||||
Repurchase of common stock | (51,083 | ) | (59,101 | ) | (66,330 | ) | |||||||
Issuance of ESPP shares under employee stock purchase program | — | 19,096 | — | ||||||||||
Net issuance of restricted stock units | (8,390 | ) | (7,106 | ) | (7,941 | ) | |||||||
Proceeds from stock options exercised | 29,538 | 8,622 | 26,079 | ||||||||||
Net cash provided by (used in) financing activities | (98,820 | ) | 378,570 | 375,926 | |||||||||
Net increase (decrease) in cash and cash equivalents | 81,339 | 140,362 | 592,873 | ||||||||||
Cash and cash equivalents: | |||||||||||||
Beginning of period | 1,149,909 | 1,009,547 | 955,107 | ||||||||||
End of period | $ | 1,231,248 | $ | 1,149,909 | $ | 1,547,980 | |||||||
Total cash, cash equivalents, and short-term investments | $ | 1,231,248 | $ | 1,149,909 | $ | 1,573,075 | |||||||
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 29, 2014 | December 28, 2013 | March 30, 2013 | ||||||||||||
(in thousands, except per share data) | ||||||||||||||
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items: | ||||||||||||||
GAAP gross profit | $ | 339,937 | $ | 328,672 | $ | 376,102 | ||||||||
GAAP gross profit % | 56.1 | % | 53.0 | % | 62.2 | % | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 18,542 | 19,098 | 7,777 | |||||||||||
Acquisition-related inventory write-up | 5,518 | 13,066 | — | |||||||||||
Total special items | 24,060 | 32,164 | 7,777 | |||||||||||
GAAP gross profit excluding special items | $ | 363,997 | $ | 360,836 | $ | 383,879 | ||||||||
GAAP gross profit % excluding special items | 60.1 | % | 58.2 | % | 63.5 | % | ||||||||
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items: | ||||||||||||||
GAAP operating expenses | $ | 233,199 | $ | 258,278 | $ | 221,824 | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 4,863 | 4,968 | 3,903 | |||||||||||
Impairment of long-lived assets | — | 5,197 | — | |||||||||||
Severance and restructuring (1) | 3,338 | 10,227 | 151 | |||||||||||
Acquisition-related costs | (88 | ) | 4,137 | — | ||||||||||
Other operating expenses (income), net (2) | 2,913 | 7,307 | 1,678 | |||||||||||
Total special items | 11,026 | 31,836 | 5,732 | |||||||||||
GAAP operating expenses excluding special items | $ | 222,173 | $ | 226,442 | $ | 216,092 | ||||||||
Reconciliation of GAAP net income to GAAP net income excluding special items: | ||||||||||||||
GAAP net income | $ | 122,544 | $ | 44,353 | $ | 131,388 | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 23,405 | 24,066 | 11,680 | |||||||||||
Acquisition-related inventory write-up | 5,518 | 13,066 | — | |||||||||||
Impairment of long-lived assets | — | 5,197 | — | |||||||||||
Severance and restructuring (1) | 3,338 | 10,227 | 151 | |||||||||||
Acquisition-related costs | (88 | ) | 4,137 | — | ||||||||||
Other operating expenses (income), net (2) | 2,913 | 7,307 | 1,678 | |||||||||||
Interest and other expense, net (3) | 3,723 | — | — | |||||||||||
Pre-tax total special items | 38,809 | 64,000 | 13,509 | |||||||||||
Tax effect of special items | (3,658 | ) | (5,894 | ) | (3,806 | ) | ||||||||
Fixed asset tax basis adjustment (4) | (34,562 | ) | — | — | ||||||||||
Research & development tax credits | — | — | (3,899 | ) | ||||||||||
Discontinued operations, net of tax | — | — | (2,603 | ) | ||||||||||
GAAP net income excluding special items | $ | 123,133 | $ | 102,459 | $ | 134,589 | ||||||||
GAAP net income per share excluding special items: | ||||||||||||||
Basic | $ | 0.44 | $ | 0.36 | $ | 0.46 | ||||||||
Diluted | $ | 0.43 | $ | 0.36 | $ | 0.45 | ||||||||
Shares used in the calculation of earnings per share excluding special items: | ||||||||||||||
Basic | 282,627 | 282,664 | 292,888 | |||||||||||
Diluted | 288,575 | 288,565 | 300,082 | |||||||||||
(1) Includes severance, retention and lease abandonment charges related to acquisitions, and severance charges related to the reorganization of various business units and manufacturing operations. | ||||||||||||||
(2) Other operating expenses (income), net are primarily for legal settlement, in-process research and development abandoned, contingent consideration adjustments related to certain acquisitions and legal expenses related to Volterra acquisition. | ||||||||||||||
(3) Includes impairment of investments in privately-held companies. | ||||||||||||||
(4) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense. | ||||||||||||||
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