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 22, 2015 announcing the Company's preliminary financial results for the second quarter of fiscal year 2015. |
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 22, 2015 announcing the Company's preliminary financial results for the second quarter of fiscal year 2015. Also provided in PDF format as a courtesy. |
• | Revenue: $567 million |
• | Gross Margin: 55.4% GAAP (60.3% excluding special items) |
• | EPS: $0.25 GAAP loss ($0.33 profit excluding special items) |
• | Cash, cash equivalents, and short term investments: $1.38 billion |
• | Fiscal second quarter revenue outlook: $565 million to $605 million |
• | Cash flow from operations: $173 million |
• | Capital additions: $17 million |
• | Proceeds from property sales: $24 million |
• | Dividends: $79 million ($0.28 per share) |
• | Stock repurchases: $60 million |
• | Revenue: $565 million to $605 million |
• | Gross Margin: 52% to 56% GAAP (58% to 62% excluding special items) |
• | EPS: $0.20 to $0.26 GAAP ($0.32 to $0.38 excluding special items) |
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 27, 2014 | September 27, 2014 | December 28, 2013 | |||||||||||
(in thousands, except per share data) | |||||||||||||
Net revenues | $ | 566,809 | $ | 580,275 | $ | 620,274 | |||||||
Cost of goods sold (1) | 252,732 | 241,454 | 291,602 | ||||||||||
Gross margin | 314,077 | 338,821 | 328,672 | ||||||||||
Operating expenses: | |||||||||||||
Research and development | 135,945 | 140,362 | 142,971 | ||||||||||
Selling, general and administrative | 79,778 | 79,989 | 83,471 | ||||||||||
Intangible asset amortization | 4,155 | 4,327 | 4,968 | ||||||||||
Impairment of long-lived assets (2) | 50,745 | 10,226 | 5,197 | ||||||||||
Impairment of goodwill and intangible assets (3) | 93,010 | — | — | ||||||||||
Severance and restructuring expenses (4) | 13,635 | 1,385 | 10,227 | ||||||||||
Acquisition-related costs | — | — | 4,137 | ||||||||||
Other operating expenses (income), net (5) | 885 | 1,574 | 7,307 | ||||||||||
Total operating expenses | 378,153 | 237,863 | 258,278 | ||||||||||
Operating income (loss) | (64,076 | ) | 100,958 | 70,394 | |||||||||
Interest and other income (expense), net | (7,599 | ) | (6,477 | ) | (5,833 | ) | |||||||
Income (loss) before provision for income taxes | (71,675 | ) | 94,481 | 64,561 | |||||||||
Provision (benefit) for income taxes (6) | 359 | (5,499 | ) | 20,208 | |||||||||
Net income (loss) | $ | (72,034 | ) | $ | 99,980 | $ | 44,353 | ||||||
Earnings (loss) per share: | |||||||||||||
Basic | $ | (0.25 | ) | $ | 0.35 | $ | 0.16 | ||||||
Diluted | $ | (0.25 | ) | $ | 0.35 | $ | 0.15 | ||||||
Shares used in the calculation of earnings (loss) per share: | |||||||||||||
Basic | 282,992 | 284,086 | 282,664 | ||||||||||
Diluted | 282,992 | 289,430 | 288,565 | ||||||||||
Dividends paid per share | $ | 0.28 | $ | 0.28 | $ | 0.26 | |||||||
SCHEDULE OF SPECIAL EXPENSE ITEMS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 27, 2014 | September 27, 2014 | December 28, 2013 | |||||||||||
(in thousands) | |||||||||||||
Cost of goods sold: | |||||||||||||
Intangible asset amortization | $ | 18,750 | $ | 18,750 | $ | 19,098 | |||||||
Accelerated depreciation (1) | 8,895 | — | — | ||||||||||
Acquisition-related inventory write-up | — | — | 13,066 | ||||||||||
Total | $ | 27,645 | $ | 18,750 | $ | 32,164 | |||||||
Operating expenses: | |||||||||||||
Intangible asset amortization | $ | 4,155 | $ | 4,327 | $ | 4,968 | |||||||
Impairment of long-lived assets (2) | 50,745 | 10,226 | 5,197 | ||||||||||
Impairment of goodwill and intangible assets (3) | 93,010 | — | — | ||||||||||
Severance and restructuring (4) | 13,635 | 1,385 | 10,227 | ||||||||||
Acquisition-related costs | — | — | 4,137 | ||||||||||
Other operating expenses (income), net (5) | 885 | 1,574 | 7,307 | ||||||||||
Total | $ | 162,430 | $ | 17,512 | $ | 31,836 | |||||||
Interest and other expense (income), net | $ | (217 | ) | $ | — | $ | — | ||||||
Total | $ | (217 | ) | $ | — | $ | — | ||||||
Provision (benefit) for income taxes: | |||||||||||||
Reversal of Tax Reserves (6) | $ | — | $ | (21,747 | ) | $ | — | ||||||
Fiscal year 2014 research & development tax credits | (2,863 | ) | — | — | |||||||||
Total | $ | (2,863 | ) | $ | (21,747 | ) | $ | — | |||||
(1) Accelerated depreciation related to San Jose wafer manufacturing building and equipment. | |||||||||||||
(2) Includes impairment charges related to MEMS and non-MEMS wafer manufacturing equipment and end of line test equipment. | |||||||||||||
(3) Includes impairment of goodwill and write-off of in-process research and development related to MEMS business unit. | |||||||||||||
(4) Includes severance charges associated with closure of San Jose wafer manufacturing facility and reorganization of various business units, and severance & retention and lease abandonment charges related to Volterra acquisition. | |||||||||||||
(5) Includes loss related to sale of land & buildings, expected loss on rent expense for vacated office space, legal settlement, and contingent consideration adjustments related to certain acquisitions. | |||||||||||||
(6) Includes reversal of tax reserves related to a favorable settlement of a foreign tax issue. | |||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||
(Unaudited) | |||||||||||||
December 27, 2014 | September 27, 2014 | December 28, 2013 | |||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 1,305,870 | $ | 1,243,883 | $ | 1,149,909 | |||||||
Short-term investments | 75,012 | 75,094 | — | ||||||||||
Total cash, cash equivalents and short-term investments | 1,380,882 | 1,318,977 | 1,149,909 | ||||||||||
Accounts receivable, net | 258,506 | 281,932 | 288,285 | ||||||||||
Inventories | 306,564 | 305,108 | 297,234 | ||||||||||
Deferred tax assets | 59,794 | 54,379 | 69,154 | ||||||||||
Other current assets | 67,244 | 67,383 | 85,554 | ||||||||||
Total current assets | 2,072,990 | 2,027,779 | 1,890,136 | ||||||||||
Property, plant and equipment, net | 1,195,323 | 1,303,861 | 1,372,393 | ||||||||||
Intangible assets, net | 306,111 | 337,917 | 404,652 | ||||||||||
Goodwill | 511,838 | 595,441 | 596,898 | ||||||||||
Other assets | 38,265 | 40,127 | 42,803 | ||||||||||
TOTAL ASSETS | $ | 4,124,527 | $ | 4,305,125 | $ | 4,306,882 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 82,526 | $ | 96,347 | $ | 99,009 | |||||||
Income taxes payable | 20,102 | 20,122 | 21,717 | ||||||||||
Accrued salary and related expenses | 150,405 | 126,624 | 140,738 | ||||||||||
Accrued expenses | 54,103 | 65,216 | 94,110 | ||||||||||
Deferred revenue on shipments to distributors | 27,103 | 26,821 | 25,542 | ||||||||||
Total current liabilities | 334,239 | 335,130 | 381,116 | ||||||||||
Long-term debt | 1,000,000 | 1,001,026 | 1,000,871 | ||||||||||
Income taxes payable | 363,251 | 350,396 | 337,053 | ||||||||||
Deferred tax liabilities | 120,308 | 145,597 | 202,435 | ||||||||||
Other liabilities | 64,988 | 61,572 | 29,343 | ||||||||||
Total liabilities | 1,882,786 | 1,893,721 | 1,950,818 | ||||||||||
Stockholders' equity: | |||||||||||||
Common stock and capital in excess of par value | 283 | 284 | 283 | ||||||||||
Retained earnings | 2,259,997 | 2,430,194 | 2,368,350 | ||||||||||
Accumulated other comprehensive loss | (18,539 | ) | (19,074 | ) | (12,569 | ) | |||||||
Total stockholders' equity | 2,241,741 | 2,411,404 | 2,356,064 | ||||||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 4,124,527 | $ | 4,305,125 | $ | 4,306,882 | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 27, 2014 | September 27, 2014 | December 28, 2013 | |||||||||||
(in thousands) | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income (loss) | $ | (72,034 | ) | $ | 99,980 | $ | 44,353 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
Stock-based compensation | 20,776 | 22,420 | 22,869 | ||||||||||
Depreciation and amortization | 71,625 | 63,693 | 64,404 | ||||||||||
Deferred taxes | (30,849 | ) | 6,207 | (11,705 | ) | ||||||||
Loss (gain) from sale of property, plant and equipment | 1,844 | 244 | 265 | ||||||||||
Tax benefit (shortfall) related to stock-based compensation | (229 | ) | 1,610 | (726 | ) | ||||||||
Impairment of long-lived assets | 50,745 | 10,226 | 5,197 | ||||||||||
Impairment of goodwill and intangible assets | 93,010 | — | — | ||||||||||
Excess tax benefit from stock-based compensation | (1,931 | ) | (2,249 | ) | (2,459 | ) | |||||||
Changes in assets and liabilities: | |||||||||||||
Accounts receivable | 23,426 | 13,896 | 33,056 | ||||||||||
Inventories | (1,486 | ) | (15,650 | ) | 14,030 | ||||||||
Other current assets | 1,009 | (24,974 | ) | 30,330 | |||||||||
Accounts payable | (12,007 | ) | 4,455 | (3,252 | ) | ||||||||
Income taxes payable | 12,835 | (12,289 | ) | 19,002 | |||||||||
Deferred revenue on shipments to distributors | 282 | 1,087 | (1,637 | ) | |||||||||
All other accrued liabilities | 15,839 | (51,659 | ) | 20,704 | |||||||||
Net cash provided by (used in) operating activities | 172,855 | 116,997 | 234,431 | ||||||||||
Cash flows from investing activities: | |||||||||||||
Purchase of property, plant and equipment | (18,585 | ) | (31,686 | ) | (46,133 | ) | |||||||
Proceeds from sales of property, plant and equipment | 24,467 | 212 | — | ||||||||||
Payments in connection with business acquisition, net of cash acquired | — | — | (453,506 | ) | |||||||||
Purchases of available-for-sale securities | — | (25,142 | ) | — | |||||||||
Proceeds from maturity of available-for-sale securities | — | — | 27,000 | ||||||||||
Net cash provided by (used in) investing activities | 5,882 | (56,616 | ) | (472,639 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||
Excess tax benefit from stock-based compensation | 1,931 | 2,249 | 2,459 | ||||||||||
Contingent consideration paid | — | — | (4,601 | ) | |||||||||
Repayment of notes payable | — | (437 | ) | (1,839 | ) | ||||||||
Issuance of debt | — | — | 497,795 | ||||||||||
Debt issuance cost | — | — | (3,431 | ) | |||||||||
Net issuance of restricted stock units | (6,822 | ) | (8,038 | ) | (7,106 | ) | |||||||
Proceeds from stock options exercised | 8,323 | 9,704 | 8,622 | ||||||||||
Issuance of ESPP shares under employee stock purchase program | 18,653 | — | 19,096 | ||||||||||
Repurchase of common stock | (59,666 | ) | (62,685 | ) | (59,101 | ) | |||||||
Dividends paid | (79,169 | ) | (79,763 | ) | (73,324 | ) | |||||||
Net cash provided by (used in) financing activities | (116,750 | ) | (138,970 | ) | 378,570 | ||||||||
Net increase (decrease) in cash and cash equivalents | 61,987 | (78,589 | ) | 140,362 | |||||||||
Cash and cash equivalents: | |||||||||||||
Beginning of period | 1,243,883 | 1,322,472 | 1,009,547 | ||||||||||
End of period | $ | 1,305,870 | $ | 1,243,883 | $ | 1,149,909 | |||||||
Total cash, cash equivalents, and short-term investments | $ | 1,380,882 | $ | 1,318,977 | $ | 1,149,909 | |||||||
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
December 27, 2014 | September 27, 2014 | December 28, 2013 | ||||||||||||
(in thousands, except per share data) | ||||||||||||||
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items: | ||||||||||||||
GAAP gross profit | $ | 314,077 | $ | 338,821 | $ | 328,672 | ||||||||
GAAP gross profit % | 55.4 | % | 58.4 | % | 53.0 | % | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 18,750 | 18,750 | 19,098 | |||||||||||
Accelerated depreciation (1) | 8,895 | — | — | |||||||||||
Acquisition-related inventory write-up | — | — | 13,066 | |||||||||||
Total special items | 27,645 | 18,750 | 32,164 | |||||||||||
GAAP gross profit excluding special items | $ | 341,722 | $ | 357,571 | $ | 360,836 | ||||||||
GAAP gross profit % excluding special items | 60.3 | % | 61.6 | % | 58.2 | % | ||||||||
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items: | ||||||||||||||
GAAP operating expenses | $ | 378,153 | $ | 237,863 | $ | 258,278 | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 4,155 | 4,327 | 4,968 | |||||||||||
Impairment of long-lived assets (2) | 50,745 | 10,226 | 5,197 | |||||||||||
Impairment of goodwill and intangible assets (3) | 93,010 | — | — | |||||||||||
Severance and restructuring (4) | 13,635 | 1,385 | 10,227 | |||||||||||
Acquisition-related costs | — | — | 4,137 | |||||||||||
Other operating expenses (income), net (5) | 885 | 1,574 | 7,307 | |||||||||||
Total special items | 162,430 | 17,512 | 31,836 | |||||||||||
GAAP operating expenses excluding special items | $ | 215,723 | $ | 220,351 | $ | 226,442 | ||||||||
Reconciliation of GAAP net income (loss) to GAAP net income excluding special items: | ||||||||||||||
GAAP net income (loss) | $ | (72,034 | ) | $ | 99,980 | $ | 44,353 | |||||||
Special items: | ||||||||||||||
Intangible asset amortization | 22,905 | 23,077 | 24,066 | |||||||||||
Accelerated depreciation (1) | 8,895 | — | — | |||||||||||
Acquisition-related inventory write-up | — | — | 13,066 | |||||||||||
Impairment of long-lived assets (2) | 50,745 | 10,226 | 5,197 | |||||||||||
Impairment of goodwill and intangible assets (3) | 93,010 | — | — | |||||||||||
Severance and restructuring (4) | 13,635 | 1,385 | 10,227 | |||||||||||
Acquisition-related costs | — | — | 4,137 | |||||||||||
Other operating expenses (income), net (5) | 885 | 1,574 | 7,307 | |||||||||||
Interest and other expense (income), net | (217 | ) | — | — | ||||||||||
Pre-tax total special items | 189,858 | 36,262 | 64,000 | |||||||||||
Tax effect of special items | (21,283 | ) | (5,873 | ) | (5,894 | ) | ||||||||
Reversal of tax reserves (6) | — | (21,747 | ) | — | ||||||||||
Fiscal year 2014 research & development tax credits | (2,863 | ) | — | — | ||||||||||
GAAP net income excluding special items | $ | 93,678 | $ | 108,622 | $ | 102,459 | ||||||||
GAAP net income per share excluding special items: | ||||||||||||||
Basic | $ | 0.33 | $ | 0.38 | $ | 0.36 | ||||||||
Diluted | $ | 0.33 | $ | 0.38 | $ | 0.36 | ||||||||
Shares used in the calculation of earnings per share excluding special items: | ||||||||||||||
Basic | 282,992 | 284,086 | 282,664 | |||||||||||
Diluted | 282,992 | 289,430 | 288,565 | |||||||||||
(1) Accelerated depreciation related to San Jose wafer manufacturing building and equipment. | ||||||||||||||
(2) Includes impairment charges related to MEMS and non-MEMS wafer manufacturing equipment and end of line test equipment. | ||||||||||||||
(3) Includes impairment of goodwill and write-off of in-process research and development related to MEMS business unit. | ||||||||||||||
(4) Includes severance charges associated with closure of San Jose wafer manufacturing facility and reorganization of various business units, and severance & retention and lease abandonment charges related to Volterra acquisition. | ||||||||||||||
(5) Includes loss related to sale of land & buildings, expected loss on rent expense for vacated office space, legal settlement, and contingent consideration adjustments related to certain acquisitions. | ||||||||||||||
(6) Includes reversal of tax reserves related to a favorable settlement of a foreign tax issue. | ||||||||||||||
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