FORM 8-K |
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 94-2896096 (I.R.S. Employer I. D. No.) |
Maxim Integrated Products, Inc. | |
By:/s/ Sumeet Gagneja | |
Sumeet Gagneja Vice President, Chief Accounting Officer (Chief Accounting Officer and Duly Authorized Officer) |
• | Gross Margin: 64.7% GAAP (65.9% excluding special items) |
• | EPS: $0.47 GAAP ($0.60 excluding special items) |
• | Fiscal third quarter revenue outlook: $520 to $560 million |
• | 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 |
• | 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) |
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. | |||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||
(Unaudited) | |||||||||||||
December 29, 2018 | September 29, 2018 | December 30, 2017 | |||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 1,406,740 | $ | 1,598,772 | $ | 1,631,510 | |||||||
Short-term investments | 553,901 | 964,643 | 1,191,765 | ||||||||||
Total cash, cash equivalents and short-term investments | 1,960,641 | 2,563,415 | 2,823,275 | ||||||||||
Accounts receivable, net | 391,419 | 439,407 | 235,695 | ||||||||||
Inventories | 278,925 | 275,374 | 259,597 | ||||||||||
Other current assets | 26,933 | 33,329 | 24,153 | ||||||||||
Total current assets | 2,657,918 | 3,311,525 | 3,342,720 | ||||||||||
Property, plant and equipment, net | 571,983 | 573,014 | 597,818 | ||||||||||
Intangible assets, net | 67,161 | 74,785 | 67,716 | ||||||||||
Goodwill | 532,251 | 532,251 | 491,015 | ||||||||||
Other assets | 59,614 | 56,977 | 65,243 | ||||||||||
TOTAL ASSETS | $ | 3,888,927 | $ | 4,548,552 | $ | 4,564,512 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 99,577 | $ | 84,087 | $ | 84,770 | |||||||
Price adjustment and other revenue reserves | 130,601 | 135,187 | — | ||||||||||
Income taxes payable | 39,507 | 60,877 | 10,523 | ||||||||||
Accrued salary and related expenses | 102,427 | 106,273 | 113,716 | ||||||||||
Accrued expenses | 34,368 | 42,091 | 37,687 | ||||||||||
Current portion of debt | — | 499,762 | 498,694 | ||||||||||
Total current liabilities | 406,480 | 928,277 | 745,390 | ||||||||||
Long-term debt | 991,866 | 991,506 | 990,428 | ||||||||||
Income taxes payable | 673,051 | 652,163 | 801,260 | ||||||||||
Other liabilities | 62,116 | 64,283 | 41,736 | ||||||||||
Total liabilities | 2,133,513 | 2,636,229 | 2,578,814 | ||||||||||
Stockholders' equity: | |||||||||||||
Common stock and capital in excess of par value | 279 | 279 | 283 | ||||||||||
Retained earnings | 1,766,471 | 1,924,764 | 1,997,207 | ||||||||||
Accumulated other comprehensive loss | (11,336 | ) | (12,720 | ) | (11,792 | ) | |||||||
Total stockholders' equity | 1,755,414 | 1,912,323 | 1,985,698 | ||||||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 3,888,927 | $ | 4,548,552 | $ | 4,564,512 | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
December 29, 2018 | September 29, 2018 | December 30, 2017 | |||||||||||
(in thousands) | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income (loss) | $ | 131,892 | $ | 197,423 | $ | (75,015 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||
Stock-based compensation | 21,656 | 20,497 | 21,040 | ||||||||||
Depreciation and amortization | 26,803 | 31,191 | 35,813 | ||||||||||
Deferred taxes | (5,174 | ) | (3,032 | ) | (3,188 | ) | |||||||
Loss (gain) from disposal of property, plant and equipment | 2,275 | 621 | (649 | ) | |||||||||
Impairment of investments in privately-held companies | 753 | — | 850 | ||||||||||
Other adjustments | — | (117 | ) | — | |||||||||
Changes in assets and liabilities: | |||||||||||||
Accounts receivable | 43,402 | (23,604 | ) | (2,480 | ) | ||||||||
Inventories | (3,505 | ) | 7,002 | (14,125 | ) | ||||||||
Other current assets | 6,038 | (12,625 | ) | 31,459 | |||||||||
Accounts payable | 7,664 | (5,263 | ) | 13,643 | |||||||||
Income taxes payable | (482 | ) | 33,743 | 234,264 | |||||||||
Deferred margin on shipments to distributors | — | — | (16,994 | ) | |||||||||
Accrued salary and related expenses | (375 | ) | (45,408 | ) | 10,523 | ||||||||
All other accrued liabilities | (6,697 | ) | 6,757 | (5,266 | ) | ||||||||
Net cash provided by (used in) operating activities | 224,250 | 207,185 | 229,875 | ||||||||||
Cash flows from investing activities: | |||||||||||||
Purchase of property, plant and equipment | (12,597 | ) | (18,316 | ) | (22,413 | ) | |||||||
Proceeds from sales of property, plant and equipment | 1 | 1 | 1,444 | ||||||||||
Proceeds from sale of available-for-sale securities | 18,815 | 8,438 | 21,895 | ||||||||||
Proceeds from maturity of available-for-sale securities | 416,720 | 301,834 | 118,211 | ||||||||||
Payment in connection with business acquisition, net of cash acquired | — | (2,949 | ) | — | |||||||||
Purchases of available-for-sale securities | (23,707 | ) | (190,880 | ) | (137,166 | ) | |||||||
Purchases of privately-held companies' securities | (156 | ) | (750 | ) | (1,500 | ) | |||||||
Net cash provided by (used in) investing activities | 399,076 | 97,378 | (19,529 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||
Repayment of debt | (500,000 | ) | — | — | |||||||||
Contingent consideration paid | — | (8,000 | ) | — | |||||||||
Net issuance of restricted stock units | (5,916 | ) | (7,528 | ) | (6,104 | ) | |||||||
Proceeds from stock options exercised | 7,235 | 6,608 | 13,507 | ||||||||||
Issuance of common stock under employee stock purchase program | 17,689 | — | 14,975 | ||||||||||
Repurchase of common stock | (207,558 | ) | (112,498 | ) | (76,953 | ) | |||||||
Dividends paid | (126,808 | ) | (127,857 | ) | (101,421 | ) | |||||||
Net cash provided by (used in) financing activities | (815,358 | ) | (249,275 | ) | (155,996 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | (192,032 | ) | 55,288 | 54,350 | |||||||||
Cash and cash equivalents: | |||||||||||||
Beginning of period | $ | 1,598,772 | $ | 1,543,484 | $ | 1,577,160 | |||||||
End of period | $ | 1,406,740 | $ | 1,598,772 | $ | 1,631,510 | |||||||
Total cash, cash equivalents, and short-term investments | $ | 1,960,641 | $ | 2,563,415 | $ | 2,823,275 | |||||||
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
December 29, 2018 | September 29, 2018 | December 30, 2017 | ||||||||||||
(in thousands, except per share data) | ||||||||||||||
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items: | ||||||||||||||
GAAP gross profit | $ | 373,048 | $ | 430,236 | $ | 409,676 | ||||||||
GAAP gross profit % | 64.7 | % | 67.4 | % | 65.8 | % | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 6,868 | 6,915 | 11,139 | |||||||||||
Total special items | 6,868 | 6.915 | 11,139 | |||||||||||
GAAP gross profit excluding special items | $ | 379,916 | $ | 437.151 | $ | 420,815 | ||||||||
GAAP gross profit % excluding special items | 65.9 | % | 68.5 | % | 67.6 | % | ||||||||
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items: | ||||||||||||||
GAAP operating expenses | $ | 190,844 | $ | 196,053 | $ | 208,628 | ||||||||
Special items: | ||||||||||||||
Intangible asset amortization | 756 | 773 | 995 | |||||||||||
Impairment of long-lived assets | 753 | — | 850 | |||||||||||
Severance and restructuring | 1,179 | 994 | 6,523 | |||||||||||
Other operating expenses (income), net | — | 60 | (959 | ) | ||||||||||
Total special items | 2,688 | 1,827 | 7,409 | |||||||||||
GAAP operating expenses excluding special items | $ | 188,156 | $ | 194.226 | $ | 201,219 | ||||||||
Reconciliation of GAAP net income (loss) to GAAP net income excluding special items: | ||||||||||||||
GAAP net income (loss) | $ | 131,892 | $ | 197,423 | $ | (75,015 | ) | |||||||
Special items: | ||||||||||||||
Intangible asset amortization | 7,624 | 7,688 | 12,134 | |||||||||||
Impairment of long-lived assets (1) | 753 | — | 850 | |||||||||||
Severance and restructuring | 1,179 | 994 | 6,523 | |||||||||||
Other operating expenses (income), net | — | 60 | (959 | ) | ||||||||||
Interest and other expense (income), net | (351 | ) | (378 | ) | (119 | ) | ||||||||
Total pre-tax special items | 9,205 | 8,364 | 18,429 | |||||||||||
Other income tax effects and adjustments (2) | 3,758 | 4,754 | (897 | ) | ||||||||||
Impact of U.S. tax effects and adjustments (3) | 22,082 | — | 243,550 | |||||||||||
GAAP net income excluding special items | $ | 166,937 | $ | 210,541 | $ | 186,067 | ||||||||
GAAP net income per share excluding special items: | ||||||||||||||
Basic | $ | 0.60 | $ | 0.76 | $ | 0.66 | ||||||||
Diluted | $ | 0.60 | $ | 0.75 | $ | 0.65 | ||||||||
Shares used in the calculation of earnings per share excluding special items: | ||||||||||||||
Basic | 276,252 | 278,045 | 281,560 | |||||||||||
Diluted (4) | 280,008 | 282,454 | 286,356 | |||||||||||
(1) Includes impairment of investments in privately-held companies and other equipment impairment charges. | ||||||||||||||
(2) Includes tax effect of pre-tax special items and miscellaneous tax adjustments. | ||||||||||||||
(3) Includes effect of U.S. tax legislation enacted on December 22, 2017. | ||||||||||||||
(4) Shares used in diluted earnings per share excluding special items differs from GAAP loss per share due to net income on a non-GAAP basis. | ||||||||||||||
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