-----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, E7pNF/HcGzJPCXhQxYOGjCtsDdCVvLDrZjOCSrk8WUtSfQXO1gFUwTFRqHN+r/Bb 6MtcbvhV0onaMEs37hP8TQ== 0000891618-97-004483.txt : 19971114 0000891618-97-004483.hdr.sgml : 19971114 ACCESSION NUMBER: 0000891618-97-004483 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970927 FILED AS OF DATE: 19971112 SROS: NONE 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: SEC FILE NUMBER: 000-16538 FILM NUMBER: 97712419 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 10-Q 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 SEPTEMBER 27, 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 OCTOBER 31, 1997 $.001 PAR VALUE 65,006,367 SHARES 2 MAXIM INTEGRATED PRODUCTS, INC. INDEX - ----- PART I. FINANCIAL INFORMATION PAGE ---- ITEM 1. Financial Statements Consolidated Balance Sheets 3 As of June 30, 1997 and September 27, 1997 Consolidated Statements of Income 4 for the three months ended September 30, 1996 and September 27, 1997 Consolidated Statements of Cash Flows 5 for the three months ended September 30, 1996 and September 27, 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, September 27, 1997 1997 (Amounts in thousands) (Unaudited) ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 18,562 $ 22,197 Short-term investments 205,391 253,111 ------------- ------------- Total cash, cash equivalents and short-term investments 223,953 275,308 ------------- ------------- Accounts receivable, net 91,642 95,762 Inventories 36,833 37,013 Deferred taxes and other current assets 24,579 25,551 ------------- ------------- Total current assets 377,007 433,634 ------------- ------------- Property, plant and equipment, at cost, less accumulated depreciation 174,508 182,767 Other assets 4,871 4,706 ------------- ------------- TOTAL ASSETS $ 556,386 $ 621,107 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 25,249 $ 28,228 Income taxes payable 10,916 -- Accrued salaries 16,408 18,604 Accrued expenses 16,312 22,301 Deferred income on shipments to distributors 16,336 15,033 ------------- ------------- Total current liabilities 85,221 84,166 ------------- ------------- Other liabilities 4,000 4,000 Deferred income taxes 1,600 1,600 Commitments ------------- ------------- Stockholders' equity: Common stock 64 64 Additional paid-in capital 92,837 119,292 Retained earnings 373,770 413,734 Translation adjustment (1,106) (1,749) ------------- ------------- Total stockholders' equity 465,565 531,341 ------------- ------------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 556,386 $ 621,107 ============= =============
See accompanying notes. 3 4 CONSOLIDATED STATEMENTS OF INCOME MAXIM INTEGRATED PRODUCTS, INC.
(Amounts in thousands, except per share data) Three Months Ended (Unaudited September 30, September 27, 1996 1997 ------------ ------------ Net revenues $ 101,000 $ 125,000 Cost of goods sold 33,027 41,500 ------------ ------------ Gross margin 67,973 83,500 ------------ ------------ Operating expenses: Research and development 11,896 15,480 Selling, general and administrative 9,948 10,934 ------------ ------------ 21,844 26,414 ------------ ------------ Operating income 46,129 57,086 Interest income, net 1,434 3,466 ------------ ------------ Income before provision for income taxes 47,563 60,552 Provision for income taxes 16,171 20,588 ------------ ------------ Net income $ 31,392 $ 39,964 ------------ ------------ Income per share $ 0.45 $ 0.53 ------------ ------------ Common and common equivalent shares 70,384 75,405 ============ ============
See accompanying notes 4 5 CONSOLIDATED STATEMENTS OF CASH FLOWS MAXIM INTEGRATED PRODUCTS, INC.
For the three months ended Increase (decrease) in cash and cash equivalents September 30, September 27, (Amounts in thousands)(Unaudited) 1996 1997 ------------- ------------- Cash flows from operating activities: Net income $ 31,392 $ 39,964 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and translation adjustment 4,929 3,445 Changes in assets and liabilities: Accounts receivable (1,338) (4,120) Inventories (4,126) (180) Prepaid taxes and other current assets 841 (972) Accounts payable (4,983) 2,979 Income taxes payable (950) 14,901 Deferred income taxes -- -- Deferred income on shipments to distributors 2,332 (1,303) All other accrued liabilities 4,900 8,185 ------------- ------------- Net cash provided by operating activities 32,997 62,899 ------------- ------------- Cash flows from investing activities: Additions to property, plant and equipment (12,172) (12,206) Deposits and other non-current assets (179) 24 Purchases of held-to-maturity securities (24,313) -- Purchases of available-for-sale securities -- (104,267) Proceeds from maturities of held-to-maturity securities 14,409 5,800 Proceeds from sales/maturities of available-for-sale securities -- 50,747 ------------- ------------- Net cash used in investing activities (22,255) (59,902) ------------- ------------- Cash flows from financing activities: Issuance of common stock 4,605 11,188 Repurchase of common stock (16,314) (10,550) ------------- ------------- Net cash used in/provided by financing activities (11,709) 638 ------------- ------------- Net increase (decrease) in cash and cash equivalents (967) 3,635 Cash and cash equivalents: Beginning of year 60,283 18,562 ------------- ------------- End of period $ 59,316 $ 22,197 ============= =============
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 September 27, 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, 1997. Effective July 1,1997, the Company adopted a 52-53 week fiscal year that will end on the last Saturday in June, and in which each accounting quarter will end on the last Saturday of the quarter. NOTE 2: INVENTORIES Inventories consist of (in thousands): June 30, September 27, 1997 1997 (unaudited) ------------ ------------ Raw materials $ 5,058 $ 4,550 Work in process 22,349 22,703 Finished goods 9,426 9,760 ------------ ------------ $ 36,833 $ 37,013 ============ ============ 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 All investment securities owned at September 27, 1997 are classified as available-for-sale and are included in short-term investments. At September 27, 1997, all investment securities consist of U.S. Treasury and Federal Agency debt securities maturing within one year. 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 September 27, 1997. The cost of securities sold is based on the specific identification method. Interest earned on securities is included in investment income. 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 ending December 27, 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 September 27, 1997 the pro forma amounts would be as follows. Three Months ended September 30, September 27, 1996 1997 --------------------------- Pro forma earnings per share: Basic income per common share .51 .62 ==== ==== Diluted income per share .45 .53 ==== ==== Prior to this pronouncement the Company was required to present only the net income per common and common equivalent shares outstanding (see note 3) which is equivalent to Diluted income per share shown above. 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 ended September 27, 1997 increased 23.8% compared to the same period a year ago. The increase is attributable primarily to higher unit shipments resulting from continued introduction of new proprietary products and increased market acceptance of the company's proprietary and second source products. During the quarter, 57% 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 firm commitments and net monetary 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 66.8% in the three months ended September 27, 1997, compared to 67.3% for the three months ended September 30, 1996. The decrease in gross margin for the three month period ended September 27, 1997 was due to a change in mix of products sold with a slightly lower gross margin. Research and development expenses were 12.4% of net revenues in the three months ended September 27, 1997, compared to 11.8% in the three months ended September 30, 1996. Research and development in absolute dollars increased $3,584 for the three month period ended September 27, 1997 over the comparable period a year ago. The increase is attributable to continued investments in product development efforts. Selling, general and administrative expenses were 8.7% of net revenues in the three months ended September 27, 1997, compared to 9.8% for the three months ended September 30, 1996. The decrease in percentage resulted from the growth in net revenue, reflecting economies of scale. The Company's operating income remained constant at 45.7% of net revenues for both the three months ended September 27, 1997, and the three months ended September 30, 1996. Net interest income increased to $3.5 million in the three months ended September 27, 1997 compared to $1.4 million for the comparable period a year ago, as a result of higher invested cash balances at higher average interest rates. The effective income tax rate for both the three months ended September 27, 1997 and the three months ended September 30, 1996 was 34%. This rate differs from the federal statutory rate primarily due to state income taxes and the federal research and development tax credit. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D) OUTLOOK At the end of Q198, backlog shippable within the next twelve months was $182 million as compared to $152 million reported at the end of Q497. Orders requested for delivery in Q298 remained high, representing 80% of the beginning Q298 backlog. Turns orders received in Q198 were $50.7 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.) Worldwide net bookings were higher in Q198 than in Q497, with net bookings in the Pacific Rim and Europe showing the greatest increase. Net bookings for all product areas continue to be strong, particularly for those products based on the Company's high-frequency bipolar technology. In addition, net bookings for product lines focused on our broadest markets (instrumentation and process control) continue to be strong. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of funds for the first three months of fiscal year 1998 have been the net cash generated from operating activities of $62.8 million and the issuance of common stock of $11.2 million associated with the Company's stock option programs. The principal uses of funds have been the repurchase of $10.6 million of common stock, net purchases of $47.7 million in short-term investments, and the purchase of $12.2 million in property, plant and equipment. The Company anticipates that it will spend up to $100 million for capital equipment in fiscal 1998 and believes that it possesses sufficient liquidity and capital resources to fund these purchases and its operations for the foreseeable future. In addition, the Company intends to use the proceeds from the exercise of stock options and the resulting tax benefit to repurchase its common stock. In fiscal 1998, the Company has repurchased $60 million of its common stock under this program. 9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D) FORWARD LOOKING INFORMATION Forward-looking statements in this report, including this Management's Discussion and Analysis section, involve risk and uncertainty. There are numerous factors that could cause the Company's actual results to differ materially from results predicted or implied. In this report the outlook section includes forward looking statements regarding backlog, orders, turn orders, and bookings that might imply anticipated revenue and revenue growth. Important factors affecting whether the Company will achieve future revenue and revenue growth include whether demand for the Company's products continues to increase and reflects real end user demand; whether customer cancellations and delays of outstanding orders increase (note that the Company's backlog of orders is generally not based on legally binding customer contracts); and whether the Company is able to manufacture in a correct mix to respond to orders on hand and new orders received in the future. All forward-looking statements included in this document are made as of the date hereof, based on the information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement. Other important factors that could cause actual results to differ materially from those predicted include overall economic conditions; demand for electronic products and semiconductors generally; demand for the end-user products for which the Company's semiconductors are suited; timely availability of raw materials, 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 and in particular its recent report on Form 10K. 10 11 PART II. OTHER INFORMATION 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 27 Financial Data Schedule (b) No Reports on Form 8-K were filed during the quarter ended September 27, 1997 ITEMS 1, 2, 3, 4 AND 5 HAVE BEEN OMITTED AS THEY ARE NOT APPLICABLE. 11 12 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. November 10, 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 INDEX TO EXHIBITS
Exhibit Number Description - ------- ----------- 11.1 Computation of Income Per Share 27 Financial Data Schedule
EX-11.1 2 COMPUTATION OF INCOME PER SHARE 1 EXHIBIT 11.1 Maxim Integrated Products, Inc. Computation of income per share (amounts in thousands, except per share amounts)
Three Months Ended September 30, September 27, 1996 1997 ------------- ------------- Weighted average common shares outstanding 61,075 64,282 Add weighted average shares from assumed exercise of options and warrants when treasury shares are reacquired at average stock market price 14,214 16,747 Less weighted average shares assumed repurchased from tax benefit from the assumed exercise of non-qualified stock options (4,905) (5,624) ------------- ------------- Common and common equivalent shares used in computing net income per share 70,384 75,405 ============= ============= Net income applicable to computation of income per share $ 31,392 $ 39,964 ============= ============= Income per share $ 0.45 $ 0.53 ============= =============
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS JUN-27-1998 JUL-01-1997 SEP-27-1997 275,308 0 97,069 (1,307) 37,013 433,634 253,690 (70,923) 621,107 (84,166) 0 0 0 64 533,026 621,107 125,000 125,000 41,500 41,500 26,414 0 0 60,552 20,588 39,964 0 0 0 39,964 0.53 0.53
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