-----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, RuCuu4O6DVmFZQk23qR/N6ackpst83Uyo0mPV4XSTGB5o6fQ76/5UdYfyMTzlx+Z TABa4VXRj6ERg4Q6O8WgIg== 0000950149-96-000627.txt : 19960517 0000950149-96-000627.hdr.sgml : 19960517 ACCESSION NUMBER: 0000950149-96-000627 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 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: 1934 Act SEC FILE NUMBER: 000-16538 FILM NUMBER: 96566187 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 FOR PERIOD ENDING MARCH 31, 1996 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 MARCH 31, 1996 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 Executive 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 APRIL 26, 1996 $.001 PAR VALUE 61,389,016 SHARES 2 MAXIM INTEGRATED PRODUCTS, INC. INDEX
PART I. FINANCIAL INFORMATION PAGE ---- ITEM 1. Financial Statements Consolidated Balance Sheets 3 As of June 30, 1995 and March 31, 1996 Consolidated Statements of Income 4 for the three and nine months ended March 31, 1995 and 1996 Consolidated Statements of Cash Flows 5 for the nine months ended March 31, 1995 and 1996 Notes to Consolidated Financial Statements 6-7 ITEM 2. Management's Discussion and Analysis of Financial 8-9 Condition and Results of Operations PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 10 ITEM 6. Exhibits and Reports on Form 8-K 10 SIGNATURES 11
2 3 CONSOLIDATED BALANCE SHEETS MAXIM INTEGRATED PRODUCTS, INC.
- --------------------------------------------------------------------------------------------- June 30, March 31, (In thousands) 1995 1996 ============================================================================================= (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 54,966 $ 63,650 Short-term investments 37,329 48,837 - --------------------------------------------------------------------------------------------- Total cash, cash equivalents and short-term investments 92,295 112,487 Accounts receivable, net 27,714 79,125 Inventories 19,105 28,411 Prepaid taxes and other current assets 22,708 25,382 - --------------------------------------------------------------------------------------------- Total current assets 161,822 245,405 - --------------------------------------------------------------------------------------------- Property, plant and equipment, at cost, less accumulated depreciation and amortization 87,925 131,227 Deposits and other assets 6,386 2,131 - --------------------------------------------------------------------------------------------- $ 256,133 $ 378,763 ============================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 24,785 $ 49,991 Income taxes payable 1,805 2,586 Accrued salaries 9,795 10,099 Accrued expenses 16,398 14,789 Payable related to building acquisitions 5,550 2,650 Deferred income on shipments to distributors 7,511 13,342 - --------------------------------------------------------------------------------------------- Total current liabilities 65,844 93,457 - --------------------------------------------------------------------------------------------- Other liabilities 6,000 4,000 Deferred income taxes 5,579 1,129 Commitments and contingencies Stockholders' equity: Common stock 60 61 Additional paid-in capital 64,896 79,014 Retained earnings 113,451 202,092 Translation adjustment 303 (990) - --------------------------------------------------------------------------------------------- Total stockholders' equity 178,710 280,177 - --------------------------------------------------------------------------------------------- $ 256,133 $ 378,763 ============================================================================================
See accompanying notes. 3 4 CONSOLIDATED STATEMENTS OF INCOME MAXIM INTEGRATED PRODUCTS, INC.
- ----------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended (Amounts in thousands, except per share data) March 31, March 31, (Unaudited) 1995 1996 1995 1996 =============================================================================================== Net revenues $ 66,628 $109,001 $174,816 $311,626 Cost of goods sold 27,651 35,356 72,600 110,283 - ----------------------------------------------------------------------------------------------- Gross margin 38,977 73,645 102,216 201,343 - ----------------------------------------------------------------------------------------------- Operating expenses: Research and development 13,129 11,233 31,042 35,735 Selling, general and administrative 10,958 10,971 30,761 31,501 - ----------------------------------------------------------------------------------------------- 24,087 22,204 61,803 67,236 - ----------------------------------------------------------------------------------------------- Operating income 14,890 51,441 40,413 134,107 Interest income, net 686 1,147 1,676 3,367 - ----------------------------------------------------------------------------------------------- Income before provision for income taxes 15,576 52,588 42,089 137,474 Provision for income taxes 5,452 18,406 14,731 48,833 - ----------------------------------------------------------------------------------------------- Net income $ 10,124 $ 34,182 $ 27,358 $ 88,641 - ----------------------------------------------------------------------------------------------- Income per share $ 0.15 $ 0.48 $ 0.42 $ 1.25 - ----------------------------------------------------------------------------------------------- Common and common equivalent shares 66,502 71,212 65,902 70,863 ===============================================================================================
See accompanying notes. 4 5 CONSOLIDATED STATEMENTS OF CASH FLOWS MAXIM INTEGRATED PRODUCTS, INC.
- ----------------------------------------------------------------------------------------------------- For the nine months ended March 31, Increase (decrease) in cash and cash equivalents (Amounts in thousands) (Unaudited) 1995 1996 ===================================================================================================== Cash flows provided by operating activities: Net income $ 27,358 $ 88,641 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,141 9,725 Reduction in carrying value of equipment 16,573 1,344 Changes in assets and liabilities: Accounts receivable (6,394) (51,411) Inventories, prepaid taxes and other current assets (7,172) (11,980) Accounts payable 4,070 25,206 Income taxes payable 10,428 28,044 Deferred income tax payable (3,206) (4,450) Deferred income on shipments to distributors 762 5,831 All other accrued liabilities 9,052 (6,205) - ----------------------------------------------------------------------------------------------------- Net cash provided by operating activities 59,612 84,745 - ----------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (21,379) (55,664) Deposits and other non-current assets (5,764) 4,255 Short-term investments (24,174) (11,508) - ------------------------------------------------------------------------------------------------------ Net cash used in investing activities (51,317) (62,917) - ------------------------------------------------------------------------------------------------------ Cash flows from financing activities: Issuance of common stock 6,389 14,227 Repurchase of common stock (9,025) (27,371) - ------------------------------------------------------------------------------------------------------ Net cash used in financing activities (2,636) (13,144) - ------------------------------------------------------------------------------------------------------ Net increase in cash and cash equivalents 5,659 8,684 Cash and cash equivalents: Beginning of period 28,033 54,966 - ----------------------------------------------------------------------------------------------------- End of period $ 33,692 $ 63,650 =====================================================================================================
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 nine months ended March 31, 1996 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, 1995. NOTE 2: INVENTORIES
Inventories consist of: June 30, March 31, 1995 1996 ---- ---- (Amounts in thousands) (unaudited) Raw Materials $ 1,925 $ 4,060 Work in Process 9,444 17,658 Finished Goods 7,736 6,693 -------- ------- $19,105 $28,411 ======= =======
NOTE 3: INCOME PER SHARE 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. On December 13, 1995, the Company effected a two-for-one stock split in the form of a stock dividend, thereby doubling the number of outstanding shares of common stock. All share and per share amounts for the prior periods have been adjusted to reflect the split. 6 7 MAXIM INTEGRATED PRODUCTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont'd) NOTE 4: INVESTMENT SECURITIES. At March 31, 1996, all debt securities, which consist of U.S. Treasury Securities and various municipal bond obligations collaterized by U.S. Treasury Securities all maturing within one year, are designated as held-to-maturity and carried at amortized cost which approximates market value. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in investment income. Realized gains and losses and declines in value judged to be other-than-temporary on held-to-maturity securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest on securities classified as held-to-maturity is included in investment income. The held-to-maturity securities at March 31, 1996 are as follows:
(Amounts in thousands) Cost ---------------------- ------- U.S. Treasury Securities $40,862 Municipal bonds collaterized by U.S. Treasury Securities 26,547 ------- $67,409 ======= Amounts included in short-term investments $48,837 Amounts included in cash and cash equivalents 18,572 ------- $67,409 =======
There were no gross realized gains or losses for the three months ended March 31, 1996. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net revenues increased 63.6% and 78.3% in the three and nine months ended March 31, 1996 compared to the same periods a year ago. The increases related primarily to higher unit shipments as a result of continued introduction of new proprietary products and increased market acceptance of the Company's proprietary and second source products. During the nine months ended March 31, 1996, 56% of net revenues was derived from customers outside of the United States. While the majority of these sales are denominated in U.S. dollars, the Company purchases foreign currency forward contracts to mitigate its risks on the backlog denominated in foreign currencies, and as a result, the impact of changes in foreign currency on revenues and the Company's operating results for the three and the nine month periods was minimal. Gross margin increased to 67.6% in the three months ended March 31, 1996 compared to 58.5% for the three months ended March 31, 1995. For the nine month period ended March 31, 1996, gross margin increased to 64.6%, compared to 58.5% for the nine months ended March 31, 1995. Gross margin in the three and nine months ended March 31, 1995 included $6.9 million and $10.7 million, respectively, of charges related to the Company's program to modernize its manufacturing facilities. The improvements in gross margin in the 1996 periods were principally due to the absence of these charges. Research and development expenses were 10.3% and 11.5% of net revenues in the three and nine months ended March 31, 1996, compared to 19.7% and 17.8% in the three and nine months ended March 31, 1995. The decline in percentage in both 1996 periods and the decline in absolute dollars for the 1996 three month period resulted principally from the absence in the periods of a $4.0 million charge taken in the third quarter of 1995 related to the replacement and upgrade of the Company's equipment. Without this charge research and development spending increased in absolute dollars in the 1996 three month period principally as a result of increased headcount to support additional new product introductions. Spending on research and development in absolute dollars increased in the 1996 nine month period reflecting the Company's continued commitment to new product development. Selling, general and administrative expenses were 10.1% of net revenues in both the three and nine months ended March 31, 1996, compared to 16.4% and 17.6% in the three and nine months ended March 31, 1995. In absolute dollars, selling, general and administrative expenses were essentially flat for the three and nine months periods consistent with the Company's plan to control expenses. The Company's operating income increased to 47.2% and 43.0% of net revenues in the three and nine months ended March 31, 1996, compared to 22.3% and 23.1% for the three and nine months ended March 31, 1995, as a result of factors discussed above. 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (cont'd) Interest income, net increased 67.2% and 100.9% in the three and nine months ended March 31, 1996 compared to the same periods a year ago, as a result of higher cash balances in investments. The effective tax rate of 35.5% for the nine months ended March 31, 1996, increased slightly over the effective tax rate of 35% reported in the comparable period of 1995 primarily because of the expiration of the federal research and development tax credit on June 30, 1995. The Company is subject to various risk factors in its Annual Report on Form 10-K for the year ended June 30, 1995. In addition, investors should consider the following additional factors. The Company's ability to achieve its revenue plan over the next several quarters will depend on continued demand for its products and on its ability to increase manufacturing capacity. The required increase in manufacturing capacity affects all processes, but with particular focus on the newer processes supporting the Company's advanced CMOS products and the Company's products manufactured on its high frequency processes. The Company's ability to realize its revenue goals will also be affected by its ability to match current production mix with the product mix required to fulfill orders received within a quarter for delivery in that quarter (referred to as "turns business"). This issue, which has been one of the distinguishing characteristics of the analog integrated circuit industry, results from the very large number of individual parts offered for sale (in Maxim's case, in excess of 7,000 separate line items) combined with limitations on the ability of distribution to forecast orders accurately. Because of this extreme complexity in the Company's business, no assurance can be given that the Company will achieve an optimum match of manufacturing and shippable orders. LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of funds for the first nine months of fiscal year 1996 have been the net cash generated from operating activities of $84,745,000 and the issuance of common stock of $14,227,000. The principal uses of funds have been purchases of $55,664,000 in property, plant and equipment and repurchase of $27,371,000 in common stock. Accounts receivable have increased $51,411,000 since June 30, 1995. The increase is due to the higher revenue levels and an increase in shipments occurring later in the quarter. The Company anticipates that fourth quarter capital equipment expenditures will approximate $15 - $18 million. The Company believes it possesses sufficient liquidity and capital resources to fund its operations and its capital equipment requirements for the next 12 months. STOCK SPLIT On December 13, 1995, the Company effected a two-for-one stock split in the form of a stock dividend, thereby doubling the number of outstanding shares of common stock. All share and per share amounts for the prior periods have been adjusted to reflect the split. 9 10 PART II: OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS Analog Devices, Inc. In November 1992, Maxim sued Analog Devices, Inc. ("AD") (Action #C-92 20716 RMW) in the United States District Court for the Northern District of California seeking monetary damages plus other relief. The suit alleged that AD induced five of Maxim's long-time North American distributors to terminate their distributorship of Maxim products and attempted to induce a sixth distributor, a national distributor of Maxim products, to terminate its distributorship, which actions Maxim contended violated federal antitrust and state tort laws. On September 7, 1994, the Federal District Court granted AD's motion for summary judgment against Maxim on all of its claims. Maxim filed an appeal of the judgment and on March 15, 1996, the Ninth Circuit Court of Appeals affirmed in part and reversed in part the lower court decision. The appellate court sent the case back to the Federal District Court for trial on the issues of AD's intentional interference with contract and unlawful practices under the California Business and Professions Code, with respect to AD's interference with a particular distributorship contract. No trial date has yet been scheduled. 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 (b) No reports on Form 8-K were filed during the quarter ended March 31, 1996. ITEMS 2, 3, 4 AND 5 HAVE BEEN OMITTED AS THEY ARE NOT APPLICABLE. 10 11 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. MAY 14, 1996 MAXIM INTEGRATED PRODUCTS, INC. - ------------ ------------------------------- (Date) (Registrant) /s/ Michael J. Byrd ------------------------------ Michael J. Byrd Vice President and Chief Financial Officer (For the Registrant and as Principal Financial Officer) /s/ Richard E. Slater ------------------------------ Richard E. Slater Vice President and Chief Accounting Officer (Principal Accounting Officer) 11 12 EXHIBIT INDEX
Sequentially Exhibit Numbered No. Description Page Number - ------- ---------------------------------- ------------ 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 Nine Months Ended Ended March 31, March 31, -------------------- -------------------- 1995 1996 1995 1996 -------- -------- -------- -------- Weighted average shares outstanding 57,879 60,276 57,636 59,774 Add weighted average shares from assumed exercise of options and warrants when treasury shares are reacquired at average stock market price 13,084 16,708 12,564 17,186 Less weighted average shares assumed repurchased from tax benefit from the assumed exercise of non-qualified stock options (4,461) (5,772) (4,298) (6,097) -------- -------- -------- -------- Common and common equivalent shares used in computing income per share 66,502 71,212 65,902 70,863 ======== ======== ======== ======== Net income applicable to computation of income per share $ 10,124 $ 34,182 $ 27,358 $ 88,641 ======== ======== ======== ======== Income per share $ 0.15 $ 0.48 $ 0.42 $ 1.25 ======== ======== ======== ========
Note: All shares are adjusted to reflect the two for one stock split effective on December 13, 1995. EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JUN-30-1996 JUL-01-1996 MAR-31-1996 112,487 0 80,259 (1,134) 28,411 245,405 181,851 (50,624) 378,763 93,457 0 0 0 61 281,106 378,763 311,626 311,626 110,283 110,283 67,236 0 36 137,474 48,833 88,641 0 0 0 88,641 1.25 1.25
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