EX-99.1 2 mi908623ex991.htm

Exhibit 99.1

Press Information

FOR IMMEDIATE RELEASE
NASDAQ SYMBOL MXIM

Contact:

John F. Gifford, Chairman,

 

President and Chief Executive Officer

 

(408) 737-7600

MAXIM REPORTS REVENUES AND EARNINGS

FOR THE FIRST QUARTER OF FISCAL 2005

AND INCREASES QUARTERLY DIVIDEND

          SUNNYVALE, CA–November 1, 2004–Maxim Integrated Products, Inc., (MXIM) reported net revenues of $435.1 million for its fiscal first quarter ending September 25, 2004, a 40.3% increase over the $310.2 million reported for the first quarter of fiscal 2004. Diluted earnings per share were $0.42 for the first quarter, a 68.0% increase over the $0.25 reported for the same period a year ago. Net revenues were 3.4% above the $421.0 million reported for the fourth quarter of fiscal 2004, and diluted earnings per share were 16.7% above the $0.36 reported for the fourth quarter of fiscal 2004. Net income for the first quarter was $144.5 million or 33.2% of net revenues, a 65.4% increase over the $87.4 million reported for the first quarter of last year and a 15.9% increase over the $124.7 million reported for the fourth quarter. Operating income for the Company was $210.7 million or 48.4% of net revenues for the first quarter, compared to the $125.7 million or 40.5% of net revenues reported for the same period a year ago and the $181.2 million or 43.1% of net revenues reported for the fourth quarter of fiscal 2004.

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          During the quarter, cash and short-term investments increased $88.9 million after the Company repurchased 1.3 million shares of its common stock for $58.5 million, paid dividends of $25.9 million, and acquired $66.3 million in capital equipment. Accounts receivable increased $3.3 million in the first quarter to $200.5 million due to the increase in net revenues, and inventories increased $18.0 million to $135.8 million.

          Gross margin for the first quarter was 72.4%, an increase over the 70.2% reported for the fourth quarter of fiscal 2004 as a result of the $5.9 million one-time bonus recorded in the fourth quarter and continued improvement in manufacturing efficiencies in the first quarter. First quarter gross margin for Dallas Semiconductor exceeded 70%. Research and development expense was $79.1 million or 18.2% of net revenues in the first quarter, compared to $87.8 million or 20.8% of net revenues in the fourth quarter of fiscal 2004. The decrease in research and development expense in the first quarter was due to the $9.5 million one-time fourth quarter bonus, which was offset by the hiring of additional engineers to support the Company’s new product development efforts. Selling, general and administrative expenses decreased from $26.4 million in the fourth quarter, or 6.3% of net revenues, to $25.1 million in the first quarter, or 5.8% of net revenues, primarily as a result of the $2.1 million one-time fourth quarter bonus.

          First quarter net bookings were approximately $377 million, compared to the fourth quarter’s level of $535 million. Turns orders received in the quarter were approximately $117 million, compared to the $170 million received in the prior quarter (turns orders are customer orders that are for delivery within the same quarter and may result in revenue within the same quarter if the Company has available inventory that matches those orders). First quarter ending backlog shippable within the next 12 months was approximately $458 million, including approximately $377 million requested for shipment in the second quarter of fiscal 2005. The Company’s fourth quarter ending backlog shippable within the next 12 months was approximately $529 million, including approximately $428 million that was requested for shipment in the first quarter of fiscal 2005.

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          Jack Gifford, Chairman, President, and Chief Executive Officer, commented:  “As expected, first quarter bookings were significantly below the fourth quarter’s level, as customers are apparently adjusting their inventory levels. During fiscal 2004, we booked approximately $250 million more than our estimate of consumption of our products by our customers, and we expected booking levels to make an adjustment. We believe that the fiscal 2004 third and fourth quarter booking levels reflected a desire by many customers to avoid supply chain disruptions in a longer-lead-time environment. Now that lead times are shortening, customers appear to be reverting to more of a ‘just in time’ approach to order placement.”

          Mr. Gifford continued: “Our San Antonio fab is ramping, as planned, to do 2 million moves at that facility as soon as possible.”

          Mr. Gifford added: “Analysts and investors often view a company’s free cash flow per share as one of the best indicators of value, and we agree. The following table presents Maxim’s historical free cash flow information. We will have additional comments on this data during our conference call later today.”

FREE CASH FLOW PER FULLY DILUTED SHARE(1)

(in millions except per share amounts)

 

FY2000

 

FY2001

 

FY2002

 

FY2003

 

FY2004

 

Q1 FY2005

 

 

 

 

 

 

 

 

Cash flow from operations

 

$

666

 

$

810

 

$

404

 

$

582

 

$

695

 

$

208

 

Capital expenditures

 

$

(292

)

$

(337

)

$

(90

)

$

(84

)

$

(232

)

$

(66

)

 

 

 

 

 

 

 

 

Free cash flow

 

$

374

 

$

473

 

$

314

 

$

498

 

$

463

 

$

142

 

Fully diluted shares outstanding

 

 

360

 

 

362

 

 

356

 

 

341

 

 

351

 

 

345

 

 

 

 

 

 

 

 

 

Free cash flow per fully diluted share

 

$

1.04

 

$

1.31

 

$

0.88

 

$

1.46

 

$

1.32

 

$

0.41

 

 

 

 

 

 

 

 

 

Earnings per fully diluted share

 

$

1.04

 

$

0.93

 

$

0.73

 

$

0.91

 

$

1.20

 

$

0.42

 

 

 

 

 

 

 

 

 

 

 

1)

We believe free cash flow to be relevant and useful information to our investors, as this measure is used by our management in evaluating our liquidity and the cash generated by our consolidated operating businesses. Free cash flow should be considered in addition to other measures of financial performance reported in accordance with GAAP.

          Mr. Gifford concluded: “The Company’s Board of Directors has declared an increased quarterly cash dividend of $0.10 per share. Payment will be made on November 30, 2004 to stockholders of record on November 15, 2004.”

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****

          Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risk and uncertainty. They include statements regarding the Company’s profitability and business outlook, the Company’s belief that customers are reverting to a “just in time” method for placing orders, and the Company’s belief that its San Antonio fab is ramping as planned and that it will complete 2 million moves at that facility as soon as possible. Actual results could differ materially from those forecasted based upon, among other things, general market conditions and market developments that could adversely affect the growth of the mixed-signal analog market, such as declines in customer forecasts or greater than expected cyclical downturns within the mixed-signal analog segment of the semiconductor market, as well as other risks described in the Company’s Form 10K for the fiscal year ended June 26, 2004.

          All forward-looking statements included in this news release 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.

          Maxim Integrated Products is a leading international supplier of quality analog and mixed-signal products for applications that require real world signal processing.

#  #  #


Maxim Integrated Products, Incorporated
Company Profile

NASDAQ Symbol: MXIM

•

Founded 1983

•

Public since: February 29, 1988   

OPERATIONS

 

 

 

Corporate Offices:

120 San Gabriel Drive, Sunnyvale, California 94086

U.S. Sales Offices:

Sunnyvale and Costa Mesa, CA; Wheeling, IL; Roswell, GA; Chelmsford, MA; Austin and Dallas, TX;

 

Beaverton, OR; Horsham, PA

Foreign Offices:

Munich, Germany; Tokyo, Japan; London, UK; Paris, France; Taipei, Taiwan; Seoul, South Korea;

 

Hong Kong; Singapore; Milan, Italy; Beijing, China; Stockholm, Sweden; Zurich, Switzerland;

 

Viborg, Denmark; Helsinki, Finland

PRODUCTS

Maxim designs, develops, manufactures and markets a broad range of linear and mixed-signal integrated circuits for use in a variety of electronic products. Maxim circuits “connect” the real world and the digital world by detecting, measuring, amplifying, and converting real world and communication signals, such as temperature, pressure, sound, voice, or light into the digital signals necessary for computer and DSP processing.

•     Maxim serves approximately 35,000 customers worldwide.

•     Maxim has developed more products than any other analog company In the past 20 years.

•     Maxim is recognized as the leader in CMOS analog and bipolar high-frequency technologies.

•     74% international sales for Q1 FY05

FINANCIAL HIGHLIGHTS (In thousands, except EPS)

 

 

FY2001

 

FY2002

 

FY2003

 

FY2004

 

Q1 FY2005

 

 

 

 

 

 

 

 

Net Revenues

 

$

1,576,613

 

$

1,025,104

 

$

1,153,219

 

$

1,439,263

 

$

435,067

 

Net Income

 

$

334,939

 

$

259,183

 

$

309,601

 

$

419,752

 

$

144,545

 

Shares

 

 

361,620

 

 

355,821

 

 

341,253

 

 

350,575

 

 

344,875

 

Diluted EPS

 

$

0.93

 

$

0.73

 

$

0.91

 

$

1.20

 

$

0.42

 

Cash and Short-Term Investments

 

$

1,220,352

 

$

765,501

 

$

1,164,007

 

$

1,096,613

 

$

1,185,560

 

Total Assets

 

$

2,430,531

 

$

2,010,812

 

$

2,367,962

 

$

2,549,462

 

$

2,706,031

 

Stockholders’ Equity

 

$

2,101,154

 

$

1,741,151

 

$

2,070,412

 

$

2,112,318

 

$

2,226,191

 

ROE

 

 

17.5

%

 

13.5

%

 

16.2

%

 

20.1

%

 

26.7

%

Market Cap

 

$

14,535,766

 

$

13,391,992

 

$

11,870,840

 

$

18,240,400

 

$

14,343,370

 

RESEARCH COVERAGE

 

 

 

A.G. Edwards, Brett Miller (314) 955-2620

Pacific Crest Securities, Michael McConnell (503) 790-7788

Amtech Research, Doug Freedman (415) 490-3921

Pacific Growth Equities, Jim Liang (415) 274-6889

CIBC, Richard Schafer (720) 554-1119

RBC Capital, Apjit Walia (212) 428-6406

Credit Suisse First Boston, Michael Masdea (415) 836-7779

SG Cowen, Jack Romaine (212) 278-4230

Deutsche Bank, Ross Seymore (415) 617-3268

Sanford C. Bernstein, Adam Parker (212) 756-4658

Goldman Sachs, Andrew Root (212) 902-2550

Smith Barney, Craig Ellis (415) 951-1887

Investec, Bobby Burleson, (212) 898-7716

Soundview Financial Group, Chris Caso (203) 321-7217

JMP Securities, Krishna Shankar (415) 835-8971

U.S. Bancorp Piper Jaffray, Tore Svanberg (650) 838-1411

JP Morgan, William Lewis (415) 315-6780

UBS, Tom Thornhill (415) 352-5667

Lehman Brothers, Romit Shah (212) 526-7865

Wedbush Morgan Securities, David Wu (213) 688-4547

Merrill Lynch, Joseph Osha (415) 676-3510

William Blair & Company LLC, Jeff Rosenberg (312) 364-8342

Morgan Stanley, Louis Gerhardy (415) 576-2391

 


Consolidated Statements of Income

 

 

Three Months Ending

 

 

 

 

(In thousands except per share data)

 

9/25/04

 

9/27/03

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

Net revenues

 

$

435,067

 

$

310,169

 

Cost of goods sold

 

 

120,252

 

 

93,028

 

 

 

 

 

Gross margin

 

 

314,815

 

 

217,141

 

 

 

 

72.4

%

 

70.0

%

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

 

79,097

 

 

70,096

 

Selling, general and administrative

 

 

25,062

 

 

21,389

 

 

 

 

 

Operating income

 

 

210,656

 

 

125,656

 

 

 

 

48.4

%

 

40.5

%

Interest income, net

 

 

5,729

 

 

4,751

 

 

 

 

 

Income before provision for income taxes

 

 

216,385

 

 

130,407

 

Provision for income taxes

 

 

71,840

 

 

43,034

 

 

 

 

 

Net income

 

$

144,545

 

$

87,373

 

 

 

 

 

Basic earnings per share

 

$

0.45

 

$

0.27

 

 

 

 

 

Shares used in the calculation of basic earnings per share

 

 

324,668

 

 

326,247

 

 

 

 

 

Diluted earnings per share

 

$

0.42

 

$

0.25

 

 

 

 

 

Shares used in the calculation of diluted earnings per share

 

 

344,875

 

 

347,333

 

 

 

 

 

Dividends declared per share

 

$

0.08

 

$

0.08

 

 

 

 

 

Consolidated Balance Sheets

(In thousands)

 

9/25/04

 

6/26/04

 

 

 

 

 

 

 

(unaudited)

 

 

(audited)

 

Assets

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

246,405

 

$

147,734

 

 

Short-term investments

 

 

939,155

 

 

948,879

 

 

 

 

 

 

 

Total cash, cash equivalents and short-term investments

 

 

1,185,560

 

 

1,096,613

 

 

 

 

 

 

 

Accounts receivable, net

 

 

200,491

 

 

197,158

 

 

Inventories

 

 

135,818

 

 

117,785

 

 

Deferred tax assets and other current assets

 

 

164,475

 

 

166,558

 

 

 

 

 

 

 

Total current assets

 

 

1,686,344

 

 

1,578,114

 

 

 

 

 

 

 

Property, plant and equipment, at cost, less accumulated depreciation

 

 

990,765

 

 

942,186

 

 

Other assets

 

 

28,922

 

 

29,162

 

 

 

 

 

 

 

Total assets

 

$

2,706,031

 

$

2,549,462

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

90,004

 

$

93,856

 

 

Accrued expenses

 

 

199,343

 

 

182,692

 

 

Deferred income on shipments to distributors

 

 

22,994

 

 

22,858

 

 

Income taxes payable

 

 

44,850

 

 

19,339

 

 

 

 

 

 

 

Total current liabilities

 

 

357,191

 

 

318,745

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

118,649

 

 

114,399

 

 

Other liabilities

 

 

4,000

 

 

4,000

 

 

 

 

 

 

 

Total liabilities

 

 

479,840

 

 

437,144

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

71,667

 

 

80,462

 

 

Retained earnings

 

 

2,157,419

 

 

2,038,820

 

 

Accumulated other comprehensive loss

 

 

(2,895

)

 

(6,964

)

 

 

 

 

 

 

Total stockholders’ equity

 

 

2,226,191

 

 

2,112,318

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

2,706,031

 

$

2,549,462