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Maxim Integrated Reports Results For The Second Quarter Of Fiscal 2013



    Maxim Integrated Reports Results For The Second Quarter Of Fiscal 2013

-- Revenue: $605 million

-- Gross Margin: 60.0% GAAP (61.5% excluding special expense items)

-- EPS: $0.26 GAAP ($0.42 excluding special items)

-- Cash, cash equivalents, and short term investments: $1.03 billion

-- Fiscal third quarter revenue outlook: $580 million to $610 million

PR Newswire

SAN JOSE, Calif., Jan. 24, 2013

SAN JOSE, Calif., Jan. 24, 2013 /PRNewswire/ -- Maxim Integrated Products,
Inc. (NASDAQ: MXIM) reported net revenue of $605 million for its second
quarter of fiscal 2013 ended December 29, 2012, a 3% decrease from $623
million revenue recorded in the prior quarter.

(Logo:  http://photos.prnewswire.com/prnh/20120912/SF71654LOGO)

Tunc Doluca, President and Chief Executive Officer, commented, "We are pleased
that the breadth of our businesses allowed us to achieve revenues near the
midpoint of our guidance range despite ongoing uncertainty. We have an
attractive product portfolio with design wins for new model launches in the
mobility market and we are also well positioned to benefit from a recovery in
the industrial and communications markets."

Fiscal Year 2013 Second Quarter Results

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per
share in the December quarter was $0.26. The results were affected by special
items which primarily consisted of:

  o $13 million pre-tax charge for acquisition related items
  o $22 million pre-tax charge for impairment of long-lived assets
  o $19 million tax charge for international restructuring

GAAP earnings per share, excluding special items, was $0.42. An analysis of
GAAP, versus GAAP excluding special items, is provided in the last table of
this press release.

Cash Flow Items

At the end of our second quarter of fiscal 2013, total cash, cash equivalents
and short term investments was $1.03 billion, an increase of $105 million from
the prior quarter. Notable items include:

  o Cash flow from operations: $255 million
  o Net capital expenditures: $58 million
  o Dividends:  $70 million ($0.24 per share)
  o Stock repurchases: $50 million

Business Outlook

The Company's 90 day backlog at the beginning of the third fiscal quarter of
2013 was $353 million. Based on our beginning backlog and expected turns,
results for the March 2013 quarter are expected to be:

  o Revenue: $580 million to $610 million
  o Gross Margin: 58% to 61% GAAP (60% to 63% excluding special expense items)
  o EPS: $0.39 to $0.43 GAAP ($0.39 to $0.43 excluding special expense items)

Maxim Integrated's business outlook does not include the potential impact of
any restructuring activity or mergers, acquisitions, divestitures, or other
business combinations that may be completed during the quarter.

Dividend

A cash dividend of $0.24 per share will be paid on March 6, 2013, to
stockholders of record on February 20, 2013.

Conference Call

Maxim Integrated has scheduled a conference call on January 24, 2013, at 2:00
p.m. Pacific Time to discuss its financial results for the second quarter of
fiscal 2013 and its business outlook. To listen via telephone, dial (866)
206-6154 (toll free) or (703) 639-1107.  This call will be webcast by
Shareholder.com and can be accessed at the Company's website at
www.maximintegrated.com.

Contact
Venk Nathamuni
Managing Director, Investor Relations
(408) 601-5293

 

 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
                            Three Months Ended
                            December 29,     September 29,     December 31,
                            2012             2012              2011
                            (in thousands, except per share data)
 Net revenues               $                $                 $      
                            605,306           623,075          591,359
 Cost of goods sold         241,931          237,384           243,399
         Gross margin       363,375          385,691           347,960
 Operating expenses:
     Research and           135,742          132,930           142,084
 development
     Selling, general       80,058           80,187            80,826
 and administrative
     Intangible asset       3,903            4,049             4,338
 amortization
     Impairment of          22,222           2,707             -
 long-lived assets (1)
     Severance and          2,236            -                 6,047
 restructuring
     Other operating
 expenses (income), net     1,666            415               155
 (2)
        Total operating     245,827          220,288           233,450
 expenses 
           Operating        117,548          165,403           114,510
 income
 Interest and other
 income (expense), net      (2,798)          (5,742)           2,374
 (3)
 Income before provision    114,750          159,661           116,884
 for income taxes
 Provision for income       38,128           31,773            28,754
 taxes (4)
       Net income           $                $                 $        
                            76,622            127,888          88,130
 Earnings per share: 
     Basic                  $                $                 $            
                            0.26              0.44             0.30
     Diluted                $                $                 $            
                            0.26              0.43             0.29
 Shares used in the
 calculation of earnings
 per share: 
     Basic                  292,075          292,213           291,824
     Diluted                298,759          298,782           299,290
 Dividends paid per         $                $                 $            
 share                      0.24              0.24             0.22
 SCHEDULE OF SPECIAL EXPENSE ITEMS
 (Unaudited)
                            Three Months Ended
                            December 29,     September 29,     December 31,
                            2012             2012              2011
                            (in thousands)
 Cost of goods sold:
       Intangible asset     $                $                 $            
 amortization                 8,986             9,454            8,080
       Acquisition
 related inventory write    -                -                 1,801
 up
  Total                     $                $                 $            
                              8,986             9,454            9,881
  Operating expenses: 
      Intangible asset      $                $                 $            
 amortization                 3,903             4,049            4,338
      Impairment of         22,222           2,707             -
 long-lived assets (1)
      Severance and         2,236            -                 6,047
 restructuring 
      Other operating
 expenses (income) , net    1,666            415               155
 (2)
  Total                     $                $                 $            
                            30,027              7,171          10,540
 Interest and other         $                $                 $            
 expenses (income) , net              -                 -      (1,776)
 (3)
  Total                     $                $                 $            
                                      -                 -      (1,776)
 Provision for income
 taxes:
      International         $                $                 $            
 restructuring              18,726                     -               -
 implementation (4) 
  Total                     $                $                 $            
                            18,726                     -               -
 (1) Includes impairment charges relating to land and buildings held for sale,
 wafer fab and end of line manufacturing equipment.
 (2) Other operating expenses (income), net are primarily for contingent
 consideration adjustments related to certain acquisitions, certain payroll
 taxes, interest and penalties and loss relating to sale of land and building.
 (3) Includes gain on sale of privately-held companies.
 (4) Includes impact due to international restructuring.

 STOCK-BASED COMPENSATION BY TYPE OF AWARD (in thousands)
 (Unaudited)
                                                         Employee
 Three Months Ended        Stock        Restricted     Stock          Total
 December 29, 2012       Options      Stock Units      Purchase
                                                       Plan
                         $            $                $            $        
 Cost of goods sold             477   2,572                   634        
                                                                    3,683
 Research and            2,288        8,401            1,451        12,140
 development expense
 Selling, general and    1,286        5,152            584          7,022
 administrative expense
                         $            $                $            $        
        Total                4,051    16,125               2,669       
                                                                    22,845
 Three Months Ended
 September 29, 2012
                         $            $                $            $        
 Cost of goods sold             398   2,171                   419        
                                                                    2,988
 Research and            1,829        9,210            1,284        12,323
 development expense
 Selling, general and    1,555        5,119            512          7,186
 administrative expense
                         $            $                $            $        
        Total                3,782    16,500               2,215       
                                                                    22,497
 Three Months Ended
 December 31, 2011
                         $            $                $            $        
 Cost of goods sold             565   2,657                   470        
                                                                    3,692
 Research and            2,440        9,207            1,262        12,909
 development expense
 Selling, general and    1,704        4,778            391          6,873
 administrative expense
                         $            $                $            $        
        Total                4,709    16,642               2,123       
                                                                    23,474

 CONSOLIDATED  BALANCE SHEETS
 (Unaudited)
                                    December 29,  September 29,  December 31,
                                    2012          2012           2011
                                    (in thousands) 
 ASSETS
 Current assets:
     Cash and cash equivalents      $             $              $          
                                    955,107       849,850        741,160
     Short-term investments         75,192        75,283         75,375
         Total cash, cash
 equivalents and short-term         1,030,299     925,133        816,535
 investments
     Accounts receivable, net       264,545       316,538        246,229
     Inventories                    257,690       258,689        233,404
     Deferred tax assets            80,991        71,561         87,636
     Other current assets           90,470        94,875         81,396
         Total current assets       1,723,995     1,666,796      1,465,200
 Property, plant and equipment, net 1,359,014     1,359,882      1,365,815
 Intangible assets, net             182,521       195,410        237,776
 Goodwill                           422,083       422,083        432,809
 Other assets                       50,940        60,403         19,055
               TOTAL ASSETS         $             $              $      
                                     3,738,553     3,704,574      3,520,655
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
     Accounts payable               $             $              $          
                                    110,495       127,306        118,427
     Income taxes payable           22,146        19,437         7,866
     Accrued salary and related     152,122       132,847        159,651
 expenses
     Accrued expenses               58,900        72,510         62,579
     Current portion of long term   304,794       303,272        -
 debt
     Deferred income on shipments   25,362        27,025         31,136
 to distributors
         Total current liabilities  673,819       682,397        379,659
 Long term debt                     3,997         5,592          308,700
 Income taxes payable               260,770       226,001        108,462
 Deferred tax liabilities           192,434       195,893        197,839
 Other liabilities                  26,321        26,254         21,529
         Total liabilities          1,157,341     1,136,137      1,016,189
 Stockholders' equity:
     Common stock                   7,040         292            292
     Retained earnings              2,589,619     2,583,060      2,517,166
     Accumulated other              (15,447)      (14,915)       (12,992)
 comprehensive loss
         Total stockholders' equity 2,581,212     2,568,437      2,504,466
               TOTAL LIABILITIES &  $             $              $      
 STOCKHOLDERS' EQUITY                3,738,553     3,704,574      3,520,655

 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
                                    Three Months Ended
                                    December 29,  September 29,  December 31,
                                    2012          2012           2011
                                    (in thousands)
 Cash flows from operating
 activities: 
 Net income                         $             $              $      
                                     76,622        127,888        88,130
 Adjustments to reconcile net
 income to net cash provided by
 operating activities: 
       Stock-based compensation     22,845        22,497         23,474
       Depreciation and             51,880        53,674         51,995
 amortization 
       Deferred taxes               (12,979)      22,772         (368)
       Loss (Gain) from sale of     (88)          (51)           124
 property, plant and equipment
       Loss (Gain) from sale of
 investments in privately-held      -             -              (1,811)
 companies
       Tax benefit (shortfall)
 related to stock-based             5,187         1,335          (2,581)
 compensation 
       Impairment of long-lived     22,222        2,707          -
 assets
       Excess tax benefit from      (6,615)       (5,219)        (4,242)
 stock-based compensation
       Changes in assets and
 liabilities: 
           Accounts receivable      51,993        923            82,760
           Inventories              570           (16,015)       19,045
           Other current assets     4,091         (7,839)        (1,615)
           Accounts payable         (9,536)       (26,466)       (18,397)
           Income taxes payable     37,477        10,461         12,619
           Deferred income on       (1,663)       745            (3,444)
 shipments to distributors 
           All other accrued        13,091        (50,667)       3,631
 liabilities 
 Net cash provided by operating     255,097       136,745        249,320
 activities 
 Cash flows from investing
 activities: 
           Payments for property,   (62,102)      (50,703)       (68,361)
 plant and equipment
           Proceeds from sales of   4,115         344            1,709
 property, plant and equipment
           Acquisitions             -             -              (12,018)
           Purchases of             -             -              (25,108)
 available-for-sale securities
           Proceeds from sales of
 investments in privately-held      -             -              3,225
 companies
 Net cash used in investing         (57,987)      (50,359)       (100,553)
 activities 
 Cash flows from financing
 activities: 
          Excess tax benefit from   6,615         5,219          4,242
 stock-based compensation
          Dividends paid            (70,063)      (70,199)       (64,158)
          Repayment of notes        (74)          (224)          (4,189)
 payable
          Contingent consideration  (7,476)       -              -
 paid
          Repurchase of common      (50,435)      (65,149)       (72,486)
 stock
          Issuance of ESPP          16,768        -              14,906
          Net issuance of           (6,538)       (7,107)        (7,976)
 restricted stock units
          Proceeds from stock       19,350        19,864         12,013
 options exercised
 Net cash used in financing         (91,853)      (117,596)      (117,648)
 activities 
 Net increase (decrease) in cash    105,257       (31,210)       31,119
 and cash equivalents 
 Cash and cash equivalents: 
           Beginning of period      849,850       881,060        710,041
           End of period            $             $              $    
                                     955,107       849,850        741,160
 Total cash, cash equivalents, and  $             $              $    
 short-term investments             1,030,299      925,133        816,535

 ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL EXPENSE ITEMS DISCLOSURES
 (Unaudited)
                                      Three Months Ended
                                      December     September     December
                                      29,          29,           31,
                                      2012         2012          2011
                                      (in thousands, except per share data)
 Reconciliation of GAAP gross
 profit to GAAP gross profit
 excluding special expense items:
 GAAP gross profit                    $            $             $          
                                      363,375         385,691    347,960
 GAAP gross profit %                  60.0%        61.9%         58.8%
 Special expense items:
       Intangible asset               8,986        9,454         8,080
 amortization
       Acquisition related            -            -             1,801
 inventory write up 
  Total special expense items         8,986        9,454         9,881
  GAAP gross profit excluding         $            $             $          
 special expense items                372,361         395,145    357,841
  GAAP gross profit % excluding       61.5%        63.4%         60.5%
 special expense items 
 Reconciliation of GAAP operating
 expenses to GAAP operating
 expenses excluding special
 expense items:
 GAAP operating expenses              $            $             $          
                                      245,827         220,288    233,450
 Special expense (income) items:
       Intangible asset               3,903        4,049         4,338
 amortization
       Impairment of long-lived       22,222       2,707         -
 assets (1)
      Severance and                   2,236        -             6,047
 restructuring 
      Other operating expenses        1,666        415           155
 (income), net (2) 
  Total special expense items         30,027       7,171         10,540
  GAAP operating expenses             $            $             $          
 excluding special expense items      215,800         213,117    222,910
 Reconciliation of GAAP net
 income to GAAP net income
 excluding special expense items:
 GAAP net income                      $            $             $          
                                        76,622        127,888      88,130
 Special expense (income) items:
       Intangible asset               12,889       13,503        12,418
 amortization
       Acquisition related            -            -             1,801
 inventory write up 
       Impairment of long-lived       22,222       2,707         -
 assets (1)
      Severance and                   2,236        -             6,047
 restructuring 
      Other operating expenses        1,666        415           155
 (income) , net (2) 
      Interest and other expenses     -            -             (1,776)
 (income), net (3) 
                      Pre-tax         39,013       16,625        18,645
 total special expense items 
      Tax effect of special           (9,555)      (5,371)       (6,102)
 items 
      International restructuring     18,726       -             -
 implementation (4) 
  GAAP net income excluding           $            $             $          
 special expense items                124,806         139,142    100,673
  GAAP net income per share
 excluding special expense
 items: 
     Basic                            $            $             $          
                                           0.43            0.48       0.34
     Diluted                          $            $             $          
                                           0.42            0.47       0.34
 Shares used in the calculation of
 earnings per share excluding special
 expense items: 
     Basic                            292,075      292,213       291,824
     Diluted                          298,759      298,782       299,290
 (1) Includes impairment charges relating to land and buildings held for
 sale, wafer fab and end of line manufacturing equipment.
 (2) Other operating expenses (income), net are primarily for contingent
 consideration adjustments related to certain acquisitions, certain payroll
 taxes, interest and penalties and loss relating to sale of land and
 building.
 (3) Includes gain on sale of privately-held companies.
 (4) Includes impact due to international restructuring.

Non-GAAP Measures

To supplement the consolidated financial results prepared under GAAP, Maxim
Integrated uses non-GAAP measures which are adjusted from the most directly
comparable GAAP results to exclude special items related to intangible asset
amortization; acquisition related inventory write up to fair value; impairment
of long-lived assets; severance and restructuring; contingent consideration
adjustments relating to certain acquisitions; certain payroll taxes, interest
and penalties; gain on sale of privately-held companies; and the tax provision
impacts due to implementation of international restructuring. Management uses
these non-GAAP measures internally to make strategic decisions, forecast
future results and evaluate Maxim Integrated's current performance. Many
analysts covering Maxim Integrated use the non-GAAP measures as well. Given
management's use of these non-GAAP measures, Maxim Integrated believes these
measures are important to investors in understanding Maxim Integrated's
current and future operating results as seen through the eyes of management.
In addition, management believes these non-GAAP measures are useful to
investors in enabling them to better assess changes in Maxim Integrated's core
business across different time periods. These non-GAAP measures are not in
accordance with or an alternative to GAAP financial data and may be different
from non-GAAP measures used by other companies. Because non-GAAP financial
measures are not standardized it may not be possible to compare these
financial measures with other companies' non-GAAP financial measures, even if
they have similar names. The non-GAAP measures displayed in the table above
include the following:

GAAP gross profit excluding special expense items

The use of GAAP gross profit excluding special expense items allows management
to evaluate the gross margin of the Company's core businesses and trends
across different reporting periods on a consistent basis, independent of
special expense items including intangible asset amortization and acquisition
related inventory write up to fair value.  In addition, it is an important
component of management's internal performance measurement and reward process
as it is used to assess the current and historical financial results of the
business, for strategic decision making, preparing budgets and forecasting
future results. Management presents GAAP gross profit excluding special
expense items to enable investors and analysts to evaluate our revenue
generation performance relative to the direct costs of revenue of Maxim
Integrated's core businesses.

GAAP operating expenses excluding special expense items

The use of GAAP operating expenses excluding special expense items allows
management to evaluate the operating expenses of the Company's core businesses
and trends across different reporting periods on a consistent basis,
independent of special expense items including intangible asset amortization;
acquisition related inventory write up to fair value; impairment of long-lived
assets; severance and restructuring; contingent consideration adjustments
relating to certain acquisitions; and certain payroll taxes, interest and
penalties.  In addition, it is an important component of management's internal
performance measurement and reward process as it is used to assess the current
and historical financial results of the business, for strategic decision
making, preparing budgets and forecasting future results. Management presents
GAAP operating expenses excluding special expense items to enable investors
and analysts to evaluate our core business and its direct operating
expenses.   

GAAP net income and GAAP net income per share excluding special items

The use of GAAP net income and GAAP net income per share excluding special
items allow management to evaluate the operating results of Maxim Integrated's
core businesses and trends across different reporting periods on a consistent
basis, independent of special items including intangible asset amortization;
acquisition related inventory write up to fair value; impairment of long-lived
assets; severance and restructuring; contingent consideration adjustments
relating to certain acquisitions; certain payroll taxes, interest and
penalties; gain on sale of privately-held companies; and the tax provision
impacts due to implementation of international restructuring. In addition,
they are important components of management's internal performance measurement
and reward process as it is used to assess the current and historical
financial results of the business, for strategic decision making, preparing
budgets and forecasting future results. Management presents GAAP net income
and GAAP net income per share excluding special items to enable investors and
analysts to understand the results of operations of Maxim Integrated's core
businesses and to compare our results of operations on a more consistent basis
against that of other companies in our industry.

"Safe Harbor" Statement

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include the
Company's business outlook and financial projections for its third quarter of
fiscal 2013 ending in March 2013, which includes revenue, gross margin and
earnings per share, as well as the Company's belief that it has an attractive
product portfolio with design wins for new model launches in the mobility
market and it is also well positioned to benefit from a recovery in the
industrial and communications markets. These statements involve risk and
uncertainty. Actual results could differ materially from those forecasted
based upon, among other things, general market and economic conditions and
market developments that could adversely affect the growth of the mixed-signal
analog market, product mix shifts, the loss of all or a substantial portion of
our sales to one of our large customers,  customer cancellations and price
competition, as well as other risks described in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2012 (the "10-K") and
Quarterly Reports on Form 10-Q filed after the 10-K.

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 except as required by law.

About Maxim Integrated

At Maxim Integrated, we put analog together in a way that sets our customers
apart. In Fiscal 2012, we reported revenues of $2.4 billion. For more
information, go to www.maximintegrated.com.

SOURCE Maxim Integrated Products, Inc.

Website: http://www.maxim-ic.com
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