Maxim Integrated Reports Results For The First Quarter Of Fiscal 2017

-- Revenue: $561 million

(PRNewswire) —  Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $561 million for its first quarter of fiscal 2017 ended September 24, 2016, a 1% decrease from the $566 million revenue recorded in the prior quarter, and flat from the same quarter of last year.

Logo for Maxim Integrated Products Inc.

Tunc Doluca, President and Chief Executive Officer, commented, "In the September quarter, our businesses performed in line with our improved profitability and revenue growth objectives. Despite the Note 7 smartphone cancellation, we are diverse in our revenue across a broad base of customers, end markets and applications, which is helping to lower variability in our revenue."

Fiscal Year 2017 First Quarter Results

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the September quarter was $0.48. The results were affected by pre-tax special items which primarily consisted of a $27 million gain on the sale of a business, $15 million in charges related to acquisitions, and $12 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.48. 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 the first quarter of fiscal 2017, total cash, cash equivalents and short term investments were $2.27 billion, an increase of $37 million from the prior quarter.

Notable items included:

  • Cash flow from operations: $123 million
  • Capital expenditures: $14 million
  • Proceeds related to the sale of a manufacturing facility: $24.5 million
  • Dividends: $94 million ($0.33 per share)
  • Stock repurchases: $58 million

Business Outlook

The Company's 90-day backlog at the beginning of the December 2016 quarter was $371 million. Based on the beginning backlog and expected turns, results for the December 2016 quarter are expected to be as follows:

  • Revenue: $520 million to $560 million
  • Gross Margin: 61% to 63% GAAP (63% to 65% excluding special items)
  • EPS: $0.37 to $0.43 GAAP ($0.40 to $0.46 excluding special items)

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

Dividend

A cash dividend of $0.33 per share will be paid on December 15, 2016, to stockholders of record on December 1, 2016.

Conference Call

Maxim Integrated has scheduled a conference call on October 20 at 2:00 p.m. Pacific Time to discuss its financial results for the first quarter of fiscal 2017 and its business outlook. To listen via telephone, dial (866) 802-4305 (toll free) or (703) 639-1317. This call will be webcast by Shareholder.com and can be accessed at the Company's website at investor.maximintegrated.com.

A presentation summarizing financial information to be discussed on the conference call is posted at investor.maximintegrated.com.

Contact
Kathy Ta
Managing Director, Investor Relations
(408) 601-5697










CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



Three Months Ended




September 24, 


June 25, 


September 26, 




2016


2016


2015




(in thousands, except per share data)



Net revenues

$                  561,396


$                  566,126


$                  562,510



Cost of goods sold (1)

215,664


219,099


276,159



Gross margin

345,732


347,027


286,351



Operating expenses:








Research and development

112,746


113,491


121,392



Selling, general and administrative

70,852


71,483


71,995



Intangible asset amortization

2,443


2,538


3,591



Impairment of long-lived assets (2)

6,134


429


157,697



Impairment of goodwill and intangible assets

-


27,602


-



Severance and restructuring expenses 

9,965


4,149


7,126



Other operating expenses (income), net (3)

(28,481)


4,962


315



Total operating expenses (income), net

173,659


224,654


362,116



Operating income (loss)

172,073


122,373


(75,765)



Interest and other income (expense), net 

(6,870)


(6,427)


(6,402)



Income (loss) before provision for income taxes 

165,203


115,946


(82,167)



Income tax provision (benefit)

27,589


23,607


(10,024)



Net income (loss)

$                  137,614


$                    92,339


$                  (72,143)



















Earnings (loss) per share:








Basic

$0.49


$0.32


($0.25)



Diluted

$0.48


$0.32


($0.25)











Shares used in the calculation of earnings (loss) per share:








Basic

283,633


284,354


284,588



Diluted (4)

288,574


288,544


284,588











Dividends paid per share

$0.33


$0.30


$0.30


















SCHEDULE OF SPECIAL ITEMS

(Unaudited)



Three Months Ended




September 24, 


June 25, 


September 26, 




2016


2016


2015




(in thousands)



Cost of goods sold:








Intangible asset amortization 

$12,602


$11,829


$                    16,638



Accelerated depreciation (1)

1,178


4,098


43,631



  Total 

$                    13,780


$                    15,927


$                    60,269











 Operating expenses: 








Intangible asset amortization

$2,443


$2,538


$3,591



Impairment of long-lived assets (2)

6,134


429


157,697



Impairment of goodwill and intangible assets

-


27,602


-



Severance and restructuring

9,965


4,149


7,126



Other operating expenses (income), net (3)

(28,481)


4,962


315



  Total 

$                    (9,939)


$                    39,680


$                  168,729



















Interest and other expense (income), net 

$                       (471)


$                       (247)


$                       (109)



 Total 

$                       (471)


$                       (247)


$                       (109)




(1) Includes building and equipment accelerated depreciation related to San Jose and Dallas manufacturing facilities.



(2) Includes impairment of investments in privately-held companies and other equipment impairment charges.



(3) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of fiscal year 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 for the first quarter of fiscal year 2016.






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