Maxim Integrated Reports Results For The Fourth Quarter Of

Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2015; Increases Dividend By 7%

- Revenue: $583 million

(PRNewswire) — Maxim Integrated Products, Inc. (NASDAQ: MXIM) reported net revenue of $583 million for its fourth quarter of fiscal 2015 ended June 27, 2015, a 1% increase from the $577 million revenue recorded in the prior quarter, and a 9% decrease from the same quarter of last year.

Tunc Doluca, President and Chief Executive Officer, commented, "In our June quarter, although revenue was slightly below our expectations, we exceeded our EPS guidance due to strong execution on our cost initiatives." Mr. Doluca continued, "This is a pivotal time for Maxim. We are transforming our manufacturing footprint to improve flexibility and profitability, and optimizing R&D and Sales to drive growth. Based on these initiatives, we now expect to achieve $180 million in annual, long-term savings compared to our fiscal fourth quarter 2015 run rate."

Fiscal Year 2015 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.34. The results were affected by pre-tax special items which primarily consisted of $46 million in charges related to restructuring activities, $22 million in charges related to acquisitions and $36 million in other income related to the gain on a divestiture. GAAP earnings per share, excluding special items was $0.43. 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 fourth quarter of fiscal 2015, total cash, cash equivalents and short term investments were $1.63 billion, an increase of $159 million from the prior quarter. Notable items included:

Cash flow from operations: $222 million
Net capital additions: $13 million
Dividends: $80 million ($0.28 per share)
Stock repurchases: $36 million

Business Outlook

The Company's 90-day backlog at the beginning of the first fiscal quarter of 2016 was $366 million. Based on the beginning backlog and expected turns, results for the September 2015 quarter are expected to be as follows:

Revenue: $545 million to $585 million
Gross Margin: 51% to 54% GAAP (60% to 63% excluding special items)
EPS: $0.22 to $0.28 GAAP ($0.38 to $0.44 excluding special items)

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

Dividend
A cash dividend of $0.30 per share will be paid on September 3, 2015, to stockholders of record on August 20, 2015. This represents a 7% increase in the dividend compared to the prior quarter.

Conference Call
Maxim Integrated has scheduled a conference call on July 23, 2015, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter of fiscal 2015 and its business outlook. To listen via telephone, dial (866) 804-3547 (toll free) or (703) 639-1328. This call will be webcast by Shareholder.com and can be accessed at the Company's website at www.maximintegrated.com/company/investor.

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


CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	Three Months Ended			Year Ended
	June 27,	March 28,	June 28,	June 27,	June 28,
	2015	2015	2014	2015	2014
	(in thousands, except per share data)
Net revenues	$ 582,517	$ 577,263	$ 642,467	$ 2,306,864	$ 2,453,663
Cost of goods sold (1)	278,816	261,995	273,507	1,034,997	1,068,898
Gross margin	303,701	315,268	368,960	1,271,867	1,384,765
Operating expenses:
Research and development	121,552	123,913	143,802	521,772	558,168
Selling, general and administrative	72,532	75,766	83,153	308,065	324,734
Intangible asset amortization	3,618	3,977	4,423	16,077	17,690
Impairment of long-lived assets (2)	549	5,522	6,447	67,042	11,644
Impairment of goodwill and intangible assets (3)	-	-	-	93,010	2,580
Severance and restructuring expenses (4)	12,798	2,824	5,790	30,642	24,902
Acquisition-related costs	-	-	-	-	6,983
Other operating expenses (income), net (5)	(2,296)	(2,184)	8,795	(2,021)	15,773
Total operating expenses	208,753	209,818	252,410	1,034,587	962,474
Operating income	94,948	105,450	116,550	237,280	422,291
Interest and other income (expense), net (6)	28,500	(5,534)	(8,943)	8,890	(13,065)
Income before provision for income taxes	123,448	99,916	107,607	246,170	409,226
Provision (benefit) for income taxes	24,789	20,483	22,814	40,132	54,416
Net income	$ 98,659	$ 79,433	$ 84,793	$ 206,038	$ 354,810

Earnings per share:
Basic	$ 0.35	$ 0.28	$ 0.30	$ 0.73	$ 1.25
Diluted	$ 0.34	$ 0.28	$ 0.29	$ 0.71	$ 1.23

Shares used in the calculation of earnings per share:
Basic	284,202	283,418	283,431	283,675	283,344
Diluted	289,346	288,840	289,487	288,949	289,108

Dividends paid per share	$ 0.28	$ 0.28	$ 0.26	$ 1.12	$ 1.04


SCHEDULE OF SPECIAL ITEMS
(Unaudited)
	Three Months Ended			Year Ended
	June 27,	March 28,	June 28,	June 27,	June 28,
	2015	2015	2014	2015	2014
	(in thousands)
Cost of goods sold:
Intangible asset amortization	$ 18,116	$ 18,750	$ 18,750	$ 74,366	$ 64,483
Accelerated Depreciation (1)	32,765	9,834	-	51,494	-
Acquisition-related inventory write-up	-	-	371	-	18,955
Total	$ 50,881	$ 28,584	$ 19,121	$ 125,860	$ 83,438

Operating expenses:
Intangible asset amortization	$ 3,618	$ 3,977	$ 4,423	$ 16,077	$ 17,690
Impairment of long-lived assets (2)	549	5,522	6,447	67,042	11,644
Impairment of goodwill and intangible assets (3)	-	-	-	93,010	2,580
Severance and restructuring (4)	12,798	2,824	5,790	30,642	24,902
Acquisition-related costs	-	-	-	-	6,983
Other operating expenses (income), net (5)	(2,296)	(2,184)	8,795	(2,021)	15,773
Total	$ 14,669	$ 10,139	$ 25,455	$ 204,750	$ 79,572

Interest and other expense (income), net (6)	$ (35,849)	$ -	$ 2,432	$ (36,066)	$ 6,155
Total	$ (35,849)	$ -	$ 2,432	$ (36,066)	$ 6,155

Provision (benefit) for income taxes:
Fixed assets tax basis adjustment (7)	$ -	$ -	$ (1,041)	$ -	$ (35,603)
Reversal of tax reserves (8)	-	-	-	(21,747)	-
Fiscal year 2014 research & development tax credits	-	-	-	(2,863)	-
Total	$ -	$ -	$ (1,041)	$ (24,610)	$ (35,603)


(1) Includes accelerated depreciation related to San Jose wafer manufacturing building and equipment.
(2) Includes impairment charges relating to wafer manufacturing equipment, end of line test equipment, and software.
(3) Impairment of goodwill and write-off of in-process research and development primarily related to MEMS business.
(4) Includes severance charges primarily associated with the reorganization of various business units and manufacturing operations.
(5) Other operating expenses (income), net are primarily for legal settlements, loss (gain) relating to sale of assets, and expected loss on lease abandonment.
(6) Includes sale of a business and impairment of investment in privately-held companies.
(7) Includes one-time fixed asset tax basis adjustments relating to prior year depreciation expense.
(8) Reversal of tax reserves related to the favorable settlement of a foreign tax issue.

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