Tom:
joined you on MXIM short afterhours at 54.24
Regards,
BobP
Maxim Reports Revenues and Earnings for the First Quarter of Fiscal 2002
SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 6, 2001--Maxim Integrated Products, Inc., (Nasdaq:MXIM - news) reported net revenues of $239.4 million for its fiscal first quarter ending September 29, 2001, a 43.3% decrease from the $422.3 million reported for the first quarter of fiscal 2001 and a 24.7% decrease from the $318.1 million reported for the fourth quarter of fiscal 2001. Net income for the quarter was $61.3 million compared to $119.1 million last year, a 48.5% decrease. Diluted earnings per share were $0.17 for the first quarter, a 48.5% decrease from the $0.33 reported for the same period a year ago.
During the quarter, the Company repurchased approximately 8.2 million shares of its common stock for $286.6 million and acquired a total of $25.6 million of capital equipment. The stock repurchase was enabled by temporary suspension by the SEC of regulations relating to stock repurchases after pooling-of-interests transactions. The Company also purchased an additional 2.0 million shares of its common stock during the first week of the second quarter of fiscal 2002. Accounts receivable decreased by $53.0 million in the first quarter to $99.5 million due to the decrease in net revenues, and inventories decreased $3.3 million to $159.3 million.
Gross margin for the first quarter was 70.0%, after increasing inventory reserves $3.5 million, compared to 69.8% reported for the fourth quarter. Research and development expense was $66.0 million or 27.6% of net revenues in the first quarter, compared to $70.0 million or 22.0% of net revenues in the fourth quarter. Selling, general and administrative expenses decreased $4.1 million from $29.2 million in the fourth quarter to $25.1 million in the first quarter. Operating expenses decreased as a result of the reduction of sales representative commissions, labor consolidation in the combined sales organizations completed in the fourth quarter, and controlling other discretionary spending.
First quarter bookings were approximately $211 million, an 18% increase over the previous quarter's level of $179 million. Turns orders received during the quarter were $102 million, a 64% increase over the $62 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). Bookings increased in the U.S. both for OEM and distribution channels and in the Pacific Rim region. Bookings for most product lines were higher than in the fourth quarter of fiscal 2001.
First quarter ending backlog shippable within the next 12 months was approximately $196 million, including $172 million requested for shipment in the second quarter of fiscal 2002.
Jack Gifford, Chairman, President, and Chief Executive Officer, commented on the quarter: ``Allowing that the economic recovery will continue through the next two to three quarters, Maxim performed generally according to our plan for the first quarter of this recovery. Order patterns stabilized early in the first quarter and increased as the quarter progressed. While we are encouraged by the increase in order rates, we remain cautious about our short-term revenue outlook because of customers' backlog situations and their unwillingness to commit to inventories and longer term orders due to short lead times. As lead times begin to creep out, we expect bookings rates to continue to increase. We do expect that our fourth quarter was the bottom of the dot com-induced correction period for bookings, with the first quarter representing the revenue low point. Although we expect second quarter bookings to exceed first quarter levels, we estimate that second quarter revenues and earnings will increase only slightly over first quarter levels due to available backlog at the beginning of the second quarter.''
Commenting on the effects of the war, Mr. Gifford continued: ``I believe that efforts to win this struggle will bring Americans together and will actually help to overcome the reduction in demand from the dot com and telecom equipment markets.''
Mr. Gifford concluded: ``Our productivity improvement plans associated with the acquisition of Dallas Semiconductor are progressing according to schedule. Consolidation of our worldwide distribution channels, reorganization of our internal sales organization, the transferring of Dallas' back-end manufacturing offshore, and other initiatives resulted in over $35 million in savings in the first quarter of fiscal 2002, even on a reduced revenue base.''
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 the Company's expectations regarding future revenues, the Company's assessment of its customers' willingness or unwillingness to commit to inventories and longer term orders, the Company's expectations regarding booking rates increases and the bottoms in bookings and revenues, and the Company's estimate that revenues and earnings will increase in the second fiscal quarter of 2002. Results could differ materially from those forecasted based upon, among other things, the Company incorrectly assessing customer end-user demand and willingness to commit to inventories and orders, and order cancellation levels; technical difficulties in bringing new products and processes to market in a timely manner; market developments that could adversely affect the growth of the mixed-signal analog market such as further declines in customer forecasts or greater than expected cyclical downturns within the mixed-signal analog segment of the semiconductor market or possible effects of capacity constraints affecting other suppliers to equipment manufacturers; and the Company being unable to sustain its successes in recruiting and retaining high-quality personnel and its successes in the markets its products are introduced in, as well as other risks described in the Company's Form 10K for the fiscal year ended June 30, 2001.
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.
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Consolidated Balance Sheets
(In thousands) 9/29/01 6/30/01
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 139,455 $ 93,796
Short-term investments 935,674 1,126,556
Total cash, cash equivalents
and short-term investments 1,075,129 1,220,352
Accounts receivable, net 99,462 152,488
Inventories 159,308 162,656
Deferred tax assets
and other current assets 162,792 163,596
Total current assets 1,496,691 1,699,092
Property, plant and equipment,
at cost 1,433,865 1,408,546
Less accumulated depreciation (710,422) (696,507)
Net property, plant and equipment 723,443 712,039
Other assets 18,786 19,400
Total assets $2,238,920 $2,430,531
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $ 82,532 $ 100,921
Accrued expenses 162,214 170,097
Deferred income on
shipments to distributors 39,072 45,396
Income taxes payable 11,502 8,963
Total current liabilities 295,320 325,377
Other liabilities 4,000 4,000
Total liabilities 299,320 329,377
Stockholders' equity:
Common stock 129,404 351,982
Retained earnings 1,806,932 1,745,638
Accumulated other
comprehensive income 3,264 3,534
Total stockholders' equity 1,939,600 2,101,154
Total liabilities and
stockholders' equity $2,238,920 $2,430,531
Consolidated Statements of Income
(In thousands, Three Months Ending
except per share data) 9/29/01 9/23/00
(unaudited) (unaudited)
Net revenues $239,426 $422,309
Cost of goods sold 71,845 148,415
Gross margin 167,581 273,894
70.0% 64.9%
Operating expenses:
Research and
development 65,974 66,589
Selling, general and
administrative 25,091 41,562
Operating income 76,516 165,743
32.0% 39.2%
Interest income and other, net 14,967 13,383
Income before provision
for income taxes 91,483 179,126
Provision for income taxes 30,189 60,053
Net income $ 61,294 $119,073
Basic earnings per share $ 0.19 $ 0.37
Shares used in the
calculation of basic
earnings per share 330,711 322,946
Diluted earnings per share $ 0.17 $ 0.33
Shares used in the
calculation of diluted
earnings per share 359,499 364,493
Dividends declared per share $ -- $ 0.006
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