<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------- ---------
COMMISSION FILE NO. 0-16538
MAXIM INTEGRATED PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2896096
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
Incorporation or Organization)
120 SAN GABRIEL DRIVE, 94086
SUNNYVALE, CA (Zip Code)
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (408) 737-7600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days:
YES X NO
--- ---
CLASS: COMMON STOCK, OUTSTANDING AT NOVEMBER 1, 1995
$.001 PAR VALUE 29,944,682 SHARES
<PAGE> 2
MAXIM INTEGRATED PRODUCTS, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
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<S> <C>
ITEM 1. Financial Statements
Consolidated Balance Sheets 3
As of June 30, 1995 and September 30, 1995
Consolidated Statements of Income 4
for the three months ended
September 30, 1994 and 1995
Consolidated Statements of Cash Flows 5
for the three months ended September 30,
1994 and 1995
Notes to Consolidated Financial Statements 6-7
ITEM 2. Management's Discussion and Analysis of Financial 8-9
Condition and Results of Operations
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
</TABLE>
2
<PAGE> 3
CONSOLIDATED BALANCE SHEETS
MAXIM INTEGRATED PRODUCTS, INC.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
June 30, September 30,
(Amounts in thousands) 1995 1995
=============================================================================================
(Audited) (Unaudited)
<S> <C> <C>
ASSETS
- ---------------------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 54,966 $ 47,898
Short-term investments 37,329 53,939
- -------------------------------------------------------------------------------------------
Total cash, cash equivalents and short-term investments 92,295 101,837
Accounts receivable, net 27,714 53,685
Inventories 19,105 14,488
Prepaid taxes and other current assets 22,708 22,860
- -------------------------------------------------------------------------------------------
Total current assets 161,822 192,870
- -------------------------------------------------------------------------------------------
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 87,925 91,813
Deposits and other assets 6,386 1,830
- -------------------------------------------------------------------------------------------
$ 256,133 $ 286,513
===========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------
Current liabilities:
Current portion of capital lease obligations $ 40 $ 11
Accounts payable 24,785 22,977
Income taxes payable 1,805 382
Accrued salaries 9,795 11,840
Accrued expenses 16,358 15,421
Payable related to building acquisitions 5,550 4,553
Deferred income on shipments to distributors 7,511 14,681
- -------------------------------------------------------------------------------------------
Total current liabilities 65,844 69,865
- -------------------------------------------------------------------------------------------
Other liabilities 6,000 6,000
Deferred income taxes 5,579 1,129
Commitments and Contingencies
- -------------------------------------------------------------------------------------------
Stockholders' equity:
Common stock 30 30
Additional paid-in capital 64,926 73,637
Retained earnings 113,451 136,036
Translation adjustment 303 (184)
- -------------------------------------------------------------------------------------------
Total stockholders' equity 178,710 209,519
- -------------------------------------------------------------------------------------------
$ 256,133 $ 286,513
===========================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 4
CONSOLIDATED STATEMENTS OF INCOME
MAXIM INTEGRATED PRODUCTS, INC.
<TABLE>
<CAPTION>
For the three months ended September 30, 1994 1995
(Amounts in thousands, except per share data) (unaudited) (unaudited)
============================================================================
<S> <C> <C>
Net revenues $52,004 $96,443
Cost of goods sold 21,633 38,597
- ----------------------------------------------------------------------------
Gross margin 30,371 57,846
- ----------------------------------------------------------------------------
Operating expenses:
Research and development 8,311 12,200
Selling, general and administrative 9,723 10,869
- ----------------------------------------------------------------------------
18,034 23,069
- ----------------------------------------------------------------------------
Operating income 12,337 34,777
Interest income, net 438 1,072
- ----------------------------------------------------------------------------
Income before provision for income taxes 12,775 35,849
Provision for income taxes 4,471 13,264
- ----------------------------------------------------------------------------
Net income $ 8,304 $22,585
- ----------------------------------------------------------------------------
Income per share $ 0.26 $ 0.64
- ----------------------------------------------------------------------------
Common and common equivalent shares 32,545 35,275
============================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
MAXIM INTEGRATED PRODUCTS, INC.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
For the three months ended September 30,
Increase (decrease) in cash and cash equivalents 1994 1995
(Amounts in thousands) (unaudited) (unaudited)
==========================================================================================
<S> <C> <C>
Cash flows provided by operating activities:
Net income $ 8,304 $ 22,585
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,455 2,558
Reduction of equipment value 286 816
Changes in assets and liabilities:
Accounts receivable (3,496) (25,971)
Inventories, prepaid taxes and other current assets 2,925 4,465
Accounts payable (2,139) (1,808)
Income taxes payable 4,476 12,977
Deferred income taxes -- (4.450)
Deferred income on shipments to distributors 2,331 7,170
All other accrued liabilities 4,149 1,108
- -----------------------------------------------------------------------------------------
Net cash provided by operating activities 19,291 19,450
- -----------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment (2,803) (8,746)
Deposits and other noncurrent assets (1,782) 4,556
Held-to-maturity securities 4,386 (16,610)
- -----------------------------------------------------------------------------------------
Net cash used in investing activities (199) (20,800)
- -----------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of common stock 1,748 6,083
Principal payments on capital lease obligations (32) (29)
Repurchase of Common Stock (3,683) (11,772)
- -----------------------------------------------------------------------------------------
Net cash used in financing activities (1,967) (5,718)
- -----------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 17,125 (7,068)
Cash and cash equivalents:
Beginning of year 28,033 54,966
- -----------------------------------------------------------------------------------------
End of period $ 45,158 $ 47,898
=========================================================================================
</TABLE>
See accompanying notes.
5
<PAGE> 6
MAXIM INTEGRATED PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The unaudited consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments (consisting of
normal recurring items) considered necessary for a fair presentation have been
included. The results of operations for the three months ended September 30,
1995 are not necessarily indicative of the results to be expected for the
entire year. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Annual Report on Form 10-K for the year ended June 30, 1995.
NOTE 2: INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of (in thousands): June 30, September 30,
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1995 1995
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(audited) (unaudited)
<S> <C> <C>
Raw materials $ 1,925 $ 2,152
Work in process 9,444 9,388
Finished goods 7,736 2,948
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$19,105 $14,488
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</TABLE>
NOTE 3: INCOME PER SHARE
Net income per share is calculated based on the weighted average number of
common and dilutive common equivalent shares outstanding during each respective
period. The number of common equivalent shares which became issuable pursuant
to the grant of stock options has been calculated using the treasury stock
method. Fully diluted income per share is substantially the same as reported
income per share.
6
<PAGE> 7
MAXIM INTEGRATED PRODUCTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
NOTE 4: INVESTMENT SECURITIES
At September 30, 1995, all debt securities which consist of U.S. Treasury
securities and various municipal bonds all maturing within one year are
designated as held-to-maturity and carried at amortized cost which approximates
market value. The amortized cost of debt securities in this category is
adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in investment income. Realized gains and losses
and declines in value judged to be other-than-temporary on held-to-maturity
securities are included in investment income. The cost of securities sold is
based on the specific identification method. Interest on securities classified
as held-to-maturity is included in investment income.
The held-to-maturity securities at September 30, 1995 is as follows:
<TABLE>
<CAPTION>
(Amounts in thousands) Cost
---------------------- ----
<S> <C>
U.S. Treasury securities $34,723
Municipal bonds 20,720
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$55,443
=======
Amounts included in
short-term investments $53,939
Amounts included in
cash and cash equivalents 1,504
-------
$55,443
=======
</TABLE>
There were no gross realized gains or losses for the three months ended
September 30, 1995.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net revenues increased 85.5% in the three months ended September 30, 1995
compared to the same period a year ago. The increase related primarily to
higher unit shipments as a result of continued introduction of new proprietary
products and increased market acceptance of the Company's proprietary and
second source products. During the quarter 56% of net revenues were derived
from customers outside of the United States. While the majority of these sales
are denominated in US dollars, the Company does place foreign currency
contracts to mitigate its risks on its backlog denominated in foreign
currencies, and as a result, the impact due to changes in foreign currency on
the Company's operating results for the quarter was minimal.
Gross margin increased to 60.0% in the three months ended September 30, 1995,
compared to 58.4% for the three months ended September 30, 1994. The
improvement was principally due to continued economies of scale and improved
yields, as well as an increasing proportion of proprietary products in the mix
of products sold, which generally yield a somewhat higher gross margin than
second source products. Gross margin in the September 30, 1995 quarter was
reduced by $3.5 million in costs related to the Company's continued expansion
of its Beaverton, Oregon manufacturing facility.
Research and development expenses were 12.6% of net revenues in the three
months ended September 30, 1995, compared to 16.0% in the three months ended
September 30, 1994. The percentage decrease from the three months ended
September 30, 1994 to September 30, 1995 resulted from the growth in net
revenues, reflecting economies of scale. Research and development expenses
increased in absolute dollars.
Selling, general and administrative expenses increased in absolute dollars but
decreased as a percentage of net revenues to 11.3% in the three months ended
September 30, 1995, compared to 18.7% in the three months ended September 30,
1994. The decrease in percentage resulted from the growth in net revenues,
reflecting economies of scale.
The Company's operating income increased 12.4 percentage points to 36.1% of net
revenues in the three months ended September 30, 1995, compared to the three
months ended September 30, 1994 as a result of the factors cited above.
The increase in the effective rate to 37% in the three months ended September
30, 1995, compared to 35% in the three months ended September 30, 1994, was
primarily attributable to reduce tax savings on general business credits,
municipal interest and Foreign Sales Corporation.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds for the first three months of fiscal
year 1996 have been the net cash generated from operating activities of
$19,450,000 and the issuance of common stock of $6,083,000. The principal uses
of funds have been the repurchase of common stock of $11,772,000, and the
purchase of $8,746,000 in property, plant and equipment.
The Company believes it possesses sufficient liquidity and capital resources to
fund its operations.
9
<PAGE> 10
PART II: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit has been filed with this report:
11.1 Computation of Income per Share
(b) No Reports on Form 8-K were filed during the quarter ended
September 30, 1995
ITEMS 1, 2, 3, 4, AND 5 HAVE BEEN OMITTED AS THEY ARE NOT APPLICABLE.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NOVEMBER 13, 1995 MAXIM INTEGRATED PRODUCTS, INC.
- ----------------- -----------------------------------------
(Date) (Registrant)
/s/ Michael J. Byrd
-----------------------------------------
Michael J. Byrd
Vice President and Chief Financial
Officer (For the Registrant and Principal
Financial Officer)
/s/ Richard E. Slater
-----------------------------------------
Richard E. Slater
Vice President and Chief Accounting
Officer (Principal Accounting Officer)
11
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description
11 Computation of Income Per Share.
27 Financial Data Schedule.
<PAGE> 1
Maxim Integrated Products, Inc. Exhibit 11.1
Computation of income per share
(amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Ended
September
30,
------------------------
1994 1995
-------- --------
<S> <C> <C>
Weighted average shares outstanding 28,721 29,710
Add weighted average shares from assumed exercise
of options and warrants when treasury shares are
reacquired at average stock market price 5,850 8,748
Less weighted average shares assumed repurchased
from tax benefit from the assumed exercise
of non-qualified stock options (2,026) (3,183)
-------- --------
Common and common equivalent shares used
in computing net income per share 32,545 35,275
======== ========
Net income applicable to computation of
income per share $ 8,304 $ 22,585
======== ========
Income per share $ 0.26 $ 0.64
======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 101,837
<SECURITIES> 0
<RECEIVABLES> 54,869
<ALLOWANCES> (1,184)
<INVENTORY> 14,488
<CURRENT-ASSETS> 192,870
<PP&E> 134,371
<DEPRECIATION> (42,558)
<TOTAL-ASSETS> 286,513
<CURRENT-LIABILITIES> 69,865
<BONDS> 0
<COMMON> 73,667
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 286,513
<SALES> 0
<TOTAL-REVENUES> 96,443
<CGS> 0
<TOTAL-COSTS> 38,597
<OTHER-EXPENSES> 23,069
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> 35,849
<INCOME-TAX> 13,264
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,585
<EPS-PRIMARY> 0.64
<EPS-DILUTED> 0.64
</TABLE>
