Maxim Integrated Products Inc. (MXIM, Financial) filed Quarterly Report for the period ended 2009-03-28.
Maxim Integrated Products Inc. designs develops manufactures and markets a broad range of linear and mixed-signal integrated circuits commonly referred to as analog circuits. The company also provides a range of high-frequency design processes and capabilities that can be used in custom design. Maxim Integrated Products Inc. has a market cap of $4.36 billion; its shares were traded at around $14.33 with a P/E ratio of 34.2 and P/S ratio of 2.1. The dividend yield of Maxim Integrated Products Inc. stocks is 5.5%. Maxim Integrated Products Inc. had an annual average earning growth of 7.2% over the past 10 years.
During the three months ended March 28, 2009 and March 29, 2008, approximately 73% and 78%, respectively, of net revenues were derived from customers outside of the United States. During the nine months ended March 28, 2009 and March 29, 2008, approximately 76% and 80%, respectively, of net revenues were derived from customers outside of the United States. While the majority of these sales are denominated in U.S. dollars, we enter into foreign currency forward contracts to mitigate our risks on firm commitments and net monetary assets denominated in foreign currencies. The impact of changes in foreign exchange rates on revenue and our results of operations for the three months ended March 28, 2009 and March 29, 2008 was immaterial.
Our gross margin percentage was 49.4% and 59.3% for the three months ended March 28, 2009 and March 29, 2008, respectively. The gross margin percentage for the three months ended March 28, 2009, as compared to the three months ended March 29, 2008, decreased primarily due to a decline in utilization associated with our manufacturing facilities attributable to a decline in overall demand caused by a slowdown in the global economy. During the three months ended March 28, 2009 we recorded $6.2 million in underutilization charges as a result of 27 utilization below normal levels of our fabrication facilities in San Antonio and Oregon. Inventory write downs increased by approximately $2.3 million, from $11.6 million during the three months ended March 29, 2008 to $14.0 million during the three months ended March 28, 2009. We also recorded increased amortization expenses of $1.2 million associated with the acquisitions of Mobilygen, Innova Card, and the acquisition of certain assets from Zilog completed in fiscal year 2009. These increases were offset by decreases of $3.0 million in stock-based compensation expense attributable to lower charges for stock options due to the impact of the Company's tender offer for certain under water stock options completed in December 2008.
Our gross margin percentage was 52.6% and 60.9% for the nine months ended March 28, 2009 and March 29, 2008, respectively. The gross margin percentage for the nine months ended March 28, 2009, as compared to the nine months ended March 29, 2008, decreased primarily due to an increase of $12.5 million in stock-based compensation expense related primarily to the Company's purchase of underwater stock options from employees and expense related to the purchase of stock options expiring in October 2008 recorded during the nine months ended March 28, 2009. Inventory write downs increased by $6.1 million from $28.5 million during the nine months ended March 29, 2008 to $34.6 million during the nine months ended March 28, 2009. An additional $28.1 million of accelerated depreciation expense was recorded for the nine months ended March 28, 2009 due to our decision to ramp down and eventually close our wafer fab in Dallas, Texas, $8.1 million in expense associated with the under utilization of the Company's fabrication facilities and $3.9 million in increased amortization expenses associated with our acquisitions of the Storage products division of Vitesse Semiconductor, and the secure and remote control products of Zilog, as well as the acquisition of Mobilygen and Innova Card also contributed to the gross margin decrease for the nine months ended March 28, 2009. As a result of the recent decline in our revenues, we expect our factories will continue to be underutilized until we complete the closure of our wafer fabrication facility in Dallas and demand associated with our products increases to levels consistent with amounts prior to the global economic slowdown.
Research and development expenses were $121.0 million and $138.7 million for the three months ended March 28, 2009 and March 29, 2008, respectively, which represented 35.6% and 28.5% of net revenues, respectively. The increase in research and development expenses as a percentage of revenue was primarily due to the decline in revenue. Salaries and benefits declined by approximately $22.8 million between the three months ended March 29, 2008 and the three months ended March 28, 2009. The decline is partially attributable to one week of mandatory unpaid time-off for all professional staff and a one week holiday shutdown during the three months ended March 28, 2009 and a decline in anticipated bonuses in response to the decline in the global economy. We expect to continue this practice of one week of mandatory unpaid time-off during the fourth quarter of 2009.
Selling, general and administrative expenses were $48.8 million and $39.1 million for the three months ended March 28, 2009 and March 29, 2008, respectively, which represented 14.4% and 8.0% of net revenues, respectively. The increase in selling, general and administrative expenses is primarily due to an increase in salaries and benefits of $5.9 million, resulting from increased selling related activities by field applications engineers and 28 business managers partially offset by a one week of mandatory unpaid time-off for all professional staff and a one week holiday shutdown during the three months ended March 28, 2009 and a reduction in marketing headcount in response to a decline in revenues.
Read the The complete ReportMXIM is in the portfolios of Dodge & Cox, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.
Maxim Integrated Products Inc. designs develops manufactures and markets a broad range of linear and mixed-signal integrated circuits commonly referred to as analog circuits. The company also provides a range of high-frequency design processes and capabilities that can be used in custom design. Maxim Integrated Products Inc. has a market cap of $4.36 billion; its shares were traded at around $14.33 with a P/E ratio of 34.2 and P/S ratio of 2.1. The dividend yield of Maxim Integrated Products Inc. stocks is 5.5%. Maxim Integrated Products Inc. had an annual average earning growth of 7.2% over the past 10 years.
Highlight of Business Operations:
Net revenues were $339.7 million and $487.4 million for the three months ended March 28, 2009 and March 29, 2008, respectively, a decrease of 30.3%. Net revenues for the nine months ended March 28, 2009 and March 29, 2008, were $1,251.5 million and $1,551.5 million, respectively, a decrease of 19.3%. We classify our net revenue by four major end market categories: Communications, Computing, Consumer, and Industrial. In the three and nine months ended March 28, 2009 and March 29, 2008, net revenues for all four end markets decreased due to a decline in shipments. Net shipments from Communications, Computing, Consumer and Industrial markets decreased by approximately 28%, 45%, 29% and 19% for three months ended March 28, 2009 as compared to March 29, 2008, respectively. Net shipments from Communications, Computing, Consumer and Industrial markets decreased by approximately 11%, 30%, 18% and 10% for nine months ended March 28, 2009 as compared to March 29, 2008, respectively. The continued decline in all end markets is attributable to current overall macro economic conditions. The Computing end market declined at a greater rate compared with other end markets during the three and nine months ended March 28, 2009 primarily due to reduced demand for our notebook products.During the three months ended March 28, 2009 and March 29, 2008, approximately 73% and 78%, respectively, of net revenues were derived from customers outside of the United States. During the nine months ended March 28, 2009 and March 29, 2008, approximately 76% and 80%, respectively, of net revenues were derived from customers outside of the United States. While the majority of these sales are denominated in U.S. dollars, we enter into foreign currency forward contracts to mitigate our risks on firm commitments and net monetary assets denominated in foreign currencies. The impact of changes in foreign exchange rates on revenue and our results of operations for the three months ended March 28, 2009 and March 29, 2008 was immaterial.
Our gross margin percentage was 49.4% and 59.3% for the three months ended March 28, 2009 and March 29, 2008, respectively. The gross margin percentage for the three months ended March 28, 2009, as compared to the three months ended March 29, 2008, decreased primarily due to a decline in utilization associated with our manufacturing facilities attributable to a decline in overall demand caused by a slowdown in the global economy. During the three months ended March 28, 2009 we recorded $6.2 million in underutilization charges as a result of 27 utilization below normal levels of our fabrication facilities in San Antonio and Oregon. Inventory write downs increased by approximately $2.3 million, from $11.6 million during the three months ended March 29, 2008 to $14.0 million during the three months ended March 28, 2009. We also recorded increased amortization expenses of $1.2 million associated with the acquisitions of Mobilygen, Innova Card, and the acquisition of certain assets from Zilog completed in fiscal year 2009. These increases were offset by decreases of $3.0 million in stock-based compensation expense attributable to lower charges for stock options due to the impact of the Company's tender offer for certain under water stock options completed in December 2008.
Our gross margin percentage was 52.6% and 60.9% for the nine months ended March 28, 2009 and March 29, 2008, respectively. The gross margin percentage for the nine months ended March 28, 2009, as compared to the nine months ended March 29, 2008, decreased primarily due to an increase of $12.5 million in stock-based compensation expense related primarily to the Company's purchase of underwater stock options from employees and expense related to the purchase of stock options expiring in October 2008 recorded during the nine months ended March 28, 2009. Inventory write downs increased by $6.1 million from $28.5 million during the nine months ended March 29, 2008 to $34.6 million during the nine months ended March 28, 2009. An additional $28.1 million of accelerated depreciation expense was recorded for the nine months ended March 28, 2009 due to our decision to ramp down and eventually close our wafer fab in Dallas, Texas, $8.1 million in expense associated with the under utilization of the Company's fabrication facilities and $3.9 million in increased amortization expenses associated with our acquisitions of the Storage products division of Vitesse Semiconductor, and the secure and remote control products of Zilog, as well as the acquisition of Mobilygen and Innova Card also contributed to the gross margin decrease for the nine months ended March 28, 2009. As a result of the recent decline in our revenues, we expect our factories will continue to be underutilized until we complete the closure of our wafer fabrication facility in Dallas and demand associated with our products increases to levels consistent with amounts prior to the global economic slowdown.
Research and development expenses were $121.0 million and $138.7 million for the three months ended March 28, 2009 and March 29, 2008, respectively, which represented 35.6% and 28.5% of net revenues, respectively. The increase in research and development expenses as a percentage of revenue was primarily due to the decline in revenue. Salaries and benefits declined by approximately $22.8 million between the three months ended March 29, 2008 and the three months ended March 28, 2009. The decline is partially attributable to one week of mandatory unpaid time-off for all professional staff and a one week holiday shutdown during the three months ended March 28, 2009 and a decline in anticipated bonuses in response to the decline in the global economy. We expect to continue this practice of one week of mandatory unpaid time-off during the fourth quarter of 2009.
Selling, general and administrative expenses were $48.8 million and $39.1 million for the three months ended March 28, 2009 and March 29, 2008, respectively, which represented 14.4% and 8.0% of net revenues, respectively. The increase in selling, general and administrative expenses is primarily due to an increase in salaries and benefits of $5.9 million, resulting from increased selling related activities by field applications engineers and 28 business managers partially offset by a one week of mandatory unpaid time-off for all professional staff and a one week holiday shutdown during the three months ended March 28, 2009 and a reduction in marketing headcount in response to a decline in revenues.
Read the The complete ReportMXIM is in the portfolios of Dodge & Cox, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC.
