Fiscal 2019 First Quarter Results. October 30, 2018

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Transcription:

Fiscal 2019 First Quarter Results October 30, 2018

Safe Harbor This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, the Company s projections and statements regarding revenue, gross margin, earnings per share, capital expenditures and other financial and business metrics. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to the Company s Annual Report on Form 10-K for the fiscal year ended June 30, 2018 for a description of some of the risk factors that could cause actual results to differ materially from such forward-looking statements. All forward-looking statements included in this presentation are made as of the date hereof and based on the information available to the Company as of the date hereof. The Company assumes no obligation to update any forward-looking statement. 2

Fiscal 2019 First Quarter Results Summary Net Revenue of $638 million Gross Margin of 68.5% (excluding special items 1 ); 67.4% (GAAP) Earnings Per Share of $0.75 (excluding special items 1 ); $0.70 (GAAP) Returned $240 million to shareholders Dividend payout: $128 million Stock repurchases: $112 million TTM 2 Free Cash Flow (adjusted) 3 of $915 million, 36% of TTM Revenue 1 Special Items definition in appendix 2 TTM: Trailing Twelve Months 3 Free Cash Flow = Cash Flow from Operations Capital Expenditures; TTM Cash Flow (adjusted) excludes one-time tax payment of $178M in FY18 Q4 3

4 Results and Guidance

Fiscal 2019 First Quarter Results vs. Last Year $576M Revenue +11% $638M Earnings per Share (Excluding Special Items 1 ) +25% $0.60 $0.75 TTM 2 Free Cash Flow (Adjusted) 3 +12% $819M $915M Unadjusted TTM Free Cash Flow: $737M FY18 FY19 FY18 FY19 FY18 FY19 5 1 Special Items definition in appendix 2 TTM: Trailing Twelve Months 3 Free Cash Flow = Cash Flow from Operations Capital Expenditures; TTM Cash Flow (adjusted) excludes one-time tax payment of $178M in FY18 Q4

Fiscal 2019 First Quarter Results by End Market Computing 3% Automotive +12% +13% Consumer 28% 21% +15% +9% 6 20% Communications & Data Center 28% FY19 Revenue: $638M Industrial Note: Due to nature of our general purpose products, estimates by Major Markets are imprecise Automotive Industrial Comms & Data Center Consumer FY18 and FY19 Revenue -9% Computing

Fiscal 2019 Second Quarter Guidance Guidance Revenue $570M $610M Gross Margin Earnings Per Share 66% 68% GAAP excl. Special Items 1 (65% 67% GAAP) $0.59 $0.65 GAAP excl. Special Items 1 ($0.55 $0.61 GAAP) FY19 Q2 End Market Guidance vs. FY19 Automotive: Strongly Up Industrial: Strongly Down Comms & Data Center: Strongly Down Consumer: Strongly Down Computing: Down Gross Capital Expenditures Target range of 1 3% of revenue 1 Special Items definition in Appendix Note: 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. 7

8 Key Metrics

TTM 2 Free Cash Flow (adjusted) 3 $M As % of Revenue 1,000 40% 36% 750 30% 500 20% 250 10% 0 FY14 FY15 FY16 FY17 FY18 FY19 0% 2 TTM: Trailing Twelve Months 3 Free Cash Flow = Cash Flow from Operations Capital Expenditures; TTM Cash Flow (adjusted) excludes one-time tax payment of $178M in FY18 Q4 9

Capital Expenditures vs. Depreciation % of Revenue 16% 14% 12% 10% Accelerated Depreciation Depreciation Capital Expenditures 8% 6% 4% 2% 0% FY14 FY15 FY16 FY17 FY18 FY19 Gross CapEx Target: 1 to 3% of Revenue 10

Return of Cash to Shareholders [$M] $250 $200 $150 Dividends & Share Buyback Buyback $0.46 $0.42 $0.38 $0.34 Quarterly Cash Dividend Per Share +17% +9% +10% +10% $100 $50 Dividend $0.30 $0.26 $0.22 +8% +8% +7% $0 FY13 FY15 FY17 FY19 Share buyback will increase to enable 125% FCF return to shareholders in FY19 $0.18 FY13 FY15 FY17 FY19 Quarterly dividend increased 10% to $0.46 per share in FY19 11

Appendix 1 Special Items: intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; contingent consideration adjustments relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings; impairment of investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense. 13

Reconciliation of GAAP vs. GAAP Excluding Special Items (Unaudited) 14 Three Months Ended September 29, June 30, September 23, 2018 2018 2017 (in thousands, except per share data) Reconciliation of GAAP gross profit to GAAP gross profit excluding special items: GAAP gross profit $ 430,236 $ 418,668 $ 373,831 GAAP gross profit % 67.4% 66.1% 64.9% Special items: Intangible asset amortization 6,915 11,759 11,064 Total special items 6,915 11,759 11,064 GAAP gross profit excluding special items $ 437,151 $ 430,427 $ 384,895 GAAP gross profit % excluding special items 68.5% 68.0% 66.9% Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items: GAAP operating expenses $ 196,053 $ 196,273 $ 188,665 Special items: Intangible asset amortization 773 844 1,752 Impairment of long-lived assets 42 Severance and restructuring 994 833 5,433 Other operating expenses (income), net 60 (71) (844) Total special items 1,827 1,606 6,383 GAAP operating expenses excluding special items $ 194,226 $ 194,667 $ 182,282 Reconciliation of GAAP net income (loss) to GAAP net income excluding special items: GAAP net income (loss) $ 197,423 $ 194,172 $ 154,533 Special items: Intangible asset amortization 7,688 12,603 12,816 Impairment of long-lived assets 42 Severance and restructuring 994 833 5,433 Other operating expenses (income), net 60 (71) (844) Interest and other expense (income), net (378) (941) (84) Pre-tax total special items 8,364 12,424 17,363 Other income tax effects and adjustments 4,754 1,194 (1,345) GAAP net income excluding special items $ 210,541 $ 207,790 $ 170,551 GAAP net income per share excluding special items: Basic $ 0.76 $ 0.74 $ 0.60 Diluted $ 0.75 $ 0.73 $ 0.60 Shares used in the calculation of earnings per share excluding special items: Basic 278,045 279,304 282,170 Diluted 282,454 283,934 286,437