Fiscal 2017 Second Quarter Results
January 26, 2017
Safe Harbor
2
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 25, 2016 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.
Fiscal 2017 Second Quarter Results Summary
• Net Revenue of $551 million
• Gross Margin of 64.1% (excluding special items); 61.7% (GAAP)
• Earnings Per Share of $0.46 (excluding special items); $0.45 (GAAP)
• Returned $155 million to shareholders
• Dividend payout: $94 million
• Stock repurchases: $61 million
• TTM1 Free Cash Flow of $756 million, 34% of TTM revenue
3
1TTM: Trailing Twelve Months
Note: Free Cash Flow = Cash Flow from Operations – Net Capital Expenditures
Net Capital Expenditures = Gross Capital Expenditures – Asset Sales
Results and Guidance
4
$703M
$756M
Fiscal 2017 Second Quarter Results vs. Last Year
5
$511M
$551M
+8%
FY16 Q2 FY17 Q2
Revenue
$0.32
$0.46
+44%
FY16 Q2 FY17 Q2
Earnings per Share
(Excluding Special Items2)
TTM1 Free Cash Flow3
1TTM: Trailing Twelve Months
2Special Items definition in appendix
3Free Cash Flow: Cash Flow from Operations – Net Capital Expenditures
Net Capital Expenditures: Gross Capital Expenditures – Asset Sales
FY16 Q2 FY17 Q2
+8%
Automotive Industrial Comms &
Data Center
Consumer Computing
+5%
FY16 Q2 vs. FY17 Q2 Revenue
+2%
+16%
-4%
(+2% excluding
meters divestiture)
Fiscal 2017 Second Quarter Results by End Market
6
+18%19%
25%
21%
31%
4%
FY17 Q2 Revenue: $551M
Consumer
Automotive
Industrial
Communications & Data Center
Computing
Note: Due to nature of our general purpose products, estimates by Major Markets are imprecise
Fiscal 2017 Third Quarter Guidance
FY17 Q3 Guidance
Revenue $555M – $595M
Gross Margin
63% – 65% GAAP excl. Special Items2
(61% – 63% GAAP)
Earnings Per
Share
$0.49 – $0.55 GAAP excl. Special Items1
($0.43 – $0.49 GAAP)
Gross Capital
Expenditures
Target range
of 1 – 3% of revenue
7
1Special 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.
FY17 Q3 End Market Guidance vs. FY17 Q2
Automotive Strongly Up
Industrial Strongly Up
Communications & Data Center Strongly Up
Consumer Strongly Down
Computing Up
Key Metrics
8
0%
10%
20%
30%
0
300
600
900
FY12
Q2
FY13
Q2
FY14
Q2
FY15
Q2
FY16
Q2
FY17
Q2
TTM1 Free Cash Flow
9
1TTM: Trailing Twelve Months
Note: Free Cash Flow: Cash from Operations – Net Capital Expenditures
Net Capital Expenditures: Gross Capital Expenditures – Asset Sales
FY17 Q1/Q2 Asset Sales included $24.5M/$26.5M of proceeds from the sale of securities related to the sale of a manufacturing facility in San Antonio, Texas
$M As % of Revenue
34%
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
FY12
Q2
FY13
Q2
FY14
Q2
FY15
Q2
FY16
Q2
FY17
Q2
Free Cash Flow, TTM
Net Income (ex-SI), TTM
TTM1 Free Cash Flow vs. Net Income (excluding Special Items)
10
1TTM: Trailing Twelve Month
Note: Free Cash Flow = Cash from Operations – Net Capital Expenditures
Net Capital Expenditures = Gross Capital Expenditures – Asset Sales
$M
Gross CapEx
Target:
1 to 3%
of Revenue
0%
2%
4%
6%
8%
10%
12%
14%
16%
FY12
Q2
FY13
Q2
FY14
Q2
FY15
Q2
FY16
Q2
FY17
Q2
Accelerated Depreciation
Depreciation
Gross Capital Expenditures
Capital Expenditures vs. Depreciation (excluding Special Items)
11
% of Revenue
$0.20
$0.22
$0.24
$0.26
$0.28
$0.30
$0.32
FY11 Q2 FY13 Q2 FY15Q2 FY17 Q2
Quarterly Cash Dividend Per Share
12
$0
$50
$100
$150
$200
$250
FY11 Q2 FY13 Q2 FY15 Q2 FY17 Q2
Dividends & Share Repurchases
Dividend
Return of Cash to Shareholders
Buyback
+5%
+9%
+8%
+8%
$211M remaining in share repurchase
program as of FY17 Q2 end
$0.33
+7%
+10%
14
Appendix
2Special Items: intangible asset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets;
impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; contingent consideration adjustments
relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings; impairment of
investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation
expense.
Reconciliation of GAAP vs. GAAP Excluding Special Items (Unaudited)
15
December 24, September 24, December 26,
2016 2016 2015
Reconciliation of GAAP gross profit to GAAP gross profit excluding special items:
GAAP gross profit 340,178$ 345,732$ 292,169$
GAAP gross profit % 61.7% 61.6% 57.2%
Special items:
Intangible asset amortization 11,755 12,602 14,734
Accelerated depreciation (1) 1,178 1,178 2,032
Total special items 12,933 13,780 16,766
GAAP gross profit excluding special items 353,111$ 359,512$ 308,935$
GAAP gross profit % excluding special items 64.1% 64.0% 60.5%
Reconciliation of GAAP operating expenses to GAAP operating expenses excluding
special items:
GAAP operating expenses 191,104$ 173,659$ 202,636$
Special items:
Intangible asset amortization 2,348 2,443 3,538
Impairment of long-lived assets (2) 383 6,134 1,950
Severance and restructuring 864 9,965 10,652
Other operating expenses (income), net (3) 1,909 (28,481) (247)
Total special items 5,504 (9,939) 15,893
GAAP operating expenses excluding special items 185,600$ 183,598$ 186,743$
Reconciliation of GAAP net income (loss) to GAAP net income excluding special
items:
GAAP net income (loss) 130,477$ 137,614$ 67,469$
Special items:
Intangible asset amortization 14,103 15,045 18,272
Accelerated depreciation (1) 1,178 1,178 2,032
Impairment of long-lived assets (2) 383 6,134 1,950
Severance and restructuring 864 9,965 10,652
Other operating expenses (income), net (3) 1,909 (28,481) (247)
Interest and other expense (income), net (4) (5,052) (471) 595
Pre-taxtotal special items 13,385 3,370 33,254
Other income taxeffects and adjustments (5) (11,167) (2,754) (7,903)
GAAP net income excluding special items 132,695$ 138,230$ 92,820$
GAAP net income per share excluding special items:
Basic 0.47$ 0.49$ 0.33$
Diluted 0.46$ 0.48$ 0.32$
Shares used in the calculation of earnings per share excluding special items:
Basic 283,294 283,633 285,526
Diluted 288,106 288,574 290,521
ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES
(Unaudited)
(in thousands, except per share data)
Three Months Ended
(1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility.
Other income taxeffects and adjustments (5) (11,167) (2,754)
GAAP net income excluding special items 132,695$ 138,230$ $
GAAP net income per share excluding special items:
Basic 0.47$ 0.49$ $
Diluted 0.46$ 0.48$ $
Shares used in the calculation of earnings per share excluding special items:
Basic 283,294 283,633
Diluted 288,106 288,574
(2) Includes impairment of investments in privately-held companies and other equipment impairment charges.
(5) Includes taxeffect of pre-taxspecial items and miscellaneous taxadjustments.
(1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility.
(3) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of fiscal year 2017.
(4) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio, Texas.

Earnings Presentation Q217

  • 1.
    Fiscal 2017 SecondQuarter Results January 26, 2017
  • 2.
    Safe Harbor 2 This presentationcontains 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 25, 2016 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.
  • 3.
    Fiscal 2017 SecondQuarter Results Summary • Net Revenue of $551 million • Gross Margin of 64.1% (excluding special items); 61.7% (GAAP) • Earnings Per Share of $0.46 (excluding special items); $0.45 (GAAP) • Returned $155 million to shareholders • Dividend payout: $94 million • Stock repurchases: $61 million • TTM1 Free Cash Flow of $756 million, 34% of TTM revenue 3 1TTM: Trailing Twelve Months Note: Free Cash Flow = Cash Flow from Operations – Net Capital Expenditures Net Capital Expenditures = Gross Capital Expenditures – Asset Sales
  • 4.
  • 5.
    $703M $756M Fiscal 2017 SecondQuarter Results vs. Last Year 5 $511M $551M +8% FY16 Q2 FY17 Q2 Revenue $0.32 $0.46 +44% FY16 Q2 FY17 Q2 Earnings per Share (Excluding Special Items2) TTM1 Free Cash Flow3 1TTM: Trailing Twelve Months 2Special Items definition in appendix 3Free Cash Flow: Cash Flow from Operations – Net Capital Expenditures Net Capital Expenditures: Gross Capital Expenditures – Asset Sales FY16 Q2 FY17 Q2 +8%
  • 6.
    Automotive Industrial Comms& Data Center Consumer Computing +5% FY16 Q2 vs. FY17 Q2 Revenue +2% +16% -4% (+2% excluding meters divestiture) Fiscal 2017 Second Quarter Results by End Market 6 +18%19% 25% 21% 31% 4% FY17 Q2 Revenue: $551M Consumer Automotive Industrial Communications & Data Center Computing Note: Due to nature of our general purpose products, estimates by Major Markets are imprecise
  • 7.
    Fiscal 2017 ThirdQuarter Guidance FY17 Q3 Guidance Revenue $555M – $595M Gross Margin 63% – 65% GAAP excl. Special Items2 (61% – 63% GAAP) Earnings Per Share $0.49 – $0.55 GAAP excl. Special Items1 ($0.43 – $0.49 GAAP) Gross Capital Expenditures Target range of 1 – 3% of revenue 7 1Special 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. FY17 Q3 End Market Guidance vs. FY17 Q2 Automotive Strongly Up Industrial Strongly Up Communications & Data Center Strongly Up Consumer Strongly Down Computing Up
  • 8.
  • 9.
    0% 10% 20% 30% 0 300 600 900 FY12 Q2 FY13 Q2 FY14 Q2 FY15 Q2 FY16 Q2 FY17 Q2 TTM1 Free CashFlow 9 1TTM: Trailing Twelve Months Note: Free Cash Flow: Cash from Operations – Net Capital Expenditures Net Capital Expenditures: Gross Capital Expenditures – Asset Sales FY17 Q1/Q2 Asset Sales included $24.5M/$26.5M of proceeds from the sale of securities related to the sale of a manufacturing facility in San Antonio, Texas $M As % of Revenue 34%
  • 10.
    $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 FY12 Q2 FY13 Q2 FY14 Q2 FY15 Q2 FY16 Q2 FY17 Q2 Free Cash Flow,TTM Net Income (ex-SI), TTM TTM1 Free Cash Flow vs. Net Income (excluding Special Items) 10 1TTM: Trailing Twelve Month Note: Free Cash Flow = Cash from Operations – Net Capital Expenditures Net Capital Expenditures = Gross Capital Expenditures – Asset Sales $M
  • 11.
    Gross CapEx Target: 1 to3% of Revenue 0% 2% 4% 6% 8% 10% 12% 14% 16% FY12 Q2 FY13 Q2 FY14 Q2 FY15 Q2 FY16 Q2 FY17 Q2 Accelerated Depreciation Depreciation Gross Capital Expenditures Capital Expenditures vs. Depreciation (excluding Special Items) 11 % of Revenue
  • 12.
    $0.20 $0.22 $0.24 $0.26 $0.28 $0.30 $0.32 FY11 Q2 FY13Q2 FY15Q2 FY17 Q2 Quarterly Cash Dividend Per Share 12 $0 $50 $100 $150 $200 $250 FY11 Q2 FY13 Q2 FY15 Q2 FY17 Q2 Dividends & Share Repurchases Dividend Return of Cash to Shareholders Buyback +5% +9% +8% +8% $211M remaining in share repurchase program as of FY17 Q2 end $0.33 +7% +10%
  • 14.
    14 Appendix 2Special Items: intangibleasset amortization; accelerated depreciation; acquisition-related inventory write-up; impairment of long-lived assets; impairment of goodwill and intangible assets; severance and restructuring; acquisition-related costs; contingent consideration adjustments relating to certain acquisitions; expected loss on rent expense for vacated office space; loss related to sale of land and buildings; impairment of investments in privately-held companies; tax provision impacts due to fixed asset tax basis adjustment relating to prior year depreciation expense.
  • 15.
    Reconciliation of GAAPvs. GAAP Excluding Special Items (Unaudited) 15 December 24, September 24, December 26, 2016 2016 2015 Reconciliation of GAAP gross profit to GAAP gross profit excluding special items: GAAP gross profit 340,178$ 345,732$ 292,169$ GAAP gross profit % 61.7% 61.6% 57.2% Special items: Intangible asset amortization 11,755 12,602 14,734 Accelerated depreciation (1) 1,178 1,178 2,032 Total special items 12,933 13,780 16,766 GAAP gross profit excluding special items 353,111$ 359,512$ 308,935$ GAAP gross profit % excluding special items 64.1% 64.0% 60.5% Reconciliation of GAAP operating expenses to GAAP operating expenses excluding special items: GAAP operating expenses 191,104$ 173,659$ 202,636$ Special items: Intangible asset amortization 2,348 2,443 3,538 Impairment of long-lived assets (2) 383 6,134 1,950 Severance and restructuring 864 9,965 10,652 Other operating expenses (income), net (3) 1,909 (28,481) (247) Total special items 5,504 (9,939) 15,893 GAAP operating expenses excluding special items 185,600$ 183,598$ 186,743$ Reconciliation of GAAP net income (loss) to GAAP net income excluding special items: GAAP net income (loss) 130,477$ 137,614$ 67,469$ Special items: Intangible asset amortization 14,103 15,045 18,272 Accelerated depreciation (1) 1,178 1,178 2,032 Impairment of long-lived assets (2) 383 6,134 1,950 Severance and restructuring 864 9,965 10,652 Other operating expenses (income), net (3) 1,909 (28,481) (247) Interest and other expense (income), net (4) (5,052) (471) 595 Pre-taxtotal special items 13,385 3,370 33,254 Other income taxeffects and adjustments (5) (11,167) (2,754) (7,903) GAAP net income excluding special items 132,695$ 138,230$ 92,820$ GAAP net income per share excluding special items: Basic 0.47$ 0.49$ 0.33$ Diluted 0.46$ 0.48$ 0.32$ Shares used in the calculation of earnings per share excluding special items: Basic 283,294 283,633 285,526 Diluted 288,106 288,574 290,521 ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES (Unaudited) (in thousands, except per share data) Three Months Ended (1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility. Other income taxeffects and adjustments (5) (11,167) (2,754) GAAP net income excluding special items 132,695$ 138,230$ $ GAAP net income per share excluding special items: Basic 0.47$ 0.49$ $ Diluted 0.46$ 0.48$ $ Shares used in the calculation of earnings per share excluding special items: Basic 283,294 283,633 Diluted 288,106 288,574 (2) Includes impairment of investments in privately-held companies and other equipment impairment charges. (5) Includes taxeffect of pre-taxspecial items and miscellaneous taxadjustments. (1) Includes building and equipment accelerated depreciation related to the Dallas manufacturing facility. (3) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of fiscal year 2017. (4) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio, Texas.