Analyst Conference Summary

Maxim Integrated Products

conference date: May 1, 2008 @ 2:00 PM Pacific Time
for quarter ending: March 29, 2008 (3rd fiscal quarter 2008)

Forward-looking statements

Overview: Revenues down more than is seasonally normal. Still not giving financial details because of accounting restatement process. Good cash flow and strong cash balance.

Basic data:

Revenue was $487.4 million, down sequentially 10% from $540.0 million but up 2% from $475.8 million year-earlier.

No net income or EPS data given.


Fiscal Q4 (June 2008) revenues ranging from $490 to $510 million.

Conference Highlights:

Cash and equivalents ended at $1.2 billion, increasing $34.4 million sequentially. $60.1 million was paid in dividends and $45.9 million was made in payments for previously acquired property and equipment.

Has made progress on accounting restatement; is in final phase of project, but cannot give a final completion date.

Revenue for the quarter was at about mid-point of prior guidance. Revenue mix shifted to 29% computing, 27% consumer, 24% industrial, and 20% communications. Gross margin impact of mix was positive, but gross margins declined by 0.6% sequentially due to lower utilization and higher inventory reserve requirements. But basically stable over 6 quarters.

Product development activity increased. Operating expenses increased 1% sequentially due largely to storage products acquisitions. RF wireless operations and Dallas wafer were wound down, resulting in charges.

The cash dividend of $0.1875 per share will be paid on May 29, 2008 to stockholders of record on May 14th.

Accounts receivable ended at $269.3 million, down from $285.3 million at end of December quarter. Additions to property, plant and equipment were given as $41.9 million in the quarter.

Bookings were $489.3 million. Began new quarter with $323.4 million backlog.

Cell phones, notebook, computing & peripherals, and storage will lead revenue growth in Q4. New product activity will cause operating expenses to increase slightly.

In Communications seqment, GSM edge base station Asian demand as strong. Networking data communication in China, passive optical rollouts in North America and power over Ethernet were also notable.

Industrial and automotive market demand was good.

SAS demand has been ramping in computers. Power management products are having design wins. Consumer products have also won designs. Cell phone customers are signalling future revenue growth due to audio subsystem wins. Intel selected Maxim to develop signal solution for their mobile Internet device product.

Consumer division focus on hand-held devices means constantly adding more features while shrinking size and lower power requirements. Maxim is well-positioned to do well in this market. Also expects faster-than-market growth in "core" analog products.


Analog baseband design wins? We have multiple customers, the ramp for the new products starts 2nd half of this calendar year, continuing into 2009.

Gross margins 2nd half of year. Way to think about it will stay within our target range. Where will depend on product mix and how fast our cost cutting happens.

Communications and industrial segment June quarter? Historically they are seasonaly flat this quarter.

Clarify non-recurring expenses? $38.5 total non-recurring expenses. $21.7 million of that was related to the accounting restatement. $16.8 million was restructuring related.

Secure Products? These are products used for authentication. Many are used in point of sale terminals. We have been doing these products for 10 years and it is a growing market for us.

Outsourced fabs have better technology than our fabs, so we tend to run our larger die sizes there.

Inventory? No significant change in inventory.

3G vs. 2G? I am just back from a trip to Korea. CDMA and 2G were most of our business in the past. Our share in 3G has been quite low, it is ramping and is a good opportunity for us.

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Copyright 2008 William P. Meyers