Maxim Integrated Reports Results For The Fourth Quarter Of Fiscal 2017, Increases Dividend By 9%

SAN JOSE, Calif., July 20, 2017 /PRNewswire/ -- Maxim Integrated Products, Inc. (NASDAQ:MXIM) reported net revenue of $602 million for its fourth quarter of fiscal 2017 ended June 24, 2017, a 4% increase from the $581 million revenue recorded in the prior quarter, and a 6% increase from the same quarter of last year.

Tunc Doluca, President and Chief Executive Officer, commented, "The June quarter marked the third consecutive quarter in our return to year-over-year growth, led by double-digit increases in Industrial and Automotive. Through solid execution in our manufacturing strategy, we exceeded our profitability targets and demonstrated strong earnings power and cash flow growth." Mr. Doluca continued, "Today, we are announcing a 9% increase in our dividend, reflecting our continued commitment to return cash to shareholders and confidence in our long-term outlook."

Fiscal Year 2017 Fourth Quarter Results
Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the June quarter was $0.57. The results were affected by pre-tax special items which primarily consisted of $13 million in charges related to acquisitions and $3 million in charges related to restructuring activities. GAAP earnings per share, excluding special items was $0.63. An analysis of GAAP versus GAAP excluding special items is provided in the last table of this press release.

Cash Flow Items
At the end of the fourth quarter of fiscal 2017, total cash, cash equivalents and short term investments were $2.74 billion, an increase of $589 million from the prior quarter.

Notable items included:

    --  Cash flow from operations: $237 million
    --  Gross capital expenditures: $13 million
    --  Bond offering: $496 million
    --  Dividends: $93 million ($0.33 per share)
    --  Stock repurchases: $76 million

Business Outlook
The Company's 90-day backlog at the beginning of the September 2017 quarter was $389 million. Based on the beginning backlog and expected turns, our results for the September 2017 quarter are forecasted to be as follows:

    --  Revenue: $555 to $595 million
    --  Gross Margin: 63% to 66% GAAP (65% to 68% excluding special items)
    --  EPS: $0.48 to $0.54 GAAP ($0.52 to $0.58 excluding special items)

Maxim Integrated's business outlook does not include the potential impact of any special items related to restructuring activity, acquisitions, or other business combinations that may be completed during the quarter.

Dividend and Share Repurchase
Our Board of Directors approved a 9% increase in the quarterly dividend and a new share repurchase authorization of $1 billion. A cash dividend of $0.36 per share will be paid on September 14, 2017, to stockholders of record on August 31, 2017.

Conference Call
Maxim Integrated has scheduled a conference call on July 20 at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter of fiscal 2017 and its business outlook. This call will be webcast by Shareholder.com and can be accessed at the Company's website at investor.maximintegrated.com.

A presentation summarizing financial information to be discussed on the conference call is posted at investor.maximintegrated.com.



                                     CONSOLIDATED STATEMENTS OF INCOME

                                                (Unaudited)

                                                        Three Months Ended                                       Year Ended
                                                        ------------------                                       ----------

                                                             June 24,                                             March 25,              June 25,               June 24,                  June 25,

                                                                             2017                                                   2017                   2016                      2017                  2016
                                                                             ----                                                   ----                   ----                      ----                  ----

                                                                          (in thousands, except per share data)

     Net revenues                                                        $602,005                                               $581,216               $566,126                $2,295,615            $2,194,719

     Cost of goods sold (1) (2)                                           208,339                                                214,312                219,099                   849,135               950,331

     Gross margin                                                         393,666                                                366,904                347,027                 1,446,480             1,244,388
                                                                          -------                                                -------                -------                 ---------             ---------

     Operating expenses:

     Research and development                                             114,011                                                113,163                113,491                   453,977               467,161

     Selling, general and administrative                                   75,129                                                 73,987                 71,483                   291,511               288,899

     Intangible asset amortization                                          2,050                                                  2,348                  2,538                     9,189                12,205

     Impairment of long-lived assets (3)                                        -                                                 1,000                    429                     7,517               160,582

      Impairment of goodwill and intangible
      assets                                                                    -                                                     -                27,602                         -               27,602

     Severance and restructuring expenses                                   1,175                                                    450                  4,149                    12,453                24,479

      Other operating expenses (income), net
      (4)                                                                   1,923                                                  1,704                  4,962                  (22,944)             (50,389)

     Total operating expenses (income), net                               194,288                                                192,652                224,654                   751,703               930,539
                                                                          -------                                                -------                -------                   -------               -------

     Operating income (loss)                                              199,378                                                174,252                122,373                   694,777               313,849

      Interest and other income (expense), net
      (5)                                                                 (3,798)                                               (3,884)               (6,427)                 (15,188)             (28,795)
                                                                           ------                                                 ------                 ------                   -------               -------

      Income (loss) before provision for
      income taxes                                                        195,580                                                170,368                115,946                   679,589               285,054

     Income tax provision (benefit)                                        32,271                                                 30,155                 23,607                   107,976                57,579

     Net income (loss)                                                   $163,309                                               $140,213                $92,339                  $571,613              $227,475
                                                                         ========                                               ========                =======                  ========              ========



     Earnings (loss) per share:

     Basic                                                                  $0.58                                                  $0.50                  $0.32                     $2.02                 $0.80
                                                                            =====                                                  =====                  =====                     =====                 =====

     Diluted                                                                $0.57                                                  $0.49                  $0.32                     $1.98                 $0.79
                                                                            =====                                                  =====                  =====                     =====                 =====


      Shares used in the calculation of
      earnings (loss) per share:

     Basic                                                                282,747                                                282,903                285,354                   283,147               285,081
                                                                          =======                                                =======                =======                   =======               =======

     Diluted                                                              287,494                                                287,882                288,544                   287,974               289,479
                                                                          =======                                                =======                =======                   =======               =======


     Dividends paid per share                                               $0.33                                                  $0.33                  $0.30                     $1.32                 $1.20
                                                                            =====                                                  =====                  =====                     =====                 =====



                                        SCHEDULE OF SPECIAL ITEMS

                                               (Unaudited)

                                                        Three Months Ended                                       Year Ended
                                                        ------------------                                       ----------

                                                             June 24,                                             March 25,              June 25,               June 24,                  June 25,

                                                                             2017                                                   2017                   2016                      2017                  2016
                                                                             ----                                                   ----                   ----                      ----                  ----

                                                                                      (in thousands)

     Cost of goods sold:

     Intangible asset amortization                                        $11,064                                                $11,064                $11,829                   $46,485               $55,030

     Accelerated depreciation (1)                                               -                                                 1,103                  4,098                     3,459                53,827

     Other cost of goods sold (2)                                               -                                                     -                     -                        -                6,123

       Total                                                              $11,064                                                $12,167                $15,927                   $49,944              $114,980
                                                                          =======                                                =======                =======                   =======              ========


      Operating expenses:

     Intangible asset amortization                                         $2,050                                                 $2,348                 $2,538                    $9,189               $12,205

     Impairment of long-lived assets (3)                                        -                                                 1,000                    429                     7,517               160,582

      Impairment of goodwill and intangible
      assets                                                                    -                                                     -                27,602                         -               27,602

     Severance and restructuring                                            1,175                                                    450                  4,149                    12,453                24,479

      Other operating expenses (income), net
      (4)                                                                   1,923                                                  1,704                  4,962                  (22,944)             (50,389)

       Total                                                               $5,148                                                 $5,502                $39,680                    $6,215              $174,479
                                                                           ======                                                 ======                =======                    ======              ========



      Interest and other expense (income), net
      (5)                                                                   $(90)                                                 $(48)                $(247)                 $(5,661)                 $194

      Total                                                                 $(90)                                                 $(48)                $(247)                 $(5,661)                 $194
                                                                             ====                                                   ====                  =====                   =======                  ====


      Income tax provision (benefit)

      Fiscal year 2015 & 2014 research &
      development tax credits                                                   -                                                     -                     -                        -              (2,475)

      Total                                                     $               -                                     $               -      $              -      $                 -             $(2,475)
                                                                =================                                     =================      ================      ===================              =======


      (1) Includes building and equipment accelerated depreciation related to the San Jose and Dallas
      manufacturing facilities.

     (2) Includes expense related to a patent license settlement.

      (3) Includes impairment of investments in privately-held companies and other equipment impairment charges
      relating to the San Antonio wafer manufacturing facility.

      (4) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter
      of fiscal year 2017, gain on sale of energy metering business during the third quarter of fiscal year
      2016, loss (gain) relating to sale of assets, and expected loss on lease abandonment.

      (5) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San
      Antonio, Texas.



                CONSOLIDATED  BALANCE SHEETS

                         (Unaudited)

                                                         June 24,            March 25,            June 25,

                                                                        2017                 2017                2016
                                                                        ----                 ----                ----

                                                      (in thousands)

                           ASSETS

     Current assets:

     Cash and cash equivalents                                    $2,246,121           $1,656,727          $2,105,229

     Short-term investments                                          498,718              499,154             125,439
                                                                     -------              -------             -------

      Total cash, cash equivalents and short-term
      investments                                                  2,744,839            2,155,881           2,230,668

     Accounts receivable, net                                        256,454              257,592             256,531

     Inventories                                                     247,242              241,439             227,929

     Other current assets                                             57,059               60,195              91,920
                                                                      ------               ------              ------

     Total current assets                                          3,305,594            2,715,107           2,807,048

     Property, plant and equipment, net                              606,581              636,835             692,551

     Intangible assets, net                                           90,867              103,981             146,540

     Goodwill                                                        491,015              491,015             490,648

     Other assets                                                     72,974               69,689              84,100

     Assets held for sale                                              3,202                1,156              13,729

     TOTAL ASSETS                                                 $4,570,233           $4,017,783          $4,234,616
                                                                  ==========           ==========          ==========


            LIABILITIES AND STOCKHOLDERS' EQUITY

     Current liabilities:

     Accounts payable                                                $77,373              $82,938             $82,535

     Income taxes payable                                              3,688                4,538              21,153

     Accrued salary and related expenses                             145,299              135,702             166,698

     Accrued expenses                                                 37,663               35,208              50,521

     Deferred revenue on shipments to distributors                    14,974               35,724              38,779

     Short term debt                                                       -                   -            249,717
                                                                         ---                 ---            -------

     Total current liabilities                                       278,997              294,110             609,403

     Long-term debt                                                1,487,678              991,877             990,090

     Income taxes payable                                            557,498              534,028             480,645

     Other liabilities                                                43,366               37,459              46,664

     Total liabilities                                             2,367,539            1,857,474           2,126,802
                                                                   ---------            ---------           ---------

     Stockholders' equity:

     Common stock and capital in excess of par value                     283                  284                 284

     Retained earnings                                             2,212,301            2,169,760           2,121,749

     Accumulated other comprehensive loss                            (9,890)             (9,735)           (14,219)

     Total stockholders' equity                                    2,202,694            2,160,309           2,107,814
                                                                   ---------            ---------           ---------

             TOTAL LIABILITIES & STOCKHOLDERS' EQUITY             $4,570,233           $4,017,783          $4,234,616
                                                                  ==========           ==========          ==========


                                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     (Unaudited)

                                                                Three Months Ended         Year Ended
                                                                ------------------         ----------

                                                                     June 24,              March 25,             June 25,            June 24,              June 25,

                                                                                      2017                  2017                2016                  2017                   2016
                                                                                      ----                  ----                ----                  ----                   ----

                                                                           (in thousands)

     Cash flows from operating activities:

     Net income (loss)                                                            $163,309              $140,213             $92,339              $571,613               $227,475

      Adjustments to reconcile net income (loss) to
      net cash provided by operating activities:

     Stock-based compensation                                                       17,624                18,300              16,444                71,117                 69,701

     Depreciation and amortization                                                  38,194                40,473              46,414               164,292                244,637

     Deferred taxes                                                                  1,697              (16,967)           (13,510)              (7,895)              (48,138)

     In Process Research & Development written-off                                       -                    -             27,602                     -                27,602

      Loss (gain) from sale of property, plant and
      equipment                                                                      7,006                 4,809               5,048                16,365                  2,283

     Loss (gain) on sale of business                                                     -                    -                  -             (26,620)              (58,944)

      Tax benefit (shortfall) related to stock-based
      compensation                                                                       -                    -              3,657                     -                 7,375

     Impairment of long-lived assets                                                   665                     -                  -                1,462                160,153

      Impairment of investments in privately-held
      companies                                                                          -                1,000                   -                6,720                      -

      Excess tax benefit from stock-based
      compensation                                                                       -                    -            (1,890)                    -               (9,550)

     Changes in assets and liabilities:

     Accounts receivable                                                             1,138              (33,249)             21,971                    78                 22,313

     Inventories                                                                   (5,715)              (5,505)              7,657              (21,215)                44,086

     Other current assets                                                            (727)               16,862               8,012               (3,547)                 2,943

     Accounts payable                                                              (5,235)               11,887               5,076               (6,205)               (3,676)

     Income taxes payable                                                           22,619                20,931              19,792                60,798                 56,641

     Deferred revenue on shipments to distributors                                (20,751)                (412)              4,322              (23,805)                 8,452

     Accrued salary and related expenses                                             9,597                26,227                   -             (21,399)                     -

     All other accrued liabilities                                                   7,507               (3,872)             11,137               (8,102)              (31,468)

      Net cash provided by (used in) operating
      activities                                                                   236,928               220,697             254,071               773,657                721,885
                                                                                   -------               -------             -------               -------                -------

     Cash flows from investing activities:

     Purchase of property, plant and equipment                                    (13,050)              (8,286)           (22,488)             (51,421)              (69,369)

      Proceeds from sales of property, plant and
      equipment                                                                      7,576                   787              34,691                10,792                 85,142

      Proceeds from sale of available-for-sale
      securities                                                                         -                    -                  -               50,994                      -

      Proceeds from maturity of available-for-sale
      securities                                                                    50,000                     -             50,000                75,000                 50,000

     Proceeds from sale of business                                                      -                    -                  -               42,199                105,000

     Purchases of available-for-sale securities                                   (49,891)             (99,398)           (25,000)            (450,135)              (99,948)

      Purchases of privately-held companies'
      securities                                                                         -                (162)            (1,554)              (2,825)              (10,483)

     Proceeds from other investing activities                                            -                    -                  -                    -                 2,380

      Net cash provided by (used in) investing
      activities                                                                   (5,365)            (107,059)             35,649             (325,396)                62,722
                                                                                    ------              --------              ------              --------                 ------

     Cash flows from financing activities:

      Excess tax benefit from stock-based
      compensation                                                                       -                    -              1,890                     -                 9,550

     Repayment of notes payable                                                          -                    -                  -            (250,000)                     -


     Issuance of debt                                                              500,000                     -            250,000               500,000                250,000

     Debt issuance cost                                                            (3,688)                    -              (283)              (3,688)                 (283)

     Net issuance of restricted stock units                                        (7,471)              (8,268)            (2,687)             (25,183)              (24,084)

     Proceeds from stock options exercised                                          18,434                17,502              12,272                63,003                 79,608

      Issuance of common stock under employee stock
      purchase program                                                              19,805               (3,194)             19,625                34,269                 33,975

     Repurchase of common stock                                                   (75,853)             (56,999)           (90,438)            (251,799)             (237,086)

     Dividends paid                                                               (93,396)             (93,387)           (85,210)            (373,971)             (342,023)

      Net cash provided by (used in) financing
      activities                                                                   357,831             (144,346)            105,169             (307,369)             (230,343)
                                                                                   -------              --------             -------              --------               --------

      Net increase (decrease) in cash and cash
      equivalents                                                                  589,394              (30,708)            394,889               140,892                554,264

     Cash and cash equivalents:

     Beginning of period                                                         1,656,727             1,687,435           1,710,340             2,105,229              1,550,965

     End of period                                                              $2,246,121            $1,656,727          $2,105,229            $2,246,121             $2,105,229
                                                                                ==========            ==========          ==========            ==========             ==========


      Total cash, cash equivalents, and short-term
      investments                                                               $2,744,839            $2,155,881          $2,230,668            $2,744,839             $2,230,668
                                                                                ==========            ==========          ==========            ==========             ==========



                     ANALYSIS OF GAAP VERSUS GAAP EXCLUDING SPECIAL ITEMS DISCLOSURES

                                                (Unaudited)

                                                                      Three Months Ended                                               Year Ended
                                                                      ------------------

                                                                   June 24,                                         March 25,                     June 25,          June 24,            June 25,

                                                                                     2017                                         2017                         2016                2017                 2016
                                                                                     ----                                         ----                         ----                ----                 ----

                                                                             (in thousands, except per share data)

      Reconciliation of GAAP gross profit to GAAP
      gross profit excluding special items:
     -------------------------------------------

     GAAP gross profit                                                           $393,666                                     $366,904                     $347,027          $1,446,480           $1,244,388

                               GAAP gross profit %                                 65.4%                                       63.1%                       61.3%              63.0%               56.7%


     Special items:

     Intangible asset amortization                                                 11,064                                       11,064                       11,829              46,485               55,030

     Accelerated depreciation (1)                                                       -                                       1,103                        4,098               3,459               53,827

     Other cost of goods sold (2)                                                       -                                           -                           -                  -               6,123

      Total special items                                                          11,064                                       12,167                       15,927              49,944              114,980
                                                                                   ------                                       ------                       ------              ------              -------

       GAAP gross profit excluding special items                                 $404,730                                     $379,071                     $362,954          $1,496,424           $1,359,368

       GAAP gross profit % excluding special items                                  67.2%                                       65.2%                       64.1%              65.2%               61.9%


      Reconciliation of GAAP operating expenses
      to GAAP operating expenses excluding
      special items:
     ------------------------------------------

     GAAP operating expenses                                                     $194,288                                     $192,652                     $224,654            $751,703             $930,539


     Special items:

     Intangible asset amortization                                                  2,050                                        2,348                        2,538               9,189               12,205

     Impairment of long-lived assets (3)                                                -                                       1,000                          429               7,517              160,582

      Impairment of goodwill and intangible
      assets                                                                            -                                           -                      27,602                   -              27,602

     Severance and restructuring                                                    1,175                                          450                        4,149              12,453               24,479

     Other operating expenses (income), net (4)                                     1,923                                        1,704                        4,962            (22,944)            (50,389)

       Total special items                                                          5,148                                        5,502                       39,680               6,215              174,479
                                                                                    -----                                        -----                       ------               -----              -------

       GAAP operating expenses excluding special
        items                                                                    $189,140                                     $187,150                     $184,974            $745,488             $756,060
                                                                                 ========                                     ========                     ========            ========             ========


      Reconciliation of GAAP net income (loss) to
      GAAP net income excluding special items:
     -------------------------------------------

     GAAP net income (loss)                                                      $163,309                                     $140,213                      $92,339            $571,613             $227,475


     Special items:

     Intangible asset amortization                                                 13,114                                       13,412                       14,367              55,674               67,235

     Accelerated depreciation (1)                                                       -                                       1,103                        4,098               3,459               53,827

     Other cost of goods sold (2)                                                       -                                           -                           -                  -               6,123

     Impairment of long-lived assets (3)                                                -                                       1,000                          429               7,517              160,582

      Impairment of goodwill and intangible
      assets                                                                            -                                           -                      27,602                   -              27,602


     Severance and restructuring                                                    1,175                                          450                        4,149              12,453               24,479

     Other operating expenses (income), net (4)                                     1,923                                        1,704                        4,962            (22,944)            (50,389)

      Interest and other expense (income), net
      (5)                                                                            (90)                                        (48)                       (247)            (5,661)                 194

       Pre-tax total special items                                                 16,122                                       17,621                       55,360              50,498              289,653

       Fiscal year 2015 & 2014 research &
        development tax credits                                                         -                                           -                           -                  -             (2,475)

      Other income tax effects and adjustments
      (6)                                                                             499                                        1,957                      (7,228)           (11,465)            (43,392)

      GAAP net income excluding special items                                    $179,930                                     $159,791                     $140,471            $610,646             $471,261
                                                                                 ========                                     ========                     ========            ========             ========


      GAAP net income per share excluding special
       items:

     Basic                                                                          $0.64                                        $0.56                        $0.49               $2.16                $1.65
                                                                                    =====                                        =====                        =====               =====                =====

     Diluted                                                                        $0.63                                        $0.56                        $0.49               $2.12                $1.63
                                                                                    =====                                        =====                        =====               =====                =====


      Shares used in the calculation of earnings
      per share excluding special items:

     Basic                                                                        282,747                                      282,903                      285,354             283,147              285,081
                                                                                  =======                                      =======                      =======             =======              =======

     Diluted                                                                      287,494                                      287,882                      288,544             287,974              289,479
                                                                                  =======                                      =======                      =======             =======              =======


      (1) Includes building and equipment accelerated depreciation related to the San Jose and Dallas manufacturing
      facilities.

     (2) Includes expense related to a patent license settlement.

      (3) Includes impairment of investments in privately-held companies and other equipment impairment charges
      relating to the San Antonio wafer manufacturing facility.

      (4) Includes gain on sale of micro-electromechanical systems (MEMS) business line during the first quarter of
      fiscal year 2017, gain on sale of energy metering business during the third quarter of fiscal year 2016, loss
      (gain) relating to sale of assets, and expected loss on lease abandonment.

      (5) Includes gain on sale of shares received for the sale of the wafer manufacturing facility in San Antonio,
      Texas.

     (6) Includes tax effect of pre-tax special items and miscellaneous tax adjustments.

Non-GAAP Measures
To supplement the consolidated financial results prepared under GAAP, Maxim Integrated uses non-GAAP measures which are adjusted from the most directly comparable GAAP results to exclude special items related to intangible asset amortization; accelerated depreciation; other costs of goods sold; impairment of long-lived assets; impairment of goodwill and other intangible assets; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net; fiscal year 2016 research and development tax credits, and other income tax effects and adjustments. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate Maxim Integrated's current performance. Many analysts covering Maxim Integrated use the non-GAAP measures as well. Given management's use of these non-GAAP measures, Maxim Integrated believes these measures are important to investors in understanding Maxim Integrated's current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in Maxim Integrated's core business across different time periods. These non-GAAP measures are not in accordance with or an alternative to GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. The non-GAAP measures displayed in the table above include the following:

GAAP Gross Profit Excluding Special Items
The use of GAAP gross profit excluding special items allows management to evaluate the gross margin of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization, accelerated depreciation, and other costs of goods sold. In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP gross profit excluding special items to enable investors and analysts to evaluate our revenue generation performance relative to the direct costs of revenue of Maxim Integrated's core businesses.

GAAP Operating Expenses Excluding Special Items
The use of GAAP operating expenses excluding special items allows management to evaluate the operating expenses of the Company's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; impairment of long-lived assets; impairment of goodwill and other intangible assets; severance and restructuring, and other operating expenses (income), net. In addition, it is an important component of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP operating expenses excluding special items to enable investors and analysts to evaluate our core business and its direct operating expenses.

GAAP Provision for Income Taxes Excluding Special Items
The use of a GAAP provision for income taxes excluding special items allows management to evaluate the provision for income taxes across different reporting periods on a consistent basis, independent of special items including the tax provision impact of pre-tax special items. In fiscal year 2016, we began using a long-term tax rate to compute the GAAP provision for income taxes excluding special items. This long-term tax rate considers the income tax impact of pre-tax special items and eliminates the effects of significant non-recurring and period specific tax items which vary in size and frequency. In the first and second quarter of fiscal year 2017, we used a long-term tax rate of 18%, which was our forecast of the weighted average of our normalized fiscal year GAAP tax rate excluding special items over a four-year period, that includes the past three fiscal years plus the current fiscal year projection at the beginning of fiscal year 2017. We review the long-term tax rate on an annual basis and more frequently whenever events occur that may materially affect the long-term tax rate such as tax law changes; significant changes in our geographic earnings mix; or changes in our corporate structure. Starting in the third quarter of fiscal year 2017, we transitioned to a long-term tax rate of 15%, which reflects the impact of changes in our manufacturing structure and focused research and development expenditures, resulting in improved projections for fiscal year 2017 and future periods.

GAAP Net Income and GAAP Net Income per Share Excluding Special Items
The use of GAAP net income and GAAP net income per share excluding special items allow management to evaluate the operating results of Maxim Integrated's core businesses and trends across different reporting periods on a consistent basis, independent of special items including intangible asset amortization; accelerated depreciation; other costs of goods sold; impairment of long-lived assets; impairment of goodwill and other intangible assets; severance and restructuring; other operating expenses (income), net; interest and other expense (income), net; fiscal year 2016 research and development tax credits, and other income tax effects and adjustments. In addition, they are important components of management's internal performance measurement and reward process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents GAAP net income and GAAP net income per share excluding special items to enable investors and analysts to understand the results of operations of Maxim Integrated's core businesses and to compare our results of operations on a more consistent basis against that of other companies in our industry.

"Safe Harbor" Statement
This press release 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 statements include the Company's business outlook and financial projections for its first quarter of fiscal 2018 ending in September 2017, which includes revenue, gross margin and earnings per share. These statements involve risk and uncertainty. Actual results could differ materially from those forecasted, based upon, among other things, general market and economic conditions, market developments that could adversely affect the growth of the mixed-signal analog market, product mix shifts, the loss of all or a substantial portion of our sales to one or more of our large customers, customer cancellations and price competition, as well as other risks described in the Company's Annual Report on Form 10-K for the fiscal year ended June 25, 2016 (the "Form 10-K"). The Form 10-K may be found at https://www.sec.gov/Archives/edgar/data/743316/000074331616000081/maxim10-kfy2016.htm.

All forward-looking statements included in this news release 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 except as required by law.

About Maxim Integrated
Maxim Integrated develops innovative analog and mixed-signal products and technologies to make systems smaller and smarter, with enhanced security and increased energy efficiency. We are empowering design innovation for our automotive, industrial, healthcare, mobile consumer, and cloud data center customers to deliver industry-leading solutions that help change the world. Learn more at http://www.maximintegrated.com.

Contact
Kathy Ta
Managing Director, Investor Relations
(408) 601-5697

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SOURCE Maxim Integrated Investor Relations