Applied Materials Announces Results for First Quarter of Fiscal 2008

二月 12, 2008

-- Net Sales: $2.09 billion (8% decrease year over year; 12% decrease quarter over quarter)
-- Net Income: $262 million (35% decrease year over year; 38% decrease quarter over quarter)
-- EPS: $0.19 ($0.10 decrease year over year; $0.11 decrease quarter over quarter)
-- New Orders: $2.50 billion (2% decrease year over year; 13% increase quarter over quarter)

SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 12, 2008--Applied Materials, Inc. reported results for its first fiscal quarter ended January 27, 2008. Net sales were $2.09 billion, down 8 percent from $2.28 billion for the first quarter of fiscal 2007, and down 12 percent from $2.37 billion for the fourth quarter of fiscal 2007. Gross margin for the first quarter of fiscal 2008 was 44.8 percent, down from 46.7 percent for the first quarter of fiscal 2007, and down from 45.5 percent for the fourth quarter of fiscal 2007. Net income for the first quarter of fiscal 2008 was $262 million, or $0.19 per share, down from net income of $403 million, or $0.29 per share, for the first quarter of fiscal 2007, and down from net income of $422 million, or $0.30 per share, for the fourth quarter of fiscal 2007.

New orders of $2.50 billion for the first quarter of fiscal 2008 decreased 2 percent from $2.54 billion for the first quarter of fiscal 2007, and increased 13 percent from $2.21 billion for the fourth quarter of fiscal 2007. Regional distribution of new orders for the first quarter of fiscal 2008 was: Taiwan 32 percent, North America 20 percent, Korea 14 percent, Japan 12 percent, Southeast Asia and China 11 percent, and Europe 11 percent. Backlog at the end of the first quarter of fiscal 2008 was $4.10 billion, compared to $3.65 billion at the end of the fourth quarter of fiscal 2007.

"We executed well in a challenging global chip equipment market," said Mike Splinter, president and CEO. "The strength in our new orders reflects robust demand for our display products and recognition of our first Applied SunFab(TM) Thin Film Line orders.

"This is a pivotal year for Applied and we are focused on execution and growth throughout the company. Our long-term prospects are excellent as we build on our foundation of semiconductor equipment and services to add new businesses and move into new markets," concluded Splinter.

Non-GAAP net income for the first quarter of fiscal 2008 was $345 million, or $0.25 per share, compared to non-GAAP net income of $405 million, or $0.29 per share, for the first quarter of fiscal 2007, and $472 million or $0.34 per share for the fourth quarter of fiscal 2007. Non-GAAP adjustments are explained below and detailed in the accompanying Reconciliation of GAAP to Non-GAAP Results.

Effective in the first quarter of fiscal 2008, Applied renamed two of its reportable segments. The Fab Solutions segment is now called Applied Global Services, and the Adjacent Technologies segment is now called Energy and Environmental Solutions. In addition, Applied changed its management reporting system for services, with all service results reported in the Applied Global Services segment. Fiscal 2007 segment information has been reclassified to conform to fiscal 2008.

Results by reportable segment for the first quarter of fiscal 2008 and the first and fourth quarters of fiscal 2007 were:

    Three Months Ended  

Three Months Ended

 

Three Months Ended

    January 27, 2008  

October 28, 2007

  January 28, 2007
   

New
Orders

 

Net
Sales

 

Operating
Income
(Loss)

 

New
Orders

 

Net
Sales

 

Operating
Income
(Loss)

 

New
Orders

 

Net
Sales

 

Operating
Income
(Loss)

(In millions)

                                   
Silicon   $ 1,075   $ 1,237   $ 445     $ 1,343   $ 1,511   $ 550     $ 1,755   $ 1,490   $ 520  
 
Applied Global
Services 		  610     595     149       645     605     159       718     560     159  
 
Display   555     133     34       120     189     47       34     196     50  
 

Energy and
Environmental
Solutions

260     122     (48 )     98     62     (30 )     31     32     (15 )

Non-GAAP net income and non-GAAP EPS, detailed in the accompanying Reconciliation of GAAP to Non-GAAP Results, exclude charges related to (i) restructuring and asset impairments, (ii) equity-based compensation, (iii) certain items associated with acquisitions, including amortization of intangibles and inventory fair value adjustments on products sold, (iv) certain costs associated with ceasing development of beamline implant products, and/or (v) the resolution of income tax audits and changes in tax credits. Management uses non-GAAP net income and non-GAAP EPS to evaluate the company’s operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with Generally Accepted Accounting Principles (GAAP) and may differ from non-GAAP methods of accounting and reporting used by other companies. Applied believes that these measures enhance investors’ ability to review the company’s business from the same perspective as the company’s management and facilitate comparisons of this period’s results with prior periods. The presentation of this additional information should not be considered a substitute for net income or EPS prepared in accordance with GAAP.

Applied Materials will discuss its fiscal 2008 first quarter results, along with its outlook for the second quarter of fiscal 2008, on the earnings call today beginning at 1:30 p.m. Pacific Standard Time. A webcast of the earnings call will be available at www.appliedmaterials.com.

This press release contains forward-looking statements, including statements regarding Applied’s performance, growth opportunities and prospects. Forward-looking statements may contain words such as “expect,” “believe,” “may,” “should,” “will,” “forecast” or similar expressions, and include the assumptions that underlie such statements. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including but not limited to: the sustainability of demand in the nanomanufacturing technology industry and broadening of demand for emerging applications such as solar, which are subject to many factors, including global economic conditions, business and consumer spending, demand for electronic products and semiconductors, and geopolitical uncertainties; customers’ capacity requirements, including capacity utilizing the latest technology, and fab utilization; the timing, rate, amount and sustainability of capital spending for nanomanufacturing technology products; variability of operating results among the company’s reportable segments caused by differing conditions in the served markets; difficulties in production planning and execution in new businesses such as solar; the successful implementation and effectiveness of initiatives to enhance global operations and efficiencies; the successful performance of acquired businesses and joint ventures; Applied’s ability to (i) successfully develop, deliver and support a broad range of products and expand its markets and develop new markets, (ii) maintain effective cost controls and timely align its cost structure with business conditions, (iii) effectively manage its resources and production capability, including its supply chain, (iv) obtain and protect intellectual property rights in key technologies, and (v) attract, motivate and retain key employees; and other risks described in Applied Materials’ SEC filings, including its reports on Forms 10-K, 10-Q and 8-K. All forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof. The company undertakes no obligation to update any forward-looking statements.

Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in Nanomanufacturing Technology™ solutions with a broad portfolio of innovative equipment, services and software products for the fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible electronics and energy-efficient glass. At Applied Materials, we apply Nanomanufacturing Technology to improve the way people live. Learn more at www.appliedmaterials.com.

APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
   

Three Months Ended

(In thousands, except per share amounts)

 

January 27,

2008

 

 

January 28,

2007

     
Net sales   $ 2,087,397   $ 2,277,267  
Cost of products sold     1,152,416     1,214,729  
Gross margin     934,981     1,062,538  
     
Operating expenses:          
Research, development and engineering     273,219     287,567  
Marketing and selling     123,917     106,912  
General and administrative     115,976     121,811  
Restructuring and asset impairments     48,986     (3,278 )
Income from operations     372,883     549,526  
     
Pre-tax loss of equity method investment     9,586     3,937  
Interest expense     4,545     10,468  
Interest income     30,570     30,103  
Income before income taxes     389,322     565,224  
     
Provision for income taxes     126,946     161,748  
Net income   $ 262,376   $ 403,476  
     
Earnings per share:          
Basic   $ 0.19   $ 0.29  
Diluted   $ 0.19   $ 0.29  
     
Weighted average number of shares:          
Basic     1,371,245     1,394,710  
Diluted     1,383,886     1,409,014  
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

  January 27,
2008 		  October 28,
2007
ASSETS        
   
Current assets:        
Cash and cash equivalents   $ 1,215,649     $ 1,202,722  
Short-term investments     689,907       1,166,857  
Accounts receivable, net     2,014,501       2,049,427  
Inventories     1,387,512       1,313,237  
Deferred income taxes     409,773       424,502  
Other current assets     474,464       448,879  
Total current assets     6,191,806       6,605,624  
   
Long-term investments     1,457,825       1,362,425  
Property, plant and equipment     2,815,860       2,782,204  
Less: accumulated depreciation and amortization     (1,750,773 )     (1,730,962 )
Net property, plant and equipment     1,065,087       1,051,242  
   
Goodwill, net     1,017,705       1,000,176  
Purchased technology and other intangible assets, net     354,450       373,178  
Equity method investment     105,474       115,060  
Deferred income taxes and other assets     160,141       146,370  
Total assets   $ 10,352,488     $ 10,654,075  
   
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Current portion of long-term debt   $ 2,674     $ 2,561  
Accounts payable and accrued expenses     2,174,683       2,213,313  
Income taxes payable     176,113       157,549  
Total current liabilities     2,353,470       2,373,423  
   
Long-term debt     202,476       202,281  
Other liabilities     337,811       256,962  
Total liabilities     2,893,757       2,832,666  
   
Stockholders' equity:        
Common stock     13,536       13,857  
Additional paid-in capital     4,707,141       4,658,832  
Retained earnings     11,044,518       10,863,291  
Treasury stock     (8,323,728 )     (7,725,924 )
Accumulated other comprehensive income     17,264       11,353  
Total stockholders' equity     7,458,731       7,821,409  
Total liabilities and stockholders' equity   $ 10,352,488     $ 10,654,075  

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

   

Three Months Ended

(In thousands)

 

January 27,

2008

 

January 28,

2007

         
Cash flows from operating activities:        
Net income   $ 262,376     $ 403,476  

Adjustments required to reconcile net income to cash provided by operating activities:

       
Depreciation and amortization     78,474       60,904  
Loss on fixed asset retirements     11,211       3,122  
Restructuring and asset impairments     48,986       (3,278 )
Deferred income taxes     3,417       (2,457 )
Net recognized loss on investments     639       1,767  
Pretax loss of equity-method investment     9,586       3,937  
Equity-based compensation     38,722       34,901  
Changes in operating assets and liabilities, net of amounts acquired:        
Accounts receivable, net     34,926       (24,350 )
Inventories     (73,937 )     (110,695 )
Other current assets     (22,579 )     (31 )
Other assets     (4,984 )     (3,078 )
Accounts payable and accrued expenses     (95,459 )     (107,823 )
Income taxes payable     94,248       121,082  
Other liabilities     4,105       3,720  
Cash provided by operating activities     389,731       381,197  
Cash flows from investing activities:        
Capital expenditures     (74,144 )     (58,901 )
Cash paid for acquisition, net of cash acquired     (19,084 )     —  
Proceeds from disposition of assets held for sale     —       9,484  
Proceeds from sales and maturities of investments     806,776       730,009  
Purchases of investments     (423,529 )     (728,520 )

Cash provided (used) for investing activities

    290,019       (47,928 )
Cash flows from financing activities:        
Long-term debt borrowings     343       —  
Proceeds from common stock issuances     15,681       75,094  
Common stock repurchases     (600,000 )     (132,017 )
Payment of dividends to stockholders     (83,068 )     (69,614 )
Cash used for financing activities     (667,044 )     (126,537 )
Effect of exchange rate changes on cash and cash equivalents     221       420  
Increase in cash and cash equivalents     12,927       207,152  
Cash and cash equivalents — beginning of period     1,202,722       861,463  
Cash and cash equivalents — end of period   $ 1,215,649     $ 1,068,615  
Supplemental cash flow information:        
Cash payments for income taxes   $

41,878

    $ 40,428  
Cash payments for interest   $ 45     $ 57  
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
    Three Months Ended

(In thousands, except per share amounts)

  January 27,
2008 		  October 28,
2007 		  January 28,
2007
 

Non-GAAP Net Income

           
 
Reported net income (GAAP basis)   $ 262,376     $ 421,761     $ 403,476  

Restructuring and asset impairments 1, 2, 3

    48,986       3,039       (3,278 )
Equity-based compensation expense     38,722       30,889       34,900  

Certain items associated with acquisitions 4

    31,038       29,497       13,380  

Costs associated with ceasing development of beamline implant products 5

           
    1,021       9,391     -  

Resolution of audits of prior years' income tax filings 6

           
  -     -       (29,863 )
Income tax effect of non-GAAP adjustments     (37,326 )     (22,691 )     (13,434 )
 
Non-GAAP net income   $ 344,817     $ 471,886     $ 405,181  
 

Non-GAAP Net Income Per Diluted Share

           
 
Reported net income per diluted share (GAAP basis)            
  $ 0.19     $ 0.30     $ 0.29  
Restructuring and asset impairments     0.02     -     -  
Equity-based compensation expense     0.02       0.02       0.02  
Certain items associated with acquisitions     0.02       0.01       0.01  
Costs associated with ceasing development of beamline implant products            
  -     -     -  
Resolution of audits of prior years' income tax filings            
  -     -       (0.02 )
 
Non-GAAP net income - per diluted share   $ 0.25     $ 0.34     $ 0.29  
 
Shares used in diluted shares calculation     1,383,886       1,403,687       1,409,014  
 

1 Results for the first fiscal quarter ended January 27, 2008 included restructuring charges of $38 million associated with a global cost reduction plan.

2 Results for the fiscal quarter ended January 27, 2008 and October 28, 2007 included restructuring and asset impairment charges of $11 million and $3 million, respectively, associated with ceasing development of beamline implant products.

3 Results for the first fiscal quarter ended January 28, 2007 included a net benefit of $3 million from the sale of the Hillsboro, Oregon facility.

4 Incremental charges attributable to acquisitions consisting of inventory fair value adjustments on products sold and amortization of purchased intangible assets.

5 Results for the fiscal quarters ended January 27, 2008 and October 28, 2007 include other operating charges of $1 million and $9 million, respectively, associated with ceasing development of beamline implant products.

6 Consists of benefit from the resolution of audits of prior years' income tax filings.

Contacts

Applied Materials, Inc.
Randy Bane, 408-986-7977 (investment community)
David Miller, 408-563-9582 (editorial/media)

返回