Applied Materials Announces Results for First Fiscal Quarter 2005
SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 15, 2005--Applied Materials, Inc. (Nasdaq:AMAT)
-- Net Sales: $1.78 billion (19% decrease quarter over quarter;
14% increase year over year)
-- Net Income: $289 million (37% decrease quarter over quarter;
251% increase year over year)
-- EPS: $0.17 ($0.10 decrease quarter over quarter; $0.12
increase year over year)
-- New Orders: $1.68 billion (36% decrease quarter over quarter;
less than 1% decrease year over year)
Applied Materials, Inc., the world's largest supplier of wafer fabrication solutions to the global semiconductor industry, reported results for its first fiscal quarter ended January 30, 2005. Net sales were $1.78 billion, down 19 percent from $2.20 billion for the fourth fiscal quarter of 2004, and up 14 percent from $1.56 billion for the first fiscal quarter of 2004. Gross margin for the first fiscal quarter of 2005 was 44.4 percent, down from 46.6 percent for the fourth fiscal quarter of 2004, and up from 43.5 percent for the first fiscal quarter of 2004. Net income for the first fiscal quarter of 2005 was $289 million, or $0.17 per share, down from net income of $455 million, or $0.27 per share, for the fourth fiscal quarter of 2004, and up from net income of $82 million, or $0.05 per share, for the first fiscal quarter of 2004.
The company's ongoing net income was $289 million, or $0.17 per share, for the first fiscal quarter of 2005, down from $455 million, or $0.27 per share, for the fourth fiscal quarter of 2004, and up from $200 million, or $0.12 per share, for the first fiscal quarter of 2004. Ongoing results for the fourth fiscal quarter of 2004 and the first fiscal quarter of 2005 were the same as reported net income.
New orders of $1.68 billion for the first fiscal quarter of 2005 decreased 36 percent from $2.62 billion for the fourth fiscal quarter of 2004, and decreased less than 1 percent from $1.68 billion for the first fiscal quarter of 2004. Regional distribution of new orders for the first fiscal quarter of 2005 was: Taiwan 31 percent, North America 20 percent, Europe 17 percent, Korea 15 percent, Japan 9 percent, and Southeast Asia and China 8 percent. Backlog at the end of the first fiscal quarter of 2005 was $3.21 billion, compared to $3.37 billion at the end of the fourth fiscal quarter of 2004.
During the first fiscal quarter of 2005, the company repurchased approximately 17 million shares of common stock at an average price of $17.30 per share for an aggregate purchase price of $300 million.
"Given the challenging semiconductor environment this past quarter, we are pleased with the company's financial performance," said Mike Splinter, president and chief executive officer. "During the quarter, we focused the company on effectively using our resources to improve operational efficiency, lower costs and achieve our profitability goals.
"The semiconductor industry is investing to increase its 90-nanometer (nm) volume production and has begun qualifying 65nm manufacturing," Splinter continued. "We are working closely with customers to deliver the capabilities needed for their most rigorous manufacturing requirements. Through innovations, like our strained silicon processes that hold the promise of providing significant gains in chip speed and power performance, we are delivering the technologies that are moving the industry forward.
"As the number of applications for chips continues to increase, we are confident in the long-term expansion of the semiconductor industry, and we continue to invest in the technologies and services that we believe position the company to benefit from this growth," concluded Splinter.
Reconciliations of reported results of operations under U.S. Generally Accepted Accounting Principles (GAAP) to ongoing results are included as a supplement to this press release. Due to the amount of charges incurred in prior periods as a result of realignment activities, Applied Materials believes that ongoing results are useful to investors because they reflect baseline performance exclusive of charges associated with realignment activities. Ongoing results are the primary indicator used by Applied Materials' management to plan and forecast future periods. These non-GAAP measures are neither in accordance with, nor an alternative for, GAAP, and may be materially different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered as a substitute for net income prepared in accordance with GAAP.
This press release contains forward-looking statements, including, but not limited to, statements regarding the semiconductor industry's production trends, long-term expansion and growth; the company's operational efficiency, manufacturing capability, delivery of innovations that provide significant performance gains for future chip generations, technological leadership, strategic position and growth opportunities; and increases in the number of chip applications. Forward-looking statements may contain words such as "expect," "anticipate," "believe," "may," "should," "will," "estimate," "forecast," "see," "promise," 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. Risks and uncertainties include, but are not limited to: the sustainability of demand in the semiconductor and semiconductor equipment industries, which is subject to many factors, including global economic conditions, business spending, consumer confidence, demand for electronic products and semiconductors, and geopolitical uncertainties; customers' capacity requirements, including capacity utilizing the latest technology, which depend in part on customers' inventory levels relative to demand for their products; the timing, rate, amount and sustainability of capital spending for new technology, such as 300mm and sub-100 nanometer applications; the company's ability to develop, deliver and support a broad range of products and services on a timely basis; the company's successful and timely development of new markets, products, processes and services; the company's ability to timely satisfy manufacturing requirements; the company's ability to maintain effective cost controls and to timely align its cost structure with business conditions; the successful integration and performance of acquired businesses; the effectiveness of strategic transactions; changes in management; and other risks described in Applied Materials' Securities and Exchange Commission filings, including the reports on Form 10-K and Form 10-Q. 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 the forward-looking statements in this press release.
Applied Materials will be discussing its first fiscal quarter results, along with its outlook for the second fiscal quarter of 2005, on a conference call today beginning at 1:30 p.m. Pacific Time. A webcast of the conference call will be available on Applied Materials' web site under the "Investors" section.
Applied Materials, Inc., headquartered in Santa Clara, California, (Nasdaq:AMAT) is the largest supplier of equipment and services to the global semiconductor industry. Applied Materials' web site is www.appliedmaterials.com.
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three Months Ended
February 1, January 30,
(In thousands, except per share amounts) 2004 2005
----------------------------------------------------------------------
Net sales $1,555,448 $1,780,576
Cost of products sold 879,279 990,351
---------- ----------
Gross margin 676,169 790,225
Operating expenses:
Research, development and engineering 242,645 241,762
Marketing and selling 88,398 77,830
General and administrative 80,294 88,423
Restructuring, asset impairments and
other charges 167,459 -
---------- -----------
Income from operations 97,373 382,210
Interest expense 11,800 9,272
Interest income 31,273 36,658
---------- -----------
Income before income taxes 116,846 409,596
Provision for income taxes 34,470 120,831
---------- -----------
Net income $ 82,376 $ 288,765
---------- -----------
Earnings per share:
Basic $ 0.05 $ 0.17
Diluted $ 0.05 $ 0.17
Weighted average number of shares:
Basic 1,682,025 1,672,671
Diluted 1,735,268 1,687,140
----------------------------------------------------------------------
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
----------------------------------------------------------------------
October 31, January 30,
(In thousands) 2004 2005
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,281,844 $ 2,184,429
Short-term investments 4,296,152 4,213,790
Accounts receivable, net 1,670,153 1,740,874
Inventories 1,139,368 1,204,182
Deferred income taxes 610,095 621,147
Other current assets 283,907 236,177
------------ ------------
Total current assets 10,281,519 10,200,599
Property, plant and equipment 2,953,130 2,976,738
Less: accumulated depreciation and
amortization (1,607,602) (1,646,967)
------------ ------------
Net property, plant and equipment 1,345,528 1,329,771
Goodwill, net 257,321 337,825
Purchased technology and other intangible
assets, net 50,291 82,625
Deferred income taxes and other assets 158,786 147,729
------------ ------------
Total assets $12,093,445 $12,098,549
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 45,864 $ 46,672
Accounts payable and accrued expenses 1,895,061 1,759,514
Income taxes payable 347,056 416,173
------------ ------------
Total current liabilities 2,287,981 2,222,359
Long-term debt 410,436 416,244
Other liabilities 133,001 160,112
------------ ------------
Total liabilities 2,831,418 2,798,715
------------ ------------
Stockholders' equity:
Common stock 16,803 16,678
Additional paid-in capital 2,070,733 1,818,616
Deferred stock compensation, net (96) -
Retained earnings 7,164,170 7,452,935
Accumulated other comprehensive income 10,417 11,605
------------ ------------
Total stockholders' equity 9,262,027 9,299,834
------------ ------------
Total liabilities and stockholders' equity $12,093,445 $12,098,549
----------------------------------------------------------------------
APPLIED MATERIALS, INC.
SUPPLEMENTAL CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS --
ONGOING BASIS
Three Months Ended
----------------------------------------------------------------------
February 1, 2004
------------------------------------
(In thousands, except per share Special Ongoing
amounts) Reported(1) Items(2) Results
----------------------------------------------------------------------
Net sales $1,555,448 $ - $1,555,448
Cost of products sold 879,279 - 879,279
---------- ----------- -----------
Gross margin 676,169 - 676,169
Operating expenses:
Research, development
and engineering 242,645 - 242,645
Marketing and selling 88,398 - 88,398
General and
administrative 80,294 - 80,294
Restructuring, asset
impairments and
other charges 167,459 (167,459)(a) -
---------- ----------- -----------
Income from operations 97,373 167,459 264,832
Interest expense 11,800 - 11,800
Interest income 31,273 - 31,273
---------- ----------- -----------
Income before income taxes 116,846 167,459 284,305
Provision for income taxes 34,470 49,400 (b) 83,870
---------- ----------- -----------
Net income $ 82,376 $ 118,059 $ 200,435
---------- ----------- -----------
Earnings per share:
Basic $ 0.05 $ 0.07 $ 0.12
Diluted $ 0.05 $ 0.07 $ 0.12
Weighted average number of
shares:
Basic 1,682,025 1,682,025 1,682,025
Diluted 1,735,268 1,735,268 1,735,268
----------------------------------------------------------------------
1) Reported results of operations are presented in accordance with
U.S. Generally Accepted Accounting Principles (GAAP).
2) Special items for the first fiscal quarter of 2004 consisted of
the following:
a) Restructuring, asset impairments and other charges resulting
primarily from the consolidation of facilities associated with
realignment activities.
b) The tax effect of special items.
3) There were no special items for the first fiscal quarter of 2005.
Therefore, ongoing results are the same as reported results of
operations.
APPLIED MATERIALS, INC.
SUPPLEMENTAL CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS --
ONGOING BASIS
Three Months Ended
----------------------------------------------------------------------
January 30, 2005
--------------------------------------
(In thousands, except per share Special Ongoing
amounts) Reported(1) Items(3) Results
----------------------------------------------------------------------
Net sales $1,780,576 $ - $1,780,576
Cost of products sold 990,351 - 990,351
---------- ---------- -----------
Gross margin 790,225 - 790,225
Operating expenses:
Research, development and
engineering 241,762 - 241,762
Marketing and selling 77,830 - 77,830
General and
administrative 88,423 - 88,423
Restructuring, asset
impairments and
other charges - - -
---------- ---------- -----------
Income from operations 382,210 - 382,210
Interest expense 9,272 - 9,272
Interest income 36,658 - 36,658
---------- ---------- -----------
Income before income taxes 409,596 - 409,596
Provision for income taxes 120,831 - 120,831
---------- ---------- -----------
Net income $ 288,765 $ - $ 288,765
---------- ---------- -----------
Earnings per share:
Basic $ 0.17 $ - $ 0.17
Diluted $ 0.17 $ - $ 0.17
Weighted average number of
shares:
Basic 1,672,671 1,672,671 1,672,671
Diluted 1,687,140 1,687,140 1,687,140
----------------------------------------------------------------------
1) Reported results of operations are presented in accordance with
U.S. Generally Accepted Accounting Principles (GAAP).
2) Special items for the first fiscal quarter of 2004 consisted of
the following:
a) Restructuring, asset impairments and other charges resulting
primarily from the consolidation of facilities associated with
realignment activities.
b) The tax effect of special items.
3) There were no special items for the first fiscal quarter of 2005.
Therefore, ongoing results are the same as reported results of
operations.
CONTACT: Applied Materials, Inc.
Paul Bowman, 408-563-1698 (investment community)
David Miller, 408-563-9582 (editorial/media)
SOURCE: Applied Materials, Inc.