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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported): August 17, 2004
Applied Materials, Inc.
Commission File Number 0-6920
| Delaware | 94-1655526 | |
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
3050 Bowers Avenue
P.O. Box 58039
Santa Clara, CA 95052-8039
(408) 727-5555
N/A
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1
|
Press Release issued by Applied Materials, Inc. dated August 17, 2004. |
Item 12. Results of Operations and Financial Condition.
On August 17, 2004, Applied Materials, Inc. (“Applied Materials”) announced its financial results for the third fiscal quarter ended August 1, 2004. A copy of Applied Materials’ press release is attached hereto as Exhibit 99.1.
The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of Applied Materials, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Use of Non-GAAP Financial Information
To supplement the consolidated condensed financial statements prepared under United States Generally Accepted Accounting Principles (“GAAP”), Applied Materials uses a non-GAAP financial measure, as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended, of net income that is GAAP net income, adjusted to exclude special items. Reconciliations of reported results of operations under GAAP to ongoing results have been included as a supplement to the 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.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Applied Materials, Inc. (Registrant) |
||||
| By: | /s/ Joseph J. Sweeney | |||
| Joseph J. Sweeney | ||||
| Group Vice President Legal Affairs and Intellectual Property and Corporate Secretary |
||||
Dated: August 17, 2004
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Exhibit Index
| Exhibit | ||
| No. |
Description |
|
99.1
|
Press Release issued by Applied Materials, Inc. dated August 17, 2004. |
EXHIBIT 99.1 Release: Immediate Contact: Paul Bowman (investment community) Jeff Lettes (editorial/media) (408) 563-1698 (408) 563-5161 APPLIED MATERIALS ANNOUNCES RESULTS FOR THIRD FISCAL QUARTER 2004 New Orders Increase to $2.46 Billion; Net Sales Increase to $2.24 Billion SANTA CLARA, Calif., August 17, 2004 -- Applied Materials, Inc., the world's largest supplier of equipment and services to the global semiconductor industry, reported results for its third fiscal quarter ended August 1, 2004. Net sales were $2.24 billion, up 11 percent from $2.02 billion for the second fiscal quarter of 2004, and up 104 percent from $1.09 billion for the third fiscal quarter of 2003. Gross margin for the third fiscal quarter of 2004 was 47.4 percent, up from 46.5 percent for the second fiscal quarter of 2004, and up from 31.7 percent for the third fiscal quarter of 2003. Net income for the third fiscal quarter of 2004 was $441 million, or $0.26 per share, up from net income of $373 million, or $0.22 per share, for the second fiscal quarter of 2004, and up from a net loss of $37 million, or $0.02 per share, for the third fiscal quarter of 2003. The company's ongoing net income was $441 million, or $0.26 per share, for the third fiscal quarter of 2004, up from $373 million, or $0.22 per share, for the second fiscal quarter of 2004, and up from $78 million, or $0.05 per share, for the third fiscal quarter of 2003. Ongoing results for the second and third fiscal quarters of 2004 were the same as reported net income since there were no special items. New orders of $2.46 billion for the third fiscal quarter of 2004 increased 11 percent from $2.21 billion for the second fiscal quarter of 2004, and increased 134 percent from $1.05 billion for the third fiscal quarter of 2003. Regional distribution of new orders for the third fiscal quarter of 2004 was: Taiwan 28 percent, North America 19 percent, Japan 17 percent, Southeast Asia and China 15 percent, Korea 12 percent, and Europe 9 percent. Backlog at the end of the third fiscal quarter of 2004 was $2.99 billion, compared to $2.80 billion at the end of the second fiscal quarter of 2004. "Our financial results demonstrate that Applied Materials is continuing to grow while delivering excellent profitability and productivity," said Mike Splinter, president and chief executive officer. "We are building on our technology leadership, introducing leading-edge products and entering new businesses to provide more capability to our customers." Applied Materials continues to deliver breakthrough technologies with a broad portfolio of transistor, interconnect, and inspection solutions for manufacturing chips at 65 nanometers and beyond. During the quarter, the company launched the Applied Quantum(TM) X, Applied Reflexion LK Ecmp(TM) and Applied Producer(R) HARP(TM) products, and added the FlexStar(TM) system through the acquisition of Torrex. Applied Materials also entered into agreements with Brooks Automation, Praxair Electronics, and Phoenix Silicon to broaden its service product offerings. In addition, Applied Materials announced yesterday a definitive agreement to acquire the operating subsidiaries and businesses of Metron Technology, which provides a wide range of oursource solutions to the semiconductor industry. "With our growth strategy in place, our focus is clearly on building a stronger Applied Materials as we further expand our product offerings and capabilities," concluded Splinter.
Applied Materials, Inc. August 17, 2004 Page 2 of 6 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 realignment charges incurred in certain prior periods, 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, those relating to the company's strategic position and business outlook, as well as the semiconductor and semiconductor equipment industries' trends. Forward-looking statements may contain words such as "expect," "anticipate," "believe," "may," "should," "will," "estimate," "forecast," "see," 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, timing, rate and amount of increased 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 (such as 300mm and nanometer applications); the company's ability to timely develop, deliver and support a broad range of products and services and successfully develop new markets; the company's ability to timely satisfy manufacturing requirements; the company's ability to timely align its cost structure with business conditions; changes in management; the possible inability to complete acquisition(s) as anticipated or at all and the possible inability to realize the potential benefits of the integration and performance of acquired business(es); effectiveness of strategic transactions and other risks described in Applied Materials' Securities and Exchange Commission filings. All forward-looking statements are based on management's estimates, projections and assumptions as of the date hereof. The company assumes no obligation to update the information in this press release. Applied Materials will be discussing its third fiscal quarter results, along with its outlook for the fourth fiscal quarter of 2004, 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. (Nasdaq: AMAT) is the largest supplier of equipment and services to the global semiconductor industry. Applied Materials' web site is http://www.appliedmaterials.com. ###
Applied Materials, Inc. August 17, 2004 Page 3 of 6 APPLIED MATERIALS, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended ---------------------------- ---------------------------- July 27, August 1, July 27, August 1, (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2003 2004 2003 2004 ----------- ----------- ----------- ----------- Net sales $ 1,094,907 $ 2,236,152 $ 3,256,293 $ 5,809,705 Cost of products sold 747,979 1,176,920 2,146,209 3,135,663 ----------- ----------- ----------- ----------- Gross margin 346,928 1,059,232 1,110,084 2,674,042 Operating expenses: Research, development and engineering 217,025 256,781 692,668 743,601 Marketing and selling 78,121 101,513 253,906 285,886 General and administrative 72,307 87,394 223,306 251,145 Restructuring, asset impairments and other charges 66,181 -- 258,250 167,459 ----------- ----------- ----------- ----------- Income/(loss) from operations (86,706) 613,544 (318,046) 1,225,951 Interest expense 11,626 13,489 35,185 36,971 Interest income 46,131 24,869 119,759 82,362 ----------- ----------- ----------- ----------- Income/(loss) before income taxes (52,201) 624,924 (233,472) 1,271,342 Provision for/(benefit from) income taxes (15,399) 184,353 (68,874) 375,047 ----------- ----------- ----------- ----------- Net income/(loss) $ (36,802) $ 440,571 $ (164,598) $ 896,295 ----------- ----------- ----------- ----------- Earnings/(loss) per share: Basic $ (0.02) $ 0.26 $ (0.10) $ 0.53 Diluted $ (0.02) $ 0.26 $ (0.10) $ 0.52 Weighted average number of shares: Basic 1,659,365 1,696,544 1,655,430 1,689,573 Diluted 1,659,365 1,721,690 1,655,430 1,727,626
Applied Materials, Inc. August 17, 2004 Page 4 of 6 APPLIED MATERIALS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS October 26, August 1, (IN THOUSANDS) 2003 2004 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 1,364,857 $ 2,047,442 Short-term investments 4,128,349 4,548,645 Accounts receivable, net 912,875 1,527,603 Inventories 950,692 1,152,774 Deferred income taxes 782,823 572,245 Other current assets 231,177 292,734 ------------ ------------ Total current assets 8,370,773 10,141,443 Property, plant and equipment 3,094,427 2,922,091 Less: accumulated depreciation and amortization (1,534,597) (1,539,487) ------------ ------------ Net property, plant and equipment 1,559,830 1,382,604 Goodwill, net 223,521 249,157 Purchased technology and other intangible assets, net 92,512 62,416 Other assets 64,986 82,849 ------------ ------------ Total assets $ 10,311,622 $ 11,918,469 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 105,292 $ 103,829 Accounts payable and accrued expenses 1,319,471 1,779,143 Income taxes payable 216,114 323,880 ------------ ------------ Total current liabilities 1,640,877 2,206,852 Long-term debt 456,422 454,491 Deferred income taxes and other liabilities 146,289 153,713 ------------ ------------ Total liabilities 2,243,588 2,815,056 ------------ ------------ Stockholders' equity: Common stock 16,774 16,982 Additional paid-in capital 2,223,553 2,364,609 Deferred stock compensation, net (1,543) (371) Retained earnings 5,812,867 6,709,162 Accumulated other comprehensive income 16,383 13,031 ------------ ------------ Total stockholders' equity 8,068,034 9,103,413 ------------ ------------ Total liabilities and stockholders' equity $ 10,311,622 $ 11,918,469 ------------ ------------ - ------------------ Amounts as of August 1, 2004 are unaudited. Amounts as of October 26, 2003 are derived from the October 26, 2003 audited financial statements.
Applied Materials, Inc. August 17, 2004 Page 5 of 6 APPLIED MATERIALS, INC. SUPPLEMENTAL CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - ONGOING BASIS (UNAUDITED) Three Months Ended -------------------------------------------------------------------------------------- July 27, 2003 August 1, 2004 -------------------------------------------- --------------------------------------- Special Ongoing Special Ongoing (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Reported(1) Items(2) Results Reported(1) Items(3) Results ----------- ----------- ----------- ----------- ----------- ----------- Net sales $ 1,094,907 $ -- $ 1,094,907 $ 2,236,152 $ -- $ 2,236,152 Cost of products sold 747,979 (93,404)(a) 654,575 1,176,920 -- 1,176,920 ----------- ----------- ----------- ----------- ----------- ----------- Gross margin 346,928 93,404 440,332 1,059,232 -- 1,059,232 Operating expenses: Research, development and engineering 217,025 (3,916)(b) 213,109 256,781 -- 256,781 Marketing and selling 78,121 -- 78,121 101,513 -- 101,513 General and administrative 72,307 -- 72,307 87,394 -- 87,394 Restructuring, asset impairments and other charges 66,181 (66,181)(c) -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Income/(loss) from operations (86,706) 163,501 76,795 613,544 -- 613,544 Interest expense 11,626 -- 11,626 13,489 -- 13,489 Interest income 46,131 -- 46,131 24,869 -- 24,869 ----------- ----------- ----------- ----------- ----------- ----------- Income/(loss) before income taxes (52,201) 163,501 111,300 624,924 -- 624,924 Provision for/(benefit from) income taxes (15,399) 48,233(d) 32,834 184,353 -- 184,353 ----------- ----------- ----------- ----------- ----------- ----------- Net income/(loss) $ (36,802) $ 115,268 $ 78,466 $ 440,571 $ -- $ 440,571 ----------- ----------- ----------- ----------- ----------- ----------- Earnings/(loss) per share: Basic $ (0.02) $ 0.07 $ 0.05 $ 0.26 $ -- $ 0.26 Diluted $ (0.02) $ 0.07 $ 0.05 $ 0.26 $ -- $ 0.26 Weighted average number of shares: Basic 1,659,365 1,659,365 1,659,365 1,696,544 1,696,544 1,696,544 Diluted 1,659,365 1,692,207 1,692,207 1,721,690 1,721,690 1,721,690 - ---------------- (1) Reported results of operations are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). (2) Special items for the third fiscal quarter of 2003 consisted of the following: (a) Charges to cost of products sold for inventory write-offs as a result of the implementation of the global spares distribution system and refocused product efforts, which included the Etec mask pattern products. (b) Charges to research, development and engineering expense for laboratory tool write-offs as a result of refocused product efforts associated with realignment activities. (c) Restructuring, asset impairments and other charges consisted of a reduction in the workforce, the consolidation of facilities and impairment of certain assets associated with realignment activities. (d) Provision for the tax effect of special items. (3) There were no special items for the third fiscal quarter of 2004. Therefore, ongoing results are the same as reported results of operations.
Applied Materials, Inc. August 17, 2004 Page 6 of 6 APPLIED MATERIALS, INC. SUPPLEMENTAL CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - ONGOING BASIS (UNAUDITED) Nine Months Ended ------------------------------------------------------------------------------------- July 27, 2003 August 1, 2004 ------------------------------------------ ----------------------------------------- Special Ongoing Special Ongoing (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Reported(1) Items(2) Results Reported(1) Items(3) Results ----------- ----------- ----------- ----------- ----------- ----------- Net sales $ 3,256,293 $ -- $ 3,256,293 $ 5,809,705 $ -- $ 5,809,705 Cost of products sold 2,146,209 (142,404)(a) 2,003,805 3,135,663 -- 3,135,663 ----------- ----------- ----------- ----------- ----------- ----------- Gross margin 1,110,084 142,404 1,252,488 2,674,042 -- 2,674,042 Operating expenses: Research, development and engineering 692,668 (13,916)(b) 678,752 743,601 -- 743,601 Marketing and selling 253,906 -- 253,906 285,886 -- 285,886 General and administrative 223,306 -- 223,306 251,145 -- 251,145 Restructuring, asset impairments and other charges 258,250 (258,250)(c) -- 167,459 (167,459)(e) -- ----------- ----------- ----------- ----------- ----------- ----------- Income/(loss) from operations (318,046) 414,570 96,524 1,225,951 167,459 1,393,410 Interest expense 35,185 -- 35,185 36,971 -- 36,971 Interest income 119,759 -- 119,759 82,362 -- 82,362 ----------- ----------- ----------- ----------- ----------- ----------- Income/(loss) before income taxes (233,472) 414,570 181,098 1,271,342 167,459 1,438,801 Provision for/(benefit from) income taxes (68,874) 122,298(d) 53,424 375,047 49,400(f) 424,447 ----------- ----------- ----------- ----------- ----------- ----------- Net income/(loss) $ (164,598) $ 292,272 $ 127,674 $ 896,295 $ 118,059 $ 1,014,354 ----------- ----------- ----------- ----------- ----------- ----------- Earnings/(loss) per share: Basic $ (0.10) $ 0.18 $ 0.08 $ 0.53 $ 0.07 $ 0.60 Diluted $ (0.10) $ 0.17 $ 0.08 $ 0.52 $ 0.07 $ 0.59 Weighted average number of shares: Basic 1,655,430 1,655,430 1,655,430 1,689,573 1,689,573 1,689,573 Diluted 1,655,430 1,685,001 1,685,001 1,727,626 1,727,626 1,727,626 ----------- ----------- ----------- ----------- ----------- ----------- - ---------------- (1) Reported results of operations are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). (2) Special items for the nine months ended July 27, 2003 consisted of the following: (a) Charges to cost of products sold for inventory write-offs as a result of the implementation of the global spares distribution system and refocused product efforts, which included the Etec mask pattern products. (b) Charges to research, development and engineering expense for laboratory tool write-offs as a result of refocused product efforts associated with realignment activities. (c) Restructuring, asset impairments and other charges consisted of reduction in the workforce, the consolidation of facilities and impairment of certain assets associated with realignment activities. (d) Provision for the tax effect of special items. (3) Special items for the nine months ended August 1, 2004, all of which occurred in the first fiscal quarter of 2004, consisted of the following: (e) Restructuring, asset impairments and other charges resulting primarily from the consolidation of facilities associated with realignment activities. (f) Provision for the tax effect of special items.