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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): November 17, 2004
Applied Materials, Inc.
| Delaware (State or other jurisdiction of incorporation) |
0-6920 (Commission File Number) |
94-1655526 (IRS Employer Identification No.) |
| 3050 Bowers Avenue P.O. Box 58039 Santa Clara, CA (Address of principal executive offices) |
95052-8039 (Zip Code) |
Registrant’s telephone number, including area code: (408) 727-5555
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) | |
o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
| Item 2.02. Results of Operations and Financial Condition | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURE | ||||||||
| Exhibit Index | ||||||||
| EXHIBIT 99.1 | ||||||||
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Item 2.02. Results of Operations and Financial Condition.
On November 17, 2004, Applied Materials, Inc. (“Applied Materials”) announced its financial results for the fourth fiscal quarter and the fiscal year ended October 31, 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 in
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 are 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.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
| Exhibit No. |
Description |
|
99.1
|
Press Release issued by Applied Materials, Inc. dated November 17, 2004. |
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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: November 17, 2004
Exhibit Index
| Exhibit No. |
Description |
|
99.1
|
Press Release issued by Applied Materials, Inc. dated November 17, 2004. |
Exhibit 99.1 Release: Immediate Contact: Paul Bowman (investment community) David Miller (editorial/media) (408)563-1698 (408)563-9582 APPLIED MATERIALS ANNOUNCES RESULTS FOR FOURTH FISCAL QUARTER 2004 New Orders of $2.62 Billion; Net Sales of $2.20 Billion SANTA CLARA, Calif., November 17, 2004 -- Applied Materials, Inc., the world's largest supplier of wafer fabrication solutions to the global semiconductor industry, reported results for its fourth fiscal quarter ended October 31, 2004. Net sales were $2.20 billion, down 1 percent from $2.24 billion for the third fiscal quarter of 2004, and up 80 percent from $1.22 billion for the fourth fiscal quarter of 2003. Gross margin for the fourth fiscal quarter of 2004 was 46.6 percent, down from 47.4 percent for the third fiscal quarter of 2004 and up from 40.5 percent for the fourth fiscal quarter of 2003. Net income for the fourth fiscal quarter of 2004 was $455 million, or $0.27 per share, up from net income of $441 million, or $0.26 per share, for the third fiscal quarter of 2004, and up from net income of $15 million, or $0.01 per share, for the fourth fiscal quarter of 2003. The results of the fourth fiscal quarter of 2004 include litigation settlements and a favorable tax rate adjustment due primarily to changes in export tax benefits and the global effective tax rate with respect to foreign operations. The company's ongoing net income was $455 million, or $0.27 per share, for the fourth fiscal quarter of 2004, up from $441 million, or $0.26 per share, for the third fiscal quarter of 2004, and up from $95 million, or $0.06 per share, for the fourth fiscal quarter of 2003. Ongoing results for the third and fourth fiscal quarters of 2004 were the same as reported net income. New orders of $2.62 billion for the fourth fiscal quarter of 2004 increased 7 percent from $2.46 billion for the third fiscal quarter of 2004, and increased 105 percent from $1.28 billion for the fourth fiscal quarter of 2003. Regional distribution of new orders for the fourth fiscal quarter of 2004 was: Taiwan 25 percent, Japan 20 percent, North America 17 percent, Korea 16 percent, Southeast Asia and China 11 percent, and Europe 11 percent. Backlog at the end of the fourth fiscal quarter of 2004 was $3.37 billion, compared to $2.99 billion at the end of the third fiscal quarter of 2004. During the fourth fiscal quarter of 2004, the company repurchased 31 million shares of common stock at an average price of $16.13 per share for an aggregate purchase price of $500 million. "We are pleased with our financial performance this quarter and our strong growth for this fiscal year," said Mike Splinter, president and chief executive officer. "Our team delivered solid results with increased orders driven by customer demand for our industry-leading 300mm and sub-100 nanometer products." -more-
Applied Materials, Inc. November 17, 2004 Page 2 of 7 The company also announced its results for its fiscal year ended October 31, 2004. Fiscal 2004 new orders were $8.98 billion, a 108 percent increase from fiscal 2003 new orders of $4.32 billion. Net sales for fiscal 2004 were $8.01 billion, a 79 percent increase from fiscal 2003 net sales of $4.48 billion. Net income for fiscal 2004 was $1.35 billion, or $0.78 per diluted share, up from a loss of $149 million, or $0.09 loss per share, for fiscal 2003. "We introduced 10 breakthrough products in critical technology areas for transistors, interconnects, defect review and flat panel displays, as well as new service products," Splinter continued. "Applied Materials increased its market share in a number of its core product areas and won customer awards for outstanding reliability and quality. "As the fourth quarter progressed, some customers became more cautious in response to inventory concerns, slowing their 200mm investments," said Splinter. "Even with these near-term market challenges, we believe our customers will continue to invest in advanced technology and 300mm manufacturing. We remain focused on translating our proven product and process expertise into cost-effective, innovative solutions for our customers," 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, those relating to customers' investments, market conditions, and the company's strategic position and business outlook. 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 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 -more-
Applied Materials, Inc. November 17, 2004 Page 3 of 7 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. 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 fourth quarter and fiscal 2004 results, along with its outlook for the first 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. (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. November 17, 2004 Page 4 of 7 APPLIED MATERIALS, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS Three Months Ended Fiscal Year Ended - --------------------------------------------------------------------------------------------------- October 26, October 31, October 26, October 31, (In thousands, except per share amounts) 2003 2004 2003 2004 - --------------------------------------------------------------------------------------------------- Net sales $ 1,220,998 $ 2,203,348 $ 4,477,291 $ 8,013,053 Cost of products sold 726,627 1,176,145 2,872,836 4,311,808 ----------- ----------- ----------- ----------- Gross margin 494,371 1,027,203 1,604,455 3,701,245 Operating expenses: Research, development and engineering 227,950 248,272 920,618 991,873 Marketing and selling 71,283 108,490 325,189 394,376 General and administrative 77,370 106,100 300,676 357,245 Restructuring, asset impairments and other charges 113,504 - 371,754 167,459 Litigation settlements, net - 26,627 - 26,627 ----------- ----------- ----------- ----------- Income/(loss) from operations 4,264 537,714 (313,782) 1,763,665 Interest expense 11,690 15,906 46,875 52,877 Interest income 29,342 36,100 149,101 118,462 ----------- ----------- ----------- ----------- Income/(loss) before income taxes 21,916 557,908 (211,556) 1,829,250 Provision for/(benefit from) income taxes 6,465 102,900 (62,409) 477,947 ----------- ----------- ----------- ----------- Net income/(loss) $ 15,451 $ 455,008 $ (149,147) $ 1,351,303 ----------- ----------- ----------- ----------- Earnings/(loss) per share: Basic $ 0.01 $ 0.27 $ (0.09) $ 0.80 Diluted $ 0.01 $ 0.27 $ (0.09) $ 0.78 Weighted average number of shares: Basic 1,671,926 1,683,671 1,659,557 1,688,121 Diluted 1,715,763 1,703,331 1,659,557 1,721,645 - ---------------------------------------------------------------------------------------------------
Applied Materials, Inc. November 17, 2004 Page 5 of 7 APPLIED MATERIALS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS October 26, October 31, (In thousands) 2003 2004 - ------------------------------------------------------------------------------------ ASSETS Current assets: Cash and cash equivalents $ 1,364,857 $ 2,281,844 Short-term investments 4,128,349 4,296,152 Accounts receivable, net 912,875 1,670,153 Inventories 950,692 1,139,368 Deferred income taxes 782,823 610,095 Other current assets 231,177 283,907 ------------ ------------ Total current assets 8,370,773 10,281,519 Property, plant and equipment 3,094,427 2,953,130 Less: accumulated depreciation and amortization (1,534,597) (1,607,602) ------------ ------------ Net property, plant and equipment 1,559,830 1,345,528 Goodwill, net 223,521 257,321 Purchased technology and other intangible assets, net 92,512 50,291 Other assets 64,986 158,786 ------------ ------------ Total assets $ 10,311,622 $ 12,093,445 ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 105,292 $ 45,864 Accounts payable and accrued expenses 1,319,471 1,895,061 Income taxes payable 216,114 347,056 ------------ ------------ Total current liabilities 1,640,877 2,287,981 Long-term debt 456,422 410,436 Deferred income taxes and other liabilities 146,289 133,001 ------------ ------------ Total liabilities 2,243,588 2,831,418 ------------ ------------ Stockholders' equity: Common stock 16,774 16,803 Additional paid-in capital 2,223,553 2,070,733 Deferred stock compensation, net (1,543) (96) Retained earnings 5,812,867 7,164,170 Accumulated other comprehensive income 16,383 10,417 ------------ ------------ Total stockholders' equity 8,068,034 9,262,027 ------------ ------------ Total liabilities and stockholders' equity $ 10,311,622 $ 12,093,445 - ------------------------------------------------------------------------------------
Applied Materials, Inc. November 17, 2004 Page 6 of 7 APPLIED MATERIALS, INC. SUPPLEMENTAL CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - ONGOING BASIS Three Months Ended - ---------------------------------------------------------------------------------------------------------------------------------- October 26, 2003 October 31, 2004 ------------------------------------------- --------------------------------------- Special Ongoing Special Ongoing (In thousands, except per share amounts) Reported(1) Items(2) Results Reported(1) Items(3) Results - ---------------------------------------------------------------------------------------------------------------------------------- Net sales $ 1,220,998 $ - $ 1,220,998 $ 2,203,348 $ - $ 2,203,348 Cost of products sold 726,627 - 726,627 1,176,145 - 1,176,145 ----------- ----------- ----------- ----------- ----------- ----------- Gross margin 494,371 - 494,371 1,027,203 - 1,027,203 Operating expenses: Research, development and engineering 227,950 - 227,950 248,272 - 248,272 Marketing and selling 71,283 - 71,283 108,490 - 108,490 General and administrative 77,370 - 77,370 106,100 - 106,100 Restructuring, asset impairments and other charges 113,504 (113,504) (a) - - - - Litigation settlements, net - - - 26,627 - 26,627 ----------- ----------- ----------- ----------- ----------- ----------- Income from operations 4,264 113,504 117,768 537,714 - 537,714 Interest expense 11,690 - 11,690 15,906 - 15,906 Interest income 29,342 - 29,342 36,100 - 36,100 ----------- ----------- ----------- ----------- ----------- ----------- Income before income taxes 21,916 113,504 135,420 557,908 - 557,908 Provision for income taxes 6,465 33,484 (b) 39,949 102,900 - 102,900 ----------- ----------- ----------- ----------- ----------- ----------- Net income $ 15,451 $ 80,020 $ 95,471 $ 455,008 $ - $ 455,008 ----------- ----------- ----------- ----------- ----------- ----------- Earnings per share: Basic $ 0.01 $ 0.05 $ 0.06 $ 0.27 $ - $ 0.27 Diluted $ 0.01 $ 0.05 $ 0.06 $ 0.27 $ - $ 0.27 Weighted average number of shares: Basic 1,671,926 1,671,926 1,671,926 1,683,671 1,683,671 1,683,671 Diluted 1,715,763 1,715,763 1,715,763 1,703,331 1,703,331 1,703,331 - ---------------------------------------------------------------------------------------------------------------------------------- (1) Reported results of operations are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). (2) Special items for the fourth fiscal quarter of 2003 consisted of the following: a) Restructuring, asset impairments and other charges resulting from employee-related costs, the consolidation of facilities and impairment of certain assets associated with realignment activities. b) The tax effect of special items. (3) There were no special items for the fourth fiscal quarter of 2004. Therefore, ongoing results are the same as reported results of operations.
Applied Materials, Inc. November 17, 2004 Page 7 of 7 APPLIED MATERIALS, INC. SUPPLEMENTAL CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - ONGOING BASIS Fiscal Year Ended - ----------------------------------------------------------------------------------------------------------------------------------- October 26, 2003 October 31, 2004 ---------------------------------------- ------------------------------------------ Special Ongoing Special Ongoing (In thousands, except per share amounts) Reported(1) Items(2) Results Reported(1) Items(3) Results - ----------------------------------------------------------------------------------------------------------------------------------- Net sales $4,477,291 $ - $4,477,291 $8,013,053 $ - $ 8,013,053 Cost of products sold 2,872,836 (142,404)(a) 2,730,432 4,311,808 - 4,311,808 ---------- ---------- ---------- ---------- ---------- ----------- Gross margin 1,604,455 142,404 1,746,859 3,701,245 - 3,701,245 Operating expenses: Research, development and engineering 920,618 (13,916)(b) 906,702 991,873 - 991,873 Marketing and selling 325,189 - 325,189 394,376 - 394,376 General and administrative 300,676 - 300,676 357,245 - 357,245 Restructuring, asset impairments and other charges 371,754 (371,754)(c) - 167,459 (167,459) (e) - Litigation settlements, net - - - 26,627 - 26,627 ---------- ---------- ---------- ---------- ---------- ----------- Income/(loss) from operations (313,782) 528,074 214,292 1,763,665 167,459 1,931,124 Interest expense 46,875 - 46,875 52,877 - 52,877 Interest income 149,101 - 149,101 118,462 - 118,462 ---------- ---------- ---------- ---------- ---------- ----------- Income/(loss) before income taxes (211,556) 528,074 316,518 1,829,250 167,459 1,996,709 Provision for/(benefit from) income taxes (62,409) 155,782 (d) 93,373 477,947 49,400 (f) 527,347 ---------- ---------- ---------- ---------- ---------- ----------- Net income/(loss) $ (149,147) $ 372,292 $ 223,145 $1,351,303 $ 118,059 $ 1,469,362 ---------- ---------- ---------- ---------- ---------- ----------- Earnings/(loss) per share: Basic $ (0.09) $ 0.22 $ 0.13 $ 0.80 $ 0.07 $ 0.87 Diluted $ (0.09) $ 0.22 $ 0.13 $ 0.78 $ 0.07 $ 0.85 Weighted average number of shares: Basic 1,659,557 1,659,557 1,659,557 1,688,121 1,688,121 1,688,121 Diluted 1,659,557 1,691,644 1,691,644 1,721,645 1,721,645 1,721,645 - ----------------------------------------------------------------------------------------------------------------------------------- (1) Reported results of operations are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). (2) Special items for the fiscal year ended October 26, 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 resulting from refocused product efforts associated with realignment activities. c) Restructuring, asset impairments and other charges resulting from employee-related costs, the consolidation of facilities and impairment of certain assets associated with realignment activities. d) The tax effect of special items. (3) Special items for the fiscal year ended October 31, 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) The tax effect of special items.