Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): February 15, 2006
Applied Materials, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-6920 | 94-1655526 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
| 3050 Bowers Avenue | ||||
| P.O. Box 58039 | ||||
| Santa Clara, CA | 95052-8039 | |||
| (Address of principal executive | (Zip Code) | |||
| offices) | ||||
Registrant’s telephone number, including area code: (408) 727-5555
N/A
(Former name or former address, if changed since last report.)
(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
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
| Item 2.02 Results of Operations and Financial Condition | ||||||||
| Item 9.01 Financial Statements and Exhibits | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EXHIBIT 99.1 | ||||||||
Table of Contents
Item 2.02 Results of Operations and Financial Condition.
On February 15, 2006, Applied Materials, Inc. (“Applied”) announced its financial results
for its first fiscal quarter ended January 29, 2006. A copy of
Applied’s 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, 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
99.1
|
Press Release issued by Applied Materials, Inc. dated February 15, 2006. |
2
Table of Contents
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) |
||||
| Dated: February 15, 2006 | ||||
| By: | /s/ Joseph J. Sweeney | |||
| Joseph J. Sweeney | ||||
| Senior Vice President, General Counsel and Corporate Secretary |
||||
3
Table of Contents
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Press Release issued by Applied Materials, Inc. dated February 15, 2006. |
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 FIRST FISCAL QUARTER 2006
FOR FIRST FISCAL QUARTER 2006
| • | Net Sales: $1.86 billion (8% increase quarter over quarter; 4% increase year over year) |
| • | Net Income: $143 million (42% decrease quarter over quarter; 51% decrease year over year) includes charges for real estate and facilities disinvestment and equity-based compensation |
| • | EPS: $0.09 ($0.06 decrease quarter over quarter; $0.08 decrease year over year) includes charges for real estate and facilities disinvestment and equity-based compensation |
| • | New Orders: $2.04 billion (21% increase quarter over quarter; 22% increase year over year) |
SANTA CLARA, Calif., February 15, 2006 — Applied Materials, Inc., reported results for its
first fiscal quarter ended January 29, 2006. Net sales were $1.86 billion, up 8 percent from $1.72
billion for the fourth fiscal quarter of 2005, and up 4 percent from $1.78 billion for the first
fiscal quarter of 2005. Gross margin for the first fiscal quarter of 2006 was 45.1 percent, up from
44.2 percent for the fourth fiscal quarter of 2005, and up from 44.4 percent for the first fiscal
quarter of 2005. Net income for the first fiscal quarter of 2006 was $143 million, or $0.09 per
share, down from net income of $247 million, or $0.15 per share, for the fourth fiscal quarter of
2005, and down from net income of $289 million, or $0.17 per share, for the first fiscal quarter of
2005.
Excluding the charges discussed below, non-GAAP net income was $312 million, or $0.19 per
share, for the first fiscal quarter of 2006. The company reported pre-tax asset impairment and
restructuring charges of $215 million, or $0.08 per diluted share after tax, consisting of
approximately $124 million for asset write-offs and impairments and approximately $91 million for
restructuring of lease obligations. In addition, the company recognized approximately $52 million
of charges, or $0.02 per diluted share after tax, in connection with its equity-based compensation
programs. The company began expensing stock options in the first quarter of fiscal 2006.
New orders of $2.04 billion for the first fiscal quarter of 2006 increased 21 percent from
$1.69 billion for the fourth fiscal quarter of 2005, and increased 22 percent from $1.68 billion
for the first fiscal quarter of 2005. Regional distribution of new orders for the first fiscal
quarter of 2006 was: Taiwan 24 percent, North America 22 percent, Korea 18 percent, Europe 15
percent, Japan 13 percent, and Southeast Asia and China 8 percent. Backlog at the end of the first
fiscal quarter of 2006 was $2.73 billion, compared to $2.57 billion at the end of the fourth fiscal
quarter of 2005.
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“Our performance in the first quarter is an exciting start for 2006. A significant increase in
customer demand translated into higher-than-expected order growth and strong financial performance
for Applied Materials,” said Mike Splinter, president and chief executive officer. “We are seeing
momentum across our broad product portfolio for both high-volume production and leading-edge 65nm
and 45nm chip development applications.
“Our differentiated nanomanufacturing technologies are providing solutions to customers’ most
challenging requirements, from strain engineering processes to enable faster transistor
performance, to advanced deposition and etch systems for today’s Flash and DRAM memory chips. Our
innovative thin film and mask metrology processes are extending current lithography technology into
future device generations.
“We are confident that our broad technology solutions position Applied to outgrow and
outperform the industry and deliver strong financial results,” concluded Splinter.
The company continued to return value to stockholders through stock repurchases and cash
dividends. During the first fiscal quarter of 2006, the company repurchased approximately 27
million shares of common stock at an average price of $18.84 per share for an aggregate purchase
price of $500 million and paid $48 million in dividends.
This press release includes financial measures that are not in accordance with GAAP,
consisting of non-GAAP net income and non-GAAP earnings per share (EPS). 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. Applied believes that these measures are useful
to investors because they 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. These non-GAAP measures exclude charges related to (i) asset impairments and
restructuring associated with Applied’s disinvestment of a portion of its real estate and
facilities portfolio, and (ii) equity-based compensation. These financial measures are not in
accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by
other companies. The presentation of this additional information should not be considered a
substitute for net income or EPS prepared in accordance with GAAP. Reconciliations of reported net
income and reported EPS to non-GAAP net income and non-GAAP EPS, respectively, are included at the
end of this press release.
This press release contains forward-looking statements, including statements regarding the
company’s performance, growth, momentum, product capabilities, technology leadership, strategic
position, financial results and delivery of stockholder value; customer demand and industry growth.
Forward-looking statements may contain words such as “expect,” “anticipate,” “believe,” “may,”
“should,” “will,” “estimate,” “forecast,” “continue” 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 integrated circuits, and geopolitical uncertainties;
customers’ capacity
-more-
requirements, including capacity utilizing the latest technology; 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 successfully develop, deliver and support a broad range of
products and to expand its markets and develop new markets; the ability to maintain effective cost
controls and to timely align the company’s cost structure with business conditions; the company’s
ability to effectively manage its resources and production capability, including its supply chain;
and other risks described in Applied Materials’ Securities and Exchange Commission 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 will discuss its first fiscal quarter 2006 results, along with its outlook
for the second fiscal quarter of 2006, 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 global leader in nanomanufacturing technology
solutions for the electronics industry with a broad portfolio of innovative equipment, service and
software products. 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
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
| Three Months Ended | ||||||||
| January 30, | January 29, | |||||||
| (In thousands, except per share amounts) | 2005 | 2006 | ||||||
Net sales |
$ | 1,780,576 | $ | 1,857,592 | ||||
Cost of products sold |
990,351 | 1,019,893 | ||||||
Gross margin |
790,225 | 837,699 | ||||||
Operating expenses: |
||||||||
Research, development and engineering |
241,762 | 272,877 | ||||||
Marketing and selling |
77,830 | 100,773 | ||||||
General and administrative |
88,423 | 105,263 | ||||||
Restructuring and asset impairments |
— | 214,847 | ||||||
Income from operations |
382,210 | 143,939 | ||||||
Interest expense |
9,272 | 8,705 | ||||||
Interest income |
36,658 | 48,691 | ||||||
Income before income taxes |
409,596 | 183,925 | ||||||
Provision for income taxes |
120,831 | 41,145 | ||||||
Net income |
$ | 288,765 | $ | 142,780 | ||||
Earnings per share: |
||||||||
Basic |
$ | 0.17 | $ | 0.09 | ||||
Diluted |
$ | 0.17 | $ | 0.09 | ||||
Weighted average number of shares: |
||||||||
Basic |
1,672,671 | 1,598,260 | ||||||
Diluted |
1,687,140 | 1,608,165 | ||||||
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
CONSOLIDATED CONDENSED BALANCE SHEETS
| October 30, | January 29, | |||||||
| (In thousands) | 2005 | 2006 | ||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 990,342 | $ | 1,107,299 | ||||
Short-term investments |
4,944,999 | 4,700,837 | ||||||
Accounts receivable, net |
1,615,504 | 1,754,545 | ||||||
Inventories |
1,034,093 | 1,023,175 | ||||||
Deferred income taxes |
592,742 | 667,633 | ||||||
Assets held for sale |
— | 55,763 | ||||||
Other current assets |
271,003 | 232,143 | ||||||
Total current assets |
9,448,683 | 9,541,395 | ||||||
Property, plant and equipment |
3,011,110 | 2,750,498 | ||||||
Less: accumulated depreciation and amortization |
(1,736,086 | ) | (1,667,248 | ) | ||||
Net property, plant and equipment |
1,275,024 | 1,083,250 | ||||||
Goodwill, net |
338,982 | 347,049 | ||||||
Purchased technology and other intangible assets, net |
81,093 | 80,841 | ||||||
Deferred income taxes and other assets |
125,375 | 157,373 | ||||||
Total assets |
$ | 11,269,157 | $ | 11,209,908 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 7,574 | $ | 2,567 | ||||
Accounts payable and accrued expenses |
1,618,042 | 1,603,963 | ||||||
Income taxes payable |
139,798 | 271,973 | ||||||
Total current liabilities |
1,765,414 | 1,878,503 | ||||||
Long-term debt |
407,380 | 407,380 | ||||||
Other liabilities |
167,814 | 256,446 | ||||||
Total liabilities |
2,340,608 | 2,542,329 | ||||||
Stockholders’ equity: |
||||||||
Common stock |
16,067 | 15,866 | ||||||
Additional paid-in capital |
721,937 | 371,819 | ||||||
Retained earnings |
8,227,793 | 8,322,978 | ||||||
Accumulated other comprehensive loss |
(37,248 | ) | (43,084 | ) | ||||
Total stockholders’ equity |
8,928,549 | 8,667,579 | ||||||
Total liabilities and stockholders’
equity |
$ | 11,269,157 | $ | 11,209,908 | ||||
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
| Three Months Ended | ||||||||
| January 30, | January 29, | |||||||
| (In thousands, except per share amounts) | 2005 | 2006 | ||||||
Non-GAAP Net Income |
||||||||
Reported net income (GAAP basis) |
$ | 288,765 | $ | 142,780 | ||||
Restructuring and asset impairments |
— | 214,847 | ||||||
Equity-based compensation expense |
— | 51,952 | ||||||
Income tax effect of non-GAAP adjustments |
— | (97,480 | ) | |||||
Non-GAAP net income |
$ | 288,765 | $ | 312,099 | ||||
Non-GAAP Net Income Per Diluted Share |
||||||||
Reported net income per diluted share (GAAP basis) |
$ | 0.17 | $ | 0.09 | ||||
Restructuring
and asset impairments |
— | 0.08 | ||||||
Equity-based compensation expense |
— | 0.02 | ||||||
Non-GAAP net income – per diluted share |
$ | 0.17 | $ | 0.19 | ||||
Shares used in diluted shares calculation |
1,687,140 | 1,608,165 | ||||||