e8vk
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): November 15, 2006
Applied Materials, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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000-06920
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94-1655526 |
(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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3050 Bowers Avenue
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P.O. Box 58039
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Santa Clara, CA
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95052-8039 |
(Address of principal executive offices)
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(Zip Code) |
Registrants 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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.
On November 15, 2006, Applied Materials, Inc. (Applied Materials) announced its financial results
for its fourth fiscal quarter and the fiscal year ended October 29, 2006. 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. |
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Description |
99.1
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Press Release issued by Applied Materials, Inc. dated November 15, 2006. |
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.
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Applied Materials, Inc.
(Registrant)
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Date: November 15, 2006 |
By: |
/s/ Joseph J. Sweeney
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Joseph J. Sweeney |
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Senior Vice President, General Counsel
and Corporate Secretary |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
99.1
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Press Release issued by Applied Materials, Inc. dated November 15, 2006. |
exv99w1
Exhibit 99.1
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Release:
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Immediate |
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Contact:
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Randy Bane (investment community)
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David Miller (editorial/media) |
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(408) 986-7977
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(408)563-9582 |
APPLIED MATERIALS ANNOUNCES RESULTS
FOR FOURTH QUARTER OF FISCAL 2006
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Net Sales: $2.52 billion (1% decrease quarter over quarter; 47% increase year over year) |
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Net Income: $449 million (12% decrease quarter over quarter; 82% increase year over year), including charges for
equity-based compensation |
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EPS: $0.30 ($0.03 decrease quarter over quarter; $0.15 increase year over year), including charges for equity-based
compensation |
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New Orders: $2.69 billion (1% increase quarter over quarter; 59% increase year over year) |
SANTA CLARA, Calif., November 15, 2006 Applied Materials, Inc. reported results for its
fourth fiscal quarter ended October 29, 2006. Net sales were $2.52 billion, down 1 percent from
$2.54 billion for the third quarter of fiscal 2006, and up 47 percent from $1.72 billion for the
fourth quarter of fiscal 2005. Gross margin for the fourth quarter of fiscal 2006 was 47.1 percent,
down from 48.1 percent for the third quarter of fiscal 2006, and up from 44.2 percent for the
fourth quarter of fiscal 2005. Net income for the fourth quarter of fiscal 2006 was $449 million,
or $0.30 per share, down from net income of $512 million, or $0.33 per share, for the third quarter
of fiscal 2006, and up from net income of $247 million, or $0.15 per share, for the fourth quarter
of fiscal 2005.
Non-GAAP net income was $482 million, or $0.33 per share, for the fourth quarter of fiscal
2006. Non-GAAP adjustments consisted principally of: $56 million, or $0.03 per diluted share, of
equity-based compensation charges, and $18 million, or $0.01 per diluted share, of certain costs
associated with acquisitions, which were partially offset by a $20 million tax benefit, or $0.01
per diluted share, primarily from the resolution of audits of prior years income tax filings.
New orders of $2.69 billion for the fourth quarter of fiscal 2006 increased 1 percent from
$2.67 billion for the third quarter of fiscal 2006, and increased 59 percent from $1.69 billion for
the fourth quarter of fiscal 2005. Regional distribution of new orders for the fourth quarter of
fiscal 2006 was: Japan 22 percent, Taiwan 21 percent, North America 19 percent, Korea 15 percent,
Southeast Asia and China 13 percent, and Europe 10 percent. Backlog at the end of the fourth
quarter of fiscal 2006 was $3.40 billion, compared to $3.32 billion at the end of the third quarter
of fiscal 2006.
Applied Materials delivered a strong quarter with healthy cash flow, said Mike Splinter,
president and CEO. We expanded our product offerings, extending our flat panel display systems for
Generation 8.5 manufacturing and launching our strategy for solar technology. We also returned
value to stockholders by reducing outstanding shares by 10 percent, primarily through our
accelerated stock buyback.
After the acquisition of Applied Films, Applied made certain changes to its internal financial
reporting structure during the fourth quarter and, as a result, is reporting four segments:
Silicon, Fab Solutions, Display,
and Adjacent Technologies. The Silicon segment manufactures and sells equipment to fabricate
semiconductor
chips. The Fab Solutions segment offers a broad range of products to maintain,
service and optimize customers semiconductor fabs, including total parts management, spare parts,
remanufactured equipment, maintenance agreements, total support programs, and environmental and
software solutions. The Display segment manufactures, sells and services equipment used to make
flat panel displays. The Adjacent Technologies segment manufactures, sells and services equipment
used to fabricate solar photovoltaic cells, flexible electronics and energy-efficient glass. Net
sales by reportable segment for the fourth quarter of fiscal 2006 were: Silicon, $1.61 billion; Fab
Solutions, $590 million; Display, $296 million; and Adjacent Technologies, $20 million.
During the fourth quarter of fiscal 2006, the company repurchased 154 million shares of common
stock at an average price of $17.15 per share for an aggregate purchase price of $2.64 billion, and
paid $77 million in dividends.
The company also announced its results for the fiscal year ended October 29, 2006. Fiscal 2006
new orders were $9.89 billion, a 55 percent increase from $6.39 billion for fiscal 2005. Net sales
for fiscal 2006 were $9.17 billion, a 31 percent increase from $6.99 billion for fiscal 2005. Net
income for fiscal 2006 was $1.52 billion, or $0.97 per diluted share, up from $1.21 billion, or
$0.73 per diluted share, for fiscal 2005.
Applied Materials will discuss its fiscal 2006 fourth quarter and annual results, along with
its outlook for the first quarter of fiscal 2007, on a conference call today beginning at 1:30 p.m.
Pacific Standard Time. A webcast of the conference call will be available on Applied Materials web
site.
This press release includes financial measures that are not in accordance with Generally
Accepted Accounting Principles (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 companys
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 companys business from the same perspective as the companys management and
facilitate comparisons of this periods results with prior periods. These non-GAAP measures
exclude charges related to (i) equity-based compensation,
(ii) inventory fair value adjustments on products sold and
amortization of purchased intangible assets associated with
acquisitions, (iii) in-process research and development charges associated with the Applied
Films acquisition, (iv) asset impairment and restructuring activities, and (v) resolution of income
tax audits. 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
companys performance, technology
leadership, opportunities, and return of stockholder value. 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 nanomanufacturing technology
industry and broadening of demand for emerging applications such as solar, which are subject
to many factors, including
global economic conditions, business spending, consumer confidence,
demand for electronic products and integrated circuits, and geopolitical uncertainties; customers
capacity requirements, including capacity utilizing the latest technology; the timing, rate, amount
and sustainability of capital spending for new nanomanufacturing technology; the companys ability
to successfully develop, deliver and support a broad range of products and to expand its markets
and develop new markets; the successful integration and performance of acquired businesses; the
effectiveness of joint ventures; retention of key employees; the companys ability to maintain
effective cost controls and to timely align its cost structure with business conditions; the
companys 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 managements 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 panels, 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.
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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
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Three Months Ended |
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Twelve Months Ended |
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October 30, |
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October 29, |
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October 30, |
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October 29, |
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(In thousands, except per share amounts) |
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2005 |
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2006 |
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2005 |
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2006 |
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Net sales |
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$ |
1,718,120 |
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$ |
2,518,293 |
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$ |
6,991,823 |
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$ |
9,167,014 |
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Cost of products sold |
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957,990 |
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1,332,169 |
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3,905,949 |
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4,875,212 |
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Gross margin |
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760,130 |
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1,186,124 |
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3,085,874 |
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4,291,802 |
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Operating expenses: |
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Research, development and engineering |
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236,708 |
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299,240 |
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940,507 |
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1,152,326 |
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Marketing and selling |
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89,880 |
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116,365 |
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358,524 |
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438,654 |
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General and administrative |
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82,002 |
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134,199 |
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338,878 |
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468,088 |
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Restructuring and asset impairments |
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1,490 |
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212,113 |
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Income from operations |
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351,540 |
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634,830 |
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1,447,965 |
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2,020,621 |
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Pre-tax loss of unconsolidated
equity-method investment |
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2,849 |
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2,849 |
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Interest expense |
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9,394 |
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9,308 |
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37,819 |
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36,096 |
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Interest income |
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48,368 |
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37,396 |
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171,423 |
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185,295 |
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Income before income taxes |
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390,514 |
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660,069 |
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1,581,569 |
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2,166,971 |
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Provision for income taxes |
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143,800 |
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211,040 |
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371,669 |
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650,308 |
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Net income |
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$ |
246,714 |
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$ |
449,029 |
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$ |
1,209,900 |
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$ |
1,516,663 |
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Earnings per share: |
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Basic |
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$ |
0.15 |
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$ |
0.31 |
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$ |
0.74 |
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$ |
0.98 |
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Diluted |
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$ |
0.15 |
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$ |
0.30 |
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$ |
0.73 |
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$ |
0.97 |
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Weighted average number of shares: |
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Basic |
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1,617,809 |
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1,469,975 |
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1,645,531 |
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1,551,339 |
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Diluted |
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1,628,655 |
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1,482,132 |
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1,657,493 |
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1,565,072 |
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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
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October 30, |
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October 29, |
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(In thousands) |
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2005* |
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2006 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
990,342 |
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$ |
861,463 |
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Short-term investments |
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2,342,952 |
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1,035,875 |
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Accounts receivable, net |
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1,615,504 |
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|
2,026,199 |
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Inventories |
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1,034,093 |
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1,406,777 |
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Deferred income taxes |
|
|
581,183 |
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|
455,473 |
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Assets held for sale |
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|
37,211 |
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Other current assets |
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271,003 |
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|
258,021 |
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Total current assets |
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6,835,077 |
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6,081,019 |
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Long-term investments |
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2,651,927 |
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1,314,861 |
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Property, plant and equipment |
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3,011,110 |
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2,753,883 |
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Less: accumulated depreciation and amortization |
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(1,736,086 |
) |
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(1,729,589 |
) |
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Net property, plant and equipment |
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1,275,024 |
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1,024,294 |
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Goodwill, net |
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338,982 |
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|
572,558 |
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Purchased technology and other intangible assets, net |
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81,093 |
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|
201,066 |
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Unconsolidated equity-method investment |
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|
144,431 |
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Deferred income taxes and other assets |
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87,054 |
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142,608 |
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Total assets |
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$ |
11,269,157 |
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$ |
9,480,837 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Current portion of long-term debt |
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$ |
7,574 |
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$ |
202,535 |
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Accounts payable and accrued expenses |
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1,618,042 |
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|
2,023,651 |
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Income taxes payable |
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|
139,798 |
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|
209,859 |
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Total current liabilities |
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1,765,414 |
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|
2,436,045 |
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Long-term debt |
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|
407,380 |
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|
204,708 |
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Other liabilities |
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|
167,814 |
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|
188,684 |
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Total liabilities |
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|
2,340,608 |
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|
2,829,437 |
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Stockholders equity: |
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Common stock |
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|
16,067 |
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|
13,917 |
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Additional paid-in capital |
|
|
721,937 |
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Retained earnings |
|
|
8,227,793 |
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|
|
6,656,493 |
|
Accumulated other comprehensive loss |
|
|
(37,248 |
) |
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|
(19,010 |
) |
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Total stockholders equity |
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|
8,928,549 |
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|
6,651,400 |
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|
|
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Total liabilities and stockholders equity |
|
$ |
11,269,157 |
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$ |
9,480,837 |
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* |
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Certain amounts in the October 30, 2005 consolidated condensed balance sheet have been
reclassified to conform to the 2006 presentation. |
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
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|
|
|
|
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|
|
Three Months Ended |
|
Twelve Months Ended |
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|
|
October 30, |
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October 29, |
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October 30, |
|
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October 29, |
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(In thousands, except per share amounts) |
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2005 |
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2006 |
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2005 |
|
|
2006 |
|
Non-GAAP Net Income |
|
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|
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|
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|
|
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|
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|
Reported net income (GAAP basis) |
|
$ |
246,714 |
|
|
$ |
449,029 |
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|
$ |
1,209,900 |
|
|
$ |
1,516,663 |
|
Equity-based compensation expense 1 |
|
|
|
|
|
|
55,553 |
|
|
|
|
|
|
|
216,269 |
|
Restructuring and asset impairments 2 |
|
|
|
|
|
|
1,490 |
|
|
|
|
|
|
|
212,113 |
|
In-process research and development 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000 |
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Impact of certain items associated with
acquisitions4 |
|
|
5,615 |
|
|
|
18,456 |
|
|
|
18,151 |
|
|
|
35,157 |
|
Resolution of audits
of prior years income tax filings |
|
|
32,000 |
|
|
|
(20,000 |
) |
|
|
(99,761 |
) |
|
|
(53,915 |
) |
Income tax effect of non-GAAP adjustments |
|
|
(2,049 |
) |
|
|
(22,268 |
) |
|
|
(6,625 |
) |
|
|
(142,712 |
) |
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|
aaaaaaa
a |
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|
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|
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|
Non-GAAP net income |
|
$ |
282,280 |
|
|
$ |
482,260 |
|
|
$ |
1,121,665 |
|
|
$ |
1,797,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income Per Diluted Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income per diluted share (GAAP basis) |
|
$ |
0.15 |
|
|
$ |
0.30 |
|
|
$ |
0.73 |
|
|
$ |
0.97 |
|
Equity-based compensation expense |
|
|
|
|
|
|
0.03 |
|
|
|
|
|
|
|
0.11 |
|
Restructuring and asset impairments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.08 |
|
In-process research and development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.01 |
|
Impact of certain items associated with
acquisitions |
|
|
|
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
Resolution of audits of prior
years income tax filings |
|
|
0.02 |
|
|
|
(0.01 |
) |
|
|
(0.06 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per diluted share |
|
$ |
0.17 |
|
|
$ |
0.33 |
|
|
$ |
0.68 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in diluted shares calculation |
|
|
1,628,655 |
|
|
|
1,482,132 |
|
|
|
1,657,493 |
|
|
|
1,565,072 |
|
|
|
|
1 |
|
Applied began expensing stock options in the first quarter of fiscal 2006. |
|
2 |
|
Results for the twelve months ended October 29, 2006, included asset impairment
and restructuring charges of $212 million, or $0.08 per diluted share, associated primarily
with the facilities disinvestment program initiated in the first quarter of fiscal 2006.
Results for the fourth fiscal quarter ended October 29, 2006 included a net charge of $1
million consisting of additional impairment charges on assets held for sale of $10 million,
partially offset by $9 million of adjustments associated with prior years realignment programs
and the settlement of the Hayward lease obligation. |
|
3 |
|
In-process research and development charge associated with the acquisition of
Applied Films Corporation in the third quarter of fiscal 2006. The in-process research and
development charge was included in research, development and engineering expense on the
Consolidated Condensed Statement of Operations. |
|
4 |
|
Impact of incremental charges attributable to acquisitions consisting of inventory
fair value adjustments on products sold and amortization of purchased intangible assets |