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

Applied Materials, Inc.

(Exact name of registrant as specified in its charter)

Delaware		000-06920		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)

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		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))

 

 

Item 2.02 Results of Operations and Financial Condition.

On February 10, 2009, Applied Materials, Inc. (“Applied Materials”) announced its financial results for its first fiscal quarter ended January 25, 2009. 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.

Exhibit No.		Description
99.1		Press Release issued by Applied Materials, Inc. dated February 10, 2009.

SIGNATURES

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.

EXHIBIT INDEX

Exhibit No.		Description
99.1		Press Release issued by Applied Materials, Inc. dated February 10, 2009.

Exhibit 99.1

		NEWS RELEASE		CONTACT:
				David Miller (editorial/media) 408.563.9582
				Michael Sullivan (financial community) 408.986.7977

APPLIED MATERIALS ANNOUNCES FIRST FISCAL QUARTER 2009 RESULTS

     SANTA CLARA, Calif., February 10, 2009 — Applied Materials, Inc. today reported that for its first fiscal quarter ended January 25, 2009, net sales were $1.33 billion, gross margin was 29.4 percent, GAAP net loss was $133 million, GAAP net loss per share was $0.10, and new orders were $903 million. These results included a restructuring charge of $133 million associated with a global cost reduction program announced on November 12, 2008.

     “We acted early and decisively to reduce costs in line with economic conditions that have resulted in an unprecedented decline in demand,” said Mike Splinter, president and CEO. “With our leading technology and strong balance sheet, Applied is positioned to weather this recession and invest in new products and services.”

     The following table shows comparisons to the first and fourth quarters of fiscal 2008.

		Q1 FY ‘09				Q1 FY ‘08				Q4 FY ‘08
Net sales		$1.33 billion				$2.09 billion				$2.04 billion
Gross margin percent			29.4	%			44.8	%			39.1	%
Net income (loss)		($133 million)				$262 million				$231 million
Earnings (loss) per share			($0.10	)		$	0.19			$	0.17
New orders		$903 million				$2.50 billion				$2.21 billion

     Regional distribution of new orders was: Europe 39 percent, North America 26 percent, Japan 17 percent, Southeast Asia and China 9 percent, Korea 7 percent, and Taiwan 2 percent. Backlog at the end of the first quarter of fiscal 2009 was $4.05 billion, down from $4.85 billion at the end of the fourth quarter of fiscal 2008.

     Non-GAAP net loss for the first quarter of fiscal 2009 was $3 million, or $0.00 per share. The following table shows comparisons of non-GAAP results to the first and fourth quarters of fiscal 2008. Non-GAAP adjustments are explained below and detailed in the accompanying Reconciliation of GAAP to Non-GAAP Results.

		Q1 FY ‘09				Q1 FY ‘08				Q4 FY ‘08
Non-GAAP net income (loss)		($3 million)				$345 million				$264 million
Non-GAAP earnings (loss) per share		$	0.00			$	0.25			$	0.20

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     Non-GAAP net income (loss) and non-GAAP earnings (loss) per share, detailed in the accompanying Reconciliation of GAAP to Non-GAAP Results, exclude charges related to one or more of the following: (i) equity-based compensation, (ii) gain on sale of facility, (iii) certain items associated with acquisitions, including amortization of intangibles and inventory fair value adjustments on products sold, (iv) restructuring and asset impairments, (v) certain costs associated with ceasing development of beamline implant products, and/or (vi) the resolution of income tax audits and changes in tax credits. Management uses non-GAAP net income (loss) and non-GAAP earnings (loss) per share to evaluate the company’s operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Applied believes that these measures 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. The presentation of this additional information should not be considered a substitute for net income (loss) or earnings (loss) per share prepared in accordance with GAAP.

     Results by reportable segment for the first quarter of fiscal 2009 and the first and fourth quarters of fiscal 2008 were:

						Q1 FY ‘09												Q1 FY ‘08												Q4 FY ‘08
										Operating												Operating												Operating
		New				Net				Income				New				Net				Income				New				Net				Income
(In millions)		Orders				Sales				(Loss)				Orders				Sales				(Loss)				Orders				Sales				(Loss)
Silicon		$	246			$	546			$	34			$	1,075			$	1,237			$	445			$	1,162			$	744			$	177
Applied Global Services			310				345				26				610				595				149				496				528				123
Display			26				149				26				555				133				34				65				334				113
Energy and Environmental Solutions			321				293				(65	)			260				122				(48	)			490				438				21

     Applied Materials will discuss its fiscal 2009 first quarter results on the earnings call today beginning at 1:30 p.m. Pacific Standard Time. A webcast of the earnings call will be available at www.appliedmaterials.com.

     This press release contains forward-looking statements, including statements regarding Applied’s performance, cost reductions, strategic position, financial strength and product investment. Forward-looking statements may contain words such as “expect,” “believe,” “may,” “can,” “should,” “will,” “forecast” 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, including but not limited to: the level of demand for nanomanufacturing technology products, which is subject to many factors, including uncertain global economic and industry conditions, business and consumer spending, demand for electronic products and semiconductors, governmental renewable energy policies and incentives, and customers’ utilization rates and

Applied Materials, Inc.
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capacity requirements, including capacity utilizing the latest technology; the duration and severity of the recession; customers’ ability to acquire sufficient capital and/or obtain regulatory approvals; variability of operating results among the company’s segments caused by differing conditions in the served markets; Applied’s ability to (i) develop, deliver and support a broad range of products, expand its markets and develop new markets, (ii) timely implement and maintain effective cost reduction programs, realize expected benefits, and align its cost structure with business conditions, (iii) plan and manage its resources and production capability, including its supply chain, (iv) implement initiatives that enhance global operations and efficiencies, (v) obtain and protect intellectual property rights in key technologies, and (vi) attract, motivate and retain key employees; and other risks described in Applied Materials’ SEC 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, 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 panel displays, 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

		Three Months Ended
		January 25,				January 27,
(In thousands, except per share amounts)		2009				2008
Net sales		$	1,333,396			$	2,087,397
Cost of products sold			941,820				1,152,416
Gross margin			391,576				934,981
Operating expenses:
Research, development and engineering			229,540				273,219
General and administrative			141,241				115,976
Marketing and selling			84,115				123,917
Restructuring and asset impairments			132,772				48,986
Income (loss) from operations			(196,092	)			372,883
Pre-tax loss of equity method investment			15,808				9,586
Interest expense			5,994				4,545
Interest income			15,235				30,570
Income (loss) before income taxes			(202,659	)			389,322
Provision (benefit) for income taxes			(69,725	)			126,946
Net income (loss)		$	(132,934	)		$	262,376
Earnings (loss) per share:
Basic		$	(0.10	)		$	0.19
Diluted		$	(0.10	)		$	0.19
Weighted average number of shares:
Basic			1,329,223				1,371,245
Diluted			1,329,223				1,383,886

Applied Materials, Inc.
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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS

		January 25,				October 26,
(In thousands)		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	1,366,196			$	1,411,624
Short-term investments			551,196				689,044
Accounts receivable, net			1,274,853				1,691,027
Inventories			2,131,092				1,987,017
Deferred income taxes, net			402,720				388,807
Income taxes receivable			187,183				125,605
Other current assets			366,428				371,033
Total current assets			6,279,668				6,664,157
Long-term investments			1,210,997				1,367,056
Property, plant and equipment			2,888,267				2,831,952
Less: accumulated depreciation and amortization			(1,780,081	)			(1,737,752	)
Net property, plant and equipment			1,108,186				1,094,200
Goodwill, net			1,171,740				1,174,673
Purchased technology and other intangible assets, net			366,980				388,429
Equity method investment			63,725				79,533
Deferred income taxes and other assets			226,307				238,270
Total assets		$	10,427,603			$	11,006,318
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt		$	1,259			$	1,068
Accounts payable and accrued expenses			2,387,837				2,771,090
Income taxes payable			140,635				173,394
Total current liabilities			2,529,731				2,945,552
Long-term debt			201,895				201,576
Other liabilities			339,306				310,232
Total liabilities			3,070,932				3,457,360
Stockholders’ equity:
Common stock			13,293				13,308
Additional paid-in capital			5,125,991				5,095,894
Retained earnings			11,386,759				11,601,288
Treasury stock			(9,157,868	)			(9,134,962	)
Accumulated other comprehensive loss			(11,504	)			(26,570	)
Total stockholders’ equity			7,356,671				7,548,958
Total liabilities and stockholders’ equity		$	10,427,603			$	11,006,318

Applied Materials, Inc.
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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

		Three Months Ended
		January 25,				January 27,
(In thousands)		2009				2008
Cash flows from operating activities:
Net income (loss)		$	(132,934	)		$	262,376
Adjustments required to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization			71,228				78,474
Loss on fixed asset retirements			3,447				11,211
Provision for bad debts			47,526				—
Restructuring and asset impairments			132,772				48,986
Deferred income taxes			(13,054	)			3,417
Net recognized loss on investments			5,398				639
Pretax loss of equity-method investment			15,808				9,586
Equity-based compensation			33,608				38,722
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable			368,648				34,926
Inventories			(144,075	)			(73,937	)
Other current assets			10,890				(22,579	)
Other assets			1,311				(4,984	)
Accounts payable and accrued expenses			(518,373	)			(95,459	)
Income taxes			(94,337	)			94,248
Other liabilities			26,920				4,105
Cash provided by (used in) operating activities			(185,217	)			389,731
Cash flows from investing activities:
Capital expenditures			(73,318	)			(74,144	)
Cash paid for acquisition, net of cash acquired			—				(19,084	)
Proceeds from sales and maturities of investments			541,689				2,038,001
Purchases of investments			(227,348	)			(1,654,754	)
Cash provided by investing activities			241,023				290,019
Cash flows from financing activities:
Debt borrowings			510				343
Proceeds from common stock issuances			182				15,681
Common stock repurchases			(22,906	)			(600,000	)
Payment of dividends to stockholders			(79,762	)			(83,068	)
Cash used in financing activities			(101,976	)			(667,044	)
Effect of exchange rate changes on cash and cash equivalents			742				221
Increase (decrease) in cash and cash equivalents			(45,428	)			12,927
Cash and cash equivalents — beginning of period			1,411,624				1,202,722
Cash and cash equivalents — end of period		$	1,366,196			$	1,215,649
Supplemental cash flow information:
Cash payments for income taxes		$	12,064			$	41,878
Cash payments for interest		$	42			$	45

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APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS

		Three Months Ended
		January 25,				January 27,				October 26,
(In thousands, except per share amounts)		2009				2008				2008
Non-GAAP Net Income (Loss)
Reported net income (loss) (GAAP basis)		$	(132,934	)		$	262,376			$	231,095
Equity-based compensation expense			33,608				38,722				43,778
Certain items associated with acquisitions 1			26,025				31,038				35,320
Gain on sale of facility			—				—				(21,837	)
Restructuring and asset impairments 2, 3, 4			132,772				48,986				(9,686	)
Costs associated with ceasing development of beamline implant products 5			—				1,021				—
Income tax effect of non-GAAP adjustments			(62,939	)			(37,326	)			(14,765	)
Non-GAAP net income (loss)		$	(3,468	)		$	344,817			$	263,905
Non-GAAP Net Income (Loss) Per Diluted Share
Reported net income (loss) per diluted share (GAAP basis)		$	(0.10	)		$	0.19			$	0.17
Equity-based compensation expense			0.02				0.02				0.02
Certain items associated with acquisitions			0.01				0.02				0.02
Gain on sale of facility			—				—				(0.01	)
Restructuring and asset impairments			0.06				0.02				—
Costs associated with ceasing development of beamline implant products			—				—				—
Non-GAAP net income (loss) — per diluted share		$	0.00			$	0.25			$	0.20
Shares used in diluted shares calculation			1,329,223				1,383,886				1,350,092