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 May 12, 2009, Applied Materials, Inc. (“Applied Materials”) announced its financial results for its second fiscal quarter ended April 26, 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 May 12, 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 May 12, 2009.

Exhibit 99.1

		David Miller (editorial/media) 408.563.9582 Michael Sullivan (financial community) 408.986.7977

APPLIED MATERIALS ANNOUNCES SECOND QUARTER OF FISCAL 2009 RESULTS

SANTA CLARA, Calif., May 12, 2009 — Applied Materials, Inc. today reported results for its second fiscal quarter ended April 26, 2009. Net sales were $1.02 billion, and the GAAP net loss was $255 million, or $0.19 per share. The company also reported a non-GAAP net loss for the period of $136 million, or $0.10 per share.

     “In a period of exceptionally weak demand, Applied preserved its strong balance sheet, returned a dividend to our stockholders and made substantial investments in our future,” said Mike Splinter, Chairman and CEO.

GAAP Results

		Q2 FY ’09		Q1 FY ’09		Q2 FY ’08
Net sales		$1.02 billion		$1.33 billion		$2.15 billion
Net income (loss)		($255 million)		($133 million)		$303 million
Earnings (loss) per share		($0.19)		($0.10)		$0.22

Non-GAAP Results

		Q2 FY ’09		Q1 FY ’09		Q2 FY ’08
Non-GAAP net income (loss)		($136 million)		($3 million)		$362 million
Non-GAAP earnings (loss) per share		($0.10)		$0.00		$0.26

     The non-GAAP results exclude the impact of the following, as applicable for a particular quarter: investment impairments, equity-based compensation, restructuring and asset impairments, acquisition-related costs, ceasing implant development, and amounts associated with the resolution of income tax audits. A reconciliation of the GAAP and non-GAAP results is provided in the financial statements included in this release.

Order and Backlog Summary

     New orders totaled $649 million and were generated in the following regions: North America 20 percent, Taiwan 19 percent, Europe 19 percent, Japan 16 percent, Korea 13 percent, and Southeast Asia and China 13 percent. Backlog at the end of the period was $3.16 billion, down from $4.05 billion at the end of the first quarter of fiscal 2009.

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Reportable Segment Results

		Q2 FY ’09												Q1 FY ’09												Q2 FY ’08
		New				Net				Operating Income				New				Net				Operating Income				New				Net				Operating Income
(In millions)		Orders				Sales				(Loss)				Orders				Sales				(Loss)				Orders				Sales				(Loss)
Silicon		$	259			$	260				($96	)		$	246			$	546			$	34			$	1,061			$	1,268			$	448
Applied Global Services		$	236			$	319				($1	)		$	310			$	345			$	26			$	602			$	599			$	159
Display		$	13			$	84			$	1			$	26			$	149			$	26			$	493			$	198			$	59
Energy and Environmental Solutions		$	141			$	357				($93	)		$	321			$	293				($65	)		$	257			$	85				($71	)

Use of Non-GAAP Financial Measures

     Management uses non-GAAP results 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 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 results prepared in accordance with GAAP.

Webcast Information

     Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast will be available at www.appliedmaterials.com.

Forward-Looking Statements

     This press release contains forward-looking statements, including statements regarding Applied’s performance and investments. 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 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

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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. 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								Six Months Ended
		April 26,				April 27,				April 26,				April 27,
(In thousands, except per share amounts)		2009				2008				2009				2008
Net sales		$	1,020,077			$	2,149,998			$	2,353,473			$	4,237,395
Cost of products sold			864,558				1,183,170				1,806,378				2,335,586
Gross margin			155,519				966,828				547,095				1,901,809
Operating expenses:
Research, development and engineering			236,335				287,122				465,875				560,341
General and administrative			101,080				122,035				242,321				238,011
Marketing and selling			84,678				119,410				168,793				243,327
Restructuring and asset impairments			26,709				510				159,481				49,496
Income (loss) from operations			(293,283	)			437,751				(489,375	)			810,634
Pre-tax loss of equity method investment			19,175				9,766				34,983				19,352
Impairment of equity method investment and strategic investments			77,081				—				77,081				—
Interest expense			5,058				6,256				11,052				10,801
Interest income			11,789				32,414				27,024				62,984
Income (loss) before income taxes			(382,808	)			454,143				(585,467	)			843,465
Provision (benefit) for income taxes			(127,418	)			151,636				(197,143	)			278,582
Net income (loss)		$	(255,390	)		$	302,507			$	(388,324	)		$	564,883
Earnings (loss) per share:
Basic		$	(0.19	)		$	0.22			$	(0.29	)		$	0.41
Diluted		$	(0.19	)		$	0.22			$	(0.29	)		$	0.41
Weighted average number of shares:
Basic			1,331,729				1,356,705				1,330,476				1,363,975
Diluted			1,331,729				1,373,314				1,330,476				1,379,071

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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS

		April 26,				October 26,
(In thousands)		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	1,466,976			$	1,411,624
Short-term investments			597,389				689,044
Accounts receivable, net			914,392				1,691,027
Inventories			1,901,024				1,987,017
Deferred income taxes, net			390,025				388,807
Income taxes receivable			300,401				125,605
Other current assets			344,599				371,033
Total current assets			5,914,806				6,664,157
Long-term investments			1,000,705				1,367,056
Property, plant and equipment			2,864,396				2,831,952
Less: accumulated depreciation and amortization			(1,774,273	)			(1,737,752	)
Net property, plant and equipment			1,090,123				1,094,200
Goodwill, net			1,171,740				1,174,673
Purchased technology and other intangible assets, net			347,117				388,429
Equity method investment			—				79,533
Deferred income taxes and other assets			224,608				238,270
Total assets		$	9,749,099			$	11,006,318
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt		$	1,156			$	1,068
Accounts payable and accrued expenses			1,047,915				1,545,355
Customer deposits and deferred revenue			962,975				1,225,735
Income taxes payable			120,787				173,394
Total current liabilities			2,132,833				2,945,552
Long-term debt			201,165				201,576
Other liabilities			319,202				310,232
Total liabilities			2,653,200				3,457,360
Stockholders’ equity:
Common stock			13,330				13,308
Additional paid-in capital			5,155,301				5,095,894
Retained earnings			11,031,711				11,601,288
Treasury stock			(9,100,915	)			(9,134,962	)
Accumulated other comprehensive loss			(3,528	)			(26,570	)
Total stockholders’ equity			7,095,899				7,548,958
Total liabilities and stockholders’ equity		$	9,749,099			$	11,006,318

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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

		Six Months Ended
		April 26,				April 27,
(In thousands)		2009				2008
Cash flows from operating activities:
Net income (loss)		$	(388,324	)		$	564,883
Adjustments required to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization			146,108				154,321
Loss on fixed asset retirements			7,002				21,527
Provision for bad debts			62,539				—
Restructuring and asset impairments			159,481				49,496
Deferred income taxes			35,927				(38,538	)
Excess tax benefits from equity-based compensation plans			—				(5,406	)
Net recognized loss (gain) on investments			10,915				(3,560	)
Pretax loss of equity-method investment			34,983				19,352
Impairment of equity-method investment and strategic investments			77,081				—
Equity-based compensation			72,780				89,044
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable			714,096				385,830
Inventories			85,993				(277,478	)
Other current assets			13,411				116,352
Other assets			(1,144	)			(4,875	)
Accounts payable and accrued expenses			(649,976	)			(107,155	)
Customer deposits and deferred revenue			(262,760	)			302,195
Income taxes			(246,739	)			(11,803	)
Other liabilities			27,710				9,548
Cash provided by (used in) operating activities			(100,917	)			1,263,733
Cash flows from investing activities:
Capital expenditures			(128,099	)			(137,699	)
Cash paid for acquisition, net of cash acquired			—				(235,324	)
Proceeds from sales and maturities of investments			925,485				3,131,994
Purchases of investments			(486,527	)			(3,376,917	)
Cash provided by (used in) investing activities			310,859				(617,946	)
Cash flows from financing activities:
Debt repayments			(323	)			(12	)
Proceeds from common stock issuances			27,633				308,463
Common stock repurchases			(22,906	)			(899,984	)
Excess tax benefits from equity-based compensation plans			—				5,406
Payment of dividends to stockholders			(159,736	)			(164,274	)
Cash used in financing activities			(155,332	)			(750,401	)
Effect of exchange rate changes on cash and cash equivalents			742				151
Increase (decrease) in cash and cash equivalents			55,352				(104,463	)
Cash and cash equivalents — beginning of period			1,411,624				1,202,722
Cash and cash equivalents — end of period		$	1,466,976			$	1,098,259
Supplemental cash flow information:
Cash payments for income taxes		$	83,128			$	167,185
Cash payments for interest		$	7,211			$	7,229

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

		Three Months Ended												Six Months Ended
		April 26,				April 27,				January 25,				April 26,				April 27,
(In thousands, except per share amounts)		2009				2008				2009				2009				2008
Non-GAAP Net Income (Loss)
Reported net income (loss) (GAAP basis)		$	(255,390	)		$	302,507			$	(132,934	)		$	(388,324	)		$	564,883
Equity-based compensation expense			39,172				50,322				33,608				72,780				89,044
Certain items associated with acquisitions 1			24,824				31,144				26,025				50,849				62,182
Restructuring and asset impairments 2,3,4			26,709				510				132,772				159,481				49,496
Costs associated with ceasing development of beamline implant products 5			—				259				—				—				1,280
Impairment of equity method investment and strategic investments			77,081				—				—				77,081				—
Income tax effect of non-GAAP adjustments and resolution of audits of prior years’ income tax filings			(48,040	)			(23,142	)			(62,939	)			(110,979	)			(60,468	)
Non-GAAP net income (loss)		$	(135,644	)		$	361,600			$	(3,468	)		$	(139,112	)		$	706,417
Non-GAAP Net Income (Loss) Per Diluted Share
Reported net income (loss) per diluted share (GAAP basis)		$	(0.19	)		$	0.22			$	(0.10	)		$	(0.29	)		$	0.41
Equity-based compensation expense			0.02				0.03				0.02				0.04				0.05
Certain items associated with acquisitions			0.01				0.02				0.01				0.03				0.03
Restructuring and asset impairments			0.01				—				0.06				0.08				0.02
Costs associated with ceasing development of beamline implant products			—				—				—				—				—
Impairment of equity method investment and strategic investments			0.05				—				—				0.05				—
Resolution of audits of prior years’ income tax filings			(0.01	)			—				—				(0.01	)			—
Non-GAAP net income (loss) — per diluted share		$	(0.10	)		$	0.26			$	0.00			$	(0.10	)		$	0.51
Shares used in diluted shares calculation			1,331,729				1,373,314				1,329,223				1,330,476				1,379,071