North Coast Solar Stocks

February 12, 2008

Applied Materials Announces Results for First Quarter of Fiscal 2008

Filed under: AMAT — Tags: , , , — Jason @ 4:03 pm

Tuesday February 12, 4:03 pm ET
— Net Sales: $2.09 billion (8% decrease year over year; 12% decrease quarter over quarter)
— Net Income: $262 million (35% decrease year over year; 38% decrease quarter over quarter)
— EPS: $0.19 ($0.10 decrease year over year; $0.11 decrease quarter over quarter)
— New Orders: $2.50 billion (2% decrease year over year; 13% increase quarter over quarter)

SANTA CLARA, Calif.–(BUSINESS WIRE)–Applied Materials, Inc. reported results for its first fiscal quarter ended January 27, 2008. Net sales were $2.09 billion, down 8 percent from $2.28 billion for the first quarter of fiscal 2007, and down 12 percent from $2.37 billion for the fourth quarter of fiscal 2007. Gross margin for the first quarter of fiscal 2008 was 44.8 percent, down from 46.7 percent for the first quarter of fiscal 2007, and down from 45.5 percent for the fourth quarter of fiscal 2007. Net income for the first quarter of fiscal 2008 was $262 million, or $0.19 per share, down from net income of $403 million, or $0.29 per share, for the first quarter of fiscal 2007, and down from net income of $422 million, or $0.30 per share, for the fourth quarter of fiscal 2007.

New orders of $2.50 billion for the first quarter of fiscal 2008 decreased 2 percent from $2.54 billion for the first quarter of fiscal 2007, and increased 13 percent from $2.21 billion for the fourth quarter of fiscal 2007. Regional distribution of new orders for the first quarter of fiscal 2008 was: Taiwan 32 percent, North America 20 percent, Korea 14 percent, Japan 12 percent, Southeast Asia and China 11 percent, and Europe 11 percent. Backlog at the end of the first quarter of fiscal 2008 was $4.10 billion, compared to $3.65 billion at the end of the fourth quarter of fiscal 2007.

“We executed well in a challenging global chip equipment market,” said Mike Splinter, president and CEO. “The strength in our new orders reflects robust demand for our display products and recognition of our first Applied SunFab™ Thin Film Line orders.

“This is a pivotal year for Applied and we are focused on execution and growth throughout the company. Our long-term prospects are excellent as we build on our foundation of semiconductor equipment and services to add new businesses and move into new markets,” concluded Splinter.

Non-GAAP net income for the first quarter of fiscal 2008 was $345 million, or $0.25 per share, compared to non-GAAP net income of $405 million, or $0.29 per share, for the first quarter of fiscal 2007, and $472 million or $0.34 per share for the fourth quarter of fiscal 2007. Non-GAAP adjustments are explained below and detailed in the accompanying Reconciliation of GAAP to Non-GAAP Results.

Effective in the first quarter of fiscal 2008, Applied renamed two of its reportable segments. The Fab Solutions segment is now called Applied Global Services, and the Adjacent Technologies segment is now called Energy and Environmental Solutions. In addition, Applied changed its management reporting system for services, with all service results reported in the Applied Global Services segment. Fiscal 2007 segment information has been reclassified to conform to fiscal 2008.

Results by reportable segment for the first quarter of fiscal 2008 and the first and fourth quarters of fiscal 2007 were:

Three Months Ended

Three Months Ended

Three Months Ended

January 27, 2008

October 28, 2007

January 28, 2007

New
Orders

Net
Sales

Oper-
ating
Income
(Loss)

New
Orders

Net
Sales

Oper-
ating
Income
(Loss)

New
Orders

Net
Sales

Oper-
ating
Income
(Loss)

(In mil-
lions)

Silicon $ 1,075 $ 1,237 $ 445 $ 1,343 $ 1,511 $ 550 $ 1,755 $ 1,490 $ 520
Applied Global
Services
610 595 149 645 605 159 718 560 159
Display 555 133 34 120 189 47 34 196 50

Energy and
Environ-
mental
Solutions

260 122 (48 ) 98 62 (30 ) 31 32 (15 )

Non-GAAP net income and non-GAAP EPS, detailed in the accompanying Reconciliation of GAAP to Non-GAAP Results, exclude charges related to (i) restructuring and asset impairments, (ii) equity-based compensation, (iii) certain items associated with acquisitions, including amortization of intangibles and inventory fair value adjustments on products sold, (iv) certain costs associated with ceasing development of beamline implant products, and/or (v) the resolution of income tax audits and changes in tax credits. 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. These measures are not in accordance with Generally Accepted Accounting Principles (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 companys business from the same perspective as the companys management and facilitate comparisons of this periods results with prior periods. The presentation of this additional information should not be considered a substitute for net income or EPS prepared in accordance with GAAP.

Applied Materials will discuss its fiscal 2008 first quarter results, along with its outlook for the second quarter of fiscal 2008, 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 Applieds performance, growth opportunities and prospects. Forward-looking statements may contain words such as expect, believe, may, 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 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 and consumer spending, demand for electronic products and semiconductors, and geopolitical uncertainties; customers capacity requirements, including capacity utilizing the latest technology, and fab utilization; the timing, rate, amount and sustainability of capital spending for nanomanufacturing technology products; variability of operating results among the companys reportable segments caused by differing conditions in the served markets; difficulties in production planning and execution in new businesses such as solar; the successful implementation and effectiveness of initiatives to enhance global operations and efficiencies; the successful performance of acquired businesses and joint ventures; Applieds ability to (i) successfully develop, deliver and support a broad range of products and expand its markets and develop new markets, (ii) maintain effective cost controls and timely align its cost structure with business conditions, (iii) effectively manage its resources and production capability, including its supply chain, (iv) obtain and protect intellectual property rights in key technologies, and (v) 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 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:AMATNews) 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.

APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Three Months Ended

(In thousands, except per share amounts)

January 27,

2008

January 28,

2007

Net sales $ 2,087,397 $ 2,277,267
Cost of products sold 1,152,416 1,214,729
Gross margin 934,981 1,062,538
Operating expenses:
Research, development and engineering 273,219 287,567
Marketing and selling 123,917 106,912
General and administrative 115,976 121,811
Restructuring and asset impairments 48,986 (3,278 )
Income from operations 372,883 549,526
Pre-tax loss of equity method investment 9,586 3,937
Interest expense 4,545 10,468
Interest income 30,570 30,103
Income before income taxes 389,322 565,224
Provision for income taxes 126,946 161,748
Net income $ 262,376 $ 403,476
Earnings per share:
Basic $ 0.19 $ 0.29
Diluted $ 0.19 $ 0.29
Weighted average number of shares:
Basic 1,371,245 1,394,710
Diluted 1,383,886 1,409,014
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

January 27,
2008
October 28,
2007
ASSETS
Current assets:
Cash and cash equivalents $ 1,215,649 $ 1,202,722
Short-term investments 689,907 1,166,857
Accounts receivable, net 2,014,501 2,049,427
Inventories 1,387,512 1,313,237
Deferred income taxes 409,773 424,502
Other current assets 474,464 448,879
Total current assets 6,191,806 6,605,624
Long-term investments 1,457,825 1,362,425
Property, plant and equipment 2,815,860 2,782,204
Less: accumulated depreciation and amortization (1,750,773 ) (1,730,962 )
Net property, plant and equipment 1,065,087 1,051,242
Goodwill, net 1,017,705 1,000,176
Purchased technology and other intangible assets, net 354,450 373,178
Equity method investment 105,474 115,060
Deferred income taxes and other assets 160,141 146,370
Total assets $ 10,352,488 $ 10,654,075
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt $ 2,674 $ 2,561
Accounts payable and accrued expenses 2,174,683 2,213,313
Income taxes payable 176,113 157,549
Total current liabilities 2,353,470 2,373,423
Long-term debt 202,476 202,281
Other liabilities 337,811 256,962
Total liabilities 2,893,757 2,832,666
Stockholders’ equity:
Common stock 13,536 13,857
Additional paid-in capital 4,707,141 4,658,832
Retained earnings 11,044,518 10,863,291
Treasury stock (8,323,728 ) (7,725,924 )
Accumulated other comprehensive income 17,264 11,353
Total stockholders’ equity 7,458,731 7,821,409
Total liabilities and stockholders’ equity $ 10,352,488 $ 10,654,075

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Three Months Ended

(In thousands)

January 27,

2008

January 28,

2007

Cash flows from operating activities:
Net income $ 262,376 $ 403,476

Adjustments required to reconcile net income to cash provided by operating activities:

Depreciation and amortization 78,474 60,904
Loss on fixed asset retirements 11,211 3,122
Restructuring and asset impairments 48,986 (3,278 )
Deferred income taxes 3,417 (2,457 )
Net recognized loss on investments 639 1,767
Pretax loss of equity-method investment 9,586 3,937
Equity-based compensation 38,722 34,901
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable, net 34,926 (24,350 )
Inventories (73,937 ) (110,695 )
Other current assets (22,579 ) (31 )
Other assets (4,984 ) (3,078 )
Accounts payable and accrued expenses (95,459 ) (107,823 )
Income taxes payable 94,248 121,082
Other liabilities 4,105 3,720
Cash provided by operating activities 389,731 381,197
Cash flows from investing activities:
Capital expenditures (74,144 ) (58,901 )
Cash paid for acquisition, net of cash acquired (19,084 )
Proceeds from disposition of assets held for sale 9,484
Proceeds from sales and maturities of investments 806,776 730,009
Purchases of investments (423,529 ) (728,520 )

Cash provided (used) for investing activities

290,019 (47,928 )
Cash flows from financing activities:
Long-term debt borrowings 343
Proceeds from common stock issuances 15,681 75,094
Common stock repurchases (600,000 ) (132,017 )
Payment of dividends to stockholders (83,068 ) (69,614 )
Cash used for financing activities (667,044 ) (126,537 )
Effect of exchange rate changes on cash and cash equivalents 221 420
Increase in cash and cash equivalents 12,927 207,152
Cash and cash equivalents beginning of period 1,202,722 861,463
Cash and cash equivalents end of period $ 1,215,649 $ 1,068,615
Supplemental cash flow information:
Cash payments for income taxes $

41,878

$ 40,428
Cash payments for interest $ 45 $ 57
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
Three Months Ended

(In thousands, except per share amounts)

January 27,
2008
October 28,
2007
January 28,
2007

Non-GAAP Net Income

Reported net income (GAAP basis) $ 262,376 $ 421,761 $ 403,476

Restructuring and asset impairments 1, 2, 3

48,986 3,039 (3,278 )
Equity-based compensation expense 38,722 30,889 34,900

Certain items associated with acquisitions 4

31,038 29,497 13,380

Costs associated with ceasing development of beamline implant products 5

1,021 9,391

Resolution of audits of prior years’ income tax filings 6

(29,863 )
Income tax effect of non-GAAP adjustments (37,326 ) (22,691 ) (13,434 )
Non-GAAP net income $ 344,817 $ 471,886 $ 405,181

Non-GAAP Net Income Per Diluted Share

Reported net income per diluted share (GAAP basis)
$ 0.19 $ 0.30 $ 0.29
Restructuring and asset impairments 0.02
Equity-based compensation expense 0.02 0.02 0.02
Certain items associated with acquisitions 0.02 0.01 0.01
Costs associated with ceasing development of beamline implant products
Resolution of audits of prior years’ income tax filings
(0.02 )
Non-GAAP net income – per diluted share $ 0.25 $ 0.34 $ 0.29
Shares used in diluted shares calculation 1,383,886 1,403,687 1,409,014

1 Results for the first fiscal quarter ended January 27, 2008 included restructuring charges of $38 million associated with a global cost reduction plan.

2 Results for the fiscal quarter ended January 27, 2008 and October 28, 2007 included restructuring and asset impairment charges of $11 million and $3 million, respectively, associated with ceasing development of beamline implant products.

3 Results for the first fiscal quarter ended January 28, 2007 included a net benefit of $3 million from the sale of the Hillsboro, Oregon facility.

4 Incremental charges attributable to acquisitions consisting of inventory fair value adjustments on products sold and amortization of purchased intangible assets.

5 Results for the fiscal quarters ended January 27, 2008 and October 28, 2007 include other operating charges of $1 million and $9 million, respectively, associated with ceasing development of beamline implant products.

6 Consists of benefit from the resolution of audits of prior years’ income tax filings.

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create a free website or blog at WordPress.com.

%d bloggers like this: