Applied Materials Announces Results for Third Fiscal Quarter 2005
SANTA CLARA, Calif.--(
BUSINESS WIRE)--Aug. 16, 2005--Applied Materials, Inc. (Nasdaq:AMAT):
-- Net Sales: $1.63 billion (12% decrease quarter over quarter; 27% decrease year over year)
-- Net Income: $370 million (21% increase quarter over quarter; 16% decrease year over year)
-- EPS: $0.23 ($0.05 increase quarter over quarter; $0.03 decrease year over year)
-- New Orders: $1.47 billion (5% decrease quarter over quarter; 40% decrease year over year)
Applied Materials, Inc., the world's largest supplier of wafer fabrication solutions to the global semiconductor industry, reported results for its third fiscal quarter ended July 31, 2005. Net sales were $1.63 billion, down 12 percent from $1.86 billion for the second fiscal quarter of 2005, and down 27 percent from $2.24 billion for the third fiscal quarter of 2004. Gross margin for the third fiscal quarter of 2005 was 43.9 percent, compared to 44.0 percent for the second fiscal quarter of 2005, and down from 47.4 percent for the third fiscal quarter of 2004. Net income for the third fiscal quarter of 2005 was $370 million, or $0.23 per share, up from net income of $305 million, or $0.18 per share, for the second fiscal quarter of 2005, and down from net income of $441 million, or $0.26 per share, for the third fiscal quarter of 2004. The results of the third fiscal quarter of 2005 included a favorable tax adjustment of $132 million, or $0.08 per share, principally due to the resolution of a multi-year tax examination.
New orders of $1.47 billion for the third fiscal quarter of 2005 decreased 5 percent from $1.55 billion for the second fiscal quarter of 2005, and decreased 40 percent from $2.46 billion for the third fiscal quarter of 2004. Regional distribution of new orders for the third fiscal quarter of 2005 was: Japan 23 percent, Korea 19 percent, North America 19 percent, Taiwan 15 percent, Europe 12 percent, and Southeast Asia and China 12 percent. Backlog at the end of the third fiscal quarter of 2005 was $2.61 billion, compared to $2.85 billion at the end of the second fiscal quarter of 2005.
During the third fiscal quarter of 2005, the company repurchased approximately 27 million shares of common stock at an average price of $16.62 per share for an aggregate purchase price of $450 million. Also during the third fiscal quarter of 2005, the company declared a quarterly cash dividend of $0.03 per share, payable on September 7, 2005 to stockholders of record on August 17, 2005.
"Applied Materials again demonstrated its leadership in technology innovation with the introduction of the Applied UVision(TM) inspection system and the advanced etch and film deposition technologies that we showcased this quarter," said Mike Splinter, president and chief executive officer. "Our unique solutions are helping customers advance technology in order to deliver new levels of performance for transistors, interconnects and other chip features required by new generations of electronics products.
"While industry conditions remained challenging, we met our financial targets, continued to generate strong cash flow and returned value to our stockholders through share repurchase and a dividend. With our financial strength and technology leadership, Applied is well positioned to benefit from customers' increased capital spending," concluded Splinter.
This press release contains forward-looking statements, including statements regarding the company's technology leadership, strategic position, cash generation and product capabilities; and customers' requirements and capital investments. 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 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 successful integration and performance of acquired businesses; changes in management; and other risks described in Applied Materials' Securities and Exchange Commission filings, including its reports on Form 10-K, Form 10-Q and Form 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 third fiscal quarter results, along with its outlook for the fourth fiscal quarter of 2005, 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), headquartered in Santa Clara, California, is the largest supplier of equipment and services to the global semiconductor industry. Applied Materials' web site is www.appliedmaterials.com.
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
---------------------------------------------------------------------
(In thousands, except August 1, July 31, August 1, July 31,
per share amounts) 2004 2005 2004 2005
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Net sales $2,236,152 $1,631,938 $5,809,705 $5,273,703
Cost of products sold 1,176,920 914,849 3,135,663 2,947,959
---------- ---------- ---------- ----------
Gross margin 1,059,232 717,089 2,674,042 2,325,744
Operating expenses:
Research,
development and
engineering 256,781 236,448 743,601 703,799
Marketing and
selling 101,513 98,366 285,886 268,644
General and
administrative 87,394 79,578 251,145 256,876
Restructuring,
asset impairments
and other charges - - 167,459 -
---------- ---------- ---------- ----------
Income from operations 613,544 302,697 1,225,951 1,096,425
Interest expense 13,489 9,338 36,971 28,425
Interest income 24,869 45,948 82,362 123,055
---------- ---------- ---------- ----------
Income before income
taxes 624,924 339,307 1,271,342 1,191,055
Provision for/(benefit
from) income taxes 184,353 (30,284) 375,047 227,869
---------- ---------- ---------- ----------
Net income $ 440,571 $ 369,591 $ 896,295 $ 963,186
---------- ---------- ---------- ----------
Earnings per share:
Basic $ 0.26 $ 0.23 $ 0.53 $ 0.58
Diluted $ 0.26 $ 0.23 $ 0.52 $ 0.58
Weighted average
number of shares:
Basic 1,696,544 1,630,895 1,689,573 1,654,740
Diluted 1,721,690 1,641,818 1,727,626 1,666,720
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APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
---------------------------------------------------------------------
October 31, July 31,
(In thousands) 2004(1) 2005
---------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,493,292 $ 1,255,746
Short-term investments 5,084,704 4,972,697
Accounts receivable, net 1,670,153 1,525,133
Inventories 1,139,368 1,073,722
Deferred income taxes 610,095 627,366
Other current assets 283,907 289,805
----------- -----------
Total current assets 10,281,519 9,744,469
Property, plant and equipment 2,953,130 2,993,156
Less: accumulated depreciation and
amortization (1,607,602) (1,709,558)
----------- -----------
Net property, plant and equipment 1,345,528 1,283,598
Goodwill, net 257,321 337,825
Purchased technology and other intangible
assets, net 50,291 88,601
Deferred income taxes and other assets 158,786 164,156
----------- -----------
Total assets $12,093,445 $11,618,649
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 45,864 $ 46,165
Accounts payable and accrued expenses 1,895,061 1,703,540
Income taxes payable 347,056 227,614
----------- -----------
Total current liabilities 2,287,981 1,977,319
Long-term debt 410,436 414,290
Other liabilities 133,001 155,395
----------- -----------
Total liabilities 2,831,418 2,547,004
----------- -----------
Stockholders' equity:
Common stock 16,803 16,225
Additional paid-in capital 2,070,733 987,064
Deferred stock compensation, net (96) -
Retained earnings 7,164,170 8,078,026
Accumulated other comprehensive
income/(loss) 10,417 (9,670)
----------- -----------
Total stockholders' equity 9,262,027 9,071,645
----------- -----------
Total liabilities and stockholders' equity $12,093,445 $11,618,649
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(1) Certain amounts in the October 31, 2004 consolidated condensed
balance sheet have been reclassified to conform to the 2005
presentation.
