APPLIED MATERIALS FIRST QUARTER RESULTS EXCEED EXPECTATIONS
(Thomson Reuters ONE) -
Projects Strong Sequential Growth
* Non-GAAP EPS of 18 cents; GAAP EPS of 9 cents
* Orders of $2.0 billion up 26% sequentially led by Silicon Systems Group
* Expects Q2 non-GAAP EPS of 20 to 28 cents
SANTA CLARA, Calif., Feb. 16, 2012 -- Applied Materials, Inc. (NASDAQ:AMAT), the
world's leading supplier of manufacturing solutions for the semiconductor,
display and solar industries, today reported results for its first quarter of
fiscal 2012 ended January 29, 2012.
Applied generated orders of $2.01 billion and net sales of $2.19 billion. Non-
GAAP operating income was $344 million, and non-GAAP net income was $240 million
or 18 cents per share. GAAP operating income was $179 million, and GAAP net
income was $117 million or 9 cents per share. Applied completed the acquisition
of Varian Semiconductor Equipment Associates, Inc. during the quarter, and the
results include Varian's operations for the full period.
"Global demand for mobile devices is driving a third consecutive year of strong
capital investment by semiconductor customers," said Mike Splinter, chairman and
chief executive officer. "As a result, we see solid order momentum and an
improved outlook overall for our second quarter."
"Applied delivered net sales and earnings above the high end of our
expectations," said George Davis, chief financial officer. "In a quarter in
which we closed the Varian acquisition, we also returned substantial capital to
our stockholders, paying $104 million in cash dividends and using $200 million
to repurchase over 18 million shares of our common stock."
Quarterly Financial Results Summary
+---------------------------+---------------+---------------+---------------+
| GAAP Results | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+---------------------------+---------------+---------------+---------------+
| Net sales | $2.19 billion | $2.18 billion | $2.69 billion |
+---------------------------+---------------+---------------+---------------+
| Operating income | $179 million | $361 million | $674 million |
+---------------------------+---------------+---------------+---------------+
| Net income | $117 million | $456 million | $506 million |
+---------------------------+---------------+---------------+---------------+
| Earnings per share (EPS) | $0.09 | $0.34 | $0.38 |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP Results | | | |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP operating income | $344 million | $384 million | $659 million |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP net income | $240 million | $271 million | $484 million |
+---------------------------+---------------+---------------+---------------+
| Non-GAAP EPS | $0.18 | $0.21 | $0.36 |
+---------------------------+---------------+---------------+---------------+
During the quarter, Varian generated orders of approximately $270 million and
net sales of approximately $200 million which were reported within the Silicon
Systems Group (SSG) and the Applied Global Services (AGS) segments. The Varian
business contributed approximately $0.01 to the company's non-GAAP EPS, which
excludes acquisition-related charges equivalent to approximately $0.09 per
share.
Non-GAAP results for the above periods exclude the impact of the following,
where applicable: certain discrete tax items, restructuring and asset impairment
charges and any associated adjustment related to restructuring actions, certain
acquisition-related costs, investment impairments, and gain or loss on sale of
facilities. A reconciliation of the GAAP and non-GAAP results is provided in the
financial statements included in this release. See also "Use of Non-GAAP
Financial Measures" below.
First Quarter Reportable Segment Results and Comparisons to the Prior Quarter
Silicon Systems Group orders were $1.42 billion, up 53 percent reflecting
increased demand in foundry and the addition of Varian's business. Net sales
were $1.34 billion, up 26 percent. Non-GAAP operating income increased to $386
million or 29 percent of net sales. GAAP operating income was $271 million or
20 percent of net sales. New order composition was: foundry 57 percent, logic
and other 14 percent, flash 19 percent, and DRAM 10 percent.
Applied Global Services orders were $517 million, down 8 percent. Net sales were
$534 million, down 15 percent, in line with the company's expectations. AGS
orders and net sales reflected lower wafer starts, partially offset by the
addition of Varian's business; net sales also reflected lower thin film solar
volumes. Non-GAAP operating income decreased to $113 million or 21 percent of
net sales, reflecting the decrease in net sales. GAAP operating income was $107
million or 20 percent of net sales.
Display orders were $40 million, reflecting ongoing weakness in LCD TV equipment
demand. Net sales were $104 million, down 39 percent, and non-GAAP operating
income decreased to $7 million or 7 percent of net sales, driven by the decrease
in net sales. GAAP operating income was $5 million or 5 percent of net sales.
Energy and Environmental Solutions (EES) orders were $33 million, down 62
percent, reflecting solar industry overcapacity. Net sales were $207 million,
down 34 percent. The segment had a non-GAAP operating loss of $17 million and a
GAAP operating loss of $23 million.
Additional Quarterly Financial Information
* Backlog decreased by $230 million from the fourth quarter to $2.2 billion.
* Non-GAAP gross margin was 40.7 percent, up from 39.5 percent in the fourth
quarter. The GAAP gross margin was 35.9 percent, down from 39.0 percent in
the fourth quarter.
* The effective tax rate was 26.4 percent.
* Cash, cash equivalents and investments decreased to $2.95 billion primarily
due to the acquisition of Varian for approximately $4.2 billion, net of cash
acquired.
Business Outlook
For the second quarter of fiscal 2012, Applied expects net sales to be up 5
percent to 15 percent sequentially. The company expects non-GAAP EPS to be in
the range of $0.20 to $0.28. The non-GAAP EPS outlook excludes known charges
related to completed acquisitions of approximately $0.05 per share but does not
exclude other non-GAAP adjustments that may arise subsequent to this release.
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
atwww.appliedmaterials.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements
regarding Applied's performance, industry outlooks, customer investment, order
momentum, and business outlook for the second quarter of fiscal 2012. Forward-
looking statements may contain words such as "expect," "believe," "may," "can,"
"should," "will," "anticipate" 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 Applied's products, which is subject to many
factors, including uncertain global economic and industry conditions, business
and consumer spending, demand for electronic products and semiconductors,
government renewable energy policies and incentives, and customers' utilization
rates and new technology and capacity requirements; variability of operating
expenses and results among the company's segments caused by differing conditions
in the served markets; the concentrated nature of Applied's customer base;
Applied's ability to (i) develop, deliver and support a broad range of products,
expand its markets and develop new markets, (ii) timely 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) integrate Varian's
operations, product lines, technology and employees and realize synergies, (vi)
obtain and protect intellectual property rights in key technologies, (vii)
attract, motivate and retain key employees, and (viii) accurately forecast
future operating and financial results, which depends on multiple assumptions
related to, without limitation, market conditions, customer requirements and
business needs; 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.
About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in providing
innovative equipment, services and software to enable the manufacture of
advanced semiconductor, flat panel display and solar photovoltaic products. Our
technologies help make innovations like smartphones, flat screen TVs and solar
panels more affordable and accessible to consumers and businesses around the
world. At Applied Materials, we turn today's innovations into the industries of
tomorrow. Learn more atwww.appliedmaterials.com.
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
January January
29, 30,
(In millions, except per share amounts) 2012 2011
Net sales $ 2,189 $ 2,686
Cost of products sold 1,403 1,550
Gross margin 786 1,136
Operating expenses:
Research, development and engineering 304 270
Selling, general and administrative 303 221
Restructuring charges and asset impairments - (29)
Total operating expenses 607 462
Income from operations 179 674
Interest and other expenses 24 5
Interest and other income, net 4 11
Income before income taxes 159 680
Provision for income taxes 42 174
Net income $ 117 $ 506
Earnings per share:
Basic and diluted $ 0.09 $ 0.38
Weighted average number of shares:
Basic 1,299 1,324
Diluted 1,310 1,335
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
January October
29, 30,
(In millions) 2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ 1,681 $ 5,960
Short-term investments 316 283
Accounts receivable, net 1,576 1,532
Inventories 1,772 1,701
Deferred income taxes, net 572 580
Other current assets 240 299
Total current assets 6,157 10,355
Long-term investments 955 931
Property, plant and equipment, net 956 866
Goodwill 3,875 1,335
Purchased technology and other intangible assets,
net 1,519 211
Deferred income taxes and other assets 135 163
Total assets $ 13,597 $ 13,861
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 2 $ -
Accounts payable and accrued expenses 1,327 1,520
Customer deposits and deferred revenue 1,014 1,116
Income taxes payable 151 158
Total current liabilities 2,494 2,794
Long-term debt 1,947 1,947
Employee benefits and other liabilities 506 320
Total liabilities 4,947 5,061
Total stockholders' equity 8,650 8,800
Total liabilities and stockholders' equity $ 13,597 $ 13,861
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
January January
29, 30,
(In millions) 2012 2011
Cash flows from operating activities:
Net income $ 117 $ 506
Adjustments required to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 112 63
Net loss on dispositions and fixed asset retirements 2 1
Provision for bad debts 4 -
Restructuring charges and asset impairments - (29)
Deferred income taxes 28 10
Net recognized loss on investments 5 4
Share-based compensation 53 33
Net change in operating assets and liabilities, net of
amounts acquired (140) (163)
Cash provided by operating activities 181 425
Cash flows from investing activities:
Capital expenditures (37) (24)
Proceeds from sale of facility - 39
Cash paid for acquisition, net of cash acquired (4,179) -
Proceeds from sales and maturities of investments 313 443
Purchases of investments (254) (537)
Cash used in investing activities (4,157) (79)
Cash flows from financing activities:
Proceeds from common stock issuances 2 13
Common stock repurchases (200) (150)
Payment of dividends to stockholders (104) (93)
Cash used in financing activities (302) (230)
Effect of exchange rate changes on cash and cash
equivalents (1) -
Increase (decrease) in cash and cash equivalents (4,279) 116
Cash and cash equivalents - beginning of period 5,960 1,858
Cash and cash equivalents - end of period $ 1,681 $ 1,974
Supplemental cash flow information:
Cash payments for income taxes $ 33 $ 165
Cash refunds from income taxes $ 3 $ 1
Cash payments for interest $ 41 $ -
Reportable Segment Results
+------------+-----------------------+-----------------------+-----------------------+
| | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+------------+------+------+---------+------+------+---------+------+------+---------+
| | | |Operating| | |Operating| | |Operating|
| (In | New | Net | Income | New | Net | Income | New | Net | Income |
| millions) |Orders|Sales | (Loss) |Orders|Sales | (Loss) |Orders|Sales | (Loss) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|SSG |$1,418|$1,344| $271 | $925 |$1,067| $278 |$1,610|$1,496| $543 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|AGS | $517 | $534 | $107 | $564 | $629 | $160 | $552 | $567 | $85 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Display | $40 | $104 | $5 | $20 | $171 | $31 | $142 | $147 | $28 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|EES | $33 | $207 | $(23) | $86 | $315 | $17 | $668 | $476 | $144 |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Corporate | - | - | $(181) | - | - | $(125) | - | - | $(126) |
+------------+------+------+---------+------+------+---------+------+------+---------+
|Consolidated|$2,008|$2,189| $179 |$1,595|$2,182| $361 |$2,971|$2,686| $674 |
+------------+------+------+---------+------+------+---------+------+------+---------+
Corporate Unallocated Expenses
+------------------------+-----------+-----------+-----------+
| (In millions) | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+------------------------+-----------+-----------+-----------+
| Restructuring charges | | | |
| and asset impairments, | $- | $- | $(1) |
| net | | | |
+------------------------+-----------+-----------+-----------+
| Share-based | $53 | $36 | $33 |
| compensation | | | |
+------------------------+-----------+-----------+-----------+
| Other unallocated | $128 | $89 | $94 |
| expenses | | | |
+------------------------+-----------+-----------+-----------+
| Corporate | $181 | $125 | $126 |
+------------------------+-----------+-----------+-----------+
Additional Information
+-------------------+----------------+----------------+----------------+
| | Q1 FY2012 | Q4 FY2011 | Q1 FY2011 |
+-------------------+----------------+----------------+----------------+
| New Orders and Net Sales by Geography |
+-------------------+--------+-------+--------+-------+--------+-------+
| (In $ millions) | New | Net | New | Net | New | Net |
| | Orders | Sales | Orders | Sales | Orders | Sales |
+-------------------+--------+-------+--------+-------+--------+-------+
| North America | 467 | 417 | 324 | 434 | 679 | 610 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 23 | 19 | 20 | 20 | 23 | 23 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Europe | 209 | 179 | 176 | 271 | 346 | 278 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 11 | 8 | 11 | 12 | 12 | 10 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Japan | 167 | 217 | 173 | 255 | 187 | 166 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 8 | 10 | 11 | 12 | 6 | 6 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Korea | 666 | 628 | 330 | 363 | 225 | 169 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 33 | 29 | 21 | 17 | 8 | 6 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Taiwan | 367 | 489 | 283 | 353 | 745 | 635 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 18 | 22 | 18 | 16 | 25 | 24 |
+-------------------+--------+-------+--------+-------+--------+-------+
| Southeast Asia | 50 | 79 | 98 | 98 | 135 | 154 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 3 | 4 | 6 | 4 | 4 | 6 |
+-------------------+--------+-------+--------+-------+--------+-------+
| China | 82 | 180 | 211 | 408 | 654 | 674 |
+-------------------+--------+-------+--------+-------+--------+-------+
| % of Total | 4 | 8 | 13 | 19 | 22 | 25 |
+-------------------+--------+-------+--------+-------+--------+-------+
| |
+----------------------------------------------------------------------+
| Employees (In thousands) |
+-------------------+----------------+----------------+----------------+
| Regular Full Time | 14.6 | 12.9 | 13.0 |
+-------------------+----------------+----------------+----------------+
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
Three Months Ended
January
(In millions, except per share 29, October 30, January 30,
amounts) 2012 2011 2011
Non-GAAP Gross Margin
Reported gross margin (GAAP
basis) $ 786 $ 852 $ 1,136
Certain items associated with
acquisitions (1) 104 10 9
Non-GAAP gross margin $ 890 $ 862 $ 1,145
Non-GAAP Operating Income
Reported operating income
(GAAP basis) $ 179 $ 361 $ 674
Certain items associated with
acquisitions (1) 142 13 13
Varian deal cost 23 10 -
Restructuring charges and
asset impairments (2) - - (29)
Loss on sale of facility - - 1
Non-GAAP operating income $ 344 $ 384 $ 659
Non-GAAP Net Income
Reported net income (GAAP
basis) $ 117 $ 456 $ 506
Certain items associated with
acquisitions (1) 142 13 13
Varian deal cost 23 10 -
Restructuring charges and
asset impairments (2) - - (29)
Impairment of strategic
investments( ) - 3 -
Loss on sale of facility - - 1
Reinstatement of federal R&D
tax credit - - (13)
Resolution of audits of prior
years' income tax filings - (203) -
Income tax effect of non-GAAP
adjustments (42) (8) 6
Non-GAAP net income $ 240 $ 271 $ 484
Non-GAAP Earnings Per Diluted
Share
Reported earnings per diluted
share (GAAP basis) $ 0.09 $ 0.34 $ 0.38
Certain items associated with
acquisitions 0.08 0.01 0.01
Varian deal cost 0.01 0.01 -
Restructuring charges and
asset impairments - - (0.01)
Reinstatement of federal R&D
tax credit and
resolution of audits of prior
years' income tax filings - (0.15) (0.01)
Non-GAAP earnings per diluted
share $ 0.18 $ 0.21 $ 0.36
Weighted average number of
diluted shares 1,310 1,321 1,335
(1 )These items are incremental charges attributable to acquisitions, consisting
of inventory fair value adjustments on products sold, amortization of purchased
intangible assets, shared-based compensation associated with accelerated vesting
and other integration costs.
(2) Results for the three months ended January 30, 2011 included asset
impairment charges of $3 million related to a facility held-for-sale, offset by
favorable adjustments of $28 million related to a restructuring program
announced on July 21, 2010, and $4 million related to a restructuring program
announced on November 12, 2008.
APPLIED MATERIALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
Three Months Ended
January October
29, 30, January 30,
(In millions) 2012 2011 2011
Non-GAAP SSG Operating Income
Reported operating income (GAAP
basis) $ 271 $ 278 $ 543
Certain items associated with
acquisitions (1) 115 3 3
Varian deal cost - 3 -
Non-GAAP operating income $ 386 $ 284 $ 546
Non-GAAP AGS Operating Income
Reported operating income (GAAP
basis) $ 107 $ 160 $ 85
Certain items associated with
acquisitions (1) 6 2 2
Non-GAAP operating income $ 113 $ 162 $ 87
Non-GAAP Display Operating
Income
Reported operating income (GAAP
basis) $ 5 $ 31 $ 28
Certain items associated with
acquisitions (1) 2 2 2
Non-GAAP operating income $ 7 $ 33 $ 30
Non-GAAP EES Operating Income
(Loss)
Reported operating income (loss)
(GAAP basis) $ (23) $ 17 $ 144
Certain items associated with
acquisitions (1) 6 6 6
Restructuring charges and asset
impairments (2) - - (28)
Non-GAAP operating income (loss) $ (17) $ 23 $ 122
(1 )These items are incremental charges attributable to acquisitions, consisting
of inventory fair value adjustments on products sold, amortization of purchased
intangible assets, share-based compensation associated with accelerated
vesting and other integration costs.
(2) Results for the three months ended January 30, 2011 included asset
impairment charges of $3 million related to a facility held-for-sale, offset by
favorable adjustments of $28 million related to a restructuring program
announced on July 21, 2010, and $4 million related to a restructuring program
announced on November 12, 2008.
Contact:
Howard Clabo (media) 408.748.5775
Michael Sullivan (investors) 408.986.7977
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Applied Materials via Thomson Reuters ONE
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Datum: 16.02.2012 - 22:05 Uhr
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