Applied Materials Announces Record Results for Second Fiscal Quarter 2000; Record New Orders, Net Sales and Net Income.Business Editors/Technology Writers SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif.--(BUSINESS WIRE)--May 10, 2000 Applied Materials Applied Materials, Inc. NASDAQ: AMAT (HKSE: 4336 ) is the global leader in nanomanufacturing technology solutions with a broad portfolio of innovative equipment, service and software products for the fabrication of semiconductor chips, flat panel solar displays, solar , Inc., the world's largest supplier of wafer fabrication Wafer Fabrication is a procedure composed of many repeated sequential processes to produce complete electrical or photonic circuits. Examples include production of radio frequency (RF) amplifiers, LEDs, optical computer components, and CPUs for computers. solutions to the semiconductor industry, reported record results for its second fiscal quarter ended April 30, 2000. Record net income, excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items and the acquisition of Etec Systems, Inc. (Etec), for the second fiscal quarter of 2000 was $454 million, or $0.55 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, up from $328 million, or $0.40 per diluted share, for the first fiscal quarter of 2000, and up significantly from $140 million, or $0.18 per diluted share, for the second fiscal quarter of 1999. Record net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $2.19 billion, up 27 percent from $1.72 billion for the first fiscal quarter of 2000, and up 87 percent from $1.17 billion for the second fiscal quarter of 1999. Record ongoing net income (net income, excluding one-time items) for the second fiscal quarter of 2000 was $459 million, or $0.53 per diluted share, up from $327 million, or $0.39 per diluted share, for the first fiscal quarter of 2000, and up significantly from $142 million, or $0.17 per diluted share, for the second fiscal quarter of 1999. Reported results for all periods presented reflect the acquisition of Etec, which was completed during the quarter and accounted for as a pooling-of-interests. Record new orders of $2.93 billion for the second fiscal quarter of 2000 increased 19 percent from $2.45 billion for the first fiscal quarter of 2000, and increased 101 percent from $1.46 billion for the second fiscal quarter of 1999. Regional distribution of new orders for the second fiscal quarter of 2000 was: Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan 25 percent, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. 25 percent, Japan 15 percent, Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). 14 percent, Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. and
China 11 percent and Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. 10 percent. Record backlog BacklogThe total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the second fiscal quarter of 2000 was $3.18 billion, compared to $2.46 billion at the end of the first fiscal quarter of 2000. Gross margin for the second fiscal quarter of 2000 was 50.1 percent, up from 49.8 percent for the first fiscal quarter of 2000, and up from 46.3 percent for the second fiscal quarter of 1999. Record ongoing net income as a percentage of net sales was 21.0 percent for the second fiscal quarter of 2000, compared to 19.0 percent for the first fiscal quarter of 2000 and 12.1 percent for the second fiscal quarter of 1999. "We are very pleased to report another record quarter resulting from increased customer demand and improved operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. . Global semiconductor use continues to expand, driven by communications, server-related and consumer products," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. C. Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. , chairman and chief executive officer. Feature-rich, digital telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and consumer applications for semiconductors are growing faster than expected. This demand for advanced devices has resulted in increased capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by semiconductor manufacturers. Applied Materials' new orders for the second fiscal quarter of 2000 reflect customers' increased investments in advanced manufacturing capacity and next-generation technologies for new copper and low-k In semiconductor manufacturing, a Low-κ dielectric is a material with a small dielectric constant relative to silicon dioxide. Although the proper symbol for the dielectric constant is the Greek letter κ (kappa), in conversation such materials are referred to as being dielectric dielectric (dī'ĭlĕk`trĭk), material that does not conduct electricity readily, i.e., an insulator (see insulation). A good dielectric should also have other properties: It must resist breakdown under high voltages; it should not applications. "We are in a major industry upturn and expect strong demand to continue for semiconductor devices that enable Internet-related, telecommunications and consumer products. Applied Materials, with its industry-leading solutions and unmatched global support infrastructure, is well-positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this opportunity," concluded Morgan. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, but not limited to, those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc capital spending by customers, semiconductor demand, product applications and customer migration to advanced technologies. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such statements. Such risks and uncertainties include, but are not limited to: changes in customer capacity requirements and demand for semiconductors; the ability of the Company to maintain its technology and market share leadership; the successful and timely development of new markets, products, processes and services; the successful integration and growth of acquired businesses; the ability of the Company to satisfy manufacturing demands, based in part on the availability of critical components; the ability of the Company to continue to improve productivity and operating performance; changes in global economic conditions; and those risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this press release. Applied Materials, Inc., a Fortune 500 global growth company, is the world's largest supplier of wafer fabrication solutions to the semiconductor industry. Applied Materials is traded on the Nasdaq National Market under the symbol, "AMAT AMAT Applied Materials (stock symbol) AMAT Average Memory Access Time AMAT Automatic Message Accounting Transmitter AMAT Anti-Materiel (bomb or mine) AMAT Ageing Management Assessment Team ". Applied Materials' website is http://www.appliedmaterials.com.
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
----------------------------------------------------------------------
(In thousands, except May 2, April 30, May 2, April 30,
per share amounts) 1999 2000 1999 2000
----------------------------------------------------------------------
Net sales $1,170,662 $2,190,031 $1,992,037 $3,912,221
Cost of products sold(a) 628,373 1,092,433 1,088,948 1,957,302
---------- ---------- ---------- ----------
Gross margin 542,289 1,097,598 903,089 1,954,919
Operating expenses:
Research, development
and engineering 179,856 253,283 338,195 476,563
Marketing and selling 81,135 111,580 156,036 212,292
General and
administrative(a) 86,000 118,890 152,416 210,707
Non-recurring items(a) -- 40,000 5,000 40,000
---------- ---------- ---------- ----------
Income from operations 195,298 573,845 251,442 1,015,357
Non-recurring income(a) -- 68,158 20,000 68,158
Interest expense 11,753 13,259 23,376 25,489
Interest income 24,264 41,072 50,704 78,992
---------- ---------- ---------- ----------
Income before taxes
and equity in net
income/(loss)
of joint venture 207,809 669,816 298,770 1,137,018
Provision for
income taxes 64,497 200,945 93,124 341,044
---------- ---------- ---------- ----------
Income before equity in
net income/(loss) of
joint venture 143,312 468,871 205,646 795,974
Equity in net
income/(loss) of
joint venture (1,182) -- 2,275 --
---------- ---------- ---------- ----------
Income from
continuing operations 142,130 468,871 207,921 795,974
Provision for
discontinuance
of joint venture 1,182 -- (2,275) --
---------- ---------- ---------- ----------
Net income $ 143,312 $ 468,871 $ 205,646 $ 795,974
---------- ---------- ---------- ----------
Earnings per share:
Basic - continuing
operations $ 0.18 $ 0.58 $ 0.27 $ 0.99
Basic - discontinued
operations -- -- -- --
---------- ---------- ---------- ----------
Total basic $ 0.18 $ 0.58 $ 0.27 $ 0.99
---------- ---------- ---------- ----------
Diluted -
continuing operations $ 0.17 $ 0.54 $ 0.25 $ 0.93
Diluted -
discontinued operations -- -- -- --
---------- ---------- ---------- ----------
Total diluted $ 0.17 $ 0.54 $ 0.25 $ 0.93
---------- ---------- ---------- ----------
Weighted average
number of shares:
Basic 776,130 805,142 772,606 801,940
Diluted 819,832 861,200 813,068 856,666
----------------------------------------------------------------------
Historical amounts have been restated to reflect the acquisition
of Etec, which was completed on March 29, 2000, and a two-for-one
stock split in the form of a 100 percent stock dividend, effective
March 15, 2000.
(a) The Company's results of operations for the second fiscal quarter
of 2000 include: 1) a pre-tax charge of $14 million (consisting of
$6.5 million in cost of products sold and $7.5 million in general
and administrative expenses) to conform Etec's accounting policies
to those of the Company; 2) $40 million of pre-tax, non-recurring
operating expenses incurred in connection with the acquisition of
Etec; and 3) $68 million of pre-tax, non-operating income related
to a previous litigation settlement with ASM International, B.V.
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS(b)
----------------------------------------------------------------------
October 31, April 30,
(In thousands) 1999 2000
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 868,121 $ 1,186,813
Short-term investments 1,951,254 2,187,115
Accounts receivable, net 1,268,146 1,650,661
Inventories 727,107 979,751
Deferred income taxes 341,668 331,266
Other current assets 154,424 153,486
----------- -----------
Total current assets 5,310,720 6,489,092
Property, plant and equipment, net 1,278,269 1,241,786
Other assets 425,521 398,956
----------- -----------
Total assets $ 7,014,510 $ 8,129,834
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 5,789 $ 26
Current portion of long-term debt 36,484 42,055
Accounts payable and accrued expenses 1,442,718 1,633,690
Income taxes payable 246,506 249,390
----------- -----------
Total current liabilities 1,731,497 1,925,161
Long-term debt 584,357 575,847
Deferred income taxes and other liabilities 123,398 135,806
----------- -----------
Total liabilities 2,439,252 2,636,814
----------- -----------
Stockholders' equity:
Common stock 7,932 8,076
Additional paid-in capital 1,443,723 1,572,793
Retained earnings 3,122,337 3,917,603
Accumulated other comprehensive
income/(loss) 1,266 (5,452)
----------- -----------
Total stockholders' equity 4,575,258 5,493,020
----------- -----------
Total liabilities and
stockholders' equity $ 7,014,510 $ 8,129,834
----------------------------------------------------------------------
Historical amounts have been restated to reflect the acquisition
of Etec, which was completed on March 29, 2000, and a two-for-one
stock split in the form of a 100 percent stock dividend, effective
March 15, 2000.
(b) Amounts as of April 30, 2000 are unaudited. Amounts as of October
31, 1999 are audited.
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