Applied Materials Announces Results for Second Fiscal Quarter 2001; New Orders of $1.35 Billion; Net Sales of $1.91 Billion.Business/Technology Editors 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 15, 2001 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 results for its second fiscal quarter ended April 29, 2001. 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 $1.91 billion, down 30 percent from $2.73 billion for the first fiscal quarter of 2001, and down 13 percent from $2.19 billion for the second fiscal quarter of 2000. Ongoing net income (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) for the second fiscal quarter of 2001 was $269 million, or $0.32 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, down 52 percent from $558 million, or $0.66 per diluted share, for the first fiscal quarter of 2001, and down 41 percent from $459 million, or $0.53 per diluted share, for the second fiscal quarter of 2000. New orders were $1.35 billion for the second fiscal quarter of 2001, decreasing 44 percent from $2.43 billion for the first fiscal quarter of 2001, and decreasing 54 percent from $2.93 billion for the second fiscal quarter of 2000. Regional distribution of new orders for the second fiscal quarter of 2001 was: 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. 24 percent, Japan 21 percent, 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 20 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 15 percent, Europe 14 percent and Korea 6 percent. Backlog Backlog The 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 2001 decreased to $3.05 billion, from $3.90 billion at the end of the first fiscal quarter of 2001. Gross margin for the second fiscal quarter of 2001 was 44.8 percent, down from 48.8 percent for the first fiscal quarter of 2001, and down from 50.1 percent for the second fiscal quarter of 2000. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. as a percentage of net sales, excluding one-time items, was 17.4 percent for the second fiscal quarter of 2001, compared to 27.5 percent for the first fiscal quarter of 2001 and 28.7 percent for the second fiscal quarter of 2000. Ongoing net income as a percentage of net sales was 14.1 percent for the second fiscal quarter of 2001, compared to 20.4 percent for the first fiscal quarter of 2001 and 21.0 percent for the second fiscal quarter of 2000. "Our business continued to experience a severe decline during the second quarter," said 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, "as decreased demand for electronic goods resulted in reduced capital equipment investment by semiconductor manufacturers. We have responded by taking actions to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our cost structure with lower business volumes. Despite cutbacks in semiconductor 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. , customers continue to invest in new technologies, such as copper, and the transition to 300mm wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. . In this difficult environment, we will continue to focus on supporting customers by providing the industry with the most comprehensive portfolio of leading-edge products." The Company's reported results of operations for the second fiscal quarter of 2001 included a pre-tax restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $58 million, or $0.05 per diluted share after tax, associated with the previously announced Voluntary Separation Plan, as well as other severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs and facilities consolidations, including the closure of Etec's Tucson, Arizona Tucson (pronounced /ˈtusɑn/, Spanish: Tucsón [tuk'son] printed circuit board equipment inspection business. "We remain confident in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth prospects of our business," said Morgan. "Applied Materials will again use this difficult period to better service our customers, invest in technology, introduce new products, strengthen our global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. and increase market share so that we will be in an even stronger position when the next upturn occurs." 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 customers' transitions to new technologies and long-term growth prospects. 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 by such statements. Such risks and uncertainties include, but are not limited to: the Company's ability to timely align its cost structure with prevailing market conditions; the length and severity of the current economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. ; changes in customer capacity requirements and demand for semiconductors; changes in the timing and amount of capital equipment purchases by customers; the successful and timely development of new markets, products, processes and services; and other risks described in Applied Materials' filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this press release. Applied Materials will be discussing its second fiscal quarter results, along with its outlook for the third fiscal quarter of 2001, on a conference call today beginning at 1:30 p.m. PST PST Paroxysmal supraventricular tachycardia, see there . A webcast of the conference call will be available on Applied Materials' Web site under the "Investors" section. Applied Materials (Nasdaq: 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 ), the largest supplier of products and services to the global semiconductor industry, is one of the world's leading information infrastructure providers. Applied Materials enables Information for Everyone(TM) by helping semiconductor manufacturers produce more powerful, portable and affordable chips. Applied Materials' Web site is http://www.appliedmaterials.com.
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
(In thousands, except April 30, April 29, April 30, April 29,
per share amounts) 2000 2001 2000 2001
----------------------------------------------------------------------
Net sales $2,190,031 $1,909,435 $3,912,221 $4,640,567
Cost of products sold 1,092,433 1,054,463 1,957,302 2,452,944
---------- ---------- ---------- ----------
Gross margin 1,097,598 854,972 1,954,919 2,187,623
Operating expenses:
Research, development
and engineering 253,283 312,606 476,563 648,918
Marketing and selling 111,580 119,752 212,292 263,209
General and
administrative 118,890 89,763 210,707 192,112
Non-recurring items(1) 40,000 58,414 40,000 58,414
---------- ---------- ---------- ----------
Income from operations 573,845 274,437 1,015,357 1,024,970
Non-recurring income 68,158 -- 68,158 --
Interest expense 13,259 11,897 25,489 24,272
Interest income 41,072 53,408 78,992 112,546
---------- ---------- ---------- ----------
Income before
income taxes 669,816 315,948 1,137,018 1,113,244
Provision for
income taxes 200,945 89,218 341,044 328,407
---------- ---------- ---------- ----------
Net income $ 468,871 $ 226,730 $ 795,974 $ 784,837
---------- ---------- ---------- ----------
Earnings per share:
Basic $ 0.58 $ 0.28 $ 0.99 $ 0.97
Diluted $ 0.54 $ 0.27 $ 0.93 $ 0.93
Weighted average
number of shares:
Basic 805,142 811,354 801,940 810,897
Diluted 861,200 847,912 856,666 846,419
----------------------------------------------------------------------
(1) The Company's reported results of operations for the second fiscal
quarter of 2001 included a pre-tax restructuring charge of $58
million, or $0.05 per diluted share after tax, associated with the
previously announced Voluntary Separation Plan, as well as other
severance costs and facilities consolidations, including the
closure of Etec's Tucson, Arizona printed circuit board equipment
inspection business.
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS(2)
October 29, April 29,
(In thousands) 2000 2001
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,647,604 $ 1,977,310
Short-term investments 2,580,435 2,563,077
Accounts receivable, net 2,351,379 1,614,911
Inventories 1,503,751 1,649,122
Deferred income taxes 549,108 543,405
Other current assets 206,870 305,611
------------ ------------
Total current assets 8,839,147 8,653,436
Property, plant and equipment, net 1,366,782 1,549,206
Other assets 339,801 343,924
------------ ------------
Total assets $ 10,545,730 $ 10,546,566
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 94,676 $ 112,900
Current portion of long-term debt 11,621 4,652
Accounts payable and
accrued expenses 2,268,608 1,798,452
Income taxes payable 384,806 187,257
------------ ------------
Total current liabilities 2,759,711 2,103,261
Long-term debt 573,126 566,427
Deferred income taxes
and other liabilities 108,545 124,744
------------ ------------
Total liabilities 3,441,382 2,794,432
------------ ------------
Stockholders' equity:
Common stock 8,125 8,131
Additional paid-in capital 1,930,212 1,779,956
Retained earnings 5,185,181 5,970,018
Accumulated other
comprehensive income/(loss) (19,170) (5,971)
------------ ------------
Total stockholders' equity 7,104,348 7,752,134
------------ ------------
Total liabilities and
stockholders' equity $ 10,545,730 $ 10,546,566
----------------------------------------------------------------------
(2) Amounts as of April 29, 2001 are unaudited. Amounts as of October
29, 2000 are from the October 29, 2000 audited financial
statements.
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