Applied Materials Announces Results for Third Fiscal Quarter 2001; New Orders of $1.21 Billion; Net Sales of $1.33 Billion.Business Editors/High-Tech 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)--Aug. 14, 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 third fiscal quarter ended July July: see month. 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 $1.33 billion, down 30 percent from $1.91 billion for the second fiscal quarter of 2001, and down 51 percent from $2.73 billion for the third 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 third fiscal quarter of 2001 was $41 million, or $0.05 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 85 percent from $269 million, or $0.32 per diluted share, for the second fiscal quarter of 2001, and down 93 percent from $604 million, or $0.70 per diluted share, for the third fiscal quarter of 2000. Reported net income for the third fiscal quarter of 2001 was $29 million, or $0.03 per diluted share, down 87 percent from $227 million, or $0.27 per diluted share, for the second fiscal quarter of 2001, and down 95 percent from $604 million, or $0.70 per diluted share, for the third fiscal quarter of 2000. New orders were $1.21 billion for the third fiscal quarter of 2001, decreasing 11 percent from $1.35 billion for the second fiscal quarter of 2001, and decreasing 63 percent from $3.28 billion for the third fiscal quarter of 2000. Regional distribution of new orders for the third 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. 44 percent, Japan 19 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 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
5 percent and Korea 3 percent. 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 third fiscal quarter of 2001 decreased to $2.65 billion, from $3.05 billion at the end of the second fiscal quarter of 2001. "The industry-wide decline in demand for most semiconductor chips continued to place downward pressure on new equipment orders during our 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. "The semiconductor industry is experiencing near-historic lows in factory utilization, resulting in further cutbacks in 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. . Despite reduced spending levels, customers continue to invest in our advanced solutions for copper, nanometer-sized geometries and 300mm wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. processing. Our leadership in these advanced technologies places Applied Materials in a strategic position when our customers move into volume production." Orders for ion implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. , process diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler and control and chemical vapor deposition Vapor deposition Production of a film of material often on a heated surface and in a vacuum. Vapor deposition technology is used in a large variety of applications. products were sequentially higher than the prior quarter. "Success in these and other products are a strong indicator that our continued investment in product development will provide significant future benefit," continued Morgan. Gross margin for the third fiscal quarter of 2001 was 40.0 percent, down from 44.8 percent for the second fiscal quarter of 2001, and down from 50.9 percent for the third 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 1.2 percent for the third fiscal quarter of 2001, compared to 17.4 percent for the second fiscal quarter of 2001 and 30.2 percent for the third fiscal quarter of 2000. Ongoing net income as a percentage of net sales was 3.1 percent for the third fiscal quarter of 2001, compared to 14.1 percent for the second fiscal quarter of 2001 and 22.1 percent for the third fiscal quarter of 2000. "Despite the current weakness in the market, we believe 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. outlook for the semiconductor industry remains strong. We will continue to reduce costs in this difficult environment as well as prepare the Company for the eventual upturn in business and implement critical new technologies for our customers," 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 the semiconductor industry's long-term outlook and the Company's strategic position in an upturn. 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 align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. its cost structure with 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 third fiscal quarter results, along with its outlook for the fourth 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 Nine Months Ended
----------------------------------------------------------------------
(In thousands, except July 30, July 29, July 30, July 29,
per share amounts) 2000 2001 2000 2001
----------------------------------------------------------------------
Net sales $2,732,028 $1,333,871 $6,644,249 $5,974,438
Cost of products sold 1,340,126 800,839 3,297,428 3,253,783
---------- ---------- ---------- ----------
Gross margin 1,391,902 533,032 3,346,821 2,720,655
Operating expenses:
Research, development
and engineering 303,946 277,333 780,509 926,251
Marketing and selling 128,426 125,979 340,718 389,188
General and
administrative 133,291 114,369 343,998 306,481
Non-recurring items(1) -- 14,150 40,000 72,564
---------- ---------- ---------- ----------
Income from operations 826,239 1,201 1,841,596 1,026,171
Non-recurring income -- -- 68,158 --
Interest expense 12,665 10,709 38,154 34,981
Interest income 48,970 54,153 127,962 166,699
---------- ---------- ---------- ----------
Income before
income taxes 862,544 44,645 1,999,562 1,157,889
Provision for
income taxes 258,763 16,120 599,807 344,527
---------- ---------- ---------- ----------
Net income $ 603,781 $ 28,525 $1,399,755 $ 813,362
---------- ---------- ---------- ----------
Earnings per share:
Basic $ 0.75 $ 0.04 $ 1.74 $ 1.00
Diluted $ 0.70 $ 0.03 $ 1.63 $ 0.96
Weighted average
number of shares:
Basic 809,345 814,920 804,532 812,219
Diluted 862,071 853,905 858,585 848,793
----------------------------------------------------------------------
(1) The Company's reported results of operations for the third fiscal
quarter of 2001 included a non-tax deductible charge of $10
million for acquired in-process research and development
associated with the acquisition of Oramir Semiconductor Equipment
Ltd., and a pre-tax restructuring charge of $4 million associated
with severance and benefits costs. These non-recurring charges
amounted to $0.02 per diluted share after tax for the third fiscal
quarter of 2001.
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS(2)
----------------------------------------------------------------------
October 29, July 29,
(In thousands) 2000 2001
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,647,604 $ 1,365,036
Short-term investments 2,580,435 3,315,886
Accounts receivable, net 2,351,379 1,315,800
Inventories 1,503,751 1,453,996
Deferred income taxes 549,108 545,598
Other current assets 206,870 244,711
----------- -----------
Total current assets 8,839,147 8,241,027
Property, plant and equipment, net 1,366,782 1,653,001
Other assets 339,801 339,258
----------- -----------
Total assets $10,545,730 $10,233,286
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 94,676 $ 99,993
Current portion of long-term debt 11,621 4,652
Accounts payable and
accrued expenses 2,268,608 1,502,940
Income taxes payable 384,806 138,689
----------- -----------
Total current liabilities 2,759,711 1,746,274
Long-term debt 573,126 565,893
Deferred income taxes and
other liabilities 108,545 126,505
----------- -----------
Total liabilities 3,441,382 2,438,672
----------- -----------
Stockholders' equity:
Common stock 8,125 8,163
Additional paid-in capital 1,930,212 1,827,316
Retained earnings 5,185,181 5,998,543
Accumulated other comprehensive
income/(loss) (19,170) (39,408)
----------- -----------
Total stockholders' equity 7,104,348 7,794,614
----------- -----------
Total liabilities and
stockholders' equity $10,545,730 $10,233,286
----------------------------------------------------------------------
(2) Amounts as of July 29, 2001 are unaudited. Amounts as of October
29, 2000 are from the October 29, 2000 audited financial
statements.
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