Dell Posts Record Operating Results in Fiscal Fourth Quarter; Servers, Storage Systems Drive 18-Percent Revenue Growth, 26-Percent Increase in EPS.To download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. high-resolution high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and , print-ready JPEG JPEG in full Joint Photographic Experts Group Standard computer file format for storing graphic images in a compressed form for general use. JPEG images are compressed using a mathematical algorithm. images, click on the thumbnail A miniature representation of a page or image that is used to identify a file by its contents. Clicking the thumbnail opens the file. Thumbnails are an option in file managers, such as Windows Explorer, and they are found in photo editing and graphics program to quickly browse multiple image above. WARNING: these images are very large (800K+) Click here for caption Business Editors/High-Tech Writers MULTIMEDIA AVAILABLE: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=4571658 ROUND ROCK, Texas--(BUSINESS WIRE)--Feb. 12, 2004 Dell's fiscal fourth-quarter 2004 was its best operating period ever. The company achieved record product shipments, revenue, operating and net income, and earnings per share. Dell (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DELL) continued its leading growth in enterprise computing Refers to information technology in the larger company. See enterprise data and enterprise networking. . Shipments of PowerEdge servers jumped 40 percent from the year-ago quarter, more than double the rate for the rest of the industry. Storage revenue was 47 percent higher. And company strength was global: product shipments were up more than 30 percent in Europe, the Middle East and Africa Europe, the Middle East and Africa, usually abbreviated to EMEA, is a regional designation used for government, marketing and business purposes. It is particularly common amongst North American based companies, who often divide their international operations into the and in Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). and Japan, and exceeded 20 percent in the Americas A·mer·i·cas , the See America. . Company revenue for the quarter ended Jan. 30 was $11.5 billion, 18 percent higher than a year ago. Net earnings were 29 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , up 26 percent. Full-year sales were $41.4 billion, 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. was $3.5 billion and per-share earnings were $1.01, all Dell records.
Fourth Quarter Full Year
----------------------- ------------------------
(in millions,
except share data) FY '04 FY '03 Change FY '04 FY '03 Change
Revenue $11,512 $9,735 18% $41,444 $35,404 17%
Operating Income $ 981 $ 819 20% $ 3,544 $ 2,844 25%
Net Income $ 749 $ 603 24% $ 2,645 $ 2,122 25%
Earnings Per Share $ 0.29 $ 0.23 26% $ 1.01 $ 0.80 26%
"Dell is alone in simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics providing customers great value, growing faster than the industry and earning a compelling profit for investors," said Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) Rollins Rol·lins , Theodore Walter Known as "Sonny." Born 1930. American jazz saxophonist and composer who originated the now standard practice of playing bop in three-quarter time. , the company's president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "Doing that requires a high-quality, low-cost business model and great discipline. We have both. "Much of the industry's quarterly growth was at the low ends of the desktop and notebook See notebook computer. 1. (computer) notebook - laptop computer. 2. (tool) notebook - Labtech Notebook. categories, which offer little if any profitability. Dell met its operating targets by pursuing profitable growth." Dell's profitability was up strongly from a year ago, both in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute and as a percent of revenue. Fourth-quarter operating income was $981 million, or 8.5 percent of revenue. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were 9.6 percent of revenue, matching a company low and down from 9.9 percent in the year-ago quarter. Below operating income, strong sales and earnings growth in markets outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. resulted in a lower effective tax rate. Industry-leading profits and efficient asset management helped Dell generate $1.1 billion in cash from operations. Total cash and investments at the end of the quarter were $11.9 billion, the highest in company history. Mr. Rollins said Dell expects first-quarter fiscal-2005 product shipments to rise more than 20 percent, ahead of anticipated industry growth. The resulting company volume should produce quarterly revenue of $11.2 billion, up about 17 percent from the prior year, and earnings per share of 28 cents, up 22 percent. Servers, Storage Systems Push Regional Strength With record sales in the fourth quarter, the company reached $8.5 billion in full-year revenue in Europe, the Middle East and Africa (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ), 23 percent more than in fiscal 2003. Quarterly company product shipments in the region rose 33 percent, highlighted by increases in the three largest national markets: the United Kingdom, France and Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . Without Dell, industry volumes were up 20 percent. Total product shipments in Asia-Pacific and Japan increased 34 percent, those for servers 36 percent. Absent Dell, the regional industry was up just 9 percent overall, 10 percent in servers. In China, already the region's second-largest national market, combined company volumes of servers and notebook computers A laptop computer that weighs in a range from five to seven pounds. The term originated when laptops were routinely more than 10 pounds, and those that became lighter were placed in a special "notebook" category. In practice, notebook computer and laptop computer are synonymous. were 47 percent higher. Dell product shipments in the Americas rose 22 percent, thanks to solid increases in all customer segments. Total volumes in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. were up 25 percent. Growth in systems sold to U.S. consumers was 26 percent, more than twice the average of other companies. Enterprise Categories Strong, Printers Exceed Expectations Dell's 40-percent increase in server shipments earned the company nearly two additional points of market share versus a year ago. In the United States, where Dell is the category leader, server volumes were up 49 percent, two-and-a-half times the rate of the rest of the industry. Sales from PowerVault and Dell/EMC The Dell/EMC brand is reserved for products that result from Dell's partnership with EMC Corporation. In some cases these are products that are jointly designed by Dell and EMC, while in other cases these are EMC products for which Dell will provide support. external storage systems are now at a $1.8 billion annual run rate. Revenue from software and peripheral (S&P) products rose 36 percent in the fourth quarter. Dell's own products -- including printers and accessories, LCD (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. television/computer monitors, handheld handheld: see personal digital assistant. devices and digital projectors See data projector. -- accounted for nearly half of S&P sales. Since their introduction in March, Dell has sold more than 2 million of its printers. Fourth-quarter volumes were nearly double those for Q3. Customer feedback shows exceptional satisfaction with Dell's unique ink-management process, which alerts users on their computer screens when ink is low, provides a link to purchase replacement cartridges
In January January: see month. , Dell announced it would expand its imaging line through new technology partnerships with Fuji Xerox Fuji Xerox Co., Ltd. (富士ゼロックス株式会社 Co. Ltd., Eastman Kodak (company) Kodak - The photographic company responsible for Photo CD. http://kodak.com/. Co. and Samsung Electronics Samsung Electronics (SEC, Hangul:삼성전자; KSE: 005930, KSE: 005935, LSE: SMSN, LSE: SMSD) is a South Korean multinational corporation and the world's largest and leading electronics and information technology company. Co. Ltd., and its successful existing relationship with Lexmark (Lexmark International, Inc., Lexington, KY, www.lexmark.com) A manufacturer of desktop and network printers that was spun off from IBM in 1991. For five years, IBM and Lexmark agreed not to compete with each other, and IBM continued to market printers to its own mainframe and International Inc. Shipments of Inspiron and Latitude latitude, angular distance of any point on the surface of the earth north or south of the equator. The equator is latitude 0°, and the North Pole and South Pole are latitudes 90°N and 90°S, respectively. notebook computers were up 40 percent, ahead of the rest of the industry. Volumes of Dimension and OptiPlex desktop computers rose 21 percent, compared with an average 8 percent for other companies. About Dell Dell Inc. (NASDAQ:DELL) is a premier provider of products and services required for customers worldwide to build their information-technology and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the infrastructures. Company revenue for the past year totaled $41.4 billion. Dell, through its direct business model, designs, manufactures and customizes products and services to customer requirements, and offers an extensive selection of software and peripherals. Information on Dell and its products can be obtained at www.dell.com. Dell, PowerEdge, PowerVault, Inspiron, Latitude, Dimension and OptiPlex are trademarks of Dell Inc. EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. is a registered trademark of EMC Corp. Market comparisons based on IDC data. Dell disclaims any proprietary interest in the marks and names of others. Special note: Statements in this press release that relate to future results and events (including statements about fiscal first-quarter financial and operating performance) are based on the company's current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including general economic and business conditions; the level of demand for the company's products and services; the level and intensity of competition in the technology industry and the pricing pressures that have resulted; the company's ability to timely and effectively manage periodic product transitions, as well as component availability and cost; the company's ability to develop new products based on new or evolving technology and the market's acceptance of those products; the company's ability to manage its inventory levels to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. excess inventory, declining inventory values and obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. ; the product, customer and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. sales mix sales mix See product mix. of any particular period; the company's ability to effectively manage its operating costs operating costs npl → gastos mpl operacionales ; and the effect of armed hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. , terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. or public health issues on the economy generally, on the level of demand for the company's products and services and on the company's ability to manage its supply and delivery logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. in such an environment. Additional discussion of these and other factors affecting the company's business and prospects is contained in the company's periodic filings with the Securities and Exchange Commission. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statements of income, financial position and cash flows follow.
DELL INC.
Condensed Consolidated Statement
of Operations and Related Financial Highlights
(in millions, except per share data)
(unaudited)
Three Months Ended
-------------------------- % Growth Rates
Jan. 30, Oct. 31, Jan. 31, -----------------------
2004 2003 2003 Sequential Yr. to Yr.
-------- -------- -------- ---------- -----------
Net revenue $11,512 $10,622 $9,735 8.4% 18.2%
Cost of revenue 9,421 8,687 7,954 8.5% 18.4%
-------- -------- --------
Gross margin 2,091 1,935 1,781 8.1% 17.4%
Selling, general
and
administrative 991 905 845 9.5% 17.3%
Research,
development and
engineering 119 118 117 1.0% 1.7%
-------- -------- --------
Total operating
expenses 1,110 1,023 962 8.4% 15.4%
-------- -------- --------
Operating income 981 912 819 7.6% 19.7%
Investment and
other income, net 49 41 42 19.4% 17.4%
-------- -------- --------
Income before
income taxes 1,030 953 861 8.1% 19.6%
Income tax
provision 281 276 258 1.8% 9.0%
-------- -------- --------
Net income $749 $677 $603 10.7% 24.2%
======== ======== ========
Earnings per
common share:
Basic $0.29 $0.26 $0.23
======== ======== ========
Diluted $0.29 $0.26 $0.23
======== ======== ========
Weighted average
shares
outstanding:
Basic 2,557 2,563 2,576
Diluted 2,616 2,623 2,621
Percentage of
Total Net
Revenue:
-------------
Gross margin 18.2% 18.2% 18.3%
Selling, general
and
administrative 8.6% 8.5% 8.7%
Research,
development and
engineering 1.0% 1.1% 1.2%
Total operating
expenses 9.6% 9.6% 9.9%
Operating income 8.5% 8.6% 8.4%
Income before
income taxes 8.9% 9.0% 8.8%
Net income 6.5% 6.4% 6.2%
Income tax rate 27.3% 29.0% 30.0%
Net Revenue by
Geographic
Region:
--------------
Percentage of
Total Net Revenue
------------------
Americas 67% 71% 69%
Europe 22% 19% 21%
Asia Pacific --
Japan 11% 10% 10%
Net Revenue by
Product Line:
--------------
Percentage of
Total Net Revenue
------------------
Desktops 52% 50% 55%
Notebooks 27% 28% 26%
Enterprise 21% 22% 19%
Note: Percentage growth rates and ratios are calculated based on
underlying data in thousands.
DELL INC.
Condensed Consolidated Statement
of Operations and Related Financial Highlights
(in millions, except per share data)
(unaudited)
Year Ended % Growth
---------------------- Rates
Jan. 30, Jan. 31, ----------
2004 2003 Yr. to Yr.
---------- ---------- ----------
Net revenue $41,444 $35,404 17.1%
Cost of revenue 33,892 29,055 16.6%
---------- ----------
Gross margin 7,552 6,349 18.9%
Selling, general and
administrative 3,544 3,050 16.2%
Research, development and
engineering 464 455 2.0%
---------- ----------
Total operating expenses 4,008 3,505 14.4%
---------- ----------
Operating income 3,544 2,844 24.6%
Investment and other income, net 180 183 (1.7%)
---------- ----------
Income before income taxes 3,724 3,027 23.0%
Income tax provision 1,079 905 19.1%
---------- ----------
Net income $2,645 $2,122 24.6%
========== ==========
Earnings per common share:
Basic $1.03 $0.82
========== ==========
Diluted $1.01 $0.80
========== ==========
Weighted average shares
outstanding:
Basic 2,565 2,584
Diluted 2,619 2,644
Percentage of Total Net Revenue:
--------------------------------
Gross margin 18.2% 17.9%
Selling, general and
administrative 8.6% 8.6%
Research, development and
engineering 1.1% 1.3%
Total operating expenses 9.7% 9.9%
Operating income 8.6% 8.0%
Income before income taxes 9.0% 8.6%
Net income 6.4% 6.0%
Income tax rate 29.0% 29.9%
Net Revenue by Geographic Region:
---------------------------------
Percentage of Total Net Revenue
-------------------------------
Americas 69% 71%
Europe 21% 19%
Asia Pacific -- Japan 10% 10%
Net Revenue by Product Line:
----------------------------
Percentage of Total Net Revenue
-------------------------------
Desktops 51% 53%
Notebooks 27% 27%
Enterprise 22% 20%
Note: Percentage growth rates and ratios are calculated based on
underlying data in thousands.
DELL INC.
Condensed Consolidated Statement
of Financial Position and Related Financial Highlights
(in millions, except for "Ratios" and "Other information")
(unaudited)
Jan. 30, Oct. 31, Jan. 31,
2004 2003 2003
-------- -------- --------
Assets:
-------
Current assets:
Cash and cash equivalents $4,317 $4,356 $4,232
Short-term investments 835 626 406
Accounts receivable, net 3,635 3,142 2,586
Inventories 327 358 306
Other 1,519 1,599 1,394
-------- -------- --------
Total current assets 10,633 10,081 8,924
Property, plant and equipment, net 1,517 1,498 913
Investments 6,770 6,050 5,267
Other non-current assets 391 496 366
-------- -------- --------
Total assets $19,311 $18,125 $15,470
======== ======== ========
Liabilities and Stockholders' Equity:
-------------------------------------
Current liabilities:
Accounts payable $7,316 $6,851 $5,989
Accrued and other 3,580 3,350 2,944
-------- -------- --------
Total current liabilities 10,896 10,201 8,933
Long-term debt 505 506 506
Other non-current liabilities 1,630 1,540 1,158
-------- -------- --------
Total liabilities 13,031 12,247 10,597
Stockholders' equity 6,280 5,878 4,873
-------- -------- --------
Total liabilities and stockholders' equity $19,311 $18,125 $15,470
======== ======== ========
Ratios:
-------
Quick ratio 0.81 0.80 0.81
Days supply in inventory 3 4 3
Days of sales outstanding(a) 31 31 28
Days in accounts payable 70 71 68
-------- -------- --------
Cash conversion cycle (36) (36) (37)
Other Information:
------------------
Headcount (approximate) 46,000 44,300 39,100
Average total revenue/unit (approximate) $1,540 $1,620 $1,640
Note: Ratios are calculated based on underlying data in thousands.
(a) Days of sales outstanding include the effect of product costs
related to in-transit customer shipments that are classified in
other current assets. At Jan. 30, 2004, Oct. 31, 2003, and Jan.
31, 2003, days of sales outstanding included days of sales in
accounts receivable and days of in-transit customer shipments of
28 and 3 days; 27 and 4 days; and 24 and 4 days, respectively.
DELL INC.
Condensed Consolidated Statement of Cash Flows
(in millions)
(unaudited)
Three Months Twelve Months
Ended Ended
-----------------------------
Jan. 30, 2004
-----------------------------
Cash flows from operating activities:
Net income $749 $2,645
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 76 263
Tax benefits from employee stock plans 74 181
Other, primarily effects of exchange
rate changes on monetary assets and
liabilities denominated in foreign
currencies (212) (564)
Changes in:
Operating working capital 306 872
Non-current assets and liabilities 65 273
------------- -------------
Net cash provided by operating
activities 1,058 3,670
Cash flows from investing activities:
Investments:
Purchases (3,607) (12,099)
Maturities and sales 2,695 10,078
Cash assumed in consolidation of Dell
Financial Services L.P. -- 172
Capital expenditures (62) (329)
Purchase of assets held in master lease
facilities -- (636)
------------- -------------
Net cash used in investing activities (974) (2,814)
Cash flows from financing activities:
Purchase of common stock (500) (2,000)
Issuance of common stock under employee
plans 120 628
Other -- (11)
------------- -------------
Net cash used in financing activities (380) (1,383)
Effect of exchange rate changes on cash
and cash equivalents 257 612
------------- -------------
Net (decrease)/increase in cash and cash
equivalents (39) 85
Cash and cash equivalents at beginning of
period 4,356 4,232
------------- -------------
Cash and cash equivalents at end of
period $4,317 $4,317
============= =============
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