- Q3 orders of $2.89 billion up
17% year over year, with record Silicon Systems orders
- Q3 net sales of $2.49
billion up 10% year over year led by growth in Silicon Systems and
Services
- Q3 non-GAAP adjusted EPS of
$0.33 up 18% year over year; GAAP EPS of $0.27 up 13% year over
year
SANTA CLARA, Calif., Aug. 13, 2015 - Applied
Materials, Inc. (NASDAQ:AMAT), the global leader in materials
engineering solutions for the semiconductor, display and solar
industries, today reported results for its third quarter ended July
26, 2015.
Third quarter orders were $2.89 billion, up 15
percent sequentially and up 17 percent year over year. Net sales
were $2.49 billion, up 2 percent sequentially and up 10 percent
year over year.
On a non-GAAP adjusted basis, the company reported
gross margin of 43.9 percent, operating margin of 20.8 percent, and
net income of $410 million or $0.33 per diluted share. The company
recorded GAAP gross margin of 40.9 percent, operating margin of
15.9 percent, and net income of $329 million or $0.27 per diluted
share. The GAAP results included the effect of cost reduction
actions in the solar business consisting of $34 million of
inventory charges and $17 million of restructuring and asset
impairment charges.
The company generated $334 million in cash from
operations, paid dividends of $123 million and used $625 million to
repurchase 32 million shares of common stock.
"Applied is focused on profitable growth and the
results show in our third-quarter performance when we delivered our
highest ever 300mm semiconductor equipment orders and record
revenue in services," said Gary Dickerson, president and CEO. "Our
highly differentiated materials engineering products help customers
accelerate major technology inflections including 3D NAND, and this
quarter we generated the highest flash memory orders in our
history."
Quarterly Results Summary
|
|
|
|
|
|
|
|
Change |
|
|
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
|
Q3 FY2015
vs.
Q2 FY2015 |
|
Q3 FY2015
vs.
Q3 FY2014 |
|
|
(In millions,
except per share amounts and percentages) |
New
orders |
|
$2,892 |
|
$2,515 |
|
$2,479 |
|
15% |
|
17% |
Net
sales |
|
$2,490 |
|
$2,442 |
|
$2,265 |
|
2% |
|
10% |
Gross
margin |
|
40.9% |
|
41.6% |
|
43.8% |
|
(0.7) points |
|
(2.9) points |
Operating
margin |
|
15.9% |
|
17.0% |
|
17.3% |
|
(1.1) points |
|
(1.4) points |
Net
income |
|
$329 |
|
$364 |
|
$301 |
|
(10)% |
|
9% |
Diluted
earnings per share (EPS) |
|
$0.27 |
|
$0.29 |
|
$0.24 |
|
(7)% |
|
13% |
|
|
|
|
|
|
|
|
Change |
Non-GAAP Adjusted Results |
|
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
|
Q3 FY2015
vs.
Q2 FY2015 |
|
Q3 FY2015
vs.
Q3 FY2014 |
|
|
(In millions,
except per share amounts and percentages) |
Non-GAAP
adjusted gross margin |
|
43.9% |
|
43.2% |
|
45.5% |
|
0.7 points |
|
(1.6) points |
Non-GAAP
adjusted operating margin |
|
20.8% |
|
19.5% |
|
21.1% |
|
1.3 points |
|
(0.3) points |
Non-GAAP
adjusted net income |
|
$410 |
|
$362 |
|
$349 |
|
13% |
|
17% |
Non-GAAP
adjusted diluted EPS |
|
$0.33 |
|
$0.29 |
|
$0.28 |
|
14% |
|
18% |
|
|
|
|
|
|
|
|
|
|
|
Applied's non-GAAP adjusted results exclude the
impact of the following, where applicable: certain items related to
mergers and acquisitions; restructuring charges and any associated
adjustments; impairments of assets, or investments; gain or loss on
sale of strategic investments; and certain discrete adjustments and
tax items. A reconciliation of the GAAP and non-GAAP adjusted
results is provided in the financial tables included in this
release. See also "Use of Non-GAAP Adjusted Financial Measures"
section.
Business Outlook
For the fourth quarter of fiscal 2015, Applied
expects net sales to be in the range of flat to down 7 percent from
the previous quarter, and non-GAAP adjusted diluted EPS is expected
to be in the range of $0.27 to $0.31.
This outlook excludes known charges related to
completed acquisitions of $0.04 per share and does not exclude
other non-GAAP adjustments that may arise subsequent to this
release.
Third Quarter Reportable Segment
Information
Silicon Systems
Group |
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
|
(In
millions, except percentages) |
New
orders |
$ |
2,007 |
|
|
$ |
1,704 |
|
|
$ |
1,565 |
|
Foundry |
32 |
% |
|
36 |
% |
|
50 |
% |
DRAM |
18 |
% |
|
31 |
% |
|
14 |
% |
Flash |
39 |
% |
|
21 |
% |
|
22 |
% |
Logic and
other |
11 |
% |
|
12 |
% |
|
14 |
% |
Net
sales |
1,635 |
|
|
1,560 |
|
|
1,476 |
|
Operating
income |
411 |
|
|
374 |
|
|
381 |
|
Operating
margin |
25.1 |
% |
|
24.0 |
% |
|
25.8 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
Non-GAAP
adjusted operating income |
$ |
455 |
|
|
$ |
418 |
|
|
$ |
423 |
|
Non-GAAP
adjusted operating margin |
27.8 |
% |
|
26.8 |
% |
|
28.7 |
% |
Applied Global
Services
|
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
|
(In
millions, except percentages) |
New
orders |
$ |
561 |
|
|
$ |
641 |
|
|
$ |
552 |
|
Net
sales |
665 |
|
|
646 |
|
|
567 |
|
Operating
income |
170 |
|
|
170 |
|
|
154 |
|
Operating
margin |
25.6 |
% |
|
26.3 |
% |
|
27.2 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
Non-GAAP
adjusted operating income |
$ |
173 |
|
|
$ |
170 |
|
|
$ |
154 |
|
Non-GAAP
adjusted operating margin |
26.0 |
% |
|
26.3 |
% |
|
27.2 |
% |
Display |
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
|
(In
millions, except percentages) |
New
orders |
$ |
295 |
|
|
$ |
120 |
|
|
$ |
296 |
|
Net
sales |
151 |
|
|
163 |
|
|
119 |
|
Operating
income |
25 |
|
|
40 |
|
|
25 |
|
Operating
margin |
16.6 |
% |
|
24.5 |
% |
|
21.0 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
Non-GAAP
adjusted operating income |
$ |
26 |
|
|
$ |
40 |
|
|
$ |
26 |
|
Non-GAAP
adjusted operating margin |
17.2 |
% |
|
24.5 |
% |
|
21.8 |
% |
Energy and Environmental
Solutions |
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
|
(In
millions, except percentages) |
New
orders |
$ |
29 |
|
|
$ |
50 |
|
|
$ |
66 |
|
Net
sales |
39 |
|
|
73 |
|
|
103 |
|
Operating
income (loss) |
(52 |
) |
|
(5 |
) |
|
24 |
|
Operating
margin |
(133.3 |
)% |
|
(6.8 |
)% |
|
23.3 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
Non-GAAP
adjusted operating income (loss) |
$ |
(2 |
) |
|
$ |
(4 |
) |
|
$ |
25 |
|
Non-GAAP
adjusted operating margin |
(5.1 |
)% |
|
(5.5 |
)% |
|
24.3 |
% |
Backlog Information
Applied's backlog grew 11 percent
sequentially to $3.10 billion and included negative adjustments of
$84 million, primarily consisting of order cancellations from a
foundry customer. Backlog composition by reportable segment was as
follows:
Silicon
Systems Group |
57 |
% |
Applied
Global Services |
22 |
% |
Display |
17 |
% |
Energy
and Environmental Solutions |
4 |
% |
Use of Non-GAAP Adjusted
Financial Measures
Management uses non-GAAP adjusted 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 at
www.appliedmaterials.com. A replay will be available on the website
beginning at 5:00 p.m. Pacific Time today.
Forward-Looking
Statements
This press release contains forward-looking
statements, including those regarding anticipated growth and trends
in our businesses and markets, industry outlooks, technology
transitions, our financial performance and market share positions,
our business outlook for the fourth quarter of fiscal 2015, and
other statements that are not historical facts. These statements
and their underlying assumptions are subject to risks and
uncertainties and are not guarantees of future performance. Factors
that could cause actual results to differ materially from those
expressed or implied by such statements include, without
limitation: the level of demand for our products; global economic
and industry conditions; consumer demand for electronic products;
the demand for semiconductors; customers' technology and capacity
requirements; the introduction of new and innovative technologies,
and the timing of technology transitions; our ability to develop,
deliver and support new products and technologies; the concentrated
nature of our customer base; our ability to expand our
current markets, increase market share and develop new markets;
market acceptance of existing and newly developed products; our
ability to obtain and protect intellectual property rights in key
technologies; our ability to achieve the objectives of operational
and strategic initiatives, align our resources and cost structure
with business conditions, and attract, motivate and retain key
employees; the variability of operating expenses and results among
products and segments, and our ability to accurately forecast
future results, market conditions, customer requirements and
business needs; and other risks and uncertainties described in our
SEC filings, including our most recent Forms 10-Q and 8-K. All
forward-looking statements are based on management's current
estimates, projections and assumptions, and we assume no obligation
to update them.
About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the
global leader in materials engineering solutions for the
semiconductor, flat panel display and solar photovoltaic
industries. Our technologies help make innovations like
smartphones, flat screen TVs and solar panels more affordable and
accessible to consumers and businesses around the world. Learn more
at www.appliedmaterials.com.
Contact:
Kevin Winston (editorial/media)
408.235.4498
Michael Sullivan (financial community) 408.986.7977
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
|
|
Three Months Ended |
|
Nine Months Ended |
(In millions, except per share amounts) |
|
July 26,
2015 |
|
April 26,
2015 |
|
July 27,
2014 |
|
July 26,
2015 |
|
July 27,
2014 |
Net
sales |
|
$ |
2,490 |
|
|
$ |
2,442 |
|
|
$ |
2,265 |
|
|
$ |
7,291 |
|
|
$ |
6,808 |
|
Cost of
products sold |
|
1,472 |
|
|
1,426 |
|
|
1,273 |
|
|
4,298 |
|
|
3,924 |
|
Gross
profit |
|
1,018 |
|
|
1,016 |
|
|
992 |
|
|
2,993 |
|
|
2,884 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research,
development and engineering |
|
372 |
|
|
365 |
|
|
357 |
|
|
1,088 |
|
|
1,068 |
|
Marketing
and selling |
|
112 |
|
|
109 |
|
|
108 |
|
|
332 |
|
|
324 |
|
General
and administrative |
|
135 |
|
|
140 |
|
|
126 |
|
|
392 |
|
|
375 |
|
Loss
(gain) on derivatives associated with terminated business
combination |
|
3 |
|
|
(14 |
) |
|
10 |
|
|
(89 |
) |
|
9 |
|
Total
operating expenses |
|
622 |
|
|
600 |
|
|
601 |
|
|
1,723 |
|
|
1,776 |
|
Income
from operations |
|
396 |
|
|
416 |
|
|
391 |
|
|
1,270 |
|
|
1,108 |
|
Interest
expense |
|
24 |
|
|
24 |
|
|
24 |
|
|
71 |
|
|
72 |
|
Interest
income and other income (loss), net |
|
3 |
|
|
(3 |
) |
|
3 |
|
|
2 |
|
|
14 |
|
Income
before income taxes |
|
375 |
|
|
389 |
|
|
370 |
|
|
1,201 |
|
|
1,050 |
|
Provision
for income taxes |
|
46 |
|
|
25 |
|
|
69 |
|
|
160 |
|
|
234 |
|
Net
income |
|
$ |
329 |
|
|
$ |
364 |
|
|
$ |
301 |
|
|
$ |
1,041 |
|
|
$ |
816 |
|
Earnings
per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.27 |
|
|
$ |
0.30 |
|
|
$ |
0.25 |
|
|
$ |
0.85 |
|
|
$ |
0.67 |
|
Diluted |
|
$ |
0.27 |
|
|
$ |
0.29 |
|
|
$ |
0.24 |
|
|
$ |
0.84 |
|
|
$ |
0.66 |
|
Weighted
average number of shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
1,221 |
|
|
1,230 |
|
|
1,218 |
|
|
1,225 |
|
|
1,213 |
|
Diluted |
|
1,231 |
|
|
1,241 |
|
|
1,233 |
|
|
1,238 |
|
|
1,230 |
|
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions) |
|
July 26,
2015 |
|
April 26,
2015 |
|
October 26,
2014 |
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,574 |
|
|
$ |
3,067 |
|
|
$ |
3,002 |
|
Short-term investments |
|
169 |
|
|
163 |
|
|
160 |
|
Accounts
receivable, net |
|
1,991 |
|
|
1,798 |
|
|
1,670 |
|
Inventories |
|
1,739 |
|
|
1,713 |
|
|
1,567 |
|
Other
current assets |
|
570 |
|
|
706 |
|
|
568 |
|
Total
current assets |
|
7,043 |
|
|
7,447 |
|
|
6,967 |
|
Long-term
investments |
|
958 |
|
|
936 |
|
|
935 |
|
Property,
plant and equipment, net |
|
882 |
|
|
887 |
|
|
861 |
|
Goodwill |
|
3,304 |
|
|
3,304 |
|
|
3,304 |
|
Purchased
technology and other intangible assets, net |
|
811 |
|
|
860 |
|
|
951 |
|
Deferred
income taxes and other assets |
|
155 |
|
|
153 |
|
|
156 |
|
Total
assets |
|
$ |
13,153 |
|
|
$ |
13,587 |
|
|
$ |
13,174 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable, notes payable and accrued expenses |
|
$ |
2,162 |
|
|
$ |
1,822 |
|
|
$ |
1,883 |
|
Customer
deposits and deferred revenue |
|
858 |
|
|
874 |
|
|
940 |
|
Total
current liabilities |
|
3,020 |
|
|
2,696 |
|
|
2,823 |
|
Long-term
debt |
|
1,547 |
|
|
1,947 |
|
|
1,947 |
|
Other
liabilities |
|
609 |
|
|
593 |
|
|
536 |
|
Total
liabilities |
|
5,176 |
|
|
5,236 |
|
|
5,306 |
|
Total
stockholders' equity |
|
7,977 |
|
|
8,351 |
|
|
7,868 |
|
Total
liabilities and stockholders' equity |
|
$ |
13,153 |
|
|
$ |
13,587 |
|
|
$ |
13,174 |
|
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions) |
Three Months Ended |
|
Nine Months Ended |
July 26,
2015 |
|
April 26,
2015 |
|
July 27,
2014 |
July 26,
2015 |
|
July 27,
2014 |
Cash
flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
329 |
|
|
$ |
364 |
|
|
$ |
301 |
|
|
$ |
1,041 |
|
|
$ |
816 |
|
Adjustments required to reconcile net income
to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
93 |
|
|
90 |
|
|
93 |
|
|
275 |
|
|
281 |
|
Share-based compensation |
46 |
|
|
47 |
|
|
44 |
|
|
141 |
|
|
132 |
|
Excess
tax benefits from share-based compensation |
(3 |
) |
|
(12 |
) |
|
(1 |
) |
|
(54 |
) |
|
(26 |
) |
Other |
61 |
|
|
(8 |
) |
|
49 |
|
|
89 |
|
|
70 |
|
Net
change in operating assets and liabilities |
(192 |
) |
|
(183 |
) |
|
98 |
|
|
(800 |
) |
|
120 |
|
Cash
provided by operating activities |
334 |
|
|
298 |
|
|
584 |
|
|
692 |
|
|
1,393 |
|
Cash
flows from investing activities: |
|
|
|
|
|
|
|
|
|
Capital
expenditures |
(51 |
) |
|
(64 |
) |
|
(65 |
) |
|
(164 |
) |
|
(178 |
) |
Proceeds
from sales and maturities of investments |
583 |
|
|
177 |
|
|
181 |
|
|
900 |
|
|
702 |
|
Purchases
of investments |
(616 |
) |
|
(203 |
) |
|
(308 |
) |
|
(960 |
) |
|
(632 |
) |
Cash used
in investing activities |
(84 |
) |
|
(90 |
) |
|
(192 |
) |
|
(224 |
) |
|
(108 |
) |
Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds
from common stock issuances and others, net |
1 |
|
|
42 |
|
|
1 |
|
|
43 |
|
|
67 |
|
Common
stock repurchases |
(625 |
) |
|
- |
|
|
- |
|
|
(625 |
) |
|
- |
|
Excess
tax benefits from share-based compensation |
3 |
|
|
12 |
|
|
1 |
|
|
54 |
|
|
26 |
|
Payments
of dividends to stockholders |
(123 |
) |
|
(123 |
) |
|
(121 |
) |
|
(368 |
) |
|
(363 |
) |
Cash used
in financing activities |
(744 |
) |
|
(69 |
) |
|
(119 |
) |
|
(896 |
) |
|
(270 |
) |
Effect of
exchange rate changes on cash and cash equivalents |
1 |
|
|
(1 |
) |
|
- |
|
|
- |
|
|
- |
|
Increase
(decrease) in cash and cash equivalents |
(493 |
) |
|
138 |
|
|
273 |
|
|
(428 |
) |
|
1,015 |
|
Cash and
cash equivalents - beginning of period |
3,067 |
|
|
2,929 |
|
|
2,453 |
|
|
3,002 |
|
|
1,711 |
|
Cash and
cash equivalents - end of period |
$ |
2,574 |
|
|
$ |
3,067 |
|
|
$ |
2,726 |
|
|
$ |
2,574 |
|
|
$ |
2,726 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
Cash
payments for income taxes |
$ |
51 |
|
|
$ |
118 |
|
|
$ |
49 |
|
|
$ |
258 |
|
|
$ |
108 |
|
Cash
refunds from income taxes |
$ |
5 |
|
|
$ |
2 |
|
|
$ |
21 |
|
|
$ |
10 |
|
|
$ |
33 |
|
Cash
payments for interest |
$ |
39 |
|
|
$ |
7 |
|
|
$ |
39 |
|
|
$ |
85 |
|
|
$ |
85 |
|
APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Corporate Unallocated
Expenses
(In millions) |
|
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
Share-based compensation |
|
$ |
46 |
|
|
$ |
47 |
|
|
$ |
44 |
|
Certain items associated with terminated business combination |
|
1 |
|
|
29 |
|
|
23 |
|
Loss
(gain) on derivative associated with terminated business
combination, net |
|
3 |
|
|
(14 |
) |
|
10 |
|
Other
unallocated expenses |
|
108 |
|
|
101 |
|
|
116 |
|
Total
corporate |
|
$ |
158 |
|
|
$ |
163 |
|
|
$ |
193 |
|
Additional Information
|
|
Q3 FY2015 |
|
Q2 FY2015 |
|
Q3 FY2014 |
New
Orders and Net Sales by Geography |
|
|
|
|
|
|
|
|
|
|
|
|
(In $ millions) |
|
New
Orders |
|
Net
Sales |
|
New
Orders |
|
Net
Sales |
|
New
Orders |
|
Net
Sales |
United
States |
|
262 |
|
|
650 |
|
|
368 |
|
|
632 |
|
|
680 |
|
|
683 |
|
% of
Total |
|
9 |
% |
|
26 |
% |
|
15 |
% |
|
26 |
% |
|
27 |
% |
|
30 |
% |
Europe |
|
142 |
|
|
134 |
|
|
131 |
|
|
150 |
|
|
146 |
|
|
160 |
|
% of
Total |
|
5 |
% |
|
6 |
% |
|
5 |
% |
|
6 |
% |
|
6 |
% |
|
7 |
% |
Japan |
|
727 |
|
|
271 |
|
|
365 |
|
|
257 |
|
|
378 |
|
|
229 |
|
% of
Total |
|
25 |
% |
|
11 |
% |
|
15 |
% |
|
10 |
% |
|
15 |
% |
|
10 |
% |
Korea |
|
349 |
|
|
308 |
|
|
607 |
|
|
449 |
|
|
217 |
|
|
226 |
|
% of
Total |
|
12 |
% |
|
12 |
% |
|
24 |
% |
|
18 |
% |
|
9 |
% |
|
10 |
% |
Taiwan |
|
828 |
|
|
751 |
|
|
589 |
|
|
455 |
|
|
497 |
|
|
598 |
|
% of
Total |
|
29 |
% |
|
30 |
% |
|
23 |
% |
|
19 |
% |
|
20 |
% |
|
26 |
% |
Southeast
Asia |
|
142 |
|
|
94 |
|
|
103 |
|
|
87 |
|
|
177 |
|
|
81 |
|
% of
Total |
|
5 |
% |
|
4 |
% |
|
4 |
% |
|
4 |
% |
|
7 |
% |
|
4 |
% |
China |
|
442 |
|
|
282 |
|
|
352 |
|
|
412 |
|
|
384 |
|
|
288 |
|
% of
Total |
|
15 |
% |
|
11 |
% |
|
14 |
% |
|
17 |
% |
|
16 |
% |
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees (In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Regular
Full Time |
|
14.5 |
|
|
14.3 |
|
|
13.8 |
|
APPLIED MATERIALS,
INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
|
Three Months Ended |
|
Nine Months Ended |
(In millions, except percentages) |
|
July 26,
2015 |
|
April 26,
2015 |
|
July 27,
2014 |
|
July 26,
2015 |
|
July 27,
2014 |
Non-GAAP
Adjusted Gross Profit |
|
|
|
|
|
|
|
|
|
|
Reported
gross profit - GAAP basis |
|
$ |
1,018 |
|
|
$ |
1,016 |
|
|
$ |
992 |
|
|
$ |
2,993 |
|
|
$ |
2,884 |
|
Certain
items associated with acquisitions1 |
|
41 |
|
|
39 |
|
|
38 |
|
|
120 |
|
|
116 |
|
Inventory
charges related to restructuring3 |
|
34 |
|
|
- |
|
|
- |
|
|
34 |
|
|
- |
|
Acquisition integration costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
Non-GAAP
adjusted gross profit |
|
$ |
1,093 |
|
|
$ |
1,055 |
|
|
$ |
1,030 |
|
|
$ |
3,147 |
|
|
$ |
3,001 |
|
Non-GAAP
adjusted gross margin |
|
43.9 |
% |
|
43.2 |
% |
|
45.5 |
% |
|
43.2 |
% |
|
44.1 |
% |
Non-GAAP
Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
396 |
|
|
$ |
416 |
|
|
$ |
391 |
|
|
$ |
1,270 |
|
|
$ |
1,108 |
|
Certain
items associated with acquisitions1 |
|
47 |
|
|
45 |
|
|
44 |
|
|
138 |
|
|
135 |
|
Acquisition integration costs |
|
1 |
|
|
- |
|
|
9 |
|
|
2 |
|
|
30 |
|
Loss
(gain) on derivatives associated with terminated business
combination, net |
|
3 |
|
|
(14 |
) |
|
10 |
|
|
(89 |
) |
|
9 |
|
Certain
items associated with terminated business combination2 |
|
1 |
|
|
29 |
|
|
23 |
|
|
50 |
|
|
50 |
|
Restructuring, inventory charges and asset impairments3,
4 |
|
50 |
|
|
- |
|
|
- |
|
|
50 |
|
|
7 |
|
Foreign
exchange loss due to functional currency change5 |
|
19 |
|
|
- |
|
|
- |
|
|
19 |
|
|
- |
|
Non-GAAP
adjusted operating income |
|
$ |
517 |
|
|
$ |
476 |
|
|
$ |
477 |
|
|
$ |
1,440 |
|
|
$ |
1,339 |
|
Non-GAAP
adjusted operating margin |
|
20.8 |
% |
|
19.5 |
% |
|
21.1 |
% |
|
19.8 |
% |
|
19.7 |
% |
Non-GAAP
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
Reported
net income - GAAP basis6 |
|
$ |
329 |
|
|
$ |
364 |
|
|
$ |
301 |
|
|
$ |
1,041 |
|
|
$ |
816 |
|
Certain
items associated with acquisitions1 |
|
47 |
|
|
45 |
|
|
44 |
|
|
138 |
|
|
135 |
|
Acquisition integration costs |
|
1 |
|
|
- |
|
|
9 |
|
|
2 |
|
|
30 |
|
Loss
(gain) on derivatives associated with terminated business
combination, net |
|
3 |
|
|
(14 |
) |
|
10 |
|
|
(89 |
) |
|
9 |
|
Certain
items associated with terminated business combination2 |
|
1 |
|
|
29 |
|
|
23 |
|
|
50 |
|
|
50 |
|
Restructuring, inventory charges and asset impairments3,
4 |
|
50 |
|
|
- |
|
|
- |
|
|
50 |
|
|
7 |
|
Impairment (gain on sale) of strategic investments, net |
|
(1 |
) |
|
6 |
|
|
(1 |
) |
|
6 |
|
|
(4 |
) |
Foreign
exchange loss due to functional currency change5 |
|
19 |
|
|
- |
|
|
- |
|
|
19 |
|
|
- |
|
Reinstatement of federal R&D tax credit, resolution of prior
years'
income tax filings and other tax items6 |
|
(21 |
) |
|
(54 |
) |
|
(19 |
) |
|
(92 |
) |
|
(22 |
) |
Income
tax effect of non-GAAP adjustments |
|
(18 |
) |
|
(14 |
) |
|
(18 |
) |
|
(15 |
) |
|
(45 |
) |
Non-GAAP
adjusted net income |
|
$ |
410 |
|
|
$ |
362 |
|
|
$ |
349 |
|
|
$ |
1,110 |
|
|
$ |
976 |
|
1 |
These items are incremental charges attributable to
completed acquisitions, consisting of amortization of purchased
intangible assets. |
|
|
2 |
These items are incremental charges related to the
terminated business combination agreement with Tokyo Electron
Limited, consisting of acquisition-related and integration planning
costs. |
|
|
3 |
Results for the three and nine months ended July 26,
2015 primarily included $34 million of inventory charges and $17
million of restructuring charges and asset impairments related to
cost reductions in the solar business. |
|
|
4 |
Results for the nine months ended July 27, 2014
included a $7 million of employee-related costs related to the
restructuring program announced on October 3, 2012. |
|
|
5 |
Results for the three and nine months ended July 26,
2015 included a $19 million foreign exchange loss due to an
immaterial correction of an error related to functional currency
change. |
|
|
6 |
Amounts for the three months ended April 26, 2015 and
nine months ended July 26, 2015 included an adjustment to decrease
the provision for income taxes by $39 million and $35 million,
respectively, with a corresponding increase in net income,
resulting in an increase in diluted earnings per share of $0.03.
The adjustment was excluded in Applied's non-GAAP adjusted results
and was made primarily to correct an error in the recognition of
cost of sales in the U.S. related to intercompany sales, which
resulted in overstating profitability in the U.S. and the provision
for income taxes in immaterial amounts in each year since fiscal
2010. |
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
|
Three Months Ended |
|
Nine Months Ended |
(In millions except per share amounts) |
|
July 26,
2015 |
|
April 26,
2015 |
|
July 27,
2014 |
|
July 26,
2015 |
|
July 27,
2014 |
Non-GAAP
Adjusted Earnings Per Diluted Share |
|
|
|
|
|
|
|
|
|
|
Reported
earnings per diluted share - GAAP basis1 |
|
$ |
0.27 |
|
|
$ |
0.29 |
|
|
$ |
0.24 |
|
|
$ |
0.84 |
|
|
$ |
0.66 |
|
Certain
items associated with acquisitions |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.10 |
|
|
0.09 |
|
Acquisition integration costs |
|
- |
|
|
- |
|
|
0.01 |
|
|
- |
|
|
0.02 |
|
Certain
items associated with terminated business combination |
|
- |
|
|
0.02 |
|
|
0.02 |
|
|
0.03 |
|
|
0.04 |
|
Gain on
derivative associated with terminated business combination,
net |
|
- |
|
|
(0.01 |
) |
|
- |
|
|
(0.05 |
) |
|
- |
|
Restructuring, inventory charges and asset impairments |
|
0.03 |
|
|
- |
|
|
- |
|
|
0.03 |
|
|
- |
|
Reinstatement of federal R&D tax credit, resolution
of
prior years' income tax filings and other tax items1 |
|
(0.02 |
) |
|
(0.04 |
) |
|
(0.02 |
) |
|
(0.07 |
) |
|
(0.02 |
) |
Foreign
exchange loss due to functional currency change |
|
0.02 |
|
|
- |
|
|
- |
|
|
0.02 |
|
|
- |
|
Non-GAAP
adjusted earnings per diluted share |
|
$ |
0.33 |
|
|
$ |
0.29 |
|
|
$ |
0.28 |
|
|
$ |
0.90 |
|
|
$ |
0.79 |
|
Weighted
average number of diluted shares |
|
1,231 |
|
|
1,241 |
|
|
1,233 |
|
|
1,238 |
|
|
1,230 |
|
1 |
Amounts for the three months ended April 26, 2015 and
nine months ended July 26, 2015 included an adjustment to decrease
the provision for income taxes by $39 million and $35 million,
respectively, with a corresponding increase in net income,
resulting in an increase in diluted earnings per share of $0.03.
The adjustment was excluded in Applied's non-GAAP adjusted results
and was made primarily to correct an error in the recognition of
cost of sales in the U.S. related to intercompany sales, which
resulted in overstating profitability in the U.S. and the provision
for income taxes in immaterial amounts in each year since fiscal
2010. |
|
|
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
|
Three Months Ended |
|
Nine Months Ended |
(In millions, except percentages) |
|
July 26,
2015 |
|
April 26,
2015 |
|
July 27,
2014 |
|
July 26,
2015 |
|
July 27,
2014 |
SSG
Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
411 |
|
|
$ |
374 |
|
|
$ |
381 |
|
|
$ |
1,092 |
|
|
$ |
1,086 |
|
Certain
items associated with acquisitions1 |
|
44 |
|
|
44 |
|
|
42 |
|
|
131 |
|
|
126 |
|
Acquisition integration costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
Non-GAAP
adjusted operating income |
|
$ |
455 |
|
|
$ |
418 |
|
|
$ |
423 |
|
|
$ |
1,223 |
|
|
$ |
1,213 |
|
Non-GAAP
adjusted operating margin |
|
27.8 |
% |
|
26.8 |
% |
|
28.7 |
% |
|
26.4 |
% |
|
26.7 |
% |
AGS
Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
170 |
|
|
$ |
170 |
|
|
$ |
154 |
|
|
$ |
493 |
|
|
$ |
427 |
|
Certain
items associated with acquisitions1 |
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
|
3 |
|
Inventory
charges related to restructuring2 |
|
3 |
|
|
- |
|
|
- |
|
|
3 |
|
|
- |
|
Non-GAAP
adjusted operating income |
|
$ |
173 |
|
|
$ |
170 |
|
|
$ |
154 |
|
|
$ |
497 |
|
|
$ |
430 |
|
Non-GAAP
adjusted operating margin |
|
26.0 |
% |
|
26.3 |
% |
|
27.2 |
% |
|
26.2 |
% |
|
26.7 |
% |
Display
Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
25 |
|
|
$ |
40 |
|
|
$ |
25 |
|
|
$ |
137 |
|
|
$ |
77 |
|
Certain items associated with acquisitions1 |
|
1 |
|
|
- |
|
|
1 |
|
|
2 |
|
|
2 |
|
Non-GAAP
adjusted operating income |
|
$ |
26 |
|
|
$ |
40 |
|
|
$ |
26 |
|
|
$ |
139 |
|
|
$ |
79 |
|
Non-GAAP
adjusted operating margin |
|
17.2 |
% |
|
24.5 |
% |
|
21.8 |
% |
|
23.6 |
% |
|
18.6 |
% |
EES
Non-GAAP Adjusted Operating Income (Loss) |
|
|
|
|
|
|
|
|
|
|
Reported
operating income (loss) - GAAP basis |
|
$ |
(52 |
) |
|
$ |
(5 |
) |
|
$ |
24 |
|
|
$ |
(61 |
) |
|
$ |
18 |
|
Certain
items associated with acquisitions1 |
|
2 |
|
|
1 |
|
|
1 |
|
|
4 |
|
|
4 |
|
Restructuring, inventory charges and asset impairments2 |
|
48 |
|
|
- |
|
|
- |
|
|
48 |
|
|
- |
|
Non-GAAP
adjusted operating income (loss) |
|
$ |
(2 |
) |
|
$ |
(4 |
) |
|
$ |
25 |
|
|
$ |
(9 |
) |
|
$ |
22 |
|
Non-GAAP
adjusted operating margin |
|
(5.1 |
)% |
|
(5.5 |
)% |
|
24.3 |
% |
|
(5.4 |
)% |
|
9.5 |
% |
1 |
These items are incremental charges attributable to
completed acquisitions, consisting of amortization of purchased
intangible assets. |
|
|
2 |
Results for the three and nine months ended July
26, 2015 included a $34 million of inventory charges and $17
million of restructuring charges and asset impairments related to
cost reductions in the solar business. |
APPLIED MATERIALS,
INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED OPERATING
EXPENSES
|
Three Months Ended |
(In millions) |
July 26, 2015 |
|
April 26, 2015 |
Operating
expenses - GAAP basis |
$ |
622 |
|
|
$ |
600 |
|
Gain
(loss) on derivative associated with terminated business
combination, net |
(3 |
) |
|
14 |
|
Restructuring charges and asset impairments |
(16 |
) |
|
- |
|
Certain
items associated with acquisitions |
(6 |
) |
|
(6 |
) |
Acquisition integration costs |
(1 |
) |
|
- |
|
Certain
items associated with terminated business combination |
(1 |
) |
|
(29 |
) |
Foreign
exchange loss due to functional currency change |
(19 |
) |
|
- |
|
Non-GAAP
adjusted operating expenses |
$ |
576 |
|
|
$ |
579 |
|
UNAUDITED RECONCILIATION OF GAAP TO
NON-GAAP ADJUSTED EFFECTIVE INCOME TAX RATE
|
Three Months Ended |
(In millions, except percentages) |
July 26, 2015 |
Provision
for income taxes - GAAP basis (a) |
$ |
46 |
|
Reinstatement of federal R&D tax credit, resolutions of prior
years' income tax filings and other tax items |
21 |
|
Income
tax effect of non-GAAP adjustments |
18 |
|
Non-GAAP
adjusted provision for income taxes (b) |
$ |
85 |
|
|
|
Income
before income taxes - GAAP basis (c) |
$ |
375 |
|
Certain
items associated with acquisitions |
47 |
|
Restructuring, inventory charges and asset impairments |
50 |
|
Acquisition integration costs |
1 |
|
Loss on
derivative associated with terminated business combination |
3 |
|
Certain
items associated with terminated business combination |
1 |
|
Gain on
strategic investments, net |
(1 |
) |
Foreign
exchange loss due to functional currency change |
19 |
|
Non-GAAP
adjusted income before income taxes (d) |
$ |
495 |
|
|
|
Effective
income tax rate - GAAP basis (a/c) |
12.3 |
% |
|
|
Non-GAAP
adjusted effective income tax rate (b/d) |
17.2 |
% |
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Applied Materials via Globenewswire
HUG#1945298
Applied Materials (NASDAQ:AMAT)
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