AAPL Apple Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

April 27, 2015

Date of Report (Date of earliest event reported)

 

 

 

Apple Inc.

(Exact name of Registrant as specified in its charter)

 

California		001-36743		94-2404110
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS. Employer Identification No.)

1 Infinite Loop

Cupertino, California 95014

(Address of principal executive offices) (Zip Code)

(408) 996-1010

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02

Results of Operations and Financial Condition.

On April 27, 2015, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 28, 2015 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit Number		Exhibit Description
99.1		Press release issued by Apple Inc. on April 27, 2015.
99.2		Data sheet issued by Apple Inc. on April 27, 2015.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: April 27, 2015				Apple Inc.
				By:		/s/ Luca Maestri
						Luca Maestri Senior Vice President, Chief Financial Officer

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Exhibit Index

 

Exhibit Number		Exhibit Description
99.1		Press release issued by Apple Inc. on April 27, 2015.
99.2		Data sheet issued by Apple Inc. on April 27, 2015.

Exhibit 99.1

Apple Reports Record Second Quarter Results

Strong performance of iPhone, Mac & App Store drives 27% revenue growth & 40% EPS growth, setting new second quarter records

CUPERTINO, California—April 27, 2015—Apple^® today announced financial results for its fiscal 2015 second quarter ended March 28, 2015. The Company posted quarterly revenue of $58 billion and quarterly net profit of $13.6 billion, or $2.33 per diluted share. These results compare to revenue of $45.6 billion and net profit of $10.2 billion, or $1.66 per diluted share, in the year-ago quarter. Gross margin was 40.8 percent compared to 39.3 percent in the year-ago quarter. International sales accounted for 69 percent of the quarter’s revenue.

The growth was fueled by record second quarter sales of iPhone^® and Mac^® and all-time record performance of the App Store^SM.

“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said Tim Cook, Apple’s CEO. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”

“The tremendous customer demand for our products and services in the March quarter drove revenue growth of 27 percent and EPS growth of 40 percent,” said Luca Maestri, Apple’s CFO. “Cash flow from operations was also outstanding at $19.1 billion.”

Apple is providing the following guidance for its fiscal 2015 third quarter:

 

•

revenue between $46 billion and $48 billion

 

•

gross margin between 38.5 percent and 39.5 percent

 

•

operating expenses between $5.65 billion and $5.75 billion

 

•

other income/(expense) of $350 million

 

•

tax rate of 26.3 percent

Apple will provide live streaming of its Q2 2015 financial results conference call beginning at 2:00 p.m. PDT on April 27, 2015 at www.apple.com/quicktime/qtv/earningsq215. This webcast will also be available for replay for approximately two weeks thereafter.

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This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 27, 2014, its Form 10-Q for the fiscal quarter ended December 27, 2014, and its Form 10-Q for the fiscal quarter ended March 28, 2015 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

Press Contact:

Josh Rosenstock

Apple

jrosenstock@apple.com

(408) 974-2414

Investor Relations Contacts:

Nancy Paxton

Apple

paxton1@apple.com

(408) 974-5420

Joan Hoover

Apple

hoover1@apple.com

(408) 974-4570

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2015 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPhone and App Store are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

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Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

 

		Three Months Ended								Six Months Ended
		March 28, 2015				March 29, 2014				March 28, 2015				March 29, 2014
Net sales		$	58,010			$	45,646			$	132,609			$	103,240
Cost of sales (1)			34,354				27,699				79,212				63,447
Gross margin			23,656				17,947				53,397				39,793
Operating expenses:
Research and development (1)			1,918				1,422				3,813				2,752
Selling, general and administrative (1)			3,460				2,932				7,060				5,985
Total operating expenses			5,378				4,354				10,873				8,737
Operating income			18,278				13,593				42,524				31,056
Other income/(expense), net			286				225				456				471
Income before provision for income taxes			18,564				13,818				42,980				31,527
Provision for income taxes			4,995				3,595				11,387				8,232
Net income		$	13,569			$	10,223			$	31,593			$	23,295
Earnings per share:
Basic		$	2.34			$	1.67			$	5.43			$	3.76
Diluted		$	2.33			$	1.66			$	5.39			$	3.74
Shares used in computing earnings per share:
Basic			5,793,799				6,123,302				5,818,411				6,197,903
Diluted			5,834,858				6,156,699				5,858,330				6,233,430
Cash dividends declared per share		$	0.47			$	0.44			$	0.94			$	0.88
(1) Includes share-based compensation expense as follows:
Cost of sales		$	142			$	110			$	282			$	219
Research and development		$	384			$	300			$	758			$	589
Selling, general and administrative		$	401			$	286			$	775			$	569

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Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands and par value)

 

		March 28, 2015				September 27, 2014
ASSETS:
Current assets:
Cash and cash equivalents		$	14,489			$	13,844
Short-term marketable securities			18,607				11,233
Accounts receivable, less allowances of $83 and $86, respectively			10,905				17,460
Inventories			2,396				2,111
Deferred tax assets			5,141				4,318
Vendor non-trade receivables			7,259				9,759
Other current assets			9,094				9,806
Total current assets			67,891				68,531
Long-term marketable securities			160,443				130,162
Property, plant and equipment, net			20,151				20,624
Goodwill			4,711				4,616
Acquired intangible assets, net			4,061				4,142
Other assets			3,937				3,764
Total assets		$	261,194			$	231,839
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable		$	23,159			$	30,196
Accrued expenses			22,827				18,453
Deferred revenue			8,944				8,491
Commercial paper			3,799				6,308
Total current liabilities			58,729				63,448
Deferred revenue – non-current			3,571				3,031
Long-term debt			40,072				28,987
Other non-current liabilities			29,816				24,826
Total liabilities			132,188				120,292
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,762,278 and 5,866,161 shares issued and outstanding, respectively			25,376				23,313
Retained earnings			100,920				87,152
Accumulated other comprehensive income			2,710				1,082
Total shareholders’ equity			129,006				111,547
Total liabilities and shareholders’ equity		$	261,194			$	231,839

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Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

		Six Months Ended
		March 28, 2015				March 29, 2014
Cash and cash equivalents, beginning of the period		$	13,844			$	14,259
Operating activities:
Net income			31,593				23,295
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization			5,054				4,031
Share-based compensation expense			1,815				1,377
Deferred income tax expense			1,879				2,059
Changes in operating assets and liabilities:
Accounts receivable, net			6,555				3,401
Inventories			(285	)			(65	)
Vendor non-trade receivables			2,500				1,419
Other current and non-current assets			2,448				14
Accounts payable			(5,428	)			(2,375	)
Deferred revenue			993				1,414
Other current and non-current liabilities			5,679				1,638
Cash generated by operating activities			52,803				36,208
Investing activities:
Purchases of marketable securities			(92,523	)			(90,360	)
Proceeds from maturities of marketable securities			5,871				10,869
Proceeds from sales of marketable securities			48,924				80,241
Payments made in connection with business acquisitions, net			(115	)			(559	)
Payments for acquisition of property, plant and equipment			(5,586	)			(3,367	)
Payments for acquisition of intangible assets			(155	)			(163	)
Other			88				(23	)
Cash used in investing activities			(43,496	)			(3,362	)
Financing activities:
Proceeds from issuance of common stock			309				341
Excess tax benefits from equity awards			357				363
Taxes paid related to net share settlement of equity awards			(608	)			(430	)
Dividends and dividend equivalents paid			(5,544	)			(5,430	)
Repurchase of common stock			(12,000	)			(23,000	)
Proceeds from issuance of long-term debt, net			11,332				0
Repayments of commercial paper, net			(2,508	)			0
Cash used in financing activities			(8,662	)			(28,156	)
Increase in cash and cash equivalents			645				4,690
Cash and cash equivalents, end of the period		$	14,489			$	18,949
Supplemental cash flow disclosure:
Cash paid for income taxes, net		$	7,058			$	5,369
Cash paid for interest		$	220			$	161

Exhibit 99.2

Apple Inc.

Q2 2015 Unaudited Summary Data

(Units in thousands, Revenue in millions)

 

		Q2’15								Q1’15								Q2’14								Sequential Change								Year/Year Change
						Revenue								Revenue								Revenue								Revenue								Revenue
Operating Segments
Americas						$	21,316							$	30,566							$	17,982								- 30%								19%
Europe							12,204								17,214								10,941								- 29%								12%
Greater China							16,823								16,144								9,835								4%								71%
Japan							3,457								5,448								4,047								- 37%								- 15%
Rest of Asia Pacific							4,210								5,227								2,841								- 19%								48%
Total Apple						$	58,010							$	74,599							$	45,646								- 22%								27%
		Q2’15								Q1’15								Q2’14								Sequential Change								Year/Year Change
		Units				Revenue				Units				Revenue				Units				Revenue				Units				Revenue				Units				Revenue
Product Summary
iPhone (1)			61,170			$	40,282				74,468			$	51,182				43,719			$	26,064				- 18%				- 21%				40%				55%
iPad (1)			12,623				5,428				21,419				8,985				16,350				7,610				- 41%				- 40%				- 23%				- 29%
Mac (1)			4,563				5,615				5,519				6,944				4,136				5,519				- 17%				- 19%				10%				2%
Services (2)							4,996								4,799								4,573								4%								9%
Other Products (1)(3)							1,689								2,689								1,880								- 37%								- 10%
Total Apple						$	58,010							$	74,599							$	45,646								- 22%								27%

 

(1)	Includes deferrals and amortization of related non-software services and software upgrade rights.

 

(2)	Includes revenue from the iTunes Store, App Store, Mac App Store, iBooks Store, AppleCare, Apple Pay, licensing and other services.

 

(3)	Includes sales of iPod, Apple TV, Beats Electronics and Apple-branded and third-party accessories.