-
Company delivered
year-over-year growth in orders, net sales and earnings per
share
-
FY2015 cash returns to
shareholders increased by $1.33 billion year over year to $1.81
billion
SANTA CLARA, Calif., Nov. 12, 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 fourth quarter and
fiscal year ended October 25, 2015.
Fourth quarter orders were $2.42 billion, down 16
percent sequentially and up 7 percent year over year. Net sales
were $2.37 billion, down 5 percent sequentially and up 5 percent
year over year.
On a non-GAAP adjusted basis, the company reported
fourth-quarter gross margin of 42.2 percent, operating margin of
19.3 percent, and net income of $347 million or $0.29 per diluted
share. The company recorded GAAP gross margin of 40.5 percent,
operating margin of 17.9 percent, and net income of $336 million or
$0.28 per diluted share.
The company generated $471 million in cash from
operations during the fourth quarter, paid dividends of $119
million and used $700 million to repurchase 44 million shares of
common stock at an average price of $15.78.
Full Year Results
In fiscal 2015, orders grew 5 percent to $10.10
billion, net sales increased 6 percent to $9.66 billion, non-GAAP
adjusted gross margin declined 1.2 percentage points to 42.9
percent, non-GAAP adjusted operating margin remained at 19.6
percent, and non-GAAP adjusted net income increased by 10.9 percent
to $1.46 billion or $1.19 per diluted share. The company recorded
GAAP gross margin of 40.9 percent, operating income of $1.69
billion or 17.5 percent of net sales, and net income of $1.38
billion or $1.12 per diluted share.
The company generated $1.16 billion in cash from
operations in fiscal 2015, paid dividends of $487 million and used
$1.33 billion to repurchase 76 million shares of common stock.
"In fiscal 2015, Applied Materials delivered
year-over-year growth across our semiconductor, display and service
businesses resulting in our highest earnings in four years," said
Gary Dickerson, president and CEO. "We have positioned the
company for sustainable profitable growth and we are winning share,
growing our service business and expanding our available
market."
Quarterly Results Summary
|
|
|
|
|
|
|
|
Change |
|
|
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
Q4 FY2015
vs.
Q3 FY2015 |
|
Q4 FY2015
vs.
Q4 FY2014 |
|
|
(In millions,
except per share amounts and percentages) |
New
orders |
|
$2,424 |
|
$2,892 |
|
$2,255 |
|
(16)% |
|
7% |
Net
sales |
|
$2,368 |
|
$2,490 |
|
$2,264 |
|
(5)% |
|
5% |
Gross
margin |
|
40.5% |
|
40.9% |
|
42.4% |
|
(0.4) points |
|
(1.9) points |
Operating
margin |
|
17.9% |
|
15.9% |
|
18.2% |
|
2.0 points |
|
(0.3) points |
Net
income |
|
$336 |
|
$329 |
|
$256 |
|
2% |
|
31% |
Diluted
earnings per share (EPS) |
|
$0.28 |
|
$0.27 |
|
$0.21 |
|
4% |
|
33% |
|
|
|
|
|
|
|
|
Change |
Non-GAAP Adjusted Results |
|
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
Q4 FY2015
vs.
Q3 FY2015 |
|
Q4 FY2015
vs.
Q4 FY2014 |
|
|
(In millions,
except per share amounts and percentages) |
Non-GAAP
adjusted gross margin |
|
42.2% |
|
43.9% |
|
44.2% |
|
(1.7) points |
|
(2.0) points |
Non-GAAP
adjusted operating margin |
|
19.3% |
|
20.8% |
|
19.5% |
|
(1.5) points |
|
(0.2) points |
Non-GAAP
adjusted net income |
|
$347 |
|
$410 |
|
$338 |
|
(15)% |
|
3% |
Non-GAAP
adjusted diluted EPS |
|
$0.29 |
|
$0.33 |
|
$0.27 |
|
(12)% |
|
7% |
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 first quarter of fiscal 2016, Applied
expects net sales to be down 2 percent to 9 percent sequentially.
Non-GAAP adjusted diluted EPS is expected to be in the range of
$0.23 to $0.27.
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.
Fourth Quarter and Fiscal Year
Reportable Segment Information
Silicon Systems |
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
FY2015 |
|
FY2014 |
|
|
|
|
|
|
|
|
|
|
|
(In millions,
except percentages) |
New
orders |
$ |
1,444 |
|
|
$ |
2,007 |
|
|
$ |
1,334 |
|
|
$ |
6,581 |
|
|
$ |
6,132 |
|
Foundry |
35 |
% |
|
32 |
% |
|
50 |
% |
|
34 |
% |
|
52 |
% |
DRAM |
21 |
% |
|
18 |
% |
|
20 |
% |
|
25 |
% |
|
14 |
% |
Flash |
31 |
% |
|
39 |
% |
|
12 |
% |
|
28 |
% |
|
21 |
% |
Logic and other |
13 |
% |
|
11 |
% |
|
18 |
% |
|
13 |
% |
|
13 |
% |
Net
sales |
1,494 |
|
|
1,635 |
|
|
1,434 |
|
|
6,135 |
|
|
5,978 |
|
Operating
income |
318 |
|
|
411 |
|
|
305 |
|
|
1,410 |
|
|
1,391 |
|
Operating
margin |
21.3 |
% |
|
25.1 |
% |
|
21.3 |
% |
|
23.0 |
% |
|
23.3 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP
adjusted operating income |
$ |
365 |
|
|
$ |
455 |
|
|
$ |
352 |
|
|
$ |
1,588 |
|
|
$ |
1,565 |
|
Non-GAAP
adjusted operating margin |
24.4 |
% |
|
27.8 |
% |
|
24.5 |
% |
|
25.9 |
% |
|
26.2 |
% |
Applied Global
Services
|
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
FY2015 |
|
FY2014 |
|
|
|
|
|
|
|
|
|
|
|
(In millions,
except percentages) |
New
orders |
$ |
761 |
|
|
$ |
561 |
|
|
$ |
747 |
|
|
$ |
2,653 |
|
|
$ |
2,433 |
|
Net
sales |
637 |
|
|
665 |
|
|
592 |
|
|
2,531 |
|
|
2,200 |
|
Operating
income |
171 |
|
|
170 |
|
|
146 |
|
|
664 |
|
|
573 |
|
Operating
margin |
26.8 |
% |
|
25.6 |
% |
|
24.7 |
% |
|
26.2 |
% |
|
26.0 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP
adjusted operating income |
$ |
170 |
|
|
$ |
173 |
|
|
$ |
146 |
|
|
$ |
667 |
|
|
$ |
576 |
|
Non-GAAP
adjusted operating margin |
26.7 |
% |
|
26.0 |
% |
|
24.7 |
% |
|
26.4 |
% |
|
26.2 |
% |
Display |
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
FY2015 |
|
FY2014 |
|
|
|
|
|
|
|
|
|
|
|
(In millions,
except percentages) |
New
orders |
$ |
195 |
|
|
$ |
295 |
|
|
$ |
130 |
|
|
$ |
717 |
|
|
$ |
845 |
|
Net
sales |
191 |
|
|
151 |
|
|
190 |
|
|
780 |
|
|
615 |
|
Operating
income |
19 |
|
|
25 |
|
|
52 |
|
|
156 |
|
|
129 |
|
Operating
margin |
9.9 |
% |
|
16.6 |
% |
|
27.4 |
% |
|
20.0 |
% |
|
21.0 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP
adjusted operating income |
$ |
19 |
|
|
$ |
26 |
|
|
$ |
52 |
|
|
$ |
158 |
|
|
$ |
131 |
|
Non-GAAP
adjusted operating margin |
9.9 |
% |
|
17.2 |
% |
|
27.4 |
% |
|
20.3 |
% |
|
21.3 |
% |
Energy and Environmental
Solutions |
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
FY2015 |
|
FY2014 |
|
|
|
|
|
|
|
|
|
|
|
(In millions,
except percentages) |
New
orders |
$ |
24 |
|
|
$ |
29 |
|
|
$ |
44 |
|
|
$ |
153 |
|
|
$ |
238 |
|
Net
sales |
46 |
|
|
39 |
|
|
48 |
|
|
213 |
|
|
279 |
|
Operating
income (loss) |
- |
|
|
(52 |
) |
|
(3 |
) |
|
(61 |
) |
|
15 |
|
Operating
margin |
- |
% |
|
(133.3 |
)% |
|
(6.3 |
)% |
|
(28.6 |
)% |
|
5.4 |
% |
Non-GAAP Adjusted Results |
|
|
|
|
|
|
|
|
Non-GAAP
adjusted operating income (loss) |
$ |
(1 |
) |
|
$ |
(2 |
) |
|
$ |
(1 |
) |
|
$ |
(10 |
) |
|
$ |
21 |
|
Non-GAAP
adjusted operating margin |
(2.2 |
)% |
|
(5.1 |
)% |
|
(2.1 |
)% |
|
(4.7 |
)% |
|
7.5 |
% |
Backlog Information
Applied's backlog remained
essentially flat at $3.14 billion and included negative adjustments
of $13 million. Backlog composition by reportable segment was as
follows:
Silicon
Systems |
55 |
% |
Applied
Global Services |
26 |
% |
Display |
16 |
% |
Energy
and Environmental Solutions |
3 |
% |
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 first quarter of fiscal 2016, 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 |
|
Twelve Months Ended |
(In millions, except per share amounts) |
|
October 25,
2015 |
|
July 26,
2015 |
|
October 26,
2014 |
|
October 25,
2015 |
|
October 26,
2014 |
Net
sales |
|
$ |
2,368 |
|
|
$ |
2,490 |
|
|
$ |
2,264 |
|
|
$ |
9,659 |
|
|
$ |
9,072 |
|
Cost of
products sold |
|
1,409 |
|
|
1,472 |
|
|
1,305 |
|
|
5,707 |
|
|
5,229 |
|
Gross
profit |
|
959 |
|
|
1,018 |
|
|
959 |
|
|
3,952 |
|
|
3,843 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research, development and engineering |
|
363 |
|
|
372 |
|
|
360 |
|
|
1,451 |
|
|
1,428 |
|
Marketing and selling |
|
96 |
|
|
112 |
|
|
99 |
|
|
428 |
|
|
423 |
|
General and administrative |
|
77 |
|
|
135 |
|
|
127 |
|
|
469 |
|
|
502 |
|
Loss (gain) on derivatives associated with
terminated business combination |
|
- |
|
|
3 |
|
|
(39 |
) |
|
(89 |
) |
|
(30 |
) |
Total
operating expenses |
|
536 |
|
|
622 |
|
|
547 |
|
|
2,259 |
|
|
2,323 |
|
Income
from operations |
|
423 |
|
|
396 |
|
|
412 |
|
|
1,693 |
|
|
1,520 |
|
Interest
expense |
|
32 |
|
|
24 |
|
|
23 |
|
|
103 |
|
|
95 |
|
Interest
income and other income, net |
|
6 |
|
|
3 |
|
|
9 |
|
|
8 |
|
|
23 |
|
Income
before income taxes |
|
397 |
|
|
375 |
|
|
398 |
|
|
1,598 |
|
|
1,448 |
|
Provision
for income taxes |
|
61 |
|
|
46 |
|
|
142 |
|
|
221 |
|
|
376 |
|
Net
income |
|
$ |
336 |
|
|
$ |
329 |
|
|
$ |
256 |
|
|
$ |
1,377 |
|
|
$ |
1,072 |
|
Earnings
per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.28 |
|
|
$ |
0.27 |
|
|
$ |
0.21 |
|
|
$ |
1.13 |
|
|
$ |
0.88 |
|
Diluted |
|
$ |
0.28 |
|
|
$ |
0.27 |
|
|
$ |
0.21 |
|
|
$ |
1.12 |
|
|
$ |
0.87 |
|
Weighted
average number of shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
1,182 |
|
|
1,221 |
|
|
1,220 |
|
|
1,214 |
|
|
1,215 |
|
Diluted |
|
1,190 |
|
|
1,231 |
|
|
1,236 |
|
|
1,226 |
|
|
1,231 |
|
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions) |
|
October 25,
2015 |
|
July 26,
2015 |
|
October 26,
2014 |
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,797 |
|
|
$ |
2,574 |
|
|
$ |
3,002 |
|
Short-term investments |
|
168 |
|
|
169 |
|
|
160 |
|
Accounts receivable, net |
|
1,739 |
|
|
1,991 |
|
|
1,670 |
|
Inventories |
|
1,833 |
|
|
1,739 |
|
|
1,567 |
|
Other current assets |
|
724 |
|
|
570 |
|
|
568 |
|
Total
current assets |
|
9,261 |
|
|
7,043 |
|
|
6,967 |
|
Long-term
investments |
|
946 |
|
|
958 |
|
|
935 |
|
Property,
plant and equipment, net |
|
892 |
|
|
882 |
|
|
861 |
|
Goodwill |
|
3,302 |
|
|
3,304 |
|
|
3,304 |
|
Purchased
technology and other intangible assets, net |
|
762 |
|
|
811 |
|
|
951 |
|
Deferred
income taxes and other assets |
|
145 |
|
|
155 |
|
|
156 |
|
Total
assets |
|
$ |
15,308 |
|
|
$ |
13,153 |
|
|
$ |
13,174 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Short-term debt |
|
$ |
1,200 |
|
|
$ |
400 |
|
|
$ |
- |
|
Accounts payable and accrued expenses |
|
1,833 |
|
|
1,762 |
|
|
1,883 |
|
Customer deposits and deferred revenue |
|
765 |
|
|
858 |
|
|
940 |
|
Total
current liabilities |
|
3,798 |
|
|
3,020 |
|
|
2,823 |
|
Long-term
debt |
|
3,342 |
|
|
1,547 |
|
|
1,947 |
|
Other
liabilities |
|
555 |
|
|
609 |
|
|
536 |
|
Total
liabilities |
|
7,695 |
|
|
5,176 |
|
|
5,306 |
|
Total
stockholders' equity |
|
7,613 |
|
|
7,977 |
|
|
7,868 |
|
Total
liabilities and stockholders' equity |
|
$ |
15,308 |
|
|
$ |
13,153 |
|
|
$ |
13,174 |
|
APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In
millions) |
Three Months Ended |
|
Twelve Months Ended |
October 25,
2015 |
|
July 26,
2015 |
|
October 26,
2014 |
October 25,
2015 |
|
October 26,
2014 |
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net income |
$ |
336 |
|
|
$ |
329 |
|
|
$ |
256 |
|
|
$ |
1,377 |
|
|
$ |
1,072 |
|
Adjustments required to reconcile net income to
cash
provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
96 |
|
|
93 |
|
|
94 |
|
|
371 |
|
|
375 |
|
|
Share-based compensation |
46 |
|
|
46 |
|
|
45 |
|
|
187 |
|
|
177 |
|
|
Excess tax benefits from share-based compensation |
(2 |
) |
|
(3 |
) |
|
(4 |
) |
|
(56 |
) |
|
(30 |
) |
|
Deferred income taxes |
(159 |
) |
|
18 |
|
|
15 |
|
|
(134 |
) |
|
58 |
|
|
Other |
(11 |
) |
|
43 |
|
|
(14 |
) |
|
53 |
|
|
13 |
|
|
Net change in operating assets and liabilities |
165 |
|
|
(192 |
) |
|
15 |
|
|
(635 |
) |
|
135 |
|
Cash provided by operating activities |
471 |
|
|
334 |
|
|
407 |
|
|
1,163 |
|
|
1,800 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Capital expenditures |
(53 |
) |
|
(49 |
) |
|
(63 |
) |
|
(215 |
) |
|
(241 |
) |
Cash paid for acquisitions, net of cash acquired |
(2 |
) |
|
(2 |
) |
|
(12 |
) |
|
(4 |
) |
|
(12 |
) |
Proceeds from sale of facility |
- |
|
|
- |
|
|
25 |
|
|
- |
|
|
25 |
|
Proceeds from sales and maturities of investments |
200 |
|
|
583 |
|
|
176 |
|
|
1,100 |
|
|
878 |
|
Purchases of investments |
(202 |
) |
|
(616 |
) |
|
(179 |
) |
|
(1,162 |
) |
|
(811 |
) |
Cash used in investing activities |
(57 |
) |
|
(84 |
) |
|
(53 |
) |
|
(281 |
) |
|
(161 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Debt borrowings, net of issuance costs |
2,581 |
|
|
- |
|
|
- |
|
|
2,581 |
|
|
- |
|
Proceeds from common stock issuances and others,
net |
45 |
|
|
1 |
|
|
40 |
|
|
88 |
|
|
107 |
|
Common stock repurchases |
(700 |
) |
|
(625 |
) |
|
- |
|
|
(1,325 |
) |
|
- |
|
Excess tax benefits from share-based compensation |
2 |
|
|
3 |
|
|
4 |
|
|
56 |
|
|
30 |
|
Payments of dividends to stockholders |
(119 |
) |
|
(123 |
) |
|
(122 |
) |
|
(487 |
) |
|
(485 |
) |
Cash provided by (used in) financing activities |
1,809 |
|
|
(744 |
) |
|
(78 |
) |
|
913 |
|
|
(348 |
) |
Effect of exchange rate changes on cash and cash
equivalents |
- |
|
|
1 |
|
|
- |
|
|
- |
|
|
- |
|
Increase (decrease) in cash and cash equivalents |
2,223 |
|
|
(493 |
) |
|
276 |
|
|
1,795 |
|
|
1,291 |
|
Cash and cash equivalents - beginning of period |
2,574 |
|
|
3,067 |
|
|
2,726 |
|
|
3,002 |
|
|
1,711 |
|
Cash and cash equivalents - end of period |
$ |
4,797 |
|
|
$ |
2,574 |
|
|
$ |
3,002 |
|
|
$ |
4,797 |
|
|
$ |
3,002 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
Cash payments for income taxes |
$ |
149 |
|
|
$ |
51 |
|
|
$ |
87 |
|
|
$ |
407 |
|
|
$ |
195 |
|
Cash refunds from income taxes |
$ |
2 |
|
|
$ |
5 |
|
|
$ |
78 |
|
|
$ |
12 |
|
|
$ |
111 |
|
Cash payments for interest |
$ |
7 |
|
|
$ |
39 |
|
|
$ |
7 |
|
|
$ |
92 |
|
|
$ |
92 |
|
APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATION
Corporate Unallocated
Expenses
(In millions) |
|
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
|
FY 2015 |
|
FY 2014 |
Share-based compensation |
|
$ |
46 |
|
|
$ |
46 |
|
|
$ |
45 |
|
|
$ |
187 |
|
|
$ |
177 |
|
Certain items associated with terminated business combination |
|
- |
|
|
1 |
|
|
23 |
|
|
50 |
|
|
73 |
|
Loss
(gain) on derivatives associated with terminated business
combination, net |
|
- |
|
|
3 |
|
|
(39 |
) |
|
(89 |
) |
|
(30 |
) |
Other
unallocated expenses |
|
39 |
|
|
108 |
|
|
59 |
|
|
328 |
|
|
368 |
|
Total
corporate |
|
$ |
85 |
|
|
$ |
158 |
|
|
$ |
88 |
|
|
$ |
476 |
|
|
$ |
588 |
|
Additional Information
|
|
Q4 FY2015 |
|
Q3 FY2015 |
|
Q4 FY2014 |
New
Orders and Net Sales by Geography |
|
|
|
|
|
|
|
|
|
|
|
|
(In $ millions) |
|
New
Orders |
|
Net
Sales |
|
New
Orders |
|
Net
Sales |
|
New
Orders |
|
Net
Sales |
United
States |
|
282 |
|
|
524 |
|
|
262 |
|
|
650 |
|
|
596 |
|
|
633 |
|
%
of Total |
|
12 |
% |
|
22 |
% |
|
9 |
% |
|
26 |
% |
|
26 |
% |
|
28 |
% |
Europe |
|
155 |
|
|
140 |
|
|
142 |
|
|
134 |
|
|
198 |
|
|
178 |
|
%
of Total |
|
6 |
% |
|
6 |
% |
|
5 |
% |
|
6 |
% |
|
9 |
% |
|
8 |
% |
Japan |
|
452 |
|
|
256 |
|
|
727 |
|
|
271 |
|
|
287 |
|
|
209 |
|
%
of Total |
|
19 |
% |
|
11 |
% |
|
25 |
% |
|
11 |
% |
|
13 |
% |
|
9 |
% |
Korea |
|
207 |
|
|
216 |
|
|
349 |
|
|
308 |
|
|
251 |
|
|
187 |
|
%
of Total |
|
8 |
% |
|
9 |
% |
|
12 |
% |
|
12 |
% |
|
11 |
% |
|
8 |
% |
Taiwan |
|
846 |
|
|
651 |
|
|
828 |
|
|
751 |
|
|
599 |
|
|
618 |
|
%
of Total |
|
35 |
% |
|
27 |
% |
|
29 |
% |
|
30 |
% |
|
27 |
% |
|
27 |
% |
Southeast
Asia |
|
100 |
|
|
131 |
|
|
142 |
|
|
94 |
|
|
113 |
|
|
136 |
|
%
of Total |
|
4 |
% |
|
6 |
% |
|
5 |
% |
|
4 |
% |
|
5 |
% |
|
6 |
% |
China |
|
382 |
|
|
450 |
|
|
442 |
|
|
282 |
|
|
211 |
|
|
303 |
|
%
of Total |
|
16 |
% |
|
19 |
% |
|
15 |
% |
|
11 |
% |
|
9 |
% |
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees (In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Regular
Full Time |
|
14.6 |
|
|
14.5 |
|
|
14.0 |
|
|
|
FY 2015 |
|
FY 2014 |
New
Orders and Net Sales by Geography |
|
|
|
|
|
|
|
|
(In $ millions) |
|
New
Orders |
|
Net
Sales |
|
New
Orders |
|
Net
Sales |
United
States |
|
1,323 |
|
|
2,335 |
|
|
2,200 |
|
|
1,966 |
|
%
of Total |
|
13 |
% |
|
24 |
% |
|
23 |
% |
|
22 |
% |
Europe |
|
576 |
|
|
567 |
|
|
662 |
|
|
658 |
|
%
of Total |
|
6 |
% |
|
6 |
% |
|
7 |
% |
|
7 |
% |
Japan |
|
1,786 |
|
|
1,015 |
|
|
1,031 |
|
|
817 |
|
%
of Total |
|
18 |
% |
|
10 |
% |
|
11 |
% |
|
9 |
% |
Korea |
|
1,709 |
|
|
1,437 |
|
|
1,086 |
|
|
965 |
|
%
of Total |
|
17 |
% |
|
15 |
% |
|
11 |
% |
|
10 |
% |
Taiwan |
|
2,808 |
|
|
2,376 |
|
|
2,740 |
|
|
2,702 |
|
%
of Total |
|
28 |
% |
|
25 |
% |
|
28 |
% |
|
30 |
% |
Southeast
Asia |
|
430 |
|
|
397 |
|
|
412 |
|
|
356 |
|
%
of Total |
|
4 |
% |
|
4 |
% |
|
4 |
% |
|
4 |
% |
China |
|
1,472 |
|
|
1,532 |
|
|
1,517 |
|
|
1,608 |
|
%
of Total |
|
14 |
% |
|
16 |
% |
|
16 |
% |
|
18 |
% |
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
|
|
Three Months Ended |
|
Twelve Months Ended |
(In millions, except percentages) |
|
October 25,
2015 |
|
July 26,
2015 |
|
October 26,
2014 |
|
October 25,
2015 |
|
October 26,
2014 |
Non-GAAP
Adjusted Gross Profit |
|
|
|
|
|
|
|
|
|
|
Reported
gross profit - GAAP basis |
|
$ |
959 |
|
|
$ |
1,018 |
|
|
$ |
959 |
|
|
$ |
3,952 |
|
|
$ |
3,843 |
|
Certain
items associated with acquisitions1 |
|
42 |
|
|
41 |
|
|
42 |
|
|
162 |
|
|
158 |
|
Inventory
charges related to restructuring3, 4 |
|
1 |
|
|
34 |
|
|
- |
|
|
35 |
|
|
- |
|
Acquisition integration costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
Other
significant gains, losses or charges, net 7 |
|
(2 |
) |
|
- |
|
|
- |
|
|
(2 |
) |
|
- |
|
Non-GAAP
adjusted gross profit |
|
$ |
1,000 |
|
|
$ |
1,093 |
|
|
$ |
1,001 |
|
|
$ |
4,147 |
|
|
$ |
4,002 |
|
Non-GAAP
adjusted gross margin |
|
42.2 |
% |
|
43.9 |
% |
|
44.2 |
% |
|
42.9 |
% |
|
44.1 |
% |
Non-GAAP
Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
423 |
|
|
$ |
396 |
|
|
$ |
412 |
|
|
$ |
1,693 |
|
|
$ |
1,520 |
|
Certain
items associated with acquisitions1 |
|
47 |
|
|
47 |
|
|
48 |
|
|
185 |
|
|
183 |
|
Acquisition integration costs |
|
- |
|
|
1 |
|
|
4 |
|
|
2 |
|
|
34 |
|
Loss
(gain) on derivatives associated with terminated business
combination, net |
|
- |
|
|
3 |
|
|
(39 |
) |
|
(89 |
) |
|
(30 |
) |
Certain
items associated with terminated business combination2 |
|
- |
|
|
1 |
|
|
23 |
|
|
50 |
|
|
73 |
|
Restructuring, inventory charges and asset impairments3, 4,
5 |
|
(1 |
) |
|
50 |
|
|
(2 |
) |
|
49 |
|
|
5 |
|
Foreign
exchange loss due to functional currency change6 |
|
- |
|
|
19 |
|
|
- |
|
|
19 |
|
|
- |
|
Other
significant gains, losses or charges, net 7 |
|
(13 |
) |
|
- |
|
|
(4 |
) |
|
(13 |
) |
|
(4 |
) |
Non-GAAP
adjusted operating income |
|
$ |
456 |
|
|
$ |
517 |
|
|
$ |
442 |
|
|
$ |
1,896 |
|
|
$ |
1,781 |
|
Non-GAAP
adjusted operating margin |
|
19.3 |
% |
|
20.8 |
% |
|
19.5 |
% |
|
19.6 |
% |
|
19.6 |
% |
Non-GAAP
Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
Reported
net income - GAAP basis8 |
|
$ |
336 |
|
|
$ |
329 |
|
|
$ |
256 |
|
|
$ |
1,377 |
|
|
$ |
1,072 |
|
Certain
items associated with acquisitions1 |
|
47 |
|
|
47 |
|
|
48 |
|
|
185 |
|
|
183 |
|
Acquisition integration costs |
|
- |
|
|
1 |
|
|
4 |
|
|
2 |
|
|
34 |
|
Loss
(gain) on derivatives associated with terminated business
combination, net |
|
- |
|
|
3 |
|
|
(39 |
) |
|
(89 |
) |
|
(30 |
) |
Certain
items associated with terminated business combination2 |
|
- |
|
|
1 |
|
|
23 |
|
|
50 |
|
|
73 |
|
Restructuring, inventory charges and asset impairments3, 4,
5 |
|
(1 |
) |
|
50 |
|
|
(2 |
) |
|
49 |
|
|
5 |
|
Impairment (gain on sale) of strategic investments, net |
|
(2 |
) |
|
(1 |
) |
|
(5 |
) |
|
4 |
|
|
(9 |
) |
Foreign
exchange loss due to functional currency change6 |
|
- |
|
|
19 |
|
|
- |
|
|
19 |
|
|
- |
|
Other
significant gains, losses or charges, net 7 |
|
(13 |
) |
|
- |
|
|
(4 |
) |
|
(13 |
) |
|
(4 |
) |
Reinstatement of federal R&D tax credit, resolution of prior
years' income tax filings and other tax items8 |
|
(18 |
) |
|
(21 |
) |
|
50 |
|
|
(110 |
) |
|
28 |
|
Income
tax effect of non-GAAP adjustments |
|
(2 |
) |
|
(18 |
) |
|
7 |
|
|
(17 |
) |
|
(38 |
) |
Non-GAAP
adjusted net income |
|
$ |
347 |
|
|
$ |
410 |
|
|
$ |
338 |
|
|
$ |
1,457 |
|
|
$ |
1,314 |
|
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 months ended October 25, 2015
included a $2 million favorable adjustment of restructuring
reserves related to prior restructuring plans and $1 million of
inventory charges related to cost reductions in the solar business.
Results for the three months ended July 26, 2015 primarily included
$34 million of inventory charges and $17 million of restructuring
charges and asset impairments related to the solar business. |
|
|
4 |
Results for fiscal 2015 primarily included $35
million of inventory charges, $17 million of restructuring charges
and asset impairments related to cost reductions in the solar
business, and a $2 million favorable adjustment of restructuring
reserves related to prior restructuring plans. |
|
|
5 |
Results for the three months ended October 26, 2014
included a $2 million favorable adjustment of restructuring
reserve, and results for the twelve months ended October 26, 2014
included $5 million of employee-related costs related to the
restructuring program announced on October 3, 2012. |
|
|
6 |
Results for the three months ended July 26, 2015 and
fiscal 2015 included a $19 million foreign exchange loss due to an
immaterial correction of an error related to functional currency
change. |
|
|
7 |
These items are significant gains, losses, or charges
during a period that are the result of isolated events or
transactions which have not occurred frequently in the past and are
not expected to occur regularly or be repeated in the future. |
|
|
8 |
Amounts for fiscal 2015 included an adjustment to
decrease the provision for income taxes by $35 million 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 |
|
Twelve Months Ended |
(In millions except per share amounts) |
|
October 25,
2015 |
|
July 26,
2015 |
|
October 26,
2014 |
|
October 25,
2015 |
|
October 26,
2014 |
Non-GAAP
Adjusted Earnings Per Diluted Share |
|
|
|
|
|
|
|
|
|
|
Reported
earnings per diluted share - GAAP basis1 |
|
$ |
0.28 |
|
|
$ |
0.27 |
|
|
$ |
0.21 |
|
|
$ |
1.12 |
|
|
$ |
0.87 |
|
Certain
items associated with acquisitions |
|
0.04 |
|
|
0.03 |
|
|
0.04 |
|
|
0.14 |
|
|
0.13 |
|
Acquisition integration costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
0.02 |
|
Certain
items associated with terminated business combination |
|
- |
|
|
- |
|
|
0.01 |
|
|
0.03 |
|
|
0.05 |
|
Gain on
derivatives associated with terminated business combination,
net |
|
- |
|
|
- |
|
|
(0.02 |
) |
|
(0.05 |
) |
|
(0.02 |
) |
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 |
) |
|
(0.02 |
) |
|
0.03 |
|
|
(0.09 |
) |
|
0.02 |
|
Other
significant gains, losses or charges, net |
|
(0.01 |
) |
|
- |
|
|
- |
|
|
(0.01 |
) |
|
- |
|
Foreign
exchange loss due to functional currency change |
|
- |
|
|
0.02 |
|
|
- |
|
|
0.02 |
|
|
- |
|
Non-GAAP
adjusted earnings per diluted share |
|
$ |
0.29 |
|
|
$ |
0.33 |
|
|
$ |
0.27 |
|
|
$ |
1.19 |
|
|
$ |
1.07 |
|
Weighted
average number of diluted shares |
|
1,190 |
|
|
1,231 |
|
|
1,236 |
|
|
1,226 |
|
|
1,231 |
|
1 |
Amounts for fiscal 2015 included an adjustment to
decrease the provision for income taxes by $35 million 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 |
|
Twelve Months Ended |
(In millions, except percentages) |
|
October 25,
2015 |
|
July 26,
2015 |
|
October 26,
2014 |
|
October 25,
2015 |
|
October 26,
2014 |
Silicon
Systems Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
318 |
|
|
$ |
411 |
|
|
$ |
305 |
|
|
$ |
1,410 |
|
|
$ |
1,391 |
|
Certain
items associated with acquisitions1 |
|
47 |
|
|
44 |
|
|
46 |
|
|
178 |
|
|
172 |
|
Acquisition integration costs |
|
- |
|
|
- |
|
|
1 |
|
|
- |
|
|
2 |
|
Non-GAAP
adjusted operating income |
|
$ |
365 |
|
|
$ |
455 |
|
|
$ |
352 |
|
|
$ |
1,588 |
|
|
$ |
1,565 |
|
Non-GAAP
adjusted operating margin |
|
24.4 |
% |
|
27.8 |
% |
|
24.5 |
% |
|
25.9 |
% |
|
26.2 |
% |
AGS
Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
171 |
|
|
$ |
170 |
|
|
$ |
146 |
|
|
$ |
664 |
|
|
$ |
573 |
|
Certain
items associated with acquisitions1 |
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
|
3 |
|
Inventory
charges related to restructuring2, 3 |
|
- |
|
|
3 |
|
|
- |
|
|
3 |
|
|
- |
|
Other
significant gains, losses or charges, net4 |
|
(1 |
) |
|
- |
|
|
- |
|
|
(1 |
) |
|
- |
|
Non-GAAP
adjusted operating income |
|
$ |
170 |
|
|
$ |
173 |
|
|
$ |
146 |
|
|
$ |
667 |
|
|
$ |
576 |
|
Non-GAAP
adjusted operating margin |
|
26.7 |
% |
|
26.0 |
% |
|
24.7 |
% |
|
26.4 |
% |
|
26.2 |
% |
Display
Non-GAAP Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Reported
operating income - GAAP basis |
|
$ |
19 |
|
|
$ |
25 |
|
|
$ |
52 |
|
|
$ |
156 |
|
|
$ |
129 |
|
Certain items associated with acquisitions1 |
|
- |
|
|
1 |
|
|
- |
|
|
2 |
|
|
2 |
|
Non-GAAP
adjusted operating income |
|
$ |
19 |
|
|
$ |
26 |
|
|
$ |
52 |
|
|
$ |
158 |
|
|
$ |
131 |
|
Non-GAAP
adjusted operating margin |
|
9.9 |
% |
|
17.2 |
% |
|
27.4 |
% |
|
20.3 |
% |
|
21.3 |
% |
EES
Non-GAAP Adjusted Operating Income (Loss) |
|
|
|
|
|
|
|
|
|
|
Reported
operating income (loss) - GAAP basis |
|
$ |
- |
|
|
$ |
(52 |
) |
|
$ |
(3 |
) |
|
$ |
(61 |
) |
|
$ |
15 |
|
Certain
items associated with acquisitions1 |
|
- |
|
|
2 |
|
|
2 |
|
|
4 |
|
|
6 |
|
Restructuring, inventory charges and asset impairments2,
3 |
|
(1 |
) |
|
48 |
|
|
- |
|
|
47 |
|
|
- |
|
Non-GAAP
adjusted operating income (loss) |
|
$ |
(1 |
) |
|
$ |
(2 |
) |
|
$ |
(1 |
) |
|
$ |
(10 |
) |
|
$ |
21 |
|
Non-GAAP
adjusted operating margin |
|
(2.2 |
)% |
|
(5.1 |
)% |
|
(2.1 |
)% |
|
(4.7 |
)% |
|
7.5 |
% |
1 |
These items are incremental charges attributable to
completed acquisitions, consisting of amortization of purchased
intangible assets. |
|
|
2 |
Results for the three months ended October 25, 2015
included a $2 million favorable adjustment of restructuring
reserves related to prior restructuring plans and $1 million of
inventory charges related to cost reductions in the solar business.
Results for the three months ended July 26, 2015 primarily included
$34 million of inventory charges and $17 million of restructuring
charges and asset impairments related to the solar business. |
|
|
3 |
Results for fiscal 2015 primarily included $35 million
of inventory charges, $17 million of restructuring charges and
asset impairments related to cost reductions in the solar business,
and a $2 million favorable adjustment of restructuring reserves
related to prior restructuring plans. |
|
|
4 |
These items are significant gains, losses, or charges
during a period that are the result of isolated events or
transactions which have not occurred frequently in the past and are
not expected to occur regularly or be repeated in the future. |
APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED OPERATING
EXPENSES
|
Three Months Ended |
(In millions) |
October 25, 2015 |
|
July 26, 2015 |
|
|
|
|
Operating
expenses - GAAP basis |
$ |
536 |
|
|
$ |
622 |
|
Loss
on derivatives associated with terminated business combination |
- |
|
|
(3 |
) |
Restructuring charges and asset impairments |
2 |
|
|
(16 |
) |
Certain
items associated with acquisitions |
(5 |
) |
|
(6 |
) |
Acquisition integration costs |
- |
|
|
(1 |
) |
Certain
items associated with terminated business combination |
- |
|
|
(1 |
) |
Foreign
exchange loss due to functional currency change |
- |
|
|
(19 |
) |
Other
significant gains, losses or charges, net |
11 |
|
|
- |
|
Non-GAAP
adjusted operating expenses |
$ |
544 |
|
|
$ |
576 |
|
UNAUDITED RECONCILIATION OF GAAP TO
NON-GAAP ADJUSTED EFFECTIVE INCOME TAX RATE
|
Three Months Ended |
(In millions, except percentages) |
October 25, 2015 |
|
|
Provision
for income taxes - GAAP basis (a) |
$ |
61 |
|
Reinstatement of federal R&D tax credit, resolutions of prior
years' income tax filings and other tax items |
18 |
|
Income
tax effect of non-GAAP adjustments |
2 |
|
Non-GAAP
adjusted provision for income taxes (b) |
$ |
81 |
|
|
|
Income
before income taxes - GAAP basis (c) |
$ |
397 |
|
Certain
items associated with acquisitions |
47 |
|
Restructuring, inventory charges and asset impairments |
(1 |
) |
Gain on
sale of strategic investments, net |
(2 |
) |
Other
significant gains, losses or charges, net |
(13 |
) |
Non-GAAP
adjusted income before income taxes (d) |
$ |
428 |
|
|
|
Effective
income tax rate - GAAP basis (a/c) |
15.4 |
% |
|
|
Non-GAAP
adjusted effective income tax rate (b/d) |
18.9 |
% |
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#1966318
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