Applied Materials Announces Results for Second Fiscal Quarter 1999; Record New Orders of $1.39 Billion, Net Sales of $1.12 Billion
SANTA CLARA, Calif.--(BUSINESS WIRE)--May 18, 1999--Applied Materials, Inc., the world's largest supplier of wafer fabrication systems and services to the global semiconductor industry, reported results for its second fiscal quarter ended May 2, 1999. Net sales were $1.12 billion, up 51 percent from $742 million for the first fiscal quarter of 1999, and down 5 percent from $1.18 billion for the second fiscal quarter of 1998. Ongoing net income for the second fiscal quarter of 1999 was $141.6 million, or $0.36 per diluted share, up significantly from $42.5 million, or $0.11 per diluted share, for the first fiscal quarter of 1999, and approximately the same as the $141.2 million, or $0.37 per diluted share, for the second fiscal quarter of 1998. Strong asset management performance resulted in $2.02 billion of cash and short-term investments at the end of the second fiscal quarter.
New orders for the second fiscal quarter of 1999 reached a record
$1.39 billion, an increase of 35 percent from $1.03 billion for both
the first fiscal quarter of 1999 and second fiscal quarter of 1998.
Geographically, North America new orders for the second fiscal quarter
of 1999 were 30 percent of the Company's total new orders, Europe 14
percent, Japan 17 percent, Korea 8 percent, Taiwan 25 percent and
Southeast Asia and China 6 percent. Backlog at the end of the second
fiscal quarter of 1999 increased to $1.36 billion, from $1.15 billion
at the end of the first fiscal quarter of 1999.
Gross margin for the second fiscal quarter of 1999 was 46.3
percent, up from 43.2 percent for the first fiscal quarter of 1999,
and down from 47.1 percent for the second fiscal quarter of 1998.
Ongoing net income as a percentage of net sales was 12.7 percent for
the second fiscal quarter of 1999, compared to 5.7 percent for the
first fiscal quarter of 1999 and 12.0 percent for the second fiscal
quarter of 1998. The Company's effective income tax rate for the first
and second fiscal quarters of 1999 was 31 percent, compared to 35
percent for the second fiscal quarter of 1998.
"The outstanding second quarter results reflect our ability to
deliver the critical equipment needed to manufacture narrower
linewidths as our customers continue their transition to 0.18 micron
and beyond applications," said James C. Morgan, chairman and chief
executive officer. "During the quarter, we were able to capitalize on
our extensive product strength and global support to capture both
manufacturing capacity and technology advancement purchases. In
addition, we are now beginning to realize improved productivity and
operating performance as a result of the restructuring actions taken
in the last half of fiscal 1998," continued Morgan.
Strong orders for the quarter reflected an increase in demand
from manufacturers of logic, memory and communications chips. Product
momentum was especially high for the Company's metal deposition, etch,
dielectric CVD (chemical vapor deposition) and ion implantation
systems. During the quarter, Applied Materials expanded its line of
products for the volume production of high-speed, copper-based chips
with the announcement of its new electrochemical plating system and
the Mirra(R) Electra CMP (chemical mechanical polishing) system.
Applied Materials now offers an extensive suite of products for copper
chip manufacturing, including the Black Diamond(tm) CVD Centura(R),
Dielectric Etch IPS(tm) Centura and Endura(R) Electra Barrier & Seed
systems, as well as the WF-736 DUO and SEMVision(tm) systems for
defect detection and review.
"The semiconductor industry continues to show signs of
improvement in a healthier global economic environment. As the market
for computing, consumer, communications and Internet-related products
continues to grow, we believe Applied Materials, with our technology
leadership and global infrastructure, will have an excellent
opportunity to capitalize on this growth," concluded Morgan.
This press release contains certain forward-looking statements
that are subject to known and unknown risks and uncertainties that
could cause actual results to differ materially from those expressed
or implied by such statements. Such risks and uncertainties include,
but are not limited to: the continuing improvement of the
semiconductor industry, which is dependent on many factors, including
the health of global economies, DRAM prices and overall demand for
logic, communications, memory and other chips; continued customer
transition to advanced technology, including 0.18 micron and beyond
applications; the ability of the Company to continue to achieve
improvements in productivity and operating performance; the ability of
the Company to maintain its technology leadership and improve its
market share; the ability of the Company to satisfy manufacturing
demands, based in part on the availability of critical components; and
the continued growth of the market for computing, consumer,
communications and Internet-related products. The Company assumes no
obligation to update the information in this press release.
Applied Materials, Inc. is a Fortune 500 global growth company
and the world's largest supplier of wafer fabrication systems and
services to the global semiconductor industry. Applied Materials is
traded on the Nasdaq National Market under the symbol, "AMAT". Applied
Materials' website is http://www.appliedmaterials.com.
Applied Materials, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
-----------------------------------------
(In thousands, except April 26, May 2, April 26, May 2,
per share amounts) 1998 1999 1998 1999
----------------------------------------------------------------------
Net sales $1,176,316 $1,117,626 $2,484,001 $1,860,103
Cost of products sold 622,027 600,385 1,300,271 1,021,759
---------- ---------- ---------- ----------
Gross margin 554,289 517,241 1,183,730 838,344
Operating expenses:
Research, development
and engineering 181,937 166,144 364,266 307,351
Marketing and selling 84,689 77,200 171,078 147,933
General and administrative 76,745 80,885 142,513 142,479
Non-recurring items -- -- 32,227 5,000
---------- ---------- ---------- ----------
Income from operations 210,918 193,012 473,646 235,581
Income from litigation
settlements -- -- 80,000 20,000
Interest expense 11,885 11,594 23,749 23,064
Interest income 18,230 23,856 39,509 49,402
---------- ---------- ---------- ----------
Income before taxes 217,263 205,274 569,406 281,919
Provision for
income taxes 76,042 63,635 199,292 87,395
---------- ---------- ---------- ----------
Net income $ 141,221 $ 141,639 $ 370,114 $ 194,524
---------- ---------- ---------- ----------
Earnings per share:
Basic $ 0.39 $ 0.38 $ 1.01 $ 0.52
Diluted $ 0.37 $ 0.36 $ 0.98 $ 0.50
Weighted average
number of shares:
Basic 365,936 374,300 366,555 372,379
Diluted 379,247 395,724 379,320 392,242
Applied Materials, Inc.
Consolidated Condensed Balance Sheets(a)
Oct. 25, May 2,
(In thousands) 1998 1999
-----------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 575,205 $ 518,564
Short-term investments 1,188,351 1,499,076
Accounts receivable, net 764,472 920,464
Inventories 555,881 577,917
Deferred income taxes 337,906 337,016
Other current assets 97,140 107,845
----------- -----------
Total current assets 3,518,955 3,960,882
Property, plant and equipment, net 1,261,520 1,209,177
Other assets 149,217 153,447
----------- -----------
Total assets $ 4,929,692 $ 5,323,506
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 644 $ 8,994
Current portion of long-term debt 7,367 6,846
Accounts payable and accrued expenses 1,041,341 1,024,418
Income taxes payable 68,974 199,672
----------- -----------
Total current liabilities 1,118,326 1,239,930
Long-term debt 616,572 613,336
Deferred income taxes
and other liabilities 74,173 84,435
----------- -----------
Total liabilities 1,809,071 1,937,701
----------- -----------
Stockholders' equity:
Common stock 3,679 3,754
Additional paid-in capital 792,145 876,718
Retained earnings 2,328,940 2,523,464
Accumulated other
comprehensive income/(loss) (4,143) (18,131)
----------- -----------
Total stockholders' equity 3,120,621 3,385,805
----------- -----------
Total liabilities and
stockholders' equity $ 4,929,692 $ 5,323,506
(a) Amounts as of May 2, 1999 are unaudited. Amounts as of October
25, 1998 are from the October 25, 1998 audited financial
statements.
Applied Materials' Second Fiscal Quarter 1999 Conference Call
will be pilot broadcast via its Internet site, www.appliedmaterials.com,
on May 18, 1999, starting at 1:30 p.m. (PDT).
--30--ap/sf* gdr/sf
CONTACT: Applied Materials, Inc.
Carolyn Schwartz (investment community), 408/748-5227
Jeffrey Lettes (editorial/media), 408/563-5161
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS