SANTA CLARA, Calif.--(BUSINESS WIRE)--May 13, 1997--Applied
Materials, Inc. reported results for the second fiscal quarter ended
April 27, 1997, with net sales of $900.9 million, a decrease of 20.1
percent from $1.1 billion for the second fiscal quarter of 1996, and
an increase of 7.8 percent from $835.8 million for the first fiscal
quarter of 1997. Net income for the second fiscal quarter of 1997
was $102.1 million, or $0.54 per share, down 45.0 percent from $185.8
million, or $1.01 per share, for the second fiscal quarter of 1996.
New orders of $1.0 billion were booked during the second fiscal
quarter of 1997, down from $1.3 billion during the second fiscal
quarter of 1996, but up from $904.7 million in the first fiscal
quarter of 1997. Backlog increased to $1.5 billion at the end of the
second fiscal quarter of 1997, from $1.4 billion at the end of the
first fiscal quarter of 1997.
Net income for the second fiscal quarter of 1997 was $102.1
million, or 11.3 percent of net sales, up from $89.1 million, or 10.7
percent of net sales, excluding a $59.5 million one-time acquisition
related charge, for the first fiscal quarter of 1997. Gross margin
for the second fiscal quarter of 1997 improved to 46.0 percent, from
44.5 percent in the first fiscal quarter of 1997. "Because of our
commitment to delivering total solutions to our customers at a
cost-effective price, we are constantly looking for more efficient
ways to manufacture products and provide services, and will continue
to focus on these opportunities as our business volume increases,"
said James C. Morgan, chairman and chief executive officer.
Decreased gross margin and net income in the second fiscal quarter of
1997, when compared to the second fiscal quarter of 1996, is
primarily attributable to reduced business volume and increased
investment in 300mm product development.
"We are encouraged by the continued improvement in new orders for
advanced semiconductor manufacturing equipment from the $683.2
million in new orders received in the fourth fiscal quarter of 1996,
the low point of this business cycle, to $1.0 billion in our second
fiscal quarter of 1997," said Morgan. Geographically, new orders
for the second fiscal quarter of 1997 from North America were 40
percent of the Company's total orders, Europe 13 percent, Japan 22
percent, Korea 7 percent and Asia-Pacific 18 percent. "Semiconductor
manufacturers are continuing to invest strategically for leading-edge
capability and capacity, providing new opportunities for our advanced
technologies in multiple product areas. In addition, a significant
emerging trend is the investment in new production sites in North
America and Europe by Korean and Asia-Pacific customers. With our
worldwide infrastructure and resources, Applied Materials is well
positioned to support and benefit from this globalization of the
industry," added Morgan.
The Company's financial condition remained strong as of April 27,
1997, with total assets of $3.9 billion, of which $1.1 billion was
cash and short-term investments. On May 5, 1997, the Company
announced that it had reached a settlement with Novellus Systems,
Inc., whereby Novellus agreed to pay $80 million in damages to
Applied Materials for past patent infringement. This amount was
received early in the third fiscal quarter of 1997 and will be
reflected in the Company's results of operations for that period.
Novellus also agreed to pay ongoing royalties for system shipments
subsequent to the date of the settlement.
"We are excited about our recent shipment of the industry's first
300mm production wafer processing system and the shipment of our
5,000th single-wafer, multi-chamber system. Our recent product
introductions have created a unique portfolio of leading-edge
technologies for the 0.25 micron generation purchases that are now a
significant part of our business. In April, we launched the
Dielectric Etch IPS Centura, which is the industry's most advanced
oxide etcher for 0.25 micron and below devices. Our metal and
silicon DPS etch technology is also showing very strong gains for
0.25 micron production. In CVD (chemical vapor deposition), we are
ramping production of our Ultima High Density Plasma Centura system
to meet the rapid customer acceptance of this technology.
"The PVD (physical vapor deposition) business is strong and
customers are qualifying the recently introduced IMP (ion metal
plasma) barrier technology, and the Cool Aluminum PVD/CVD process.
After its first full year in the market, the RTP (rapid thermal
processing) Centura has achieved market leadership and customers are
placing repeat orders for multiple units of our Mirra CMP (chemical
mechanical polishing) system. Overall, we expect increasing demand
for the Company's products as our customers ramp up their production
lines," Morgan said.
"The outlook for the remainder of fiscal 1997 continues to be
positive and we remain focused on leveraging our resources to better
serve our customers' need for leading-edge technology and global
support. There are tremendous long-term opportunities resulting from
the increasingly pervasive use of semiconductors in electronic
devices and the industry's transition to larger substrate sizes and
smaller device geometries. We are moving quickly to extend all of
our process technologies to the coming 300mm wafer size and we are
committed to maintaining our leadership position in the semiconductor
equipment industry," Morgan concluded.
This press release contains certain forward-looking statements
that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and
uncertainties include, but are not limited to: the increasing
pervasiveness and percentage of value represented by semiconductors
in electronic devices; changes in the relationship between
semiconductor inventory levels and the demand for semiconductors,
especially in the personal computer market; changes in customers'
strategic investment levels; the successful and timely development of
new products, processes and services (including fabrication equipment
for 300mm wafers and 0.25 micron and below devices); the successful
development of new markets; continued manufacturing efficiencies; and
product pricing pressures and other challenges from the Company's
competition. The Company assumes no obligation to update the
information in this 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 appliedmaterials.com .
*T
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
April 27, April 28, April 27, April 28,
1997 1996 1997 1996
---------- ---------- ---------- ----------
(In thousands, except
per share amounts)
Net sales $ 900,862 $1,127,855 $1,736,638 $2,168,435
Cost of products sold 486,845 586,564 950,965 1,130,344
---------- ---------- ---------- ----------
Gross margin 414,017 541,291 785,673 1,038,091
Operating expenses:
Research, development
and engineering 131,973 124,918 248,465 235,270
Marketing and selling 74,965 80,587 141,236 157,869
General and
administrative 59,617 54,820 119,225 104,375
Acquired in-process
research and
development -- -- 59,500 --
---------- ---------- ---------- ----------
Income from operations 147,462 280,966 217,247 540,577
Interest expense 4,935 4,917 10,735 10,085
Interest income 14,598 9,829 28,155 19,426
---------- ---------- ---------- ----------
Income from consolidated
companies before taxes 157,125 285,878 234,667 549,918
Provision for income
taxes 54,994 100,057 102,959 192,471
---------- ---------- ---------- ----------
Income from
consolidated
companies 102,131 185,821 131,708 357,447
Equity in net income/
(loss) of joint venture - - - -
---------- ---------- ---------- ----------
Net income $ 102,131 $ 185,821 $ 131,708 $ 357,447
---------- ---------- ---------- ----------
Earnings per share $ .54 $ 1.01 $ .71 $ 1.94
---------- ---------- ---------- ----------
Average common shares
and equivalents 187,899 183,699 186,762 183,921
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS(a)
April 27, Oct. 27,
(In thousands) 1997 1996
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 202,660 $ 403,888
Short-term investments 872,190 633,744
Accounts receivable, net 807,181 822,384
Inventories 507,632 478,552
Deferred income taxes 278,352 281,586
Other current assets 83,295 72,915
---------- ----------
Total current assets 2,751,310 2,693,069
Property, plant and
equipment, net 900,041 919,038
Other assets 240,510 25,880
---------- ----------
Total assets $3,891,861 $3,637,987
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 19,892 $ 77,522
Current portion of long-term
debt 7,659 22,640
Accounts payable and accrued
expenses 875,808 791,897
Income taxes payable 147,713 43,168
---------- ---------
Total current liabilities 1,051,072 935,227
Long-term debt 227,808 275,485
Deferred income taxes and other
non-current obligations 107,601 56,850
---------- ----------
Total liabilities 1,386,481 1,267,562
---------- ----------
Stockholders' equity:
Common stock 1,815 1,802
Additional paid-in capital 781,281 763,376
Retained earnings 1,731,272 1,599,564
Cumulative translation
adjustments (8,988) 5,683
---------- ----------
Total stockholders' equity 2,505,380 2,370,425
---------- ----------
Total liabilities and
stockholders' equity $3,891,861 $3,637,987
---------- ----------
*T
(a) Amounts as of April 27, 1997 are unaudited. Amounts as of
October 27, 1996 were obtained from the October 27, 1996 audited
financial statements.
CONTACT: Applied Materials, Inc.
Carolyn Schwartz (investment community), 408/748-5227
or
Shannon Fryhoff (editorial/media), 408/986-7229
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS
KEY: APMFXB |
