Applied Materials Announces Results for Third Fiscal Quarter 2002
New Orders Increase to $1.78 Billion
Net Sales Reach $1.46 Billion
SANTA CLARA, Calif.--(BUSINESS WIRE)--Aug. 13, 2002--Applied Materials, Inc. (Nasdaq:AMAT - News), the world's largest supplier of wafer fabrication solutions to the semiconductor industry, reported results for its third fiscal quarter ended July 28, 2002. Net sales were $1.46 billion, up 26 percent from $1.16 billion for the second fiscal quarter of 2002, and down 7 percent from $1.58 billion for the third fiscal quarter of 2001. Net income for the third fiscal quarter of 2002 was $115 million, or $0.07 per diluted share, up 121 percent from $52 million, or $0.03 per diluted share, for the second fiscal quarter of 2002, and flat with $115 million, or $0.07 per diluted share, reported for the third fiscal quarter of 2001.
New orders of $1.78 billion for the third fiscal quarter of 2002 increased 5 percent from $1.69 billion for the second fiscal quarter of 2002, and increased 47 percent from $1.21 billion for the third fiscal quarter of 2001. Regional distribution of new orders for the third fiscal quarter of 2002 was: North America 23 percent, Taiwan 18 percent, Southeast Asia and China 17 percent, Japan 15 percent, Korea 14 percent and Europe 13 percent. Backlog at the end of the third fiscal quarter of 2002 increased to $3.30 billion, from $3.11 billion at the end of the second fiscal quarter of 2002.
Gross margin for the third fiscal quarter of 2002 was 41.5 percent, compared to 40.0 percent for the second fiscal quarter of 2002 and 41.6 percent for the third fiscal quarter of 2001. Net income as a percentage of net sales was 7.9 percent for the third fiscal quarter of 2002, up from 4.5 percent for the second fiscal quarter of 2002 and up from 7.3 percent for the third fiscal quarter of 2001.
"I am pleased that orders and net sales were up for Applied Materials' third quarter," said James C. Morgan, chairman and chief executive officer. "Despite the continuing uncertainty of the global macro-economic environment, the semiconductor industry has begun a major shift requiring a substantial investment in advanced manufacturing technologies. As a result of Applied Materials' research and development efforts over the past several years, we are able to provide our customers with the innovative product and service solutions required to successfully make this transition.
"We recently introduced a number of new technologies to help our customers produce more powerful chips with geometries half the size of today's most advanced chips. With the strong long-term outlook for our industry, we believe Applied Materials is well-positioned to capitalize on the opportunities ahead," concluded Morgan.
This press release contains certain forward-looking statements, including, but not limited to, those relating to customers' investments in new technology, the Company's strategic position, the semiconductor industry's outlook and the economy. These forward-looking statements 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: uncertainties as to the sustainability of economic recovery, worldwide and in the semiconductor industry; the Company's ability to maintain effective cost controls; the Company's ability to develop, deliver and support a broader range of products and services on a timely basis; global uncertainties; changes in demand for semiconductors and customer capacity requirements, including capacity utilizing the latest technology; changes in the timing and amount of customers' investments in new technology; the successful and timely development of new markets, products, processes and services and other risks described in Applied Materials' Form 10-K, Forms 10-Q and other filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this press release.
Applied Materials will be discussing its third fiscal quarter results, along with its outlook for the fourth fiscal quarter of 2002, on a conference call today beginning at 1:30 p.m. Pacific Time. A webcast of the conference call will be available on Applied Materials' Web site under the "Investors" section. Applied Materials will file its Report on Form 10-Q for the third fiscal quarter of 2002 with the Securities and Exchange Commission (SEC) by September 11, 2002 (within 45 days after the close of its third fiscal quarter on July 28, 2002). At the time of this 10-Q filing, James C. Morgan, Applied Materials' Chief Executive Officer, and Joseph R. Bronson, Chief Financial Officer, will file sworn statements certifying the accuracy and completeness of the Company's filings, as required by the SEC's June 27, 2002 order covering the 947 largest public companies incorporated in the United States.
Applied Materials (Nasdaq: AMAT - News), the largest supplier of products and services to the global semiconductor industry, is one of the world's leading information infrastructure providers. Applied Materials enables Information for Everyone(TM) by helping semiconductor manufacturers produce more powerful, portable and affordable chips.
Applied Materials' Web site is appliedmaterials.com.
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended----------------------------------------------------------------------(In thousands, except per share July 29, July 28, July 29, July 28, amounts) 2001 2002 2001 2002----------------------------------------------------------------------Net sales $1,575,904 $1,459,682 $6,078,575 $3,616,614Cost of products sold 920,291 853,539 3,295,248 2,162,279 ---------- ---------- ---------- ----------Gross margin 655,613 606,143 2,783,327 1,454,335Operating expenses: Research, development and engineering 277,333 275,952 926,251 779,630 Marketing and selling 125,979 104,225 389,188 278,113 General and administrative 114,369 89,553 306,481 236,011 Non-recurring items 14,150 - 72,564 85,479 ---------- ---------- ---------- ----------Income from operations 123,782 136,413 1,088,843 75,102Interest expense 10,709 13,080 34,981 36,168Interest income 54,153 40,110 166,699 133,779 ---------- ---------- ---------- ----------Income before income taxes and cumulative effect of change in accounting principle 167,226 163,443 1,220,561 172,713Provision for income taxes 52,281 48,216 363,015 50,951 ---------- ---------- ---------- ----------Income before cumulative effect of change in accounting principle 114,945 115,227 857,546 121,762Cumulative effect of change in accounting principle, net of tax - - (267,399) - ---------- ---------- ---------- ----------Net income $ 114,945 $ 115,227 $ 590,147 $ 121,762 ---------- ---------- ---------- ----------Earnings per share: Basic-continuing operations $ 0.07 $ 0.07 $ 0.53 $ 0.07 Basic-cumulative effect of change in accounting principle - - (0.17) - ---------- ---------- ---------- ---------- Total basic $ 0.07 $ 0.07 $ 0.36 $ 0.07 ---------- ---------- ---------- ---------- Diluted- continuing operations $ 0.07 $ 0.07 $ 0.51 $ 0.07 Diluted- cumulative effect of change in accounting principle - - (0.16) - ---------- ---------- ---------- ---------- Total diluted $ 0.07 $ 0.07 $ 0.35 $ 0.07 ---------- ---------- ---------- ----------Weighted average number of shares: Basic 1,629,840 1,647,181 1,624,438 1,642,337 Diluted 1,707,810 1,703,196 1,697,586 1,706,894---------------------------------------------------------------------- APPLIED MATERIALS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS*---------------------------------------------------------------------- October 28, July 28,(In thousands) 2001 2002----------------------------------------------------------------------ASSETSCurrent assets: Cash and cash equivalents $ 1,356,304 $ 1,164,613 Short-term investments 3,485,088 3,687,434 Accounts receivable, net 776,451 1,085,214 Inventories 1,412,997 1,251,260 Deferred income taxes 551,785 557,601 Other current assets 199,549 257,578 ----------- -----------Total current assets 7,782,174 8,003,700Property, plant and equipment, net 1,706,488 1,799,271Other assets 339,848 406,849 ----------- -----------Total assets $ 9,828,510 $10,209,820 ----------- -----------LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities: Notes payable $ - $ 40,086 Current portion of long-term debt 4,807 9,798 Accounts payable and accrued expenses 1,477,531 1,439,752 Income taxes payable 50,478 151,720 ----------- -----------Total current liabilities 1,532,816 1,641,356Long-term debt 564,805 579,388Deferred income taxes and other liabilities 124,152 131,891 ----------- -----------Total liabilities 2,221,773 2,352,635 ----------- -----------Stockholders' equity: Common stock 16,315 16,480 Additional paid-in capital 1,872,967 1,982,423 Retained earnings 5,693,010 5,814,772 Accumulated other comprehensive income/(loss) 24,445 43,510 ----------- -----------Total stockholders' equity 7,606,737 7,857,185 ----------- -----------Total liabilities and stockholders' equity $ 9,828,510 $10,209,820---------------------------------------------------------------------- * Amounts as of July 28, 2002 are unaudited. Amounts as of October 28, 2001 are from the fiscal 2001 audited financial statements.--------------------------------------------------------------------------------Contact: Applied Materials, Inc., Santa Clara Carolyn Schwartz, 408/748-5227 (investment community) Jeffrey Lettes, 408/563-5161 (editorial/media)
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