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*AV*-To All-As you know I am very bullish on the Tech Sector, especially the semiconductor sector. More and more I am firmly convinced that a very unknowledgeable herd mentality, banding together, are manipulating this sector. Therefore, the only way to make it big is to be able to read the minds of these nefarious and illogical MMs and fund managers and beat them to the punch. Now there is the rub, trying to outfox a bunch of illogical bandits that are totally devoid of ethics and miss the boat on both the financials and technicals of a company. Case in point is the Quarterly release of AMAT's financials. Read it verbatim. Read about the #1 supplier to the semiconductor industry and then tell me what is so different today than 2-4 months ago. We are talking RECORDS here. We are talking great financials and a great future. So why in HELL did the stock and others in this equipment sector fall precipitiously.
ANSWER-Manipulation by the funds, managers, etal that REALLY drive the market and not sound fundamentals. The market has become a game of Psychology and not sound fundamentals.
Andrew
Thursday November 20, 4:02 pm Eastern Time
Company Press Release
Applied Materials Announces Record Results for the Fourth
Fiscal Quarter of 1997
Record New Orders, Revenue, Ongoing Net Income and Cash Levels
SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 20, 1997--Applied Materials, Inc.
(NASDAQ/NMS:AMAT - news), the world's largest supplier of wafer fabrication
systems and services to the worldwide semiconductor industry, reported
results for its fourth fiscal quarter ended October 26, 1997,
with record
net sales
of $1.28 billion, an increase of 48.7 percent from net sales of $861.0 million
for the fourth fiscal quarter of 1996. Net income of $180.1 million, or $0.47
per share, increased significantly compared to net income of $73.1
million,
or $0.20 per share, for the fourth fiscal quarter of 1996. Excluding
the one-time
items discussed below that are reflected in the Company's results of operations
for the fourth fiscal quarters of 1997 and 1996, ongoing net income for the
fourth fiscal quarter of 1997 was a record $187.3 million, or $0.49 per share,
compared to ongoing net income for the fourth fiscal quarter of 1996 of $89.4
million, or $0.24 per share. Gross margin for the fourth fiscal quarter of
1997 improved to 48.1 percent, the highest level since the second fiscal quarter
of 1989, from 47.2 percent for the third fiscal quarter of 1997 and 44.1 percent
for the fourth fiscal quarter of 1996.
Record new orders of $1.37 billion were received in the fourth fiscal quarter of
1997, more than double the new orders of $683.2 million received in the fourth
fiscal quarter of 1996, and an increase of 10.9 percent from new orders of
$1.24 billion for the third fiscal quarter of 1997. Backlog at the end of
fiscal 1997 increased to $1.72 billion, from $1.42 billion at the end of fiscal 1996.
''During fiscal 1997, business conditions strengthened and we exited the year
with significant momentum,'' said James C. Morgan, chairman and chief executive officer.
''This was a challenging year for the semiconductor equipment industry,
yet Applied Materials was able to outperform the industry and deliver
strong
financial results. Order momentum started building in our second fiscal quarter
and continued through the remainder of the year, allowing us to achieve record
levels of new orders, net sales and ongoing net income during our fourth fiscal quarter.''
Geographically, new orders for the fourth fiscal quarter of 1997 from customers located
in North America were 29 percent of the Company's total orders, Europe 16 percent,
Japan 18 percent and Korea 7 percent. Asia-Pacific, driven by strong demand from
customers in Taiwan and Singapore, represented 30 percent of
the Company's new
orders for the quarter.
In a significant intellectual property matter, the Company settled all outstanding
litigation with General Signal Corporation [NYSE:GSX - news] in the fourth fiscal
quarter of 1997. In connection with this settlement, the Company made a one-time
payment of $11.0 million and acquired ownership from General Signal of five patents
regarding ''cluster tool'' architecture, which had originally belonged to
Drytek Systems. This payment has been reflected in the Company's results of
operations for the fourth fiscal quarter of 1997.
The Company also declared and executed a two-for-one stock split in the form of a
100 percent stock dividend in the fourth fiscal quarter of 1997. All prior period
common stock and per share amounts appearing in this release have been restated
to reflect this stock split. During the fourth fiscal quarter of
1997, the
Company issued $400.0 million of senior notes payable, the proceeds of which will be
used for general corporate purposes, including capital expenditures and working capital
needs. As a result of this financing and continuing asset management efforts, the
Company ended fiscal 1997 with cash and short-term investments totaling $1.54
billion, the highest level in the Company's history.
The Company also announced results for its fiscal year ended October 26, 1997,
with net sales of $4.07 billion, a slight decrease from fiscal 1996 net sales of
$4.14 billion. Net income for fiscal 1997 was $498.5 million, or $1.32 per share,
down from $599.6 million, or $1.63 per share, for fiscal 1996. Ongoing net income
for fiscal 1997 was $523.7 million, or $1.39 per share, compared to ongoing net
income for fiscal 1996 of $615.9 million, or $1.68 per share. Record new orders of
$4.53 billion were received in fiscal 1997, up from $4.27 billion in fiscal 1996.
The Company's results of operations for fiscal 1997 include certain non-recurring
items, specifically: a non-tax deductible charge of $59.5 million in the first fiscal
quarter for acquired in-process research and development related to the acquisitions
of Opal, Inc. and Orbot Instruments, Ltd.; pre-tax income of $80.0
million from
the Novellus Systems, Inc. litigation settlement in the third fiscal quarter; pre-tax
bad debt expense of $16.3 million in the third fiscal quarter associated with
receivables from Thailand-based Submicron Technology PCL; and $11.0 million of pre-tax
expense in the fourth fiscal quarter for the litigation settlement with General Signal
Corporation. Fiscal 1996 results of operations include a pre-tax
charge of $25.1
million in the fourth fiscal quarter for costs associated with the Company's reduction
in force and consolidation of certain facilities.
''The improved industry environment was driven primarily by strength in the logic and
microprocessor markets, increased Asian foundry investment and technology buys
for 0.25 micron level production,'' continued Morgan. ''This is evidenced by our
fourth fiscal quarter new orders, of which almost 40 percent were for 0.25 micron or
below applications. Our strong product capability in leading-edge technology enabled us to
gain significant market share in etch, physical vapor deposition (PVD), chemical
vapor deposition (CVD), chemical mechanical polishing (CMP) and rapid thermal processing (RTP).
Two of our advanced technology products won Semiconductor International's
''Editor's Choice Best Product'' awards: the Ultima HDP (High Density Plasma)-CVD Centura
and the Metal Etch DPS (Decoupled Plasma Source) Centura systems.
''As we look forward to fiscal 1998, we believe we are strongly positioned across
all of our product lines to address our customers' requirements for next-generation
manufacturing technologies. During the low point of the most recent industry cycle,
we were able to deliver ongoing net income in excess of 10 percent of
revenues in each
fiscal quarter. This accomplishment gives us confidence that we have the capability to
adequately manage the Company and deliver solid financial performance in a variety of environments.
With our recent 30th anniversary, we celebrated our past success and now look forward to
extending our position as the leading producer of advanced manufacturing
equipment for the semiconductor industry,'' Morgan concluded.
In the first fiscal quarter of 1998, the Company settled all outstanding litigation
with Advanced Semiconductor Materials, Inc. (ASM). As a result of this settlement,
the Company received a convertible note of $80.0 million, against which a payment of
$15.0 million was received in early November. In the first fiscal quarter of 1998,
the Company will recognize a favorable $80.0 million of pre-tax non-operating income
related to this transaction, consisting of $15.0 million of cash and the unpaid balance
of the note. ASM is also required to pay ongoing royalties for all future sales of
products subject to the agreement. On November 12, 1997, the Company announced that it
agreed to make a one-time payment of $30.0 million to Trikon Technologies, Inc.
for a non-exclusive, worldwide, perpetual license of MORI(TM) plasma source and
Forcefill(TM) deposition technology. In connection with this transaction, the
Company will recognize approximately $32.0 million of pre-tax expense, including
transaction costs, in its first fiscal quarter of 1998.
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 ability to adequately manage the Company in a variety
of economic and industry environments; currency fluctuations and
instability in global
financial markets, especially in Asia-Pacific; the successful and timely development of
new markets, products, processes and services (including fabrication equipment for 300mm
wafers and 0.25 micron and below devices); manufacturing capability and capacity,
based in part on the availability of critical manufacturing components; and
challenges from the Company's competition. 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 appliedmaterials.com
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(a)
Three Months Ended Fiscal Year Ended
Oct. 26, Oct. 27, Oct. 26, Oct. 27,
1997 1996 1997 1996
---------- ---------- ---------- ----------
(In thousands,
except per share
amounts)
Net sales $1,280,396 $ 860,958 $4,074,275 $4,144,817
Cost of products sold 664,040 481,286 2,173,350 2,195,078
---------- ---------- ---------- ----------
Gross margin 616,356 379,672 1,900,925 1,949,739
Operating expenses:
Research, development
and engineering 175,267 117,862 567,612 481,394
Marketing and selling 91,954 72,880 314,381 313,631
General and
administrative 72,420 56,930 252,214 226,063
Bad debt expense -- -- 16,318 --
Acquired in-process
research and development -- -- 59,500 --
Restructuring -- 25,100 -- 25,100
---------- ---------- ---------- ----------
Income from operations 276,715 106,900 690,900 903,551
Income/(expense) from
litigation settlements (11,000) -- 69,000 --
Interest expense 5,119 5,836 20,705 20,733
Interest income 16,533 11,353 59,726 39,618
---------- ---------- ---------- ----------
Income from consolidated
companies before taxes 277,129 112,417 798,921 922,436
Provision for income
taxes 96,994 39,345 300,447 322,851
---------- ---------- ---------- ----------
Income from consolidated
companies 180,135 73,072 498,474 599,585
Equity in net income/
(loss) of joint venture -- -- -- --
---------- ---------- ---------- ----------
Net income $ 180,135 $ 73,072 $ 498,474 $ 599,585
---------- ---------- ---------- ----------
Earnings per share (b) $ 0.47 $ 0.20 $ 1.32 $ 1.63
---------- ---------- ---------- ----------
Average common shares
and equivalents (b) 382,775 365,398 377,838 367,214
---------- ---------- ---------- ----------
(a) - Results of operations for the three months ended October 26,
1997 and October 27, 1996 are unaudited. Results of operations for the
fiscal years presented have been audited.
(b) - Retroactively restated to reflect a two-for-one stock split
in the form of a 100 percent stock dividend, effective October 13,
1997.
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (a)
October 26, October 27,
(In thousands) 1997 1996
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 448,043 $ 403,888
Short-term investments 1,094,912 633,744
Accounts receivable, net 1,110,885 822,384
Inventories 686,451 478,552
Deferred income taxes 324,568 281,586
Other current assets 105,498 72,915
---------- ----------
Total current assets 3,770,357 2,693,069
Property, plant and equipment, net 1,066,053 919,038
Other assets 234,356 25,880
---------- ----------
Total assets $5,070,766 $3,637,987
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 55,943 $ 77,522
Current portion of long-term debt 10,563 22,640
Accounts payable and
accrued expenses 1,157,808 791,897
Income taxes payable 177,774 43,168
---------- ----------
Total current liabilities 1,402,088 935,227
Long-term debt 623,090 275,485
Deferred income taxes and
other liabilities 103,417 56,850
---------- ----------
Total liabilities 2,128,595 1,267,562
---------- ----------
Stockholders' equity:
Common stock 3,672 3,605
Additional paid-in capital 850,902 761,573
Retained earnings 2,098,038 1,599,564
Cumulative translation adjustments (10,441) 5,683
---------- ----------
Total stockholders' equity 2,942,171 2,370,425
---------- ----------
Total liabilities and
stockholders' equity $5,070,766 $3,637,987
---------- ----------
(a) - Common stock and additional paid-in capital have been restated
as of October 27, 1996 to reflect a two-for-one stock split in the
form of a 100 percent stock dividend, effective October 13, 1997.
Contact:
Applied Materials, Santa Clara
Carolyn Schwartz (investment community), 408/748-5227
Jeffrey Lettes (editorial/media), 408/563-5161 |
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