Apple Inc 8-K 2004-10-13
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Exhibit 99.1
Apple Reports Fourth Quarter Results
Revenue Increases 37 Percent Year-Over-Year
iPod Shipments Top 2 million
CUPERTINO, CaliforniaOctober 13, 2004Apple® today announced financial results for its fiscal 2004 fourth quarter ended September 25, 2004. For the quarter, the Company posted a net profit of $106 million, or $.26 per diluted share. These results compare to a net profit of $44 million, or $.12 per diluted share, in the year-ago quarter. Revenue for the quarter was $2.35 billion, up 37 percent from the year-ago quarter. Gross margin was 27.0 percent, up from 26.6 percent in the year-ago quarter. International sales accounted for 37 percent of the quarters revenue.
The quarters results include an after-tax restructuring charge of $4 million. Excluding this charge, the Companys net profit for the quarter would have been $110 million, or $.27 per diluted share.
Apple shipped 836,000 Macintosh® units and 2,016,000 iPods during the quarter, representing a 6 percent increase in CPU units and a 500 percent increase in iPods over the year-ago quarter.
We are thrilled to report our highest fourth quarter revenue in nine years, said Steve Jobs, Apples CEO. We shipped over 2 million iPods, our Retail store revenue grew 95 percent year-over-year, and the new iMac G5 has received phenomenal reviews and is off to a great start.
Were pleased to report 37 percent revenue growth for the quarter and operating margin above 5 percent, said Peter Oppenheimer, Apples CFO. Looking ahead to the first quarter of fiscal 2005, we expect revenue of between $2.8 and $2.9 billion, operating margin above 7 percent and earnings per diluted share of $.39 to $.42.
For the year, the Company reported net income of $276 million on revenue of $8.28 billion compared to net income of $69 million on revenue of $6.21 billion in 2003.
Non-GAAP Measures
The Company believes that presentation of results excluding items such as restructuring charges and investment gains provides meaningful supplemental information to both management and investors that is indicative of the Companys core operating results and facilitates comparison of operating results across reporting periods. The Company includes a full income statement reconciliation of these non-GAAP measures to provide a more complete view of their effect on results.
Apple will provide live streaming of its Q4 2004 financial results conference call utilizing QuickTime, Apples standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on Wednesday, October 13, 2004 at http://www.apple.com/quicktime/qtv/earningsq404/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.
This press release contains forward-looking statements about the Companys estimated revenue and earnings for the first quarter of fiscal 2005. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include continued competitive pressures in the marketplace; the effect competitive and economic factors and the Companys reaction to them may have on consumer and business buying decisions with respect to the Companys products; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the continued availability of certain components and services essential to the Companys business currently obtained by the Company from sole or limited sources, including the timely resolution of manufacturing issues associated with the G5 microprocessors used in many of the Companys Macintosh systems; possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangements, and reduced end-user purchases relative to expectations; possible disruption in commercial activity as a result of major health concerns including epidemics; risks associated with the Companys retail initiative including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships; the effect that the Companys dependency on manufacturing and logistics services provided by third-parties may have on the quality, quantity or cost of products manufactured or services rendered; the Companys reliance on the availability of third-party music content, and the ability of the Company to successfully evolve its operating system and attract sufficient Macintosh developers. More information on potential factors that could affect the Companys financial results is included from time to time in the Companys public reports filed with the SEC, including the Companys Forms 10-Q for the quarters ended December 27, 2003, March 27, 2004 and June 26, 2004; and the
Companys Form 10-K for the 2004 fiscal year to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store.
Press Contact:
Steve Dowling
(408) 974-1896
dowling@apple.com
Investor Relations Contacts:
Nancy Paxton
(408) 974-5420
paxton1@apple.com
Joan Hoover
(408) 974-4570
hoover1@apple.com
NOTE TO EDITORS: For additional information visit Apples PR website (www.apple.com/pr/), or call Apples Media Helpline at (408) 974-2042.
© 2004 Apple. All rights reserved. Apple, the Apple logo, Macintosh, Mac, Mac OS, QuickTime, iPod and iMac are either registered trademarks or trademarks of Apple. Other company and product names may be trademarks of their respective owners.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
|
|
|
September 25, |
|
September 27, |
|
||
|
|
|
|
|
|
|
||
|
ASSETS: |
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
2,969 |
|
$ |
3,396 |
|
|
Short-term investments |
|
2,495 |
|
1,170 |
|
||
|
Accounts receivable, less allowances of $47 and $49, respectively |
|
774 |
|
766 |
|
||
|
Inventories |
|
101 |
|
56 |
|
||
|
Deferred tax assets |
|
231 |
|
190 |
|
||
|
Other current assets |
|
485 |
|
309 |
|
||
|
Total current assets |
|
7,055 |
|
5,887 |
|
||
|
Property, plant, and equipment, net |
|
707 |
|
669 |
|
||
|
Goodwill |
|
80 |
|
85 |
|
||
|
Acquired intangible assets |
|
17 |
|
24 |
|
||
|
Other assets |
|
191 |
|
150 |
|
||
|
Total assets |
|
$ |
8,050 |
|
$ |
6,815 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS EQUITY: |
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
1,451 |
|
$ |
1,154 |
|
|
Accrued expenses |
|
1,229 |
|
899 |
|
||
|
Current debt |
|
|
|
304 |
|
||
|
Total current liabilities |
|
2,680 |
|
2,357 |
|
||
|
Deferred tax liabilities and other non-current liabilities |
|
294 |
|
235 |
|
||
|
Total liabilities |
|
2,974 |
|
2,592 |
|
||
|
|
|
|
|
|
|
||
|
Commitments and contingencies |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Shareholders equity: |
|
|
|
|
|
||
|
Common stock, no par value; 900,000,000 shares authorized; 391,443,617 and 366,726,584 shares issued and outstanding, respectively |
|
2,514 |
|
1,926 |
|
||
|
Deferred stock compensation |
|
(93 |
) |
(62 |
) |
||
|
Retained earnings |
|
2,670 |
|
2,394 |
|
||
|
Accumulated other comprehensive income (loss) |
|
(15 |
) |
(35 |
) |
||
|
Total shareholders equity |
|
5,076 |
|
4,223 |
|
||
|
Total liabilities and shareholders equity |
|
$ |
8,050 |
|
$ |
6,815 |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)
|
|
|
THREE MONTHS ENDED |
|
TWELVE MONTHS ENDED |
|
||||||||
|
|
|
September 25, |
|
September 27, |
|
September 25, |
|
September 27, |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
2,350 |
|
$ |
1,715 |
|
$ |
8,279 |
|
$ |
6,207 |
|
|
Cost of sales |
|
1,716 |
|
1,259 |
|
6,020 |
|
4,499 |
|
||||
|
Gross margin |
|
634 |
|
456 |
|
2,259 |
|
1,708 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
||||
|
Research and development |
|
122 |
|
111 |
|
489 |
|
471 |
|
||||
|
Selling, general, and administrative |
|
379 |
|
314 |
|
1,421 |
|
1,212 |
|
||||
|
Restructuring costs |
|
5 |
|
|
|
23 |
|
26 |
|
||||
|
Total operating expenses |
|
506 |
|
425 |
|
1,933 |
|
1,709 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating income (loss) |
|
128 |
|
31 |
|
326 |
|
(1 |
) |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other income and expense: |
|
|
|
|
|
|
|
|
|
||||
|
Gain on sales of non-current investments |
|
|
|
8 |
|
4 |
|
10 |
|
||||
|
Interest and other income, net |
|
19 |
|
16 |
|
53 |
|
83 |
|
||||
|
Total other income and expense |
|
19 |
|
24 |
|
57 |
|
93 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before provision for income taxes |
|
147 |
|
55 |
|
383 |
|
92 |
|
||||
|
Provision for income taxes |
|
41 |
|
14 |
|
107 |
|
24 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income before accounting change |
|
106 |
|
41 |
|
276 |
|
68 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cumulative effect of accounting change, net |
|
|
|
3 |
|
|
|
1 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
106 |
|
$ |
44 |
|
$ |
276 |
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per common share before accounting change: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
0.28 |
|
$ |
0.11 |
|
$ |
0.74 |
|
$ |
0.19 |
|
|
Diluted |
|
$ |
0.26 |
|
$ |
0.11 |
|
$ |
0.71 |
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
$ |
0.28 |
|
$ |
0.12 |
|
$ |
0.74 |
|
$ |
0.19 |
|
|
Diluted |
|
$ |
0.26 |
|
$ |
0.12 |
|
$ |
0.71 |
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Shares used in computing earnings per share (in thousands): |
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
383,463 |
|
362,191 |
|
371,590 |
|
360,631 |
|
||||
|
Diluted |
|
402,906 |
|
370,733 |
|
387,311 |
|
363,466 |
|
||||
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except share and per share amounts)
THREE MONTHS ENDED SEPTEMBER 25, 2004
|
|
|
As Reported |
|
Non-GAAP |
|
Non-GAAP |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net sales |
|
$ |
2,350 |
|
|
|
$ |
2,350 |
|
|
|
Cost of sales |
|
1,716 |
|
|
|
1,716 |
|
|||
|
Gross margin |
|
634 |
|
|
|
634 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Operating expenses: |
|
|
|
|
|
|
|
|||
|
Research and development |
|
122 |
|
|
|
122 |
|
|||
|
Selling, general, and administrative |
|
379 |
|
|
|
379 |
|
|||
|
Restructuring costs |
|
5 |
|
(5 |
)(a) |
|
|
|||
|
Total operating expenses |
|
506 |
|
(5 |
) |
501 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Operating income |
|
128 |
|
5 |
|
133 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Other income and expense: |
|
|
|
|
|
|
|
|||
|
Interest and other income, net |
|
19 |
|
|
|
19 |
|
|||
|
Total other income and expense |
|
19 |
|
|
|
19 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Income before provision for income taxes |
|
147 |
|
5 |
|
152 |
|
|||
|
Provision for income taxes |
|
41 |
|
1 |
(b) |
42 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net income |
|
$ |
106 |
|
$ |
4 |
|
$ |
110 |
|
|
|
|
|
|
|
|
|
|
|||
|
Earnings per common share: |
|
|
|
|
|
|
|
|||
|
Basic |
|
$ |
0.28 |
|
|
|
$ |
0.29 |
|
|
|
Diluted |
|
$ |
0.26 |
|
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Shares used in computing earnings per share (in thousands): |
|
|
|
|
|
|
|
|||
|
Basic |
|
383,463 |
|
|
|
383,463 |
|
|||
|
Diluted |
|
402,906 |
|
|
|
402,906 |
|
|||
Notes:
(a) Pre-tax restructuring costs
(b) Tax impact of restructuring costs
UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except share and per share amounts)
TWELVE MONTHS ENDED SEPTEMBER 25, 2004
|
|
|
As Reported |
|
Non-GAAP |
|
Non-GAAP |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net sales |
|
$ |
8,279 |
|
|
|
$ |
8,279 |
|
|
|
Cost of sales |
|
6,020 |
|
|
|
6,020 |
|
|||
|
Gross margin |
|
2,259 |
|
|
|
2,259 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Operating expenses: |
|
|
|
|
|
|
|
|||
|
Research and development |
|
489 |
|
|
|
489 |
|
|||
|
Selling, general, and administrative |
|
1,421 |
|
|
|
1,421 |
|
|||
|
Restructuring costs |
|
23 |
|
(23 |
)(a) |
|
|
|||
|
Total operating expenses |
|
1,933 |
|
(23 |
) |
1,910 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Operating income |
|
326 |
|
23 |
|
349 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Other income and expense: |
|
|
|
|
|
|
|
|||
|
Gain on sales of non-current investments |
|
4 |
|
(4 |
)(b) |
|
|
|||
|
Interest and other income, net |
|
53 |
|
|
|
53 |
|
|||
|
Total other income and expense |
|
57 |
|
(4 |
) |
53 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Income before provision for income taxes |
|
383 |
|
19 |
|
402 |
|
|||
|
Provision for income taxes |
|
107 |
|
5 |
(c) |
112 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net income |
|
$ |
276 |
|
$ |
14 |
|
$ |
290 |
|
|
|
|
|
|
|
|
|
|
|||
|
Earnings per common share: |
|
|
|
|
|
|
|
|||
|
Basic |
|
$ |
0.74 |
|
|
|
$ |
0.78 |
|
|
|
Diluted |
|
$ |
0.71 |
|
|
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Shares used in computing earnings per share (in thousands): |
|
|
|
|
|
|
|
|||
|
Basic |
|
371,590 |
|
|
|
371,590 |
|
|||
|
Diluted |
|
387,311 |
|
|
|
387,311 |
|
|||
Notes:
(a) Pre-tax restructuring costs
(b) Pre-tax gain on sales of non-current investments
(c) Tax impact of restructuring costs and gain on sales of non-current investments
