Elettronica
Applied Materials Announces Fourth Quarter and Fiscal Year 2013 Results
Expects S trong Growth in Silicon Systems Orders and Silicon Systems Net Sales in the First Quarter of FY2014
SANTA CLARA, Calif., November 14, 2013 - Applied Materials, Inc. (NASDAQ:AMAT), the global leader in manufacturing solutions for the semiconductor, display and solar industries, today reported results for its fourth quarter and fiscal year ended October 27, 2013.
In its fourth quarter, Applied generated orders of $2.09 billion, up 5 percent from the prior quarter led by strengthening demand in the Silicon Systems Group. Fourth quarter net sales were $1.99 billion, up 1 percent sequentially. Fourth quarter non-GAAP adjusted gross margin declined approximately 1 point to 42 percent while non-GAAP adjusted operating income grew 4 percent to $323 million or 16.2 percent. Non-GAAP adjusted net income grew 3 percent in the quarter to $228 million or 19 cents per diluted share, which was in the upper end of the guidance range. For the quarter, the company recorded GAAP gross margin of 40 percent, operating income of $211 million or 10.6 percent, and net income of $183 million or 15 cents per diluted share.
In FY2013, orders grew 5 percent to $8.47 billion, net sales declined 14 percent to $7.51 billion, non-GAAP adjusted gross margin declined 11 percent to $3.16 billion or 42.1 percent, non-GAAP adjusted operating income declined 25 percent to $1.03 billion or 13.7 percent, and non-GAAP adjusted net income declined 25 percent to $718 million or 59 cents per diluted share. The company recorded GAAP gross margin of $2.99 billion or 39.8 percent, operating income of $432 million or 5.8 percent, and net income of $256 million or 21 cents per diluted share. Applied returned $701 million to stockholders, including $456 million in dividends paid and $245 million in stock repurchases.
"This has been a transformative year for Applied Materials as we shaped a more competitive company, reduced overhead expenses, stepped up investment in product development and built momentum for profitable growth," said Gary Dickerson, president and chief executive officer. "As we look ahead to 2014, we expect stronger investment by our semiconductor and display customers and major technology inflections in transistor and memory that play to our strengths."
Quarterly Results Summary
Applied's non-GAAP adjusted results exclude the impact of the following, where applicable: certain acquisition-related costs; restructuring charges and any associated adjustments; impairments of assets, goodwill, or investments; gain or loss on sale of facilities and strategic investments; and certain tax items. A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also "Use of Non-GAAP Adjusted Financial Measures" section.
Fourth Quarter Reportable Segment Results and Comparisons to the Prior Quarter
Silicon Systems Group (SSG) orders were $1.39 billion, up 16 percent, with higher orders in foundry, flash and logic, partially offset by decreases in DRAM. Net sales declined 2 percent to $1.24 billion. Non-GAAP adjusted operating income declined to $258 million or 20.8 percent of net sales. GAAP operating income declined to $213 million or 17.1 percent of net sales. New order composition was: foundry 47 percent; flash 25 percent; logic/other 17 percent; and DRAM 11 percent.
Applied Global Services (AGS) orders were $548 million, up 6 percent. Net sales were $538 million up 8 percent. Non-GAAP adjusted operating income was flat at $116 million or 21.6 percent of net sales. GAAP operating income increased slightly to $115 million or 21.4 percent of net sales.
Display orders of $114 million were down 55 percent from high levels in the previous quarter and reflected customer push-outs of orders that are expected to be recorded in future periods. Net sales were up slightly to $163 million. Non-GAAP adjusted operating income declined to $20 million or 12.3 percent of net sales. GAAP operating income declined to $19 million or 11.7 percent of net sales, including the impact of a $10 million inventory charge.
Energy and Environmental Solutions (EES) orders increased to $40 million. Net sales declined 2 percent to $44 million. EES had a non-GAAP adjusted operating loss of $22 million and a GAAP operating loss of $30 million.
Additional Quarterly Financial Information
Full-Year Reportable Segment Results and Comparisons to the Prior Year
SSG orders increased by 4 percent to $5.51 billion, net sales decreased by 14 percent to $4.78 billion, non-GAAP adjusted operating income decreased to $1.1 billion or 22.0 percent of net sales, and GAAP operating income decreased to $876 million or 18.3 percent of net sales.
AGS orders decreased by 8 percent to $2.1 billion, net sales decreased by 11 percent to $2.0 billion, non-GAAP adjusted operating income decreased to $443 million or 21.9 percent of net sales, and GAAP operating income decreased to $436 million or 21.6 percent of net sales. Non-GAAP operating income decreased in fiscal 2013 from fiscal 2012 reflecting lower sales. Fiscal 2012 results included $85 million in sales for a thin film solar production line.
Display orders increased by 157 percent to $703 million, reflecting a recovery in TV equipment demand and share gains in array PVD equipment. Net sales increased by 14 percent to $538 million, non-GAAP adjusted operating income increased to $80 million or 14.9 percent of net sales, and GAAP operating income increased to $74 million or 13.8 percent of net sales.
EES orders decreased by 15 percent to $166 million, and net sales decreased by 59 percent to $173 million, reflecting continued overcapacity conditions in the global PV solar industry. EES generated a non-GAAP adjusted operating loss of $115 million. EES reported a GAAP operating loss of $433 million, which included $278 million in impairment charges recorded in the second quarter of FY2013, along with $40 million of restructuring charges, asset impairments, and certain items related to acquisitions.
Business Outlook
For the first quarter of fiscal 2014, Applied expects net sales to be up 3 percent to 10 percent from the previous quarter. The company expects non-GAAP adjusted operating expenses to be in the range of $540 million, plus or minus $10 million. Non-GAAP adjusted diluted EPS is expected to be in the range of 20 cents to 24 cents.
Applied's first quarter outlook for non-GAAP adjusted operating expenses excludes known charges related to completed acquisitions, integration and deal costs of approximately $28 million. The first quarter non-GAAP adjusted diluted EPS outlook excludes known charges related to completed acquisitions, integration and deal costs of 4 cents. The company's first quarter business outlook does not exclude other non-GAAP adjustments that may arise subsequent to this release.
Use of Non-GAAP Adjusted Financial Measures
Management uses non-GAAP adjusted results to evaluate the company's operating and financial performance in light of business objectives and for planning purposes. These measures are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Applied believes these measures enhance investors' ability to review the company's business from the same perspective as the company's management and facilitate comparisons of this period's results with prior periods. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP.
Webcast Information
Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast will be available at www.appliedmaterials.com . A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.
Forward-Looking Statements
This press release contains forward-looking statements, including those regarding Applied's performance, strategies and initiatives, growth opportunities, customer investment, industry inflections, and business outlook for the first quarter of fiscal 2014. These statements and their underlying assumptions 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, including but not limited to: the level of demand for Applied's products, which is subject to many factors, including uncertain global economic and industry conditions, end-demand for electronic products and semiconductors, and customers' new technology and capacity requirements; variability of operating expenses and results among the company's segments caused by differing conditions in the served markets; the concentrated nature of Applied's customer base; Applied's ability to (i) develop, deliver and support a broad range of products, expand its markets and develop new markets, (ii) achieve the objectives of operational and strategic initiatives, (iii) plan and manage its resources and production capability, (iv) obtain and protect intellectual property rights in key technologies, (v) attract, motivate and retain key employees, and (vi) accurately forecast future results, which depends on multiple assumptions related to, without limitation, market conditions, customer requirements and business needs; and other risks described in Applied's SEC filings, including its most recent Forms 10-Q and 8-K. All forward-looking statements are based on management's estimates, projections and assumptions as of the date hereof. The company undertakes no obligation to update any forward-looking statements.
About Applied Materials
Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in providing innovative equipment, services and software to enable the manufacture of advanced semiconductor, flat panel display and solar photovoltaic products. Our technologies help make innovations like smartphones, flat screen TVs and solar panels more affordable and accessible to consumers and businesses around the world. Learn more at www.appliedmaterials.com .
Contact:
Kevin Winston (editorial/media) 408.235.4498
Michael Sullivan (financial community) 408.986.7977
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Reportable Segment Results
* Operating loss for FY2013 included $278 million in goodwill and intangible asset impairment charges, while operating loss for the fourth quarter of FY2012 and FY2012 included $421 million of goodwill impairment charges.
Corporate Unallocated Expenses
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