Applied Materials Announces First Quarter 2015 Results

* Q1 net sales of  $2.36 billion up 8% year over year led by growth in Applied Global Services and Display * Q1 non-GAAP adjusted operating income of $447 million up 18% year over year; GAAP operating income of $458 million up 39% year over year * Q1 non-GAAP adjusted EPS of $0.27 up 17% year over year; GAAP EPS of $0.28 up 33% year over year SANTA CLARA, Calif., Feb. 11, 2015 - Applied Materials, Inc...

• Q1 net sales of  $2.36 billion up 8% year over year led by growth in Applied Global Services and Display
• Q1 non-GAAP adjusted operating income of $447 million up 18% year over year; GAAP operating income of $458 million up 39% year over year
• Q1 non-GAAP adjusted EPS of $0.27 up 17% year over year; GAAP EPS of $0.28 up 33% year over year

 

SANTA CLARA, Calif., Feb. 11, 2015 - Applied Materials, Inc. (NASDAQ:AMAT), the global leader in precision materials engineering solutions for the semiconductor, display and solar industries, today reported results for its first quarter ended January 25, 2015.

First quarter orders were $2.27 billion, up 1 percent sequentially and down 1 percent year over year. Net sales were $2.36 billion, up 4 percent sequentially and up 8 percent year over year.

On a non-GAAP adjusted basis, the company reported gross margin of 42.3 percent, operating income of $447 million, and net income of $338 million or $0.27 per diluted share. The company recorded GAAP gross margin of 40.7 percent, operating income of $458 million, and net income of $348 million or $0.28 per diluted share.

"Major technology inflections in semiconductor and display are creating new growth opportunities for Applied's precision materials engineering products and services," said Gary Dickerson, president and chief executive officer. "With focus and execution, we are gaining momentum toward our long-term strategic goals, and this progress will be accelerated by our planned merger with Tokyo Electron."

 

Quarterly Results Summary

 

								Change
GAAP Results		Q1 FY2015		Q4 FY2014		Q1 FY2014		Q1 FY2015 vs. Q4 FY2014		Q1 FY2015 vs. Q1 FY2014
Net sales		$2.36 billion		$2.26 billion		$2.19 billion		4%		8%
Gross profit		$959 million		$959 million		$891 million		flat		8%
Operating income		$458 million		$412 million		$330 million		11%		39%
Net income		$348 million		$256 million		$253 million		36%		38%
Diluted earnings per share (EPS)		$0.28		$0.21		$0.21		33%		33%
Non-GAAP Adjusted Results
Non-GAAP adjusted gross profit		$1.00 billion		$1.00 billion		$930 million		flat		7%
Non-GAAP adjusted operating income		$447 million		$442 million		$380 million		1%		18%
Non-GAAP adjusted net income		$338 million		$338 million		$279 million		flat		21%
Non-GAAP adjusted diluted EPS		$0.27		$0.27		$0.23		flat		17%

 

Applied's non-GAAP adjusted results exclude the impact of the following, where applicable: certain items related to acquisitions or the announced business combination; restructuring charges and any associated adjustments; impairments of assets, goodwill, or investments; gain or loss on sale of strategic investments or facilities; 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.

First Quarter Reportable Segment Results and Comparisons to the Prior Quarter

Silicon Systems Group (SSG) orders were $1.43 billion, up 7 percent, with increases in DRAM and NAND, and decreases in foundry and logic/other. Net sales increased by 1 percent to $1.45 billion. Non-GAAP adjusted operating income decreased by 1 percent to $350 million or 24.2 percent of net sales. GAAP operating income increased by 1 percent to $307 million or 21.2 percent of net sales. New order composition was: foundry 34 percent; DRAM 34 percent; flash 18 percent and logic/other 14 percent.

Applied Global Services (AGS) orders of $690 million were the second highest in group history and declined 8 percent from the record set in the previous quarter due to decreases in semiconductor services and 200mm equipment orders. Net sales of $583 million declined 2 percent. Non-GAAP adjusted operating income increased by 5 percent to $154 million or 26.4 percent of net sales. GAAP operating income increased by 5 percent to $153 million or 26.2 percent of net sales.

Display orders of $107 million were down 18 percent reflecting a decrease in TV equipment orders. Net sales increased by 45 percent to $275 million. Non-GAAP adjusted operating income increased by 40 percent to $73 million or 26.5 percent of net sales. GAAP operating income increased by 38 percent to $72 million or 26.2 percent of net sales.

Energy and Environmental Solutions (EES) orders increased by 14 percent to $50 million, and net sales increased by 15 percent to $55 million. EES reported a non-GAAP adjusted operating loss of $3 million and a GAAP operating loss of $4 million.

Applied's backlog declined by 5 percent to $2.78 billion and included negative adjustments of $53 million, primarily consisting of currency adjustments. Backlog composition by segment was:  SSG 49 percent; AGS 30 percent; Display 15 percent; and EES 6 percent.

Business Outlook

For the second quarter of fiscal 2015, Applied expects net sales to be in the range of flat to up a couple of percentage points from the previous quarter. Non-GAAP adjusted diluted EPS is expected to be in the range of $0.26 to $0.30. This outlook excludes known charges related to completed acquisitions of $0.03 per share. The 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, industry outlooks, and business outlook for the second quarter of fiscal 2015. 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; the timing and nature of technology transitions; the concentrated nature of Applied's customer base; Applied's ability to (i) develop, deliver and support a broad range of products and expand its markets, (ii) achieve the objectives of operational and strategic initiatives, (iii) obtain and protect intellectual property rights in key technologies, (iv) attract, motivate and retain key employees, (v) successfully complete the announced business combination and realize expected benefits and synergies, 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-K 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 precision materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries. 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

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

 

 

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

 

 

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED SUPPLEMENTAL INFORMATION

 

Reportable Segment Results

 

 

		Q1 FY2015												Q4 FY2014												Q1 FY2014
(In millions)		New Orders				Net Sales				Operating Income (Loss)				New Orders				Net Sales				Operating Income (Loss)				New Orders				Net Sales				Operating Income (Loss)
SSG		$	1,426			$	1,446			$	307			$	1,334			$	1,434			$	305			$	1,569			$	1,484			$	314
AGS		690				583				153				747				592				146				597				507				125
Display		107				275				72				130				190				52				79				159				26
EES		50				55				(4		)		44				48				(3		)		40				40				(11		)
Corporate		-				-				(70		)		-				-				(88		)		-				-				(124		)
Consoli- dated		$	2,273			$	2,359			$	458			$	2,255			$	2,264			$	412			$	2,285			$	2,190			$	330

 

 

Corporate Unallocated Expenses

 

 

(In millions)		Q1 FY2015				Q4 FY2014				Q1 FY2014
Share-based compensation		48				45				46
Certain items associated with announced business combination		20				23				11
Gain on derivative associated with announced business combination, net		(78		)		(39		)		(24		)
Restructuring charges and asset impairments		-				(2		)		7
Gain on sale of facility		-				(4		)		-
Other unallocated expenses		80				65				84
Total corporate		$	70			$	88			$	124

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED SUPPLEMENTAL INFORMATION

 

Additional Information

 

 

		Q1 FY2015						Q4 FY2014						Q1 FY2014
New Orders and Net Sales by Geography
(In $ millions)		New Orders			Net Sales			New Orders			Net Sales			New Orders			Net Sales
United States		411			529			596			633			403			280
% of Total		18	%		22	%		26	%		28	%		18	%		13	%
Europe		148			143			198			178			119			164
% of Total		6	%		6	%		9	%		8	%		5	%		7	%
Japan		242			231			287			209			163			164
% of Total		11	%		10	%		13	%		9	%		7	%		8	%
Korea		546			464			251			187			240			201
% of Total		24	%		20	%		11	%		8	%		11	%		9	%
Taiwan		545			519			599			618			984			705
% of Total		24	%		22	%		27	%		27	%		43	%		32	%
Southeast Asia		85			85			113			136			50			87
% of Total		4	%		4	%		5	%		6	%		2	%		4	%
China		296			388			211			303			326			589
% of Total		13	%		16	%		9	%		14	%		14	%		27	%
Employees (In thousands)
Regular Full Time		14.1						14.0						13.6

 

 

 

 APPLIED MATERIALS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

 

 

		Three Months Ended
(In millions, except percentages)		January 25,  2015				October 26,  2014				January 26,  2014
Non-GAAP Adjusted Gross Profit
Reported gross profit - GAAP basis		$	959			$	959			$	891
Certain items associated with acquisitions1		40				42				39
Non-GAAP adjusted gross profit		$	999			$	1,001			$	930
Non-GAAP adjusted gross margin (% of net sales)		42.3		%		44.2		%		42.5		%
Non-GAAP Adjusted Operating Income
Reported operating income - GAAP basis		$	458			$	412			$	330
Certain items associated with acquisitions1		46				48				45
Acquisition integration costs		1				4				11
Gain on derivative associated with announced business combination, net		(78		)		(39		)		(24		)
Certain items associated with announced business combination2		20				23				11
Restructuring charges and asset impairments3		-				(2		)		7
Gain on sale of facility		-				(4		)		-
Non-GAAP adjusted operating income		$	447			$	442			$	380
Non-GAAP adjusted operating margin (% of net sales)		18.9		%		19.5		%		17.4		%
Non-GAAP Adjusted Net Income
Reported net income - GAAP basis		$	348			$	256			$	253
Certain items associated with acquisitions1		46				48				45
Acquisition integration costs		1				4				11
Gain on derivative associated with announced business combination, net		(78		)		(39		)		(24		)
Certain items associated with announced business combination2		20				23				11
Restructuring charges and asset impairments3		-				(2		)		7
Gain on sale of facility		-				(4		)		-
Impairment (gain on sale) of strategic investments, net		1				(5		)		(5		)
Reinstatement of federal R&D tax credit, resolution of prior years' income tax filings and other tax items		(17		)		50				(15		)
Income tax effect of non-GAAP adjustments		17				7				(4		)
Non-GAAP adjusted net income		$	338			$	338			$	279

 

 

1	These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
2	These items are incremental charges related to the announced business combination agreement with Tokyo Electron Limited, consisting of acquisition-related and integration planning costs.
3	Results for the three months ended October 26, 2014 and January 26, 2014 included a $2 million favorable adjustment of restructuring reserve and $7 million of employee-related costs, respectively, related to the restructuring program announced on October 3, 2012.

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

 

 

 

 

 

APPLIED MATERIALS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

 

 

		Three Months Ended
(In millions, except percentages)		January 25,  2015				October 26,  2014				January 26,  2014
SSG Non-GAAP Adjusted Operating Income
Reported operating income - GAAP basis		$	307			$	305			$	314
Certain items associated with acquisitions1		43				46				42
Acquisition integration costs		-				1				1
Non-GAAP adjusted operating income		$	350			$	352			$	357
Non-GAAP adjusted operating margin (% of net sales)		24.2		%		24.5		%		24.1		%
AGS Non-GAAP Adjusted Operating Income
Reported operating income - GAAP basis		$	153			$	146			$	125
Certain items associated with acquisitions1		1				-				1
Non-GAAP adjusted operating income		$	154			$	146			$	126
Non-GAAP adjusted operating margin (% of net sales)		26.4		%		24.7		%		24.9		%
Display Non-GAAP Adjusted Operating Income
Reported operating income - GAAP basis		$	72			$	52			$	26
Certain items associated with acquisitions1		1				-				1
Non-GAAP adjusted operating income		$	73			$	52			$	27
Non-GAAP adjusted operating margin (% of net sales)		26.5		%		27.4		%		17.0		%
EES Non-GAAP Adjusted Operating Loss
Reported operating loss - GAAP basis		$	(4	)		$	(3	)		$	(11	)
Certain items associated with acquisitions1		1				2				1
Non-GAAP adjusted operating loss		$	(3	)		$	(1	)		$	(10	)
Non-GAAP adjusted operating margin (% of net sales)		(5.5		)%		(2.1		)%		(25.0		)%

 

 

1	These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.

 

 

 

APPLIED MATERIALS, INC.

 

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED OPERATING EXPENSES

 

 

 

 

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EFFECTIVE INCOME TAX RATE

 

 

 

Copyright GlobeNewswire

Regulatory News
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: %s via Globenewswire


[HUG#1893466]