Apple
APPLE COMPUTER INC (Form: 8-K, Received: 04/14/2004 16:27:47)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

April 14, 2004

Date of Report (date of earliest event reported)

 

APPLE COMPUTER, INC.

(Exact name of Registrant as specified in its charter)

 

California

 

0-10030

 

94-2404110

(State or other jurisdiction of
incorporation or
organization)

 

(Commission File Number)

 

(I.R.S. Employer
Identification Number)

 

1 Infinite Loop, Cupertino, CA 95014

(Address of principal executive offices)

 

(408) 996-1010

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed

since last report)

 

 



 

Item 7.            Financial Statements and Exhibits

 

(c) Exhibits

 

The following exhibits are filed herewith:

 

Exhibit
Number

 

Description

 

 

 

99.1

 

Text of press release issued by Apple Computer, Inc. dated April 14, 2004.

 

 

 

99.2

 

Data sheet issued by Apple Computer, Inc. dated April 14, 2004.

 

 

Item 12.         Results of Operations and Financial Condition

 

On April 14, 2004, Apple Computer, Inc. (Apple) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 27, 2004 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.

 

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

APPLE COMPUTER, INC.

Date: April 14, 2004

 

 

 

By:

/s/ Fred D. Anderson

 

 

 

Fred D. Anderson
Executive Vice President and
Chief Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

 

 

 

99.1

 

Text of press release issued by Apple Computer, Inc. dated April 14, 2004.

 

 

 

99.2

 

Data sheet issued by Apple Computer, Inc. dated April 14, 2004.

 

4


Exhibit 99.1

 

Apple Reports Second Quarter Results

 

Earnings per Share Triples

 

iPod Shipments Grow Over 900 Percent

 

CUPERTINO, California—April 14, 2004—Apple® today announced financial results for its fiscal 2004 second quarter ended March 27, 2004. For the quarter, the Company posted a net profit of $46 million, or $.12 per diluted share. These results compare to a net profit of $14 million, or $.04 per diluted share, in the year-ago quarter. Revenue for the quarter was $1.909 billion, up 29 percent from the year-ago quarter. Gross margin was 27.8 percent, down from 28.3 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenue.

 

The quarter’s results include an after-tax restructuring charge of $7 million. Excluding this charge, the Company’s net profit for the quarter would have been $53 million, or $.14 per diluted share.

 

Apple shipped 749 thousand Macintosh® units and 807 thousand iPods during the quarter, representing a 5 percent increase in CPU units and a 909 percent increase in iPods over the year-ago quarter.

 

“Apple had a great quarter with 29 percent revenue growth and 200 percent earnings per share growth year-over-year,” said Steve Jobs, Apple’s CEO. “We experienced growth in most areas of our business—most dramatically in selling a record 807,000 iPods, up more than 900 percent over the prior year.”

 

“We are very pleased with our third straight quarter of double-digit revenue growth,” said Fred Anderson, Apple’s CFO. “More importantly our results demonstrate operating margin expansion. Our balance sheet remains very strong with about $4.6 billion in cash and no debt. Looking ahead to the third quarter of fiscal 2004, we expect our fourth consecutive quarter of year-over-year double-digit growth in both revenue and earnings, with revenue of about $1.925 billion. We expect GAAP earnings per diluted share of $.12 to $.13, including approximately $.02 per diluted share in restructuring charges.”

 

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 Company’s core operating results.

 



 

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

 

Apple will provide live streaming of its Q2 2004 financial results conference call utilizing QuickTime™, Apple’s 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, April 14, 2004 at http://www.apple.com/quicktime/qtv/earningsq204/ 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 Company’s estimated revenue and earnings for the third quarter of fiscal 2004. 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 Company’s reaction to them may have on consumer and business buying decisions with respect to the Company’s 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 Company’s business currently obtained by the Company from sole or limited sources; 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, such as Severe Acute Respiratory Syndrome (SARS); risks associated with the Company’s retail initiative including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships; the effect that the Company’s dependency on manufacturing and logistics services provided by third-parties may have on the quality or quantity of products manufactured; the Company’s 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 Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year 2003, the Company’s Form 10-Q for the quarter ended December 27, 2003, and the Company’s Form 10-Q for the quarter ended March 27, 2004 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.

 

Press Contact:

Steve Dowling

(408) 974-1896

sdowling@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 Apple’s PR web site (http://www.apple.com/pr/) or call Apple’s Media Helpline at (408) 974-2042

 

 

© 2004 Apple. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPod and QuickTime 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)

 

 

 

March 27,
2004

 

September 27,
2003

 

ASSETS:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

3,158

 

$

3,396

 

Short-term investments

 

1,436

 

1,170

 

Accounts receivable, less allowances of $48 and $49, respectively

 

585

 

766

 

Inventories

 

63

 

56

 

Deferred tax assets

 

216

 

190

 

Other current assets

 

326

 

309

 

Total current assets

 

5,784

 

5,887

 

Property, plant, and equipment, net

 

687

 

669

 

Goodwill

 

85

 

85

 

Acquired intangible assets

 

21

 

24

 

Other assets

 

158

 

150

 

Total assets

 

$

6,735

 

$

6,815

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

991

 

$

1,154

 

Accrued expenses

 

989

 

899

 

Current debt

 

 

304

 

Total current liabilities

 

1,980

 

2,357

 

Deferred tax liabilities and other non-current liabilities

 

265

 

235

 

Total liabilities

 

2,245

 

2,592

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

Common stock, no par value; 900,000,000 shares authorized; 372,855,336 and 366,726,584 shares issued and outstanding, respectively

 

2,107

 

1,926

 

Deferred stock compensation

 

(110

)

(62

)

Retained earnings

 

2,503

 

2,394

 

Accumulated other comprehensive income (loss)

 

(10

)

(35

)

Total shareholders' equity

 

4,490

 

4,223

 

Total liabilities and shareholders' equity

 

$

6,735

 

$

6,815

 

 



 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(In millions, except share and per share amounts)

 

 

 

THREE MONTHS ENDED

 

SIX MONTHS ENDED

 

 

 

March 27,
2004

 

March 29,
2003

 

March 27,
2004

 

March 29,
2003

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,909

 

$

1,475

 

$

3,915

 

$

2,947

 

Cost of sales

 

1,379

 

1,057

 

2,849

 

2,123

 

Gross margin

 

530

 

418

 

1,066

 

824

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

123

 

119

 

242

 

240

 

Selling, general, and administrative

 

345

 

300

 

688

 

599

 

Restructuring costs

 

10

 

3

 

10

 

26

 

Total operating expenses

 

478

 

422

 

940

 

865

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

52

 

(4

)

126

 

(41

)

 

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

 

 

Gain on sales of non-current investments

 

 

 

4

 

 

Interest and other income, net

 

12

 

23

 

21

 

52

 

Total other income and expense

 

12

 

23

 

25

 

52

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

64

 

19

 

151

 

11

 

Provision for income taxes

 

18

 

5

 

42

 

3

 

 

 

 

 

 

 

 

 

 

 

Income before accounting change

 

46

 

14

 

109

 

8

 

 

 

 

 

 

 

 

 

 

 

Cumulative effect of accounting change, net

 

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

46

 

$

14

 

$

109

 

$

6

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share before accounting change:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.13

 

$

0.04

 

$

0.30

 

$

0.02

 

Diluted

 

$

0.12

 

$

0.04

 

$

0.29

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.13

 

$

0.04

 

$

0.30

 

$

0.02

 

Diluted

 

$

0.12

 

$

0.04

 

$

0.29

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share (in thousands):

 

 

 

 

 

 

 

 

 

Basic

 

365,347

 

360,490

 

363,898

 

359,774

 

Diluted

 

378,230

 

362,243

 

375,168

 

361,591

 

 



 

UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

(In millions, except share and per share amounts)

 

THREE MONTHS ENDED MARCH 27, 2004

 

 

 

As Reported

 

Non-GAAP
Adjustments

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,909

 

 

 

$

1,909

 

Cost of sales

 

1,379

 

 

 

1,379

 

Gross margin

 

530

 

 

 

530

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

123

 

 

 

123

 

Selling, general, and administrative

 

345

 

 

 

345

 

Restructuring costs

 

10

 

(10

) (a)

 

Total operating expenses

 

478

 

(10

)

468

 

 

 

 

 

 

 

 

 

Operating income

 

52

 

10

 

62

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

Interest and other income, net

 

12

 

 

 

12

 

Total other income and expense

 

12

 

 

 

12

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

64

 

10

 

74

 

Provision for income taxes

 

18

 

3

(b)

21

 

 

 

 

 

 

 

 

 

Net income

 

$

46

 

$

7

 

$

53

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

 

$

0.13

 

 

 

$

0.15

 

Diluted

 

$

0.12

 

 

 

$

0.14

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share (in thousands):

 

 

 

 

 

 

 

Basic

 

365,347

 

 

 

365,347

 

Diluted

 

378,230

 

 

 

378,230

 

 


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)

 

SIX MONTHS ENDED MARCH 27, 2004

 

 

 

As Reported

 

Non-GAAP
Adjustments

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,915

 

 

 

$

3,915

 

Cost of sales

 

2,849

 

 

 

2,849

 

Gross margin

 

1,066

 

 

 

1,066

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

242

 

 

 

242

 

Selling, general, and administrative

 

688

 

 

 

688

 

Restructuring costs

 

10

 

(10

) (a)

 

Total operating expenses

 

940

 

(10

)

930

 

 

 

 

 

 

 

 

 

Operating income

 

126

 

10

 

136

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

Gain on sales of non-current investments

 

4

 

(4

) (b)

 

Interest and other income, net

 

21

 

 

 

21

 

Total other income and expense

 

25

 

(4

)

21

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

151

 

6

 

157

 

Provision for income taxes

 

42

 

2

(c)

44

 

 

 

 

 

 

 

 

 

Net income

 

$

109

 

$

4

 

$

113

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

 

$

0.30

 

 

 

$

0.31

 

Diluted

 

$

0.29

 

 

 

$

0.30

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share (in thousands):

 

 

 

 

 

 

 

Basic

 

363,898

 

 

 

363,898

 

Diluted

 

375,168

 

 

 

375,168

 

 


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

 


Exhibit 99.2

 

April 14, 2004

 

 

Apple Computer, Inc.

Q2’04 Unaudited Summary Data

 

 

 

Q1’04 Actual

 

Q2’03 Actual

 

Q2’04 Actual

 

Sequential Change

 

Year/Year Change

 

 

 

Units k

 

Rev $m

 

Units k

 

Rev $m

 

Units k

 

Rev $m

 

Units

 

Revenue

 

Units

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iMac (1)

 

227

 

$

251

 

256

 

$

302

 

217

 

$

252

 

-4

%

0

%

-15

%

-17

%

iBook

 

201

 

221

 

133

 

151

 

201

 

223

 

0

%

1

%

51

%

48

%

Power Mac (2)

 

206

 

398

 

156

 

293

 

174

 

349

 

-16

%

-12

%

12

%

19

%

PowerBook

 

195

 

399

 

166

 

353

 

157

 

336

 

-19

%

-16

%

-5

%

-5

%

Subtotal CPUs

 

829

 

1,269

 

711

 

1,099

 

749

 

1,160

 

-10

%

-9

%

5

%

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iPod

 

733

 

256

 

80

 

31

 

807

 

264

 

10

%

3

%

909

%

752

%

Peripherals & Other HW

 

NM

 

243

 

NM

 

185

 

NM

 

272

 

NM

 

12

%

NM

 

47

%

Software & Other

 

NM

 

238

 

NM

 

160

 

NM

 

213

 

NM

 

-11

%

NM

 

33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Apple

 

 

 

$

2,006

 

 

 

$

1,475

 

 

 

$

1,909

 

 

 

-5

%

 

 

29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sequential Change

 

Year/Year Change

 

 

 

CPU
Units k

 

Rev $m

 

CPU
Units k

 

Rev $m

 

CPU
Units k

 

Rev $m

 

Units

 

Revenue

 

Units

 

Revenue

 

Operating Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

378

 

$

924

 

338

 

$

684

 

361

 

$

881

 

-4

%

-5

%

7

%

29

%

Europe

 

240

 

519

 

180

 

338

 

187

 

449

 

-22

%

-13

%

4

%

33

%

Japan

 

77

 

157

 

107

 

220

 

76

 

173

 

-1

%

10

%

-29

%

-21

%

Retail

 

73

 

273

 

42

 

135

 

70

 

266

 

-4

%

-3

%

67

%

97

%

Other Segments (3)

 

61

 

133

 

44

 

98

 

55

 

140

 

-10

%

5

%

25

%

43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Segments

 

829

 

$

2,006

 

711

 

$

1,475

 

749

 

$

1,909

 

-10

%

-5

%

5

%

29

%

 


(1)              Includes eMac product line.

(2)    Power Mac figures include server sales.

(3)    Other Segments include Asia Pacific and FileMaker.

 

NM:  Not Meaningful