Apple
APPLE COMPUTER INC (Form: 8-K, Received: 07/14/2004 16:30:05)

 

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

 

July 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 furnished herewith:

 

Exhibit
Number

 

Description

 

 

 

99.1

 

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

 

 

 

99.2

 

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

 

 

Item 12.           Results of Operations and Financial Condition

 

On July 14, 2004, Apple Computer, Inc. (Apple) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 26, 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: July 14, 2004

 

 

 

 

By:

/s/ Peter Oppenheimer

 

 

 

Peter Oppenheimer
Senior Vice President and
Chief Financial Officer

 

 

3



 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

 

 

 

99.1

 

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

 

 

 

99.2

 

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

 

4


Exhibit 99.1

 
Apple Reports Third Quarter Results

 

Revenue Increases 30 Percent and Net Profit Triples Year-Over-Year

 

 

CUPERTINO, California—July 14, 2004—Apple® today announced financial results for its fiscal 2004 third quarter ended June 26, 2004. For the quarter, the Company posted a net profit of $61 million, or $.16 per diluted share. These results compare to a net profit of $19 million, or $.05 per diluted share, in the year-ago quarter. Revenue for the quarter was $2.014 billion, up 30 percent from the year-ago quarter. Gross margin was 27.8 percent, up from 27.7 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter’s revenue.
 
The quarter’s results include an after-tax restructuring charge of $6 million. Excluding this charge, the Company’s net profit for the quarter would have been $67 million, or $.17 per diluted share.
 
Apple shipped 876 thousand Macintosh® units and 860 thousand iPods during the quarter, representing a 14 percent increase in CPU units and a 183 percent increase in iPods over the year-ago quarter.
 
“It was an outstanding quarter—our highest third quarter revenue in eight years,” said Steve Jobs, Apple’s CEO. “Our Mac-based revenue grew a healthy 19 percent, and our music-based revenue grew an incredible 162 percent. We’ve got a strong product portfolio, with some amazing new additions coming later this year.”
 
“We were very pleased with our 30 percent year-over-year revenue growth and our operating margin expansion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth quarter of fiscal 2004, we expect revenue of about $2.1 billion and earnings per diluted share of $.16 to $.17, including $.01 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 and facilitates comparison of operating results across reporting periods.

 



 

Apple will provide live streaming of its Q3 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, July 14, 2004 at http://www.apple.com/quicktime/qtv/earningsq304/ 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 fourth 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, including the timely resolution of manufacturing issues associated with the G5 microprocessors used in many of the Company’s 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, 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 Forms 10-Q for the quarters ended December 27, 2003 and March 27, 2004; and the Company’s Form 10-Q for the quarter ended June 26, 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.
 
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
Apple
(408) 974-1896
sdowling@apple.com
 
Investor Relations Contacts:
Nancy Paxton
Apple
(408) 974-5420
paxton1@apple.com
 
Joan Hoover
Apple
(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, Macintosh, Mac, Mac OS 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)
 

 

 

June 26,

 

September 27,

 

 

 

2004

 

2003

 

ASSETS:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

3,120

 

$

3,396

 

Short-term investments

 

1,846

 

1,170

 

Accounts receivable, less allowances of $47 and $49, respectively

 

629

 

766

 

Inventories

 

72

 

56

 

Deferred tax assets

 

227

 

190

 

Other current assets

 

392

 

309

 

Total current assets

 

6,286

 

5,887

 

Property, plant, and equipment, net

 

684

 

669

 

Goodwill

 

80

 

85

 

Acquired intangible assets

 

19

 

24

 

Other assets

 

154

 

150

 

Total assets

 

$

7,223

 

$

6,815

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

1,061

 

$

1,154

 

Accrued expenses

 

1,094

 

899

 

Current debt

 

 

304

 

Total current liabilities

 

2,155

 

2,357

 

Deferred tax liabilities and other non-current liabilities

 

256

 

235

 

Total liabilities

 

2,411

 

2,592

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, no par value; 900,000,000 shares authorized; 385,192,286 and 366,726,584 shares issued and outstanding, respectively

 

2,369

 

1,926

 

Deferred stock compensation

 

(103

)

(62

)

Retained earnings

 

2,564

 

2,394

 

Accumulated other comprehensive income (loss)

 

(18

)

(35

)

Total shareholders’ equity

 

4,812

 

4,223

 

Total liabilities and shareholders’ equity

 

$

7,223

 

$

6,815

 

 



 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In millions, except share and per share amounts)
 

 

 

THREE MONTHS ENDED

 

NINE MONTHS ENDED

 

 

 

June 26,

 

June 28,

 

June 26,

 

June 28,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,014

 

$

1,545

 

$

5,929

 

$

4,492

 

Cost of sales

 

1,455

 

1,117

 

4,304

 

3,240

 

Gross margin

 

559

 

428

 

1,625

 

1,252

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

125

 

120

 

367

 

360

 

Selling, general, and administrative

 

354

 

299

 

1,042

 

898

 

Restructuring costs

 

8

 

 

18

 

26

 

Total operating expenses

 

487

 

419

 

1,427

 

1,284

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

72

 

9

 

198

 

(32

)

 

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

 

 

Gain on sales of non-current investments

 

 

2

 

4

 

2

 

Interest and other income, net

 

13

 

15

 

34

 

67

 

Total other income and expense

 

13

 

17

 

38

 

69

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

85

 

26

 

236

 

37

 

Provision for income taxes

 

24

 

7

 

66

 

10

 

 

 

 

 

 

 

 

 

 

 

Income before accounting change

 

61

 

19

 

170

 

27

 

 

 

 

 

 

 

 

 

 

 

Cumulative effect of accounting change, net

 

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

61

 

$

19

 

$

170

 

$

25

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share before accounting change:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.16

 

$

0.05

 

$

0.46

 

$

0.07

 

Diluted

 

$

0.16

 

$

0.05

 

$

0.45

 

$

0.07

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.16

 

$

0.05

 

$

0.46

 

$

0.07

 

Diluted

 

$

0.16

 

$

0.05

 

$

0.45

 

$

0.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

375,023

 

360,793

 

367,606

 

360,113

 

Diluted

 

392,621

 

363,777

 

381,259

 

362,421

 

 



 

UNAUDITED NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except share and per share amounts)
 
THREE MONTHS ENDED JUNE 26, 2004
 
 

 

 

 

 

Non-GAAP

 

 

 

 

 

As Reported

 

Adjustments

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,014

 

 

 

$

2,014

 

Cost of sales

 

1,455

 

 

 

1,455

 

Gross margin

 

559

 

 

 

559

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

125

 

 

 

125

 

Selling, general, and administrative

 

354

 

 

 

354

 

Restructuring costs

 

8

 

(8

) (a)

 

Total operating expenses

 

487

 

(8

)

479

 

 

 

 

 

 

 

 

 

Operating income

 

72

 

8

 

80

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

Interest and other income, net

 

13

 

 

 

13

 

Total other income and expense

 

13

 

 

 

13

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

85

 

8

 

93

 

Provision for income taxes

 

24

 

2

(b)

26

 

 

 

 

 

 

 

 

 

Net income

 

$

61

 

$

6

 

$

67

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

 

$

0.16

 

 

 

$

0.18

 

Diluted

 

$

0.16

 

 

 

$

0.17

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Basic

 

375,023

 

 

 

375,023

 

Diluted

 

392,621

 

 

 

392,621

 

 
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)
 
NINE MONTHS ENDED JUNE 26, 2004
 

 

 

 

 

Non-GAAP

 

 

 

 

 

As Reported

 

Adjustments

 

Non-GAAP

 

 

 

 

 

 

 

 

 

Net sales

 

$

5,929

 

 

 

$

5,929

 

Cost of sales

 

4,304

 

 

 

4,304

 

Gross margin

 

1,625

 

 

 

1,625

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

367

 

 

 

367

 

Selling, general, and administrative

 

1,042

 

 

 

1,042

 

Restructuring costs

 

18

 

(18

) (a)

 

Total operating expenses

 

1,427

 

(18

)

1,409

 

 

 

 

 

 

 

 

 

Operating income

 

198

 

18

 

216

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

Gain on sales of non-current investments

 

4

 

(4

) (b)

 

Interest and other income, net

 

34

 

 

 

34

 

Total other income and expense

 

38

 

(4

)

34

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

236

 

14

 

250

 

Provision for income taxes

 

66

 

4

(c)

70

 

 

 

 

 

 

 

 

 

Net income

 

$

170

 

$

10

 

$

180

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

Basic

 

$

0.46

 

 

 

$

0.49

 

Diluted

 

$

0.45

 

 

 

$

0.47

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Basic

 

367,606

 

 

 

367,606

 

Diluted

 

381,259

 

 

 

381,259

 

 

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

 

Apple Computer, Inc.

Q3’04 Unaudited Summary Data

 

 

 

Q2’04 Actual

 

Q3’03 Actual

 

Q3’04 Actual

 

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

 

361

 

$

881

 

452

 

$

831

 

472

 

$

1,018

 

31

%

16

%

4

%

23

%

Europe

 

187

 

449

 

144

 

297

 

191

 

408

 

2

%

-9

%

33

%

37

%

Japan

 

76

 

173

 

85

 

168

 

82

 

172

 

8

%

-1

%

-4

%

2

%

Retail

 

70

 

266

 

40

 

145

 

73

 

270

 

4

%

2

%

83

%

86

%

Other Segments (1)

 

55

 

140

 

50

 

104

 

58

 

146

 

5

%

4

%

16

%

40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Segments

 

749

 

$

1,909

 

771

 

$

1,545

 

876

 

$

2,014

 

17

%

6

%

14

%

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sequential Change

 

Year/Year Change

 

 

 

Units k

 

Rev $m

 

Units k

 

Rev $m

 

Units k

 

Rev $m

 

Units

 

Revenue

 

Units

 

Revenue

 

Product Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iMac (2)

 

217

 

$

252

 

287

 

$

301

 

243

 

$

235

 

12

%

-7

%

-15

%

-22

%

iBook

 

201

 

223

 

190

 

196

 

240

 

261

 

19

%

17

%

26

%

33

%

Power Mac (3)

 

174

 

349

 

133

 

234

 

173

 

332

 

-1

%

-5

%

30

%

42

%

PowerBook

 

157

 

336

 

161

 

363

 

220

 

435

 

40

%

29

%

37

%

20

%

Subtotal CPUs

 

749

 

1,160

 

771

 

1,094

 

876

 

1,263

 

17

%

9

%

14

%

15

%

iPod

 

807

 

264

 

304

 

111

 

860

 

249

 

7

%

-6

%

183

%

124

%

Other Music Products (4)

 

NM

 

60

 

NM

 

12

 

NM

 

73

 

NM

 

22

%

NM

 

508

%

Peripherals & Other HW

 

NM

 

238

 

NM

 

168

 

NM

 

219

 

NM

 

-8

%

NM

 

30

%

Software & Other

 

NM

 

187

 

NM

 

160

 

NM

 

210

 

NM

 

12

%

NM

 

31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Apple

 

 

 

$

1,909

 

 

 

$

1,545

 

 

 

$

2,014

 

 

 

6

%

 

 

30

%

 


(1)   Other Segments include Asia Pacific and FileMaker.

(2)   Includes eMac product line.

(3)   Power Mac figures include server sales.

(4)   Other Music Products consists of iTunes Music Store sales and iPod related services and accessories.

 

NM:  Not Meaningful