Apple
APPLE COMPUTER INC (Form: 8-K, Received: 10/13/2004 16:37:05)

 

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

 

October 13, 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)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 



 

Item 2.02               Results of Operations and Financial Condition

 

On October 13, 2004, Apple Computer, Inc. (Apple) issued a press release regarding Apple’s financial results for its fourth fiscal quarter ended September 25, 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.

 

 Item 9.01              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 October 13, 2004.

 

 

 

99.2

 

Data sheet issued by Apple Computer, Inc. dated October 13, 2004.

 

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: October 13, 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 October 13, 2004.

 

 

 

99.2

 

Data sheet issued by Apple Computer, Inc. dated October 13, 2004.

 

4


Exhibit 99.1

 

 

Apple Reports Fourth Quarter Results

 

Revenue Increases 37 Percent Year-Over-Year

 

iPod Shipments Top 2 million

 

CUPERTINO, California—October 13, 2004—Apple® 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 quarter’s revenue.

 

The quarter’s results include an after-tax restructuring charge of $4 million. Excluding this charge, the Company’s 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, Apple’s 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.”

 

“We’re pleased to report 37 percent revenue growth for the quarter and operating margin above 5 percent,” said Peter Oppenheimer, Apple’s 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 Company’s 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™, 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, 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 Company’s 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 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 including epidemics; 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, quantity or cost of products manufactured or services rendered; 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 Forms 10-Q for the quarters ended December 27, 2003, March 27, 2004 and June 26, 2004; and the

 



 

Company’s 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 Apple’s PR website (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,  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,
2004

 

September 27,
2003

 

 

 

 

 

 

 

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,
2004

 

September 27,
2003

 

September 25,
2004

 

September 27,
2003

 

 

 

 

 

 

 

 

 

 

 

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
Adjustments

 

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
Adjustments

 

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

 


Exhibit 99.2

 

Apple Computer, Inc.

Q404 Unaudited Summary Data

 

 

 

Q304 Actual

 

Q403 Actual

 

Q404 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

 

472

 

$

1,018

 

453

 

$

928

 

471

 

$

1,196

 

0

%

17

%

4

%

29

%

Europe

 

191

 

408

 

158

 

323

 

155

 

423

 

-19

%

4

%

-2

%

31

%

Japan

 

82

 

172

 

76

 

171

 

56

 

175

 

-32

%

2

%

-26

%

2

%

Retail

 

73

 

270

 

59

 

193

 

98

 

376

 

34

%

39

%

66

%

95

%

Other Segments (1)

 

58

 

146

 

41

 

 

100

 

56

 

180

 

-3

%

23

%

37

%

80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Segments

 

876

 

$

2,014

 

787

 

$

1,715

 

836

 

$

2,350

 

-5

%

17

%

6

%

37

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

243

 

$

235

 

253

 

$

279

 

229

 

$

216

 

-6

%

-8

%

-9

%

-23

%

iBook

 

240

 

261

 

137

 

154

 

238

 

256

 

-1

%

-2

%

74

%

66

%

Power Mac (3)

 

173

 

332

 

221

 

419

 

156

 

340

 

-10

%

2

%

-29

%

-19

%

PowerBook

 

220

 

435

 

176

 

348

 

213

 

419

 

-3

%

-4

%

21

%

20

%

Subtotal CPUs

 

876

 

1,263

 

787

 

1,200

 

836

 

1,231

 

-5

%

-3

%

6

%

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iPod

 

860

 

249

 

336

 

121

 

2,016

 

537

 

134

%

116

%

500

%

344

%

Other Music Products (4)

 

NM

 

73

 

NM

 

14

 

NM

 

98

 

NM

 

34

%

NM

 

600

%

Peripherals & Other HW

 

NM

 

219

 

NM

 

208

 

NM

 

271

 

NM

 

24

%

NM

 

30

%

Software & Other

 

NM

 

210

 

NM

 

172

 

NM

 

213

 

NM

 

1

%

NM

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Apple

 

 

 

$

2,014

 

 

 

$

1,715

 

 

 

$

2,350

 

 

 

17

%

 

 

37

%

 


(1)   Other Segments include Asia Pacific and FileMaker.

(2)   Includes eMac product line.

(3)   Includes Xserve product line.

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

 

NM:  Not Meaningful