Apple
APPLE INC (Form: 8-K, Received: 04/25/2007 16:30:04)

 

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 25, 2007

Date of Report (date of earliest event reported)

 

APPLE INC.

(Exact name of Registrant as specified in its charter)

 

California

 

000-10030

 

94-2404110

(State or other jurisdiction of

 

(Commission File

 

(I.R.S. Employer

incorporation)

 

Number)

 

Identification Number)

 

 

 

 

 

 

1 Infinite Loop, Cupertino, CA 95014

(Address of principal executive offices)

 

(408) 996-1010

(Registrant’s telephone number, including area code)

 

 (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 April 25, 2007, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 31, 2007 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.

(d) Exhibits.

The following exhibits are furnished herewith:

Exhibit
Number

 

Description

 

 

 

99.1

 

Text of press release issued by Apple Inc. dated April 25, 2007.

 

 

 

99.2

 

Data sheet issued by Apple Inc. dated April 25, 2007.

 

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 INC.

 

 

 

 

 

 

 

 

 

 

Date: April 25, 2007

 

 

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 Inc. dated April 25, 2007.

 

 

 

99.2

 

Data sheet issued by Apple Inc. dated April 25, 2007.

 

 

4



Exhibit 99.1

Apple Reports Second Quarter Results

Earnings Grow 88 Percent Year-over-Year

CUPERTINO, California—April 25, 2007—Apple® today announced financial results for its fiscal 2007 second quarter ended March 31, 2007. The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. These results compare to revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenue.

Apple shipped 1,517,000 Macintosh® computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.

“The Mac is clearly gaining market share, with sales growing 36 percent—more than three times the industry growth rate,” said Steve Jobs, Apple’s CEO. “We’re very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline.”

“We are very pleased to report the most profitable March quarter in Apple’s history,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”

Apple will provide live streaming of its Q2 2007 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 25, 2007 at www.apple.com/quicktime/qtv/earningsq207/ 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 per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include potential litigation and government enforcement actions that may result from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; unfavorable results of legal proceedings; the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; continued competitive pressures in the marketplace;  the continued availability on acceptable terms of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the effect that product quality problems could have on the Company’s sales and operating profits; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; 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 dependency on the performance of distributors and other resellers of the Company’s products; the Company’s reliance on the availability of third-party digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; and risks associated with the Company’s retail initiative, including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships. 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 ended September 30, 2006, its Form 10-Q for the quarter ended December 30, 2006 and its Form 10-Q for the quarter ended March 31, 2007 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 computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and will enter the mobile phone market this year with its revolutionary iPhone.

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.

© 2007 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and QuickTime are 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 31,

 

September 30,

 

 

 

2007

 

2006

 

ASSETS:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,095

 

$

6,392

 

Short-term investments

 

5,482

 

3,718

 

Accounts receivable, less allowances of $48 and $52, respectively

 

928

 

1,252

 

Inventories

 

208

 

270

 

Deferred tax assets

 

640

 

607

 

Other current assets

 

1,676

 

2,270

 

Total current assets

 

16,029

 

14,509

 

Property, plant, and equipment, net

 

1,409

 

1,281

 

Goodwill

 

38

 

38

 

Acquired intangible assets, net

 

240

 

139

 

Other assets

 

995

 

1,238

 

Total assets

 

$

18,711

 

$

17,205

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

2,403

 

$

3,390

 

Accrued expenses

 

3,082

 

3,081

 

Total current liabilities

 

5,485

 

6,471

 

Non-current liabilities

 

965

 

750

 

Total liabilities

 

6,450

 

7,221

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, no par value; 1,800,000,000 shares authorized; 864,693,091 and 855,262,568 shares issued and outstanding, respectively

 

4,848

 

4,355

 

Retained earnings

 

7,381

 

5,607

 

Accumulated other comprehensive income

 

32

 

22

 

Total shareholders’ equity

 

12,261

 

9,984

 

Total liabilities and shareholders’ equity

 

$

18,711

 

$

17,205

 

 




UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share amounts)

 

 

Three Months Ended

 

Six Months Ended

 

 

 

March 31,

 

April 1,

 

March 31,

 

April 1,

 

 

 

2007

 

2006

 

2007

 

2006

 

Net sales

 

$

5,264

 

$

4,359

 

$

12,379

 

$

10,108

 

Cost of sales (1)

 

3,415

 

3,062

 

8,310

 

7,247

 

Gross margin

 

1,849

 

1,297

 

4,069

 

2,861

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development (1)

 

183

 

176

 

367

 

358

 

Selling, general, and administrative (1)

 

680

 

592

 

1,394

 

1,224

 

Total operating expenses

 

863

 

768

 

1,761

 

1,582

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

986

 

529

 

2,308

 

1,279

 

 

 

 

 

 

 

 

 

 

 

Other income and expense

 

148

 

76

 

274

 

157

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,134

 

605

 

2,582

 

1,436

 

Provision for income taxes

 

364

 

195

 

808

 

461

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

770

 

$

410

 

$

1,774

 

$

975

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.89

 

$

0.49

 

$

2.06

 

$

1.17

 

Diluted

 

$

0.87

 

$

0.47

 

$

2.00

 

$

1.11

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

863,003

 

840,910

 

860,347

 

835,658

 

Diluted

 

886,653

 

878,537

 

884,896

 

875,725

 


(1)           Includes stock-based compensation expense, which was allocated as follows:

 

Cost of sales

 

$

9

 

$

5

 

$

15

 

$

10

 

Research and development

 

$

20

 

$

13

 

$

36

 

$

28

 

Selling, general, and administrative

 

$

34

 

$

24

 

$

58

 

$

48

 

 



Exhibit 99.2

Apple Inc.
Q2 2007 Unaudited Summary Data

 

 

 

 

 

 

 

 

 

 

Year/Year

 

 

Q1 2007

 

Q2 2006

 

Q2 2007

 

Sequential Change

 

Change

 

Operating Segments

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units

 

Revenue

 

Units

 

Revenue

 

Americas

 

625

 

$

3,498

 

494

 

$

2,122

 

605

 

$

2,447

 

- 3

%

- 30

%

22

%

15

%

Europe

 

491

 

1,711

 

316

 

966

 

433

 

1,249

 

- 12

%

- 27

%

37

%

29

%

Japan

 

70

 

285

 

82

 

309

 

79

 

283

 

13

%

- 1

%

- 4

%

- 8

%

Retail

 

308

 

1,139

 

154

 

636

 

275

 

855

 

- 11

%

- 25

%

79

%

34

%

Other Segments (1)

 

112

 

482

 

66

 

326

 

125

 

430

 

12

%

- 11

%

89

%

32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Segments

 

1,606

 

$

7,115

 

1,112

 

$

4,359

 

1,517

 

$

5,264

 

- 6

%

- 26

%

36

%

21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year/Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sequential Change

 

Change

 

 

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units

 

Revenue

 

Units

 

Revenue

 

Product Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Desktops (2)

 

637

 

$

955

 

614

 

$

833

 

626

 

$

914

 

- 2

%

- 4

%

2

%

10

%

Portables (3)

 

969

 

1,455

 

498

 

739

 

891

 

1,354

 

- 8

%

- 7

%

79

%

83

%

Subtotal CPUs

 

1,606

 

2,410

 

1,112

 

1,572

 

1,517

 

2,268

 

- 6

%

- 6

%

36

%

44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iPod

 

21,066

 

3,427

 

8,526

 

1,714

 

10,549

 

1,689

 

- 50

%

- 51

%

24

%

- 1

%

Other Music Related Products and Services (4)

 

NM

 

634

 

NM

 

485

 

NM

 

653

 

N

M

3

%

N

M

35

%

Peripherals and Other Hardware

 

NM

 

297

 

NM

 

264

 

NM

 

309

 

N

M

4

%

N

M

17

%

Software, Service and Other Sales

 

NM

 

347

 

NM

 

324

 

NM

 

345

 

N

M

- 1

%

N

M

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Apple

 

 

 

$

7,115

 

 

 

$

4,359

 

 

 

$

5,264

 

 

 

- 26

%

 

 

21

%


(1)   Other Segments include Asia Pacific and FileMaker.

(2)   Includes iMac, eMac, Mac mini, Mac Pro, PowerMac and Xserve product lines.

(3)   Includes MacBook, iBook, MacBook Pro and PowerBook product lines.

(4)   Consists of iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories.

NM:  Not Meaningful