Apple
APPLE INC (Form: 8-K, Received: 07/25/2007 16:29:53)

 

 

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 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 incorporation)

 

(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)

 

 (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 July 25, 2007, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 30, 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 July 25, 2007.

 

 

 

99.2

 

Data sheet issued by Apple Inc. dated July 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: July 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 July 25, 2007.

 

 

 

99.2

 

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

 

4



Exhibit 99.1

Apple Reports Third Quarter Results

Record June Quarter Revenue and Profit

Mac Sales Set New Record

CUPERTINO, California—July 25, 2007—Apple® today announced financial results for its fiscal 2007 third quarter ended June 30, 2007. The Company posted revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. These results compare to revenue of $4.37 billion and net quarterly profit of $472 million, or $.54 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent, up from 30.3 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.

Apple shipped 1,764,000 Macintosh® computers, representing 33 percent growth over the year-ago quarter and exceeding the previous company record for quarterly Mac® shipments by over 150,000. The Company also sold 9,815,000 iPods during the quarter, representing 21 percent growth over the year-ago quarter.

“We’re thrilled to report the highest June quarter revenue and profit in Apple’s history, along with the highest quarterly Mac sales ever,” said Steve Jobs, Apple’s CEO. “iPhone is off to a great start—we hope to sell our one-millionth iPhone by the end of its first full quarter of sales—and our new product pipeline is very strong.”

“We are very pleased to report strong financial results including cash flow from operations exceeding $1.2 billion for the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2007, we expect revenue of about $5.7 billion and earnings per diluted share of about $.65.”

Apple will provide live streaming of its Q3 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, July 25, 2007 at www.apple.com/quicktime/qtv/earningsq307/ 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, iPhone™ sales 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 Company’s reliance on a sole U.S. service provider for iPhone; 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 deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; 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; and the potential impact of a finding that the Company has infringed on the intellectual property rights of others. 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 Forms 10-Q for the quarters ended December 30, 2006 and March 31, 2007, and its Form 10-Q for the quarter ended June 30, 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 has entered 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, QuickTime and iPhone 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)

 

 

June 30,
2007

 

September 30,
2006

 

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,118

 

$

6,392

 

Short-term investments

 

6,649

 

3,718

 

Accounts receivable, less allowances of $47 and $52, respectively

 

1,410

 

1,252

 

Inventories

 

251

 

270

 

Deferred tax assets

 

687

 

607

 

Other current assets

 

2,630

 

2,270

 

Total current assets

 

18,745

 

14,509

 

Property, plant and equipment, net

 

1,626

 

1,281

 

Goodwill

 

38

 

38

 

Acquired intangible assets, net

 

237

 

139

 

Other assets

 

1,001

 

1,238

 

 

 

 

 

 

 

Total assets

 

$

21,647

 

$

17,205

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

3,660

 

$

3,390

 

Accrued expenses

 

3,332

 

3,053

 

Total current liabilities

 

6,992

 

6,443

 

Non-current liabilities and other

 

1,251

 

778

 

Total liabilities

 

8,243

 

7,221

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Common stock, no par value; 1,800,000,000 shares authorized; 869,161,821 and 855,262,568 shares issued and outstanding, respectively

 

5,149

 

4,355

 

Retained earnings

 

8,199

 

5,607

 

Accumulated other comprehensive income

 

56

 

22

 

Total shareholders’ equity

 

13,404

 

9,984

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

21,647

 

$

17,205

 

 




UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share and per share amounts)

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

June 30,
2007

 

July 1,
2006

 

June 30,
2007

 

July 1,
2006

 

Net sales

 

$

5,410

 

$

4,370

 

$

17,789

 

$

14,478

 

Cost of sales (1)

 

3,415

 

3,045

 

11,725

 

10,292

 

Gross margin

 

1,995

 

1,325

 

6,064

 

4,186

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development (1)

 

208

 

175

 

575

 

533

 

Selling, general, and administrative (1)

 

746

 

584

 

2,140

 

1,808

 

Total operating expenses

 

954

 

759

 

2,715

 

2,341

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

1,041

 

566

 

3,349

 

1,845

 

 

 

 

 

 

 

 

 

 

 

Other income and expense

 

155

 

95

 

429

 

252

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,196

 

661

 

3,778

 

2,097

 

Provision for income taxes

 

378

 

189

 

1,186

 

650

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

818

 

$

472

 

$

2,592

 

$

1,447

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.94

 

$

0.55

 

$

3.01

 

$

1.72

 

Diluted

 

$

0.92

 

$

0.54

 

$

2.92

 

$

1.65

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

866,806

 

851,375

 

862,500

 

840,759

 

Diluted

 

890,671

 

876,368

 

887,095

 

876,971

 


(1)                                   Stock-based compensation expense was allocated as follows:

Cost of sales

 

$

10

 

$

6

 

$

25

 

$

16

 

Research and development

 

$

20

 

$

12

 

$

56

 

$

40

 

Selling, general, and administrative

 

$

35

 

$

19

 

$

93

 

$

67

 

 




UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

(in millions)

 

 

June 30,
2007

 

March 31,
2007

 

September 30,
2006

 

Deferred revenue-current:

 

 

 

 

 

 

 

iPhone and Apple TV

 

$

92

 

$

10

 

$

 

AppleCare

 

399

 

373

 

333

 

Other

 

572

 

520

 

385

 

Total deferred revenue-current

 

1,063

 

903

 

718

 

 

 

 

 

 

 

 

 

Deferred revenue-non-current:

 

 

 

 

 

 

 

iPhone and Apple TV

 

88

 

10

 

 

AppleCare

 

435

 

392

 

355

 

Other

 

38

 

31

 

28

 

Total deferred revenue-non-current

 

561

 

433

 

383

 

 

 

 

 

 

 

 

 

Total deferred revenue

 

$

1,624

 

$

1,336

 

$

1,101

 

 



Exhibit 99.2

Apple Inc.
Q3 2007 Unaudited Summary Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2 2007

 

Q3 2006

 

Q3 2007

 

Sequential Change  

 

Year/Year Change

 

Operating Segments (1)

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units

 

Revenue

 

Units

 

Revenue

 

Americas

 

605

 

$

2,467

 

642

 

$

2,213

 

824

 

$

2,680

 

36

%

9

%

28

%

21

%

Europe

 

433

 

1,249

 

301

 

900

 

393

 

1,160

 

- 9

%

- 7

%

31

%

29

%

Japan

 

79

 

284

 

79

 

259

 

81

 

258

 

3

%

- 9

%

3

%

 

Retail

 

275

 

834

 

216

 

688

 

330

 

915

 

20

%

10

%

53

%

33

%

Other Segments (2)

 

125

 

430

 

89

 

310

 

136

 

397

 

9

%

- 8

%

53

%

28

%

Total Operating Segments

 

1,517

 

$

5,264

 

1,327

 

$

4,370

 

1,764

 

$

5,410

 

16

%

3

%

33

%

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sequential Change

 

Year/Year Change

 

 

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units K

 

Rev $M

 

Units

 

Revenue

 

Units

 

Revenue

 

Product Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Desktops (3)

 

626

 

$

914

 

529

 

$

705

 

634

 

$

956

 

1

%

5

%

20

%

36

%

Portables (4)

 

891

 

1,354

 

798

 

1,161

 

1,130

 

1,577

 

27

%

16

%

42

%

36

%

Subtotal CPUs

 

1,517

 

2,268

 

1,327

 

1,866

 

1,764

 

2,533

 

16

%

12

%

33

%

36

%

iPod

 

10,549

 

1,689

 

8,111

 

1,497

 

9,815

 

1,570

 

- 7

%

- 7

%

21

%

5

%

Other Music Related Products and Services (5)

 

 

 

653

 

 

 

457

 

 

 

608

 

 

 

- 7

%

 

 

33

%

iPhone and Related Products and Services (6)

 

 

 

 

 

270

 

5

 

NM

 

NM

 

NM

 

NM

 

Peripherals and Other Hardware

 

 

 

309

 

 

 

236

 

 

 

308

 

 

 

 

 

 

31

%

Software, Service and Other Sales

 

 

 

345

 

 

 

314

 

 

 

386

 

 

 

12

%

 

 

23

%

Total Apple

 

 

 

$

5,264

 

 

 

$

4,370

 

 

 

$

5,410

 

 

 

3

%

 

 

24

%


(1)              In the third quarter of fiscal 2007, the Company revised the way it measures the Retail Segment’s operating results to a manner that is generally consistent with the Company’s other operating segments. Prior period results have been reclassified to reflect this change to the Retail Segment’s operating results along with the corresponding offsets to the other operating segments.

(2)              Other Segments include Asia Pacific and FileMaker.

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

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

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

(6)              Consists of iPhones and Apple-branded and third-party iPhone accessories.

NM:  Not Meaningful