Apple
APPLE INC (Form: 8-K, Received: 07/21/2008 16:31:03)

 

 

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 21, 2008

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:

 

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

 

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

 

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

 

¨ 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 21, 2008, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 28, 2008 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 21, 2008.
99.2    Data sheet issued by Apple Inc. dated July 21, 2008.


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 21, 2008    
      By:   /s/ Peter Oppenheimer
        Peter Oppenheimer
       

Senior Vice President and

Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. dated July 21, 2008.
99.2    Data sheet issued by Apple Inc. dated July 21, 2008.

Exhibit 99.1

Apple Reports Record Third Quarter Results

Revenue Up 38 Percent Year-Over-Year

Mac Sales Reach All-Time High

CUPERTINO, California – July 21, 2008 – Apple ® today announced financial results for its fiscal 2008 third quarter ended June 28, 2008. The Company posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share. These results compare to revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share, in the year-ago quarter. Gross margin was 34.8 percent, down from 36.9 percent in the year-ago quarter. International sales accounted for 42 percent of the quarter’s revenue.

Apple shipped 2,496,000 Macintosh ® computers during the quarter, representing 41 percent unit growth and 43 percent revenue growth over the year-ago quarter. The Company sold 11,011,000 iPods during the quarter, representing 12 percent unit growth and seven percent revenue growth over the year-ago quarter. Quarterly iPhone™ units sold were 717,000 compared to 270,000 in the year-ago-quarter.

“We’re proud to report the best June quarter for both revenue and earnings in Apple’s history,” said Steve Jobs, Apple’s CEO. “We set a new record for Mac sales, we think we have a real winner with our new iPhone 3G, and we’re busy finishing several more wonderful new products to launch in the coming months.”

“We’re extremely pleased with the growth of our business and the generation of almost $5.4 billion in cash in the first three quarters of fiscal 2008,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth quarter of fiscal 2008, we expect revenue of about $7.8 billion and earnings per diluted share of about $1.00.”

Apple will provide live streaming of its Q3 2008 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 Monday, July 21, 2008 at www.apple.com/quicktime/qtv/earningsQ308/ and will also be available for replay.

-more-


This press release contains forward-looking statements including without limitation those 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 without limitation potential litigation 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 other 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 sole service providers for iPhone in certain countries; 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 29, 2007; its Forms 10-Q for the quarters ended December 29, 2007 and March 29, 2008; and its Form 10-Q for the quarter ended June 28, 2008, 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 with its revolutionary iPhone.

-more-


Press Contact:

Steve Dowling

Apple

dowling@apple.com

(408) 974-1896

Investor Relations Contacts:

Nancy Paxton

Apple

paxton1@apple.com

(408) 974-5420

Joan Hoover

Apple

hoover1@apple.com

(408) 974-4570

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.

© 2008 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPhone and QuickTime are trademarks of Apple. Other company and product names may be trademarks of their respective owners.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share amounts)

 

     Three Months Ended    Nine Months Ended
     June 28,
2008
   June 30,
2007
   June 28,
2008
   June 30,
2007

Net sales

   $ 7,464    $ 5,410    $ 24,584    $ 17,789

Cost of sales (1)

     4,864      3,415      16,178      11,725
                           

Gross margin

     2,600      1,995      8,406      6,064
                           

Operating expenses:

           

Research and development (1)

     292      208      811      575

Selling, general, and administrative (1)

     916      746      2,762      2,140
                           

Total operating expenses

     1,208      954      3,573      2,715
                           

Operating income

     1,392      1,041      4,833      3,349

Other income and expense

     118      155      480      429
                           

Income before provision for income taxes

     1,510      1,196      5,313      3,778

Provision for income taxes

     438      378      1,615      1,186
                           

Net income

   $ 1,072    $ 818    $ 3,698    $ 2,592
                           

Earnings per common share:

           

Basic

   $ 1.21    $ 0.94    $ 4.20    $ 3.01

Diluted

   $ 1.19    $ 0.92    $ 4.10    $ 2.92

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

           

Basic

     883,738      866,806      879,753      862,500

Diluted

     903,167      890,671      901,028      887,095

(1)       Includes stock-based compensation expense as follows:

           

Cost of sales

   $ 21    $ 10    $ 59    $ 25

Research and development

   $ 47    $ 20    $ 133    $ 56

Selling, general, and administrative

   $ 65    $ 35    $ 183    $ 93


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

 

          June 28,     
2008
   September 29,
2007
ASSETS:      

Current assets:

     

Cash and cash equivalents

   $ 9,373    $ 9,352

Short-term investments

     11,401      6,034

Accounts receivable, less allowances of $44 and $47, respectively

     1,603      1,637

Inventories

     545      346

Deferred tax assets

     1,131      782

Other current assets

     3,945      3,805
             

Total current assets

     27,998      21,956

Property, plant and equipment, net

     2,177      1,832

Goodwill

     38      38

Acquired intangible assets, net

     291      299

Other assets

     1,205      1,222
             

Total assets

   $ 31,709    $ 25,347
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:      

Current liabilities:

     

Accounts payable

   $ 3,683    $ 4,970

Accrued expenses

     5,535      4,310
             

Total current liabilities

     9,218      9,280

Non-current liabilities

     2,869      1,535
             

Total liabilities

     12,087      10,815
             

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, no par value; 1,800,000,000 shares authorized; 885,746,656 and 872,328,972 shares issued and outstanding, respectively

     6,831      5,368

Retained earnings

     12,714      9,101

Accumulated other comprehensive income

     77      63
             

Total shareholders’ equity

     19,622      14,532
             

Total liabilities and shareholders’ equity

   $ 31,709    $ 25,347
             


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

     Nine Months Ended  
     June 28,
2008
    June 30,
2007
 

Cash and cash equivalents, beginning of the period

   $ 9,352     $ 6,392  
                

Operating Activities:

    

Net income

     3,698       2,592  

Adjustments to reconcile net income to cash generated by operating activities:

    

Depreciation, amortization, and accretion

     339       224  

Stock-based compensation expense

     375       174  

Provision for deferred income taxes

     41       206  

Loss on disposition of property, plant, and equipment

     15       7  

Changes in operating assets and liabilities:

    

Accounts receivable, net

     34       (158 )

Inventories

     (199 )     19  

Other current assets

     (100 )     (363 )

Other assets

     101       254  

Accounts payable

     (1,226 )     270  

Deferred revenue

     1,823       523  

Other liabilities

     400       26  
                

Cash generated by operating activities

     5,301       3,774  
                

Investing Activities:

    

Purchases of short-term investments

     (17,153 )     (9,587 )

Proceeds from maturities of short-term investments

     9,378       4,246  

Proceeds from sales of short-term investments

     2,367       2,420  

Purchases of long-term investments

     (31 )     (6 )

Payment for acquisition of property, plant, and equipment

     (688 )     (530 )

Payment for acquisition of intangible assets

     (89 )     (222 )

Other

     20       34  
                

Cash used in investing activities

     (6,196 )     (3,645 )
                

Financing Activities:

    

Proceeds from issuance of common stock

     411       294  

Excess tax benefits from stock-based compensation

     621       303  

Cash used to net share settle equity awards

     (116 )     —    
                

Cash generated by financing activities

     916       597  
                

Increase in cash and cash equivalents

     21       726  
                

Cash and cash equivalents, end of the period

   $ 9,373     $ 7,118  
                

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 1,022     $ 688  


UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

(In millions)

 

          June 28,     
2008
       March 29,    
2008
   September 29,
2007

Deferred revenue-current:

        

iPhone and Apple TV

   $ 1,389    $ 1,170    $ 346

AppleCare

     547      504      430

Other

     791      742      615
                    

Total deferred revenue-current

     2,727      2,416      1,391
                    

Deferred revenue-non-current:

        

iPhone and Apple TV

     632      763      290

AppleCare

     597      559      495

Other

     107      87      64
                    

Total deferred revenue-non-current

     1,336      1,409      849
                    

Total deferred revenue

   $ 4,063    $ 3,825    $ 2,240
                    

Exhibit 99.2

Apple Inc.

Q3 2008 Unaudited Summary Data

 

     Q2 2008    Q3 2007    Q3 2008    Sequential
Change
    Year/Year Change
     CPU
Units K
   Rev
$M
   CPU
Units K
   Rev
$M
   CPU
Units K
   Rev
$M
   CPU
Units
    Revenue     CPU
Units
    Revenue

Operating Segments

                          

Americas

   884    $ 3,268    824    $ 2,680    1,134    $ 3,435    28 %   5 %   38 %   28%

Europe

   627      1,780    393      1,160    576      1,648    -8 %   -7 %   47 %   42%

Japan

   118      424    81      258    102      365    -14 %   -14 %   26 %   41%

Retail

   458      1,451    330      915    476      1,445    4 %   0 %   44 %   58%

Other Segments (1)

   202      589    136      397    208      571    3 %   -3 %   53 %   44%
                                            

Total Operating Segments

   2,289    $ 7,512    1,764    $ 5,410    2,496    $ 7,464    9 %   -1 %   41 %   38%
                                            
                                   Sequential
Change
    Year/Year Change
     Units
K
   Rev
$M
   Units
K
   Rev
$M
   Units
K
   Rev
$M
   Units     Revenue     Units     Revenue

Product Summary

                          

Desktops (2)

   856    $ 1,352    634    $ 956    943    $ 1,373    10 %   2 %   49 %   44%

Portables (3)

   1,433      2,142    1,130      1,577    1,553      2,237    8 %   4 %   37 %   42%
                                            

Subtotal CPUs

   2,289      3,494    1,764      2,533    2,496      3,610    9 %   3 %   41 %   43%

iPod

   10,644      1,818    9,815      1,570    11,011      1,678    3 %   -8 %   12 %   7%

Other Music Related Products and Services (4)

        881         608         819      -7 %     35%

iPhone and Related Products & Services (5)

   1,703      378    270      5    717      419    -58 %   11 %   166 %   N/M

Peripherals and Other Hardware

        412         308         437      6 %     42%

Software, Service and Other Sales

        529         386         501      -5 %     30%
                                      

Total Apple

      $ 7,512       $ 5,410       $ 7,464      -1 %     38%
                                      

 

(1) Other Segments include Asia Pacific and FileMaker.

 

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

 

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

 

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

 

(5) Units consist of iPhone handset sales; Revenue is derived from handset sales, carrier agreements, and Apple-branded and third-party iPhone accessories.

N/M: Not Meaningful