Apple
APPLE INC (Form: 8-K, Received: 04/23/2008 16:30:25)

 

 

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 23, 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 April 23, 2008, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its second fiscal quarter ended March 29, 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 April 23, 2008.
99.2   Data sheet issued by Apple Inc. dated April 23, 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:   April 23, 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 April 23, 2008.
99.2   Data sheet issued by Apple Inc. dated April 23, 2008.

Exhibit 99.1

Apple Reports Record Second Quarter Results

Revenue Up 43 Percent Year-Over-Year

CUPERTINO, California—April 23, 2008—Apple ® today announced financial results for its fiscal 2008 second quarter ended March 29, 2008. The Company posted revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share. These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter’s revenue.

Apple shipped 2,289,000 Macintosh ® computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The Company sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 1,703,000.

“We’re delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple’s history,” said Steve Jobs, Apple’s CEO. “With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters.”

“We’re thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00.”

Apple will provide live streaming of its Q2 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 Wednesday, April 23, 2008 at www.apple.com/quicktime/qtv/earningsq208/ and will also be available for replay.


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 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 Form 10-Q for the quarter ended December 29, 2007, and its Form 10-Q for the quarter ended March 29, 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.


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    Six Months Ended
     March 29,
2008
   March 31,
2007
   March 29,
2008
   March 31,
2007

Net sales

   $ 7,512    $ 5,264    $ 17,120    $ 12,379

Cost of sales (1)

     5,038      3,415      11,314      8,310
                           

Gross margin

     2,474      1,849      5,806      4,069
                           

Operating expenses:

           

Research and development (1)

     273      183      519      367

Selling, general, and administrative (1)

     886      680      1,846      1,394
                           

Total operating expenses

     1,159      863      2,365      1,761
                           

Operating income

     1,315      986      3,441      2,308

Other income and expense

     162      148      362      274
                           

Income before provision for income taxes

     1,477      1,134      3,803      2,582

Provision for income taxes

     432      364      1,177      808
                           

Net income

   $ 1,045    $ 770    $ 2,626    $ 1,774
                           

Earnings per common share:

           

Basic

   $ 1.19    $ 0.89    $ 2.99    $ 2.06

Diluted

   $ 1.16    $ 0.87    $ 2.92    $ 2.00

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

           

Basic

     879,546      863,003      877,704      860,347

Diluted

     899,329      886,653      899,783      884,896

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

           

Cost of sales

   $ 20    $ 9    $ 38    $ 15

Research and development

   $ 47    $ 20    $ 86    $ 36

Selling, general, and administrative

   $ 65    $ 34    $ 118    $ 58


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

 

        March 29,   
2008
   September 29,
2007
ASSETS:      

Current assets:

     

Cash and cash equivalents

   $ 9,070    $ 9,352

Short-term investments

     10,378      6,034

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

     1,593      1,637

Inventories

     364      346

Deferred tax assets

     1,060      782

Other current assets

     4,271      3,805
             

Total current assets

     26,736      21,956

Property, plant and equipment, net

     1,962      1,832

Goodwill

     38      38

Acquired intangible assets, net

     300      299

Other assets

     1,435      1,222
             

Total assets

   $ 30,471    $ 25,347
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:      

Current liabilities:

     

Accounts payable

   $ 4,154    $ 4,970

Accrued expenses

     5,480      4,310
             

Total current liabilities

     9,634      9,280

Non-current liabilities

     2,784      1,535
             

Total liabilities

     12,418      10,815
             

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, no par value; 1,800,000,000 shares authorized; 881,431,003 and 872,328,972 shares issued and outstanding, respectively

     6,342      5,368

Retained earnings

     11,642      9,101

Accumulated other comprehensive income

     69      63
             

Total shareholders’ equity

     18,053      14,532
             

Total liabilities and shareholders’ equity

   $ 30,471    $ 25,347
             

 


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

     Six Months Ended  
     March 29,
2008
    March 31,
2007
 

Cash and cash equivalents, beginning of the period

   $ 9,352     $ 6,392  
                

Operating Activities:

    

Net income

     2,626       1,774  

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

    

Depreciation, amortization, and accretion

     222       143  

Stock-based compensation expense

     242       109  

Provision for deferred income taxes

     6       122  

Loss on disposition of property, plant, and equipment

     10       6  

Changes in operating assets and liabilities:

    

Accounts receivable, net

     44       324  

Inventories

     (18 )     62  

Other current assets

     (444 )     589  

Other assets

     (150 )     261  

Accounts payable

     (740 )     (987 )

Deferred revenue

     1,585       235  

Other liabilities

     597       (91 )
                

Cash generated by operating activities

     3,980       2,547  
                

Investing Activities:

    

Purchases of short-term investments

     (12,740 )     (6,223 )

Proceeds from maturities of short-term investments

     6,683       2,961  

Proceeds from sales of short-term investments

     1,676       1,505  

Purchases of long-term investments

     (17 )     (5 )

Payment for acquisition of property, plant, and equipment

     (384 )     (247 )

Payment for acquisition of intangible assets

     (63 )     (216 )

Other

     21       13  
                

Cash used in investing activities

     (4,824 )     (2,212 )
                

Financing Activities:

    

Proceeds from issuance of common stock

     233       176  

Excess tax benefits from stock-based compensation

     445       192  

Cash used to net share settle equity awards

     (116 )     —    
                

Cash generated by financing activities

     562       368  
                

(Decrease) increase in cash and cash equivalents

     (282 )     703  
                

Cash and cash equivalents, end of the period

   $ 9,070     $ 7,095  
                

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 753     $ 501  


UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

(In millions)

 

         March 29,    
2008
    December 29, 
2007
     September 29, 
2007
 

Deferred revenue-current:

       

iPhone and Apple TV

   $ 1,170    $ 816     $ 346  

AppleCare

     504      467       430  

Other

     742      776 *     615 *
                       

Total deferred revenue-current

     2,416      2,059       1,391  
                       

Deferred revenue-non-current:

       

iPhone and Apple TV

     763      624       290  

AppleCare

     559      529       495  

Other

     87      76 *     64 *
                       

Total deferred revenue-non-current

     1,409      1,229       849  
                       

Total deferred revenue

   $ 3,825    $ 3,288     $ 2,240  
                       

 

* Certain prior period amounts have been reclassified to conform to the current period presentation.

Exhibit 99.2

Apple Inc.

Q2 2008 Unaudited Summary Data

 

     Q1 2008    Q2 2007    Q2 2008                         
     CPU
Units K
   Rev
$M
   CPU
Units K
   Rev
$M
   CPU
Units K
   Rev
$M
   Sequential Change     Year/Year Change  
                       CPU Units     Revenue     CPU Units     Revenue  

Operating Segments

                          

Americas

   841    $ 4,298    605    $ 2,467    884    $ 3,268    5 %   - 24 %   46 %   32 %

Europe

   705      2,471    433      1,249    627      1,780    - 11 %   - 28 %   45 %   43 %

Japan

   91      400    79      284    118      424    30 %   6 %   49 %   49 %

Retail

   504      1,701    275      834    458      1,451    - 9 %   - 15 %   67 %   74 %

Other Segments (1)

   178      738    125      430    202      589    13 %   - 20 %   62 %   37 %
                                            

Total Operating Segments

   2,319    $ 9,608    1,517    $ 5,264    2,289    $ 7,512    - 1 %   - 22 %   51 %   43 %
                                            
                                   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)

   977    $ 1,515    626    $ 914    856    $ 1,352    - 12 %   - 11 %   37 %   48 %

Portables (3)

   1,342      2,037    891      1,354    1,433      2,142    7 %   5 %   61 %   58 %
                                            

Subtotal CPUs

   2,319      3,552    1,517      2,268    2,289      3,494    - 1 %   - 2 %   51 %   54 %

iPod

   22,121      3,997    10,549      1,689    10,644      1,818    - 52 %   - 55 %   1 %   8 %

Other Music Related Products and Services (4)

        808         653         881      9 %     35 %

iPhone and Related Products & Services (5)

   2,315      241    —        —      1,703      378    - 26 %   57 %   N/ M   N/ M

Peripherals and Other Hardware

        382         309         412      8 %     33 %

Software, Service and Other Sales

        628         345         529      - 16 %     53 %
                                      

Total Apple

      $ 9,608       $ 5,264       $ 7,512      - 22 %     43 %
                                      

 

(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