Apple
APPLE INC (Form: 8-K, Received: 01/22/2008 16:29:39)
 
 

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

January 22, 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 January 22, 2008, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its fiscal 2008 first quarter ended December 29, 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 January 22, 2008.
99.2    Data sheet issued by Apple Inc. dated January 22, 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: January 22, 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 January 22, 2008.
99.2    Data sheet issued by Apple Inc. dated January 22, 2008.

Exhibit 99.1

Apple Reports First Quarter Results

Best Quarterly Revenue & Earnings in Apple History

Mac, iPod & iPhone Sales Break Previous Records

CUPERTINO, California—January 22, 2008—Apple ® today announced financial results for its fiscal 2008 first quarter ended December 29, 2007. The Company posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share. These results compare to revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, up from 31.2 percent in the year-ago quarter. International sales accounted for 45 percent of the quarter’s revenue.

Apple shipped 2,319,000 Macintosh ® computers, representing 44 percent unit growth and 47 percent revenue growth over the year-ago quarter. The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 2,315,000.

“We’re thrilled to report our best quarter ever, with the highest revenue and earnings in Apple’s history,” said Steve Jobs, Apple’s CEO. “We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro and iTunes Movie Rentals in the first two weeks.”

“Apple’s revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarter’s record-breaking results,” said Peter Oppenheimer, Apple’s CFO. “Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding an ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94.”

Apple will provide live streaming of its Q1 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. PST on Tuesday, January 22, 2008 at www.apple.com/quicktime/qtv/earningsq108/ 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 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 sole service providers for iPhone in the US, UK, Germany and France; 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 and its Form 10-Q for the quarter ended December 29, 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 with its revolutionary iPhone.

Press Contact:

Kristin Huguet

Apple

khuguet@apple.com

(408) 974-2414


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
    

December 29,

2007

  

December 30,

2006

Net sales

   $ 9,608    $ 7,115

Cost of sales (1)

     6,276      4,895
             

Gross margin

     3,332      2,220
             

Operating expenses:

     

Research and development (1)

     246      184

Selling, general and administrative (1)

     960      714
             

Total operating expenses

     1,206      898
             

Operating income

     2,126      1,322

Other income and expense

     200      126
             

Income before provision for income taxes

     2,326      1,448

Provision for income taxes

     745      444
             

Net income

   $ 1,581    $ 1,004
             

Earnings per common share:

     

Basic

   $ 1.81    $ 1.17

Diluted

   $ 1.76    $ 1.14

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

     

Basic

     875,860      857,691

Diluted

     900,054      883,297

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

     

Cost of sales

   $ 18    $ 6

Research and development

   $ 39    $ 16

Selling, general and administrative

   $ 53    $ 24


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

 

     December 29,
2007
   September 29,
2007
ASSETS:      

Current assets:

     

Cash and cash equivalents

   $ 9,162    $ 9,352

Short-term investments

     9,286      6,034

Accounts receivable, less allowances of $45 and $47, respectively

     1,939      1,637

Inventories

     459      346

Deferred tax assets

     993      782

Other current assets

     4,350      3,805
             

Total current assets

     26,189      21,956

Property, plant and equipment, net

     1,870      1,832

Goodwill

     38      38

Acquired intangible assets, net

     311      299

Other assets

     1,631      1,222
             

Total assets

   $ 30,039    $ 25,347
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:      

Current liabilities:

     

Accounts payable

   $ 5,366    $ 4,970

Accrued expenses

     5,169      4,329
             

Total current liabilities

     10,535      9,299

Non-current liabilities

     2,700      1,516
             

Total liabilities

     13,235      10,815
             

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, no par value; 1,800,000,000 shares authorized; 878,628,867 and 872,328,972 shares issued and outstanding, respectively

     6,046      5,368

Retained earnings

     10,684      9,101

Accumulated other comprehensive income

     74      63
             

Total shareholders’ equity

     16,804      14,532
             

Total liabilities and shareholders’ equity

   $ 30,039    $ 25,347
             


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

 

     Three Months Ended  
    

December 29,

2007

   

December 30,

2006

 

Cash and cash equivalents, beginning of the period

   $ 9,352     $ 6,392  
                

Operating Activities:

    

Net income

     1,581       1,004  

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

    

Depreciation, amortization, and accretion

     106       74  

Stock-based compensation expense

     110       46  

Provision for deferred income taxes

     22       73  

Loss on disposition of property, plant, and equipment

     14       5  

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (302 )     (369 )

Inventories

     (113 )     (33 )

Other current assets

     (550 )     36  

Other assets

     (253 )     28  

Accounts payable

     484       495  

Deferred revenue

     1,048       199  

Other liabilities

     640       255  
                

Cash generated by operating activities

     2,787       1,813  
                

Investing Activities:

    

Purchases of short-term investments

     (6,127 )     (2,581 )

Proceeds from maturities of short-term investments

     2,129       934  

Proceeds from sales of investments

     758       655  

Purchases of long-term investments

     (9 )     —    

Payment for acquisition of property, plant, and equipment

     (224 )     (142 )

Payment for acquisition of intangible assets

     (8 )     (115 )

Other

     19       15  
                

Cash used in investing activities

     (3,462 )     (1,234 )
                

Financing Activities:

    

Proceeds from issuance of common stock

     179       101  

Excess tax benefits from stock-based compensation

     315       87  

Cash used to net share settle equity awards

     (9 )     —    
                

Cash generated by financing activities

     485       188  
                

(Decrease) increase in cash and cash equivalents

     (190 )     767  
                

Cash and cash equivalents, end of the period

   $ 9,162     $ 7,159  
                

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 251     $ 114  


UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

(in millions)

 

     December 29,
2007
   September 29,
2007

Deferred revenue-current:

     

iPhone and Apple TV

   $ 816    $ 346

AppleCare

     467      430

Other

     812      634
             

Total deferred revenue-current

     2,095      1,410
             

Deferred revenue-non-current:

     

iPhone and Apple TV

     624      290

AppleCare

     529      495

Other

     40      45
             

Total deferred revenue-non-current

     1,193      830
             

Total deferred revenue

   $ 3,288    $ 2,240
             

Exhibit 99.2

Apple Inc.

Q1 2008 Unaudited Summary Data

 

    Q4 2007   Q1 2007   Q1 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

  965   $ 2,928   625   $ 3,521   841   $ 4,298   - 13%   47%   35%   22%

Europe

  499     1,339   491     1,712   705     2,471   41%   85%   44%   44%

Japan

  72     255   70     285   91     400   26%   57%   30%   40%

Retail

  473     1,251   308     1,115   504     1,701   7%   36%   64%   53%

Other Segments (1)

  155     444   112     482   178     738   15%   66%   59%   53%
                                     

Total Operating Segments

  2,164   $ 6,217   1,606   $ 7,115   2,319   $ 9,608   7%   55%   44%   35%
                                     
                              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)

  817   $ 1,195   637   $ 955   977   $ 1,515   20%   27%   53%   59%

Portables (3)

  1,347     1,908   969     1,455   1,342     2,037   - 0%   7%   38%   40%
                                     

Subtotal CPUs

  2,164     3,103   1,606     2,410   2,319     3,552   7%   14%   44%   47%

iPod

  10,200     1,619   21,066     3,427   22,121     3,997   117%   147%   5%   17%

Other Music Related Products and Services (4)

      601       634       808     34%     27%

iPhone and Related Products & Services (5)

  1,119     118   —       —     2,315     241   107%   104%   NM   NM

Peripherals and Other Hardware

      346       297       382     10%     29%

Software, Service and Other Sales

      430       347       628     46%     81%
                               

Total Apple

    $ 6,217     $ 7,115     $ 9,608     55%     35%
                               

 

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

NM: Not Meaningful