Apple
APPLE INC (Form: 8-K, Received: 01/27/2015 16:31:59)

 

 

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 27, 2015

Date of Report (Date of earliest event reported)

 

 

 

LOGO

Apple Inc.

(Exact name of registrant as specified in its charter)

 

California   001-36743   94-2404110

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS. Employer

Identification No.)

1 Infinite Loop

Cupertino, California 95014

(Address of principal executive offices) (Zip Code)

(408) 996-1010

(Registrant’s telephone number, including area code)

Not applicable

(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 27, 2015, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its first fiscal quarter ended December 27, 2014 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.

 

Exhibit

Number

  

Exhibit Description

99.1    Press release issued by Apple Inc. on January 27, 2015.
99.2    Data sheet issued by Apple Inc. on January 27, 2015.


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.

 

Date: January 27, 2015 By: /s/ Luca Maestri

Luca Maestri

Senior Vice President,

Chief Financial Officer


Exhibit Index

 

Exhibit

Number

  

Exhibit Description

99.1    Press release issued by Apple Inc. on January 27, 2015.
99.2    Data sheet issued by Apple Inc. on January 27, 2015.

Exhibit 99.1

Apple Reports Record First Quarter Results

Highest-ever revenue & earnings drive 48% increase in EPS

Growth led by record revenue from iPhone, Mac & App Store

CUPERTINO, California—January 27, 2015—Apple ® today announced financial results for its fiscal 2015 first quarter ended December 27, 2014. The Company posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share. These results compare to revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent compared to 37.9 percent in the year-ago quarter. International sales accounted for 65 percent of the quarter’s revenue.

The results were fueled by all-time record revenue from iPhone ® and Mac ® sales as well as record performance of the App Store SM . iPhone unit sales of 74.5 million also set a new record.

“We’d like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high,” said Tim Cook, Apple’s CEO. “Our revenue grew 30 percent over last year to $74.6 billion, and the execution by our teams to achieve these results was simply phenomenal.”

“Our exceptional results produced EPS growth of 48 percent over last year, and $33.7 billion in operating cash flow during the quarter, an all-time record,” said Luca Maestri, Apple’s CFO. “We spent over $8 billion on our capital return program, bringing total returns to investors to almost $103 billion, over $57 billion of which occurred in just the last 12 months.”

Apple is providing the following guidance for its fiscal 2015 second quarter:

 

 

revenue between $52 billion and $55 billion

 

 

gross margin between 38.5 percent and 39.5 percent

 

 

operating expenses between $5.4 billion and $5.5 billion

 

 

other income/(expense) of $350 million

 

 

tax rate of 26.3 percent

Apple’s board of directors has declared a cash dividend of $.47 per share of the Company’s common stock. The dividend is payable on February 12, 2015, to shareholders of record as of the close of business on February 9, 2015.

Apple will provide live streaming of its Q1 2015 financial results conference call beginning at 2:00 p.m. PST on January 27, 2015 at www.apple.com/quicktime/qtv/earningsq115. This webcast will also be available for replay for approximately two weeks thereafter.


This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation 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; continued competitive pressures in the marketplace; 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 introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; 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; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 27, 2014, and its Form 10-Q for the fiscal quarter ended December 27, 2014 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 designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

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.

© 2015 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPhone and App Store are trademarks of Apple. Other company and product names may be trademarks of their respective owners.


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

 

                                                 
     Three Months Ended  
     December 27,
2014
     December 28,
2013
 

Net sales

   $ 74,599       $ 57,594   

Cost of sales (1)

     44,858         35,748   
  

 

 

    

 

 

 

Gross margin

  29,741      21,846   
  

 

 

    

 

 

 

Operating expenses:

Research and development (1)

  1,895      1,330   

Selling, general and administrative (1)

  3,600      3,053   
  

 

 

    

 

 

 

Total operating expenses

  5,495      4,383   
  

 

 

    

 

 

 

Operating income

  24,246      17,463   

Other income/(expense), net

  170      246   
  

 

 

    

 

 

 

Income before provision for income taxes

  24,416      17,709   

Provision for income taxes

  6,392      4,637   
  

 

 

    

 

 

 

Net income

$ 18,024    $ 13,072   
  

 

 

    

 

 

 

Earnings per share:

Basic

$ 3.08    $ 2.08   

Diluted

$ 3.06    $ 2.07   

Shares used in computing earnings per share:

Basic

  5,843,082      6,272,504   

Diluted

  5,881,803      6,310,161   

Cash dividends declared per common share

$ 0.47    $ 0.44   

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

  

Cost of sales

$ 140    $ 109   

Research and development

$ 374    $ 289   

Selling, general and administrative

$ 374    $ 283   


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands and par value)

 

                                                 
     December 27,
2014
     September 27,
2014
 
ASSETS:   

Current assets:

     

Cash and cash equivalents

   $ 19,478       $ 13,844   

Short-term marketable securities

     12,985         11,233   

Accounts receivable, less allowances of $87 and $86, respectively

     16,709         17,460   

Inventories

     2,283         2,111   

Deferred tax assets

     5,046         4,318   

Vendor non-trade receivables

     13,267         9,759   

Other current assets

     13,635         9,806   
  

 

 

    

 

 

 

Total current assets

  83,403      68,531   

Long-term marketable securities

  145,492      130,162   

Property, plant and equipment, net

  20,392      20,624   

Goodwill

  4,629      4,616   

Acquired intangible assets, net

  4,370      4,142   

Other assets

  3,608      3,764   
  

 

 

    

 

 

 

Total assets

$ 261,894    $ 231,839   
  

 

 

    

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:   

Current liabilities:

Accounts payable

$ 38,001    $ 30,196   

Accrued expenses

  22,724      18,453   

Deferred revenue

  8,987      8,491   

Commercial paper

  3,899      6,308   
  

 

 

    

 

 

 

Total current liabilities

  73,611      63,448   

Deferred revenue – non-current

  3,480      3,031   

Long-term debt

  32,504      28,987   

Other non-current liabilities

  28,971      24,826   
  

 

 

    

 

 

 

Total liabilities

  138,566      120,292   
  

 

 

    

 

 

 

Commitments and contingencies

Shareholders’ equity:

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,826,419 and 5,866,161 shares issued and outstanding, respectively

  24,187      23,313   

Retained earnings

  97,178      87,152   

Accumulated other comprehensive income/(loss)

  1,963      1,082   
  

 

 

    

 

 

 

Total shareholders’ equity

  123,328      111,547   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

$ 261,894    $ 231,839   
  

 

 

    

 

 

 


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

                                                 
     Three Months Ended  
     December 27,
2014
    December 28,
2013
 

Cash and cash equivalents, beginning of the period

   $ 13,844      $ 14,259   
  

 

 

   

 

 

 

Operating activities:

    

Net income

     18,024        13,072   

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

    

Depreciation and amortization

     2,575        2,144   

Share-based compensation expense

     888        681   

Deferred income tax expense

     2,197        1,253   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     751        (1,098

Inventories

     (172     (358

Vendor non-trade receivables

     (3,508     (3,459

Other current and non-current assets

     (1,648     (319

Accounts payable

     9,003        8,191   

Deferred revenue

     945        1,368   

Other current and non-current liabilities

     4,667        1,195   
  

 

 

   

 

 

 

Cash generated by operating activities

     33,722        22,670   
  

 

 

   

 

 

 

Investing activities:

    

Purchases of marketable securities

     (44,915     (48,397

Proceeds from maturities of marketable securities

     2,807        5,556   

Proceeds from sales of marketable securities

     24,166        30,302   

Payments made in connection with business acquisitions, net

     (23     (525

Payments for acquisition of property, plant and equipment

     (3,217     (1,985

Payments for acquisition of intangible assets

     (48     (59

Other

     65        5   
  

 

 

   

 

 

 

Cash used in investing activities

     (21,165     (15,103
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from issuance of common stock

     80        134   

Excess tax benefits from equity awards

     264        280   

Taxes paid related to net share settlement of equity awards

     (512     (365

Dividends and dividend equivalents paid

     (2,801     (2,769

Repurchase of common stock

     (5,030     (5,029

Proceeds from issuance of long-term debt, net

     3,485        0   

Repayments of commercial paper, net

     (2,409     0   
  

 

 

   

 

 

 

Cash used in financing activities

     (6,923     (7,749
  

 

 

   

 

 

 

Increase/(decrease) in cash and cash equivalents

     5,634        (182
  

 

 

   

 

 

 

Cash and cash equivalents, end of the period

   $ 19,478      $ 14,077   
  

 

 

   

 

 

 

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 3,869      $ 3,387   

Cash paid for interest

   $ 202      $ 161   

Exhibit 99.2

Apple Inc.

Q1 2015 Unaudited Summary Data

(Units in thousands, Revenue in millions)

 

                                                                                                                                                                                             
  Q1’15   Q4’14   Q1’14   Sequential Change   Year/Year Change  
      Revenue       Revenue       Revenue       Revenue       Revenue  

Operating Segments

 

Americas

$ 30,566    $ 19,750    $ 24,789      55%      23%   

Europe

  17,214      10,350      14,335      66%      20%   

Greater China

  16,144      6,292      9,496      157%      70%   

Japan

  5,448      3,595      5,045      52%      8%   

Rest of Asia Pacific

  5,227      2,136      3,929      145%      33%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

$ 74,599    $ 42,123    $ 57,594      77%      30%   
           
  Q1’15   Q4’14   Q1’14   Sequential Change   Year/Year Change  
  Units   Revenue   Units   Revenue   Units   Revenue   Units   Revenue   Units   Revenue  

Product Summary

 

iPhone  (1)

  74,468    $ 51,182      39,272    $ 23,678      51,025    $ 32,498      90%      116%      46%      57%   

iPad  (1)

  21,419      8,985      12,316      5,316      26,035      11,468      74%      69%      - 18%      - 22%   

Mac  (1)

  5,519      6,944      5,520      6,625      4,837      6,395      0%      5%      14%      9%   

Services  (2)

  4,799      4,608      4,397      4%      9%   

Other Products  (1)(3)

  2,689      1,896      2,836      42%      - 5%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

$ 74,599    $ 42,123    $ 57,594      77%      30%   
           

 

(1)

Includes deferrals and amortization of related non-software services and software upgrade rights.

 

(2)  

Includes revenue from the iTunes Store, the App Store, the Mac App Store, the iBooks Store, AppleCare, Apple Pay, licensing and other services.

 

(3)  

Includes sales of iPod, Apple TV, Beats Electronics and Apple-branded and third-party accessories.