Apple
APPLE INC (Form: 8-K, Received: 07/21/2015 16:32:07)

 

 

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, 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 July 21, 2015, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its third fiscal quarter ended June 27, 2015 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 July 21, 2015.
99.2    Data sheet issued by Apple Inc. on July 21, 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: July 21, 2015 Apple Inc.
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 July 21, 2015.
99.2    Data sheet issued by Apple Inc. on July 21, 2015.

Exhibit 99.1

Apple Reports Record Third Quarter Results

iPhone, Apple Watch, Mac & App Store Drive Revenue Growth of 33%

CUPERTINO, California—July 21, 2015—Apple ® today announced financial results for its fiscal 2015 third quarter ended June 27, 2015. The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, or $1.85 per diluted share. These results compare to revenue of $37.4 billion and net profit of $7.7 billion, or $1.28 per diluted share, in the year-ago quarter. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

The growth was fueled by record third quarter sales of iPhone ® and Mac ® , all-time record revenue from services and the successful launch of Apple Watch™.

“We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch,” said Tim Cook, Apple’s CEO. “The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”

“In the third quarter our year-over-year growth rate accelerated from the first half of fiscal 2015, with revenue up 33 percent and earnings per share up 45 percent,” said Luca Maestri, Apple’s CFO. “We generated very strong operating cash flow of $15 billion, and we returned over $13 billion to shareholders through our capital return program.”

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

 

  revenue between $49 billion and $51 billion

 

  gross margin between 38.5 percent and 39.5 percent

 

  operating expenses between $5.85 billion and $5.95 billion

 

  other income/(expense) of $400 million

 

  tax rate of 26.3 percent

Apple’s board of directors has declared a cash dividend of $.52 per share of the Company’s common stock. The dividend is payable on August 13, 2015, to shareholders of record as of the close of business on August 10, 2015.

Apple will provide live streaming of its Q3 2015 financial results conference call beginning at 2:00 p.m. PDT on July 21, 2015 at www.apple.com/quicktime/qtv/earningsq315. 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 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, its Form 10-Q for the fiscal quarter ended December 27, 2014, its Form 10-Q for the fiscal quarter ended March 28, 2015, and its Form 10-Q for the fiscal quarter ended June 27, 2015 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 revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, the Mac and Apple Watch. Apple’s three software platforms — iOS, OS X and watchOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

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, iPhone, Mac and Apple Watch 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      Nine Months Ended  
     June 27,
2015
     June 28,
2014
     June 27,
2015
     June 28,
2014
 

Net sales

   $ 49,605       $ 37,432       $ 182,214       $ 140,672   

Cost of sales  (1)

     29,924         22,697         109,136         86,144   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross margin

  19,681      14,735      73,078      54,528   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

Research and development  (1)

  2,034      1,603      5,847      4,355   

Selling, general and administrative  (1)

  3,564      2,850      10,624      8,835   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

  5,598      4,453      16,471      13,190   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

  14,083      10,282      56,607      41,338   

Other income/(expense), net

  390      202      846      673   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

  14,473      10,484      57,453      42,011   

Provision for income taxes

  3,796      2,736      15,183      10,968   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

$ 10,677    $ 7,748    $ 42,270    $ 31,043   
  

 

 

    

 

 

    

 

 

    

 

 

 

Earnings per share:

Basic

$ 1.86    $ 1.29    $ 7.30    $ 5.06   

Diluted

$ 1.85    $ 1.28    $ 7.25    $ 5.03   

Shares used in computing earnings per share:

Basic

  5,729,886      6,012,635      5,788,922      6,136,147   

Diluted

  5,773,099      6,051,711      5,829,920      6,172,857   

Cash dividends declared per share

$ 0.52    $ 0.47    $ 1.46    $ 1.35   
(1)  Includes share-based compensation expense as follows:

Cost of sales

$ 148    $ 115    $ 430    $ 334   

Research and development

$ 388    $ 313    $ 1,146    $ 902   

Selling, general and administrative

$ 320    $ 296    $ 1,095    $ 865   


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

                                                 
     June 27,
2015
     September 27,
2014
 
ASSETS:   

Current assets:

     

Cash and cash equivalents

   $ 15,319       $ 13,844   

Short-term marketable securities

     19,384         11,233   

Accounts receivable, less allowances of $83 and $86, respectively

     10,370         17,460   

Inventories

     2,042         2,111   

Deferred tax assets

     5,010         4,318   

Vendor non-trade receivables

     9,537         9,759   

Other current assets

     9,291         9,806   
  

 

 

    

 

 

 

Total current assets

  70,953      68,531   

Long-term marketable securities

  168,145      130,162   

Property, plant and equipment, net

  21,149      20,624   

Goodwill

  5,044      4,616   

Acquired intangible assets, net

  3,779      4,142   

Other assets

  4,081      3,764   
  

 

 

    

 

 

 

Total assets

$ 273,151    $ 231,839   
  

 

 

    

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY:   

Current liabilities:

Accounts payable

$ 26,474    $ 30,196   

Accrued expenses

  22,724      18,453   

Deferred revenue

  9,088      8,491   

Commercial paper

  4,499      6,308   

Current portion of long-term debt

  2,500      0   
  

 

 

    

 

 

 

Total current liabilities

  65,285      63,448   

Deferred revenue, non-current

  3,474      3,031   

Long-term debt

  47,419      28,987   

Other non-current liabilities

  31,296      24,826   
  

 

 

    

 

 

 

Total liabilities

  147,474      120,292   
  

 

 

    

 

 

 

Commitments and contingencies

Shareholders’ equity:

Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 5,705,400 and 5,866,161 shares issued and outstanding, respectively

  26,327      23,313   

Retained earnings

  98,252      87,152   

Accumulated other comprehensive income

  1,098      1,082   
  

 

 

    

 

 

 

Total shareholders’ equity

  125,677      111,547   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

$ 273,151    $ 231,839   
  

 

 

    

 

 

 


Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

                                                 
     Nine Months Ended  
     June 27,
2015
     June 28,
2014
 

Cash and cash equivalents, beginning of the period

   $ 13,844       $ 14,259   
  

 

 

    

 

 

 

Operating activities:

Net income

  42,270      31,043   

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

Depreciation and amortization

  8,138      5,977   

Share-based compensation expense

  2,671      2,101   

Deferred income tax expense

  2,820      3,154   

Changes in operating assets and liabilities:

Accounts receivable, net

  7,090      2,314   

Inventories

  69      170   

Vendor non-trade receivables

  222      1,486   

Other current and non-current assets

  2,286      931   

Accounts payable

  (3,263   (2,531

Deferred revenue

  1,040      1,394   

Other current and non-current liabilities

  4,448      424   
  

 

 

    

 

 

 

Cash generated by operating activities

  67,791      46,463   
  

 

 

    

 

 

 

Investing activities:

Purchases of marketable securities

  (137,524   (160,662

Proceeds from maturities of marketable securities

  9,916      15,111   

Proceeds from sales of marketable securities

  80,635      126,827   

Payments made in connection with business acquisitions, net

  (230   (898

Payments for acquisition of property, plant and equipment

  (7,629   (5,745

Payments for acquisition of intangible assets

  (201   (216

Other

  134      7   
  

 

 

    

 

 

 

Cash used in investing activities

  (54,899   (25,576
  

 

 

    

 

 

 

Financing activities:

Proceeds from issuance of common stock

  324      435   

Excess tax benefits from equity awards

  684      562   

Taxes paid related to net share settlement of equity awards

  (1,332   (839

Dividends and dividend equivalents paid

  (8,597   (8,297

Repurchase of common stock

  (22,000   (28,000

Proceeds from issuance of long-term debt, net

  21,312      11,960   

Change in commercial paper, net

  (1,808   2,010   
  

 

 

    

 

 

 

Cash used in financing activities

  (11,417   (22,169
  

 

 

    

 

 

 

Increase/(decrease) in cash and cash equivalents

  1,475      (1,282
  

 

 

    

 

 

 

Cash and cash equivalents, end of the period

$ 15,319    $ 12,977   
  

 

 

    

 

 

 

Supplemental cash flow disclosure:

Cash paid for income taxes, net

$ 10,604    $ 8,013   

Cash paid for interest

$ 427    $ 322   

Exhibit 99.2

Apple Inc.

Q3 2015 Unaudited Summary Data

(Units in thousands, Revenue in millions)

 

                                                                                                                                                                                             
  Q3 2015   Q2 2015   Q3 2014   Sequential Change   Year/Year Change  
      Revenue       Revenue       Revenue       Revenue       Revenue  
Operating Segments  

Americas

$ 20,209    $ 21,316    $ 17,574      - 5%      15%   

Europe

  10,342      12,204      8,659      - 15%      19%   

Greater China

  13,230      16,823      6,230      - 21%      112%   

Japan

  2,872      3,457      2,627      - 17%      9%   

Rest of Asia Pacific  

  2,952      4,210      2,342      - 30%      26%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

$ 49,605    $ 58,010    $ 37,432      - 14%      33%   
   

 

 

     

 

 

     

 

 

         
           

    
  Q3 2015   Q2 2015   Q3 2014   Sequential Change   Year/Year Change  
  Units   Revenue   Units   Revenue   Units   Revenue   Units   Revenue   Units   Revenue  
Product Summary  

iPhone  (1)

  47,534    $ 31,368      61,170    $ 40,282      35,203    $ 19,751      - 22%      - 22%      35%      59%   

iPad  (1)

  10,931      4,538      12,623      5,428      13,276      5,889      - 13%      - 16%      - 18%      - 23%   

Mac  (1)

  4,796      6,030      4,563      5,615      4,413      5,540      5%      7%      9%      9%   

Services  (2)

  5,028      4,996      4,485      1%      12%   

Other Products  (1)(3)   

  2,641      1,689      1,767      56%      49%   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Apple

$ 49,605    $ 58,010    $ 37,432      - 14%      33%   
   

 

 

     

 

 

     

 

 

         
           

 

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

 

(2) Includes revenue from iTunes, AppleCare, Apple Pay, licensing and other services.

 

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