• Applied Materials Announces First Quarter 2021 Results

    ソース: Nasdaq GlobeNewswire / 18 2 2021 16:01:00   America/New_York

    • Record quarterly revenue of $5.16 billion, up 24 percent year over year
    • Quarterly GAAP EPS of $1.22 and record non-GAAP EPS of $1.39, up 27 percent and 42 percent year over year, respectively
    • Generated $1.42 billion in cash from operations

    SANTA CLARA, Calif., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its first quarter ended Jan. 31, 2021.

    First Quarter Results

    Applied generated revenue of $5.16 billion. On a GAAP basis, the company recorded gross margin of 45.5 percent, operating income of $1.28 billion or 24.9 percent of net sales, and earnings per share (EPS) of $1.22.

    On a non-GAAP adjusted basis, the company reported gross margin of 45.9 percent, operating income of $1.50 billion or 29.0 percent of net sales, and EPS of $1.39.

    The company generated $1.42 billion in cash from operations and paid dividends of $201 million to shareholders.

    “In our first fiscal quarter, we’ve seen a continued acceleration of demand in our semiconductor business as major macro and industry trends fuel increasing consumption of silicon across a wide range of markets and applications,” said Gary Dickerson, president and CEO. “We have strong momentum across the company, as our broad portfolio and exposure to technology inflections, combined with the traction of our new products, put us in a great position to substantially outgrow our markets again in 2021 and beyond.”

    Quarterly Results Summary

     Q1 FY2021  Q1 FY2020 Change
      
     (In millions, except per share amounts and percentages)
    Net sales$5,162  $4,162  24%
    Gross margin45.5% 44.6% 0.9 points
    Operating margin24.9% 25.0% (0.1) points
    Net income$1,130  $892  27%
    Diluted earnings per share$1.22  $0.96  27%
    Non-GAAP Adjusted Results     
    Non-GAAP adjusted gross margin45.9% 44.9% 1.0 points
    Non-GAAP adjusted operating margin29.0% 25.7% 3.3 points
    Non-GAAP adjusted net income$1,282  $904  42%
    Non-GAAP adjusted diluted EPS$1.39  $0.98  42%

    First quarter GAAP results included $152 million of severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees, which reduced earnings per share by $0.13.

    A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also “Use of Non-GAAP Adjusted Financial Measures” section.

    Business Outlook

    In the second quarter of fiscal 2021, Applied expects net sales to be approximately $5.39 billion, plus or minus $200 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.44 to $1.56.

    This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, includes the normalized tax benefit of share-based compensation of $0.01 per share and a net income tax benefit related to intra-entity intangible asset transfers of $0.03 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.

    First Quarter Reportable Segment Information

    Semiconductor SystemsQ1 FY2021  Q1 FY2020
      
     (In millions, except percentages)
    Net sales$3,553  $2,814 
    Foundry, logic and other58% 68%
    DRAM17% 15%
    Flash memory25% 17%
    Operating income1,261  915 
    Operating margin35.5% 32.5%
    Non-GAAP Adjusted Results  
    Non-GAAP adjusted operating income$1,281  $925 
    Non-GAAP adjusted operating margin36.1% 32.9%


    Applied Global ServicesQ1 FY2021  Q1 FY2020
      
     (In millions, except percentages)
    Net sales$1,155  $997 
    Operating income332  278 
    Operating margin28.7% 27.9%
    Non-GAAP Adjusted Results  
    Non-GAAP adjusted operating income$340  $278 
    Non-GAAP adjusted operating margin29.4% 27.9%







    Display and Adjacent MarketsQ1 FY2021  Q1 FY2020
      
     (In millions, except percentages)
    Net sales$411  $332 
    Operating income65  38 
    Operating margin15.8% 11.4%
    Non-GAAP Adjusted Results  
    Non-GAAP adjusted operating income$75  $41 
    Non-GAAP adjusted operating margin18.2% 12.3%

    Use of Non-GAAP Adjusted Financial Measures

    Applied provides investors with certain non-GAAP adjusted financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; certain incremental expenses related to COVID-19; impairments of assets, or investments; gain or loss on sale of strategic investments; loss on early extinguishment of debt; certain income tax items and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Additionally, non-GAAP results exclude estimated discrete income tax expense items associated with U.S. tax legislation. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

    Management uses these non-GAAP adjusted financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

    Webcast Information

    Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.

    Forward-Looking Statements

    This press release contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, our business outlook for the second quarter of fiscal 2021 and beyond, the impact of the ongoing COVID-19 pandemic and responses thereto on our operations and financial results, strategic acquisitions and investments, including the proposed acquisition of Kokusai Electric Corporation, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic and industry conditions; the effects of regional or global health epidemics, including the severity and duration of the ongoing COVID-19 pandemic; global trade issues and changes in trade and export license policies, including the recent rules and interpretations promulgated by U.S. Department of Commerce expanding export license requirements for certain products sold to certain entities in China; consumer demand for electronic products; the demand for semiconductors; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; the concentrated nature of our customer base; acquisitions, investments and divestitures; changes in income tax laws; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; and other risks and uncertainties described in our SEC filings, including our recent Forms 10-K and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.

    About Applied Materials

    Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible the technology shaping the future. Learn more at www.appliedmaterials.com.

    Contact:

    Ricky Gradwohl (editorial/media) 408.235.4676
    Michael Sullivan (financial community) 408.986.7977


    APPLIED MATERIALS, INC.
    UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

     Three Months Ended
    (In millions, except per share amounts)January 31,
    2021    		 January 26,
    2020
    Net sales$5,162  $4,162 
    Cost of products sold2,813  2,304 
    Gross profit2,349  1,858 
    Operating expenses:   
    Research, development and engineering606  552 
    Marketing and selling147  135 
    General and administrative161  129 
    Severance and related charges152  — 
    Total operating expenses1,066  816 
    Income from operations1,283  1,042 
    Interest expense61  59 
    Interest and other income, net18  22 
    Income before income taxes1,240  1,005 
    Provision for income taxes110  113 
    Net income$1,130  $892 
    Earnings per share:   
    Basic$1.23  $0.97 
    Diluted$1.22  $0.96 
    Weighted average number of shares:   
    Basic915  916 
    Diluted925  927 


    APPLIED MATERIALS, INC.
    UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

    (In millions)January 31,
    2021    		 October 25,
    2020
    ASSETS   
    Current assets:   
    Cash and cash equivalents$6,213  $5,351 
    Short-term investments410  387 
    Accounts receivable, net3,045  2,963 
    Inventories3,925  3,904 
    Other current assets676  764 
    Total current assets14,269  13,369 
    Long-term investments1,601  1,538 
    Property, plant and equipment, net1,638  1,604 
    Goodwill3,479  3,466 
    Purchased technology and other intangible assets, net140  153 
    Deferred income taxes and other assets2,178  2,223 
    Total assets$23,305  $22,353 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities:   
    Accounts payable and accrued expenses$2,932  $3,138 
    Contract liabilities1,572  1,321 
    Total current liabilities4,504  4,459 
    Long-term debt, net of current portion5,449  5,448 
    Income taxes payable1,210  1,206 
    Other liabilities669  662 
    Total liabilities11,832  11,775 
    Total stockholders’ equity11,473  10,578 
    Total liabilities and stockholders’ equity$23,305  $22,353 


    APPLIED MATERIALS, INC.
    UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

    (In millions)

    		Three Months Ended
    January 31,
    2021    		 January 26,
    2020
    Cash flows from operating activities:   
    Net income$1,130  $892 
    Adjustments required to reconcile net income to cash provided by operating activities:   
         Depreciation and amortization94  94 
         Severance and related charges148  — 
         Share-based compensation107  93 
         Deferred income taxes28  30 
         Other—  15 
         Net change in operating assets and liabilities(86) (137)
    Cash provided by operating activities1,421  987 
    Cash flows from investing activities:   
    Capital expenditures(121) (102)
    Cash paid for acquisitions, net of cash acquired(12) — 
    Proceeds from sales and maturities of investments358  368 
    Purchases of investments(441) (428)
    Cash used in investing activities(216) (162)
    Cash flows from financing activities:   
    Proceeds from common stock issuances—  15 
    Common stock repurchases—  (200)
    Tax withholding payments for vested equity awards(142) (153)
    Payments of dividends to stockholders(201) (192)
    Cash used in financing activities(343) (530)
    Increase in cash, cash equivalents and restricted cash equivalents862  295 
    Cash, cash equivalents and restricted cash equivalents—beginning of period5,466  3,129 
    Cash, cash equivalents and restricted cash equivalents—end of period$6,328  $3,424 
        
    Reconciliation of cash, cash equivalents, and restricted cash equivalents   
    Cash and cash equivalents$6,213  $3,424 
    Restricted cash equivalents included in deferred income taxes and other assets115  — 
    Total cash, cash equivalents, and restricted cash equivalents$6,328  $3,424 
        
    Supplemental cash flow information:   
    Cash payments for income taxes$110  $82 
    Cash refunds from income taxes$19  $1 
    Cash payments for interest$35  $34 


    APPLIED MATERIALS, INC.
    UNAUDITED SUPPLEMENTAL INFORMATION

    Corporate and Other

    (In millions)Q1 FY2021  Q1 FY2020
    Unallocated net sales$43  $19 
    Unallocated cost of products sold and expenses(167) (115)
    Share-based compensation(107) (93)
    Severance and related charges(144) — 
    Total$(375) $(189)

    Additional Information

     Q1 FY2021  Q1 FY2020
    Net Sales by Geography (In millions) 
    United States343  441 
    % of Total6% 10%
    Europe299  153 
    % of Total6% 4%
    Japan458  351 
    % of Total9% 8%
    Korea1,289  508 
    % of Total25% 12%
    Taiwan1,200  1,365 
    % of Total23% 33%
    Southeast Asia190  72 
    % of Total4% 2%
    China1,383  1,272 
    % of Total27% 31%
        
    Employees (In thousands)   
    Regular Full Time24.2  22.3 


     APPLIED MATERIALS, INC.
    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

     Three Months Ended
    (In millions, except percentages)January 31,
    2021    		 January 26,
    2020
    Non-GAAP Adjusted Gross Profit   
    Reported gross profit - GAAP basis$2,349  $1,858 
    Certain items associated with acquisitions18  9 
    Certain incremental expenses related to COVID-19212  — 
    Non-GAAP adjusted gross profit$2,369  $1,867 
    Non-GAAP adjusted gross margin45.9% 44.9%
    Non-GAAP Adjusted Operating Income   
    Reported operating income - GAAP basis$1,283  $1,042 
    Certain items associated with acquisitions113  13 
    Acquisition integration and deal costs24  13 
    Certain incremental expenses related to COVID-19224  — 
    Severance and related charges3152  — 
    Non-GAAP adjusted operating income$1,496  $1,068 
    Non-GAAP adjusted operating margin29.0% 25.7%
    Non-GAAP Adjusted Net Income   
    Reported net income - GAAP basis$1,130  $892 
    Certain items associated with acquisitions113  13 
    Acquisition integration and deal costs24  13 
    Certain incremental expenses related to COVID-19224  — 
    Severance and related charges3152  — 
    Realized loss (gain) on strategic investments, net(2) 2 
    Unrealized loss (gain) on strategic investments, net(6) 2 
    Income tax effect of share-based compensation4(29) (33)
    Income tax effects related to intra-entity intangible asset transfers20  21 
    Resolution of prior years’ income tax filings and other tax items(3) (1)
    Income tax effect of non-GAAP adjustments5(41) (5)
    Non-GAAP adjusted net income$1,282  $904 


    1These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
      
    2Temporary incremental employee compensation during the COVID-19 pandemic.
      
    3The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees.
      
    4GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis.
      
    5Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.


    APPLIED MATERIALS, INC.
    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

     Three Months Ended
    (In millions, except per share amounts)January 31,
    2021    		 January 26,
    2020
    Non-GAAP Adjusted Earnings Per Diluted Share   
    Reported earnings per diluted share - GAAP basis$1.22  $0.96 
    Certain items associated with acquisitions0.01  0.01 
    Acquisition integration and deal costs0.02  0.01 
    Certain incremental expenses related to COVID-190.02  — 
    Severance and related charges0.13  — 
    Income tax effect of share-based compensation(0.03) (0.03)
    Income tax effects related to intra-entity intangible asset transfers0.02  0.03 
    Non-GAAP adjusted earnings per diluted share$1.39  $0.98 
    Weighted average number of diluted shares925  927 


    APPLIED MATERIALS, INC.
    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

     Three Months Ended
    (In millions, except percentages)January 31,
    2021    		 January 26,
    2020
    Semiconductor Systems Non-GAAP Adjusted Operating Income   
    Reported operating income - GAAP basis$1,261  $915 
    Certain items associated with acquisitions110  10 
    Acquisition integration costs(2) — 
    Certain incremental expenses related to COVID-19212  — 
    Non-GAAP adjusted operating income$1,281  $925 
    Non-GAAP adjusted operating margin36.1% 32.9%
    AGS Non-GAAP Adjusted Operating Income   
    Reported operating income - GAAP basis$332  $278 
    Certain incremental expenses related to COVID-1928  — 
    Non-GAAP adjusted operating income$340  $278 
    Non-GAAP adjusted operating margin29.4% 27.9%
    Display and Adjacent Markets Non-GAAP Adjusted Operating Income   
    Reported operating income - GAAP basis$65  $38 
    Certain items associated with acquisitions11  3 
    Certain incremental expenses related to COVID-1921  — 
    Severance and related charges38  — 
    Non-GAAP adjusted operating income$75  $41 
    Non-GAAP adjusted operating margin18.2% 12.3%


    1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
    2Temporary incremental employee compensation during the COVID-19 pandemic.
    3The severance and related charges related to workforce reduction actions globally across the Display and Adjacent Markets business.

    Note: The reconciliation of GAAP and non-GAAP adjusted segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within corporate and other and included in consolidated operating income.


    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED EFFECTIVE INCOME TAX RATE

     Three Months
    Ended
    (In millions, except percentages)January 31, 2021
      
    Provision for income taxes - GAAP basis (a)$110 
    Income tax effect of share-based compensation29 
    Income tax effects related to intra-entity intangible asset transfers(20)
    Resolutions of prior years’ income tax filings and other tax items3 
    Income tax effect of non-GAAP adjustments41 
    Non-GAAP adjusted provision for income taxes (b)$163 
      
    Income before income taxes - GAAP basis (c)$1,240 
    Certain items associated with acquisitions13 
    Acquisition integration and deal costs24 
    Certain incremental expenses related to COVID-1924 
    Severance and related charges152 
    Realized loss (gain) on strategic investments, net(2)
    Unrealized loss (gain) on strategic investments, net(6)
    Non-GAAP adjusted income before income taxes (d)$1,445 
      
    Effective income tax rate - GAAP basis (a/c)8.9%
      
    Non-GAAP adjusted effective income tax rate (b/d)11.3%


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