Apple Inc 8-K 2008-01-22
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Exhibit 99.1
Apple Reports First Quarter Results
Best Quarterly Revenue & Earnings in Apple History
Mac, iPod & iPhone Sales Break Previous Records
CUPERTINO, CaliforniaJanuary 22, 2008Apple® 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 quarters 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.
Were thrilled to report our best quarter ever, with the highest revenue and earnings in Apples history, said Steve Jobs, Apples 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.
Apples revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarters record-breaking results, said Peter Oppenheimer, Apples 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®, Apples 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 Companys 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 Companys consolidated financial statements; unfavorable results of legal proceedings; the effect of competitive and economic factors, and the Companys reaction to those factors, on consumer and business buying decisions with respect to the Companys 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 Companys 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 Companys 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 Companys gross margin; the effect that product quality problems could have on the Companys sales and operating profits; the inventory risk associated with the Companys need to order or commit to order product components in advance of customer orders; the effect that the Companys 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 Companys dependency on the performance of distributors and other resellers of the Companys products; the Companys 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 Companys financial results is included from time to time in the Companys public reports filed with the SEC, including the Companys 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 Apples PR website (www.apple.com/pr/), or call Apples 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 | ||
