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Applied Materials Announces Fourth Quarter and Fiscal Year 2021 Results
المصدر: Nasdaq GlobeNewswire / 18 نوفمبر 2021 15:01:01 America/Chicago
- Record annual revenue of $23.06 billion, up 34 percent year over year
- Record annual GAAP operating margin of 29.9 percent, non-GAAP operating margin of 31.7 percent, GAAP EPS of $6.40 and non-GAAP EPS of $6.84
- Quarterly revenue of $6.12 billion, up 31 percent year over year
- Record quarterly GAAP operating margin of 32.9 percent, non-GAAP operating margin of 33.1 percent, GAAP EPS of $1.89 and non-GAAP EPS of $1.94
SANTA CLARA, Calif., Nov. 18, 2021 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its fourth quarter and fiscal year ended Oct. 31, 2021.
Fourth Quarter Results
Applied generated revenue of $6.12 billion, which was at the low end of the guidance range due to supply chain challenges. On a GAAP basis, the company recorded gross margin of 48.1 percent, operating income of $2.01 billion or 32.9 percent of net sales, and earnings per share (EPS) of $1.89.
On a non-GAAP adjusted basis, the company reported gross margin of 48.2 percent, operating income of $2.03 billion or 33.1 percent of net sales, and EPS of $1.94.
The company generated $1.15 billion in cash from operations and returned $1.72 billion to shareholders including $1.50 billion in share repurchases and $216 million in dividends.
Full Year Results
In fiscal 2021, Applied generated revenue of $23.06 billion. On a GAAP basis, the company recorded gross margin of 47.3 percent, operating income of $6.89 billion or 29.9 percent of net sales, and EPS of $6.40.
On a non-GAAP adjusted basis, the company reported gross margin of 47.5 percent, operating income of $7.32 billion or 31.7 percent of net sales, and EPS of $6.84.
The company generated a record $5.44 billion in cash from operations and returned $4.59 billion to shareholders including $3.75 billion in share repurchases and $838 million in dividends.
“Demand for semiconductors and equipment continues to grow as the pandemic accelerates digital transformation of the economy, and currently, our supply chain cannot keep up,” said Gary Dickerson, President and CEO. “We expect supply shortages of certain silicon components to persist in the near-term, and managing these constraints in partnership with our suppliers and chipmakers is our top priority.”
“Applied delivered strong growth in fiscal 2021, with overall orders up by 62 percent year over year and Semiconductor Systems orders up 78 percent,” said Bob Halliday, Senior Vice President and CFO. “The momentum continued as our Semiconductor Systems backlog increased during the fourth quarter from $5.5 billion to $6.7 billion, and we see this strength sustaining into 2022.”
Results Summary
Change Q4 FY2021 Q4 FY2020 FY2021 FY2020 Q4 FY2021
vs.
Q4 FY2020FY2021
vs.
FY2020(In millions, except per share amounts and percentages) Net sales $ 6,123 $ 4,688 $ 23,063 $ 17,202 31% 34% Gross margin 48.1 % 45.4 % 47.3 % 44.7 % 2.7 points 2.6 points Operating margin 32.9 % 27.4 % 29.9 % 25.4 % 5.5 points 4.5 points Net income $ 1,712 $ 1,131 $ 5,888 $ 3,619 51% 63% Diluted earnings per share $ 1.89 $ 1.23 $ 6.40 $ 3.92 54% 63% Non-GAAP Adjusted Results Non-GAAP adjusted gross margin 48.2 % 45.7 % 47.5 % 45.1 % 2.5 points 2.4 points Non-GAAP adjusted operating margin 33.1 % 28.3 % 31.7 % 26.3 % 4.8 points 5.4 points Non-GAAP adjusted net income $ 1,756 $ 1,148 $ 6,287 $ 3,845 53% 64% Non-GAAP adjusted diluted EPS $ 1.94 $ 1.25 $ 6.84 $ 4.17 55% 64% 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 first quarter of fiscal 2022, Applied expects net sales to be approximately $6.16 billion, plus or minus $250 million, which includes the expected impact of ongoing supply chain challenges. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.78 to $1.92.
This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and a net income tax benefit related to intra-entity intangible asset transfers of $0.02 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.
Fourth Quarter Reportable Segment Information
Semiconductor Systems Q4 FY2021 Q4 FY2020 FY2021 FY2020 (In millions, except percentages) Net sales $ 4,307 $ 3,070 $ 16,286 $ 11,367 Foundry, logic and other 63 % 58 % 60 % 59 % DRAM 23 % 21 % 19 % 20 % Flash memory 14 % 21 % 21 % 21 % Operating income $ 1,723 $ 1,059 6,311 3,714 Operating margin 40.0 % 34.5 % 38.8 % 32.7 % Non-GAAP Adjusted Results Non-GAAP adjusted operating income $ 1,732 $ 1,073 $ 6,362 $ 3,778 Non-GAAP adjusted operating margin 40.2 % 35.0 % 39.1 % 33.2 % Applied Global Services Q4 FY2021 Q4 FY2020 FY2021 FY2020 (In millions, except percentages) Net sales $ 1,369 $ 1,106 $ 5,013 $ 4,155 Operating income $ 425 $ 320 1,508 1,127 Operating margin 31.0 % 28.9 % 30.1 % 27.1 % Non-GAAP Adjusted Results Non-GAAP adjusted operating income $ 425 $ 320 $ 1,517 $ 1,135 Non-GAAP adjusted operating margin 31.0 % 28.9 % 30.3 % 27.3 % Display and Adjacent Markets Q4 FY2021 Q4 FY2020 FY2021 FY2020 (In millions, except percentages) Net sales $ 417 $ 485 $ 1,634 $ 1,607 Operating income $ 85 $ 95 314 291 Operating margin 20.4 % 19.6 % 19.2 % 18.1 % Non-GAAP Adjusted Results Non-GAAP adjusted operating income $ 86 $ 98 $ 327 $ 304 Non-GAAP adjusted operating margin 20.6 % 20.2 % 20.0 % 18.9 % 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; gain or loss on 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. 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 first quarter of fiscal 2022 and beyond, 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, our ability to meet customer demand, and our suppliers' ability to meet our demand requirements; transportation interruptions and logistics constraints; Lunar New Year and other holidays in the countries in which we operate; 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; 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; our ability to ensure compliance with applicable law, rules and regulations; and other risks and uncertainties described in our SEC filings, including our recent Forms 10-Q 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 a better future. Learn more at www.appliedmaterials.com.
Contact:
Ricky Gradwohl (editorial/media) 408.235.4676
Michael Sullivan (financial community) 408.986.7977APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONSThree Months Ended Twelve Months Ended (In millions, except per share amounts) October 31,
2021October 25,
2020October 31,
2021October 25,
2020Net sales $ 6,123 $ 4,688 $ 23,063 $ 17,202 Cost of products sold 3,178 2,558 12,149 9,510 Gross profit 2,945 2,130 10,914 7,692 Operating expenses: Research, development and engineering 622 560 2,485 2,234 Marketing and selling 155 131 609 526 General and administrative 155 156 620 567 Severance and related charges (1 ) — 157 — Deal termination fee — — 154 — Total operating expenses 931 847 4,025 3,327 Income from operations 2,014 1,283 6,889 4,365 Interest expense 57 59 236 240 Interest and other income, net 49 19 118 41 Income before income taxes 2,006 1,243 6,771 4,166 Provision for income taxes 294 112 883 547 Net income $ 1,712 $ 1,131 $ 5,888 $ 3,619 Earnings per share: Basic $ 1.91 $ 1.24 $ 6.47 $ 3.95 Diluted $ 1.89 $ 1.23 $ 6.40 $ 3.92 Weighted average number of shares: Basic 898 914 910 916 Diluted 907 921 919 923 APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS(In millions) October 31,
2021October 25,
2020ASSETS Current assets: Cash and cash equivalents $ 4,995 $ 5,351 Short-term investments 464 387 Accounts receivable, net 4,953 2,963 Inventories 4,309 3,904 Other current assets 1,386 764 Total current assets 16,107 13,369 Long-term investments 2,055 1,538 Property, plant and equipment, net 1,934 1,604 Goodwill 3,479 3,466 Purchased technology and other intangible assets, net 104 153 Deferred income taxes and other assets 2,146 2,223 Total assets $ 25,825 $ 22,353 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 4,268 $ 3,138 Contract liabilities 2,076 1,321 Total current liabilities 6,344 4,459 Long-term debt 5,452 5,448 Income taxes payable 1,090 1,206 Other liabilities 692 662 Total liabilities 13,578 11,775 Total stockholders’ equity 12,247 10,578 Total liabilities and stockholders’ equity $ 25,825 $ 22,353 APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS(In millions) Three Months Ended Twelve Months Ended October 31,
2021October 25,
2020October 31,
2021October 25,
2020Cash flows from operating activities: Net income $ 1,712 $ 1,131 $ 5,888 $ 3,619 Adjustments required to reconcile net income to cash provided by operating activities: Depreciation and amortization 105 97 394 376 Severance and related charges (1 ) — 148 — Share-based compensation 74 73 346 307 Deferred income taxes 36 (18 ) 80 80 Other (40 ) 5 (70 ) 60 Net change in operating assets and liabilities (738 ) 27 (1,344 ) (638 ) Cash provided by operating activities 1,148 1,315 5,442 3,804 Cash flows from investing activities: Capital expenditures (206 ) (162 ) (668 ) (422 ) Cash paid for acquisitions, net of cash acquired — — (12 ) (107 ) Proceeds from sales and maturities of investments 447 366 1,471 1,754 Purchases of investments (828 ) (345 ) (2,007 ) (1,355 ) Cash used in investing activities (587 ) (141 ) (1,216 ) (130 ) Cash flows from financing activities: Debt borrowings, net of issuance costs — — — 2,979 Debt repayments — — — (2,882 ) Proceeds from common stock issuances 89 83 175 174 Common stock repurchases (1,500 ) (50 ) (3,750 ) (649 ) Tax withholding payments for vested equity awards (7 ) (6 ) (178 ) (172 ) Payments of dividends to stockholders (216 ) (200 ) (838 ) (787 ) Cash used in financing activities (1,634 ) (173 ) (4,591 ) (1,337 ) Increase (decrease) in cash, cash equivalents and restricted cash equivalents (1,073 ) 1,001 (365 ) 2,337 Cash, cash equivalents and restricted cash equivalents—beginning of period 6,174 4,465 5,466 3,129 Cash, cash equivalents and restricted cash equivalents — end of period $ 5,101 $ 5,466 $ 5,101 $ 5,466 Reconciliation of cash, cash equivalents, and restricted cash equivalents Cash and cash equivalents $ 4,995 $ 5,351 $ 4,995 $ 5,351 Restricted cash equivalents included in deferred income taxes and other assets 106 115 106 115 Total cash, cash equivalents, and restricted cash equivalents $ 5,101 $ 5,466 $ 5,101 $ 5,466 Supplemental cash flow information: Cash payments for income taxes $ 210 $ 23 $ 851 $ 542 Cash refunds from income taxes $ 1 $ 63 $ 27 $ 68 Cash payments for interest $ 68 $ 68 $ 205 $ 219 APPLIED MATERIALS, INC.
UNAUDITED SUPPLEMENTAL INFORMATIONCorporate and Other
(In millions) Q4 FY2021 Q4 FY2020 FY2021 FY2020 Unallocated net sales $ 30 $ 27 $ 130 $ 73 Unallocated cost of products sold and expenses (176 ) (145 ) (725 ) (533 ) Share-based compensation (74 ) (73 ) (346 ) (307 ) Severance and related charges 1 — (149 ) — Deal termination fee — — (154 ) — Total $ (219 ) $ (191 ) $ (1,244 ) $ (767 ) Additional Information
Q4 FY2021 Q4 FY2020 FY2021 FY2020 Net Sales by Geography (In millions) United States $ 673 $ 448 $ 2,038 $ 1,619 % of Total 11 % 10 % 9 % 10 % Europe $ 331 $ 206 $ 1,097 $ 736 % of Total 5 % 4 % 5 % 4 % Japan $ 613 $ 706 $ 1,962 $ 1,996 % of Total 10 % 15 % 8 % 11 % Korea $ 1,004 $ 719 $ 5,012 $ 3,031 % of Total 17 % 15 % 22 % 18 % Taiwan $ 1,240 $ 872 $ 4,742 $ 3,953 % of Total 20 % 19 % 20 % 23 % Southeast Asia $ 205 $ 161 $ 677 $ 411 % of Total 3 % 3 % 3 % 2 % China $ 2,057 $ 1,576 $ 7,535 $ 5,456 % of Total 34 % 34 % 33 % 32 % Employees (In thousands) Regular Full Time 27.2 24.0 APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTSThree Months Ended Twelve Months Ended (In millions, except percentages) October 31,
2021October 25,
2020October 31,
2021October 25,
2020Non-GAAP Adjusted Gross Profit Reported gross profit - GAAP basis $ 2,945 $ 2,130 $ 10,914 $ 7,692 Certain items associated with acquisitions1 6 12 27 37 Certain incremental expenses related to COVID-192 — — 12 23 Other charges — — 2 — Non-GAAP adjusted gross profit $ 2,951 $ 2,142 $ 10,955 $ 7,752 Non-GAAP adjusted gross margin 48.2 % 45.7 % 47.5 % 45.1 % Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 2,014 $ 1,283 $ 6,889 $ 4,365 Certain items associated with acquisitions1 11 16 47 54 Acquisition integration and deal costs 5 26 45 80 Certain incremental expenses related to COVID-192 — — 24 30 Severance and related charges3 (1 ) — 157 — Deal termination fee — — 154 — Other charges — — 6 — Non-GAAP adjusted operating income $ 2,029 $ 1,325 $ 7,322 $ 4,529 Non-GAAP adjusted operating margin 33.1 % 28.3 % 31.7 % 26.3 % Non-GAAP Adjusted Net Income Reported net income - GAAP basis $ 1,712 $ 1,131 $ 5,888 $ 3,619 Certain items associated with acquisitions1 11 16 47 54 Acquisition integration and deal costs 5 26 46 80 Certain incremental expenses related to COVID-192 — — 24 30 Severance and related charges3 (1 ) — 157 — Deal termination fee — — 154 — Realized loss (gain) on strategic investments, net (41 ) — (43 ) (1 ) Unrealized loss (gain) on strategic investments, net (11 ) (7 ) (56 ) (8 ) Loss on early extinguishment of debt — — — 33 Other charges — — 6 — Income tax effect of share-based compensation4 12 13 — — Income tax effects related to intra-entity intangible asset transfers 4 10 64 114 Resolution of prior years’ income tax filings and other tax items 55 (36 ) 33 (41 ) Income tax effect of non-GAAP adjustments5 10 (5 ) (33 ) (35 ) Non-GAAP adjusted net income $ 1,756 $ 1,148 $ 6,287 $ 3,845 1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2 Temporary incremental employee compensation during the COVID-19 pandemic. 3 The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees. 4 GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. 5 Adjustment 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 RESULTSThree Months Ended Twelve Months Ended (In millions, except per share amounts) October 31,
2021October 25,
2020October 31,
2021October 25,
2020Non-GAAP Adjusted Earnings Per Diluted Share Reported earnings per diluted share - GAAP basis $ 1.89 $ 1.23 $ 6.40 $ 3.92 Certain items associated with acquisitions 0.01 0.02 0.04 0.05 Acquisition integration and deal costs 0.01 0.02 0.04 0.07 Certain incremental expenses related to COVID-19 — — 0.02 0.03 Loss on early extinguishment of debt — — — 0.03 Severance and related charges — — 0.13 — Deal termination fee — — 0.17 — Realized loss (gain) on strategic investments, net (0.03 ) — (0.03 ) — Unrealized loss (gain) on strategic investments, net (0.01 ) (0.01 ) (0.05 ) (0.01 ) Other charges — — 0.01 — Income tax effect of share-based compensation 0.01 0.02 — — Income tax effects related to intra-entity intangible asset transfers — 0.01 0.07 0.12 Resolution of prior years’ income tax filings and other tax items 0.06 (0.04 ) 0.04 (0.04 ) Non-GAAP adjusted earnings per diluted share $ 1.94 $ 1.25 $ 6.84 $ 4.17 Weighted average number of diluted shares 907 921 919 923 APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTSThree Months Ended Twelve Months Ended (In millions, except percentages) October 31,
2021October 25,
2020October 31,
2021October 25,
2020Semiconductor Systems Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 1,723 $ 1,059 $ 6,311 $ 3,714 Certain items associated with acquisitions1 9 12 38 41 Acquisition integration costs — 2 (2 ) 3 Certain incremental expenses related to COVID-192 — — 12 20 Other charges — — 3 — Non-GAAP adjusted operating income $ 1,732 $ 1,073 $ 6,362 $ 3,778 Non-GAAP adjusted operating margin 40.2 % 35.0 % 39.1 % 33.2 % AGS Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 425 $ 320 $ 1,508 $ 1,127 Certain incremental expenses related to COVID-192 — — 8 8 Other charges — — 1 — Non-GAAP adjusted operating income $ 425 $ 320 $ 1,517 $ 1,135 Non-GAAP adjusted operating margin 31.0 % 28.9 % 30.3 % 27.3 % Display and Adjacent Markets Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 85 $ 95 $ 314 $ 291 Certain items associated with acquisitions1 1 3 4 12 Certain incremental expenses related to COVID-192 — — 1 1 Severance and related charges3 — — 8 — Non-GAAP adjusted operating income $ 86 $ 98 $ 327 $ 304 Non-GAAP adjusted operating margin 20.6 % 20.2 % 20.0 % 18.9 % 1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2 Temporary incremental employee compensation during the COVID-19 pandemic. 3 The 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) October 31, 2021 Provision for income taxes - GAAP basis (a) $ 294 Income tax effect of share-based compensation (12 ) Income tax effects related to intra-entity intangible asset transfers (4 ) Resolutions of prior years’ income tax filings and other tax items (55 ) Income tax effect of non-GAAP adjustments (10 ) Non-GAAP adjusted provision for income taxes (b) $ 213 Income before income taxes - GAAP basis (c) $ 2,006 Certain items associated with acquisitions 11 Acquisition integration and deal costs 5 Severance and related charges (1 ) Realized loss (gain) on strategic investments, net (41 ) Unrealized loss (gain) on strategic investments, net (11 ) Non-GAAP adjusted income before income taxes (d) $ 1,969 Effective income tax rate - GAAP basis (a/c) 14.7 % Non-GAAP adjusted effective income tax rate (b/d) 10.8 %