Apple Reports First Fiscal Quarter Results
CUPERTINO, California–Jan. 14, 1998–Apple Computer, Inc. today announced
financial results for its fiscal 1998 first quarter which ended Dec. 26,
1997. For the quarter, the Company generated revenues of $1.6 billion and
unit sales of 635,000. The Company recorded a quarterly net profit of $47
million, resulting in basic and diluted earnings per share of $.37 and
$.33, respectively. Apple recorded a net loss of $161 million, or $(1.26)
per share, in the September quarter, and recorded a net loss of $120
million, or $(.96) per share, in the year-ago quarter.
The Company achieved gross margins of 22 percent during the quarter,
compared to 20 percent in the September quarter and 19 percent in the
year-ago quarter. International sales accounted for 50 percent of the
Company’s quarterly revenues.
The profitable results were buoyed by the successful introduction of the
Company’s Power Macintosh G3 computers on November 10. Over 133,000 units
of the G3 systems shipped during the quarter, rendering the G3 launch the
most successful in the Company’s history. The Company also continued to
drive down operating expenses of a recurring nature to $313 million,
compared to $353 million in the September quarter and $521 million in the
year-ago quarter.
“The December quarter results reflect the benefits of the disciplined focus
that Apple has undertaken in recent months,” said Apple interim CEO Steve
Jobs. “We’ve concentrated on providing the powerful products our customers
want at competitive prices, and we continue to streamline our business and
work with industry partners to facilitate this focus. Returning Apple to
sustainable profitability is the Company’s number one objective for fiscal
1998, and we believe we’re making great progress toward that goal.”
“We’re extremely pleased with the quality of the quarter’s earnings,” said
Apple CFO Fred Anderson. “Not only did we achieve a solid operating profit,
but our improving asset management resulted in positive cash flow from
operations of $143 million.”
Apple Computer, Inc. ignited the personal computer revolution in the 1970s
with the Apple II, and reinvented the personal computer in the 1980s with
the Macintosh. Apple is now recommitted to its original mission – to bring
the best personal computing products and support to students, educators,
designers, scientists, engineers, businesspersons and consumers in over 140
countries around the world.
The statements in this release regarding sustainable profitability and
improving asset management are forward looking and subject to risk and
uncertainty, and future results could differ materially from our forecasts.
For a detailed discussion of factors that may affect the Company’s
operating results, interested parties should review the Company’s SEC
reports, including Apple’s Annual Report on Form 10-K for the year ended
September 26, 1997, as well as the Form 10-Q for the quarter ended December
26, 1997, to be filed with the SEC.
Contacts:
Katie Cotton
(408) 974-7269
email: katiec@apple.com
Investor Relations Contact:
Nancy Paxton
(408) 974-5420
email: paxton1@apple.com
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APPLE COMPUTER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in millions, except per share amounts)
THREE MONTHS ENDED
December 26, December 27,
1997 1996
Net sales $1,578 $ 2,129
Costs and expenses:
Cost of sales 1,225 1,732
Research and development 79 149
Selling, general and administrative 234 372
1,538 2,253
Operating income (loss) 40 (124)
Interest and other income
(expense), net 7 4
Income (loss) before benefit from
income taxes 47 (120)
Provision (benefit) from income taxes — —
Net income (loss) $47 $ (120)
==================================================================
Basic earnings (loss)
per common share $0.37 $ (0.96)
==================================================================
Diluted earnings (loss) per common $0.33 $ (0.96)
and common equivalent share
==================================================================
Common shares used in the
calculations of basic
earnings (loss) per share
(in thousands) 127,989 124,532
Common and common equivalent
shares used in the calculations
of diluted earnings (loss) per
share (in thousands) 139,839 124,532
=================================================================
APPLE COMPUTER, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(In millions)
December 26, September 26,
1997 1997
(Unaudited)
Current assets:
Cash and cash equivalents $1,193 $1,230
Short-term investments 434 229
Accounts receivable, net of
allowance for doubtful
accounts of $96 ($99 at
September 26, 1997) 902 1,035
Inventories:
Purchased parts 99 141
Work in process 5 15
Finished goods 300 281
404 437
Deferred tax assets 233 259
Other current assets 207 234
Total current assets 3,373 3,424
Property, plant, and equipment:
Land and buildings 402 453
Machinery and equipment 416 460
Office furniture and equipment 100 110
Leasehold improvements 151 172
1,069 1,195
Accumulated depreciation and
amortization (640) (709)
Net property, plant, and equipment 429 486
Other assets 324 323
$4,126 $ 4,233
=================================================================
APPLE COMPUTER, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDERS’ EQUITY
(Dollars in millions)
December 26, September 26,
1997 1997
(Unaudited)
Current liabilities:
Notes payable to banks $ 24 $ 25
Accounts payable 655 685
Accrued compensation and employee
benefits 92 99
Accrued marketing and
distribution 261 278
Accrued warranty and related 126 128
Accrued restructuring costs 144 180
Other current liabilities 367 423
Total current liabilities 1,669 1,818
Long-term debt 952 951
Deferred tax liabilities 261 264
Shareholders’ equity:
Series A non-voting convertible
preferred stock,
no par value; 150,000 shares
authorized, issued and outstanding 150 150
Common stock, no par value;
320,000,000 shares authorized;
128,018,985 shares issued and
outstanding at December 26, 1997
(127,949,220 shares at
September 26, 1997) 499 498
Retained earnings 636 589
Other (41) (37)
Total shareholders’ equity 1,244 1,200
$4,126 $ 4,233
