SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 16, 1997
APPLE COMPUTER, INC.
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA
(State or Other Jurisdiction of Incorporation)
0-10030 94-2404110
(Commission File Number) (I.R.S. Employer Identification Number)
1 INFINITE LOOP, CUPERTINO, CALIFORNIA 95014
(Address of Principal Executive Offices) (Zip Code)
(408) 996-1010
(Registrant's Telephone Number, Including Area Code)
The Index to Exhibits appears on page 4.
<PAGE> 1
INFORMATION INCLUDED IN THIS REPORT
ITEMS 1 THROUGH 4, 6 AND 8 NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
(i)Reference is made to the press release issued to the public by the
Registrant on April 16, 1997, the text of which is attached hereto as Exhibit
99.1, for a description of the events reported pursuant to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
NOT APPLICABLE.
(b) Pro Forma Financial Information.
NOT APPLICABLE.
(c) Exhibits.
99.1Text of press release dated April 16, 1997.
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SIGNATURES
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.
APPLE COMPUTER, INC.
DATE: April 25, 1997 By: /s/ Fred D. Anderson
Name:Fred D. Anderson
Title:Executive Vice President and
Chief Financial Officer
<PAGE> 3
INDEX TO EXHIBITS
Exhibit Description Page
99.1 Text of press release dated April 16, 1997 5
<PAGE> 4
Exhibit 99.1
Apple Reports Second Fiscal Quarter Results
Company Recaps Extensive New Product Offerings and
Restructuring Progress.
CUPERTINO, Calif. April 16, 1997 Apple Computer, Inc. today announced
financial results for the Company's fiscal 1997 second quarter ended March
28, 1997. Revenues for the quarter were $1.6 billion, compared to $2.1 billion
in the quarter ended Dec. 27, 1996 and $2.2 billion in the quarter ended March
29, 1996. International sales accounted for 49 percent of total revenues in
the current quarter.
As previously indicated, the Company incurred two large charges of a non-
operating nature during the quarter. Pursuant to generally accepted accounting
principles, the Company recorded a charge of $375 million for the write-off of
in-process research and development activity related to its Feb. 4, 1997
acquisition of NeXT Software, Inc.
Additionally, the Company recorded a charge of $155 million to increase
reserves to cover the costs of restructuring activities previously announced
by the Company on March 14, 1997.
The Company's total loss for the quarter was $708 million, or $(5.64) per
share, compared to a net loss of $120 million, or $(.96) per share in the
December 1996 quarter and a net loss of $740 million, or $(5.99) per share, in
the year-ago quarter. Exclusive of the charges for restructuring and the
write-off of in-process research and development, the Company's current quarter
loss from operations was $186 million, or $(1.48) per share.
Gross margins for the quarter were 19 percent, compared to 19 percent in the
December quarter, and compared to -19 percent (or 9 percent before inventory
adjustments) in the year-ago quarter.
Aside from the charges for restructuring and the write-off of in-process
research and development, operating expenses for the quarter were $489
million, down $32 million from the December quarter and down $65 million
from the year ago quarter.
"While the operating results are disappointing, we made significant progress
toward executing our strategic plans during the quarter," said Apple chairman
and chief executive officer Dr. Gilbert F. Amelio. "We've streamlined our
organization and narrowed our focus, were divesting non-core assets, and we're
executing a plan to reduce annual operating expenses by $500 million. We've
also made great progress toward strengthening Apples competitive position by
introducing several exciting new products to the market, and we've completed
the NeXT acquisition, paving the way for delivery of our modern OS, code-named
'Rhapsody.'"
<PAGE> 5
"We experienced continued success in asset management during the quarter," said
Apple executive vice president and chief financial officer Fred Anderson. "Our
cash balance at the end of Q2 was in excess of $1.4 billion, our inventories
were just over $500 million, and despite the quarter's loss, we generated
positive cash flow from operations."
"We expect to see rapid improvements in the Company's financial performance as
the results of restructuring kick in," added Anderson. "We anticipate higher
revenues and a significantly reduced operating loss in the Company's third
fiscal quarter and continued progress toward our goal of returning to
profitability in the fourth quarter."
New Products
Apple introduced an array of new products in recent weeks. On April 4, the
Company announced the Power Macintosh(R) 6500 series of computers for home
and small business customers, including the first 300 MHz system to hit the
personal computer market. In addition, the Company introduced two PC-compatible
computers, the Power Macintosh 7300/180, which includes a 166 MHz Intel Pentium
processor; and the Power Macintosh 4400/200, which includes a 133 MHz Cyrix
PR166 6x86 processor.
Earlier in the quarter, Apple announced the Macintosh PowerBook(R) 3400 series,
featuring the first 240 MHz notebook computer on the market, as well as a new
line of Power Macintosh computers for business, professional publishing, and
Internet/media authoring.
For education customers, Apple introduced its most comprehensive lineup of
new products in 20 years, including the eMate(TM) 300, three powerful
all-in-one desktop models, two models in a powerful new tower design, and
three new solution bundles for secondary schools.
Claris (R) Corporation, Apple's wholly-owned software subsidiary, achieved
record-breaking revenues of $70 million during the quarter. Revenue growth was
driven in large part by an unprecedented level of operating system upgrades
to Mac (R) OS 7.6, introduced in January.
"In the last three months, we executed one of the most exciting and 0
comprehensive series of product introductions in the history of Apple," said
Apple executive vice president of marketing Guerrino De Luca. "These products
demonstrate the ongoing innovation at Apple and our commitment to providing
distinctive, powerful, easy-to-use products to meet the needs of our
customers."
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Except for the historical information contained herein, the statements
regarding establishing competitive leadership, effecting innovation,
continuing focus on certain industry growth areas, reduction of the Company's
operating expenses and losses, and the timing of execution of the Company's
business plans are forward-looking statements that involve risks and
uncertainties. Potential risks and uncertainties include, without limitation,
continued competitive pressures in the marketplace; the effect competitive
factors and the Company's reaction to them may have on consumer and business
buying decisions with respect to the Company's products; the consequences
competitive factors and buying decisions may have on current inventory
valuations; the Company's ability to successfully integrate the personnel,
products and operations of NeXT Software; the ability of the Company to make
timely delivery of successful technological innovations to the marketplace;
the ability of the Company to successfully resolve its quality issues; the
effect of any future losses on the Company's needs for liquidity; the effect
of the announced business restructuring on the future performance of the
Company, especially the performance of the Company's employees; and the need
for any future restructuring, and the effect that it might have on the
performance of the Company. More information on potential factors that could
affect the Company's financial results is included in the Company's Form 10-K
for the 1996 fiscal year and will also be included in the Company's Form 10-Q
for the second fiscal quarter, to be filed with the SEC.
Apple Computer, Inc., a recognized innovator in the information industry and
leader in multimedia technologies, creates powerful solutions based on easy-
to-use personal computers, servers, peripherals, software, handheld computers
and Internet content. Headquartered in Cupertino, California, Apple develops,
manufactures, licenses and markets solutions, products, technologies and
services for business, education, consumer, entertainment, scientific and
engineering and government customers in more than 140 countries.
Press Contact:
Katie Cotton
Apple Computer, Inc.
(408) 974-7269
email: [email protected]
Investor Relations Contact:
Nancy Paxton
Apple Computer, Inc.
(408) 974-5420
email: [email protected]
<PAGE> 7
NOTE TO EDITORS: To access Apple press releases, background material,
and contact information on the web, visit The Source at:
http://www.apple.com/source/. If you are interested in receiving Apple press
releases by fax, call 1-800-AAPL-FAX (1-800-227-5329) and enter your PIN
number. If you do not have a PIN number, contact Apple's Media Helpline at
(408)974-2042 to request one. If you would like to receive Apple press releases
by email, please send an email message to [email protected]. In
the subject field, type the text subscribe [your full name].
Apple, the Apple logo, Macintosh, Power Macintosh, and PowerBook are registered
trademarks and eMate is a trademark of Apple Computer, Inc. Additional company
and product names may be trademarks or registered trademarks of the individual
companies and are respectfully acknowledged.
<PAGE> 8
APPLE COMPUTER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
March 28, March 29, March 28, March 29,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $1,601 $ 2,185 $3,730 $ 5,333
Costs and expenses:
Cost of sales 1,298 2,606 3,030 5,279
Research and
development 141 150 290 303
Selling, general
and administrative 348 404 720 845
In-process research
and development 375 - 375 -
Restructuring costs 155 207 155 207
2,317 3,367 4,570 6,634
Operating loss (716) (1,182) (840) (1,301)
Interest and
other income
(expense),net 8 7 12 17
Loss before benefit
from income taxes (708) (1,175) (828) (1,284)
Benefit from
income taxes - (435) - (475)
Net loss $(708) $(740) $(828) $ (809)
Loss per
common share $(5.64) $(5.99) $(6.62) $(6.55)
Cash dividends
paid per
common share $ -- $ -- $ -- $ 0.12
Common shares
used in the
calculations of
loss per share
(in thousands) 125,609 123,659 125,071 123,326
</TABLE>
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APPLE COMPUTER, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(In millions)
<TABLE>
<CAPTION>
March 28, September 27
1997 1996
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,273 $1,552
Short-term investments 186 193
Accounts receivable, net
of allowance for doubtful
accounts of $96 ($91 at
September 27, 1996) 1,149 1,496
Inventories:
Purchased parts 220 213
Work in process 19 43
Finished goods 270 406
509 662
Deferred tax assets 303 342
Other current assets 222 270
Total current assets 3,642 4,515
Property, plant, and equipment:
Land and buildings 461 480
Machinery and equipment 529 544
Office furniture and equipment 124 136
Leasehold improvements 181 188
1,295 1,348
Accumulated depreciation and
amortization (739) (750)
Net property, plant, and equipment 556 598
Other assets 289 251
$4,487 $ 5,364
</TABLE>
<PAGE> 10
APPLE COMPUTER, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in millions)
<TABLE>
<CAPTION>
March 28, September 27
1997 1996
(Unaudited)
<S> <C> <C>
Current liabilities:
Notes payable to banks $ 133 $ 186
Accounts payable 840 791
Accrued compensation and
employee benefits 137 120
Accrued marketing and distribution 277 257
Accrued warranty and related 143 181
Accrued restructuring costs 227 117
Other current liabilities 254 351
Total current liabilities 2,011 2,003
Long-term debt 952 949
Deferred tax liabilities 282 354
Shareholders' equity:
Common stock, no par value;
320,000,000 shares authorized;
126,424,977 shares issued and
outstanding at March 28, 1997
(124,496,972 shares at
September 27, 1996) 472 439
Retained earnings 806 1,634
Other (36) (15)
Total shareholders' equity 1,242 2,058
$4,487 $ 5,364
</TABLE>
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