UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report: October 14, 1997
(Date of earliest event reported)
INTEL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-6217 94-1672743
-------- ------ ----------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
2200 Mission College Boulevard, Santa Clara, California 95052-8119
- ------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(408) 765-8080
--------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS
5.1 Attached hereto as Exhibit 99.1 and incorporated by reference herein
is financial information for Intel Corporation for the quarter ended
September 27, 1997 and forward-looking statements relating to the 4th
Quarter of 1997, as presented in a press release of October 14, 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) Exhibits
99.1 Financial information for Intel Corporation for the quarter
ended September 27, 1997 and forward-looking statements relating
to the 4th Quarter of 1997.
<PAGE> 3
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.
INTEL CORPORATION
(Registrant)
Date: October 15, 1997 By: /s/ Andy D. Bryant
------------------
Andy D. Bryant
Vice President, Chief Financial
Officer and Principal Accounting
Officer
EXHIBIT 99.1
Q3 Revenue $6.2 Billion, up 20 Percent
Q3 Earnings Per Share $0.88, up 19 Percent
Record Quarterly Microprocessor Unit Shipments
SANTA CLARA, Calif., Oct. 14, 1997 -- Driven by both solid demand in North
America and rapid market acceptance of its newest processors, the Pentium(R)
processor with MMX(TM) technology and the Pentium(R) II processor, Intel
Corporation set a record for unit shipments of microprocessors in the third
quarter, the company said today. Intel's transition to processors with MMX
media enhancement technology accelerated during the quarter with well over
half of the company's shipments of microprocessors coming from processors
with MMX technology.
Third quarter revenue was $6.2 billion, up 20 percent from $5.1 billion
for the third quarter of 1996. Third quarter revenue was up 3 percent from
second quarter 1997 revenue of $6.0 billion.
Net income in the third quarter was $1.57 billion, up 20 percent from
third quarter 1996 net income of $1.31 billion, and down 4 percent from
second quarter 1997 net income of $1.65 billion.
Earnings per share in the third quarter rose to $0.88 from $0.74 in the
third quarter of 1996, an increase of 19 percent. Earnings per share in the
third quarter were down 4 percent from $0.92 in the second quarter of 1997,
primarily the result of a much weaker than expected Flash memory market
segment.
"The quarter saw a lot of our energy going into product conversions as
the Pentium processor with MMX technology continued to ramp and we accelerated
shipments of the Pentium II processor with its novel high performance bus
architecture," said Dr. Andrew S. Grove, chairman and chief executive officer.
"Our factories were especially responsive to the challenges presented by this
rapid conversion, by meeting our volume needs with excellent yields of advanced
processors."
In the third quarter, the company repurchased a total of 2.5 million
shares of Common Stock at a cost of $251 million under an ongoing program.
Since the program began in 1990, the company has repurchased 200.7 million
shares at a total cost of $5.9 billion.
During the quarter the company announced its regular quarterly cash
dividend of $0.03 per share. The dividend is payable on December 1, 1997 to
stockholders of record on November 1, 1997. Intel has paid a quarterly
dividend for the last 5 years.
Intel's 1998 Step-Up Warrants (INTCW) expire on March 14, 1998. The
warrants must be exercised on or before Friday, March 13, 1998. The last day
of trading of the warrants on the NASDAQ Stock Market will be March 10, 1998.
BUSINESS OUTLOOK
----------------
The following statements are based on current expectations. These statements
are forward-looking and actual results may differ materially. These statements
do not take into account the potential effects of future mergers or
acquisitions.
** The company expects revenue for the fourth quarter of 1997 to be slightly
up from third quarter revenue of $6.2 billion.
** Gross margin percentage in the fourth quarter is expected to be flat to
slightly up from 58 percent in the third quarter. In the short-term Intel's
gross margin percentage varies primarily with revenue levels and product mix.
** The company still believes that over the long-term the gross margin
percentage will be 50 percent plus or minus a few points. Intel's long-term
gross margin percentage will vary depending on product mix.
** Expenses (R & D plus MG &A) in the fourth quarter are expected to be
approximately 10 to 15 percent higher than expenses of $1.3 billion in the
third quarter, primarily as the result of seasonal spending on advertising
and marketing. Expenses are dependent in part on the level of revenue.
** R & D spending is expected to be approximately $2.4 billion for 1997.
** The company expects interest and other income for the fourth quarter to be
approximately $160 million, assuming no significant changes in cash balances
or interest rates and no unanticipated items.
** The tax rate in 1997 is expected to remain at 35.5 percent.
** Capital spending is expected to be approximately $4.5 billion for 1997.
Depreciation is expected to be approximately $2.2 billion for 1997.
The above statements contained in this outlook are forward-looking
statements that involve a number of risks and uncertainties. These statements
do not take into account the potential financial effects of future mergers or
acquisitions, including any one time charges, and related operational risks
such as the company's ability to successfully integrate any acquired
businesses, enter new market segments and manage the growth of such
businesses.
In addition to the factors discussed above, among the other factors that
could cause actual results to differ materially are the following: business
conditions and growth in the computing industry and in the general economy;
changes in customer order patterns, including timing of delivery and changes in
seasonal fluctuations in PC buying patterns; changes in the mixes of
microprocessor types and speeds, motherboards, purchased components and other
products; competitive factors, such as rival chip architectures and
manufacturing technologies, competing software-compatible microprocessors,
acceptance of new products and response to price pressures; risk of inventory
obsolescence due to shifts in market demand; variations in inventory valuation;
excess or shortage of purchased components; timing of software industry product
introductions; continued success in technological advances and their
implementation, including the manufacturing ramp; development, implementation
and initial production of new strategic products and processes; excess or
shortage of manufacturing capacity; unanticipated costs or other adverse effects
associated with processors and other products containing errata (deviations from
published specifications); risks associated with foreign operations; litigation
involving intellectual property and consumer issues; level of stock repurchases;
and other risk factors listed from time to time in the company's SEC reports,
including but not limited to the report on Form 10-Q for the quarter ended June
28, 1997 (Part I, Item 2, Outlook section).
INTEL CORPORATION
-----------------
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
-----------------------------------------
(Millions, except per share amounts)
------------------------------------
<TABLE>
INCOME 3 Months Ended 9 Months Ended
-------------- --------------
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET REVENUES $ 6,155 $ 5,142 $18,563 $14,407
------- ------- ------- -------
Cost of sales 2,604 2,201 7,254 6,772
Research and development 586 449 1,742 1,288
Marketing, general and administrative 676 565 2,073 1,600
------- ------- ------- -------
Operating costs and expenses 3,866 3,215 11,069 9,660
------- ------- ------- -------
OPERATING INCOME 2,289 1,927 7,494 4,747
Interest and other 151 91 571 248
------- ------- ------- -------
INCOME BEFORE TAXES 2,440 2,018 8,065 4,995
Income taxes 866 706 2,863 1,748
------- ------- ------- -------
NET INCOME $ 1,574 $ 1,312 $ 5,202 $ 3,247
======= ======= ======= =======
EARNINGS PER SHARE $ 0.88 $ 0.74 $ 2.89 $ 1.84
======= ======= ======= =======
COMMON SHARES AND EQUIVALENTS 1,797 1,770 1,798 1,769
</TABLE>
________________________________________________________________________________
<TABLE>
BALANCE SHEET At At
Sept. 27, Dec. 28,
1997 1996
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and short-term investments $ 8,960 $ 7,994
Accounts receivable, net 3,921 3,723
Inventories 1,507 1,293
Deferred tax assets and other 752 674
------- -------
Total current assets 15,140 13,684
Property, plant and equipment, net 9,745 8,487
Long-term investments 1,815 1,353
Other assets 501 211
------- -------
TOTAL ASSETS $27,201 $23,735
======= =======
CURRENT LIABILITIES
Short-term debt $ 297 $ 389
Accounts payable and accrued liabilities 3,539 3,014
Deferred income on shipments to distributors 517 474
Income taxes payable 811 986
------- -------
Total current liabilities 5,164 4,863
------- -------
LONG-TERM DEBT 386 728
------- -------
DEFERRED TAX LIABILITIES 1,123 997
------- -------
PUT WARRANTS 582 275
------- -------
STOCKHOLDERS' EQUITY
Common Stock and
capital in excess of par value 3,389 2,897
Retained earnings 16,557 13,975
------- -------
Total stockholders' equity 19,946 16,872
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $27,201 $23,735
======= =======
</TABLE>
