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: January 13, 1998
(Date of earliest event reported)
INTEL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-6217 94-1672743
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(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
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(Address of principal executive offices) (Zip Code)
(408) 765-8080
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(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 and the year ended December
27, 1997 and forward-looking statements relating to
1998 and the 1st Quarter of 1998, as presented in a
press release of January 13, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) Exhibits
99.1 Financial information for Intel Corporation for
the quarter and the year ended December 27, 1997 and
forward-looking statements relating to 1998 and the 1st
Quarter of 1998.
<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: January 13, 1998 By: /s/ Andy D. Bryant
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Andy D. Bryant
Vice President, Chief Financial
Officer and Principal Accounting
Officer
EXHIBIT 99.1
INTEL'S 1997 REVENUE AND EARNINGS SET NEW RECORDS
1997 Revenue up 20% to $25.1 Billion; 1997 EPS $3.87, up 33%;
Record quarterly revenue
SANTA CLARA, Calif., Jan. 13, 1998 - Driven by the rapid market
acceptance of the Pentium(R) II processor and the Pentium(R)
processor with MMX(TM) technology, both of which were introduced in
1997, Intel's 1997 revenues and earnings per share set new
records, the company said today. 1997 was the eighth consecutive
year of both record revenue and earnings for Intel.
Revenue totaled $25.1 billion in 1997, up from $20.8 billion
in 1996. Net income was $6.9 billion or $3.87 per share, up from
$5.2 billion or $2.90 per share in 1996.
Fourth quarter revenue of $6.5 billion set a record, and was
up from $6.4 billion for the fourth quarter of 1996. Net income
was $1.7 billion for the fourth quarter, down from $1.9 billion
for the comparable period a year ago. Earnings per share in the
fourth quarter were $0.98, down from $1.06 in the final quarter
of 1996.
"In 1997 our factories ramped new processing and packaging
technologies at an unprecedented rate," said Dr. Andrew S. Grove,
chairman and chief executive officer. "We introduced two major
new microprocessors, the Pentium processor with MMX technology
and the Pentium II processor, essentially replacing our previous
product line."
"New market segments, from the basic PC to high performance
workstations and servers, offer growth opportunities for Intel.
In November, we announced a realignment of our product strategies
and management to embrace all segments, positioning Intel to
excel in a worldwide computing industry that continues to evolve
and expand."
In the fourth quarter, the company repurchased a total of
12.7 million shares of common stock at a cost of $1.0 billion
under an ongoing program. For the full year the company
repurchased 43.6 million shares at a cost of $3.4 billion. Since
the program began in 1990, the company has repurchased 213.4
million shares at a total cost of $6.9 billion.
During the quarter, the company announced its regular
quarterly cash dividend of $0.03 per share. The dividend is
payable on March 1, 1998 to stockholders of record on February 1,
1998. Intel has paid a quarterly dividend for over five 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
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The following statements are based on current expectations.
These statements are forward-looking, and actual results may
differ materially. These statements do not reflect the potential
impact of any mergers or acquisitions that may be completed after
the date of this release, except as noted below.
** The company expects revenue for the first quarter of 1998 to
be approximately flat with fourth quarter revenue of $6.5
billion.
** Gross margin percentage in the first quarter of 1998 is
expected to be down a few points from 59 percent in the fourth
quarter, primarily the result of purchased components used on the
SEC cartridge for the Pentium II processor. Intel's gross margin
expectation for 1998 is 55 percent, plus or minus a few points.
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 first quarter of 1998 are
expected to be approximately 2 to 5 percent lower than the
expenses of $1.4 billion in the fourth quarter, primarily because
of seasonally lower marketing and advertising expenses. Expenses
are dependent in part on the level of revenue.
** R & D spending is expected to be approximately $2.8 billion
for 1998, up from $2.3 billion in 1997.
** The company expects interest and other income for the first
quarter of 1998 to be approximately $175 million assuming no
significant changes in cash balances, or interest rates, and no
unanticipated items.
** The tax rate in 1998 is expected to be 34.0 percent.
** Capital spending for 1998 is expected to be approximately $5.3
billion, up from $4.5 billion in 1997.
** Depreciation is expected to be approximately $2.7 billion for
1998, up from $2.2 billion in 1997. Depreciation in the first
quarter of 1998 is expected to be approximately $580 million.
** The FTC announced on January 13 that it would not seek to
enjoin Intel's proposed acquisition of Chips and Technologies,
Inc. If completed, the acquisition is expected to result in a
one-time charge to Intel's earnings. The amount of the charge
has not yet been determined.
The above statements contained in this outlook are forward-
looking statements that involve a number of risks and
uncertainties. In addition to factors discussed above, among
other factors that could cause actual results to differ
materially are the following: business and economic conditions,
and growth in the computing industry in various geographic
regions; changes in customer order patterns, including changes in
customer and channel inventory levels and in seasonal 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 and acceptance of new products in specific market
segments; pricing pressures; changes in end users' preferences;
risk of inventory obsolescence and variations in inventory
valuation; excess of purchased components; timing of software
industry product introductions; continued success in
technological advances, including development, implementation and
initial production of new strategic products and processes in a
cost-effective manner; execution of the manufacturing ramp;
excess or shortage of manufacturing capacity; the ability to
successfully integrate any acquired businesses, enter new market
segments and manage the growth of such businesses; 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;
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 September 27, 1997 (Part I, Item 2, Outlook
section).
INTEL CORPORATION
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CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
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(Millions, except per share amounts)
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<TABLE>
INCOME 3 Months Ended 12 Months Ended
-------------- ---------------
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET REVENUE $ 6,507 $ 6,440 $25,070 $20,847
------- ------- ------- -------
Cost of sales 2,691 2,392 9,945 9,164
Research and development 605 520 2,347 1,808
Marketing, general
and administrative 818 722 2,891 2,322
------- ------- ------- -------
Operating costs and expenses 4,114 3,634 15,183 13,294
------- ------- ------- -------
OPERATING INCOME 2,393 2,806 9,887 7,553
Interest and other 201 133 772 381
------- ------- ------- -------
INCOME BEFORE TAXES 2,594 2,939 10,659 7,934
Income taxes 851 1,029 3,714 2,777
------- ------- ------- -------
NET INCOME $ 1,743 $ 1,910 $ 6,945 $ 5,157
======= ======= ======= =======
BASIC EARNINGS PER SHARE $ 1.07 $ 1.16 $ 4.25 $ 3.13
======= ======= ======= =======
DILUTED EARNINGS PER SHARE $ 0.98 $ 1.06 $ 3.87 $ 2.90
======= ======= ======= =======
COMMON SHARES OUTSTANDING 1,633 1,644 1,635 1,645
COMMON SHARES ASSUMING DILUTION 1,785 1,794 1,795 1,776
</TABLE>
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<TABLE>
BALANCE SHEET
At At
Dec. 27, Dec. 28,
1997 1996
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<S> <C> <C>
CURRENT ASSETS
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Cash and short-term investments $ 9,927 $ 7,994
Accounts receivable 3,438 3,723
Inventories 1,697 1,293
Deferred tax assets and other 805 674
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Total current assets 15,867 13,684
Property, plant and equipment, net 10,666 8,487
Long-term investments 1,839 1,353
Other assets 508 211
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TOTAL ASSETS $28,880 $23,735
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CURRENT LIABILITIES
- -------------------
Short-term debt $ 322 $ 389
Accounts payable and accrued liabilities 4,017 3,014
Deferred income on shipments to distributors 516 474
Income taxes payable 1,165 986
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Total current liabilities 6,020 4,863
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LONG-TERM DEBT 448 728
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DEFERRED TAX LIABILITIES 1,076 997
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PUT WARRANTS 2,041 275
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STOCKHOLDERS' EQUITY
Common Stock and
capital in excess of par value 3,311 2,897
Retained earnings 15,984 13,975
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Total stockholders' equity 19,295 16,872
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $28,880 $23,735
======= =======
</TABLE>
