<PAGE>
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: July 13, 1999
(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 of (Commission (IRS Employer
incorporation) File Number) Identification No.)
2200 Mission College Blvd., 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)
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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 June 26, 1999 and forward-looking statements
relating to 1999, the third quarter of 1999 and the second
half of 1999, as presented in a press release of July 13,
1999.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits
99.1 Financial information for Intel Corporation for the
quarter ended June 26, 1999 and forward-looking statements
relating to 1999, the third quarter of 1999 and the second
half of 1999.
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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.
INTEL CORPORATION
(Registrant)
Date: July 13, 1999 By: /s/ ANDY D. BRYANT
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Andy D. Bryant
Senior Vice President,
Chief Financial Officer
and Principal Accounting
Officer
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EXHIBIT 99.1
INTEL SECOND QUARTER REVENUE $6.7 BILLION
REVENUE UP 14% AND EPS UP 55% FROM SECOND QUARTER 1998
SANTA CLARA, Calif., July 13, 1999 - Intel Corporation announced second
quarter revenue of $6.7 billion and earnings of $1.7 billion or $0.51 per
share. Second quarter revenue was up 14 percent from second quarter 1998
revenue of $5.9 billion. Second quarter revenue was down 5 percent from
first quarter 1999 revenue of $7.1 billion.
Net income in the second quarter was $1.7 billion, up 49 percent from
second quarter 1998 net income of $1.2 billion. Net income in the second
quarter was down 13 percent from first quarter 1999 net income of $2.0
billion.
Second quarter earnings per share of $0.51 increased 55 percent from
$0.33 in the second
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quarter of 1998. Earnings per share in the second quarter declined 11
percent from $0.57 in the first quarter of 1999.
"We are pleased with our accomplishments this quarter. We made
progress positioning Intel for the evolving Internet economy. The Pentium
- -Registered Trademark- III processor, a high performance multimedia processor
for the most demanding Internet applications, is on track to be our fastest
ramping processor ever," said Dr. Craig R. Barrett, president and chief
executive officer. "In addition, we regained market segment share in the
value PC segment with the Intel-Registered Trademark- Celeron-TM-
processor. As expected, second quarter revenue reflected a seasonal slowdown,
and we look forward to a strong second half."
During the quarter, the company paid its quarterly cash dividend of $0.03
per share, an increase from $0.02 paid in the first quarter. The dividend was
paid on June 1, 1999, to stockholders of record on May 7, 1999. Intel has paid
a regular quarterly cash dividend for over six years.
During the quarter, the company repurchased a total of 25 million
shares of common stock, at a cost of $1.5 billion, under an ongoing program.
Since the program began in 1990, the company has repurchased 634.6 million
shares at a total cost of $16.4 billion.
On July 12, 1999, Intel acquired Dialogic Corporation for $44 per share
in an all-cash tender offer valued at approximately $780 million.
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.
NOTE: THESE STATEMENTS DO NOT INCLUDE THE IMPACT OF THE ACQUISITIONS OF
DIALOGIC CORPORATION OR LEVEL ONE COMMUNICATIONS OR THE POTENTIAL IMPACT OF
ANY OTHER MERGERS OR ACQUISITIONS THAT MAY BE COMPLETED AFTER JUNE 26, 1999.
** The company expects revenue for the third quarter of 1999 to be up
slightly from second quarter revenue of $6.7 billion. The company expects
a strong second half.
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** Gross margin percentage in the third quarter of 1999 is expected to be up
slightly from 59 percent in the second quarter. Intel's gross margin
expectation for the full year 1999 is now 60 percent, plus or minus a few
points, up from prior guidance of 57 percent, plus or minus a few points.
This change in guidance reflects the positive impact of the company's ongoing
focus on cost improvements and manufacturing efficiencies. In the short
term, Intel's gross margin percentage varies primarily with revenue levels
and product mix as well as changes in unit costs.
** Expenses (R&D plus MG&A) in the third quarter of 1999 are expected to be
approximately 4 to 6 percent higher than second quarter expenses of $1.7
billion, primarily due to higher spending on R&D projects. Expenses are
dependent in part on the level of revenue.
** R&D spending is expected to be approximately $3.0 billion for the full
year 1999.
** The company expects interest and other income for the third quarter of
1999 to be approximately $275 million, depending on interest rates, cash
balances, the company's ability to realize expected gains, and assuming no
unanticipated items.
** The tax rate for 1999 is expected to be 33.0 percent.
** Capital spending for 1999 is expected to be approximately $3.0 billion.
** Depreciation and amortization is expected to be approximately $3.3 billion
for 1999. Depreciation and amortization for the third quarter of 1999 is
expected to be approximately $810 million.
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
such as the recent global financial difficulties, and growth in the computing
industry in various geographic regions; changes in customer order patterns,
including changes in customer and channel inventory levels and changes due to
year 2000 issues; changes in the mixes of microprocessor types and speeds,
purchased components and other products; competitive factors, such as rival
chip architectures and manufacturing technologies, competing
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software-compatible microprocessors and acceptance of new products in
specific market segments; pricing pressures; development and timing of
introduction of compelling software applications; insufficient, excess or
obsolete inventory and variations in inventory valuation; continued success
in technological advances, including development and implementation of new
processes and strategic products for specific market segments; execution of
the manufacturing ramp, including the transitions to the Pentium III
processor and to the 0.18 micron process technology; excess or shortage of
manufacturing capacity; the ability to grow new businesses and successfully
integrate and operate any acquired businesses; unanticipated costs or other
adverse effects associated with processors and other products containing
errata (deviations from published specifications); impact on the company's
business due to internal systems or systems of suppliers, infrastructure
providers and other third parties adversely affected by year 2000 problems;
claims due to year 2000 issues allegedly related to the company's products or
year 2000 remediation efforts; litigation involving antitrust, intellectual
property, consumer and other 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 March 27, 1999 (Part I, Item 2, Outlook
section).
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INTEL CORPORATION
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
(In millions, except per share amounts)
<TABLE>
<CAPTION>
INCOME Three Months Ended Six Months Ended
----------------------- --------------------
June 26, June 27, June 26, June 27,
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET REVENUE $ 6,746 $ 5,927 $ 13,849 $ 11,928
-------- -------- --------- ---------
Cost of sales 2,771 3,027 5,683 5,776
Research and development 731 623 1,394 1,218
Marketing, general and
administrative 924 671 1,815 1,382
Purchased in-process research
and development - - - 165
-------- -------- -------- --------
Operating costs and expenses 4,426 4,321 8,892 8,541
-------- -------- -------- --------
OPERATING INCOME 2,320 1,606 4,957 3,387
Interest and other 290 144 637 344
-------- -------- -------- --------
INCOME BEFORE TAXES 2,610 1,750 5,594 3,731
Income taxes 861 578 1,846 1,286
-------- -------- -------- --------
NET INCOME $ 1,749 $ 1,172 $ 3,748 $ 2,445
======== ======== ======== ========
BASIC EARNINGS PER SHARE $ 0.53 $ 0.35 $ 1.13 $ 0.73
======== ======== ======== ========
DILUTED EARNINGS PER SHARE $ 0.51 $ 0.33 $ 1.08 $ 0.69
======== ======== ======== ========
COMMON SHARES OUTSTANDING 3,310 3,382 3,317 3,332
COMMON SHARES ASSUMING DILUTION 3,446 3,537 3,462 3,543
- -------------------------------------------------------------------------------------------
BALANCE SHEET At At At
June 26, Mar. 27, Dec. 26,
1999 1999 1998
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CURRENT ASSETS
Cash and short-term investments $ 10,609 $ 10,589 $ 7,626
Accounts receivable 3,265 3,319 3,527
Inventories:
Raw materials 222 232 206
Work in process 947 797 795
Finished goods 594 679 581
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1,763 1,708 1,582
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Deferred tax assets and other 836 833 740
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Total current assets 16,473 16,449 13,475
Property, plant and equipment, net 11,412 11,492 11,609
Long-term investments 3,453 5,867 5,365
Other assets 1,463 1,285 1,022
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TOTAL ASSETS $ 32,801 $ 33,093 $ 31,471
======== ======== ========
CURRENT LIABILITIES
Short-term debt $ 135 $ 182 $ 159
Accounts payable and accrued liabilities 3,840 3,921 4,081
Deferred income on shipments to distributors 499 690 606
Income taxes payable 643 1,423 958
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Total current liabilities 5,117 6,216 5,804
LONG-TERM DEBT 666 699 702
DEFERRED TAX LIABILITIES 1,546 1,452 1,387
PUT WARRANTS - - 201
STOCKHOLDERS' EQUITY
Common Stock and
capital in excess of par value 4,819 5,025 4,822
Retained earnings 20,653 19,701 18,555
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Total stockholders' equity 25,472 24,726 23,377
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,801 $ 33,093 $ 31,471
======== ======== ========
</TABLE>
