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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: April 13, 1999
(Date of earliest event reported)
INTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-6217 94-1672743
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
2200 Mission College Blvd., Santa Clara, CA 95052-8119
(Address of principal executive offices)
(408) 765-8080
(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 March 27, 1999 and forward-looking statements
relating to 1999 and the second quarter of 1999, as presented
in a press release of March 27, 1999.
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 March 27, 1999 and forward-looking
statements relating to 1999 and the second quarter 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: April 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 FIRST QUARTER REVENUE $7.1 BILLION
EARNINGS PER SHARE $0.57 (ADJUSTED FOR 2-FOR-1 SPLIT)
REVENUE UP 18% AND EPS UP 58% FROM FIRST QUARTER 1998
All of the share and per-share amounts in this release have been
adjusted to reflect the 2:1 stock distribution that was
paid April 11, 1999 to stockholders of record on March 23, 1999.
SANTA CLARA, Calif., April 13, 1999 - Intel Corporation announced first quarter
revenue of $7.1 billion and earnings of $2.0 billion or $0.57 per share,
adjusted for the 2-for-1 stock split paid on April 11, 1999. Early in the
second quarter, Intel shipped its 100 millionth microprocessor based on the P6
microarchitecture.
First quarter revenue of $7.1 billion was up 18 percent from first quarter
1998 revenue of $6.0 billion. First quarter revenue was down 7 percent from
fourth quarter 1998 revenue of $7.6 billion.
Net income in the first quarter was $2.0 billion, up 57 percent from first
quarter 1998 net income of $1.3 billion. Net income in the first quarter was
down 3 percent from fourth quarter 1998 net income of $2.1 billion.
First quarter earnings per share of $0.57 increased 58 percent from $0.36
in the first quarter of 1998. Earnings per share in the first quarter declined
3 percent from $0.59 in the fourth quarter of 1998.
All of the share and per-share amounts in this release have been adjusted
to reflect the 2-for-1 stock distribution that was paid April 11, 1999 to
stockholders of record on March 23, 1999.
"We are pleased with our substantial year over year growth in profitability
resulting from our cost control efforts. As we expected, revenue declined from
the prior quarter reflecting a seasonally slower selling period," said Dr. Craig
R. Barrett, President and Chief Executive Officer. "We are seeing positive
results from the launch of new products across all segments, including the
introductions of the Pentium-Registered Trademark- III and Pentium III Xeon-TM-
processors and higher speed Intel-Registered Trademark- Celeron-TM- and mobile
Pentium II processors."
During the quarter, the company paid its regular quarterly cash dividend of
$0.02 per share, post-split. The dividend was paid on March 1, 1999, to
stockholders of record on Feb. 7, 1999. Intel has paid a regular quarterly cash
dividend for over six years. Also during the
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quarter, the board of directors approved an increase, from $0.02 per share to
$0.03 per share, in the company's first dividend to be paid after the stock
split. This dividend is payable on June 1, 1999, to stockholders of record
on May 7, 1999.
In the first quarter, the company repurchased a total of 21 million shares
of common stock, at a cost of $1.3 billion, under an ongoing program. Since the
program began in 1990, the company has repurchased 609.6 million shares at a
total cost of $14.9 billion.
During the quarter, Intel and Level One Communications announced a
definitive stock-for-stock merger agreement valued at approximately $2.2 billion
under which Intel would acquire Level One. The transaction is subject to
regulatory review, Level One stockholder approval and other normal closing
conditions.
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 REFLECT THE POTENTIAL IMPACT OF ANY MERGERS OR ACQUISITIONS THAT MAY BE
COMPLETED AFTER THE DATE OF THIS RELEASE.
** The company expects revenue for the second quarter of 1999 to be flat to
slightly down from first quarter revenue of $7.1 billion, due to seasonal
factors.
** Gross margin percentage in the second quarter of 1999 is expected to be
approximately flat with 59 percent in the first quarter. Intel's gross margin
expectation for 1999 is 57 percent, plus or minus a few points. In the short
term, Intel's gross margin percentage varies primarily with revenue levels and
product mix.
** Expenses (R&D plus MG&A) in the second quarter of 1999 are expected to be
approximately 6 to 10 percent higher than first quarter expenses of $1.6
billion, due to higher spending associated with merchandising and increased
R&D. 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 second quarter of 1999
to be approximately $300 million, depending on interest rates, cash balances,
the company's ability to realize expected gains, and assuming no unanticipated
items.
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** The tax rate for 1999 is expected to be 33.0 percent. Tax rate guidance for
1999 has been lowered from previous guidance of 33.5 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 second quarter of 1999 is
expected to be approximately $800 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 ongoing 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 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-K for the year ended Dec. 26, 1998 (Part II,
Item 7, Outlook section).
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INTEL CORPORATION
CONSOLIDATED SUMMARY FINANCIAL STATEMENTS
(In millions, except per share amounts)
<TABLE>
<CAPTION>
INCOME Three Months Ended
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Mar. 27, Mar. 28,
1999 1998
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<S> <C> <C>
NET REVENUE $ 7,103 $ 6,001
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Cost of sales 2,912 2,749
Research and development 663 595
Marketing, general and administrative 891 711
Purchased in-process research and development - 165
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Operating costs and expenses 4,466 4,220
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OPERATING INCOME 2,637 1,781
Interest and other 347 200
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INCOME BEFORE TAXES 2,984 1,981
Income taxes 985 708
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NET INCOME $ 1,999 $ 1,273
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BASIC EARNINGS PER SHARE $ 0.60 $ 0.39
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DILUTED EARNINGS PER SHARE $ 0.57 $ 0.36
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COMMON SHARES OUTSTANDING 3,324 3,281
COMMON SHARES ASSUMING DILUTION 3,478 3,549
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BALANCE SHEET At At
Mar. 27, Dec. 26,
1999 1998
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CURRENT ASSETS
Cash and short-term investments $ 10,589 $ 7,626
Accounts receivable 3,319 3,527
Inventories:
Raw materials 232 206
Work in process 797 795
Finished goods 679 581
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1,708 1,582
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Deferred tax assets and other 833 740
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Total current assets 16,449 13,475
Property, plant and equipment, net 11,492 11,609
Long-term investments 3,867 5,365
Other assets 1,285 1,022
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TOTAL ASSETS $ 33,093 $ 31,471
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CURRENT LIABILITIES
Short-term debt $ 182 $ 159
Accounts payable and accrued liabilities 3,921 4,081
Deferred income on shipments to distributors 690 606
Income taxes payable 1,423 958
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Total current liabilities 6,216 5,804
LONG-TERM DEBT 699 702
DEFERRED TAX LIABILITIES 1,452 1,387
PUT WARRANTS - 201
STOCKHOLDERS' EQUITY
Common Stock and
capital in excess of par value 5,025 4,822
Retained earnings 19,701 18,555
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Total stockholders' equity 24,726 23,377
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 33,093 $ 31,471
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