Form 8-K APPLE INC For: Jan 29

January 29, 2019 4:31 PM


 
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
January 29, 2019
Date of Report (Date of earliest event reported)
 
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Apple Inc.
(Exact name of Registrant as specified in its charter)

California
 
001-36743
 
94-2404110
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
One Apple Park Way
Cupertino, California 95014
(Address of principal executive offices) (Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 





Item 2.02    Results of Operations and Financial Condition.
On January 29, 2019, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its first fiscal quarter ended December 29, 2018. A copy of Apple’s press release is attached hereto as Exhibit 99.1.
The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01    Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
Number
 
Exhibit Description
 
 
99.1
 






SIGNATURE
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.

Date:
January 29, 2019
 
Apple Inc.
 
 
 
 
 
 
 
 
 
By:
 
/s/ Luca Maestri
 
 
 
 
 
Luca Maestri
 
 
 
 
 
Senior Vice President,
Chief Financial Officer




Exhibit 99.1


Apple Reports First Quarter Results

Services, Mac and Wearables Set New All-Time Revenue Records

EPS Reaches All-Time High at $4.18

CUPERTINO, California — January 29, 2019 — Apple® today announced financial results for its fiscal 2019 first quarter ended December 29, 2018. The Company posted quarterly revenue of $84.3 billion, a decline of 5 percent from the year-ago quarter, and quarterly earnings per diluted share of $4.18, up 7.5 percent. International sales accounted for 62 percent of the quarter’s revenue.

Revenue from iPhone® declined 15 percent from the prior year, while total revenue from all other products and services grew 19 percent. Services revenue reached an all-time high of $10.9 billion, up 19 percent over the prior year. Revenue from Mac® and Wearables, Home and Accessories also reached all-time highs, growing 9 percent and 33 percent, respectively, and revenue from iPad® grew 17 percent.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” said Tim Cook, Apple’s CEO. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”

“We generated very strong operating cash flow of $26.7 billion during the December quarter and set an all-time EPS record of $4.18,” said Luca Maestri, Apple’s CFO. “We returned over $13 billion to our investors during the quarter through dividends and share repurchases. Our net cash balance was $130 billion at the end of the quarter, and we continue to target a net cash neutral position over time.”

Apple is providing the following guidance for its fiscal 2019 second quarter:

revenue between $55 billion and $59 billion
gross margin between 37 percent and 38 percent
operating expenses between $8.5 billion and $8.6 billion
other income/(expense) of $300 million
tax rate of approximately 17 percent

Apple’s board of directors has declared a cash dividend of $0.73 per share of the Company’s common stock. The dividend is payable on February 14, 2019 to shareholders of record as of the close of business on February 11, 2019.

Apple will provide live streaming of its Q1 2019 financial results conference call beginning at 2:00 p.m. PST on January 29, 2019 at www.apple.com/investor/earnings-call/. This webcast will also be available for replay for approximately two weeks thereafter.

Apple periodically provides information for investors on its corporate website, apple.com, and its investors relations website, investor.apple.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance and details related to its annual meeting of shareholders.





This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), tax rate, and plans for return of capital. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation: the effect of global and regional economic conditions on the Company's business, including effects on purchasing decisions by consumers and businesses; the ability of the Company to compete in markets that are highly competitive and subject to rapid technological change; the ability of the Company to manage frequent introductions and transitions of products and services, including delivering to the marketplace, and stimulating customer demand for, new products, services and technological innovations on a timely basis; the effect that shifts in the mix of products and services and in the geographic, currency or channel mix, component cost increases, price competition, or the introduction of new products, including new products with higher cost structures, could have on the Company’s gross margin; the dependency of the Company on the performance of distributors of the Company's products, including cellular network carriers and other resellers; the inventory and other asset risks associated with the Company’s need to order, or commit to order, product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components, services and new technologies essential to the Company's business, including components and technologies that may only be available from single or limited sources; the dependency of the Company on manufacturing and logistics services provided by third parties, many of which are located outside of the US and which may affect the quality, quantity or cost of products manufactured or services rendered to the Company; the effect of product and services design and manufacturing defects on the Company’s financial performance and reputation; the dependency of the Company on third-party intellectual property and digital content, which may not be available to the Company on commercially reasonable terms or at all; the dependency of the Company on support from third-party software developers to develop and maintain software applications and services for the Company’s products; the impact of unfavorable legal proceedings, such as a potential finding that the Company has infringed on the intellectual property rights of others; the impact of changes to laws and regulations that affect the Company’s activities, including the Company’s ability to offer products or services to customers in different regions; the ability of the Company to manage risks associated with its international activities, including complying with laws and regulations affecting the Company’s international operations; the ability of the Company to manage risks associated with the Company’s retail stores; the ability of the Company to manage risks associated with the Company’s investments in new business strategies and acquisitions; the impact on the Company's business and reputation from information technology system failures, network disruptions or losses or unauthorized access to, or release of, confidential information; the ability of the Company to comply with laws and regulations regarding data protection; the continued service and availability of key executives and employees; political events, international trade disputes, war, terrorism, natural disasters, public health issues, and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products; financial risks, including risks relating to currency fluctuations, credit risks and fluctuations in the market value of the Company’s investment portfolio; and changes in tax rates and exposure to additional tax liabilities. More information on these risks and other potential factors that could affect the Company’s financial results is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple revolutionized personal technology with the introduction of the Macintosh in 1984. Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, macOS, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services including the App Store, Apple Music, Apple Pay and iCloud. Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.

Press Contact:
Kristin Huguet
Apple
khuguet@apple.com
(408) 974-2414

Investor Relations Contacts:
Nancy Paxton
Apple
paxton1@apple.com
(408) 974-5420
Matt Blake
Apple
mattblake@apple.com
(408) 974-7406

NOTE TO EDITORS: For additional information visit Apple Newsroom (www.apple.com/newsroom), or call Apple’s Media Helpline at (408) 974-2042.
© 2019 Apple Inc. All rights reserved. Apple, the Apple logo, iPhone, Mac and iPad are trademarks of Apple Inc. Other company and product names may be trademarks of their respective owners.





Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)
 
Three Months Ended
 
December 29,
2018
 
December 30,
2017
Net sales:
 
 
 
   Products
$
73,435

 
$
79,164

   Services
10,875

 
9,129

Total net sales (1)
84,310

 
88,293

Cost of sales:
 
 
 
   Products
48,238

 
50,575

   Services
4,041

 
3,806

Total cost of sales
52,279

 
54,381

Gross margin
32,031

 
33,912

 
 
 
 
Operating expenses:
 
 
 
Research and development
3,902

 
3,407

Selling, general and administrative
4,783

 
4,231

Total operating expenses
8,685

 
7,638

 
 
 
 
Operating income
23,346

 
26,274

Other income/(expense), net
560

 
756

Income before provision for income taxes
23,906

 
27,030

Provision for income taxes
3,941

 
6,965

Net income
$
19,965

 
$
20,065

 
 
 
 
Earnings per share:
 
 
 
Basic
$
4.22

 
$
3.92

Diluted
$
4.18

 
$
3.89

Shares used in computing earnings per share:
 
 
 
Basic
4,735,820

 
5,112,877

Diluted
4,773,252

 
5,157,787

 
 
 
 
(1) Net sales by reportable segment:
 
 
 
Americas
$
36,940

 
$
35,193

Europe
20,363

 
21,054

Greater China
13,169

 
17,956

Japan
6,910

 
7,237

Rest of Asia Pacific
6,928

 
6,853

Total net sales
$
84,310

 
$
88,293

 
 
 
 
(1) Net sales by category:
 
 
 
iPhone
$
51,982

 
$
61,104

Mac
7,416

 
6,824

iPad
6,729

 
5,755

Wearables, Home and Accessories
7,308

 
5,481

Services
10,875

 
9,129

Total net sales
$
84,310

 
$
88,293






Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)

 
December 29,
2018
 
September 29,
2018
ASSETS:
Current assets:
 
 
 
Cash and cash equivalents
$
44,771

 
$
25,913

Marketable securities
41,656

 
40,388

Accounts receivable, net
18,077

 
23,186

Inventories
4,988

 
3,956

Vendor non-trade receivables
18,904

 
25,809

Other current assets
12,432

 
12,087

Total current assets
140,828

 
131,339

 
 
 
 
Non-current assets:
 
 
 
Marketable securities
158,608

 
170,799

Property, plant and equipment, net
39,597

 
41,304

Other non-current assets
34,686

 
22,283

Total non-current assets
232,891

 
234,386

Total assets
$
373,719

 
$
365,725

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
 
 
 
Accounts payable
$
44,293

 
$
55,888

Other current liabilities
36,703

 
33,327

Deferred revenue
5,546

 
5,966

Commercial paper
11,969

 
11,964

Term debt
9,772

 
8,784

Total current liabilities
108,283

 
115,929

 
 
 
 
Non-current liabilities:
 
 
 
Term debt
92,989

 
93,735

Other non-current liabilities
54,555

 
48,914

Total non-current liabilities
147,544

 
142,649

Total liabilities
255,827

 
258,578

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Shareholders’ equity:
 
 
 
Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,729,803 and 4,754,986 shares issued and outstanding, respectively
40,970

 
40,201

Retained earnings
80,510

 
70,400

Accumulated other comprehensive income/(loss)
(3,588
)
 
(3,454
)
Total shareholders’ equity
117,892

 
107,147

Total liabilities and shareholders’ equity
$
373,719

 
$
365,725







Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
 
Three Months Ended
 
December 29,
2018
 
December 30,
2017
Cash and cash equivalents, beginning balances
$
25,913

 
$
20,289

Operating activities:
 
 
 
Net income
19,965

 
20,065

Adjustments to reconcile net income to cash generated by operating activities:
 
 
 
Depreciation and amortization
3,395

 
2,745

Share-based compensation expense
1,559

 
1,296

Deferred income tax expense/(benefit)
53

 
(33,737
)
Other
(54
)
 
(11
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
5,130

 
(5,570
)
Inventories
(1,076
)
 
434

Vendor non-trade receivables
6,905

 
(9,660
)
Other current and non-current assets
(886
)
 
(197
)
Accounts payable
(8,501
)
 
12,602

Deferred revenue
(370
)
 
569

Other current and non-current liabilities
570

 
39,757

Cash generated by operating activities
26,690

 
28,293

Investing activities:
 
 
 
Purchases of marketable securities
(7,077
)
 
(41,272
)
Proceeds from maturities of marketable securities
7,203

 
14,048

Proceeds from sales of marketable securities
9,723

 
16,801

Payments for acquisition of property, plant and equipment
(3,355
)
 
(2,810
)
Payments made in connection with business acquisitions, net
(167
)
 
(173
)
Purchases of non-marketable securities
(427
)
 
(141
)
Other
(56
)
 
(43
)
Cash generated by/(used in) investing activities
5,844

 
(13,590
)
Financing activities:
 
 
 
Payments for taxes related to net share settlement of equity awards
(1,318
)
 
(1,038
)
Payments for dividends and dividend equivalents
(3,568
)
 
(3,339
)
Repurchases of common stock
(8,796
)
 
(10,095
)
Proceeds from issuance of term debt, net

 
6,969

Change in commercial paper, net
6

 
2

Cash used in financing activities
(13,676
)
 
(7,501
)
Increase/(Decrease) in cash and cash equivalents
18,858

 
7,202

Cash and cash equivalents, ending balances
$
44,771

 
$
27,491

Supplemental cash flow disclosure:
 
 
 
Cash paid for income taxes, net
$
4,916

 
$
3,551

Cash paid for interest
$
836

 
$
623



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