-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GN20Rt1biTKY6YT6pXUeeQEV1VI+g5MsYEg/jItKTbSsmFAGLdSB4bzKV0zhoxRl 6V8VkubczE2nxuAiLwJraQ== 0001157523-03-004301.txt : 20030814 0001157523-03-004301.hdr.sgml : 20030814 20030814161019 ACCESSION NUMBER: 0001157523-03-004301 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030814 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELL INC CENTRAL INDEX KEY: 0000826083 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 742487834 STATE OF INCORPORATION: DE FISCAL YEAR END: 0129 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17017 FILM NUMBER: 03847843 BUSINESS ADDRESS: STREET 1: ONE DELL WAY STREET 2: STED CITY: ROUND ROCK STATE: TX ZIP: 78682-2244 BUSINESS PHONE: 5127284737 MAIL ADDRESS: STREET 1: ONE DELL WAY CITY: ROUND ROCK STATE: TX ZIP: 78682 FORMER COMPANY: FORMER CONFORMED NAME: DELL COMPUTER CORP DATE OF NAME CHANGE: 19920703 8-K 1 a4455290.txt DELL INC. 8-K 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 (Date of Earliest Event Reported): August 14, 2003 Dell Inc. (Exact name of registrant as specified in its charter) Delaware 0-17017 74-2487834 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) One Dell Way, Round Rock, Texas 78682 (Address of principal executive offices, including zip code) 512-338-4400 (Registrant's telephone number, including area code) The information in this Report, including the exhibit, is provided under Item 12 of Form 8-K and, pursuant to General Instruction B.6. thereunder, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information in this Report, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933. Item 7 -- Financial Statements and Exhibits. (c) Exhibits -- The following exhibit is furnished as part of this Report: Exhibit 99.1 -- Text of Press Release issued by Dell Inc., dated August 14, 2003. Item 12 -- Results of Operations and Financial Condition On August 14, 2003, Dell Inc. issued a press release announcing its financial results for the fiscal quarter ended August 1, 2003. A copy of the press release is furnished as Exhibit 99.1 to this Report. 2 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 thereunto duly authorized. DELL INC. Dated: August 14, 2003 By: /s/Robert W. Davis ------------------ Robert W. Davis Vice President, Corporate Finance (On behalf of the registrant and as principal accounting officer) 3 EXHIBIT INDEX Exhibit No. Description of Exhibit ------- ---------------------- 99.1 -- Text of Press Release issued by Dell Inc., dated August 14, 2003 4 EX-99 3 a4455290ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Dell's Superior Execution Produces Record Shipments, Revenue and Operating Income in Q2; Q3 Guidance: Sales of $10.5 Billion, 26 Cents in EPS ROUND ROCK, Texas--(BUSINESS WIRE)--Aug. 14, 2003--Continued strong growth in servers and storage systems and in key global markets helped Dell (Nasdaq:DELL) achieve best-ever quarterly operating results in the period ended Aug. 1, and widen its overall global market-share lead. Total product shipments in the company's fiscal second-quarter 2004 were up 27 percent from one year ago, more than four times the growth for the rest of the industry. Dell server volumes rose at the same strong percentage rate. Company shipments increased 46 percent in Asia-Pacific and Japan and 31 percent in Europe, the Middle East and Africa. Without Dell, growth in those regions was 6 percent and 12 percent, respectively. Second-quarter revenue was $9.8 billion, up 16 percent from the same period one year ago. Per-share earnings were 24 cents, an increase of 26 percent. Second Quarter Year to Date (in millions, except share FY'04 FY'03 Change FY'04 FY'03 Change data) ------- ------- ------ -------- -------- ------ Revenue $9,778 $8,459 16% $19,310 $16,525 17% Operating Income $ 840 $ 677 24% $ 1,651 $ 1,267 30% Net Income $ 621 $ 501 24% $ 1,219 $ 958 27% Earnings Per Share $ 0.24 $ 0.19 26% $ 0.47 $ 0.36 31% "We've again shown Dell's unique ability to profitably earn a larger share of business by focusing on standards-based technologies, managing costs and creating value for customers," said Kevin B. Rollins, Dell's president and chief operating officer. "We've done that regardless of the pace of industry demand and the appetite of others to generate sales, even at a loss." Mr. Rollins said industry shipments in the third quarter would likely grow at a rate in the high single digits from one year ago, but that Dell expects its volumes to increase more than 25 percent. The company believes such growth would generate record company revenue of about $10.5 billion, a 15-percent increase from the prior year, and generate earnings per share of 26 cents, a 24-percent rise. Second-quarter operating expenses were a record-low 9.6 percent of revenue, down from 9.8 percent in the first quarter and 9.9 percent a year ago. Operating profit as a percent of revenue increased to 8.6 percent -- the company's highest in nearly three years, and up from 8.0 percent in last year's second quarter. Dell generated $740 million in cash from operations during the period. At the end of the quarter, cash and investments totaled $10.6 billion. Dell Global Market Share Nears 18 Percent Dell's second-quarter growth earned it nearly three points of additional global market share, and the company outpaced average industry growth in all regional markets and worldwide product categories. In Asia-Pacific and Japan, shipments of Dell PowerEdge servers were up 40 percent, more than double the rate for other companies in the region. Dell Japan, the No. 3 computer-systems supplier nationally, increased unit volumes 35 percent, while the rest of the industry declined 2 percent. The company gained three share points and accounted for more than 10 percent of industry shipments in Japan for the first time. Respondents to a recent survey by a leading Japanese information-technology publication ranked Dell No. 1 in customer satisfaction for standards-based servers for the fifth consecutive year. Total volumes in China, another priority market for Dell, increased 71 percent -- the third straight quarter of company growth in excess of 65 percent. Server shipments in that market were up 79 percent and notebook-computer volumes doubled. Dell's profitability in Europe, the Middle East and Africa (EMEA) was up almost 90 percent. The company's quarterly performance was highlighted by combined server growth of 30 percent -- nearly twice that of other companies -- in the United Kingdom, France and Germany, all strategically important markets. Overall growth of 43 percent in the U.K. was almost four times the average for the rest of the industry. In the United States, Dell achieved a 23-percent increase in shipments -- versus an average 2 percent for other companies -- and industry-best profitability. Dell added two points to its No. 1 U.S. server share. Dell shipments to U.S. consumers increased 47 percent -- 70 percent for notebook computers from the company's Inspiron line. Growth in systems sold to small and medium businesses was up 30 percent. Company volumes in the Americas region outside of the U.S. rose 30 percent, highlighted by a 73-percent gain in Mexico. Product Leadership Earns Continued Recognition Dell's 27-percent increase in second-quarter server shipments was eight points higher than the average server growth for other companies. Revenue from external storage systems was up 46 percent to an annual run rate of more than $1.5 billion. Third-party opinions underscored Dell's strength with customers in enterprise product categories. Technology Business Research Inc. (TBR) ranked Dell No. 1 in service and support for standards-based servers for eight consecutive quarters. InfoWorld, in its annual readers' choice awards, named a PowerEdge model "best server" and a PowerVault storage system "best enterprise storage product." The same report gave a Dell/EMC entry-level storage array an overall "excellent" rating and a perfect score for management. In desktop computers, Dell's combined 25-percent growth in shipments of Dimension and OptiPlex systems countered an average 1-percent increase for others. The company also extended to 23 consecutive quarters its leadership of TBR's study of satisfaction among corporate desktop-computer buyers. Additionally, PC Magazine gave Dell a grade of "A+" for service and reliability in desktop computers, marking the eighth straight time the company has earned an "A" or better. Consistent with new accounting standards effective in the third quarter, Dell expects to begin consolidating operations of Dell Financial Services, the company's U.S. joint venture with CIT Group Inc., when it announces third-quarter results in November. The accounting change will not alter the company's risk profile, and is expected to have no material effect on Dell's operating results or financial position. About Dell Dell Inc. (Nasdaq:DELL) is a premier provider of products and services required for customers worldwide to build their information-technology and Internet infrastructures. Company revenue for the past four quarters totaled $38.2 billion. Dell, through its direct business model, designs, manufactures and customizes products and services to customer requirements, and offers an extensive selection of software and peripherals. Information on Dell and its products can be obtained at www.dell.com. Dell, Inspiron, PowerEdge, PowerVault, Dimension and OptiPlex are trademarks of Dell Inc. Dell disclaims any proprietary interest in the marks and names of others. Special note: Statements in this press release that relate to future results and events (including statements about fiscal third-quarter financial and operating performance) are based on the company's current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including general economic and business conditions; the level of demand for the company's products and services; the level and intensity of competition in the technology industry and the pricing pressures that have resulted; the company's ability to timely and effectively manage periodic product transitions, as well as component availability and cost; the company's ability to develop new products based on new or evolving technology and the market's acceptance of those products; the company's ability to manage its inventory levels to minimize excess inventory, declining inventory values and obsolescence; the product, customer and geographic sales mix of any particular period; the company's ability to effectively manage its operating costs; and the effect of armed hostilities, terrorism or public health issues on the economy generally, on the level of demand for the company's products and services and on the company's ability to manage its supply and delivery logistics in such an environment. Additional discussion of these and other factors affecting the company's business and prospects is contained in the company's periodic filings with the Securities and Exchange Commission. Consolidated statements of income and financial position follow. DELL INC. Condensed Consolidated Statement of Operations and Related Financial Highlights (in millions, except per share data) (unaudited) Three Months Ended ------------------------ % Growth Rates Aug. 1, May 2, Aug. 2, --------------------- 2003 2003 2002 Sequential Yr. to Yr. -------- ------- ------- ---------- ---------- Net revenue $9,778 $9,532 $8,459 2.6% 15.6% Cost of revenue 8,000 7,784 6,944 2.8% 15.2% -------- ------- ------- Gross margin 1,778 1,748 1,515 1.7% 17.4% Selling, general and administrative 822 826 727 (0.4%) 13.2% Research, development and engineering 116 111 111 3.7% 3.8% -------- ------- ------- Total operating expenses 938 937 838 0.1% 12.0% -------- ------- ------- Operating income 840 811 677 3.5% 24.1% Investment and other income, net 47 43 49 10.2% (4.3%) -------- ------- ------- Income before income taxes 887 854 726 3.9% 22.2% Income tax provision 266 256 225 3.9% 18.1% -------- ------- ------- Net income $621 $598 $501 3.9% 24.0% ======== ======= ======= Earnings per common share: Basic $0.24 $0.23 $0.19 ======== ======= ======= Diluted $0.24 $0.23 $0.19 ======== ======= ======= Weighted average shares outstanding: Basic 2,567 2,572 2,586 Diluted 2,624 2,614 2,649 Percentage of Total Net Revenue: - ------------------- Gross margin 18.2% 18.3% 17.9% Selling, general and administrative 8.4% 8.6% 8.6% Research, development and engineering 1.2% 1.2% 1.3% Total operating expenses 9.6% 9.8% 9.9% Operating income 8.6% 8.5% 8.0% Income before income taxes 9.1% 9.0% 8.6% Net income 6.3% 6.3% 5.9% Income tax rate 30.0% 30.0% 31.0% Net Revenue by Geographic Region: - ------------------- Percentage of Total Net Revenue - ------------------- Americas 70% 68% 73% Europe 19% 21% 18% Asia Pacific - Japan 11% 11% 9% Net Revenue by Product Line: - -------------- Percentage of Total Net Revenue - ------------------- Desktops 51% 53% 52% Notebooks 28% 27% 28% Enterprise 21% 20% 20% Note: Percentage growth rates and ratios are calculated based on underlying data in thousands. DELL INC. Condensed Consolidated Statement of Operations and Related Financial Highlights (in millions, except per share data) (unaudited) Six Months Ended --------------------- % Growth Rates Aug. 1, Aug. 2, ------------ 2003 2002 Yr. to Yr. ---------- --------- ------------ Net revenue $19,310 $16,525 16.9% Cost of revenue 15,784 13,619 15.9% ---------- --------- Gross margin 3,526 2,906 21.3% Selling, general and administrative 1,648 1,418 16.3% Research, development and engineering 227 221 2.6% ---------- --------- Total operating expenses 1,875 1,639 14.4% ---------- --------- Operating income 1,651 1,267 30.3% Investment and other income, net 90 97 (7.7%) ---------- --------- Income before income taxes 1,741 1,364 27.6% Income tax provision 522 406 28.2% ---------- --------- Net income $1,219 $958 27.3% ========== ========= Earnings per common share: Basic $0.47 $0.37 ========== ========= Diluted $0.47 $0.36 ========== ========= Weighted average shares outstanding: Basic 2,570 2,591 Diluted 2,619 2,661 Percentage of Total Net Revenue: - ----------------------- Gross margin 18.3% 17.6% Selling, general and administrative 8.5% 8.6% Research, development and engineering 1.2% 1.3% Total operating expenses 9.7% 9.9% Operating income 8.6% 7.7% Income before income taxes 9.0% 8.3% Net income 6.3% 5.8% Income tax rate 30.0% 29.9% Net Revenue by Geographic Region: - ------------------------- Percentage of Total Net Revenue - ----------------------- Americas 69% 71% Europe 20% 19% Asia Pacific - Japan 11% 10% Net Revenue by Product Line: - ---------------------------- Percentage of Total Net Revenue - ----------------------- Desktops 52% 53% Notebooks 27% 27% Enterprise 21% 20% Note: Percentage growth rates and ratios are calculated based on underlying data in thousands. DELL INC. Condensed Consolidated Statement of Financial Position and Related Financial Highlights (in millions, except for "Ratios" and "Other Information") (unaudited) Aug. 1, May 2, Aug. 2, 2003 2003 2002 -------- -------- -------- Assets: - ------- Current assets: Cash and cash equivalents $4,636 $4,474 $3,725 Short term investments 484 388 319 Accounts receivable, net 2,883 2,656 2,590 Inventories, net 358 264 291 Other 1,246 1,238 1,358 -------- -------- -------- Total current assets 9,607 9,020 8,283 Property, plant and equipment, net 1,062 889 872 Investments 5,498 5,470 4,589 Other non-current assets 373 333 318 -------- -------- -------- Total assets $16,540 $15,712 $14,062 ======== ======== ======== Liabilities and Stockholders' Equity: - ------------------------------------- Current liabilities: Accounts payable $6,418 $6,082 $5,621 Accrued and other 2,846 2,787 2,424 -------- -------- -------- Total current liabilities 9,264 8,869 8,045 Long term debt 506 506 516 Other 1,264 1,261 935 -------- -------- -------- Total liabilities 11,034 10,636 9,496 Stockholders' equity 5,506 5,076 4,566 -------- -------- -------- Total liabilities and stockholders' equity $16,540 $15,712 $14,062 ======== ======== ======== Ratios: - ------- Quick ratio 0.86 0.85 0.82 Days supply in inventory 4 3 4 Days of sales outstanding(a) 30 29 32 Days in accounts payable 72 70 73 -------- -------- -------- Cash conversion cycle (38) (38) (37) Other Information: - ------------------ Headcount (approximate) 41,800 40,000 36,000 Average total revenue/unit (approximate) $1,610 $1,620 $1,770 Note: Ratios are calculated based on underlying data in thousands. (a) Days of sales outstanding include the effect of product costs related to in-transit customer shipments (arising from the adoption of SAB 101) that are classified in other current assets. At Aug. 1, 2003, May 2, 2003, and Aug. 2, 2002, days of sales outstanding included days of sales in accounts receivable and days of in-transit customer shipments of 26 and 4 days; 25 and 4 days; and 28 and 4 days, respectively. CONTACT: Dell Inc., Round Rock Media Contacts: T.R. Reid, 512-728-7977 tr_reid@dell.com or Mike Maher, 512-723-2575 mike_maher@dell.com or Investor Contacts: Lynn A. Tyson, 512-723-1130 lynn_tyson@dell.com or Robert Williams, 512-728-7570 robert_williams@dell.com -----END PRIVACY-ENHANCED MESSAGE-----