-----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, UKseop1HVtmX91sZJyfELolkLlTiUAnagOic6nGs4AHmEcSe3ZoV2sId6VAE5bDz oFX04EhSoUnRegIhk0MKfg== 0001157523-04-001327.txt : 20040212 0001157523-04-001327.hdr.sgml : 20040212 20040212164649 ACCESSION NUMBER: 0001157523-04-001327 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040212 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040212 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: 04592310 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 a4571689.txt DELL 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): February 12, 2004 ------- 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 February 12, 2004. Item 12 -- Results of Operations and Financial Condition On February 12, 2004 Dell Inc. issued a press release announcing its financial results for the fiscal quarter ended January 30, 2004. 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: February 12, 2004 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 February 12, 2004 4 EX-99.1 3 a4571689ex99.txt EXHIBIT 99.1 PRESS RELEASE EXHIBIT 99.1 Dell Posts Record Operating Results in Fiscal Fourth Quarter; Servers, Storage Systems Drive 18-Percent Revenue Growth, 26-Percent Increase in EPS ROUND ROCK, Texas--(BUSINESS WIRE)--Feb. 12, 2004--Dell's fiscal fourth-quarter 2004 was its best operating period ever. The company achieved record product shipments, revenue, operating and net income, and earnings per share. Dell (NASDAQ:DELL) continued its leading growth in enterprise computing. Shipments of PowerEdge servers jumped 40 percent from the year-ago quarter, more than double the rate for the rest of the industry. Storage revenue was 47 percent higher. And company strength was global: product shipments were up more than 30 percent in Europe, the Middle East and Africa and in Asia-Pacific and Japan, and exceeded 20 percent in the Americas. Company revenue for the quarter ended Jan. 30 was $11.5 billion, 18 percent higher than a year ago. Net earnings were 29 cents per share, up 26 percent. Full-year sales were $41.4 billion, operating income was $3.5 billion and per-share earnings were $1.01, all Dell records. Fourth Quarter Full Year ----------------------- ------------------------ (in millions, except share data) FY '04 FY '03 Change FY '04 FY '03 Change Revenue $11,512 $9,735 18% $41,444 $35,404 17% Operating Income $ 981 $ 819 20% $ 3,544 $ 2,844 25% Net Income $ 749 $ 603 24% $ 2,645 $ 2,122 25% Earnings Per Share $ 0.29 $ 0.23 26% $ 1.01 $ 0.80 26% "Dell is alone in simultaneously providing customers great value, growing faster than the industry and earning a compelling profit for investors," said Kevin Rollins, the company's president and chief operating officer. "Doing that requires a high-quality, low-cost business model and great discipline. We have both. "Much of the industry's quarterly growth was at the low ends of the desktop and notebook categories, which offer little if any profitability. Dell met its operating targets by pursuing profitable growth." Dell's profitability was up strongly from a year ago, both in absolute terms and as a percent of revenue. Fourth-quarter operating income was $981 million, or 8.5 percent of revenue. Operating expenses were 9.6 percent of revenue, matching a company low and down from 9.9 percent in the year-ago quarter. Below operating income, strong sales and earnings growth in markets outside the United States resulted in a lower effective tax rate. Industry-leading profits and efficient asset management helped Dell generate $1.1 billion in cash from operations. Total cash and investments at the end of the quarter were $11.9 billion, the highest in company history. Mr. Rollins said Dell expects first-quarter fiscal-2005 product shipments to rise more than 20 percent, ahead of anticipated industry growth. The resulting company volume should produce quarterly revenue of $11.2 billion, up about 17 percent from the prior year, and earnings per share of 28 cents, up 22 percent. Servers, Storage Systems Push Regional Strength With record sales in the fourth quarter, the company reached $8.5 billion in full-year revenue in Europe, the Middle East and Africa (EMEA), 23 percent more than in fiscal 2003. Quarterly company product shipments in the region rose 33 percent, highlighted by increases in the three largest national markets: the United Kingdom, France and Germany. Without Dell, industry volumes were up 20 percent. Total product shipments in Asia-Pacific and Japan increased 34 percent, those for servers 36 percent. Absent Dell, the regional industry was up just 9 percent overall, 10 percent in servers. In China, already the region's second-largest national market, combined company volumes of servers and notebook computers were 47 percent higher. Dell product shipments in the Americas rose 22 percent, thanks to solid increases in all customer segments. Total volumes in Canada, Mexico and Brazil were up 25 percent. Growth in systems sold to U.S. consumers was 26 percent, more than twice the average of other companies. Enterprise Categories Strong, Printers Exceed Expectations Dell's 40-percent increase in server shipments earned the company nearly two additional points of market share versus a year ago. In the United States, where Dell is the category leader, server volumes were up 49 percent, two-and-a-half times the rate of the rest of the industry. Sales from PowerVault and Dell/EMC external storage systems are now at a $1.8 billion annual run rate. Revenue from software and peripheral (S&P) products rose 36 percent in the fourth quarter. Dell's own products -- including printers and accessories, LCD television/computer monitors, handheld devices and digital projectors -- accounted for nearly half of S&P sales. Since their introduction in March, Dell has sold more than 2 million of its printers. Fourth-quarter volumes were nearly double those for Q3. Customer feedback shows exceptional satisfaction with Dell's unique ink-management process, which alerts users on their computer screens when ink is low, provides a link to purchase replacement cartridges online and ships 99.8 percent of orders the same day. In January, Dell announced it would expand its imaging line through new technology partnerships with Fuji Xerox Co. Ltd., Eastman Kodak Co. and Samsung Electronics Co. Ltd., and its successful existing relationship with Lexmark International Inc. Shipments of Inspiron and Latitude notebook computers were up 40 percent, ahead of the rest of the industry. Volumes of Dimension and OptiPlex desktop computers rose 21 percent, compared with an average 8 percent for other companies. 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 year totaled $41.4 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, PowerEdge, PowerVault, Inspiron, Latitude, Dimension and OptiPlex are trademarks of Dell Inc. EMC is a registered trademark of EMC Corp. Market comparisons based on IDC data. 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 first-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, financial position and cash flows follow. DELL INC. Condensed Consolidated Statement of Operations and Related Financial Highlights (in millions, except per share data) (unaudited) Three Months Ended -------------------------- % Growth Rates Jan. 30, Oct. 31, Jan. 31, ----------------------- 2004 2003 2003 Sequential Yr. to Yr. -------- -------- -------- ---------- ----------- Net revenue $11,512 $10,622 $9,735 8.4% 18.2% Cost of revenue 9,421 8,687 7,954 8.5% 18.4% -------- -------- -------- Gross margin 2,091 1,935 1,781 8.1% 17.4% Selling, general and administrative 991 905 845 9.5% 17.3% Research, development and engineering 119 118 117 1.0% 1.7% -------- -------- -------- Total operating expenses 1,110 1,023 962 8.4% 15.4% -------- -------- -------- Operating income 981 912 819 7.6% 19.7% Investment and other income, net 49 41 42 19.4% 17.4% -------- -------- -------- Income before income taxes 1,030 953 861 8.1% 19.6% Income tax provision 281 276 258 1.8% 9.0% -------- -------- -------- Net income $749 $677 $603 10.7% 24.2% ======== ======== ======== Earnings per common share: Basic $0.29 $0.26 $0.23 ======== ======== ======== Diluted $0.29 $0.26 $0.23 ======== ======== ======== Weighted average shares outstanding: Basic 2,557 2,563 2,576 Diluted 2,616 2,623 2,621 Percentage of Total Net Revenue: - ------------- Gross margin 18.2% 18.2% 18.3% Selling, general and administrative 8.6% 8.5% 8.7% Research, development and engineering 1.0% 1.1% 1.2% Total operating expenses 9.6% 9.6% 9.9% Operating income 8.5% 8.6% 8.4% Income before income taxes 8.9% 9.0% 8.8% Net income 6.5% 6.4% 6.2% Income tax rate 27.3% 29.0% 30.0% Net Revenue by Geographic Region: - -------------- Percentage of Total Net Revenue - ------------------ Americas 67% 71% 69% Europe 22% 19% 21% Asia Pacific -- Japan 11% 10% 10% Net Revenue by Product Line: - -------------- Percentage of Total Net Revenue - ------------------ Desktops 52% 50% 55% Notebooks 27% 28% 26% Enterprise 21% 22% 19% 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) Year Ended % Growth ---------------------- Rates Jan. 30, Jan. 31, ---------- 2004 2003 Yr. to Yr. ---------- ---------- ---------- Net revenue $41,444 $35,404 17.1% Cost of revenue 33,892 29,055 16.6% ---------- ---------- Gross margin 7,552 6,349 18.9% Selling, general and administrative 3,544 3,050 16.2% Research, development and engineering 464 455 2.0% ---------- ---------- Total operating expenses 4,008 3,505 14.4% ---------- ---------- Operating income 3,544 2,844 24.6% Investment and other income, net 180 183 (1.7%) ---------- ---------- Income before income taxes 3,724 3,027 23.0% Income tax provision 1,079 905 19.1% ---------- ---------- Net income $2,645 $2,122 24.6% ========== ========== Earnings per common share: Basic $1.03 $0.82 ========== ========== Diluted $1.01 $0.80 ========== ========== Weighted average shares outstanding: Basic 2,565 2,584 Diluted 2,619 2,644 Percentage of Total Net Revenue: - -------------------------------- Gross margin 18.2% 17.9% Selling, general and administrative 8.6% 8.6% Research, development and engineering 1.1% 1.3% Total operating expenses 9.7% 9.9% Operating income 8.6% 8.0% Income before income taxes 9.0% 8.6% Net income 6.4% 6.0% Income tax rate 29.0% 29.9% Net Revenue by Geographic Region: - --------------------------------- Percentage of Total Net Revenue - ------------------------------- Americas 69% 71% Europe 21% 19% Asia Pacific -- Japan 10% 10% Net Revenue by Product Line: - ---------------------------- Percentage of Total Net Revenue - ------------------------------- Desktops 51% 53% Notebooks 27% 27% Enterprise 22% 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) Jan. 30, Oct. 31, Jan. 31, 2004 2003 2003 -------- -------- -------- Assets: - ------- Current assets: Cash and cash equivalents $4,317 $4,356 $4,232 Short-term investments 835 626 406 Accounts receivable, net 3,635 3,142 2,586 Inventories 327 358 306 Other 1,519 1,599 1,394 -------- -------- -------- Total current assets 10,633 10,081 8,924 Property, plant and equipment, net 1,517 1,498 913 Investments 6,770 6,050 5,267 Other non-current assets 391 496 366 -------- -------- -------- Total assets $19,311 $18,125 $15,470 ======== ======== ======== Liabilities and Stockholders' Equity: - ------------------------------------- Current liabilities: Accounts payable $7,316 $6,851 $5,989 Accrued and other 3,580 3,350 2,944 -------- -------- -------- Total current liabilities 10,896 10,201 8,933 Long-term debt 505 506 506 Other non-current liabilities 1,630 1,540 1,158 -------- -------- -------- Total liabilities 13,031 12,247 10,597 Stockholders' equity 6,280 5,878 4,873 -------- -------- -------- Total liabilities and stockholders' equity $19,311 $18,125 $15,470 ======== ======== ======== Ratios: - ------- Quick ratio 0.81 0.80 0.81 Days supply in inventory 3 4 3 Days of sales outstanding(a) 31 31 28 Days in accounts payable 70 71 68 -------- -------- -------- Cash conversion cycle (36) (36) (37) Other Information: - ------------------ Headcount (approximate) 46,000 44,300 39,100 Average total revenue/unit (approximate) $1,540 $1,620 $1,640 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 that are classified in other current assets. At Jan. 30, 2004, Oct. 31, 2003, and Jan. 31, 2003, days of sales outstanding included days of sales in accounts receivable and days of in-transit customer shipments of 28 and 3 days; 27 and 4 days; and 24 and 4 days, respectively. DELL INC. Condensed Consolidated Statement of Cash Flows (in millions) (unaudited) Three Months Twelve Months Ended Ended ----------------------------- Jan. 30, 2004 ----------------------------- Cash flows from operating activities: Net income $749 $2,645 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 76 263 Tax benefits from employee stock plans 74 181 Other, primarily effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies (212) (564) Changes in: Operating working capital 306 872 Non-current assets and liabilities 65 273 ------------- ------------- Net cash provided by operating activities 1,058 3,670 Cash flows from investing activities: Investments: Purchases (3,607) (12,099) Maturities and sales 2,695 10,078 Cash assumed in consolidation of Dell Financial Services L.P. -- 172 Capital expenditures (62) (329) Purchase of assets held in master lease facilities -- (636) ------------- ------------- Net cash used in investing activities (974) (2,814) Cash flows from financing activities: Purchase of common stock (500) (2,000) Issuance of common stock under employee plans 120 628 Other -- (11) ------------- ------------- Net cash used in financing activities (380) (1,383) Effect of exchange rate changes on cash and cash equivalents 257 612 ------------- ------------- Net (decrease)/increase in cash and cash equivalents (39) 85 Cash and cash equivalents at beginning of period 4,356 4,232 ------------- ------------- Cash and cash equivalents at end of period $4,317 $4,317 ============= ============= 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-----