-----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, U+i8MFGZHcRgL9APAPXL8WLVD396nz2weGhz9tSqvj1R9H14epzrxiZOA8Nl8qRY z91Z+BBZJAuAIp3Av/GDog== 0001157523-04-007685.txt : 20040812 0001157523-04-007685.hdr.sgml : 20040812 20040812164611 ACCESSION NUMBER: 0001157523-04-007685 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040812 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040812 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: 04970861 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 a4700989.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 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 August 12, 2004. Item 12 -- Results of Operations and Financial Condition On August 12, 2004 Dell Inc. issued a press release announcing its financial results for the fiscal quarter ended July 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: August 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., August 12, 2004 EX-99.1 2 a4700989ex991.txt DELL INC. EXHIBIT 99.1 Exhibit 99.1 Dell Second-Quarter Revenue Up 20 Percent, EPS 29 Percent Higher; Growth in Servers, Markets Outside U.S. is Exceptionally Strong ROUND ROCK, Texas--(BUSINESS WIRE)--Aug. 12, 2004--Dell (Nasdaq:DELL) showed its unique ability to both grow rapidly in key markets and achieve strong profitability again in the company's fiscal second-quarter 2005, which ended July 30. Dell revenue was $11.7 billion, a company record and 20 percent higher than in the same quarter a year ago. Sales in Europe, the Middle East and Africa and in Asia-Pacific and Japan rose 30 and 29 percent, respectively. Combined revenue for enterprise systems, including servers and storage systems, accounted for 22 percent of overall sales, matching a company high. Earnings per share were 31 cents, 29 percent higher and also a Dell record. Results were consistent with revised company guidance in mid-July, which included an increase in earnings expectations. (in millions, except share data) Second Quarter Year to Date FY'05 FY'04 Change FY'05 FY'04 Change ----- ----- ------ ----- ----- ------ Revenue $11,706 $9,778 20% $23,246 $19,310 20% Operating Income $1,006 $840 20% $1,972 $1,651 19% Net Income $799 $621 29% $1,530 $1,219 26% Earnings Per Share $0.31 $0.24 29% $0.59 $0.47 26% "We start with the marketplace advantage of a more efficient, more customer-focused way of doing business," said Kevin Rollins, Dell's chief executive officer. "And our global team is consistently disciplined in applying that business model. "Like our shareholders, our expectation is for volume and share growth along with solid profitability. Those objectives aren't mutually exclusive." According to Mr. Rollins, Dell's third-quarter product shipments should be 21 percent higher than in the same year-ago period. Such growth is expected to produce quarterly revenue of about $12.5 billion, up 18 percent, and earnings per share of 33 cents, a 27-percent increase. In the most-recent quarter, operating expenses were 9.6 percent of revenue, equaling a company low. Operating profit as a percent of revenue was 8.6 percent, up from 8.4 percent in the year's first quarter. Dell generated more than $700 million in cash from operations during the period, at the end of which company cash and investments totaled $11.8 billion. EMEA Leads Robust Worldwide Volume Gains Dell's global product shipments increased 19 percent, sharply faster than for the rest of the industry. Second-quarter shipment growth in Europe, the Middle East and Africa was 30 percent, 12 points higher than the average of other companies in the region. Among Dell highlights: a 44-percent rise -- double the rest of the industry -- in server shipments, and a 60-percent increase in total storage revenue. Overall company volumes in the United Kingdom were up 30 percent, twice that of the industry excluding Dell. Server growth of 34 percent in the U.K. enabled Dell to close the gap between itself and the national category leader by more than eight share points from a year ago. Dell France achieved a 38-percent increase in overall shipments, 37 percent in servers. Company shipment growth of 28 percent in Asia-Pacific and Japan was more than double that of the rest of the industry. Dell server volumes in the region were up 33 percent. In Japan, Dell's 19-percent shipment increase compared with 1 percent for other suppliers. Dell gained two points of market share from last year's second quarter, as its share exceeded 12 percent for the first time and again ranked No. 3 nationally. Profitable growth in China during the period included a 41-percent jump in server shipments. Dell was recently recognized for the first time with a "gold" user-satisfaction award for standards-based server service by the China Center for Information Industry Development. In the Americas, Dell revenue grew 16 percent. The company added nearly two points to its leading United States market share, with shipments increasing at more than twice the average of other companies. Total demand by large-corporate and small- and medium-business customers increased 21 percent. Americas volumes outside the U.S. rose 25 percent, led by strong growth in Canada. U.S. consumers purchased 29 percent more Dell notebook computers than in the same period a year ago. Servers, Printers Highlight Strategic Product Growth Dell's 31-percent second-quarter increase in server shipments was 12 points higher than average server growth for other companies. The company is introducing a new, eighth-generation of PowerEdge servers, which feature more powerful processors and enhanced systems-management software. Revenue from software and peripheral products increased 31 percent, helped by sustained strong demand for Dell printers. Those products are being introduced in more countries, including Japan during the second quarter and China in Q3. The company expects to sell five million Dell printers during fiscal 2005, up from an original target of four million. Dell's overall printing and imaging business is now at a $1 billion annual run rate. In notebook computers, Dell's combined shipments of Inspiron and Latitude systems rose 28 percent, significantly more than the increase 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 four quarters totaled $45.4 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, Inspiron and Latitude are trademarks of Dell Inc. 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 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, 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 July 30, April 30, Aug. 1, --------------------- 2004 2004 2003 Sequential Yr. to Yr. --------- --------- --------- ---------- ---------- Net revenue $11,706 $11,540 $9,778 1.4% 19.7% Cost of revenue 9,572 9,467 8,000 1.1% 19.6% --------- --------- --------- Gross margin 2,134 2,073 1,778 3.0% 20.0% Selling, general and administrative 1,008 991 822 1.8% 22.6% Research, development and engineering 120 116 116 3.8% 4.2% --------- --------- --------- Total operating expenses 1,128 1,107 938 2.0% 20.3% --------- --------- --------- Operating income 1,006 966 840 4.1% 19.7% Investment and other income, net 46 49 47 (6.5%) (2.2%) --------- --------- --------- Income before income taxes 1,052 1,015 887 3.6% 18.6% Income tax provision 253 284 266 (11.2%) (5.1%) --------- --------- --------- Net income $799 $731 $621 9.3% 28.7% ========= ========= ========= Earnings per common share: Basic $0.32 $0.29 $0.24 ========= ========= ========= Diluted $0.31 $0.28 $0.24 ========= ========= ========= Weighted average shares outstanding: Basic 2,518 2,539 2,567 Diluted 2,574 2,593 2,624 Percentage of Total Net Revenue: - ------------- Gross margin 18.2% 18.0% 18.2% Selling, general and administrative 8.6% 8.6% 8.4% Research, development and engineering 1.0% 1.0% 1.2% Total operating expenses 9.6% 9.6% 9.6% Operating income 8.6% 8.4% 8.6% Income before income taxes 9.0% 8.8% 9.1% Net income 6.8% 6.3% 6.3% Income tax rate 24.0% 28.0% 30.0% Net Revenue by Geographic Region: - -------------- Percentage of Total Net Revenue - ------------- Americas 68% 65% 70% Europe 21% 23% 19% Asia Pacific -- Japan 11% 12% 11% Net Revenue by Product Line: - -------------- Percentage of Total Net Revenue - ------------- Desktops 49% 51% 51% Notebooks 29% 28% 28% Enterprise 22% 21% 21% 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 July 30, Aug. 1, ---------- 2004 2003 Yr. to Yr. --------- --------- ---------- Net revenue $23,246 $19,310 20.4% Cost of revenue 19,039 15,784 20.6% --------- --------- Gross margin 4,207 3,526 19.3% Selling, general and administrative 1,999 1,648 21.3% Research, development and engineering 236 227 4.2% --------- --------- Total operating expenses 2,235 1,875 19.2% --------- --------- Operating income 1,972 1,651 19.4% Investment and other income, net 95 90 6.1% --------- --------- Income before income taxes 2,067 1,741 18.7% Income tax provision 537 522 2.8% --------- --------- Net income $1,530 $1,219 25.6% ========= ========= Earnings per common share: Basic $0.61 $0.47 ========= ========= Diluted $0.59 $0.47 ========= ========= Weighted average shares outstanding: Basic 2,529 2,570 Diluted 2,583 2,619 Percentage of Total Net Revenue: - ------------------------------- Gross margin 18.1% 18.3% Selling, general and administrative 8.6% 8.5% Research, development and engineering 1.0% 1.2% Total operating expenses 9.6% 9.7% Operating income 8.5% 8.6% Income before income taxes 8.9% 9.0% Net income 6.6% 6.3% Income tax rate 26.0% 30.0% Net Revenue by Geographic Region: - -------------------------------- Percentage of Total Net Revenue - ------------------------------- Americas 66% 69% Europe 22% 20% Asia Pacific -- Japan 12% 11% Net Revenue by Product Line: - --------------------------- Percentage of Total Net Revenue - ------------------------------- Desktops 50% 52% Notebooks 28% 27% Enterprise 22% 21% 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) July 30, April 30, Aug. 1, 2004 2004 2003 --------- --------- --------- Assets: - ------ Current assets: Cash and cash equivalents $4,025 $4,075 $4,636 Short-term investments 1,509 1,180 484 Accounts receivable, net 3,625 3,424 2,883 Inventories 418 425 358 Other 2,055 2,073 1,246 --------- --------- --------- Total current assets 11,632 11,177 9,607 Property, plant and equipment, net 1,578 1,510 1,062 Investments 6,276 6,631 5,498 Other non-current assets 446 391 373 --------- --------- --------- Total assets $19,932 $19,709 $16,540 ========= ========= ========= Liabilities and Stockholders' Equity: - ------------------------------------ Current liabilities: Accounts payable $7,444 $7,518 $6,418 Accrued and other 3,877 3,803 2,846 --------- --------- --------- Total current liabilities 11,321 11,321 9,264 Long-term debt 505 505 506 Other non-current liabilities 1,899 1,778 1,264 --------- --------- --------- Total liabilities 13,725 13,604 11,034 Stockholders' equity 6,207 6,105 5,506 --------- --------- --------- Total liabilities and stockholders' equity $19,932 $19,709 $16,540 ========= ========= ========= Ratios: - ------ Quick ratio 0.81 0.77 0.86 Days supply in inventory 4 4 4 Days of sales outstanding(a) 31 31 30 Days in accounts payable 70 71 72 --------- --------- --------- Cash conversion cycle (35) (36) (38) Other Information: - ----------------- Headcount (approximate) 50,000 47,800 41,800 Average total revenue/unit (approximate) $1,610 $1,570 $1,610 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 July 30, 2004, April 30, 2004, and August 1, 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 26 and 4 days, respectively. DELL INC. Condensed Consolidated Statement of Cash Flows (in millions) (unaudited) Three Months Six Months Ended Ended ------------ ------------ July 30, 2004 -------------------------- Cash flows from operating activities: Net income $799 $1,530 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 79 161 Tax benefits from employee stock plans 45 70 Other, primarily effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies (51) (163) Changes in: Operating working capital (270) (189) Non-current assets and liabilities 101 296 ------------ ------------ Net cash provided by operating activities 703 1,705 Cash flows from investing activities: Investments: Purchases (3,214) (6,719) Maturities and sales 3,221 6,485 Capital expenditures (134) (216) ------------ ------------ Net cash used in investing activities (127) (450) Cash flows from financing activities: Purchase of common stock (891) (2,022) Issuance of common stock under employee plans 196 310 ------------ ------------ Net cash used in financing activities (695) (1,712) Effect of exchange rate changes on cash and cash equivalents 69 165 ------------ ------------ Net decrease in cash and cash equivalents (50) (292) Cash and cash equivalents at beginning of period 4,075 4,317 ------------ ------------ Cash and cash equivalents at end of period $4,025 $4,025 ============ ============ 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-----