AMAT finances suffer but display market boosts revenues
A decline in foundry bookings was offset by growth in memory and logic orders and higher bookings in the Display Group and Applied Global Services in the last quarter. The company has also taken on a new CEO
Applied Materials, Inc., (AMAT or Applied) has reported results for its third quarter of fiscal 2013 ended July 28th, 2013.
The firm generated orders of $2 billion, down 12 percent from the prior quarter as a seasonal decline in foundry bookings was partially offset by growth in memory and logic orders along with higher bookings in the Display Group and Applied Global Services.
Net sales were $1.98 billion, essentially flat sequentially. The company recorded GAAP operating income of $250 million and GAAP net income of $168 million or 14 cents per diluted share.
Applied has also appointed a new chief executive officer (CEO).
Gary E. Dickerson entered into an offer letter with Applied, effective as of September 1st, 2013, under which his initial base salary will be $980,000 and his target bonus under Applied's Senior Executive Bonus Plan for Applied's fiscal year 2013 will be 175 percent of his base salary.
Dickerson will also receive a stock option covering 1,000,000 shares of Applied's common stock under Applied's Employee Stock Incentive Plan (ESIP), effective September 1st, 2013. The option will be scheduled to vest annually as to 25 percent of the shares over four years, subject to Dickerson's continued employment.
Michael R. Splinter, who has served as Applied's CEO since 2003, has agreed, effective September 1st, 2013, to continue as Executive Chairman of the Board through March 31st, 2015 or such other date that may be mutually agreed upon by Applied and Splinter, His duties will be primarily focused on providing leadership on strategic projects, industry-wide initiatives and major public policy issues, as well as continuing to support Dickerson as he assumes the role of President and CEO.
During this time, Splinter will remain an employee and member of the Board, and his base salary and target bonus will remain unchanged. Effective as of September 1st, 2013, Splinter will remain eligible to receive the same severance payments as under his current arrangement, plus a lump sum payment equal to 18 months of COBRA coverage premiums if (1) he terminates employment on March 31st 2015 or another mutually agreed-upon employment end date, or (2) Applied terminates his employment earlier without cause and not due to death or disability, or he resigns for good reason.
Upon Splinter's retirement, any time-based vesting requirements applicable to his equity awards will lapse fully and any equity awards with performance .based vesting requirements will remain outstanding and eligible to become earned and vested based on actual performance following completion of the applicable performance periods. In order to receive these benefits related to his equity awards, Splinter will be required to execute and not revoke a release of claims, non .disparagement and non.solicitation agreement in favour of Applied.
