Apple 1998 Annual Report Download - page 11

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use. Net charges related to the Company's restructuring plan of $217 million and $179 million were recognized in 1997 and 1996, respectively.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This section and other parts of this Form 10-K contain forward-looking statements that involve risks and uncertainties. The Company's actual
results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in the subsection entitled "Factors That May Affect Operating Results and Financial Condition" below.
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of this
Form 10-K. All information is based on the Company's fiscal calendar.
RESULTS OF OPERATIONS
The following table sets forth annual results of operations for fiscal years 1998, 1997, and 1996 (in millions except unit shipment and per share
amounts):
NM: Not Meaningful
9
1998 CHANGE 1997 CHANGE 1996
--------- ----------- --------- ----------- ---------
Net sales.......................................... $ 5,941 (16)% $ 7,081 (28)% $ 9,833
Macintosh CPU unit sales (in thousands).......... 2,763 (4)% 2,874 (27)% 3,960
Gross margin....................................... $ 1,479 8% $ 1,368 41% $ 968
Percentage of net sales.......................... 25% 19% 10%
Research and development........................... $ 303 (38)% $ 485 (20)% $ 604
Percentage of net sales.......................... 5% 7% 6%
Selling, general and administrative................ $ 908 (29)% $ 1,286 (18)% $ 1,568
Percentage of net sales.......................... 15% 18% 16%
Special charges:
In-process research and development.............. $ 7 (98)% $ 375 NM $ --
Percentage of net sales........................ -- % 5% -- %
Restructuring costs.............................. $ -- (100)% $ 217 21% $ 179
Percentage of net sales........................ -- % 3% 2%
Termination of license agreement................. $ -- (100)% $ 75 NM $ --
Percentage of net sales........................ -- % 1% -- %
Interest and other income (expense), net........... $ 68 172% $ 25 (72)% $ 88
Provision (benefit) for income taxes............... $ 20 NM $ -- 100% $ (479)
Net income (loss).................................. $ 309 NM $ (1,045) (28)% $ (816)
Earnings (loss) per common share:
Basic............................................ $ 2.34 NM $ (8.29) (26)% $ (6.59)
Diluted.......................................... $ 2.10 NM $ (8.29) (26)% $ (6.59)