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Friday June 27, 10:27 AM
Micron Technology, Inc., Reports Results for the Third Quarter of Fiscal 2008 |
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Boise, Idaho, United States, Friday, June 27, 2008 -- (Business Wire India) -- Micron Technology, Inc., (NYSE:MU) announced results of operations for the company's third quarter of fiscal 2008, which ended May 29, 2008. For the third quarter of fiscal 2008, the company posted a net loss of $236 million, or $0.30 per diluted share, on net sales of $1.5 billion. These results compare to GAAP results for the second quarter of a net loss of $777 million, or $1.01 per diluted share, or on a non-GAAP basis for the second quarter (which exclude the effect of a goodwill impairment charge) of a net loss of $314 million, or $0.41 per diluted share, on net sales of $1.4 billion.
The company's net sales in the third quarter of fiscal 2008 increased 10 percent compared to the second quarter primarily from higher sales of both DRAM and NAND Flash memory products. Sales of DRAM products in the third quarter of fiscal 2008 increased compared to the second quarter as a result of an approximate 10 percent increase in gigabit sales, partially offset by an approximate 5 percent decrease in average selling prices. For the same periods, sales of NAND Flash products increased as a result of an approximate 40 percent increase in gigabit sales, partially offset by an approximate 20 percent decrease in the average selling price. The dollar amount of finished goods inventories for memory products at the end of the third quarter remained fairly stable compared to the second quarter, as higher levels of production were substantially offset by the higher sales volumes and improvements in the company's manufacturing costs per bit. Cost of goods sold per gigabit in the third quarter decreased approximately 15 percent and 25 percent compared to the second quarter for DRAM and NAND Flash memory products, respectively.
"Micron continues to execute strongly on its cost reductions through advanced technology deployment and 300 millimeter manufacturing efficiencies, resulting in a positive gross margin in the third quarter," said Mark Durcan, Micron President and Chief Operating Officer. "The combination of our premium product portfolio plus recent substantial cost per bit reductions has positioned us well."
Sales of CMOS image sensors in the third quarter of fiscal 2008 increased 27 percent compared to the second quarter and represented 11 percent of the company's total sales in the third quarter. The company's gross margin on sales of imaging products improved to 35 percent in the third quarter compared to 24 percent in the second quarter, reflecting a greater mix of higher megapixel sensors.
The company generated $217 million in cash flow from operating activities during the third quarter of fiscal 2008 and ended the quarter with $1.6 billion in cash and investments. The company had capital expenditures during the third quarter of fiscal 2008 of $577 million and expects total capital expenditures for the 2008 fiscal year to be between $2.5 billion and $3.0 billion. In the third quarter of fiscal 2008, TECH Semiconductor, a consolidated joint venture, entered into a $600 million credit facility to refinance its existing debt of $240 million and to finance future capital expenditures.
The company hosted a conference call on June 26,2008 at 2:30 p.m. MDT to discuss its financial results. The call, audio and slides will be available online at www.micron.com. A webcast replay will be available on the company's Web site until June 26, 2009. A taped audio replay of the conference call will also be available at 706-645-9291(conference number: 50696269) beginning at 5:30 p.m. MDT from June 26,2008 and continuing until 5:30 p.m. MDT on July 3, 2008.
Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAM, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking and mobile products. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the MU symbol. To learn more about Micron Technology, Inc., visit www.micron.com.
MICRON TECHNOLOGY, INC.
CONSOLIDATED FINANCIAL SUMMARY
(Amounts in millions except per share data)
3rd 2nd Qtr. 3rd Qtr. Nine Months
Qtr. Ended
May 29, Feb. 28, May 31, May 29, May 31,
2008 2008 2007 2008 2007
------- -------- ---------- ------- -------
Net sales $1,498 $ 1,359 $ 1,294 $ 4,392 $4,251
Cost of goods sold (1) 1,450 1,402 1,188 4,382 3,346
------- -------- ---------- -------- -------
Gross margin 48 (43) 106 10 905
Selling, general and
administrative 116 120 134 348 467
Research and development 170 180 195 513 621
Goodwill impairment (2) -- 463 -- 463 --
Restructure (3) 8 8 -- 29 --
Other operating (income)
expense (4) (21) (42) (28) (86) (64)
------- -------- ---------- -------- -------
Operating income (loss) (225) (772) (195) (1,257) (119)
Interest income
(expense), net (6) 3 17 6 88
Other non-operating
income (expense) -- (6) 1 (7) 9
Income tax benefit
(provision) (5) (13) 4 (9) (16) (24)
Noncontrolling interests
in net (income) loss 8 (6) (39) (1) (116)
------- -------- ---------- -------- -------
Net income (loss) $ (236) $ (777) $ (225) $(1,275) $ (162)
======= ======== ========== ======== =======
Earnings (loss) per
share:
Basic $(0.30) $ (1.01) $ (0.29) $ (1.65) $(0.21)
Diluted (0.30) (1.01) (0.29) (1.65) (0.21)
Number of shares used in
per share
calculations:
Basic 772.8 772.4 769.9 772.4 768.5
Diluted 772.8 772.4 769.9 772.4 768.5
Reconciliation of GAAP to Non-GAAP Financial Measures (6)
Net income (loss):
On a GAAP basis $ (236) $ (777) $ (225) $ (1,275) $ (162)
Goodwill impairment -- 463 -- 463 --
------- -------- ---------- -------- -------
On a non-GAAP basis $ (236) $ (314) $ (225) $ (812) $ (162)
======= ======== ========== ======== =======
Diluted earnings (loss)
per share:
On a GAAP basis $(0.30) $ (1.01) $ (0.29) $ (1.65) $(0.21)
Goodwill impairment -- 0.60 -- 0.60 --
------- -------- ---------- -------- -------
On a non-GAAP basis $(0.30) $ (0.41) $ (0.29) $ (1.05) $(0.21)
======= ======== ========== ======== =======
CONSOLIDATED FINANCIAL SUMMARY, Continued
As of
May 29, Feb. 28, Aug. 30,
2008 2008 2007
-------- ---------- --------
Cash and short-term
investments $ 1,584 $ 1,853 $ 2,616
Receivables 995 894 994
Inventories (1) 1,453 1,449 1,532
Total current assets 4,129 4,304 5,234
Property, plant and
equipment, net 8,721 8,634 8,279
Goodwill (2) 58 58 515
Total assets 13,616 13,785 14,818
Accounts payable and
accrued expenses 1,374 1,299 1,385
Current portion of long-
term debt 262 244 423
Total current liabilities 1,784 1,720 2,026
Long-term debt (7) 2,159 2,162 1,987
Noncontrolling interests
in subsidiaries 2,811 2,808 2,607
Total shareholders'
equity 6,508 6,738 7,752
Nine Months Ended
May 29, May 31,
2008 2007
---------- --------
Net cash provided by
operating activities $ 775 $ 793
Net cash used for
investing activities (1,289) (1,513)
Net cash provided by (used for)
financing activities (204) 1,956
Depreciation and
amortization 1,528 1,244
Expenditures for
property, plant and
equipment (1,809) (2,851)
Net cash received from
noncontrolling interests 203 974
Payments on equipment
purchase contracts (348) (393)
Noncash equipment
acquisitions on
contracts payable and
capital leases 404 802
(1) The results for the second and first quarters of fiscal 2008
include charges of $15 million and $62 million, respectively, to
write down the carrying value of work in process and finished goods
inventories of memory products to their estimated fair market values.
(2) In the second quarter of fiscal 2008, in accordance with FASB
Statement No. 142, "Goodwill and Other Intangible Assets," the
company performed a test to determine whether or not its goodwill was
impaired. Based on the results of the test, the company wrote off all
of the $463 million of goodwill associated with its Memory segment as
of February 28, 2008.
(3) In the fourth quarter of fiscal 2007, the company announced it was
pursuing a number of initiatives to drive greater cost efficiencies
and revenue growth across its operations. In the third quarter and
first nine months of fiscal 2008, the company recorded restructure
charges of $8 million and $29 million, respectively, consisting
primarily of employee severance and related costs and relocation and
retention bonuses. The company also incurred a charge to write down
the carrying value of certain facilities to their estimated fair
values in the first quarter of fiscal 2008. Since the fourth quarter
of fiscal 2007, the company has incurred $48 million due to the
restructuring initiatives. At the end of the third quarter of fiscal
2008, liabilities for unpaid portions of the restructure charge were
$8 million.
(4) Other operating income for the third quarter of fiscal 2008
includes $13 million from the gains on disposals of semiconductor
equipment. Other operating income for the first nine months of 2008
includes $70 million from gains on disposals of semiconductor
equipment, $33 million of losses from changes in foreign currency
exchange rates and $38 million of receipts from the U.S. government
in connection with anti-dumping tariffs received in the first quarter
of fiscal 2008. Other operating income for the third quarter of
fiscal 2007 includes $15 million from gains on disposals of
semiconductor equipment and $7 million in grants received in
connection with the company's operations in China. Other operating
income for the first nine months of fiscal 2007 includes $25 million
from gains on disposals of semiconductor equipment and a gain of $30
million from the sale of certain intellectual property to Toshiba
Corporation.
(5) Income taxes for fiscal 2008 and 2007 primarily reflect taxes on
the company's non-U.S. operations and U.S. alternative minimum tax.
The company has a valuation allowance for its net deferred tax asset
associated with its U.S. operations. Tax attributable to U.S.
operations in fiscal 2008 and 2007 were substantially offset by
changes in the valuation allowance.
Effective at the beginning of the first quarter of fiscal 2008, the
company adopted the provisions of FIN 48. In connection with the
adoption of FIN 48, the company increased its liability and decreased
retained earnings by $1 million for net unrecognized tax benefits at
August 31, 2007. Due to certain foreign statutes of limitations which
expired on December 31, 2007, the company recognized approximately
$15 million of previously unrecognized tax benefits in the second
quarter of fiscal 2008. The company does not expect to recognize any
additional previously unrecognized tax benefits during fiscal 2008.
(6) To supplement our consolidated financial statements presented on a
GAAP basis, the company uses non-GAAP measures of net income and
earnings per share, which are adjusted to exclude goodwill impairment
charges. Management does not consider these charges in evaluating the
core operational activities of the company. In addition, management
believes these non-GAAP measures are useful to investors in enabling
them to better assess changes in the company's operating results
across different time periods. These measures should be considered in
addition to results prepared in accordance with GAAP, but should not
be considered a substitute for or superior to GAAP results. The non-
GAAP financial measures presented by the company may be different
than the non-GAAP financial measures presented by other companies.
(7) In the third quarter of fiscal 2008, the company's TECH subsidiary
borrowed $270 million against a credit facility at Singapore
Interbank Offered Rate ("SIBOR") plus 2.5%, subject to customary
covenants. Payments are due in approximately equal installments over
13 quarters commencing in May 2009. Also in the third quarter of
fiscal 2008, TECH repaid $240 million outstanding under its previous
credit facility.
Media contact details
CONTACT:
Micron Technology, Inc.
Kipp A. Bedard, Investor Relations
208-368-4400
kbedard@micron.com
or
Daniel Francisco, Media Relations
208-368-5584
dfrancisco@micron.com
CONTACT:
Micron Technology, Inc.
Kipp A. Bedard, Investor Relations
208-368-4400
kbedard@micron.com
or
Daniel Francisco, Media Relations
208-368-5584
dfrancisco@micron.com
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