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Micron Technology, Inc., reports earnings for the third quarter of fiscal 1997
Business Wire - June 16, 1997 17:07
MICRON-TECHNOLOGY MU %IDAHO %COMPUTERS %ELECTRONICS %COMED %EARNINGS V%BW P%BW
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BOISE, Idaho--(BUSINESS WIRE)--June 16, 1997--Micron Technology, Inc., today reported net income of $97 million, or $0.44 per fully diluted share, on net sales of $965 million for the third quarter of fiscal 1997, ended May 29. For the second quarter of fiscal 1997, the Company's operations, exclusive of non-recurring gains, realized $0.18 per fully diluted share on net sales of $876 million. Net income for the third quarter of the prior fiscal year was $58 million, or $0.27 per fully diluted share, on net sales of $771 million.
Net sales of the Company's semiconductor memory products were $511 million in the third quarter of fiscal 1997 as compared to $402 million in the second quarter and $416 million in the third quarter of the prior fiscal year. Gross margins on sales of semiconductor memory products improved to approximately 49% in the third quarter of fiscal 1997 as compared to 32% in the second quarter and 38% in the third quarter of fiscal 1996. The higher level of net sales and improved gross margin resulted from increased production achieved on the latest shrink version of the 16 Meg DRAM in the third quarter of fiscal 1997, and from the conversion from 6-inch to 8-inch wafer processing and higher average density products in late fiscal 1996. The Company's megabit production of semiconductor memory increased by 31% in the third quarter of fiscal 1997 compared to the second quarter of fiscal 1997, primarily due to further yield improvements on the 16 Meg DRAM. The results for the third quarter of fiscal 1997 also benefited from a slight increase over the second quarter in the average selling price for the 16 Meg DRAM.
Net sales of the Company's PC systems in the third quarter of fiscal 1997 declined approximately 7% as compared to the second quarter and increased 30% compared to the third quarter of fiscal 1996. The slight decline in the third quarter was principally attributable to a decline in average selling prices for the Company's low-end PC systems, a shift in product mix toward these low-end systems and a 2% decline in total unit sales.
The gross margin percentage for the Company's PC systems decreased to 15% in the third quarter of fiscal 1997 compared to 17% in the second quarter of fiscal 1997 and 16% in the third quarter of fiscal 1996. The decline in gross margin was primarily due to a shift in product mix to low-end desktop and notebook systems which generally have lower gross margin percentages than the balance of the Company's PC products. The Company continues to experience pressure on its PC systems gross margins as a result of intense competition in the PC industry and consumer expectations of more powerful PC systems at lower prices.
The Company ended the quarter with cash and investment balances of $521 million. The Company has no outstanding borrowings on its bank lines of credit and has available a shelf registration for up to $1 billion in debt or equity securities.
Micron Technology, Inc., and its subsidiaries manufacture and market DRAMs, very fast SRAMs, FLASH, other semiconductor memory components, personal computer systems, remote intelligent communications (RIC) products, and complex printed circuit board assemblies. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the symbol MU.
"Micron" is a trademark of Micron Technology, Inc.
MICRON TECHNOLOGY, INC., CONSOLIDATED FINANCIAL SUMMARY
(Amounts in millions except per share data)
QUARTER ENDED 9 MONTHS ENDED
May 29, May 30, May 29, May 30,
1997 1996 1997 1996
SELECTED RESULTS
OF OPERATIONS
Net sales:(1)
Semiconductor memory products $510.7 $416.3 $1,254.4 $1,931.7
Personal computer systems 361.8 280.3 1,091.0 779.4
Other 92.5 74.4 223.9 242.2
Total net sales 965.0 771.0 2,569.3 2,953.3
Costs and expenses:
Cost of goods sold 650.0 558.0 1,880.3 1,648.2
Selling, general and
administrative(2) 93.4 63.6 264.2 212.2
Research and development 52.6 51.2 146.6 145.8
Restructuring charge ----- ----- ----- 29.9
Total costs and expenses 796.0 672.8 2,291.1 2,036.1
Operating income 169.0 98.2 278.2 917.2
Gain (loss) on sale
of investments
and subsidiary stock, net(3) ----- (1.5) 214.3 2.0
Interest income (expense), net 1.5 2.1 (2.4) 14.9
Income before income taxes
and minority interests 170.5 98.8 490.1 934.1
Income tax provision 67.8 38.6 214.5 355.5
Minority interests in net income 5.9 2.0 15.4 3.7
Net income 96.8 58.2 260.2 574.9
Earnings per share
Primary 0.45 0.27 1.21 2.66
Fully diluted 0.44 0.27 1.20 2.66
Number of shares used in
per share calculations
Primary 217.5 214.5 215.6 215.9
Fully diluted 218.4 214.5 216.7 215.9
Cash dividends declared
per share ----- $0.05 ----- $0.15
(1) The value of the Company's semiconductor memory products
included in PC systems and other products is included under
"Semiconductor memory products." "Other" includes revenue from
contract manufacturing and module assembly services, construction
management services, government research and development contracts,
and licensing fees.
(2) Selling, general and administrative expenses in the third
quarter of 1996 reflect an approximate $12 million pretax gain from
disposal of equipment.
(3) Net gain on sales of investments and subsidiary stock for the
nine months ended May 29, 1997 includes a pretax gain of $190 million
recorded in the second quarter for the sale of 15.4 million shares of
common stock of Micron Electronics, Inc.
SELECTED CASH FLOW DATA
(For the nine months ended)
Depreciation 338.7 261.7
Net cash provided by operating activities 436.4 951.2
Expenditures for property, plant and equipment (368.4) (1,275.9)
Net cash used for investing activities (216.3) (838.9)
Payments on equipment purchase contracts (37.1) (178.7)
Net repayments on lines of credit (90.0) (200.0)
Net cash provided by (used for) financing activities (62.7) 152.6
Net increase in cash and equivalents 157.4 264.9
Proceeds from sale of subsidiary stock 253.4 1.5
Equipment acquisitions on contracts
payable and capital leases 20.8 206.4
SELECTED FINANCIAL DATA
May 29, 1997 August 29, 1996
Cash and liquid investments $521.0 $286.8
Receivables 367.3 347.4
Inventories 376.6 251.4
Total current assets 1,338.2 964.0
Property, plant and equipment, net 2,713.0 2,708.1
Total assets 4,154.5 3,751.5
Accounts payable and accrued expenses 466.1 423.7
Short-term debt 0.4 90.0
Current portion of long-term debt 113.0 75.2
Total current liabilities 647.3 664.5
Long-term debt 281.2 314.7
Shareholders' equity 2,789.1 2,502.0
CONTACT: Micron Technology, Inc.
Kipp Bedard, 208/368-4400
Web site URL<http://www.businesswire.com
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