Press Release
SOURCE: Micron Technology, Inc.
Micron Technology, Inc., Reports Consolidated Results for the Third Quarter of Fiscal Year 2002
BOISE, Idaho--(BUSINESS WIRE)--June 25, 2002--Micron Technology, Inc. (NYSE:MU - News), today announced a net loss for the third quarter of fiscal 2002 of $24 million, or $0.04 per diluted share, on net sales of $771 million. These results compare to a net loss of $30 million, or $0.05 per diluted share, on net sales of $646 million for the second quarter of fiscal 2002 and a net loss from continuing operations of $301 million, or $0.50 per diluted share, on net sales of $818 million for the third quarter of fiscal 2001.
Net sales in the third quarter of fiscal 2002 were 19% higher compared to the immediately preceding quarter ended February 28, 2002 due to 44% higher average selling prices. Although average selling prices were higher for the third quarter of fiscal 2002, prices declined from early April through the end of the quarter due to adverse market conditions. Megabits sold by the Company in the third quarter of fiscal 2002 were 17% lower than in the second quarter, and megabits of finished goods inventories increased significantly as compared to the end of the second quarter.
Based on the recent declines in selling prices, the Company recorded a write-down of $26 million in the third quarter of fiscal 2002 to record inventories of semiconductor products at their estimated market values. Excluding this write-down and the effect of previous write-downs of products sold in the third quarter, the Company's gross margin for the third quarter of fiscal 2002 would have been lower by an estimated $55 million.
The Company ended its third quarter of fiscal 2002 with approximately $1.3 billion in cash and liquid investments.
The Company will host a conference call today at 3:30 p.m. MDT to discuss its consolidated financial results. The conference call, including audio and slides will be available online at www.micron.com. (In order to access the webcast, you will need Internet Explorer 4.0 or higher, RealPlayer or Windows Media Player and speakers for audio.) A webcast replay will be available until July 2, 2002. A taped replay of the audio portion of the call will be available at 973/341-3080 (confirmation code: 3336286) beginning at 5:30 p.m. MDT today and continuing until 5:30 MDT on June 27, 2002.
Micron Technology, Inc., and its subsidiaries manufacture and market DRAMs, very fast SRAMs, Flash memory, other semiconductor components and memory modules. 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 its web site at www.micron.com.
MICRON TECHNOLOGY, INC.
CONSOLIDATED FINANCIAL SUMMARY
(Amounts in millions except per share data)
QUARTER ENDED NINE MONTHS ENDED
May 30, Feb. 28, May 31, May 30, May 31,
2002 2002 2001 2002 2001
--------- --------- --------- --------- ---------
Net sales:
Semiconductor
Operations $ 771.2 $ 645.9 $ 802.9 $ 1,841.0 $ 3,412.1
Web-hosting
Operations -- -- 15.4 -- 43.4
Other -- -- -- -- 0.1
--------- --------- --------- --------- ---------
Total net sales 771.2 645.9 818.3 1,841.0 3,455.6
Cost of goods
sold(1) 603.0 502.9 1,094.1 1,742.4 2,768.6
--------- --------- --------- --------- ---------
Gross margin 168.2 143.0 (275.8) 98.6 687.0
Selling, general
and
administrative 77.2 79.3 104.3 236.4 319.7
Research and
development 134.4 135.9 114.5 424.8 384.4
Other operating
(income)
expense(2) 3.3 (13.2) 32.6 (4.9) 30.8
--------- --------- --------- --------- ---------
Operating loss (46.7) (59.0) (527.2) (557.7) (47.9)
Interest income,
net 5.0 10.6 26.9 30.4 102.7
Other
non-operating
income (expense) 1.4 (2.3) 0.6 (6.8) 5.8
Income tax
benefit(3) 16.1 20.3 195.5 213.6 0.8
Minority interest
in net income -- -- 3.1 -- (7.1)
--------- --------- --------- --------- ---------
Income (loss)
from continuing
operations (24.2) (30.4) (301.1) (320.5) 54.3
Loss from
discontinued PC
Operations, net -- -- (12.3) -- (103.8)
--------- --------- --------- --------- ---------
Net loss $ (24.2) $ (30.4) $ (313.4) $ (320.5) $ (49.5)
========= ========= ========= ========= =========
Basic earnings
(loss) per
share:(4)
Continuing
operations $ (0.04) $ (0.05) $ (0.50) $ (0.53) $ 0.09
Net loss (0.04) (0.05) (0.53) (0.53) (0.08)
Diluted earnings
(loss) per
share:(4)
Continuing
operations $ (0.04) $ (0.05) $ (0.50) $ (0.53) $ 0.09
Net loss (0.04) (0.05) (0.53) (0.53) (0.08)
Number of shares
used in per share
calculations:
Basic 602.3 600.5 596.3 600.7 590.7
Diluted 602.3 600.5 596.3 600.7 605.8
SELECTED FINANCIAL DATA
AS OF
May 30, Feb. 28, Aug. 30,
2002 2002 2001
---------- ---------- ----------
Cash and liquid investments $ 1,251.8 $ 1,480.9 $ 1,678.3
Receivables (5) 585.0 462.6 791.6
Inventories (1) 686.5 547.6 491.1
Total current assets 2,563.3 3,005.3 3,137.7
Property, plant and equipment, net 4,706.2 4,429.7 4,704.1
Total assets 8,120.4 8,196.4 8,363.2
Accounts payable and accrued expenses 528.3 390.6 512.9
Current portion of long-term debt 91.5 80.5 86.2
Total current liabilities 731.3 568.5 687.0
Long-term debt 360.3 380.9 445.0
Redeemable common stock (4) 58.7 -- --
Shareholders' equity 6,893.8 6,896.8 7,134.8
NINE MONTHS ENDED
May 30, May 31,
2002 2001
-------- --------
Depreciation and amortization $ 881.9 $ 819.2
Expenditures for property, plant and equipment 475.2 1,225.4
Equipment acquisitions on contracts payable
and capital leases 98.2 136.5
On April 22, 2002, the Company acquired substantially all of the assets of Toshiba Corporation's ("Toshiba's") DRAM operations at Dominion Semiconductor, L.L.C. located in Virginia. The purchase price of $328 million consisted of cash and 1.5 million shares of the Company's common stock. The acquired facility employs approximately 1,000 people.
(1) The Company's results for the third quarters of fiscal 2002 and 2001 include write-downs of $26 million and $261 million, respectively, to record inventories of semiconductor products at their estimated market values. The Company's results for the first nine months fiscal 2002 and 2001 include similar write-downs aggregating $203 million and $261 million, respectively.
(2) Other operating (income) expense in the third quarter of fiscal 2002 includes losses of $15 million from changes in currency exchange rates relating primarily to the Company's Yen-denominated debt. Other operating (income) expense for the first nine months of fiscal 2002 includes a net $10 million loss relating to semiconductor equipment disposed of or held for sale. Other operating (income) expense for the third quarter of fiscal 2001 includes a $15 million write-off of certain design costs associated with the Company's Lehi facility and a $13 million loss relating to semiconductor equipment disposed of or held for sale.
(3) The effective tax rate for the first nine months of fiscal 2002 was 40%, which primarily reflects the U.S. statutory income tax rate, the net effect of state taxes and the effect of foreign income at non-U.S. tax rates. The Company's future effective income tax rate will vary based on fluctuations in the mix of income and losses among tax jurisdictions with differing rates.
(4) In connection with the acquisition of the Virginia facility, the Company issued 1.5 million shares of common stock, which was valued at $58 million on the date of the acquisition. The Company granted Toshiba an option to require Micron to repurchase all of these shares on October 21, 2003 for approximately $68 million if the closing price of the Company's common stock is not at or above $45.05 per share for 20 consecutive trading days during the option period. The carrying value of the redeemable common stock is accreted to its redemption amount of $68 million by a charge directly to retained earnings. The accretion was $0.6 million in the third quarter of fiscal 2002.
(5) During the first quarter of fiscal 2002, the Company received $547 million in cash for the refund of income taxes.
In the third quarter of fiscal 2001, the Company completed the divestiture of its PC business. The Company's historical consolidated financial information presents the net effect of discontinued PC operations separate from the results of the Company's continuing operations. In the fourth quarter of fiscal 2001, the Company contributed its interest in its Interland Web-hosting Operations to the Micron Technology Foundation. Since the date of the contribution, the results of operations of Interland have been excluded from the Company's financial statements.
--------------------------------------------------------------------------------
Contact:
Micron Technology, Inc.
Sean M. Mahoney (Media Relations), 208/368-3127
smahoney@micron.com
or
David T. Parker (Investor Relations), 208/368-5584
dtparker@micron.com
Web Site URL micron.com
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