To all:
I don't remember seeing this phrase in MU's SEC documents before:
"....If average selling prices for semiconductor memory products continue to decline, the Company may not be able to remain profitable.
If pricing for the Company's semiconductor products remains at current levels for an extended period of time or declines further, the Company may be required to make changes in its operations, including but not limited to, reduction of the amount or changes in timing of its capital expenditures, renegotiation of existing debt agreements, reduction of production and workforce levels, reduction of research and development, or changes in the products produced."
Also, I don't remember MU spelling out problems with their LOC quiet so explicitly before:
"....Historically, the Company has reinvested substantially all cash flow from semiconductor memory operations in capacity expansion and enhancement programs.
The Company's cash flow from operations depends primarily on average selling prices and per unit manufacturing costs of the Company's semiconductor memory products. If for any extended period of time average selling prices decline faster than the rate at which the Company is able to decrease per unit manufacturing costs, the Company may not be able to generate sufficient cash flows from operations to sustain operations.
The Company has a $500 million unsecured revolving credit agreement which is available to finance its semiconductor operations. However, the agreement contains certain restrictive covenants, including a minimum fixed charge coverage ratio and a maximum operating losses covenant, which the Company may not be able to meet if semiconductor market conditions continue to deteriorate. In the event that the Company does not comply with the covenants, there can be no assurance that the Company would be able to successfully renegotiate the agreement or obtain a waiver to the covenants of the existing agreement. In either event, the Company may not be able to draw on the credit facility."
Now all of this is not new news to readers of this SI thread. I think it's a fairly recent move on MU's part to point it out though (we were the one pointing it out before to the bulls)
Kathleen |
