AMD ACHIEVES RECORD SALES AND BOOKINGS AS IT RETURNS TO PROFITABILITY
Financial Statements
AMD Selected Corporate Data
SUNNYVALE, CA --OCTOBER 6, 1998--Led by substantial growth in sales of AMD-K6® -2 processors with 3DNow!(TM) technology, AMD today reported record sales of $685,927,000 during its third quarter, ended September 27, 1998, which resulted in net income of $1,006,000, or $0.01 per share.
Sales increased by 30 percent from the immediate-prior quarter, and by 15 percent from the like period of 1997.
In the immediate-prior quarter, AMD reported a net loss of $64,560,000 on sales of $526,538,000, which resulted in a net loss of $0.45 per share. In the like period of 1997, AMD reported a net loss of $31,675,000 on sales of $596,644,000. The net loss amounted to $0.22 per share.
For the first nine months of 1998, the company reported total sales of $1,753,321,000, which resulted in a net loss of $126,281,000, or $0.88 per share. For the first nine months of 1997, AMD reported total sales of $1,743,204,000, which resulted in a net loss of $8,756,000, or $0.06 per share.
"AMD achieved record sales and returned to nominal profitability on rapid market acceptance of our AMD-K6-2 processor with 3DNow! technology," said W.J. Sanders III, chairman and chief executive officer. "This product, introduced on May 28, 1998, was the largest contributor to the substantial increase in sales of our Microsoft® Windows® compatible AMD-K6 processor family.
"Shipments of AMD-K6 family processors increased by more than one million units to 3.8 million units, and AMD-K6 family processor sales increased by 70 percent over the immediate-prior quarter. Excellent manufacturing and sales execution enabled AMD to return to profitability one quarter ahead of expectations.
"We are extremely pleased by the strong demand in the retail channel for personal computers powered by AMD-K6-2 processors," Sanders continued. "According to PC Data, systems powered by AMD-K6 family processors captured 31 percent of the total U.S. retail market for desktop systems in August, the latest period for which data are available. In the rapidly growing market for sub-$1,000 systems, PCs powered by AMD-K6 family processors captured a 54 percent market share — the highest penetration we have achieved to date. The highest-volume desktop system sold in the United States retail channel in August was a system powered by an AMD-K6-2 processor with 3DNow! technology, even surpassing sales of Apple Computer's successful iMac system.
"During the quarter, we introduced and shipped hundreds of thousands of our 350MHz AMD-K6-2 processors," Sanders continued. "With the availability of these higher-performance devices, AMD now has very attractive products for the mainstream desktop market: systems priced at $1,500 and below, which comprise 80 percent of the U.S. retail desktop personal computer market.
"During the quarter we also introduced a 300MHz AMD-K6 processor for mobile applications. The AMD-K6/300 has a clock speed matching the highest-speed mobile processor on the market.
"In the face of continuing intense price pressures and weak overall industry demand, we were able to maintain flat sales compared to the immediate-prior quarter in the aggregate for our Communications Group, our Memory Group, and Vantis, our programmable logic subsidiary," said Sanders.
"On the strength of demand for AMD-K6 family processors, total third-quarter company bookings achieved a record level," Sanders concluded.
Cautionary Statement
Investors are cautioned that all forward-looking statements of management's expectations involve risks and uncertainties that could cause actual results to differ materially from current expectations.
Any forward-looking statements about the AMD-K6 processor involve risks and uncertainties, including whether: the company will be able to significantly increase output of AMD-K6 processors, including higher-performance AMD-K6-2 processors; the company will maintain or increase the current production yields; the company will be successful in expanding its customer base; customer demand for the AMD-K6 processors will continue at current or greater levels; and worldwide economic conditions, including the economic conditions in Asia, will change and affect demand for microprocessors and other integrated circuits. Investors are urged to consult the risks and uncertainties detailed in the company's reports filed with the Securities and Exchange Commission.
About AMD
AMD is a global supplier of integrated circuits for the personal and networked computer and communications markets. AMD produces processors, flash memories, programmable logic devices, and products for communications and networking applications. Founded in 1969 and based in Sunnyvale, California, AMD had revenues of $2.4 billion in 1997. (NYSE: AMD).
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