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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Time Traveler who wrote (34219)	7/10/1998 2:15:00 AM
From: VICTORIA GATE, MD	Respond to of 1580818

Time Traveler re<believes you did not include the net interest expense into your operations cost.> yes , very good thanks but AMD ONLY NEED -14 CENTS READ THIS Banks Loosen AMD's Loan Covenants As Chip Market Slumps By Christopher Grimes NEW YORK (Dow Jones)--Advanced Micro Devices Inc. (AMD) and its banks renegotiated its credit requirements to reflect the slumping worldwide semiconductor market. AMD, of Sunnyvale Calif., competes with Intel Corp. (INTC) in the computer chip market. AMD has suffered losses in the past four quarters, including the $65 million net loss it reported after the market closed Wednesday. Scott Allen, an AMD spokesman, said the company has been in compliance with its loan covenants during the first and second quarters. AMD sought the new terms as a precautionary move, given the global slump in the chip market, Allen said. Under the renegotiated terms, AMD can't let its ratio of cash and equivalents to liabilities to fall below .8 to 1 from the third quarter of 1998 to the third quarter of 1999. The ratio is required to be .9 to 1 at the end of 1999 and thereafter. Under terms of the amended agreement, AMD's minimum net worth can't fall below $1.9 billion beyond the end of the third quarter, and it can't suffer net losses greater than $20 million for the third quarter of 1998. Net income for the fourth quarter of 1998 is required to be at least $1. AMD's most recent loss was worse than it had to be, analysts said. The company spent $139 million on research and development; high R&D spending is viewed as a positive at technology companies. It also spent $101 million on marketing, general and administrative items. Presumably, those expenses could be cut if the company were concerned about violating the loan covenants. But some analysts are expecting a loss of about $30 million for AMD in the third quarter. Ashok Kumar, an analyst at Piper Jaffray Inc., said the company could be forced to "artificially restructure its operating expenses to meet these covenants." Earlier this year, AMD filed for a shelf registration for $1 billion in common and preferred shares, debt securities and warrants. The amendment, which was released in a filing with the Securities and Exchange Commission on Thursday, went into effect June 26. The company discussed the new credit terms during a Wednesday afternoon conference call with analysts to discuss second-quarter earnings. In trading Thursday, AMD shares were down on news of the company's loss, which was wider than expected. AMD stock recently was trading down 2 1/8, or 11.7%, to 16 on heavy volume. Earlier, the shares traded at a 52-week low of 15 5/16; the previous low of 16 3/16 was set July 2. - By Christopher Grimes; 201-938-5253 vg