You should love this. They used really sharp pencils this time. From what I am seeing right off is they lost almost twice as much as reported but threw in some goodies to dress the release up. Have to go and get a second mortgage on the house so I can get some puts. <g>
BOISE, Idaho--(BUSINESS WIRE)--Sept. 28, 1998--Micron Technology, Inc., today reported a net loss for its fiscal 1998 operations of $234 million, or $1.10 per share - diluted, on net sales of $3.0 billion. Net income for fiscal 1997 was $332 million, or $1.55 per share - diluted, on net sales of $3.5 billion. Results of operations for fiscal 1998 included a $38 million after-tax gain ($0.18 per share - diluted) on the sale in the second fiscal quarter of substantially all of the Company's holdings in its contract manufacturing subsidiary. For the fourth quarter of fiscal 1998, the Company's net sales were $692 million and the net loss was $89 million, or $0.42 per share - diluted, compared to net sales of $610 million and net loss of $106 million ($0.50 per share - diluted) for the third quarter of fiscal 1998. The losses incurred in fiscal 1998 were primarily due to severe declines in per megabit selling prices on the Company's semiconductor memory products. Per megabit prices declined approximately 60 percent in fiscal 1998 following a 75 percent decline in fiscal 1997 and a 45 percent decline in fiscal 1996. The Company's memory output was significantly higher in fiscal 1998 than in 1997, principally as a result of manufacturing efficiencies and aggressive transitions from .30(mu) to .21(mu) line-width devices. Late in fiscal 1998 the Company transitioned to 64 Meg SDRAM products of which over 80 percent are PC-100 compliant. The Company's semiconductor operations gross margin declined to 5 percent for fiscal 1998 as compared to 39 percent for fiscal 1997. The gross margin decline during the year was a result of average selling prices decreasing at a rate faster than the Company was able to decrease manufacturing costs. Net sales of PC systems (exclusive of semiconductor memory) increased as a percentage of the Company's sales from 42 percent in fiscal 1997 to 48 percent in fiscal 1998. Unit sales of PC systems increased 5 percent in fiscal 1998 as compared to fiscal 1997 while average selling prices for PC systems declined 11 percent as a result of intense competition in the Company's desktop and notebook markets. The Company's semiconductor memory operations increased megabits sold in the fourth fiscal quarter by 63 percent over the third fiscal quarter in part due to a 39 percent decrease in finished goods inventory. Semiconductor memory operations had a negative gross margin of 10 percent in the fourth fiscal quarter compared to a negative 20 percent in the third fiscal quarter. The Company's PC operations had a slight improvement in gross margin in the fourth fiscal quarter in spite of declines in average selling prices. Fourth quarter PC unit sales were 9 percent higher than the third quarter of fiscal 1998. Steve Appleton, Chairman, CEO and President commented on the fiscal 1998 results: "While this has been a challenging year, we have positioned Micron as the lowest cost DRAM manufacturer and have a significant edge on our competition. We are pleased with the progress our team has made ramping our .21(mu) technology and their efforts in ensuring our current manufacturing operations are capable of .18(mu) technology production. Although we cannot yet determine if recent stability in the market will be sustained, current market conditions are encouraging. We are pleased that both the semiconductor team and PC team continue to make strong improvements in operations." On June 18, 1998, the Company announced the intent to acquire the semiconductor memory operations of Texas Instruments, Incorporated. This transaction is expected to close in the next few weeks. Additional information regarding the TI acquisition will be provided upon the close of the transaction. Micron Technology, Inc., and its subsidiaries manufacture and market DRAMs, very fast SRAMs, Flash, other semiconductor components, memory modules, graphics accelerators, personal computer systems, and radio frequency identification (RFID) products. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the symbol MU. 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)
SELECTED RESULTS OF OPERATIONS
QUARTER ENDED 12 MONTHS ENDED
Sept. 3, Aug. 28, Sept. 3, Aug. 28,
1998 1997 1998 1997
Net sales (1)
Semiconductor memory products $372.5 $483.7 $1,386.2 $1,738.1
Personal computer systems 307.9 372.5 1,459.8 1,463.5
Other 11.6 90.0 165.9 313.9
Total net sales 692.0 946.2 3,011.9 3,515.5
Costs and expenses:
Cost of goods sold 650.7 658.8 2,731.5 2,539.2
Selling, general and
administrative 98.7 104.8 467.9 370.9
Research and development 71.8 62.3 271.8 208.9
Other operating expense (income),
net (2) 2.1 (3.9) 34.3 (5.9)
Total costs and expenses 823.3 822.0 3,505.5 3,113.1
Operating income (loss) (131.3) 124.2 (493.6) 402.4
Gain (loss) on sale of subsidiary
stock and investments, net (3) (0.1) 0.0 157.0 186.7
Gain on issuance of subsidiary
stock, net 0.5 1.5 1.3 29.1
Interest income (expense), net (1.3) 3.3 0.1 0.9
Income (loss) before income taxes
and minority interests (132.2) 129.0 (335.2) 619.1
Income tax benefit (provision) 49.1 (52.7) 118.8 (267.3)
Minority interests in net income (6.0) (4.2) (17.3) (19.6)
Net income (loss) ($89.1) $72.1 ($233.7) $332.2
Earnings (loss) per share
Basic ($0.42) $0.34 ($1.10) $1.58
Diluted ($0.42) $0.33 ($1.10) $1.55
Number of shares used in per share
calculations
Basic 213.3 210.9 212.2 210.0
Diluted 213.3 215.8 212.2 214.3
SELECTED CASH FLOW DATA
Sept. 3, 1998 Aug. 28, 1997
Depreciation and amortization $606.6 $476.3
Net cash provided by operating activities 189.2 603.1
Expenditures for property, plant and equipment (707.1) (516.9)
Net cash used for investing activities (186.0) (678.4)
Payments on equipment purchase contracts (63.5) (53.9)
Net repayments on lines of credit 0.0 (90.0)
Proceeds from issuance of debt 102.9 587.8
Repayments of debt (125.7) (101.1)
Net cash provided by (used for) financing
activities (64.1) 418.7
Net increase (decrease) in cash and
equivalents (60.9) 343.4
Proceeds from sale and issuance of
subsidiary stock 239.3 255.3
Equipment acquisitions on contracts payable
and capital leases $212.6 $41.5
SELECTED FINANCIAL DATA
Sept. 3, 1998 Aug. 28, 1997
Cash and liquid investments $649.4 $987.7
Receivables 489.5 458.9
Inventories 291.1 454.2
Total current assets 1,499.2 1,972.4
Property, plant and equipment, net 3,030.8 2,761.2
Total assets 4,688.3 4,851.3
Accounts payable and accrued expenses 456.6 546.1
Short-term debt 10.1 10.6
Current portion of long-term debt 97.3 116.0
Total current liabilities 740.3 749.9
Long-term debt 757.3 762.3
Shareholders' equity $2,693.0 $2,883.1
(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, government research and development contracts, and licensing fees.
(2) Other operating expense (income) for 1998 includes charges associated with PC operations of $11 million resulting from employee termination benefits and consolidation of domestic and international operations and $5 million from the write-off of software development costs. Other operating expense reflects pre-tax gains from the write-down and disposal of semiconductor memory operations equipment of $14 million and $3 million in 1998 and 1997, respectively.
(3) Net gains on sale of investments and subsidiary stock for the year ended September 3, 1998 includes a pretax gain of $157 million on the sale of 90% of the Company's contract manufacturing subsidiary. Net gains on sale of investments and subsidiary stock for the year ended August 28, 1997, includes a pretax gain of $190 million on the sale of shares of Micron Electronics Inc. common stock.
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