Maverick - AMD Achieves Record Sales and Bookings as it Returns to Profitability
Business Wire - October 06, 1998 17:07
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 6, 1998--Led by substantial growth in
sales of AMD-K6(R)-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(R) Windows(R)
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 AMD-K6 family processors involve risks and
uncertainties, including: whether the company will be able to maintain or increase output of
higher-performance AMD-K6-2 processors; whether customer demand for AMD-K6
family processors will continue at current or greater levels; whether uncertain worldwide
economic conditions, including the economic conditions in Asia, will result in decreased
demand for microprocessors and other integrated circuits; and whether as a result of
industry conditions or for other reasons customers will cancel currently booked orders or
decrease their placement of orders in the future. 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).
WORLD WIDE WEB: Press announcements and other information about AMD are
available on the Internet via the World Wide Web. Type amd.com at the URL
prompt.
3DNow! and Vantis are trademarks of Advanced Micro Devices, Inc.
AMD-K6, AMD-K6-2, AMD, the logo and combinations thereof are registered
trademarks of Advanced Micro Devices, Inc.
Microsoft and Windows are registered trademarks of Microsoft Corporation
GENERAL NOTICE: Other product names used in this publication are for identification
purposes only and may be trademarks of their respective companies.
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
Quarters Ended Nine Months Ended
(Unaudited) (Unaudited)
Sept. 27, June 28, Sept. 28, Sept. 27, Sept. 28,
1998 1998 1997 1998 1997
Net sales $ 685,927 $ 526,538 $ 596,644 $ 1,753,321 $ 1,743,204
Cost of
sales 422,985 390,140 428,240 1,236,716 1,149,582
Research and
development 143,665 139,158 125,917 410,943 340,846
Marketing,
general and
administra-
tive 109,768 101,198 100,915 299,180 298,417
676,418 630,496 655,072 1,946,839 1,788,845
Operating
income
(loss) 9,509 (103,958) (58,428) (193,518) (45,641)
Litigation
settlement -- -- -- (11,500) --
Interest
income and
other, net 10,071 8,518 5,532 24,170 28,572
Interest
expense (21,182) (17,663) (14,151) (51,317) (33,519)
Loss before
income taxes
and equity in
joint venture (1,602) (113,103) (67,047) (232,165) (50,588)
Benefit for
income taxes (635) (44,110) (30,072) (91,742) (25,294)
Loss before
equity in
joint venture (967) (68,993) (36,975) (140,423) (25,294)
Equity in net
income of
joint venture 1,973 4,433 5,300 14,142 16,538
Net income
(loss) $ 1,006 $ (64,560) $ (31,675) $ (126,281) $ (8,756)
Net income
(loss) per
common share
- Basic $ 0.01 $ (0.45) $ (0.22) $ (0.88) $ (0.06)
- Diluted $ 0.01 $ (0.45) $ (0.22) $ (0.88) $ (0.06)
Shares used
in per share
calculation
- Basic 143,915 143,462 141,055 143,249 139,975
- Diluted 146,642 143,462 141,055 143,249 139,975
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
Sept. 27, Dec. 28,
1998 1997
(Unaudited) (Audited)
Assets
Current assets:
Cash, cash equivalents and
short-term investments $ 580,510 $ 467,032
Accounts receivable, net 372,393 329,111
Inventories 172,231 168,517
Deferred income taxes 168,554 160,583
Prepaid expenses and other
current assets 71,915 50,024
Total current assets 1,365,603 1,175,267
Property, plant and equipment, net 2,375,105 1,990,689
Investment in joint venture 206,792 204,031
Other assets 168,618 145,284
$ 4,116,118 $ 3,515,271
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ 5,167 $ 6,601
Accounts payable 312,543 359,536
Accrued compensation and benefits 83,763 63,429
Accrued liabilities 161,984 134,656
Income tax payable 20,386 12,676
Deferred income on shipments
to distributors 86,790 83,508
Current portion of long-term
debt and capital lease obligations 149,220 66,364
Total current liabilities 819,853 726,770
Deferred income taxes 2,339 96,269
Long-term debt and capital lease
obligations, less current portion 1,364,230 662,689
Stockholders' equity:
Capital stock:
Common stock, par value 1,453 1,428
Capital in excess of par value 1,051,619 1,018,884
Retained earnings 939,850 1,066,131
Accumulated other comprehensive loss (63,226) (56,900)
Total stockholders' equity 1,929,696 2,029,543
$ 4,116,118 $ 3,515,271
Advanced Micro Devices, Inc. INFORMATION ONLY
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS(a)
(Includes Pre-Tax FASL Investment Equity Income in Operating Income
(Loss))
(Thousands except per share amounts)
Quarters Ended Nine Months Ended
(Unaudited) (Unaudited)
Sept. 27, June 28, Sept. 28, Sept. 27, Sept. 28,
1998 1998 1997 1998 1997
Net sales $ 685,927 $ 526,538 $ 596,644 $ 1,753,321 $ 1,743,204
Cost of
sales 422,985 390,140 428,240 1,236,716 1,149,582
Income from
equity
investment
in FASL (4,487) (7,416) (11,041) (27,891) (30,779)
Research and
development 143,665 139,158 125,917 410,943 340,846
Marketing,
general and
administra-
tive 109,768 101,198 100,915 299,180 298,417
671,931 623,080 644,031 1,918,948 1,758,066
Operating
income (loss) 13,996 (96,542) (47,387) (165,627) (14,862)
Litigation
settlement -- -- -- (11,500) --
Interest
income and
other, net 10,071 8,518 5,532 24,170 28,572
Interest
expense (21,182) (17,663) (14,151) (51,317) (33,519)
Income (loss)
before income
taxes 2,885 (105,687) (56,006) (204,274) (19,809)
Benefit for
income taxes (635) (44,110) (30,072) (91,742) (25,294)
Provision for
taxes on
equity income
in FASL 2,514 2,983 5,741 13,749 14,241
Net income
(loss) $ 1,006 $ (64,560) $ (31,675) $ (126,281) $ (8,756)
Net income
(loss) per
common share
- Basic $ 0.01 $ (0.45) $ (0.22) $ (0.88) $ (0.06)
- Diluted $ 0.01 $ (0.45) $ (0.22) $ (0.88) $ (0.06)
Shares used
in per share
calculation
- Basic 143,915 143,462 141,055 143,249 139,975
- Diluted 146,642 143,462 141,055 143,249 139,975
(a) The above statements of operations are not in accordance with
generally accepted accounting principles (GAAP) in that the
pre-tax equity income of FASL has been reclassified and included
in the determination of operating income (loss). Net income
(loss) and related net income (loss) per common share amounts are
the same as those reported under GAAP.
AMD
Selected Corporate Data
(Unaudited)
Product Line Breakdown Q3 '98 Q2 '98 Q3 '97
% of Revenue % of Revenue % of Revenue
Sales Sales Sales
Communications Group
(CPD, EPD, NPD) 18 $ 126M 23 $ 123M 30 $ 179M
Vantis (PLD) 7 50M 10 52M 10 62M
Memory Group (MG) 19 129M 25 132M 30 178M
Computation Products
Group (CMD, PPD, TMD) 56 381M 42 220M 30 178M
Other Data Q3 '98 Q2 '98 Q3 '97
Depreciation and
Amortization $ 117M $ 113M $ 104M
Capital Additions 321M 314M 169M
Headcount 13,384 13,314 12,617
International Sales 52% 48% 60%
CONTACT: Advanced Micro Devices
Scott Allen, 408/749-3311
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