Micron Technology, Inc., Reports Profits for the Second Quarter of Fiscal 1999
Business Wire - March 24, 1999 17:18
BOISE, Idaho--(BUSINESS WIRE)--March 24, 1999--Micron Technology, Inc., (NYSE:MU) today reported net income for the second quarter of fiscal 1999, ended March 4, of $22 million, or $0.08 per share-diluted, on net sales of $1,026 million. As previously reported, results for the second fiscal quarter reflect a write down of the Company's flat panel display assets which adversely affected earnings by $0.03 per share-diluted. For the first quarter of fiscal 1999, the Company's net loss was $46 million, or $0.19 per share-diluted on net sales of $794 million. For the second quarter of fiscal 1998, net sales were $763 million and net loss was $51 million, or $0.24 per share-diluted.
Gross margin on semiconductor operations was 32% in the second quarter of fiscal 1999 as compared to 9% in the first quarter. The gross margin percentage increase was primarily attributable to stable pricing and cost per megabit reductions achieved on higher production volumes. In the second fiscal quarter, the Company produced approximately 90% more megabits of memory than in the first fiscal quarter through manufacturing efficiencies achieved on the latest shrink of the 64 Meg SDRAM and resolution of backend production constraints. Resolution of backend production constraints associated with the Company's rapid transition to .21(mu) devices in the first fiscal quarter accounted for approximately one-third of the second fiscal quarter's production increases. The Company shipped 75% more megabits of memory in the second quarter than in the first quarter of fiscal 1999.
Steve Appleton, Chairman, CEO and President commented, "We're very pleased with the .21(mu) ramp at our Boise site, which was substantially completed early in the second fiscal quarter. The initial transfer of the Company's technology to our international sites is also progressing well."
Unit sales of the Company's PC systems decreased 14% comparing the second quarter to the first quarter of fiscal 1999. While average selling prices for PC systems increased 4%, comparing the second quarter of fiscal 1999 to the first quarter, as a result of a product mix shift to more richly configured systems, all PC systems experienced considerable pricing pressure in the second quarter.
On March 19, the Company announced an agreement to sell certain of its flat panel display assets to PixTech, Inc. Pursuant to the terms of the transaction, which is expected to close in late April, in exchange for the transfer of certain assets and liabilities to PixTech, the Company will receive approximately 7 million shares of PixTech Common Stock and warrants to purchase an additional 310,000 shares of PixTech Common Stock at an approximate exercise price of $2.25. The Company wrote down its flat panel display assets by $15 million ($0.03 per share - diluted) in the second quarter of fiscal 1999.
This press release is intended to provide a summary of results for the second quarter of fiscal 1999. A more detailed analysis of the quarter will be contained in the Company's second quarter Form 10-Q which is expected to be available in mid-April. A taped replay of the Company's quarterly conference call will be available at 719/457-0820 under access code 649026 beginning at 7 p.m. MST today and continuing through March 25.
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 6 MONTHS ENDED
Mar. 4, Feb. 26, Mar. 4, Feb. 26,
1999 1998 1999 1998
--------- -------- --------- --------
Net sales (1)
Semiconductor memory
products $ 697.1 $ 283.4 $ 1,106.6 $ 723.5
Personal computer
systems 309.5 396.5 661.6 841.6
Other 19.2 83.3 51.2 155.3
Total net sales 1,025.8 763.2 1,819.4 1,720.4
Costs and expenses:
Cost of goods sold 745.1 740.5 1,422.8 1,487.6
Selling, general and
administrative 125.5 138.6 228.5 264.6
Research and development 85.5 72.0 153.2 139.1
Other operating expense,
net (2) 18.4 24.2 26.1 28.8
Total costs and expenses 974.5 975.3 1,830.6 1,920.1
Operating income (loss) 51.3 (212.1) (11.2) (199.7)
Gain (loss) on sale of
subsidiary stock and
investments, net (3) -- 157.1 (0.1) 157.1
Gain on issuance of
subsidiary stock, net 0.4 0.5 1.6 0.6
Interest income
(expense), net (11.7) 1.8 (19.6) 0.5
Income (loss) before
income taxes and
minority interests 40.0 (52.7) (29.3) (41.5)
Income tax provision
(benefit) 16.1 (10.8) (11.4) (6.3)
Minority interests
in net income (loss) 1.5 9.0 5.8 9.2
Net income (loss) $22.4 ($50.9) ($23.7) ($44.4)
Earnings (loss) per share
Basic $0.08 ($0.24) ($0.09) ($0.21)
Diluted $0.08 ($0.24) ($0.09) ($0.21)
Number of shares used in
per share calculations
Basic 264.3 215.2 255.0 214.9
Diluted 272.9 215.2 255.0 214.9
SELECTED CASH FLOW DATA
(For the six months ended)
Mar. 4, 1999 Feb. 26, 1998
------------ -------------
Depreciation and amortization $408.9 $283.6
Net cash provided by operating activities 377.9 112.7
Expenditures for property, plant and
equipment (306.2) (381.3)
Proceeds from sale of subsidiary stock -- 235.9
Net cash used for investing activities (1,583.3) (123.5)
Cash received in conjunction with
acquisition 681.1 --
Proceeds from issuance of common stock 576.7 9.9
Payments on equipment purchase contracts (153.5) (20.1)
Net cash provided by (used for)
financing activities 1,075.5 (48.2)
Net decrease in cash and equivalents (129.9) (59.0)
Equipment acquisitions on contracts
payable and capital leases 55.8 48.7
SELECTED FINANCIAL DATA Mar. 4, 1999 Sept. 3, 1998
----------------------- ------------ -------------
Cash and liquid investments $1,782.6 $649.6
Receivables 591.9 489.5
Inventories 364.9 291.6
Total current assets 2,824.8 1,500.9
Property, plant and equipment, net 3,581.6 3,035.3
Total assets 6,771.2 4,703.5
Accounts payable and accrued expenses 560.2 460.7
Short-term debt -- 10.1
Current portion of long-term debt 102.9 98.6
Total current liabilities 741.7 745.7
Long-term debt 1,574.4 758.8
Shareholders' equity 3,945.1 2,701.3
All financial data has been restated to reflect the pooling of
interests with Rendition, Inc. that occurred September 11, 1998.
(1) The value of the Company's semiconductor memory products included
in PC systems and other products is included under "Semiconductor
memory products." "Other" revenue in the second quarter and first
six months of 1998 includes $63 million and $124 million,
respectively, in revenue from contract manufacturing and module
assembly services, which was sold in the second quarter of fiscal
1998.
(2) Other expense for the second quarter of 1999 includes a $15
million charge to write down certain flat panel display assets,
$5 million of loss recognized on joint venture investments, and a
$4 million charge for the cost of consolidating the Company's PC
operations in Japan, partially offset by $5 million from
cancellation of a compensation program.
Other expense for the second quarter of 1998 includes charges of
$13 million associated with the Company's PC Operations resulting
from employee termination benefits and consolidation of domestic
and international operations, $3 million for the write off of
abandoned in-development software projects, and $4 million
related to the disposal and write down of semiconductor memory
operations equipment.
(3) Net gain on sale of investments and subsidiary stock for the
second quarter of 1998 reflect the sale of 90% of the Company's
contract manufacturing subsidiary.
CONTACT: Micron Technology, Inc.
Kipp Bedard, 208/368-4400
Web site URL<http://www.micron.com
Fax-on-demand: 800/239-0337 |
