Micron Technology, Inc., Reports Results for the Third Quarter of Fiscal 2009

BOISE, Idaho — (BUSINESS WIRE) — June 25, 2009 Micron Technology, Inc., (NYSE: MU) today announced results of operations for the company’s third quarter of fiscal 2009, which ended June 4, 2009. For the third quarter of fiscal 2009, the company posted a net loss of $290 million, or $0.36 per diluted share, on net sales of $1.1 billion. The company ended the quarter with cash and investments of $1.3 billion.

Revenue from sales of DRAM products increased 14 percent in the third quarter compared to the second quarter principally due to an increase in sales volumes for DRAM products. Revenue from sales of NAND Flash products was flat in the third quarter compared to the second quarter. Significant cost reductions in NAND Flash production contributed to comparably lower average selling prices to Intel Corporation, the company’s IM Flash joint venture partner. However, the effects of these lower average selling prices to Intel were offset by an overall 20 percent increase in NAND Flash sales volume and a significant increase in average selling prices to all other trade customers.

Memory production in the third quarter was significantly higher compared to the preceding quarter. Increases in bit production resulted from the company’s continued transition to higher density 34 nanometer (nm) NAND Flash products and 50nm DRAM products.

The company’s gross margin on sales of memory products improved from negative 30 percent in the second quarter of fiscal 2009 to positive 11 percent in the third quarter, resulting from significant decreases in per gigabit manufacturing costs and the benefit in the third quarter from sales of products previously written down. As a result of these decreases in per gigabit manufacturing costs and increases in average selling prices, there was no lower of cost or market write-down of memory inventories during the third quarter. Cost of goods sold in the third quarter includes approximately $30 million of charges for unused production capacity at the company’s Inotera and IM Flash joint ventures and an estimated benefit of $242 million from sales in the third quarter of products written down in previous periods.

Sales of CMOS image sensors in the third quarter increased 53 percent compared to the preceding quarter as a result of a significant increase in unit sales. The company’s gross margin on sales of CMOS image sensors was two percent in the third quarter and continues to be negatively impacted by underutilization of dedicated 200mm manufacturing capacity. In the third quarter, the company announced the signing of an agreement to sell a majority interest in its Aptina imaging solutions business, which is expected to be completed in the fourth quarter. In connection with the sale, the company recorded a $53 million charge, the estimated loss on the transaction, to write down the value of Aptina assets now classified as held for sale.

The company will host a conference call today at 2:30 p.m. MDT to discuss its financial results. The call, audio and slides will be available online at www.micron.com. A webcast replay will be available on the company’s web site until June 25, 2010. A taped audio replay of the conference call will also be available at 706-645-9291 (conference number: 14636400) beginning at 5:30 p.m. MDT today and continuing until 5:30 p.m. MDT on July 2, 2009.

Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAM, NAND Flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking and mobile products. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the MU symbol. To learn more about Micron Technology, Inc., visit www.micron.com.

This press release contains forward-looking statements regarding the timing of the sale of a majority interest in the Company’s Aptina imaging solutions business and estimated loss. Actual events or results may differ materially from those contained in the forward-looking statements. Please refer to the documents the Company files on a consolidated basis from time to time with the Securities and Exchange Commission, specifically the Company's most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause the actual results for the Company on a consolidated basis to differ materially from those contained in our forward-looking statements (see Risk Factors). Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this report to conform to actual results.

MICRON TECHNOLOGY, INC.

CONSOLIDATED FINANCIAL SUMMARY

(in millions except per share amounts)

     
3rd Qtr. 2nd Qtr. 3rd Qtr. Nine Months Ended
Jun. 4, Mar. 5, May 29, Jun. 4,   May 29,
2009 2009 2008 2009 2008
 
Net sales $ 1,106 $ 993 $ 1,498 $ 3,501 $ 4,392
Cost of goods sold (1)   999     1,260     1,450     4,110     4,382  
Gross margin 107 (267 ) 48 (609 ) 10
Selling, general and administrative 80 90 116 272 348
Research and development 162 168 170 508 513
Restructure (2) 19 105 8 58 29
Goodwill impairment (3) -- 58 -- 58 463
Other operating (income) expense (4)   92     20     (21 )   121     (86 )
Operating loss (246 ) (708 ) (225 ) (1,626 ) (1,257 )
Interest income (expense), net (31 ) (31 ) (6 ) (82 ) 6
Other non-operating income (expense) (3 ) (3 ) -- (15 ) (7 )
Income tax (provision) benefit (5) 2 (4 ) (13 ) (15 ) (16 )
Equity in net losses of equity method investees (6) (45 ) (56 ) -- (106 ) --
Noncontrolling interests in net (income) loss   33     51     8     97     (1 )
Net loss $ (290 ) $ (751 ) $ (236 ) $ (1,747 ) $ (1,275 )

Loss per share:

Basic $ (0.36 ) $ (0.97 ) $ (0.30 ) $ (2.22 ) $ (1.65 )
Diluted (0.36 ) (0.97 ) (0.30 ) (2.22 ) (1.65 )
 
Number of shares used in per share calculations:
Basic 813.3 773.9 772.8 786.5 772.4
Diluted 813.3 773.9 772.8 786.5 772.4
 
 
3rd Qtr. 2nd Qtr. 3rd Qtr. Nine Months Ended
Jun. 4, Mar. 5, May 29, Jun. 4, May 29,
2009 2009 2008 2009 2008
 
Period-end inventory write-down $ -- $ 234 $ -- $ 603 $ 77
Estimated effect of previous inventory write-downs (242 ) (277 ) (21 ) (676 ) (85 )
Restructure 19 105 8 58 29
Goodwill impairment -- 58 -- 58 463
Write-down of Aptina imaging assets   53     --     --     53     --  
$ (170 ) $ 120   $ (13 ) $ 96   $ 484  
As of
Jun. 4,   Mar. 5,   Aug. 28,
2009 2009 2008
Cash and short-term investments $ 1,306 $ 932 $ 1,362
Receivables 750 654 1,032
Inventories (1) 999 859 1,291
Total current assets 3,128 2,523 3,779
Property, plant and equipment, net 7,536 7,910 8,811
Total assets 11,664 11,526 13,430
 
Accounts payable and accrued expenses 1,037 950 1,111
Current portion of long-term debt 372 353 275
Total current liabilities 1,825 1,637 1,598
Long-term debt (7) 2,752 2,542 2,451
Noncontrolling interests in subsidiaries 2,130 2,344 2,865
Total shareholders’ equity (8) 4,697 4,742 6,178
 
 
Nine Months Ended
Jun. 4, May 29,
2009 2008
Net cash provided by operating activities $ 849 $ 775
Net cash used for investing activities (681 ) (1,289 )
Net cash used for financing activities (105 ) (204 )
 
Depreciation and amortization 1,648 1,528
Expenditures for property, plant and equipment (439 ) (1,809 )
Cash (paid to) received from noncontrolling interests (568 ) 203
Payments on equipment purchase contracts (127 ) (348 )
 
Noncash equipment acquisitions on contracts payable and capital leases 305 404

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