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

BOISE, Idaho—(BUSINESS WIRE)—December 23, 2008— Micron Technology, Inc., (NYSE:MU) today announced results of operations for the company’s first quarter of fiscal 2009, which ended December 4, 2008. For the first quarter of fiscal 2009, the company posted a net loss of $706 million, or $0.91 per diluted share, on net sales of $1.4 billion. These results reflect a non-cash charge to cost of goods sold of $369 million to write down the value of work in process and finished goods inventories of memory products to their estimated market values and a benefit of $157 million from first quarter sales of products that were subject to previous write-downs. In the first quarter of fiscal 2009, the company generated $359 million in cash flow from operating activities and ended the quarter with cash and investments of $1.0 billion.

Sales of the company’s memory products in the first quarter of fiscal 2009 decreased 4 percent compared to the preceding quarter as a result of significant decreases in market selling prices for the company’s products, partially offset by a higher sales volume. The company’s sales measured in gigabits increased 35 percent and 40 percent for DRAM and NAND Flash products, respectively. The sales volume, which outpaced production during the first quarter, resulted in a 15 percent decrease in gigabits of the company’s finished goods inventories during the quarter. Average selling prices for the company’s memory products decreased 34 percent and 24 percent for DRAM and NAND Flash products, respectively.

The company’s reported gross margin decreased in the first quarter compared to the preceding quarter as decreases in per gigabit average selling prices for memory products outpaced decreases in cost. Comparing the first quarter to the fourth quarter of fiscal 2008, absent the effects of the first quarter and prior period inventory write-downs, per gigabit costs decreased 12 percent and 14 percent for DRAM and NAND Flash products, respectively.

The company’s cost-cutting and restructuring activities have yielded reductions in operating costs in nearly all areas and contributed to the company’s cash flow from operating activities in the first quarter.

Sales of CMOS image sensors in the first quarter of fiscal 2009 were relatively stable compared to the preceding quarter. The company’s gross margin on sales of Imaging products also remained stable compared to the fourth quarter, reflecting a slight decrease in costs per part.

The company will host a conference call today at 2:30 p.m. MST 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 Dec. 23, 2009. A taped audio replay of the conference call will also be available at 706-645-9291 (conference number: 76127953) beginning at 5:30 p.m. MST today and continuing until 5:30 p.m. MST on Dec. 30, 2008.

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.

MICRON TECHNOLOGY, INC.

CONSOLIDATED FINANCIAL SUMMARY

(Amounts in millions except per share data)

 

1st Qtr.

 

4th Qtr.

 

1st Qtr.

Dec. 4,

Aug. 28,

Nov. 29,

 

2008

 

2008

 

2007

 
Net sales $ 1,402 $ 1,449 $ 1,535
Cost of goods sold (1)   1,851     1,514     1,530  
Gross margin (449 ) (65 ) 5
Selling, general and administrative 102 107 112
Research and development 178 167 163
Restructure (2) (66 ) 4 13
Other operating (income) expense, net (3)   9     (5 )   (23 )
Operating loss (672 ) (338 ) (260 )
Interest income (expense), net (20 ) (9 ) 9
Other non-operating income (expense), net (14 ) (6 ) (1 )
Income tax provision (4) (13 ) (2 ) (7 )
Noncontrolling interests in net (income) loss   13     11     (3 )
Net loss $ (706 ) $ (344 ) $ (262 )
Earnings (loss) per share:
Basic $ (0.91 ) $ (0.45 ) $ (0.34 )
Diluted (0.91 ) (0.45 ) (0.34 )
 
Number of shares used in per share calculations:
Basic 773.3 772.9 771.9
Diluted 773.3 772.9 771.9
 

Reconciliation of GAAP to Non-GAAP Financial Measures (5)

 
Gross margin:
On a GAAP basis $ (449 ) $ (65 ) $ 5
Period-end inventory write-down 369 205 62
Estimated net effect of previous write-downs (157 ) (13 ) (14 )
NAND Flash memory price adjustments   --     (70 )   --  
On a non-GAAP basis $ (237 ) $ 57   $ 53  
 
Net loss:
On a GAAP basis $ (706 ) $ (344 ) $ (262 )
Period-end inventory write-down 369 205 62
Estimated net effect of previous write-downs (157 ) (13 ) (14 )
Restructure (66 ) 4 13
NAND Flash memory price adjustments   --     (70 )   --  
On a non-GAAP basis $ (560 ) $ (218 ) $ (201 )
 
Diluted earnings (loss) per share:
On a GAAP basis $ (0.91 ) $ (0.45 ) $ (0.34 )
Inventory write-downs 0.48 0.27 0.08
Estimated net effect of previous write-downs (0.20 ) (0.02 ) (0.02 )
Restructure (0.09 ) 0.01 0.02
NAND Flash memory price adjustments   --     (0.09 )   --  
On a non-GAAP basis $ (0.72 ) $ (0.28 ) $ (0.26 )

CONSOLIDATED FINANCIAL SUMMARY, Continued

   
 

As of

Dec. 4,

Aug. 28,

 

2008

   

2008

 
Cash and short-term investments $ 1,028 $ 1,362
Receivables 1,031 1,032
Inventories (1) 883 1,291
Total current assets 3,037 3,779
Property, plant and equipment, net 8,460 8,811
Total assets (6) 12,676 13,430
 
Accounts payable and accrued expenses 943 1,111
Current portion of long-term debt 343 275
Total current liabilities 1,635 1,598
Long-term debt 2,523 2,451
Noncontrolling interests in subsidiaries 2,702 2,865
Total shareholders’ equity 5,484 6,178
 
 

Quarter Ended

Dec. 4,

Nov. 29,

 

2008

   

2007

 
Net cash provided by operating activities $ 359 $ 276
Net cash used for investing activities (489 ) (406 )
Net cash provided by financing activities (88 ) (182 )
 
Depreciation and amortization 594 504
Expenditures for property, plant and equipment (270 ) (765 )
Net cash received from (paid to) noncontrolling interests (150 ) 150
Payments on equipment purchase contracts (64 ) (122 )
 
Noncash equipment acquisitions on contracts
payable and capital leases 153 152

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