Micron Technology, Inc., (NASDAQ:MU) today announced results of
operations for its fourth quarter and 2015 fiscal year, which ended
September 3, 2015. Revenues for the fourth quarter of fiscal 2015
were $3.60 billion and were 7 percent lower compared to the third
quarter of fiscal 2015 and 15 percent lower compared to the fourth
quarter of fiscal 2014. Revenues for fiscal year 2015 were $16.19
billion and net income attributable to Micron shareholders was
$2.90 billion, or $2.47 per diluted share. Cash flows from
operations were $5.21 billion for fiscal year 2015.
"We are pleased to report Fiscal Year 2015 results that include
revenue of $16.2 billion, $2.72 in non-GAAP earnings per share, and
$2.3 billion in dilution management activities, including convert
retirements and share repurchases," stated D. Mark Durcan, Chief
Executive Officer. "While fourth quarter results were impacted by
continued weakness in the PC sector, we believe that memory
industry fundamentals remain favorable over the long term."
GAAP Income and Per Share Data – On a GAAP(1)
basis, net income attributable to Micron shareholders for the
fourth quarter of fiscal 2015 was $471 million, or $0.42 per
diluted share, compared to net income of $491 million, or $0.42 per
diluted share, for the third quarter of fiscal 2015 and net income
of $1.15 billion, or $0.96 per diluted share, for the fourth
quarter of fiscal 2014.
Non-GAAP Income and Per Share Data – On a
non-GAAP(2) basis, net income attributable to Micron shareholders
for the fourth quarter of fiscal 2015 was $399 million, or $0.37
per diluted share, compared to net income of $620 million, or $0.54
per diluted share, for the third quarter of fiscal 2015. For a
reconciliation of GAAP to non-GAAP results, see the accompanying
financial tables and footnotes.
Revenues for the fourth quarter of fiscal 2015 were 7 percent
lower compared to the third quarter of fiscal 2015 primarily due to
a 7 percent decline in DRAM average selling prices and relatively
flat DRAM sales volume. Non-Volatile trade revenues for the fourth
quarter of fiscal 2015 also declined 7 percent compared to the
third quarter primarily as a result of lower sales volume. The
company's overall consolidated gross margin of 27 percent for the
fourth quarter of fiscal 2015 was 4 percent lower compared to the
third quarter of fiscal 2015 primarily due to lower average selling
prices for DRAM.
Cash flows from operations were $1.03 billion for the fourth
quarter of fiscal 2015, while investments in capital expenditures
were $1.85 billion. For fiscal year 2015, cash flows from
operations were $5.21 billion and investments in capital
expenditures were $4.12 billion. The company ended the fourth
quarter of fiscal 2015 with cash and marketable investments of
$5.63 billion.
The company will host a conference call Thursday, Oct. 1, 2015
at 2:30 p.m. MT to discuss its financial results. The call, audio
and slides will be available online at
http://investors.micron.com/events.cfm. A webcast replay will be
available on the company's website until Oct. 1, 2016. A taped
audio replay of the conference call will also be available at
1-404-537-3406 or 1-855-859-2056 (conference number: 43149721)
beginning at 5:30 p.m. MT, Thursday, Oct. 1, 2015 and continuing
until 5:30 p.m. MT, Thursday, Oct. 8, 2015. For Investor Relations
and other company updates, follow @MicronTech on Twitter at
https://twitter.com/MicronTech.
Micron Technology, Inc., is a global leader in advanced
semiconductor systems. Micron's broad portfolio of high-performance
memory technologies-including DRAM, NAND and NOR Flash-is the basis
for solid state drives, modules, multichip packages and other
system solutions. Backed by more than 35 years of technology
leadership, Micron's memory solutions enable the world's most
innovative computing, consumer, enterprise storage, networking,
mobile, embedded and automotive applications. Micron's common stock
is traded on the NASDAQ under the MU symbol. To learn more about
Micron Technology, Inc., visit www.micron.com.
(1) GAAP represents U.S. Generally Accepted Accounting
Principles.
(2) Non-GAAP represents GAAP excluding the impact of certain
activities which the company's management excludes in analyzing the
company's operating results and understanding trends in the
company's earnings. Non-GAAP also includes the impact on shares
used in per share calculations of the company's outstanding capped
call transactions. For a reconciliation of GAAP to non-GAAP
results, see the accompanying financial tables and footnotes.
MICRON TECHNOLOGY,
INC. |
CONSOLIDATED FINANCIAL
SUMMARY |
(in millions except per
share amounts) |
|
|
|
|
|
|
|
4th Qtr. |
3rd Qtr. |
4th Qtr. |
Year
Ended |
|
September 3, |
June 4, |
August 28, |
September 3, |
August 28, |
|
2015 |
2015 |
2014 |
2015 |
2014 |
Net sales |
$ 3,600 |
$ 3,853 |
$ 4,227 |
$ 16,192 |
$ 16,358 |
Cost of goods sold |
2,630 |
2,651 |
2,842 |
10,977 |
10,921 |
Gross margin |
970 |
1,202 |
1,385 |
5,215 |
5,437 |
Selling, general and administrative |
170 |
169 |
180 |
719 |
707 |
Research and development |
379 |
406 |
358 |
1,540 |
1,371 |
Other operating (income) expense, net
(1) |
(6) |
(4) |
19 |
(42) |
272 |
Operating income |
427 |
631 |
828 |
2,998 |
3,087 |
Gain on MMJ Acquisition (2) |
— |
— |
— |
— |
(33) |
Interest income (expense), net |
(90) |
(88) |
(81) |
(336) |
(329) |
Other non-operating income (expense), net
(3) |
18 |
(16) |
198 |
(53) |
8 |
Income tax (provision) benefit (4) |
69 |
(104) |
87 |
(157) |
(128) |
Equity in net income of equity method
investees |
47 |
68 |
119 |
447 |
474 |
Net (income) attributable to noncontrolling
interests |
— |
— |
(1) |
— |
(34) |
Net income attributable to
Micron |
$ 471 |
$ 491 |
$ 1,150 |
$ 2,899 |
$ 3,045 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic |
$ 0.44 |
$ 0.46 |
$ 1.08 |
$ 2.71 |
$ 2.87 |
Diluted |
0.42 |
0.42 |
0.96 |
2.47 |
2.54 |
|
|
|
|
|
|
Number of shares used in per share
calculations: |
|
|
|
|
|
Basic |
1,060 |
1,073 |
1,068 |
1,070 |
1,060 |
Diluted |
1,124 |
1,170 |
1,203 |
1,170 |
1,198 |
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL
SUMMARY, Continued |
|
|
September 3, |
June 4, |
August 28, |
As of |
2015 |
2015 |
2014 |
Cash and short-term investments |
$ 3,521 |
$ 4,860 |
$ 4,534 |
Receivables |
2,507 |
2,530 |
2,906 |
Inventories |
2,340 |
2,381 |
2,455 |
Total current assets |
8,596 |
10,008 |
10,245 |
Long-term marketable investments |
2,113 |
2,470 |
819 |
Property, plant and equipment, net |
10,554 |
9,857 |
8,682 |
Total assets |
24,143 |
25,052 |
22,416 |
|
|
|
|
Accounts payable and accrued expenses |
2,611 |
3,204 |
2,864 |
Current debt (3)(5) |
1,089 |
1,134 |
1,618 |
Total current liabilities |
3,905 |
4,551 |
4,791 |
Long-term debt (3)(5) |
6,252 |
6,334 |
4,893 |
|
|
|
|
Total Micron shareholders' equity |
12,302 |
12,449 |
10,760 |
Noncontrolling interests in subsidiaries |
937 |
897 |
802 |
Total equity |
13,239 |
13,346 |
11,562 |
|
|
|
|
|
|
Year
Ended |
|
|
September 3, |
August 28, |
|
|
2015 |
2014 |
Net cash provided by operating
activities |
|
$ 5,208 |
$ 5,699 |
Net cash provided by (used for) investing
activities |
|
(6,232) |
(2,902) |
Net cash provided by (used for) financing
activities |
|
(718) |
(1,499) |
|
|
|
|
Depreciation and amortization |
|
2,805 |
2,270 |
Expenditures for property, plant and
equipment |
|
(4,021) |
(3,107) |
Payments on equipment purchase contracts |
|
(95) |
(30) |
Repayments of debt |
|
(2,329) |
(3,843) |
Proceeds from issuance of debt and
sale-leaseback transactions |
|
2,503 |
2,226 |
Cash paid to acquire treasury stock |
|
(884) |
(76) |
|
|
|
|
Noncash equipment acquisitions on contracts
payable and capital leases |
|
345 |
243 |
(1) Other operating expense for fiscal 2014 included a charge in
the first quarter of $233 million to accrue a liability in
connection with the company's settlement of all pending litigation
between it and Rambus, Inc., including all antitrust and patent
matters. The amount accrued represented the discounted value of
amounts due under the arrangement. Other expense in the fourth
quarter of fiscal 2014 and fiscal year 2014 included charges of $22
million and $40 million, respectively, primarily associated with
the company's efforts to wind down and dispose of its 200mm
operations, primarily in Agrate, Italy and Kiryat Gat, Israel, and
charges associated with other workforce optimization
activities.
(2) In the second quarter of 2014, the provisional amounts
recorded in connection with the acquisition of Elpida Memory, Inc.,
now known as Micron Memory Japan, Inc. ("MMJ"), were adjusted,
primarily for pre-petition liabilities, and the company recorded a
non-operating expense of $33 million for these measurement period
adjustments.
(3) Other non-operating income (expense) consisted of the
following:
|
4th Qtr. |
3rd Qtr. |
4th Qtr. |
Year
Ended |
|
September 3, |
June 4, |
August 28, |
September 3, |
August 28, |
|
2015 |
2015 |
2014 |
2015 |
2014 |
Loss on restructure of debt |
$ (1) |
$ (18) |
$ (13) |
$ (49) |
$ (184) |
Gain (loss) from changes in currency exchange
rates |
(1) |
1 |
(3) |
(27) |
(28) |
Gain from disposition of interest in
Aptina |
— |
— |
119 |
1 |
119 |
Gain from issuance of Inotera shares |
— |
— |
93 |
— |
93 |
Other |
20 |
1 |
2 |
22 |
8 |
|
$ 18 |
$ (16) |
$ 198 |
$ (53) |
$ 8 |
In fiscal 2015, the company initiated a series of actions to
restructure its debt, including:
- Debt Conversions and Settlement: Holders of substantially
all of the company's remaining 2031B Notes (with an aggregate
principal amount of $114 million) exercised their option in the
fourth quarter of fiscal 2014 to convert their remaining notes and,
in each case, the company elected to settle the conversion amount
entirely in cash, resulting in aggregate payments of $389 million
in the first quarter of fiscal 2015.
- Cash Repurchases: Repurchased $368 million in aggregate
principal amount of 2032 Notes and 2033 Notes for an aggregate of
$1,019 million in cash.
- Early Repayment of Debt: Repaid a $121 million note prior
to its scheduled maturity.
These actions resulted in aggregate losses of $1 million, $18
million and $30 million in the fourth, third and first quarters of
fiscal 2015, respectively. In fiscal 2014, the company recognized
losses of $184 million from transactions to restructure its debt,
including conversions and settlements, repurchases, exchange
transactions and the early repayment of notes and capital
leases.
The company previously held an equity interest in Aptina Imaging
Corporation ("Aptina"), which was accounted for under the equity
method. On August 15, 2014, ON Semiconductor Corporation completed
its acquisition of Aptina. In connection therewith, the company
recognized a gain of $119 million in the fourth quarter of fiscal
2014 based on its diluted ownership interest in Aptina of
approximately 27%.
Other non-operating income in the fourth quarter of fiscal 2014
included a gain of $93 million recognized in connection with the
issuances of common shares by Inotera Memory, Inc., an equity
method investment of the company, in May 2014. As a result of the
issuances, the company's interest in Inotera decreased to 33%.
(4) Income taxes for the fourth quarter of fiscal 2015 and
fiscal year 2015 included a benefit of $58 million and expense of
$80 million, respectively, related to changes in amounts of net
deferred tax assets associated with the company's MMJ and MMT
operations. The company's unrecognized tax benefits increased by
approximately $120 million in fiscal 2015, primarily related to
transfer pricing and other matters. Income taxes for the fourth
quarter of fiscal 2014 and fiscal year 2014 included a benefit of
$118 million and expense of $59 million, respectively, related to
changes in amounts of net deferred tax assets associated with the
company's MMJ and MMT operations. Remaining taxes for fiscal 2015
and 2014 primarily reflect taxes on the company's other non-U.S.
operations. The company has a full valuation allowance for its net
deferred tax asset associated with its U.S. operations. The
provision (benefit) for taxes on U.S. operations for fiscal 2015
and 2014 was substantially offset by changes in the valuation
allowance.
(5) Effective in the fourth quarter of 2015, the company adopted
ASU 2015-03 – Simplifying the Presentation of Debt Issuance Costs.
ASU 2015-03 requires that debt issuance costs related to a
recognized debt liability be presented in the balance sheet as a
direct deduction from the carrying amount of that debt liability,
consistent with debt discounts, as opposed to an asset. The new
accounting standard required retrospective application and the
financial information contained herein has been adjusted to reflect
the impact of adopting this new accounting standard.
On April 30, 2015, the company issued $550 million in aggregate
principal amount of 5.25% Senior Notes due January 2024 (the "2024
Notes") and $450 million in aggregate principal amount of 5.625%
Senior Notes due January 2026 (the "2026 Notes"). Issuance costs
for the 2024 Notes and 2026 Notes totaled $9 million.
On February 3, 2015, the company issued $1.00 billion in
aggregate principal amount of 5.25% Senior Notes due August 2023
(the "2023 Notes"). Issuance costs for the 2023 Notes totaled
$12 million.
In 2015, we recorded capital lease obligations aggregating $324
million, including $291 million related to equipment sale-leaseback
transactions, at a weighted-average effective interest rate of
3.2%, payable in periodic installments through May 2019.
As of September 3, 2015, the company had revolving credit
facilities available that provide for up to $842 million of
additional financing based on eligible receivables and inventories
and a term loan agreement available to obtain financing
collateralized by certain property, plant, and equipment in the
amount of 6.90 billion New Taiwan dollars or an equivalent amount
in U.S. dollars (approximately $213 million as of September 3,
2015), of which the company drew $40 million on June 18, 2015.
MICRON TECHNOLOGY,
INC. |
RECONCILIATION OF GAAP
TO NON-GAAP RESULTS |
(in millions except per
share amounts) |
|
|
|
|
4th Qtr. |
3rd Qtr. |
|
September 3, |
June 4, |
|
2015 |
2015 |
GAAP net income attributable to Micron |
$ 471 |
$ 491 |
Non-GAAP adjustments: |
|
|
Restructure and asset
impairments |
— |
1 |
Amortization of debt discount
and other costs |
33 |
34 |
Loss on restructure of
debt |
1 |
18 |
(Gain) loss from changes in
currency exchange rates |
1 |
(1) |
(Gain) from remeasurement of
equity interest |
(21) |
— |
Estimated tax
effects of above items |
(13) |
— |
Non-cash taxes from MMJ and
MMT |
(58) |
67 |
Non-cash taxes from business
acquisition activities |
(21) |
— |
Non-cash taxes from
Inotera |
6 |
10 |
Total non-GAAP
adjustments |
(72) |
129 |
Non-GAAP net income attributable to
Micron |
$ 399 |
$ 620 |
|
|
|
Number of shares used in diluted per share
calculations: |
|
|
GAAP |
1,124 |
1,170 |
Effect of capped calls |
(44) |
(31) |
Non-GAAP |
1,080 |
1,139 |
|
|
|
Diluted earnings per share: |
|
|
GAAP |
$ 0.42 |
$ 0.42 |
Effects of above |
(0.05) |
0.12 |
Non-GAAP |
$ 0.37 |
$ 0.54 |
The table above sets forth non-GAAP net income attributable to
Micron, diluted shares and diluted earnings per share. The
adjustments above may or may not be infrequent or nonrecurring in
nature but are a result of periodic or non-core operating
activities of the company. The company believes this non-GAAP
information is helpful to understanding trends and in analyzing the
company's operating results and earnings. The company is providing
this information to investors to assist in performing analyses of
the company's operating results. When evaluating performance and
making decisions on how to allocate company resources, management
uses this non-GAAP information and believes investors should have
access to similar data when making their investment decisions. The
presentation of these adjusted amounts vary from numbers presented
in accordance with U.S. GAAP and therefore may not be comparable to
amounts reported by other companies.
The company's management excludes the following items in
analyzing the company's operating results and understanding trends
in the company's earnings:
- Restructure and asset impairments;
- Amortization of debt discount and other costs, including the
accretion of non-cash interest expense associated with the
company's convertible debt and the MMJ installment debt;
- Loss on restructure of debt;
- (Gain) loss from changes in currency exchange rates;
- (Gain) from remeasurement of equity interest;
- The estimated tax effects of above items;
- Non-cash taxes resulting from utilization of, and other changes
in, deferred tax assets of MMJ and MMT;
- Non-cash taxes resulting from business acquisition activities;
and
- Non-cash taxes resulting from utilization of, and other changes
in, deferred tax assets of Inotera, an equity method investment of
the company.
Non-GAAP diluted shares include the impact of the company's
outstanding capped call transactions, which are anti-dilutive in
GAAP earnings per share but are expected to mitigate the dilutive
effect of the company's convertible notes. The anti-dilutive effect
of the capped calls is based on the average share price for the
period the capped calls are outstanding during the quarter.
CONTACT: Kipp A. Bedard
Investor Relations
kbedard@micron.com
(208) 368-4465
Daniel Francisco
Media Relations
dfrancisco@micron.com
(208) 368-5584
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