Micron Technology, Inc. (Nasdaq: MU) today announced results for
its first quarter of fiscal 2021, which ended Dec. 3, 2020.
Fiscal Q1 2021 highlights
- Revenue of $5.77 billion versus $6.06 billion for the prior
quarter and $5.14 billion for the same period last year
- GAAP net income of $803 million, or $0.71 per diluted
share
- Non-GAAP net income of $897 million, or $0.78 per diluted
share
- Operating cash flow of $1.97 billion versus $2.27 billion for
the prior quarter and $2.01 billion for the same period last
year
“Micron delivered outstanding fiscal first quarter results,
driven by focused execution and strong end-market demand,” said
Micron Technology President and CEO Sanjay Mehrotra. “We are
excited about the strengthening DRAM industry fundamentals. For the
first time in our history, Micron is simultaneously leading on DRAM
and NAND technologies, and we are in an excellent position to
benefit from accelerating digital transformation of the global
economy fueled by AI, 5G, cloud, and the intelligent edge.”
Quarterly
Financial Results |
(in
millions, except per share amounts) |
GAAP(1) |
|
Non-GAAP(2) |
FQ1-21 |
FQ4-20 |
FQ1-20 |
|
FQ1-21 |
FQ4-20 |
FQ1-20 |
|
|
|
|
|
|
|
|
Revenue |
$ |
5,773 |
|
$ |
6,056 |
|
$ |
5,144 |
|
|
$ |
5,773 |
|
$ |
6,056 |
|
$ |
5,144 |
|
Gross margin |
1,736 |
|
2,068 |
|
1,366 |
|
|
1,784 |
|
2,111 |
|
1,405 |
|
percent of revenue |
30.1 |
% |
34.1 |
% |
26.6 |
% |
|
30.9 |
% |
34.9 |
% |
27.3 |
% |
Operating expenses |
870 |
|
911 |
|
848 |
|
|
811 |
|
809 |
|
811 |
|
Operating income |
866 |
|
1,157 |
|
518 |
|
|
973 |
|
1,302 |
|
594 |
|
percent of revenue |
15.0 |
% |
19.1 |
% |
10.1 |
% |
|
16.9 |
% |
21.5 |
% |
11.5 |
% |
Net income attributable to
Micron |
803 |
|
988 |
|
491 |
|
|
897 |
|
1,229 |
|
548 |
|
Diluted earnings per
share |
0.71 |
|
0.87 |
|
0.43 |
|
|
0.78 |
|
1.08 |
|
0.48 |
|
Investments in capital expenditures, net(2) were $2.78 billion
for the first quarter of 2021. Micron ended the quarter with cash,
marketable investments, and restricted cash of $8.36 billion, for a
net cash(2) position of $1.73 billion.
Business Outlook
The following table presents Micron’s guidance for the second
quarter of 2021:
FQ2-21 |
GAAP(1)
Outlook |
Non-GAAP(2)
Outlook |
|
|
|
Revenue |
$5.8 billion ± $200 million |
$5.8 billion ± $200 million |
Gross margin |
25% ± 1% |
31% ± 1% |
Operating expenses |
$882 million ± $25 million |
$825 million ± $25 million |
Interest (income) expense, net |
$37 million |
$35 million |
Diluted earnings per share |
$0.41 ± $0.07 |
$0.75 ± $0.07 |
Further information regarding Micron’s business outlook is
included in the prepared remarks and slides, which have been posted
at investors.micron.com.
Investor Webcast
Micron will host a conference call on Thursday, Jan. 7, 2021, at
2:30 p.m. MT to discuss its first quarter financial results and
provide forward-looking guidance for its second quarter. A live
webcast of the call will be available online at
investors.micron.com. A webcast replay will be available for one
year after the call. For Investor Relations and other company
updates, follow @MicronTech on Twitter at
twitter.com/MicronTech.
About Micron Technology, Inc.
We are an industry leader in innovative memory and storage
solutions. Through our global brands — Micron® and Crucial® — our
broad portfolio of high-performance memory and storage
technologies, including DRAM, NAND, 3D XPoint™ memory, and NOR, is
transforming how the world uses information to enrich life for all.
Backed by more than 40 years of technology leadership, our memory
and storage solutions enable disruptive trends, including
artificial intelligence, 5G, machine learning, and autonomous
vehicles, in key market segments like mobile, data center, client,
consumer, industrial, graphics, automotive, and networking. Our
common stock is traded on Nasdaq under the MU symbol. To learn more
about Micron Technology, Inc., visit micron.com.
Micron and the Micron orbit logo are trademarks of Micron
Technology, Inc. All other trademarks are the property of their
respective owners.
Forward-Looking Statements
This press release contains forward-looking statements regarding
our industry, our strategic position, and our financial and
operating results. These forward-looking statements are subject to
a number of risks and uncertainties that could cause actual results
to differ materially. Please refer to the documents we file with
the Securities and Exchange Commission, specifically our most
recent Form 10-K and Form 10-Q. These documents contain and
identify important factors that could cause our actual results to
differ materially from those contained in these forward-looking
statements. These certain factors can be found at
www.micron.com/certainfactors. 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 release to
conform these statements to actual results.
(1) |
GAAP represents U.S. Generally Accepted Accounting Principles. |
(2) |
Non-GAAP represents GAAP excluding the impact of certain
activities, which management excludes in analyzing our operating
results and understanding trends in our earnings, adjusted free
cash flow, net cash, and business outlook. Further information
regarding Micron’s use of non-GAAP measures and reconciliations
between GAAP and non-GAAP measures are included within this press
release. |
|
|
MICRON TECHNOLOGY,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(In millions, except per share
amounts)(Unaudited)
|
1st Qtr. |
4th Qtr. |
1st Qtr. |
|
December 3,2020 |
September 3,2020 |
November 28,2019 |
|
|
|
|
Revenue |
$ |
5,773 |
|
|
$ |
6,056 |
|
|
$ |
5,144 |
|
Cost of goods sold |
4,037 |
|
|
3,988 |
|
|
3,778 |
|
Gross margin |
1,736 |
|
|
2,068 |
|
|
1,366 |
|
|
|
|
|
Research and development |
647 |
|
|
630 |
|
|
640 |
|
Selling, general, and
administrative |
214 |
|
|
231 |
|
|
211 |
|
Other operating (income)
expense, net |
9 |
|
|
50 |
|
|
(3 |
) |
Operating income |
866 |
|
|
1,157 |
|
|
518 |
|
|
|
|
|
Interest income |
10 |
|
|
13 |
|
|
44 |
|
Interest expense |
(48 |
) |
|
(50 |
) |
|
(47 |
) |
Other non-operating income
(expense), net |
13 |
|
|
5 |
|
|
46 |
|
|
841 |
|
|
1,125 |
|
|
561 |
|
|
|
|
|
Income tax (provision)
benefit |
(51 |
) |
|
(136 |
) |
|
(55 |
) |
Equity in net income (loss) of
equity method investees |
13 |
|
|
1 |
|
|
2 |
|
Net income |
803 |
|
|
990 |
|
|
508 |
|
|
|
|
|
Net income attributable to
noncontrolling interests |
— |
|
|
(2 |
) |
|
(17 |
) |
Net income attributable to Micron |
$ |
803 |
|
|
$ |
988 |
|
|
$ |
491 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.72 |
|
|
$ |
0.89 |
|
|
$ |
0.44 |
|
Diluted |
0.71 |
|
|
0.87 |
|
|
0.43 |
|
|
|
|
|
Number of shares used in per
share calculations |
|
|
|
Basic |
1,115 |
|
|
1,111 |
|
|
1,107 |
|
Diluted |
1,135 |
|
|
1,131 |
|
|
1,129 |
|
|
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY,
INC.CONSOLIDATED BALANCE SHEETS(In
millions)(Unaudited)
As of |
December 3,2020 |
September 3,2020 |
|
|
|
Assets |
|
|
Cash and equivalents |
$ |
5,985 |
|
|
$ |
7,624 |
|
Short-term investments |
1,047 |
|
|
518 |
|
Receivables |
3,691 |
|
|
3,912 |
|
Inventories |
5,521 |
|
|
5,607 |
|
Other current assets |
285 |
|
|
304 |
|
Total current assets |
16,529 |
|
|
17,965 |
|
Long-term marketable
investments |
1,264 |
|
|
1,048 |
|
Property, plant, and
equipment |
32,229 |
|
|
31,031 |
|
Operating lease right-of-use
assets |
577 |
|
|
584 |
|
Intangible assets |
336 |
|
|
334 |
|
Deferred tax assets |
726 |
|
|
707 |
|
Goodwill |
1,228 |
|
|
1,228 |
|
Other noncurrent assets |
802 |
|
|
781 |
|
Total assets |
$ |
53,691 |
|
|
$ |
53,678 |
|
|
|
|
Liabilities and
equity |
|
|
Accounts payable and accrued
expenses |
$ |
4,856 |
|
|
$ |
5,817 |
|
Current debt |
273 |
|
|
270 |
|
Other current liabilities |
559 |
|
|
548 |
|
Total current liabilities |
5,688 |
|
|
6,635 |
|
Long-term debt |
6,356 |
|
|
6,373 |
|
Noncurrent operating lease
liabilities |
529 |
|
|
533 |
|
Noncurrent unearned government
incentives |
656 |
|
|
643 |
|
Other noncurrent
liabilities |
555 |
|
|
498 |
|
Total liabilities |
13,784 |
|
|
14,682 |
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
Shareholders’ equity |
|
|
Common stock |
120 |
|
|
119 |
|
Additional capital |
9,034 |
|
|
8,917 |
|
Retained earnings |
34,138 |
|
|
33,384 |
|
Treasury stock |
(3,495 |
) |
|
(3,495 |
) |
Accumulated other comprehensive income (loss) |
110 |
|
|
71 |
|
Total equity |
39,907 |
|
|
38,996 |
|
Total liabilities and equity |
$ |
53,691 |
|
|
$ |
53,678 |
|
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In millions)(Unaudited)
Three months ended |
December 3,2020 |
November 28,2019 |
|
|
|
Cash flows from
operating activities |
|
|
Net income |
$ |
803 |
|
|
$ |
508 |
|
Adjustments to reconcile net income to net cash provided by
operating activities |
|
|
Depreciation expense and amortization of intangible assets |
1,487 |
|
|
1,296 |
|
Amortization of debt discount and other costs |
7 |
|
|
10 |
|
Stock-based compensation |
92 |
|
|
72 |
|
(Gain) loss on debt prepayments, repurchases, and conversions |
— |
|
|
(42 |
) |
Change in operating assets and liabilities |
|
|
Receivables |
251 |
|
|
(208 |
) |
Inventories |
86 |
|
|
175 |
|
Accounts payable and accrued expenses |
(753 |
) |
|
178 |
|
Deferred income taxes, net |
(24 |
) |
|
19 |
|
Other |
18 |
|
|
3 |
|
Net cash provided by operating activities |
1,967 |
|
|
2,011 |
|
|
|
|
Cash flows from
investing activities |
|
|
Expenditures for property,
plant, and equipment |
(2,738 |
) |
|
(1,943 |
) |
Purchases of
available-for-sale securities |
(1,002 |
) |
|
(407 |
) |
Proceeds from maturities of
available-for-sale securities |
216 |
|
|
163 |
|
Proceeds from sales of
available-for-sale securities |
45 |
|
|
988 |
|
Proceeds from government
incentives |
40 |
|
|
22 |
|
Other |
21 |
|
|
(12 |
) |
Net cash provided by (used for) investing activities |
(3,418 |
) |
|
(1,189 |
) |
|
|
|
Cash flows from
financing activities |
|
|
Payments on equipment purchase
contracts |
(97 |
) |
|
(11 |
) |
Repayments of debt |
(84 |
) |
|
(1,415 |
) |
Acquisition of noncontrolling
interest in IMFT |
— |
|
|
(744 |
) |
Proceeds from issuance of
debt |
— |
|
|
1,250 |
|
Other |
(33 |
) |
|
(72 |
) |
Net cash provided by (used for) financing activities |
(214 |
) |
|
(992 |
) |
|
|
|
Effect of changes in currency exchange rates on cash, cash
equivalents, and restricted cash |
27 |
|
|
(14 |
) |
|
|
|
Net increase (decrease) in
cash, cash equivalents, and restricted cash |
(1,638 |
) |
|
(184 |
) |
Cash, cash equivalents, and
restricted cash at beginning of period |
7,690 |
|
|
7,279 |
|
Cash, cash equivalents, and
restricted cash at end of period |
$ |
6,052 |
|
|
$ |
7,095 |
|
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY,
INC.RECONCILIATION OF GAAP TO NON-GAAP
MEASURES(In millions, except per share amounts)
|
1st Qtr. |
4th Qtr. |
1st Qtr. |
|
December 3,2020 |
September 3,2020 |
November 28,2019 |
|
|
|
|
GAAP gross margin |
$ |
1,736 |
|
|
$ |
2,068 |
|
|
$ |
1,366 |
|
Stock-based compensation |
41 |
|
|
37 |
|
|
31 |
|
Other |
7 |
|
|
6 |
|
|
8 |
|
Non-GAAP gross
margin |
$ |
1,784 |
|
|
$ |
2,111 |
|
|
$ |
1,405 |
|
|
|
|
|
GAAP operating
expenses |
$ |
870 |
|
|
$ |
911 |
|
|
$ |
848 |
|
Stock-based compensation |
(51 |
) |
|
(52 |
) |
|
(41 |
) |
Restructure and asset impairments |
(8 |
) |
|
(50 |
) |
|
4 |
|
Non-GAAP operating
expenses |
$ |
811 |
|
|
$ |
809 |
|
|
$ |
811 |
|
|
|
|
|
GAAP operating
income |
$ |
866 |
|
|
$ |
1,157 |
|
|
$ |
518 |
|
Stock-based compensation |
92 |
|
|
89 |
|
|
72 |
|
Restructure and asset impairments |
8 |
|
|
50 |
|
|
(4 |
) |
Other |
7 |
|
|
6 |
|
|
8 |
|
Non-GAAP operating
income |
$ |
973 |
|
|
$ |
1,302 |
|
|
$ |
594 |
|
|
|
|
|
GAAP net income
attributable to Micron |
$ |
803 |
|
|
$ |
988 |
|
|
$ |
491 |
|
Stock-based compensation |
92 |
|
|
89 |
|
|
72 |
|
Restructure and asset impairments |
8 |
|
|
50 |
|
|
(4 |
) |
Amortization of debt discount and other costs |
7 |
|
|
6 |
|
|
10 |
|
(Gain) loss on debt prepayments, repurchases, and conversions |
— |
|
|
— |
|
|
(42 |
) |
Other |
7 |
|
|
6 |
|
|
8 |
|
Estimated tax effects of above and non-cash changes in net deferred
income taxes |
(20 |
) |
|
90 |
|
|
13 |
|
Non-GAAP net income
attributable to Micron |
$ |
897 |
|
|
$ |
1,229 |
|
|
$ |
548 |
|
|
|
|
|
GAAP weighted-average
common shares outstanding - Diluted |
1,135 |
|
|
1,131 |
|
|
1,129 |
|
Adjustment for stock-based compensation and capped calls |
11 |
|
|
11 |
|
|
9 |
|
Non-GAAP
weighted-average common shares outstanding - Diluted |
1,146 |
|
|
1,142 |
|
|
1,138 |
|
|
|
|
|
GAAP diluted earnings
per share |
$ |
0.71 |
|
|
$ |
0.87 |
|
|
$ |
0.43 |
|
Effects of the above adjustments |
0.07 |
|
|
0.21 |
|
|
0.05 |
|
Non-GAAP diluted
earnings per share |
$ |
0.78 |
|
|
$ |
1.08 |
|
|
$ |
0.48 |
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES,
Continued
|
1st Qtr. |
4th Qtr. |
1st Qtr. |
|
December 3,2020 |
September 3,2020 |
November 28,2019 |
|
|
|
|
GAAP net cash provided by operating
activities |
$ |
1,967 |
|
|
$ |
2,271 |
|
|
$ |
2,011 |
|
Investments in capital
expenditures, net |
|
|
|
Expenditures for property, plant, and equipment, net(1) |
(2,726 |
) |
|
(2,268 |
) |
|
(1,936 |
) |
Payments on equipment purchase contracts |
(97 |
) |
|
(14 |
) |
|
(11 |
) |
Amounts funded by partners |
40 |
|
|
122 |
|
|
22 |
|
Adjusted free cash
flow |
$ |
(816 |
) |
|
$ |
111 |
|
|
$ |
86 |
|
(1) |
Expenditures for property, plant, and equipment, net include
proceeds from sales of property, plant, and equipment of $12
million for the first quarter of 2021, $12 million for the fourth
quarter of 2020, and $7 million for the first quarter of
2020. |
|
|
As of |
December 3,2020 |
September 3,2020 |
|
|
|
Cash and short-term investments |
$ |
7,032 |
|
|
$ |
8,142 |
|
Current and noncurrent
restricted cash |
67 |
|
|
66 |
|
Long-term marketable
investments |
1,264 |
|
|
1,048 |
|
Current and long-term
debt |
(6,629 |
) |
|
(6,643 |
) |
Net cash |
$ |
1,734 |
|
|
$ |
2,613 |
|
|
|
|
|
|
|
|
|
The tables above reconcile GAAP to non-GAAP measures of gross
margin, operating expenses, operating income, net income
attributable to Micron, diluted shares, diluted earnings per share,
adjusted free cash flow, and net cash. The non-GAAP adjustments
above may or may not be infrequent or nonrecurring in nature, but
are a result of periodic or non-core operating activities. We
believe this non-GAAP information is helpful in understanding
trends and in analyzing our operating results and earnings. We are
providing this information to investors to assist in performing
analysis of our operating results. When evaluating performance and
making decisions on how to allocate our resources, management uses
this non-GAAP information and believes investors should have access
to similar data when making their investment decisions. We believe
these non-GAAP financial measures increase transparency by
providing investors with useful supplemental information about the
financial performance of our business, enabling enhanced comparison
of our operating results between periods and with peer companies.
The presentation of these adjusted amounts varies from amounts
presented in accordance with U.S. GAAP and therefore may not be
comparable to amounts reported by other companies. Our management
excludes the following items in analyzing our operating results and
understanding trends in our earnings:
- Stock-based compensation;
- Flow-through of business acquisition-related inventory
adjustments;
- Acquisition-related costs;
- Start-up and preproduction costs;
- Employee severance;
- Restructure and asset impairments;
- Amortization of debt discount and other costs, including the
accretion of non-cash interest expense associated with our
convertible notes and other debt;
- Gains and losses from debt repurchases and conversions;
- Gains and losses from business acquisition activities;
- Initial impact of inventory accounting policy change to FIFO
and change in inventory cost absorption in the second quarter of
2021; and
- The estimated tax effects of above, non-cash changes in net
deferred income taxes, assessments of tax exposures, and
significant changes in tax law.
Non-GAAP diluted shares are adjusted for the impact of
additional shares resulting from the exclusion of stock-based
compensation from non-GAAP income. Non-GAAP diluted shares also
include the impact of capped calls, which are anti-dilutive in GAAP
earnings per share but are expected to mitigate the dilutive effect
of convertible notes, based on the average share price for the
period the capped calls were outstanding.
MICRON TECHNOLOGY,
INC.RECONCILIATION OF GAAP TO NON-GAAP
OUTLOOK
|
|
GAAP Outlook |
|
Adjustments |
|
Non-GAAP Outlook |
|
|
|
|
|
|
|
|
Revenue |
$5.8 billion ± $200 million |
|
— |
|
|
$5.8 billion ± $200 million |
Gross margin |
25% ± 1% |
|
6% |
A |
|
31% ± 1% |
Operating
expenses |
$882 million ± $25 million |
|
$57 million |
B |
|
$825 million ± $25 million |
Interest (income)
expense, net |
$37 million |
|
$2 million |
C |
|
$35 million |
Diluted earnings
per share(1) |
$0.41 ± $0.07 |
|
$0.34 |
A, B, C, D |
|
$0.75 ± $0.07 |
|
|
|
|
|
|
|
Non-GAAP
Adjustments(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A |
Inventory
accounting policy change to FIFO – cost of goods sold |
|
$ |
135 |
|
A |
Change in
inventory cost absorption – cost of goods sold |
|
165 |
|
A |
Stock-based
compensation – cost of goods sold |
|
54 |
|
A |
Other – cost of
goods sold |
|
7 |
|
B |
Stock-based
compensation – research and development |
|
30 |
|
B |
Stock-based
compensation – sales, general, and administrative |
|
27 |
|
C |
Amortization of
debt discount and other costs |
|
2 |
|
D |
Tax effects of the
above items and non-cash changes in net deferred income taxes |
|
(27 |
) |
|
|
|
|
|
|
|
$ |
393 |
|
(1) |
GAAP earnings per share based on approximately 1.14 billion diluted
shares and non-GAAP earnings per share based on approximately 1.15
billion diluted shares. |
|
|
The tables above reconcile our GAAP to non-GAAP guidance based
on the current outlook. The guidance does not incorporate the
impact of any potential business combinations, divestitures,
restructuring activities, balance sheet valuation adjustments,
strategic investments, financing transactions, and other
significant transactions. The timing and impact of such items are
dependent on future events that may be uncertain or outside of our
control.
Contacts:
Farhan Ahmad
Investor Relations
farhanahmad@micron.com
(408) 834-1927
Erica Rodriguez Pompen
Media Relations
epompen@micron.com
(408) 834-1873
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