Micron Technology, Inc., Reports Results for the Fourth Quarter and 2009 Fiscal Year

BOISE, Idaho — (BUSINESS WIRE) — September 29, 2009 — Micron Technology, Inc., (NYSE: MU) today announced results of operations for its fourth quarter and 2009 fiscal year, which ended September 3, 2009. For the fourth quarter of fiscal 2009, the company posted a net loss of $88 million, or $0.10 per diluted share, on net sales of $1.3 billion. For the 2009 fiscal year, the company posted a net loss of $1.8 billion, or $2.29 per diluted share, on net sales of $4.8 billion. In the fourth quarter and for the 2009 fiscal year, the company generated $357 million and $1.2 billion, respectively, in cash flows from operations. The company ended the year with $1.5 billion in cash and investments.

“The market, while still challenging, is beginning to improve. Micron has been one of the only companies in the industry able to generate positive operating cash flow every quarter during this downturn. Our operating performance and ongoing cost improvements put Micron in a great competitive position going forward,” said Steve Appleton, Micron Chairman and CEO.

Revenue from sales of DRAM products increased 28 percent in the fourth quarter compared to the third quarter due to a 19 percent increase in sales volumes and an 8 percent increase in average selling prices. Revenue from sales of NAND Flash products increased 10 percent in the fourth quarter compared to the third quarter due to a 23 percent increase in sales volumes. This was partially offset by an 11 percent decrease in average selling prices resulting primarily from reduced manufacturing costs associated with products sold to Intel Corporation, the company’s NAND Flash manufacturing partner. Prices for NAND Flash products sold to Intel approximate cost, which decreased significantly in the fourth quarter compared to the third quarter as the transition to the company’s 34 nanometer (nm) NAND process technology was substantially completed. Average selling prices for NAND Flash sales excluding those to Intel were relatively stable in the fourth quarter compared to the previous quarter.

The company’s gross margin on sales of memory products continued to improve from 11 percent in the third quarter of fiscal 2009 to 12 percent in the fourth quarter. Cost of goods sold in the fourth quarter includes approximately $37 million of charges for unused production capacity at the company’s Inotera and IM Flash joint ventures. There was no lower of cost or market write-down of memory inventories during the third or fourth quarters. When adjusted to exclude the effects of selling products subject to previous lower of cost or market write-downs and the idle capacity costs from Inotera and IM Flash, gross margins on sales of memory products improved to positive 8 percent in the fourth quarter compared to negative 12 percent in the third quarter as a result of significant decreases in per gigabit manufacturing costs.

Unit sales from the company’s imaging segment were approximately 30 percent higher in the fourth quarter as compared to the preceding quarter, the effect of which was essentially offset by a decline in the average selling price resulting from the transition during the quarter to wafer foundry sales of products. Gross margin on sales of imaging products however improved to 20 percent in the fourth quarter as compared to 2 percent in the third quarter primarily as a result of increased utilization of dedicated 200 millimeter (mm) manufacturing capacity.

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 Sept. 29, 2010. A taped audio replay of the conference call will also be available at 706-645-9291 (conference number: 30898947) beginning at 5:30 p.m. MDT today and continuing until 5:30 p.m. MDT on Oct. 6, 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.

 MICRON TECHNOLOGY, INC.

CONSOLIDATED FINANCIAL SUMMARY

(in millions except per share amounts)

               
  4th Qtr.   3rd Qtr.   4th Qtr.   Year Ended
  Sep. 3,   Jun. 4,   Aug. 28,   Sep. 3,   Aug. 28,
  2009  

2009

  2008   2009   2008
                   
Net sales $ 1,302     $ 1,106     $ 1,449     $ 4,803     $ 5,841  
Cost of goods sold (1)   1,132       999       1,514       5,242       5,896  
Gross margin   170       107       (65 )     (439 )     (55 )
Selling, general and administrative   82       80       107       354       455  
Research and development   139       162       167       647       680  
Restructure (2)   12       19       4       70       33  
Goodwill impairment (3)   --       --       --       58       463  
Other operating (income) expense (4)   (14 )     92       (5 )     107       (91 )
Operating loss   (49 )     (246 )     (338 )     (1,675 )     (1,595 )
Interest income (expense), net   (31 )     (31 )     (9 )     (113 )     (3 )
Other non-operating income (expense)   (1 )     (3 )     (6 )     (16 )     (13 )
Income tax (provision) benefit (5)   13       2       (2 )     (2 )     (18 )
Equity in net losses of equity method investees (6)   (34 )     (45 )     --       (140 )     --  
Noncontrolling interests in net (income) loss   14       33       11       111       10  
Net loss $ (88 )   $ (290 )   $ (344 )   $ (1,835 )   $ (1,619 )
                   
Loss per share:                  
Basic $ (0.10 )   $ (0.36 )   $ (0.45 )   $ (2.29 )   $ (2.10 )
Diluted   (0.10 )     (0.36 )     (0.45 )     (2.29 )     (2.10 )
                   
Number of shares used in per share calculations:                  
Basic   844.3       813.3       772.9       800.7       772.5  
Diluted   844.3       813.3       772.9       800.7       772.5  
               
  4th Qtr.   3rd Qtr.        
  Sep. 3,   Jun. 4,            
  2009   2009            
                   
Memory gross margin, as reported $ 146     $ 104              
Idle capacity costs from Inotera and

IM Flash Singapore

 

37

      25              
Estimated effects of previous inventory

write-downs

 

(91

)

   

(242

)

           
Memory gross margin, adjusted (7) $ 92     $ (113 )            
Memory gross margin percentage, as reported   12 %     11 %            
Memory gross margin percentage, adjusted   8 %     (12

%)

           

CONSOLIDATED FINANCIAL SUMMARY, Continued

 
   
  As of
  Sep. 3,   Jun. 4,   Aug. 28,
  2009   2009   2008
           
Cash and short-term investments $ 1,485   $ 1,306     $ 1,362  
Receivables   798     750       1,032  
Inventories (1)   987     999       1,291  
Total current assets   3,344     3,128       3,779  
Property, plant and equipment   7,081     7,536       8,811  
Total assets   11,455     11,664       13,430  
           
Accounts payable and accrued expenses   1,037     1,037       1,111  
Current portion of long-term debt   424     372       275  
Total current liabilities   1,892     1,825       1,598  
Long-term debt (8)   2,674     2,752       2,451  
Noncontrolling interests in subsidiaries   1,986     2,130       2,865  
Total shareholders’ equity (9)   4,654     4,697       6,178  
       
      Year Ended
    Sep. 3,   Aug. 28,
    2009   2008
         
Net cash provided by operating activities   $ 1,206     $ 1,018  
Net cash used for investing activities     (674 )     (2,092 )
Net cash provided by (used for) financing activities     (290 )     125  
         
Depreciation and amortization     2,139       2,060  
Expenditures for property, plant and equipment     (488 )     (2,529 )
Net cash (paid to) received from noncontrolling interests     (681 )     268  
Payments on equipment purchase contracts     (144 )     (387 )
         
Noncash equipment acquisitions on contracts payable

and capital leases

   

331

     

501

 

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