Micron Technology, Inc., Reports Results for the Second Quarter of Fiscal 2006

BOISE, Idaho—(BUSINESS WIRE)—April 10, 2006— Micron Technology, Inc., (NYSE: MU) today announced results of operations for its second quarter of fiscal 2006, ended March 2, 2006. The Company had net income of $193 million, or $0.27 per diluted share, on net sales of $1.2 billion. For the first quarter of fiscal 2006, the Company reported net income of $63 million, or $0.09 per diluted share, on net sales of $1.4 billion.

The Company achieved an eight percent reduction in cost per megabit for DDR and DDR2 memory products comparing the second quarter to the first quarter of fiscal 2006. During the second quarter, the Company continued to shift its product mix to higher margin products, with CMOS image sensors leading gross margin performance across all product categories. The Company's revenue and gross margin decreased in the second quarter compared to the first quarter of fiscal 2006 primarily as a result of declines in average selling prices for memory products.

IM Flash Technologies, LLC, a joint venture between the Company (51 percent) and Intel Corporation (49 percent), began operations during the second quarter of fiscal 2006. IMFT manufactures NAND Flash products for the Company and Intel. The initial contributions from the parties included cash from Intel in the amount of $500 million. In addition, the Company recognized a $230 million gain, reflected in other operating income, on the sale of existing NAND flash memory designs and certain related technology to Intel.

Effective as of the beginning of the third quarter of fiscal 2006, the Company began consolidating the operating results of TECH Semiconductor. Production from TECH Semiconductor has approximated 20 to 25 percent of the Company's overall memory production. The Company's arrangement with TECH Semiconductor has historically been reported in revenue and cost of goods sold.

During the third quarter of fiscal 2006, the Company entered into a merger agreement to acquire Lexar Media, Inc. in a stock-for-stock transaction that will be accounted for as a purchase by Micron. Completion of the merger is subject to customary closing conditions, including Lexar shareholder and regulatory approvals.

At the end of the second quarter of fiscal 2006, the Company had $2.6 billion in cash and short-term investments. During the quarter, the Company generated $880 million in cash from operations and invested $268 million in capital expenditures. In addition to scheduled payments on notes and capital leases in the second quarter, the Company called for redemption of its 2.5 percent convertible subordinated notes, and holders of these notes converted them into 53.7 million shares of Company stock. In connection with the conversion of these notes, the Company negotiated the early termination of its call spread options for net proceeds to the Company of $171 million that were received on March 3, 2006, subsequent to quarter end. The Company anticipates capital additions for fiscal year 2006, with the inclusion of IM Flash Technologies and TECH Semiconductor, will total approximately $2.6 billion.

The Company will host a conference call today at 3:30 p.m. MDT to discuss its financial results. The conference 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 April 11, 2007. A taped audio replay of the conference call will also be available at (973) 341-3080 (confirmation code: 7252236) beginning at 5:30 p.m. MDT today and continuing until 5:30 p.m. MDT on April 17, 2006.

Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, 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)

                   2nd Qtr. 1st Qtr. 2nd Qtr.     Six Months Ended
                   Mar. 2,  Dec. 1,   Mar. 3,      Mar. 2,   Mar 3,
                    2006     2005      2005         2006      2005

Net sales        $ 1,225.0 $1,361.8 $ 1,307.9    $ 2,586.8 $ 2,568.2
Cost of goods sold   989.7  1,050.7     953.9      2,040.4   1,791.2
  Gross margin       235.3    311.1     354.0        546.4     777.0

Selling, general and 
 administrative      107.8     95.3      84.9        203.1     171.7
Research and 
 development         159.5    165.5     151.4        325.0     299.8
Other operating (income) 
 expense (1)        (219.2)   (12.1)     (8.7)      (231.3)      4.2
Operating income     187.2     62.4     126.4        249.6     301.3

Interest income 
 (expense), net       12.3      0.3      (5.0)        12.6      (9.5)
Other non-operating 
 income (expense)      1.0      0.1       0.1          1.1      (1.2)
Income tax 
 provision (2)        (7.3)    (0.2)     (3.6)        (7.5)    (17.8)
Net income         $ 193.2   $ 62.6   $ 117.9      $ 255.8   $ 272.8

Earnings per share:
  Basic             $ 0.29    $0.10    $ 0.18       $ 0.39    $ 0.42
  Diluted             0.27     0.09      0.17         0.37      0.40

Number of shares used in per share
calculations:
  Basic              661.5    650.1     647.1        655.8     646.6
  Diluted            714.6    707.1     701.3        710.6     700.8


                                               As of
                                     Mar. 2,   Dec. 1,   Sep. 1,
                                      2006      2005      2005

Cash and short-term 
investments                        $ 2,584.8 $  1,377.4  $  1,290.4
Receivables  (4)                                                926.7          805.3          794.4
Inventories                                                        686.0          682.3          771.5
Total  current  assets                                  4,286.0      2,941.9      2,925.6
Property,  plant  and  equipment,  net      4,711.9      4,676.6      4,683.8
Restricted  cash  (3)                                          14.4            49.4            50.2
Total  assets                                                  9,377.4      8,009.5      8,006.4

Accounts  payable  and  accrued  expenses    910.4          721.0          752.5
Current  portion  of  long-term  debt            148.5          146.2          147.0
Total  current  liabilities                        1,204.8          977.3          978.6
Long-term  debt  (3)                                          312.1          960.9      1,020.2
Noncontrolling  interest  in  subsidiary    498.6                --                --
Shareholders'  equity                                  6,954.2      5,923.5      5,846.8

                                                                                                  Six  Months  Ended
                                                                                                    Mar.  2,  Mar.  3,
                                                                                                      2006        2005

Net  cash  provided  by  operating  activities              $  1,305.1  $  599.8
Net  cash  used  for  investing  activities                      (694.1)      (700.2)
Net  cash  provided  by  (used  for)  financing  
  activities                                                                              400.1          (26.2)

Depreciation  and  amortization                                          594.6          630.9
Expenditures  for  property,  plant  and  equipment      (455.2)      (670.6)
Payments  on  equipment  purchase  contracts                    (77.1)      (143.4)

Noncash  equipment  acquisitions  on  contracts
payable  and  capital  leases                                                143.5          276.9

(1)  Other  operating  income  for  the  second  quarter  of  fiscal  2006
includes  $230  million  of  net  proceeds  from  Intel  Corporation  ("Intel")
for  the  sale  of  the  Company's  existing  NAND  Flash  memory  designs  and
certain  related  technology  to  Intel  and  the  Company's  acquisition  of  a
perpetual,  paid-up  license  to  use  and  modify  such  designs.  Other
operating  expense  for  the  second  quarter  and  first  six  month  of  fiscal
2006  include  $9  million  and  $9  million,  respectively,  from  losses  net
of  gains  on  write-downs  and  disposals  of  semiconductor  equipment.
Other  operating  income  for  the  first  quarter  of  fiscal  2006  includes
net  gains  of  $12  million  from  changes  in  currency  exchange  rates
primarily  as  the  result  of  a  generally  stronger  U.S.  dollar  relative
to  the  Japanese  yen  and  euro.  Other  operating  expense  for  the  first
six  months  of  fiscal  2005  includes  net  losses  of  $15  million  from
changes  in  currency  exchange  rates.  Other  operating  income  for  the
first  six  month  of  fiscal  2005  includes  $12  million  in  receipts  from
the  U.S.  government  in  connection  with  anti-dumping  tariffs.

(2)  Income  taxes  for  2006  and  2005  primarily  reflect  taxes  on  the
Company's  non-U.S.  operations  and  U.S.  alternative  minimum  tax.  The
Company  has  a  valuation  allowance  for  its  net  deferred  tax  asset
associated  with  its  U.S.  operations.  The  provision  for  taxes  on  U.S.
operations  in  2006  and  2005  was  substantially  offset  by  reductions  in
the  valuation  allowance.  Until  such  time  as  the  Company  utilizes  a
significant  portion  of  its  U.S.  net  operating  loss  carryforwards  and
unused  tax  credits,  the  provision  for  taxes  on  the  Company's  U.S.
operations  is  expected  to  be  substantially  offset  by  reductions  in  the
valuation  allowance.  As  of  March  2,  2006,  the  Company  had  aggregate
U.S.  tax  net  operating  loss  carryforwards  of  $1.7  billion  and  unused
U.S.  tax  credit  carryforwards  of  $185  million.  The  Company  also  has
unused  state  tax  net  operating  loss  carryforwards  of  $1.3  billion  and
unused  state  tax  credits  of  $146  million.  Substantially  all  of  the  net
operating  loss  carryforwards  expire  in  2022  to  2025  and  substantially
all  of  the  tax  credit  carryforwards  expire  in  2013  to  2026.  During  the
second  quarter  of  fiscal  2006,  the  Company  utilized  approximately  $1.0
billion  of  its  U.S.  and  state  tax  net  operating  loss  carryforwards  as
a  result  of  the  IMFT  and  related  transactions.

(3)  In  the  second  quarter  of  fiscal  2006,  the  Company's  $632.5
million  2.5  percent  Convertible  Subordinated  Notes  ("Notes")  were
converted  into  53.7  million  shares  of  common  stock.  In  addition,  the
Company's  related  interest  rate  swap  terminated  by  its  terms  on
February  6,  2006  and,  as  a  result,  $35  million  pledged  as  collateral
for  the  swap  became  unrestricted.  Unamortized  issuance  costs  of  $10
million  were  charged  to  additional  capital  in  the  second  quarter  of
fiscal  2006  in  connection  with  the  conversion  of  the  Notes.

(4)  On  February  14,  2006,  the  Company  terminated  its  outstanding
call  spread  options  covering  a  total  of  approximately  53.7  million
shares  of  its  common  stock  ("Call  Spread  Options").  The  Company
originally  entered  into  the  Call  Spread  Options  in  connection  with  its
issuance  of  the  Notes.  The  Company  had  a  receivable  of  $171  million  as
of  the  end  of  the  second  quarter  of  fiscal  2006  for  the  settlement  of
the  Call  Spread  Options,  which  was  received  on  March  3,  2006.  The
settlement  was  accounted  for  as  a  capital  transaction.

 


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