Micron Technology, Inc., Reports Results for the Third Quarter of Fiscal 2012
Posted on June 20, 2012 at 16:04 PM EDT
BOISE, Idaho, June 20, 2012 (GLOBE NEWSWIRE) -- Micron Technology, Inc., (Nasdaq:MU) today announced results of operations for its third quarter of fiscal 2012, which ended May 31, 2012. For the third quarter, the company had a net loss attributable to Micron shareholders of $320 million, or $0.32 per diluted share, on net sales of $2.2 billion. The results for the third quarter of fiscal 2012 compare to a net loss of $282 million, or $0.29 per diluted share, on net sales of $2.0 billion for the second quarter of fiscal 2012, and net income of $75 million, or $0.07 per diluted share, on net sales of $2.1 billion for the third quarter of fiscal 2011.
Revenues from sales of DRAM products in the third quarter of fiscal 2012 were 20 percent higher due primarily to a 12 percent increase in sales volume and a 7 percent increase in average selling prices compared to the second quarter of fiscal 2012, which included the adverse impact of a $58 million charge to revenue. Revenues from sales of NAND Flash products were slightly higher in the third quarter of fiscal 2012 compared to the second quarter of fiscal 2012, due primarily to an approximate 40 percent increase in sales volume offset by decreases in average selling prices. Sales of NOR Flash products were approximately 10 percent of total net sales for the third quarter of fiscal 2012. The company's consolidated gross margin of 11 percent in the third quarter of fiscal 2012 was slightly higher than the second quarter of fiscal 2012. Improvements in margins from sales of DRAM and NOR Flash products were partially offset by declines in margins from sales of NAND Flash products.
Cash flows from operations for the third quarter of fiscal 2012 were $686 million, which included a $300 million customer advance from Intel received in connection with the company's recently announced expansion of its IM Flash activities. During the third quarter of fiscal 2012, the company raised approximately $875 million in convertible debt financing, net of costs associated with capped call transactions and other costs, and invested approximately $325 million in capital expenditures. The company ended the third quarter with cash and investments of $2.7 billion.
The company will host a conference call Wednesday, June 20 at 2:30 p.m. MDT 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 June 27, 2013. A taped audio replay of the conference call will also be available at (404) 537-3406 (conference number: 90798592) beginning at 5:30 p.m. MDT Wednesday, June 20, 2012 and continuing until 5:30 p.m. MDT on Wednesday, June 27, 2012.
Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets a full range of DRAM, NAND Flash and NOR Flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, embedded and mobile products. Micron's common stock is traded on the NASDAQ under the MU symbol. To learn more about Micron Technology, Inc., visit www.micron.com.
The Micron Technology, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6950
(1) Other operating (income) expense consisted of the following:
Other operating expense in the third quarter of fiscal 2012 in the table above includes $17 million from the termination of a lease with IM Flash Technologies, LLC ("IMFT"), a joint venture of the company, and a charge of $10 million to write off a receivable in connection with resolution of certain prior year tax matters.
(2) On April 18, 2012, the company issued $550 million of 2.375% Convertible Senior Notes due May 1, 2032 (the "2032C Notes") and $450 million of 3.125% Convertible Senior Notes due May 1, 2032 (the "2032D Notes" and, together with the 2032C Notes, the "2032 Notes"). Issuance costs for the 2032 Notes totaled $21 million. The initial conversion rate for the 2032C Notes is 103.8907 shares of common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $9.63 per share of common stock. The initial conversion rate for the 2032D Notes is 100.1803 shares of common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $9.98 per share of common stock. Upon the issuance of the 2032 Notes, the company recorded $805 million of debt, $191 million of additional capital and $17 million of deferred debt issuance costs (included in other noncurrent assets). The difference between the debt recorded at inception and the principal amount ($104 million for the 2032C Notes and $92 million for the 2032D Notes) is being accreted to principal through interest expense through May 2019 for the 2032C Notes and May 2021 for the 2032D Notes, the expected life of the notes.
(3) Other non-operating income for the second quarter of fiscal 2012 included $39 million in net gains from the disposition of noncurrent equity investments. Other non-operating income for the third quarter of fiscal 2011 included $15 million for the termination of the company's debt guarantee obligation recorded in connection with the acquisition of Numonyx in the third quarter of fiscal 2010. Other non-operating expense for the first nine months of fiscal 2011 included a $111 million loss recognized in the first quarter of fiscal 2011 in connection with a series of debt restructure transactions with certain holders of the company's convertible notes.
(4) Income taxes for the third quarter and first nine months of 2012 included a tax benefit of $42 million and $56 million, respectively, related to the favorable resolution of certain prior year tax matters, which was previously reserved as an uncertain tax position. Income tax provision in the third quarter of fiscal 2011 included a net charge of $74 million, of which $27 million was related to the gain on the disposition of the Japan Fab and $47 million was to record a valuation allowance against certain remaining deferred tax assets at the company's Japanese subsidiary. Income tax provision in the third quarter and first nine months of fiscal 2011 included charges of $5 million and $45 million, respectively, in connection with the Samsung agreement. Income taxes for the second quarter of fiscal 2011 included a charge to reduce net deferred tax assets by $19 million in connection with a change in certain tax rates. Remaining taxes in the third quarter and first nine months of fiscal 2012 and 2011 primarily reflect taxes on the company's non-U.S. operations. The company has a valuation allowance for its net deferred tax asset associated with its U.S. operations. Taxes attributable to the company's U.S. operations in the third quarter and first nine months of 2012 and 2011 were substantially offset by changes in the valuation allowance.
(5) As a result of the ongoing challenging global environment in the solar industry and unfavorable worldwide supply and demand conditions, on May 25, 2012, the Board of Directors of Transform Solar Pty Ltd. ("Transform"), an equity method investment of the company, approved a liquidation plan. As a result of the liquidation plan, the company recognized a charge of $69 million and its investment balance in Transform was reduced to zero.
(6) On February 27, 2012, the company entered into agreements with Intel relating to its IM Flash Singapore, LLP ("IMFS") and IMFT joint ventures. The transactions contemplated by such agreements became effective on April 6, 2012. In connection therewith, the company acquired Intel's 18 percent interest in IMFS and the assets of IMFT located at the company's Virginia wafer fabrication facility. As a result, Intel received distributions of aggregating approximately $600 million. Additionally, Intel deposited $300 million with the company to be applied to Intel's future purchases of NAND Flash products under a NAND Flash supply agreement or, under certain circumstances, to be refunded.
In connection with purchasing the IMFT assets located in Virginia, the company terminated IMFT's lease to use approximately 50 percent of the Virginia fabrication facility. As a result, other operating expense included a charge of $17 million in the third quarter of fiscal 2012.
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