UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
October
2, 2007
Date
of
Report (date of earliest event reported)
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MICRON
TECHNOLOGY, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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1-10658
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75-1618004
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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8000
South Federal Way
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Boise,
Idaho 83716-9632
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(Address
of principal executive offices)
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(208)
368-4000
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(Registrant’s
telephone number, including area code)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
c
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
c
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
c
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
c
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4c))
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Item
2.02.
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Results
of Operations and Financial
Condition.
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On
October 2, 2007, Micron Technology, Inc. announced its financial results for
the
quarter and year ended August 30, 2007. The full text of the press
release issued in connection with the announcement is attached as Exhibit 99.1
to this Current Report on Form 8-K.
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Item
2.05.
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Costs
Associated with Exit or Disposal
Activities.
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The
Company is pursuing a number of initiatives to drive greater cost efficiencies
and revenue growth across its operations. These initiatives include
workforce reductions in certain areas of the Company as the Company’s business
is realigned. Additional initiatives include establishing certain
operations closer in location to the Company’s global customers, evaluating
functions more efficiently performed through partnerships or other outside
relationships and reducing the Company’s overhead costs to meet or exceed
industry benchmarks. The Company is also exploring opportunities to
leverage the Company’s industry-leading technology and diversified product
portfolio to accelerate revenue growth and increase shareholder
value. It is anticipated that these initiatives will be implemented
over several quarters.
In
the
fourth quarter of fiscal 2007, the Company incurred a restructure charge
of $19
million in connection with the implementation of its cost efficiency
initiatives. The fourth quarter charge is comprised primarily of
employee severance and related costs resulting from a reduction in the Company’s
workforce. The Company anticipates that it will incur some level of
restructure charges through the end of fiscal 2008 as it continues to implement
these initiatives, but is currently unable to estimate the aggregate amount
of
the charges.
This
Current Report on Form 8-K contains forward-looking statements regarding
future
restructure charges. Actual events or results may differ materially from
those
contained in the forward-looking statements. Please refer to the documents
the
Company files on a consolidated basis from time to time with the Securities
and
Exchange Commission, specifically the Company's most recent Form 10-K and
Form
10-Q. These documents contain and identify important factors that could cause
the actual results for the Company on a consolidated basis to differ materially
from those contained in our forward-looking statements (see Certain Factors).
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 report to conform to actual
results.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits.
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The
following exhibits are filed
herewith:
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Exhibit
No.
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Description
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99.1
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Press
Release issued on October 2, 2007
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MICRON
TECHNOLOGY, INC.
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Date:
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October
2, 2007
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By:
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/s/
W. G. Stover, Jr
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Name:
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W.
G. Stover, Jr.
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Title:
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Vice
President of Finance and
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Chief
Financial Officer
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INDEX
TO EXHIBITS FILED WITH
THE
CURRENT REPORT ON FORM 8-K DATED OCTOBER 2, 2007
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Exhibit
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Description
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99.1
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Press
Release issued on October 2, 2007
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EXHIBIT
99.1
FOR
IMMEDIATE RELEASE
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Contacts:
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Kipp
A. Bedard
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Daniel
Francisco
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Investor
Relations
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Media
Relations
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kbedard@micron.com
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dfrancisco@micron.com
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(208)
368-4400
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(208)
368-5584
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MICRON
TECHNOLOGY, INC., REPORTS RESULTS FOR THE
2007
FISCAL YEAR AND FOURTH QUARTER
BOISE,
Idaho, October 2, 2007 – Micron Technology, Inc., (NYSE: MU) today
announced results of operations for its 2007 fiscal year and fourth quarter,
which ended August 30, 2007. For the fourth quarter of fiscal 2007, the
company
incurred a net loss of $158 million, or $0.21 per diluted share, on net
sales of
$1.4 billion, which compares to a net loss of $225 million, or $0.29 per
diluted
share, on net sales of $1.3 billion for the third quarter. For the 2007
fiscal
year, the company incurred a net loss of $320 million, or $0.42 per diluted
share, on net sales of $5.7 billion, which compares to net income of $408
million, or $0.57 per diluted share, on net sales of $5.3 billion for the
prior
fiscal year.
The
company’s fourth quarter and fiscal year 2007 results were heavily influenced by
industry supply/demand dynamics that depressed average selling prices for
memory
products. The company’s net sales for the fourth quarter of fiscal 2007
increased 11 percent compared to the third quarter primarily as a result
of
higher megabit sales of memory products. Compared to the prior quarter,
fourth
quarter megabit sales increased approximately 25 percent and 60 percent
for DRAM
and NAND Flash memory products, respectively, while average selling prices
for
both DRAM and NAND Flash memory products decreased approximately 15 percent.
Sales of NAND Flash include sales from the company’s consolidated NAND Flash
manufacturing joint venture (“IM Flash”) to the company’s joint venture partner
at long-term negotiated prices approximating cost. The results for the
fourth
quarter include a charge of $20 million to write down the carrying value
of work
in process and finished goods inventories of memory products to their estimated
fair market values.
Sales
of
CMOS image sensors in the fourth quarter of fiscal 2007 increased approximately
five percent compared to the third quarter primarily as a result of higher
average selling prices reflecting the company’s shift in mix to higher megapixel
products.
The
company’s manufacturing operations achieved noticeable scale improvements in
2007, with wafer production increasing in excess of 20 percent over fiscal
2006.
The company’s cost of goods sold per megabit decreased in the fourth quarter of
fiscal 2007 compared to the third quarter by approximately 10 percent and
40
percent for DRAM and NAND Flash memory products, respectively. These cost
reductions were achieved through improved manufacturing efficiencies and
the
production of significantly more NAND Flash wafers.
During
the fourth quarter of fiscal 2007, the company began executing initiatives
to
drive greater cost efficiency and revenue growth. The company recorded
a
restructure charge in the fourth quarter of $19 million comprised primarily
of
employee severance and related costs resulting from a reduction in the
company’s
workforce in the quarter. The company continues to pursue opportunities
to lower
its overhead costs through the utilization of partnerships and other outside
relationships. Selling, general and administrative expenses in the fourth
quarter include increased costs associated with the company’s outstanding legal
matters.
The
company had capital expenditures of approximately $850 million and $4 billion,
including expenditures by our joint ventures during the fourth quarter
and 2007
fiscal year, respectively, and ended the fiscal year with cash and investment
balances of $2.6 billion.
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 October 2, 2008. A taped audio replay of the conference call will
also be
available at (973) 341-3080 (conference number: 9266785) beginning at 5:30
p.m.
MDT today and continuing until 5:30 p.m. MDT on October 9, 2007.
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)
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4th
Qtr.
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3rd
Qtr.
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4th
Qtr.
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Year
Ended
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|||||||||||||||||
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Aug.
30,
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May
31,
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Aug.
31,
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Aug.
30,
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Aug.
31,
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||||||||||||||||
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2007
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2007
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2006
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2007
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2006
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||||||||||||||||
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Net
sales
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$ |
1,437
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$ |
1,294
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$ |
1,373
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$ |
5,688
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$ |
5,272
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||||||||||
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Cost
of goods sold (1)
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1,264
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1,188
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1,049
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4,610
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4,072
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Gross
margin
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173
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106
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324
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1,078
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1,200
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|||||||||||||||
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Selling,
general and administrative
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143
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134
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144
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610
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460
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Research
and development
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184
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195
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163
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805
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656
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Other
operating (income) expense (2)
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(12 | ) | (28 | ) | (36 | ) | (76 | ) | (266 | ) | ||||||||||
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Restructure
(3)
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19
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--
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--
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19
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--
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|||||||||||||||
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Operating
income (loss)
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(161 | ) | (195 | ) |
53
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(280 | ) |
350
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||||||||||||
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Interest
income (expense), net
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15
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17
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36
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103
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76
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|||||||||||||||
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Other
non-operating income (expense)
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--
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1
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3
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9
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7
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|||||||||||||||
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Income
tax (provision) (4)
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(6 | ) | (9 | ) | (4 | ) | (30 | ) | (18 | ) | ||||||||||
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Noncontrolling
interests in net income
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(6 | ) | (39 | ) | (24 | ) | (122 | ) | (7 | ) | ||||||||||
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Net
income (loss)
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$ | (158 | ) | $ | (225 | ) | $ |
64
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$ | (320 | ) | $ |
408
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Earnings
(loss) per share:
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||||||||||||||||||||
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Basic
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$ | (0.21 | ) | $ | (0.29 | ) | $ |
0.09
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$ | (0.42 | ) | $ |
0.59
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Diluted
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(0.21 | ) | (0.29 | ) |
0.08
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(0.42 | ) | 0.57 | ||||||||||||
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Number
of shares used in per share calculations:
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||||||||||||||||||||
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Basic
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770.9
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769.9
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746.5
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769.1
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691.7
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|||||||||||||||
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Diluted
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770.9
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769.9
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759.5
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769.1
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725.1
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|||||||||||||||
CONSOLIDATED
FINANCIAL SUMMARY, Continued
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As
of
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||||||||||||
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Aug.
30,
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May
31,
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Aug.
31,
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||||||||||
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2007
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2007
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2006
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||||||||||
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Cash
and short-term investments
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$ |
2,616
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$ |
2,920
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$ |
3,079
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Receivables
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994
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839
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956
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|||||||||
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Inventories
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1,532
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1,449
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963
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Total
current assets
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5,234
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5,287
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5,101
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Property,
plant and equipment, net
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8,279
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7,866
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5,888
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Goodwill
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515
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514
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502
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|||||||||
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Total
assets
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14,818
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14,417
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12,221
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|||||||||
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Accounts
payable and accrued expenses
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1,385
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1,245
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1,319
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|||||||||
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Current
portion of long-term debt
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423
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411
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166
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|||||||||
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Total
current liabilities
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2,026
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1,857
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1,661
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Long-term
debt (5)
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1,987
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1,913
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405
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|||||||||
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Noncontrolling
interests in subsidiaries (6)
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2,607
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2,327
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1,568
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|||||||||
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Total
shareholders’ equity
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7,752
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7,887
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8,114
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|||||||||
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Year
Ended
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||||||||
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Aug.
30,
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Aug.
31,
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|||||||
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2007
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2006
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|||||||
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Net
cash provided by operating activities
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$ |
937
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$ |
2,019
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||||
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Net
cash used for investing activities
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(2,391 | ) | (1,756 | ) | ||||
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Net
cash provided by financing activities
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2,215
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644
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||||||
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Depreciation
and amortization
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1,718
|
1,281
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||||||
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Expenditures
for property, plant and equipment
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(3,603 | ) | (1,365 | ) | ||||
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Cash
received from noncontrolling interests
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1,249
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984
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||||||
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Payments
on equipment purchase contracts
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(487 | ) | (209 | ) | ||||
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Noncash
equipment acquisitions on contracts payable and capital
leases
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1,010
|
326
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(1)
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The
results for the fourth quarter include a charge of $20 million
to write
down the carrying value of work in process and finished goods inventories
of memory products to their estimated fair market
values.
|
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(2)
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Other
operating (income) expense for the fourth quarter of fiscal 2007
includes
$18 million from gains on disposals of semiconductor equipment
and losses
of $11 million from changes in currency exchange rates. Other
operating income for the third quarter of fiscal 2007 includes
$15 million
from gains on disposals of semiconductor equipment and $7 million
in
grants received in connection with the Company’s operations in
China. Other operating income for the fourth quarter and for
fiscal 2006 includes $16 million and $23 million, respectively,
from the
extension of an economic development agreement in Lehi allowing
the
Company to recover amounts relating to certain investments in the
Company’s Lehi facility. Other operating income for fiscal 2006
includes $230 million of net proceeds from Intel Corporation from
the sale
of the Company’s existing NAND Flash memory designs and certain related
technology to Intel net of amounts paid by the Company for a perpetual,
paid-up license to use and modify such
designs.
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(3)
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In
the fourth quarter of fiscal 2007, the Company announced it was
pursuing a
number of initiatives to drive greater cost efficiencies and revenue
growth across its operations. During the fourth quarter, the
Company recorded a restructure charge of $19 million consisting
primarily
of employee severance and related costs resulting from a reduction
in the
Company’s workforce of approximately 1,000 employees in the
quarter. At the end of the fourth quarter of fiscal 2007,
liabilities for unpaid portions of the restructure charge were
approximately $5 million.
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(4)
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Income
taxes for 2007 and 2006 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 benefit in 2007 and provision in 2006 for
taxes on U.S. operations was substantially offset by changes in
the
valuation allowance. As of August 30, 2007, the Company had
aggregate U.S. tax net operating loss carryforwards of $2.2 billion
and
unused U.S. tax credit carryforwards of $202 million. The
Company also has unused state tax net operating loss carryforwards
of $1.5
billion and unused state tax credits of $169 million at the same
date. Substantially all of the net operating loss carryforwards
expire in 2022 to 2027 and substantially all of the tax credit
carryforwards expire in 2013 to
2027.
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(5)
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In
the fourth quarter and for fiscal 2007, the Company received $96
million
and $454 million, respectively, in proceeds from equipment financing
arrangements payable in periodic installments over the next five
years.
|
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In
May 2007, the Company issued $1.3 billion of 1.875% Convertible
Senior
Notes due June 1, 2014 (the “Senior Notes”). The issuance costs
associated with the Senior Notes totaled $26 million. Holders
of the Senior Notes may convert all or some of their Senior Notes
at any
time prior to maturity, unless previously redeemed or repurchased,
into
the Company’s common stock at a conversion rate of 70.2679 shares for each
$1,000 principal amount of Senior Notes. This conversion rate
is equivalent to a conversion price of approximately $14.23 per
share. The Company may redeem the Senior Notes at any time
after June 6, 2011, at par if the trading price of the Company’s common
stock is at least 130% of the conversion price for a specified
period of
time.
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In
connection with the offering of the Senior Notes, the Company also
entered
into three capped call transactions (the “Capped Calls”). The
Capped Calls each have an initial strike price of approximately
$14.23 per
share, subject to certain adjustments, which matches the initial
conversion price of the Senior Notes. The Capped Calls are in
three equal tranches; have cap prices of $17.25, $20.13 and $23.00
per
share; and cover, subject to anti-dilution adjustments similar
to those
contained in the Senior Notes, an approximate combined total of
91.3
million shares of common stock. The Capped Calls are intended
to reduce the potential dilution upon conversion of the Senior
Notes. Settlement of the Capped Calls in cash on their
respective expiration dates would result in the Company receiving
an
amount ranging from zero if the market price per share of the Company’s
common stock is at or below $14.23 to a maximum of $538
million. The Company paid approximately $151 million to
purchase the Capped Calls. The Capped Calls expire on various
dates between November 2011 and December 2012. The Capped Calls
are considered capital transactions and the related cost was recorded
as a
charge to additional capital.
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(6)
|
Effective
March 30, 2007, the Company acquired all of the shares of TECH
Semiconductor Singapore Pte. Ltd. (“TECH”) common stock held by the
Singapore Economic Development Board for $290 million, of which
$216
million was outstanding as of August 30, 2007, payable through
December
2007. As a result of the acquisition, the Company’s ownership
interest in TECH increased from 43% to
73%.
|