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
June
26, 2008
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):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o
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 June
26, 2008, the Company announced its financial results for the quarter ended May
29, 2008. 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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In the
fourth quarter of fiscal 2007, the Company began 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.
In the
third quarter and first nine months of 2008, the Company recorded charges of $8
million and $29 million, respectively, for employee severance and related costs,
a write-down of certain facilities to their fair values, and relocation and
retention bonuses. Since the fourth quarter of 2007, the Company has
incurred $48 million due to the restructuring initiatives. 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 June 26, 2008
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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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June
26, 2008
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By:
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/s/
Ronald C. Foster
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Name:
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Ronald
C. Foster
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Title:
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Chief
Financial Officer and
Vice
President of Finance
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INDEX
TO EXHIBITS FILED WITH
THE
CURRENT REPORT ON FORM 8-K DATED JUNE 26, 2008
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Exhibit
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Description
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99.1
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Press
Release issued on June 26, 2008
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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
THIRD QUARTER OF FISCAL
2008
BOISE, Idaho, June 26, 2008 –
Micron Technology, Inc., (NYSE: MU) today announced results of operations for
the company’s third quarter of fiscal 2008, which ended May 29, 2008. For the
third quarter of fiscal 2008, the company posted a net loss of $236 million, or
$0.30 per diluted share, on net sales of $1.5 billion. These results compare to
GAAP results for the second quarter of a net loss of $777 million, or $1.01 per
diluted share, or on a non-GAAP basis for the second quarter (which exclude the
effect of a goodwill impairment charge) of a net loss of $314 million, or $0.41
per diluted share, on net sales of $1.4 billion.
The
company’s net sales in the third quarter of fiscal 2008 increased 10 percent
compared to the second quarter primarily from higher sales of both DRAM and NAND
Flash memory products. Sales of DRAM products in the third quarter of fiscal
2008 increased compared to the second quarter as a result of an approximate 10
percent increase in gigabit sales, partially offset by an approximate 5 percent
decrease in average selling prices. For the same periods, sales of NAND Flash
products increased as a result of an approximate 40 percent increase in gigabit
sales, partially offset by an approximate 20 percent decrease in the average
selling price. The dollar amount of finished goods inventories for memory
products at the end of the third quarter remained fairly stable compared to the
second quarter, as higher levels of production were substantially offset by the
higher sales volumes and improvements in the company’s manufacturing costs per
bit. Cost of goods sold per gigabit in the third quarter decreased approximately
15 percent and 25 percent compared to the second quarter for DRAM and NAND Flash
memory products, respectively.
“Micron
continues to execute strongly on its cost reductions through advanced technology
deployment and 300 millimeter manufacturing efficiencies, resulting in a
positive gross margin in the third quarter,” said Mark Durcan, Micron President
and Chief Operating Officer. “The combination of our premium product portfolio
plus recent substantial cost per bit reductions has positioned us
well.”
Sales of
CMOS image sensors in the third quarter of fiscal 2008 increased 27 percent
compared to the second quarter and represented 11 percent of the company’s total
sales in the third quarter. The company’s gross margin on sales of imaging
products improved to 35 percent in the third quarter compared to 24 percent in
the second quarter, reflecting a greater mix of higher megapixel
sensors.
The
company generated $217 million in cash flow from operating activities during the
third quarter of fiscal 2008 and ended the quarter with $1.6 billion in cash and
investments. The company had capital expenditures during the third quarter of
fiscal 2008 of $577 million and expects total capital expenditures for the 2008
fiscal year to be between $2.5 billion and $3.0 billion. In the third quarter of
fiscal 2008, TECH Semiconductor, a consolidated joint venture, entered into a
$600 million credit facility to refinance its existing debt of $240 million and
to finance future capital expenditures.
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 June 26, 2009. A taped audio replay of the conference call will also be
available at (706) 645-9291(conference number: 50696269) beginning at 5:30 p.m.
MDT today and continuing until 5:30 p.m. MDT on July 3, 2008.
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
(Amounts
in millions except per share data)
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3rd
Qtr.
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2nd
Qtr.
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3rd Qtr.
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Nine
Months Ended
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|||||||||||||||||
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May
29,
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Feb.
28,
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May
31,
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May
29,
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May
31,
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||||||||||||||||
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2008
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2008
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2007
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2008
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2007
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Net
sales
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$ | 1,498 | $ | 1,359 | $ | 1,294 | $ | 4,392 | $ | 4,251 | ||||||||||
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Cost
of goods sold (1)
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1,450 | 1,402 | 1,188 | 4,382 | 3,346 | |||||||||||||||
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Gross
margin
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48 | (43 | ) | 106 | 10 | 905 | ||||||||||||||
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Selling,
general and administrative
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116 | 120 | 134 | 348 | 467 | |||||||||||||||
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Research
and development
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170 | 180 | 195 | 513 | 621 | |||||||||||||||
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Goodwill
impairment (2)
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-- | 463 | -- | 463 | -- | |||||||||||||||
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Restructure
(3)
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8 | 8 | -- | 29 | -- | |||||||||||||||
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Other
operating (income) expense (4)
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(21 | ) | (42 | ) | (28 | ) | (86 | ) | (64 | ) | ||||||||||
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Operating
income (loss)
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(225 | ) | (772 | ) | (195 | ) | (1,257 | ) | (119 | ) | ||||||||||
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Interest
income (expense), net
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(6 | ) | 3 | 17 | 6 | 88 | ||||||||||||||
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Other
non-operating income (expense)
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-- | (6 | ) | 1 | (7 | ) | 9 | |||||||||||||
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Income
tax benefit (provision) (5)
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(13 | ) | 4 | (9 | ) | (16 | ) | (24 | ) | |||||||||||
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Noncontrolling
interests in net (income) loss
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8 | (6 | ) | (39 | ) | (1 | ) | (116 | ) | |||||||||||
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Net
income (loss)
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$ | (236 | ) | $ | (777 | ) | $ | (225 | ) | $ | (1,275 | ) | $ | (162 | ) | |||||
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Earnings
(loss) per share:
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||||||||||||||||||||
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Basic
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$ | (0.30 | ) | $ | (1.01 | ) | $ | (0.29 | ) | $ | (1.65 | ) | $ | (0.21 | ) | |||||
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Diluted
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(0.30 | ) | (1.01 | ) | (0.29 | ) | (1.65 | ) | (0.21 | ) | ||||||||||
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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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772.8 | 772.4 | 769.9 | 772.4 | 768.5 | |||||||||||||||
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Diluted
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772.8 | 772.4 | 769.9 | 772.4 | 768.5 | |||||||||||||||
Reconciliation
of GAAP to Non-GAAP Financial Measures (6)
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Net
income (loss):
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On a
GAAP basis
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$ | (236 | ) | $ | (777 | ) | $ | (225 | ) | $ | (1,275 | ) | $ | (162 | ) | |||||
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Goodwill
impairment
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-- | 463 | -- | 463 | -- | |||||||||||||||
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On a
non-GAAP basis
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$ | (236 | ) | $ | (314 | ) | $ | (225 | ) | $ | (812 | ) | $ | (162 | ) | |||||
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Diluted
earnings (loss) per share:
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On a
GAAP basis
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$ | (0.30 | ) | $ | (1.01 | ) | $ | (0.29 | ) | $ | (1.65 | ) | $ | (0.21 | ) | |||||
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Goodwill
impairment
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-- | 0.60 | -- | 0.60 | -- | |||||||||||||||
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On a
non-GAAP basis
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$ | (0.30 | ) | $ | (0.41 | ) | $ | (0.29 | ) | $ | (1.05 | ) | $ | (0.21 | ) | |||||
CONSOLIDATED
FINANCIAL SUMMARY, Continued
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As
of
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||||||||||||
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May
29,
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Feb. 28,
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Aug. 30,
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||||||||||
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2008
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2008
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2007
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Cash
and short-term investments
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$ | 1,584 | $ | 1,853 | $ | 2,616 | ||||||
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Receivables
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995 | 894 | 994 | |||||||||
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Inventories
(1)
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1,453 | 1,449 | 1,532 | |||||||||
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Total
current assets
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4,129 | 4,304 | 5,234 | |||||||||
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Property,
plant and equipment, net
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8,721 | 8,634 | 8,279 | |||||||||
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Goodwill
(2)
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58 | 58 | 515 | |||||||||
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Total
assets
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13,616 | 13,785 | 14,818 | |||||||||
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Accounts
payable and accrued expenses
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1,374 | 1,299 | 1,385 | |||||||||
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Current
portion of long-term debt
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262 | 244 | 423 | |||||||||
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Total
current liabilities
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1,784 | 1,720 | 2,026 | |||||||||
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Long-term
debt (7)
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2,159 | 2,162 | 1,987 | |||||||||
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Noncontrolling
interests in subsidiaries
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2,811 | 2,808 | 2,607 | |||||||||
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Total
shareholders’ equity
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6,508 | 6,738 | 7,752 | |||||||||
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Nine
Months Ended
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May 29,
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May 31,
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2008
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2007
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Net
cash provided by operating activities
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$ | 775 | $ | 793 | ||||
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Net
cash used for investing activities
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(1,289 | ) | (1,513 | ) | ||||
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Net
cash provided by (used for) financing activities
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(204 | ) | 1,956 | |||||
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Depreciation
and amortization
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1,528 | 1,244 | ||||||
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Expenditures
for property, plant and equipment
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(1,809 | ) | (2,851 | ) | ||||
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Net
cash received from noncontrolling interests
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203 | 974 | ||||||
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Payments
on equipment purchase contracts
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(348 | ) | (393 | ) | ||||
| Noncash equipment acquisitions on contracts payable and capital leases | 404 | 802 | ||||||
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(1)
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The
results for the second and first quarters of fiscal 2008 include charges
of $15 million and $62 million, respectively, 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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In
the second quarter of fiscal 2008, in accordance with FASB Statement No.
142, “Goodwill and Other Intangible Assets,” the company performed a test
to determine whether or not its goodwill was impaired. Based on the
results of the test, the company wrote off all of the $463 million of
goodwill associated with its Memory segment as of February 28,
2008.
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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. In the third quarter and first nine months
of fiscal 2008, the company recorded restructure charges of $8 million and
$29 million, respectively, consisting primarily of employee severance and
related costs and relocation and retention bonuses. The company also
incurred a charge to write down the carrying value of certain facilities
to their estimated fair values in the first quarter of fiscal 2008. Since
the fourth quarter of fiscal 2007, the company has incurred $48 million
due to the restructuring initiatives. At the end of the third quarter of
fiscal 2008, liabilities for unpaid portions of the restructure charge
were $8 million.
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(4)
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Other
operating income for the third quarter of fiscal 2008 includes $13 million
from the gains on disposals of semiconductor equipment. Other operating
income for the first nine months of 2008 includes $70 million from gains
on disposals of semiconductor equipment, $33 million of losses from
changes in foreign currency exchange rates and $38 million of receipts
from the U.S. government in connection with anti-dumping tariffs received
in the first quarter of fiscal 2008. 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
first nine months of fiscal 2007 includes $25 million from gains on
disposals of semiconductor equipment and a gain of $30 million from the
sale of certain intellectual property to Toshiba
Corporation.
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(5)
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Income
taxes for fiscal 2008 and 2007 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. Tax attributable to U.S. operations in fiscal 2008 and
2007 were substantially offset by changes in the valuation
allowance.
Effective
at the beginning of the first quarter of fiscal 2008, the company adopted
the provisions of FIN 48. In connection with the adoption of FIN 48, the
company increased its liability and decreased retained earnings by $1
million for net unrecognized tax benefits at August 31, 2007. Due to
certain foreign statutes of limitations which expired on December 31,
2007, the company recognized approximately $15 million of previously
unrecognized tax benefits in the second quarter of fiscal 2008. The
company does not expect to recognize any additional previously
unrecognized tax benefits during fiscal
2008.
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(6)
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To
supplement our consolidated financial statements presented on a GAAP
basis, the company uses non-GAAP measures of net income and earnings per
share, which are adjusted to exclude goodwill impairment charges.
Management does not consider these charges in evaluating the core
operational activities of the company. In addition, management believes
these non-GAAP measures are useful to investors in enabling them to better
assess changes in the company’s operating results across different time
periods. These measures should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a
substitute for or superior to GAAP results. The non-GAAP financial
measures presented by the company may be different than the non-GAAP
financial measures presented by other
companies.
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(7)
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In
the third quarter of fiscal 2008, the company’s TECH subsidiary borrowed
$270 million against a credit facility at Singapore Interbank Offered Rate
("SIBOR") plus 2.5%, subject to customary covenants. Payments are due in
approximately equal installments over 13 quarters commencing in May 2009.
Also in the third quarter of fiscal 2008, TECH repaid $240 million
outstanding under its previous credit
facility.
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