"In the fiscal third quarter, Micron experienced market headwinds driven primarily by weakness in the PC sector," stated
GAAP Income and Per Share Data - On a GAAP(1) basis, net income attributable to Micron shareholders for the third quarter of fiscal 2015 was
Non-GAAP Income and Per Share Data - On a non-GAAP(2) basis, net income attributable to Micron shareholders for the third quarter of fiscal 2015 was
Revenues for the third quarter of fiscal 2015 were 8 percent lower compared to the second quarter of fiscal 2015 primarily due to a 10 percent decline in DRAM average selling prices and relatively flat DRAM sales volume. The company's overall consolidated gross margin of 31 percent for the third quarter of fiscal 2015 was down 3 percent compared to the second quarter of fiscal 2015 primarily due to lower average selling prices for DRAM, partially offset by lower manufacturing costs.
Investments in capital expenditures were
The company will host a conference call
(1) GAAP represents U.S. Generally Accepted Accounting Principles.
(2) Non-GAAP represents GAAP excluding the impact of certain activities which the company's management excludes in analyzing the company's operating results and understanding trends in the company's earnings. Non-GAAP also includes the impact on shares used in per share calculations of the company's outstanding capped call transactions. For a reconciliation of GAAP to non-GAAP results, see the accompanying financial tables and footnotes.
CONSOLIDATED FINANCIAL SUMMARY | |||||
(in millions except per share amounts) | |||||
3rd Qtr. | 2nd Qtr. | 3rd Qtr. | Nine Months Ended | ||
2015 | 2015 | 2014 | 2015 | 2014 | |
Net sales | $ 3,853 | $ 4,166 | $ 3,982 | $ 12,592 | $ 12,131 |
Cost of goods sold | 2,651 | 2,761 | 2,614 | 8,347 | 8,079 |
Gross margin | 1,202 | 1,405 | 1,368 | 4,245 | 4,052 |
Selling, general and administrative | 169 | 187 | 174 | 549 | 527 |
Research and development | 406 | 379 | 349 | 1,161 | 1,013 |
Other operating (income) expense, net (1) | (4) | (16) | 6 | (36) | 253 |
Operating income | 631 | 855 | 839 | 2,571 | 2,259 |
Interest income (expense), net | (88) | (75) | (75) | (246) | (248) |
Other non-operating income (expense), net (2) | (16) | (6) | (21) | (71) | (223) |
Income tax (provision) benefit (3) | (104) | (47) | (72) | (226) | (215) |
Equity in net income of equity method investees (4) | 68 | 208 | 135 | 400 | 355 |
Net (income) loss attributable to noncontrolling interests | — | (1) | — | — | (33) |
Net income attributable to Micron | $ 491 | $ 934 | $ 806 | $ 2,428 | $ 1,895 |
Earnings per share: | |||||
Basic | $ 0.46 | $ 0.87 | $ 0.76 | $ 2.26 | $ 1.79 |
Diluted | 0.42 | 0.78 | 0.68 | 2.05 | 1.58 |
Number of shares used in per share calculations: | |||||
Basic | 1,073 | 1,074 | 1,067 | 1,072 | 1,058 |
Diluted | 1,170 | 1,190 | 1,190 | 1,185 | 1,196 |
CONSOLIDATED FINANCIAL SUMMARY, Continued | |||
As of | 2015 | 2015 | 2014 |
Cash and short-term investments | $ 4,860 | $ 4,479 | $ 4,534 |
Receivables | 2,530 | 2,761 | 2,906 |
Inventories | 2,381 | 2,377 | 2,455 |
Total current assets | 10,008 | 9,918 | 10,245 |
Long-term marketable investments | 2,470 | 1,869 | 819 |
Property, plant and equipment, net | 9,857 | 9,233 | 8,682 |
Total assets | 25,136 | 23,818 | 22,498 |
Accounts payable and accrued expenses | 3,204 | 2,662 | 2,864 |
Current debt (2) (5) | 1,148 | 1,199 | 1,638 |
Total current liabilities | 4,566 | 4,120 | 4,811 |
Long-term debt (2) (5) | 6,403 | 5,519 | 4,955 |
Total Micron shareholders' equity | 12,458 | 12,426 | 10,771 |
Noncontrolling interests in subsidiaries | 897 | 815 | 802 |
Total equity | 13,355 | 13,241 | 11,573 |
Nine Months Ended | |||
2015 | 2014 | ||
Net cash provided by operating activities | $ 4,178 | $ 4,352 | |
Net cash provided by (used for) investing activities | (4,722) | (1,204) | |
Net cash provided by (used for) financing activities | 215 | (1,953) | |
Depreciation and amortization | 2,062 | 1,680 | |
Expenditures for property, plant and equipment | (2,256) | (1,800) | |
Proceeds from issuance of debt and sale-leaseback transactions | 2,463 | 1,076 | |
Repayments of debt | (2,051) | (3,134) |
(1) Other operating expense for the first nine months of fiscal 2014 included a charge of
(2) Other non-operating income (expense) consisted of the following:
3rd Qtr. | 2nd Qtr. | 3rd Qtr. | Nine Months Ended | ||
2015 | 2015 | 2014 | 2015 | 2014 | |
Loss on restructure of debt | $ — | ||||
Gain (loss) from changes in currency exchange rates | 1 | (6) | (5) | (26) | (25) |
Adjustment to gain on MMJ Acquisition | — | — | — | — | (33) |
Other | 1 | — | — | 3 | 6 |
In the third quarter of fiscal 2015, the company recognized aggregate losses of
(3) Income taxes for the third and second quarters of fiscal 2015 and third quarter of fiscal 2014 included
(4) Equity in net income of equity method investees for the second quarter of fiscal 2015 included $65 million related to the company's share of Inotera's release of valuation allowances against its deferred tax assets related to its net operating loss carryforward.
(5) On
In the third quarter of fiscal 2015, the company also recorded
As of
RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||
(in millions except per share amounts) | ||
3rd Qtr. | 2nd Qtr. | |
2015 | 2015 | |
GAAP net income attributable to Micron | $ 491 | $ 934 |
Non-GAAP adjustments: | ||
Restructure and asset impairments | 1 | 1 |
Amortization of debt discount and other costs | 34 | 33 |
Loss on restructure of debt | 18 | — |
(Gain) loss from changes in currency exchange rates | (1) | 6 |
Estimated tax effects of above items | — | (1) |
Non-cash taxes from MMJ and MMT | 22 | 33 |
Non-cash taxes from MMJ for changes in |
45 | — |
Non-cash taxes from Inotera | 10 | (65) |
Total non-GAAP adjustments | 129 | 7 |
Non-GAAP net income attributable to Micron | $ 620 | $ 941 |
Number of shares used in diluted per share calculations: | ||
GAAP | 1,170 | 1,190 |
Effect of capped calls | (31) | (27) |
Non-GAAP | 1,139 | 1,163 |
Diluted earnings per share: | ||
GAAP | $ 0.42 | $ 0.78 |
Effects of above | 0.12 | 0.03 |
Non-GAAP | $ 0.54 | $ 0.81 |
The table above sets forth non-GAAP net income attributable to Micron, diluted shares and diluted earnings per share. The adjustments above may or may not be infrequent or nonrecurring in nature but are a result of periodic or non-core operating activities of the company. The company believes this non-GAAP information is helpful to understanding trends and in analyzing the company's operating results and earnings. The company is providing this information to investors to assist in performing analyses of the company's operating results. When evaluating performance and making decisions on how to allocate company resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. The presentation of these adjusted amounts vary from numbers presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies.
The company's management excludes the following items in analyzing the company's operating results and understanding trends in the company's earnings:
- Restructure and asset impairments;
- Amortization of debt discount and other costs, including the accretion of non-cash interest expense associated with the company's convertible debt and the MMJ creditor installment debt;
- Loss on restructure of debt;
- (Gain) loss from changes in currency exchange rates;
- The estimated tax effects of above items;
- Non-cash taxes resulting from utilization of, and other changes in, deferred tax assets of MMJ and MMT;
- Non-cash taxes from MMJ resulting from changes in
Japan tax laws and rates; and - Non-cash taxes resulting from utilization of, and other changes in, deferred tax assets of Inotera, an equity method investment of the company.
Non-GAAP diluted shares include the impact, based on the average share price for the quarter, of the company's outstanding capped call transactions, which are anti-dilutive in GAAP earnings per share but are expected to mitigate the dilutive effect of the company's convertible notes.
CONTACT:Source:Kipp A. Bedard Investor Relations kbedard@micron.com (208) 368-4465Daniel Francisco Media Relations dfrancisco@micron.com (208) 368-5584
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