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
25, 2009
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
25, 2009, the Company announced its financial results for the fiscal quarter
ended June 4, 2009. 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
response to a severe downturn in the semiconductor memory industry and global
economic conditions, the Company initiated restructure plans in 2009. In the
first quarter of 2009, IM Flash, a joint venture between the Company and Intel,
terminated its agreement with the Company to obtain NAND Flash memory supply
from the Company’s Boise facility, reducing the Company’s NAND Flash production
by approximately 35,000 200mm wafers per month. In addition, the Company and
Intel agreed to suspend tooling and the ramp of NAND Flash production at IM
Flash’s Singapore wafer fabrication facility. On February 23, 2009, the Company
announced that it will phase out all remaining 200mm wafer manufacturing
operations at its Boise, Idaho, facility, reducing employment there by as many
as 2,000 positions by the end of fiscal 2009.
As a
result of these actions, the Company recorded a net $66 million credit to
restructure in the first quarter of fiscal 2009, and restructure charges of $105
million and $19 million in the second quarter and third quarter of fiscal 2009,
respectively, primarily attributable to the Company’s Memory segment. The net
credit in the first quarter of fiscal 2009 includes a $144 million gain in
connection with the termination of the NAND Flash supply agreement, charges of
$56 million to reduce the carrying value of certain 200mm wafer manufacturing
equipment at its Boise, Idaho facility and charges of $22 million for severance
and other termination benefits. The charge in the second quarter of fiscal 2009
includes charges of $87 million to reduce the carrying value of certain 200mm
wafer manufacturing equipment at its Boise, Idaho facility and charges of $17
million for severance and other termination benefits. The charge in the third
quarter of fiscal 2009 includes charges of $11 million for severance and other
termination benefits and $7 million of additional asset write-downs. Excluding
any gains or losses from sales of equipment, the Company expects to incur
additional restructure costs through fiscal 2009 of approximately $7 million,
comprised primarily of severance and other employee related costs.
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 Risk 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 25, 2009
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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
25, 2009
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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 25, 2009
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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 25, 2009
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EXHIBT
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)
368-4465
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(208)
368-5584
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MICRON TECHNOLOGY, INC.,
REPORTS RESULTS FOR THE
THIRD QUARTER OF FISCAL
2009
BOISE, Idaho, June 25, 2009 –
Micron Technology, Inc., (NYSE: MU) today announced results of operations for
the company’s third quarter of fiscal 2009, which ended June 4, 2009. For the
third quarter of fiscal 2009, the company posted a net loss of $290 million, or
$0.36 per diluted share, on net sales of $1.1 billion. The company ended the
quarter with cash and investments of $1.3 billion.
Revenue
from sales of DRAM products increased 14 percent in the third quarter compared
to the second quarter principally due to an increase in sales volumes for DRAM
products. Revenue from sales of NAND Flash products was flat in the third
quarter compared to the second quarter. Significant cost reductions in NAND
Flash production contributed to comparably lower average selling prices to Intel
Corporation, the company’s IM Flash joint venture partner. However, the effects
of these lower average selling prices to Intel were offset by an overall 20
percent increase in NAND Flash sales volume and a significant increase in
average selling prices to all other trade customers.
Memory
production in the third quarter was significantly higher compared to the
preceding quarter. Increases in bit production resulted from the company’s
continued transition to higher density 34 nanometer (nm) NAND Flash products and
50nm DRAM products.
The
company’s gross margin on sales of memory products improved from negative 30
percent in the second quarter of fiscal 2009 to positive 11 percent in the third
quarter, resulting from significant decreases in per gigabit manufacturing costs
and the benefit in the third quarter from sales of products previously written
down. As a result of these decreases in per gigabit manufacturing costs and
increases in average selling prices, there was no lower of cost or market
write-down of memory inventories during the third quarter. Cost of goods sold in
the third quarter includes approximately $30 million of charges for unused
production capacity at the company’s Inotera and IM Flash joint ventures and an
estimated benefit of $242 million from sales in the third quarter of products
written down in previous periods.
Sales of
CMOS image sensors in the third quarter increased 53 percent compared to the
preceding quarter as a result of a significant increase in unit sales. The
company’s gross margin on sales of CMOS image sensors was two percent in the
third quarter and continues to be negatively impacted by underutilization of
dedicated 200mm manufacturing capacity. In the third quarter, the company
announced the signing of an agreement to sell a majority interest in its Aptina
imaging solutions business, which is expected to be completed in the fourth
quarter. In connection with the sale, the company recorded a $53 million charge,
the estimated loss on the transaction, to write down the value of Aptina assets
now classified as held for sale.
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 25, 2010.
A taped audio replay of the conference call will also be available at (706)
645-9291(conference number: 14636400) beginning at 5:30 p.m. MDT today and
continuing until 5:30 p.m. MDT on July 2, 2009.
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.
This
press release contains forward-looking statements regarding the timing of the
sale of a majority interest in the Company’s Aptina imaging solutions business
and estimated loss. 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 Risk 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.
MICRON
TECHNOLOGY, INC.
CONSOLIDATED
FINANCIAL SUMMARY
(in
millions except per share amounts)
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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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Jun.
4,
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Mar.
5,
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May
29,
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Jun.
4,
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May
29,
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||||||||||||||||
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2009
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2009
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2008
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2009
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2008
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||||||||||||||||
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Net
sales
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$ | 1,106 | $ | 993 | $ | 1,498 | $ | 3,501 | $ | 4,392 | ||||||||||
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Cost
of goods sold (1)
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999 | 1,260 | 1,450 | 4,110 | 4,382 | |||||||||||||||
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Gross margin
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107 | (267 | ) | 48 | (609 | ) | 10 | |||||||||||||
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Selling,
general and administrative
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80 | 90 | 116 | 272 | 348 | |||||||||||||||
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Research
and development
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162 | 168 | 170 | 508 | 513 | |||||||||||||||
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Restructure
(2)
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19 | 105 | 8 | 58 | 29 | |||||||||||||||
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Goodwill
impairment (3)
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-- | 58 | -- | 58 | 463 | |||||||||||||||
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Other
operating (income) expense (4)
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92 | 20 | (21 | ) | 121 | (86 | ) | |||||||||||||
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Operating loss
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(246 | ) | (708 | ) | (225 | ) | (1,626 | ) | (1,257 | ) | ||||||||||
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Interest
income (expense), net
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(31 | ) | (31 | ) | (6 | ) | (82 | ) | 6 | |||||||||||
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Other
non-operating income (expense)
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(3 | ) | (3 | ) | -- | (15 | ) | (7 | ) | |||||||||||
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Income
tax (provision) benefit (5)
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2 | (4 | ) | (13 | ) | (15 | ) | (16 | ) | |||||||||||
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Equity
in net losses of equity method investees (6)
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(45 | ) | (56 | ) | -- | (106 | ) | -- | ||||||||||||
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Noncontrolling
interests in net (income) loss
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33 | 51 | 8 | 97 | (1 | ) | ||||||||||||||
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Net loss
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$ | (290 | ) | $ | (751 | ) | $ | (236 | ) | $ | (1,747 | ) | $ | (1,275 | ) | |||||
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Loss
per share:
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||||||||||||||||||||
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Basic
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$ | (0.36 | ) | $ | (0.97 | ) | $ | (0.30 | ) | $ | (2.22 | ) | $ | (1.65 | ) | |||||
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Diluted
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(0.36 | ) | (0.97 | ) | (0.30 | ) | (2.22 | ) | (1.65 | ) | ||||||||||
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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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813.3 | 773.9 | 772.8 | 786.5 | 772.4 | |||||||||||||||
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Diluted
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813.3 | 773.9 | 772.8 | 786.5 | 772.4 | |||||||||||||||
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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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Jun.
4,
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Mar.
5,
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May
29,
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Jun.
4,
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May
29,
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||||||||||||||||
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2009
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2009
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2008
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2009
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2008
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Period-end
inventory write-down
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$ | -- | $ | 234 | $ | -- | $ | 603 | $ | 77 | ||||||||||
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Estimated
effect of previous inventory write-downs
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(242 | ) | (277 | ) | (21 | ) | (676 | ) | (85 | ) | ||||||||||
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Restructure
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19 | 105 | 8 | 58 | 29 | |||||||||||||||
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Goodwill
impairment
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-- | 58 | -- | 58 | 463 | |||||||||||||||
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Write-down
of Aptina imaging assets
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53 | -- | -- | 53 | -- | |||||||||||||||
| $ | (170 | ) | $ | 120 | $ | (13 | ) | $ | 96 | $ | 484 | |||||||||
CONSOLIDATED
FINANCIAL SUMMARY, Continued
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As
of
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||||||||||||
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Jun.
4,
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Mar.
5,
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Aug.
28,
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||||||||||
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2009
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2009
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2008
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Cash
and short-term investments
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$ | 1,306 | $ | 932 | $ | 1,362 | ||||||
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Receivables
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750 | 654 | 1,032 | |||||||||
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Inventories
(1)
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999 | 859 | 1,291 | |||||||||
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Total
current assets
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3,128 | 2,523 | 3,779 | |||||||||
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Property,
plant and equipment, net
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7,536 | 7,910 | 8,811 | |||||||||
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Total
assets
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11,664 | 11,526 | 13,430 | |||||||||
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Accounts
payable and accrued expenses
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1,037 | 950 | 1,111 | |||||||||
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Current
portion of long-term debt
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372 | 353 | 275 | |||||||||
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Total
current liabilities
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1,825 | 1,637 | 1,598 | |||||||||
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Long-term
debt (7)
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2,752 | 2,542 | 2,451 | |||||||||
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Noncontrolling
interests in subsidiaries
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2,130 | 2,344 | 2,865 | |||||||||
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Total
shareholders’ equity (8)
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4,697 | 4,742 | 6,178 | |||||||||
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Nine
Months Ended
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||||||||
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Jun.
4,
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May
29,
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|||||||
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2009
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2008
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|||||||
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Net
cash provided by operating activities
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$ | 849 | $ | 775 | ||||
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Net
cash used for investing activities
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(681 | ) | (1,289 | ) | ||||
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Net
cash used for financing activities
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(105 | ) | (204 | ) | ||||
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Depreciation
and amortization
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1,648 | 1,528 | ||||||
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Expenditures
for property, plant and equipment
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(439 | ) | (1,809 | ) | ||||
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Cash
(paid to) received from noncontrolling interests
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(568 | ) | 203 | |||||
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Payments
on equipment purchase contracts
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(127 | ) | (348 | ) | ||||
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Noncash
equipment acquisitions on contracts payable and capital
leases
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305 | 404 | ||||||
The
company’s third quarters of fiscal 2009 and fiscal 2008 and second quarter of
fiscal 2009 included 13 weeks. The company’s first nine months of fiscal 2009
and fiscal 2008 included 40 weeks and 39 weeks, respectively.
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(1)
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The
company’s results of operations for the second quarter of fiscal 2009, the
first nine months of fiscal 2009 and the first nine months of fiscal 2008
include charges of $234 million, $603 million and $77 million,
respectively, to write down the carrying value of work in process and
finished goods inventories of memory products (both DRAM and NAND Flash)
to their estimated market values.
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(2)
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In
the second quarter of fiscal 2009, in response to a sustained severe
downturn in the semiconductor memory industry and global economic
conditions, the company announced that it would phase out all remaining
200mm wafer manufacturing operations at its Boise, Idaho, facility. In the
first quarter of fiscal 2009, the company announced a restructuring of its
memory operations. As part of the restructure announced in the first
quarter, IM Flash Technologies (“IMFT”), a joint venture between the
company and Intel Corporation, terminated its agreement with the company
to supply NAND Flash memory from the company’s Boise facility, reducing
IMFT’s NAND Flash production by approximately 35,000
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200mm
wafers per month. As a result of these actions, the company recorded a
restructure charge of $19 million and $105 million in the third quarter
and second quarter of fiscal 2009, respectively, and a net $66 million
credit to restructure in the first quarter of fiscal
2009.
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(3)
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In
the second quarter of fiscal 2009, in accordance with FASB Statement No.
142, “Goodwill and Other Intangible Assets,” the company performed a test
to determine whether its goodwill associated with its Imaging segment was
impaired. Based on the results of the test, the company wrote off the $58
million of goodwill associated with its Imaging segment as of March 5,
2009. Additionally, in the second quarter of fiscal 2008, the company
wrote off the $463 million of goodwill associated with its Memory segment
as of February 28, 2008.
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(4)
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Other
operating (income) expense for the third quarter and first nine months of
fiscal 2009 includes losses of $12 million and $55 million, respectively,
on disposals of semiconductor equipment and losses of $28 million and $25
million, respectively, from changes in currency exchange rates. Other
operating (income) expense for the third quarter of fiscal 2009 includes a
loss of $53 million to write down the carrying value of certain long-lived
assets in connection with the company’s planned sale of a majority
interest in its Aptina imaging solutions business. Other operating
(income) expense for the third quarter and first nine months of 2008
included gains of $13 million and $70 million, respectively, on disposals
of semiconductor equipment. Other operating (income) expense for the first
nine months of 2008 included a gain of $38 million for receipts from the
U.S. government in connection with anti-dumping tariffs and losses of $33
million from changes in currency exchange
rates.
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(5)
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Income
taxes for fiscal 2009 and 2008 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 2009 and
2008 were substantially offset by changes in the valuation
allowance.
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(6)
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In
the first quarter of fiscal 2009, the company acquired from Qimonda AG
approximately 35.5% of the outstanding common stock of Inotera Memories,
Inc. (“Inotera”) in a series of transactions for $398 million. The
company’s results of operations for the third quarter and second quarter
of fiscal 2009 include charges of $43 million and $56 million,
respectively, for its share of the equity in net losses of Inotera. The
carrying value of the company’s investment in Inotera as of June 4, 2009
was $261 million.
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In
connection with the acquisition, the company entered into a loan agreement
with Nan Ya Plastics Corporation (“NPC”), pursuant to which NPC made a
loan to the company in the principal amount of $200 million, the proceeds
of which were used to pay for a portion of the purchase price of the
shares in Inotera. In addition, the company entered into a loan agreement
with Inotera, pursuant to which Inotera made a loan to the company in the
principal amount of $85 million. The loan from Inotera was repaid in the
third quarter of fiscal 2009. The loans were recorded at their fair values
and reflect an aggregate discount of $31 million from their face amounts.
The aggregate discount was reflected as a reduction in the basis of the
company’s investment in Inotera.
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(7)
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In
the third and second quarters of fiscal 2009, the company received $104
million and $97 million, respectively, in proceeds from term loans from
the Singapore Economic Development Board (“EDB”). The proceeds
of the loans were used to make additional contributions into the company’s
TECH Semiconductor joint venture subsidiary. The loan agreement requires
that TECH use the proceeds from the company’s equity contributions to
purchase production assets and meet certain production milestones related
to the implementation of advanced process manufacturing. The loan contains
a covenant that limits the amount of indebtedness TECH can incur without
approval from the EDB. The loan is collateralized by the Company’s shares
in TECH up to a maximum of 66% of TECH’s outstanding
shares.
|
|
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In
the third quarter of fiscal 2009, the company issued $230 million of 4.25%
Convertible Senior Notes due October 15, 2013 (the “Senior Notes”). The
initial conversion rate for the Senior Notes is 196.7052 shares of common
stock per $1,000 principal amount of Senior Notes. This is equivalent to
an initial conversion price of approximately $5.08 per share of common
stock. Holders of the Senior Notes may convert the Senior Notes at any
time prior to maturity, unless previously redeemed or repurchased. The
company may redeem all or part of the Senior Notes at any time after April
19, 2012 if the last reported sale price of common stock has been at least
135% of the conversion price for a specified period of
time.
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|
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Concurrent
with the offering of the Senior Notes, the company entered into capped
call transactions (the “Capped Calls”) that have an initial strike price
of approximately $5.08 per share, subject to certain adjustments, which
matches the initial conversion price of the Senior Notes. The Capped Calls
have a cap price of $6.64 per share and cover, subject to anti-dilution
adjustments similar to those contained in the Senior Notes, an approximate
combined total of 45.2 million shares of common stock. The Capped Calls
are intended to reduce the potential dilution upon conversion of the
Senior Notes. If, however, the market value per share of the common stock,
as measured under the terms of the Capped Calls, exceeds the applicable
cap price of the Capped Calls, there would be dilution to the extent that
the then market value per share of the common stock exceeds the cap price.
The company paid approximately $25 million from the net proceeds from the
issuance and sale of the Senior Notes to purchase the Capped Calls. The
Capped Calls expire in October and November
2012.
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(8)
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In
the third quarter of fiscal 2009, the company completed the sale of 69.3
million shares of common stock at $4.15 per share in a registered public
offering.
|