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Micron Technology, Inc. Reports Results for the First Quarter of Fiscal 2022
Source: Nasdaq GlobeNewswire / 20 Dec 2021 16:02:49 America/New_York
BOISE, Idaho, Dec. 20, 2021 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its first quarter of fiscal 2022, which ended Dec. 2, 2021.
Fiscal Q1 2022 highlights
- Revenue of $7.69 billion versus $8.27 billion for the prior quarter and $5.77 billion for the same period last year
- GAAP net income of $2.31 billion, or $2.04 per diluted share
- Non-GAAP net income of $2.47 billion, or $2.16 per diluted share
- Operating cash flow of $3.94 billion versus $3.88 billion for the prior quarter and $1.97 billion for the same period last year
“Micron delivered solid fiscal first quarter results led by strong product portfolio momentum,” said Micron Technology President and CEO Sanjay Mehrotra. “We are now shipping our industry-leading DRAM and NAND technologies across major end markets, and we delivered new solutions to data center, client, mobile, graphics and automotive customers. As powerful secular trends including 5G, AI, and EV adoption fuel demand growth, our technology leadership and world-class execution position us to create significant shareholder value in fiscal 2022 and beyond.”
Quarterly Financial Results (in millions, except per share amounts) GAAP(1) Non-GAAP(2) FQ1-22 FQ4-21 FQ1-21 FQ1-22 FQ4-21 FQ1-21 Revenue $ 7,687 $ 8,274 $ 5,773 $ 7,687 $ 8,274 $ 5,773 Gross margin 3,565 3,912 1,736 3,616 3,964 1,784 percent of revenue 46.4 % 47.3 % 30.1 % 47.0 % 47.9 % 30.9 % Operating expenses 934 957 870 891 891 811 Operating income 2,631 2,955 866 2,725 3,073 973 percent of revenue 34.2 % 35.7 % 15.0 % 35.4 % 37.1 % 16.9 % Net income 2,306 2,720 803 2,471 2,778 897 Diluted earnings per share 2.04 2.39 0.71 2.16 2.42 0.78 Investments in capital expenditures, net(2) were $3.27 billion for the first quarter of 2022, which resulted in adjusted free cash flows(2) of $671 million. Micron repurchased approximately 3.6 million shares of its common stock for $259 million during the first quarter of fiscal 2022 and ended the quarter with cash, marketable investments, and restricted cash of $11.48 billion, for a net cash(2) position of $4.46 billion.
On December 17, 2021, Micron’s Board of Directors declared a quarterly dividend of $0.10 per share, payable in cash on January 18, 2022, to shareholders of record as of the close of business on January 3, 2022.
Business Outlook
The following table presents Micron’s guidance for the second quarter of 2022:
FQ2-22 GAAP(1) Outlook Non-GAAP(2) Outlook Revenue $7.5 billion ± $200 million $7.5 billion ± $200 million Gross margin 45.0% ± 1% 46.0% ± 1% Operating expenses $1,058 million ± $25 million $975 million ± $25 million Diluted earnings per share $1.83 ± $0.10 $1.95 ± $0.10 Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted at investors.micron.com.
Investor Webcast
Micron will host a conference call on Monday, Dec. 20, 2021 at 2:30 p.m. MT to discuss its first quarter financial results and provide forward-looking guidance for its second quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will be available for one year after the call. For Investor Relations and other company updates, follow @MicronTech on Twitter at twitter.com/MicronTech.
About Micron Technology, Inc.
We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.
© 2021 Micron Technology, Inc. All rights reserved. Micron, the Micron logo, and all other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners.
Forward-Looking Statements
This press release contains forward-looking statements regarding our industry, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents we file with the Securities and Exchange Commission, specifically our most recent Form 10-K. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at www.micron.com/certainfactors. 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 release to conform these statements to actual results.
(1) GAAP represents U.S. Generally Accepted Accounting Principles.
(2) Non-GAAP represents GAAP excluding the impact of certain activities, which management excludes in analyzing our operating results and understanding trends in our earnings, adjusted free cash flow, net cash, and business outlook. Further information regarding Micron’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release.MICRON TECHNOLOGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share amounts) (Unaudited) 1st Qtr. 4th Qtr. 1st Qtr. December 2,
2021September 2,
2021December 3,
2020Revenue $ 7,687 $ 8,274 $ 5,773 Cost of goods sold 4,122 4,362 4,037 Gross margin 3,565 3,912 1,736 Research and development 712 705 647 Selling, general, and administrative 259 236 214 Restructure and asset impairments 38 22 8 Other operating (income) expense, net (75 ) (6 ) 1 Operating income 2,631 2,955 866 Interest income 10 9 10 Interest expense (45 ) (47 ) (48 ) Other non-operating income (expense), net (75 ) 19 13 2,521 2,936 841 Income tax (provision) benefit (219 ) (230 ) (51 ) Equity in net income (loss) of equity method investees 4 14 13 Net income $ 2,306 $ 2,720 $ 803 Earnings per share Basic $ 2.06 $ 2.42 $ 0.72 Diluted 2.04 2.39 0.71 Number of shares used in per share calculations Basic 1,119 1,123 1,115 Diluted 1,130 1,138 1,135 MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)As of December 2,
2021September 2,
2021Assets Cash and equivalents $ 8,680 $ 7,763 Short-term investments 900 870 Receivables 5,250 5,311 Inventories 4,827 4,487 Assets held for sale 13 974 Other current assets 521 502 Total current assets 20,191 19,907 Long-term marketable investments 1,817 1,765 Property, plant, and equipment 35,155 33,213 Operating lease right-of-use assets 574 551 Intangible assets 347 349 Deferred tax assets 746 782 Goodwill 1,228 1,228 Other noncurrent assets 1,188 1,054 Total assets $ 61,246 $ 58,849 Liabilities and equity Accounts payable and accrued expenses $ 5,470 $ 5,325 Current debt 118 155 Other current liabilities 924 944 Total current liabilities 6,512 6,424 Long-term debt 6,904 6,621 Noncurrent operating lease liabilities 523 504 Noncurrent unearned government incentives 767 808 Other noncurrent liabilities 632 559 Total liabilities 15,338 14,916 Commitments and contingencies Shareholders’ equity Common stock 122 122 Additional capital 9,564 9,453 Retained earnings 41,267 39,051 Treasury stock (4,954 ) (4,695 ) Accumulated other comprehensive income (loss) (91 ) 2 Total equity 45,908 43,933 Total liabilities and equity $ 61,246 $ 58,849 MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)Three months ended December 2,
2021December 3,
2020Cash flows from operating activities Net income $ 2,306 $ 803 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense and amortization of intangible assets 1,671 1,487 Stock-based compensation 118 92 (Gain) loss on debt repurchases and conversions 83 — Change in operating assets and liabilities Receivables 67 251 Inventories (344 ) 130 Accounts payable and accrued expenses (42 ) (753 ) Deferred income taxes, net 54 (24 ) Other 25 (19 ) Net cash provided by operating activities 3,938 1,967 Cash flows from investing activities Expenditures for property, plant, and equipment (3,265 ) (2,738 ) Purchases of available-for-sale securities (528 ) (1,002 ) Proceeds from sale of Lehi, Utah fab 893 — Proceeds from maturities of available-for-sale securities 313 216 Proceeds from sales of available-for-sale securities 124 45 Proceeds from government incentives 55 40 Other (77 ) 21 Net cash provided by (used for) investing activities (2,485 ) (3,418 ) Cash flows from financing activities Repayments of debt (1,949 ) (84 ) Repurchases of common stock - repurchase program (259 ) — Payments of dividends to shareholders (112 ) — Repurchases of common stock - withholdings on employee equity awards (102 ) (57 ) Payments on equipment purchase contracts (78 ) (97 ) Proceeds from issuance of debt 2,000 — Other (13 ) 24 Net cash provided by (used for) financing activities (513 ) (214 ) Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash (6 ) 27 Net increase (decrease) in cash, cash equivalents, and restricted cash 934 (1,638 ) Cash, cash equivalents, and restricted cash at beginning of period 7,829 7,690 Cash, cash equivalents, and restricted cash at end of period $ 8,763 $ 6,052 MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)Lehi, Utah Fab and 3D XPoint
In the second quarter of 2021, we updated our portfolio strategy to further strengthen our focus on memory and storage innovations for the data center market. In connection therewith, we determined that there was insufficient market validation to justify the ongoing investments required to commercialize 3D XPoint at scale. Accordingly, we ceased development of 3D XPoint technology and engaged in discussions with potential buyers for the sale of our facility located in Lehi that was dedicated to 3D XPoint production. As a result, we classified the property, plant, and equipment as held for sale and ceased depreciating the assets. On June 30, 2021, we announced a definitive agreement to sell our Lehi facility to Texas Instruments Incorporated (“TI”) and closed the sale on October 22, 2021.
In the first quarter of 2022, we received $893 million from TI for the sale of the Lehi facility and disposed of $918 million of net assets, consisting primarily of property, plant, and equipment of $921 million; $55 million of other assets, consisting primarily of a receivable for reimbursement of property taxes, equipment spare parts, and raw materials; and $58 million of liabilities, consisting primarily of a finance lease obligation. As a result of the disposition of the Lehi facility, we recognized a loss of $23 million included in restructure and asset impairments in the first quarter of 2022.
In the third quarter of 2021, we recognized a charge of $435 million included in restructure and asset impairments in connection with the definitive agreement with TI (and a tax benefit of $104 million included in income tax (provision) benefit) to write down the assets held for sale to the expected consideration, net of estimated selling costs. In the second quarter of 2021, we also recognized a charge of $49 million in cost of goods sold to write down 3D XPoint inventory in connection with our decision to cease further development of this technology.
Debt Activity
On November 1, 2021, we issued in a public offering $1.00 billion in principal amount of 2.703% senior notes due 2032 (green bonds), $500 million in principal amount of 3.366% senior notes due 2041, and $500 million in principal amount of 3.477% senior notes due 2051, and received aggregate net proceeds of $1.99 billion.
On November 17, 2021, we redeemed $1.25 billion in principal amount of our 2.497% senior notes due 2023 and $600 million in principal amount of our 4.640% senior notes due 2024 for $1.93 billion in cash and recognized a non-operating loss of $83 million.
MICRON TECHNOLOGY, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (In millions, except per share amounts) 1st Qtr. 4th Qtr. 1st Qtr. December 2,
2021September 2,
2021December 3,
2020GAAP gross margin $ 3,565 $ 3,912 $ 1,736 Stock-based compensation 43 43 41 Other 8 9 7 Non-GAAP gross margin $ 3,616 $ 3,964 $ 1,784 GAAP operating expenses $ 934 $ 957 $ 870 Stock-based compensation (73 ) (50 ) (51 ) Restructure and asset impairments (38 ) (22 ) (8 ) Other 68 6 — Non-GAAP operating expenses $ 891 $ 891 $ 811 GAAP operating income $ 2,631 $ 2,955 $ 866 Stock-based compensation 116 93 92 Restructure and asset impairments 38 22 8 Other (60 ) 3 7 Non-GAAP operating income $ 2,725 $ 3,073 $ 973 GAAP net income $ 2,306 $ 2,720 $ 803 Stock-based compensation 116 93 92 Restructure and asset impairments 38 22 8 Amortization of debt discount and other costs 9 8 7 (Gain) loss on debt repurchases and conversions 83 — — Other (60 ) 3 7 Estimated tax effects of above and other tax adjustments (21 ) (68 ) (20 ) Non-GAAP net income $ 2,471 $ 2,778 $ 897 GAAP weighted-average common shares outstanding - Diluted 1,130 1,138 1,135 Adjustment for stock-based compensation 11 9 11 Non-GAAP weighted-average common shares outstanding - Diluted 1,141 1,147 1,146 GAAP diluted earnings per share $ 2.04 $ 2.39 $ 0.71 Effects of the above adjustments 0.12 0.03 0.07 Non-GAAP diluted earnings per share $ 2.16 $ 2.42 $ 0.78 RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued
1st Qtr. 4th Qtr. 1st Qtr. December 2,
2021September 2,
2021December 3,
2020GAAP net cash provided by operating activities $ 3,938 $ 3,884 $ 1,967 Expenditures for property, plant, and equipment (3,265 ) (2,015 ) (2,738 ) Proceeds from sales of property, plant, and equipment 21 4 12 Payments on equipment purchase contracts (78 ) (156 ) (97 ) Amounts funded by partners 55 160 40 Investments in capital expenditures, net (3,267 ) (2,007 ) (2,783 ) Adjusted free cash flow $ 671 $ 1,877 $ (816 ) As of December 2,
2021September 2,
2021Cash and short-term investments $ 9,580 $ 8,633 Current and noncurrent restricted cash 83 66 Long-term marketable investments 1,817 1,765 Current and long-term debt (7,022 ) (6,776 ) Net cash $ 4,458 $ 3,688 The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income, net income, diluted shares, diluted earnings per share, adjusted free cash flow, and net cash. The non-GAAP adjustments above may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. We believe this non-GAAP information is helpful in understanding trends and in analyzing our operating results and earnings. We are providing this information to investors to assist in performing analysis of our operating results. When evaluating performance and making decisions on how to allocate our resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. We believe these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of our business, enabling enhanced comparison of our operating results between periods and with peer companies. The presentation of these adjusted amounts varies from amounts presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. Our management excludes the following items in analyzing our operating results and understanding trends in our earnings:
- Stock-based compensation;
- Flow-through of business acquisition-related inventory adjustments;
- Acquisition-related costs;
- Employee severance;
- Gains and losses from settlements and patent license charges;
- Restructure and asset impairments;
- Amortization of debt discount and other costs;
- Gains and losses from debt repurchases and conversions;
- Gains and losses from business acquisition activities;
- Initial impact of inventory accounting policy change to FIFO and change in inventory cost absorption in the second quarter of 2021; and
- The estimated tax effects of above, non-cash changes in net deferred income taxes, assessments of tax exposures, certain tax matters related to prior fiscal periods, and significant changes in tax law.
Non-GAAP diluted shares are adjusted for the impact of additional shares resulting from the exclusion of stock-based compensation from non-GAAP income.
MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOKFQ2-22 GAAP Outlook Adjustments Non-GAAP Outlook Revenue $7.5 billion ± $200 million — $7.5 billion ± $200 million Gross margin 45.0% ± 1% 1% A 46.0% ± 1% Operating expenses $1,058 million ± $25 million $83 million B $975 million ± $25 million Diluted earnings per share(1) $1.83 ± $0.10 $0.12 A, B, C $1.95 ± $0.10 Non-GAAP Adjustments
(in millions)A Stock-based compensation – cost of goods sold $ 48 A Other – cost of goods sold 5 B Stock-based compensation – research and development 48 B Stock-based compensation – sales, general, and administrative 35 C Tax effects of the above items and other tax adjustments (2 ) $ 134 (1) GAAP earnings per share based on approximately 1.13 billion diluted shares and non-GAAP earnings per share based on approximately 1.14 billion diluted shares.
The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, restructuring activities, balance sheet valuation adjustments, strategic investments, financing transactions, and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control.Contacts: Farhan Ahmad Erica Rodriguez Pompen Investor Relations Media Relations farhanahmad@micron.com epompen@micron.com (408) 834-1927 (408) 834-1873 
