• 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)
    FQ1-22FQ4-21FQ1-21 FQ1-22FQ4-21FQ1-21
            
    Revenue$7,687 $8,274 $5,773  $7,687 $8,274 $5,773 
    Gross margin3,565 3,912 1,736  3,616 3,964 1,784 
    percent of revenue46.4%47.3%30.1% 47.0%47.9%30.9%
    Operating expenses934 957 870  891 891 811 
    Operating income2,631 2,955 866  2,725 3,073 973 
    percent of revenue34.2%35.7%15.0% 35.4%37.1%16.9%
    Net income2,306 2,720 803  2,471 2,778 897 
    Diluted earnings per share2.04 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:

    FQ2-22GAAP(1) OutlookNon-GAAP(2) Outlook
       
    Revenue$7.5 billion ± $200 million$7.5 billion ± $200 million
    Gross margin45.0% ± 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,
    2021
    September 2,
    2021
    December 3,
    2020
        
    Revenue$7,687  $8,274  $5,773 
    Cost of goods sold4,122  4,362  4,037 
    Gross margin3,565  3,912  1,736 
        
    Research and development712  705  647 
    Selling, general, and administrative259  236  214 
    Restructure and asset impairments38  22  8 
    Other operating (income) expense, net(75) (6) 1 
    Operating income2,631  2,955  866 
        
    Interest income10  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 investees4  14  13 
    Net income$2,306  $2,720  $803 
        
    Earnings per share   
    Basic$2.06  $2.42  $0.72 
    Diluted2.04  2.39  0.71 
        
    Number of shares used in per share calculations   
    Basic1,119  1,123  1,115 
    Diluted1,130  1,138  1,135 
             
             

    MICRON TECHNOLOGY, INC.
    CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)

    As ofDecember 2,
    2021
    September 2,
    2021
       
    Assets  
    Cash and equivalents$8,680 $7,763 
    Short-term investments900 870 
    Receivables5,250 5,311 
    Inventories4,827 4,487 
    Assets held for sale13 974 
    Other current assets521 502 
    Total current assets20,191 19,907 
    Long-term marketable investments1,817 1,765 
    Property, plant, and equipment35,155 33,213 
    Operating lease right-of-use assets574 551 
    Intangible assets347 349 
    Deferred tax assets746 782 
    Goodwill1,228 1,228 
    Other noncurrent assets1,188 1,054 
    Total assets$61,246 $58,849 
       
    Liabilities and equity  
    Accounts payable and accrued expenses$5,470 $5,325 
    Current debt118 155 
    Other current liabilities924 944 
    Total current liabilities6,512 6,424 
    Long-term debt6,904 6,621 
    Noncurrent operating lease liabilities523 504 
    Noncurrent unearned government incentives767 808 
    Other noncurrent liabilities632 559 
    Total liabilities15,338 14,916 
       
    Commitments and contingencies  
       
    Shareholders’ equity  
    Common stock122 122 
    Additional capital9,564 9,453 
    Retained earnings41,267 39,051 
    Treasury stock(4,954)(4,695)
    Accumulated other comprehensive income (loss)(91)2 
    Total equity45,908 43,933 
    Total liabilities and equity$61,246 $58,849 
       
       

    MICRON TECHNOLOGY, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)

    Three months endedDecember 2,
    2021
    December 3,
    2020
       
    Cash 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 assets1,671 1,487 
    Stock-based compensation118 92 
    (Gain) loss on debt repurchases and conversions83  
    Change in operating assets and liabilities  
    Receivables67 251 
    Inventories(344)130 
    Accounts payable and accrued expenses(42)(753)
    Deferred income taxes, net54 (24)
    Other25 (19)
    Net cash provided by operating activities3,938 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 fab893  
    Proceeds from maturities of available-for-sale securities313 216 
    Proceeds from sales of available-for-sale securities124 45 
    Proceeds from government incentives55 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 debt2,000  
    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 cash934 (1,638)
    Cash, cash equivalents, and restricted cash at beginning of period7,829 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,
    2021
    September 2,
    2021
    December 3,
    2020
        
    GAAP gross margin$3,565 $3,912 $1,736 
    Stock-based compensation43 43 41 
    Other8 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)
    Other68 6  
    Non-GAAP operating expenses$891 $891 $811 
        
    GAAP operating income$2,631 $2,955 $866 
    Stock-based compensation116 93 92 
    Restructure and asset impairments38 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 compensation116 93 92 
    Restructure and asset impairments38 22 8 
    Amortization of debt discount and other costs9 8 7 
    (Gain) loss on debt repurchases and conversions83   
    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 - Diluted1,130 1,138 1,135 
    Adjustment for stock-based compensation11 9 11 
    Non-GAAP weighted-average common shares outstanding - Diluted1,141 1,147 1,146 
        
    GAAP diluted earnings per share$2.04 $2.39 $0.71 
    Effects of the above adjustments0.12 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,
    2021
    September 2,
    2021
    December 3,
    2020
        
    GAAP 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 equipment21 4 12 
    Payments on equipment purchase contracts(78)(156)(97)
    Amounts funded by partners55 160 40 
    Investments in capital expenditures, net(3,267)(2,007)(2,783)
    Adjusted free cash flow$671 $1,877 $(816)


    As ofDecember 2,
    2021
    September 2,
    2021
       
    Cash and short-term investments$9,580  $8,633  
    Current and noncurrent restricted cash83  66  
    Long-term marketable investments1,817  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 OUTLOOK

    FQ2-22 GAAP Outlook Adjustments Non-GAAP Outlook
             
    Revenue$7.5 billion ± $200 million  —   $7.5 billion ± $200 million
    Gross margin45.0% ± 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)
     
           
    AStock-based compensation – cost of goods sold$48 
    AOther – cost of goods sold5 
    BStock-based compensation – research and development48 
    BStock-based compensation – sales, general, and administrative35 
    CTax 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 AhmadErica Rodriguez Pompen
     Investor RelationsMedia Relations
     farhanahmad@micron.comepompen@micron.com
     (408) 834-1927(408) 834-1873

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