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Form 8-K MICRON TECHNOLOGY INC For: Mar 30

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March 30, 2016 4:03 PM EDT


 
 
 
 
 



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

March 30, 2016
Date of Report (date of earliest event reported)

MICRON TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)


Delaware
 
1-10658
 
75-1618004
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)


8000 South Federal Way
Boise, Idaho 83716-9632
(Address of principal executive offices)


(208) 368-4000
(Registrant’s telephone number, including area code)



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):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c))

 
 
 
 
 





Item 2.02.
Results of Operations and Financial Condition.

On March 30, 2016, the Company announced its financial results for the second quarter of fiscal year 2016 ended March 3, 2016. 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.

Item 9.01.
Financial Statements and Exhibits.
 
 
 
(d) Exhibits.


Exhibit No.
 
Description
99.1
 
Press Release issued on March 30, 2016







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.

 
 
MICRON TECHNOLOGY, INC.
 
 
 
 
 
 
 
 
Date:
March 30, 2016
By:
/s/ Ernest E. Maddock
 
 
Name:
Ernest E. Maddock
 
 
Title:
Chief Financial Officer and
Vice President, Finance







INDEX TO EXHIBITS FILED WITH
THE CURRENT REPORT ON FORM 8-K



Exhibit
 
Description
99.1
 
Press Release issued on March 30, 2016









Exhibit 99.1
FOR IMMEDIATE RELEASE

Contacts:
Ivan Donaldson
Daniel Francisco
 
Investor Relations
Media Relations
 
 
(208) 368-4093
(208) 368-5584



MICRON TECHNOLOGY, INC., REPORTS RESULTS FOR THE
SECOND QUARTER OF FISCAL 2016

BOISE, Idaho, March 30, 2016 – Micron Technology, Inc., (NASDAQ: MU) today announced results of operations for its second quarter of fiscal 2016, which ended March 3, 2016. Revenues for the second quarter of fiscal 2016 were $2.93 billion and were 12 percent lower compared to the first quarter of fiscal 2016 and 30 percent lower compared to the second quarter of fiscal 2015. Cash flows from operations were $763 million for the second quarter of fiscal 2016.

GAAP Income and Per Share Data – On a GAAP(1) basis, net loss attributable to Micron shareholders for the second quarter of fiscal 2016 was $97 million, or ($0.09) per diluted share, compared to net income of $206 million, or $0.19 per diluted share, for the first quarter of fiscal 2016.

Non-GAAP Income and Per Share Data – On a non-GAAP(2) basis, net loss attributable to Micron shareholders for the second quarter of fiscal 2016 was $48 million, or ($0.05) per diluted share, compared to net income of $249 million, or $0.24 per diluted share, for the first quarter of fiscal 2016. For a reconciliation of GAAP to non-GAAP results, see the accompanying financial tables and footnotes.

"Although we continue to navigate challenging market conditions, we are on track with deploying our advanced DRAM and NAND technologies and improving our cost structure," said Micron CEO Mark Durcan. "As a result, we expect to significantly improve our competitive position as we move through the second half of 2016 and beyond."

Revenues for the second quarter of fiscal 2016 were lower compared to the first quarter of fiscal 2016 primarily due to approximate 10 percent declines in both DRAM average selling prices and sales volume. Non-Volatile trade revenues for the second quarter of fiscal 2016 declined 6 percent compared to the first quarter primarily as a result of an approximate 15 percent decline in average selling prices partially offset





by an increase in sales volume. The company's overall consolidated gross margin of 20 percent for the second quarter of fiscal 2016 was 5 percent lower compared to the first quarter of fiscal 2016 primarily due to lower average selling prices partially offset by manufacturing cost reductions for Non-Volatile products.

Investments in capital expenditures for the second quarter of fiscal 2016 were $1.23 billion. The company ended the second quarter of fiscal 2016 with cash and marketable investments of $5.14 billion.

The company will host a conference call Wednesday, March 30, 2016 at 2:30 p.m. MT to discuss its financial results. The call, audio, and slides will be available online at http://edge.media-server.com/m/p/336xx5th. A webcast replay will be available on the company's website until March 30, 2017. A taped audio replay of the conference call will also be available at 1-404-537-3406 or 1-855-859-2056 (conference number: 67709190) beginning at 5:30 p.m. MT, Wednesday, March 30, 2016 and continuing through Thursday, April 7, 2016. For Investor Relations and other company updates, follow @MicronTech on Twitter at https://twitter.com/MicronTech.

Micron Technology, Inc., is a global leader in advanced semiconductor systems. Micron's broad portfolio of high-performance memory technologies—including DRAM, NAND, and NOR Flash—is the basis for solid state drives, modules, multichip packages, and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer, enterprise storage, networking, mobile, embedded, and automotive applications. Micron's common stock is traded on the NASDAQ under the MU symbol. To learn more about Micron Technology, Inc., visit www.micron.com.

(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.





MICRON TECHNOLOGY, INC.
CONSOLIDATED FINANCIAL SUMMARY
(in millions except per share amounts)

 
 
2nd Qtr.
 
1st Qtr.
 
2nd Qtr.
 
Six Months Ended
 
 
March 3,
2016
 
December 3,
2015
 
March 5,
2015
 
March 3,
2016
 
March 5,
2015
Net sales
 
$
2,934

 
$
3,350

 
$
4,166

 
$
6,284

 
$
8,739

Cost of goods sold
 
2,355

 
2,501

 
2,761

 
4,856

 
5,696

Gross margin
 
579

 
849

 
1,405

 
1,428

 
3,043

Selling, general, and administrative
 
175

 
179

 
187

 
354

 
380

Research and development
 
403

 
421

 
379

 
824

 
755

Other operating (income) expense, net
 
6

 
17

 
(16
)
 
23

 
(32
)
Operating income (loss)
 
(5
)
 
232

 
855

 
227

 
1,940

Interest income (expense), net
 
(85
)
 
(85
)
 
(75
)
 
(170
)
 
(158
)
Other non-operating income (expense), net (1)
 
(6
)
 
(4
)
 
(6
)
 
(10
)
 
(55
)
Income tax (provision) benefit (2)
 
(5
)
 
4

 
(47
)
 
(1
)
 
(122
)
Equity in net income of equity method investees
 
5

 
59

 
208

 
64

 
332

Net (income) loss attributable to noncontrolling interests
 
(1
)
 
—

 
(1
)
 
(1
)
 
—

Net income (loss) attributable to Micron
 
$
(97
)
 
$
206

 
$
934

 
$
109

 
$
1,937

 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
(0.09
)
 
$
0.20

 
$
0.87

 
$
0.11

 
$
1.81

Diluted
 
(0.09
)
 
0.19

 
0.78

 
0.10

 
1.62

 
 
 
 
 
 
 
 
 
 
 
Number of shares used in per share calculations:
 
 
 
 
 
 
 
 
 
 
Basic
 
1,036

 
1,035

 
1,074

 
1,035

 
1,072

Diluted
 
1,036

 
1,085

 
1,190

 
1,072

 
1,193






CONSOLIDATED FINANCIAL SUMMARY, Continued
As of
 
March 3,
2016
 
December 3,
2015
 
September 3,
2015
Cash and short-term investments
 
$
4,035

 
$
3,641

 
$
3,521

Receivables
 
1,984

 
2,223

 
2,507

Inventories
 
2,608

 
2,435

 
2,340

Total current assets
 
8,805

 
8,510

 
8,596

Long-term marketable investments
 
1,108

 
1,771

 
2,113

Property, plant, and equipment, net
 
11,819

 
11,060

 
10,554

Total assets
 
24,819

 
24,388

 
24,143

 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
3,087

 
2,784

 
2,611

Current debt (1)(3)
 
1,125

 
1,051

 
1,089

Total current liabilities
 
4,411

 
4,025

 
3,905

Long-term debt (1)(3)
 
6,494

 
6,326

 
6,252

 
 
 
 
 
 
 
Total Micron shareholders' equity
 
12,264

 
12,301

 
12,302

Noncontrolling interests in subsidiaries
 
975

 
974

 
937

Total equity
 
13,239

 
13,275

 
13,239


 
 
Six Months Ended
 
 
March 3,
2016
 
March 5,
2015
Net cash provided by operating activities
 
$
1,883

 
$
2,843

Net cash provided by (used for) investing activities
 
(1,026
)
 
(3,202
)
Net cash provided by (used for) financing activities
 
(68
)
 
(144
)
 
 
 
 
 
Depreciation and amortization
 
1,575

 
1,355

Expenditures for property, plant, and equipment
 
(2,209
)
 
(1,522
)
Repayments of debt
 
(519
)
 
(1,149
)
Proceeds from issuance of debt
 
598

 
1,254

Cash paid to acquire treasury stock
 
(147
)
 
(244
)

























(1)
Other non-operating income (expense) consisted of the following:

 
 
2nd Qtr.
 
1st Qtr.
 
2nd Qtr.
 
Six Months Ended
 
 
March 3,
2016
 
December 3,
2015
 
March 5,
2015
 
March 3,
2016
 
March 5,
2015
Loss from changes in currency exchange rates
 
$
(5
)
 
$
(3
)
 
$
(6
)
 
$
(8
)
 
$
(27
)
Loss on restructure of debt
 
—

 
(1
)
 
—

 
(1
)
 
(30
)
Other
 
(1
)
 
—

 
—

 
(1
)
 
2

 
 
$
(6
)
 
$
(4
)
 
$
(6
)
 
$
(10
)
 
$
(55
)

During the first quarter of fiscal 2016, the company recognized a loss of $1 million on the repurchase of $57 million in aggregate principal amount of 2033E Notes for $94 million in cash. In the first six months of fiscal 2015, the company recognized losses of $30 million from transactions to restructure its debt, including conversions, settlements and repurchases of convertible notes, and the early repayment of a note.

(2)
Income taxes included a provision related to changes in amounts of net deferred tax assets associated with the company's MMJ and MMT operations of $10 million for the second quarter of fiscal 2016, $22 million for the first quarter of fiscal 2016, and $33 million for the second quarter of fiscal 2015. Income taxes for the first quarter of fiscal 2016 also included a benefit of $41 million from business acquisition activities. Remaining taxes for fiscal 2016 and 2015 primarily reflect taxes on the company's other non-U.S. operations. The company has a full valuation allowance for its net deferred tax asset associated with its U.S. operations. Income taxes on U.S. operations for fiscal 2016 and 2015 were substantially offset by changes in the valuation allowance.

(3)
In the second quarter of fiscal 2016, the company recorded capital lease obligations aggregating $424 million related to equipment sale-leaseback transactions at a weighted-average effective interest rate of 2.7%, payable in periodic installments through December 2020. In the first quarter of fiscal 2016, the company drew the remaining $174 million of financing under a term loan agreement, collateralized by certain property, plant, and equipment.





MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(in millions except per share amounts)

 
 
 
 
2nd Qtr.
 
1st Qtr.
 
 
 
 
March 3,
2016
 
December 3,
2015
GAAP net income (loss) attributable to Micron
 
 
 
$
(97
)
 
$
206

Non-GAAP adjustments:
 
 
 
 
 
 
Restructure and asset impairments
 
 
 
1

 
15

Amortization of debt discount and other costs
 
 
 
31

 
33

Loss on restructure of debt
 
 
 
—

 
1

(Gain) loss from changes in currency exchange rates
 
 
 
5

 
3

Estimated tax effects of above items
 
 
 
(1
)
 
2

Non-cash taxes from MMJ, MMT, and Inotera
 
 
 
13

 
30

Non-cash taxes from business acquisition activities
 
 
 
—

 
(41
)
Total non-GAAP adjustments
 
 
 
49

 
43

Non-GAAP net income (loss) attributable to Micron
 
 
 
$
(48
)
 
$
249

 
 
 
 
 
 
 
Number of shares used in diluted per share calculations:
 
 
 
 
 
 
GAAP
 
 
 
1,036

 
1,085

Effect of capped calls
 
 
 
—

 
(50
)
Non-GAAP
 
 
 
1,036

 
1,035

 
 
 
 
 
 
 
Diluted earnings (loss) per share:
 
 
 
 
 
 
GAAP
 
 
 
$
(0.09
)
 
$
0.19

Effects of above
 
 
 
0.04

 
0.05

Non-GAAP
 
 
 
$
(0.05
)
 
$
0.24


The table above sets forth non-GAAP net income (loss) attributable to Micron, diluted shares and diluted earnings (loss) 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 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, MMT, and Inotera (an equity method investment of the company); and
•
Non-cash taxes resulting from business acquisition activities.

Non-GAAP diluted shares include the impact 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. The anti-dilutive effect of the capped calls is based on the average share price for the period the capped calls are outstanding during the quarter.




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