Micron Know-how, Inc. Studies Outcomes for the First Quarter of Fiscal 2021 Nasdaq:MU

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Micron Technology, Inc. Reports Results for the First Quarter of Fiscal 2021 Nasdaq:MU

Industry’s first 176-layer NAND in production

BOISE, Idaho, Jan. 07, 2021 (GLOBE NEWSWIRE) — Micron Technology, Inc. (Nasdaq: MU) today announced results for its first quarter of fiscal 2021, which ended Dec. 3, 2020.

Fiscal Q1 2021 highlights

  • Revenue of $5.77 billion versus $6.06 billion for the prior quarter and $5.14 billion for the same period last year
  • GAAP net income of $803 million, or $0.71 per diluted share
  • Non-GAAP net income of $897 million, or $0.78 per diluted share
  • Operating cash flow of $1.97 billion versus $2.27 billion for the prior quarter and $2.01 billion for the same period last year

“Micron delivered outstanding fiscal first quarter results, driven by focused execution and strong end-market demand,” said Micron Technology President and CEO Sanjay Mehrotra. “We are excited about the strengthening DRAM industry fundamentals. For the first time in our history, Micron is simultaneously leading on DRAM and NAND technologies, and we are in an excellent position to benefit from accelerating digital transformation of the global economy fueled by AI, 5G, cloud, and the intelligent edge.”

Quarterly Financial Results
(in millions, except per share amounts) GAAP(1)   Non-GAAP(2)
FQ1-21 FQ4-20 FQ1-20   FQ1-21 FQ4-20 FQ1-20
               
Revenue $ 5,773   $ 6,056   $ 5,144     $ 5,773   $ 6,056   $ 5,144  
Gross margin 1,736   2,068   1,366     1,784   2,111   1,405  
percent of revenue 30.1 % 34.1 % 26.6 %   30.9 % 34.9 % 27.3 %
Operating expenses 870   911   848     811   809   811  
Operating income 866   1,157   518     973   1,302   594  
percent of revenue 15.0 % 19.1 % 10.1 %   16.9 % 21.5 % 11.5 %
Net income attributable to Micron 803   988   491     897   1,229   548  
Diluted earnings per share 0.71   0.87   0.43     0.78   1.08   0.48  

Investments in capital expenditures, net(2) were $2.78 billion for the first quarter of 2021. Micron ended the quarter with cash, marketable investments, and restricted cash of $8.36 billion, for a net cash(2) position of $1.73 billion.

Business Outlook

The following table presents Micron’s guidance for the second quarter of 2021:

FQ2-21 GAAP(1) Outlook Non-GAAP(2) Outlook
     
Revenue $5.8 billion ± $200 million $5.8 billion ± $200 million
Gross margin 25% ± 1% 31% ± 1%
Operating expenses $882 million ± $25 million $825 million ± $25 million
Interest (income) expense, net $37 million $35 million
Diluted earnings per share $0.41 ± $0.07 $0.75 ± $0.07

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 Thursday, Jan. 7, 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. Through our global brands — Micron® and Crucial® — our broad portfolio of high-performance memory and storage technologies, including DRAM, NAND, 3D XPoint™ memory, and NOR, is transforming how the world uses information to enrich life for all. Backed by more than 40 years of technology leadership, our memory and storage solutions enable disruptive trends, including artificial intelligence, 5G, machine learning, and autonomous vehicles, in key market segments like mobile, data center, client, consumer, industrial, graphics, automotive, and networking. Our common stock is traded on Nasdaq under the MU symbol. To learn more about Micron Technology, Inc., visit micron.com.

Micron and the Micron orbit logo are trademarks 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 and Form 10-Q. 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 3,
2020
September 3,
2020
November 28,
2019
       
Revenue $ 5,773     $ 6,056     $ 5,144  
Cost of goods sold 4,037     3,988     3,778  
Gross margin 1,736     2,068     1,366  
       
Research and development 647     630     640  
Selling, general, and administrative 214     231     211  
Other operating (income) expense, net 9     50     (3 )
Operating income 866     1,157     518  
       
Interest income 10     13     44  
Interest expense (48 )   (50 )   (47 )
Other non-operating income (expense), net 13     5     46  
  841     1,125     561  
       
Income tax (provision) benefit (51 )   (136 )   (55 )
Equity in net income (loss) of equity method investees 13     1     2  
Net income 803     990     508  
       
Net income attributable to noncontrolling interests     (2 )   (17 )
Net income attributable to Micron $ 803     $ 988     $ 491  
       
Earnings per share      
Basic $ 0.72     $ 0.89     $ 0.44  
Diluted 0.71     0.87     0.43  
       
Number of shares used in per share calculations      
Basic 1,115     1,111     1,107  
Diluted 1,135     1,131     1,129  
                 

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

As of December 3,
2020
September 3,
2020
     
Assets    
Cash and equivalents $ 5,985     $ 7,624  
Short-term investments 1,047     518  
Receivables 3,691     3,912  
Inventories 5,521     5,607  
Other current assets 285     304  
Total current assets 16,529     17,965  
Long-term marketable investments 1,264     1,048  
Property, plant, and equipment 32,229     31,031  
Operating lease right-of-use assets 577     584  
Intangible assets 336     334  
Deferred tax assets 726     707  
Goodwill 1,228     1,228  
Other noncurrent assets 802     781  
Total assets $ 53,691     $ 53,678  
     
Liabilities and equity    
Accounts payable and accrued expenses $ 4,856     $ 5,817  
Current debt 273     270  
Other current liabilities 559     548  
Total current liabilities 5,688     6,635  
Long-term debt 6,356     6,373  
Noncurrent operating lease liabilities 529     533  
Noncurrent unearned government incentives 656     643  
Other noncurrent liabilities 555     498  
Total liabilities 13,784     14,682  
     
Commitments and contingencies    
     
Shareholders’ equity    
Common stock 120     119  
Additional capital 9,034     8,917  
Retained earnings 34,138     33,384  
Treasury stock (3,495 )   (3,495 )
Accumulated other comprehensive income (loss) 110     71  
Total equity 39,907     38,996  
Total liabilities and equity $ 53,691     $ 53,678  
               

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

Three months ended December 3,
2020
November 28,
2019
     
Cash flows from operating activities    
Net income $ 803     $ 508  
Adjustments to reconcile net income to net cash provided by operating activities    
Depreciation expense and amortization of intangible assets 1,487     1,296  
Amortization of debt discount and other costs 7     10  
Stock-based compensation 92     72  
(Gain) loss on debt prepayments, repurchases, and conversions     (42 )
Change in operating assets and liabilities    
Receivables 251     (208 )
Inventories 86     175  
Accounts payable and accrued expenses (753 )   178  
Deferred income taxes, net (24 )   19  
Other 18     3  
Net cash provided by operating activities 1,967     2,011  
     
Cash flows from investing activities    
Expenditures for property, plant, and equipment (2,738 )   (1,943 )
Purchases of available-for-sale securities (1,002 )   (407 )
Proceeds from maturities of available-for-sale securities 216     163  
Proceeds from sales of available-for-sale securities 45     988  
Proceeds from government incentives 40     22  
Other 21     (12 )
Net cash provided by (used for) investing activities (3,418 )   (1,189 )
     
Cash flows from financing activities    
Payments on equipment purchase contracts (97 )   (11 )
Repayments of debt (84 )   (1,415 )
Acquisition of noncontrolling interest in IMFT     (744 )
Proceeds from issuance of debt     1,250  
Other (33 )   (72 )
Net cash provided by (used for) financing activities (214 )   (992 )
     
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash 27     (14 )
     
Net increase (decrease) in cash, cash equivalents, and restricted cash (1,638 )   (184 )
Cash, cash equivalents, and restricted cash at beginning of period 7,690     7,279  
Cash, cash equivalents, and restricted cash at end of period $ 6,052     $ 7,095  
               

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

  1st Qtr. 4th Qtr. 1st Qtr.
  December 3,
2020
September 3,
2020
November 28,
2019
       
GAAP gross margin $ 1,736     $ 2,068     $ 1,366  
Stock-based compensation 41     37     31  
Other 7     6     8  
Non-GAAP gross margin $ 1,784     $ 2,111     $ 1,405  
       
GAAP operating expenses $ 870     $ 911     $ 848  
Stock-based compensation (51 )   (52 )   (41 )
Restructure and asset impairments (8 )   (50 )   4  
Non-GAAP operating expenses $ 811     $ 809     $ 811  
       
GAAP operating income $ 866     $ 1,157     $ 518  
Stock-based compensation 92     89     72  
Restructure and asset impairments 8     50     (4 )
Other 7     6     8  
Non-GAAP operating income $ 973     $ 1,302     $ 594  
       
GAAP net income attributable to Micron $ 803     $ 988     $ 491  
Stock-based compensation 92     89     72  
Restructure and asset impairments 8     50     (4 )
Amortization of debt discount and other costs 7     6     10  
(Gain) loss on debt prepayments, repurchases, and conversions         (42 )
Other 7     6     8  
Estimated tax effects of above and non-cash changes in net deferred income taxes (20 )   90     13  
Non-GAAP net income attributable to Micron $ 897     $ 1,229     $ 548  
       
GAAP weighted-average common shares outstanding – Diluted 1,135     1,131     1,129  
Adjustment for stock-based compensation and capped calls 11     11     9  
Non-GAAP weighted-average common shares outstanding – Diluted 1,146     1,142     1,138  
       
GAAP diluted earnings per share $ 0.71     $ 0.87     $ 0.43  
Effects of the above adjustments 0.07     0.21     0.05  
Non-GAAP diluted earnings per share $ 0.78     $ 1.08     $ 0.48  

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

  1st Qtr. 4th Qtr. 1st Qtr.
  December 3,
2020
September 3,
2020
November 28,
2019
       
GAAP net cash provided by operating activities $ 1,967     $ 2,271     $ 2,011  
Investments in capital expenditures, net      
Expenditures for property, plant, and equipment, net(1) (2,726 )   (2,268 )   (1,936 )
Payments on equipment purchase contracts (97 )   (14 )   (11 )
Amounts funded by partners 40     122     22  
Adjusted free cash flow $ (816 )   $ 111     $ 86  
(1) Expenditures for property, plant, and equipment, net include proceeds from sales of property, plant, and equipment of $12 million for the first quarter of 2021, $12 million for the fourth quarter of 2020, and $7 million for the first quarter of 2020.
   
As of December 3,
2020
September 3,
2020
     
Cash and short-term investments $ 7,032     $ 8,142  
Current and noncurrent restricted cash 67     66  
Long-term marketable investments 1,264     1,048  
Current and long-term debt (6,629 )   (6,643 )
Net cash $ 1,734     $ 2,613  
               

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income, net income attributable to Micron, 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;
  • Start-up and preproduction costs;
  • Employee severance;
  • Restructure and asset impairments;
  • Amortization of debt discount and other costs, including the accretion of non-cash interest expense associated with our convertible notes and other debt;
  • 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, 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. Non-GAAP diluted shares also include the impact of capped calls, which are anti-dilutive in GAAP earnings per share but are expected to mitigate the dilutive effect of convertible notes, based on the average share price for the period the capped calls were outstanding.

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

    GAAP Outlook   Adjustments   Non-GAAP Outlook
               
Revenue $5.8 billion ± $200 million   —      $5.8 billion ± $200 million
Gross margin 25% ± 1%   6% A   31% ± 1%
Operating expenses $882 million ± $25 million   $57 million B   $825 million ± $25 million
Interest (income) expense, net $37 million   $2 million C   $35 million
Diluted earnings per share(1) $0.41 ± $0.07   $0.34 A, B, C, D   $0.75 ± $0.07
             
Non-GAAP Adjustments
(in millions)
           
               
A Inventory accounting policy change to FIFO – cost of goods sold   $ 135  
A Change in inventory cost absorption – cost of goods sold   165  
A Stock-based compensation – cost of goods sold   54  
A Other – cost of goods sold   7  
B Stock-based compensation – research and development   30  
B Stock-based compensation – sales, general, and administrative   27  
C Amortization of debt discount and other costs   2  
D Tax effects of the above items and non-cash changes in net deferred income taxes   (27 )
              $ 393  
(1) GAAP earnings per share based on approximately 1.14 billion diluted shares and non-GAAP earnings per share based on approximately 1.15 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
Investor Relations

(408) 834-1927

Erica Rodriguez Pompen
Media Relations

(408) 834-1873