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Micron Technology, Inc. Reports Results for the First Quarter of Fiscal 2022

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

“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:

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
  Email Contact Email Contact
 (408) 834-1927(408) 834-1873

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