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

BOISE, Idaho, June 30, 2022 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its third quarter of fiscal 2022, which ended June 2, 2022.

Fiscal Q3 2022 highlights

“Micron delivered record revenue in the fiscal third quarter driven by our team’s excellent execution across technology, products and manufacturing,” said Micron Technology President and CEO Sanjay Mehrotra. “Recently, the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023. We are confident about the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance.”

Quarterly Financial Results
 GAAP(1) Non-GAAP(2)
(in millions, except per share amounts)FQ3-22FQ2-22FQ3-21 FQ3-22FQ2-22FQ3-21
        
Revenue$8,642 $7,786 $7,422  $8,642 $7,786 $7,422 
Gross margin 4,035  3,676  3,126   4,097  3,724  3,185 
percent of revenue 46.7% 47.2% 42.1%  47.4% 47.8% 42.9%
Operating expenses 1,031  1,130  1,327   953  974  821 
Operating income 3,004  2,546  1,799   3,144  2,750  2,364 
percent of revenue 34.8% 32.7% 24.2%  36.4% 35.3% 31.9%
Net income 2,626  2,263  1,735   2,939  2,444  2,173 
Diluted earnings per share 2.34  2.00  1.52   2.59  2.14  1.88 
                    

Investments in capital expenditures, net(2) were $2.53 billion for the third quarter of 2022, which resulted in adjusted free cash flow(2) of $1.31 billion. Micron repurchased approximately 13.8 million shares of its common stock for $981 million during the third quarter of fiscal 2022 and ended the quarter with cash, marketable investments, and restricted cash of $11.98 billion, for a net cash(2) position of $5.01 billion.

On June 30, 2022, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on July 26, 2022, to shareholders of record as of the close of business on July 11, 2022.

Business Outlook

The following table presents Micron’s guidance for the fourth quarter of 2022:

FQ4-22GAAP(1) OutlookNon-GAAP(2) Outlook
   
Revenue$7.2 billion ± $400 million$7.2 billion ± $400 million
Gross margin41.5% ± 1.5%42.5% ± 1.5%
Operating expenses$1.13 billion ± $25 million$1.05 billion ± $25 million
Diluted earnings per share$1.52 ± $0.20$1.63 ± $0.20
   

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, June 30, 2022 at 2:30 p.m. Mountain time to discuss its third quarter financial results and provide forward-looking guidance for its fourth 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.

© 2022 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, demand for our products, 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 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 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)

 3rd Qtr.2nd Qtr.3rd Qtr.Nine months ended
 June 2,
2022
March 3,
2022
June 3,
2021
June 2,
2022
June 3,
2021
      
Revenue$8,642 $7,786 $7,422 $24,115 $19,431 
Cost of goods sold 4,607  4,110  4,296  12,839  12,920 
Gross margin 4,035  3,676  3,126  11,276  6,511 
      
Research and development 773  792  670  2,277  1,958 
Selling, general, and administrative 264  263  230  786  658 
Restructure and asset impairments   5  453  43  466 
Other operating (income) expense, net (6) 70  (26) (11) 101 
Operating income 3,004  2,546  1,799  8,181  3,328 
      
Interest income 20  12  8  42  28 
Interest expense (44) (55) (46) (144) (136)
Other non-operating income (expense), net 8  6  45  (61) 62 
  2,988  2,509  1,806  8,018  3,282 
      
Income tax (provision) benefit (358) (255) (65) (832) (164)
Equity in net income (loss) of equity method investees (4) 9  (6) 9  23 
Net income$2,626 $2,263 $1,735 $7,195 $3,141 
      
Earnings per share     
Basic$2.36 $2.02 $1.55 $6.44 $2.81 
Diluted 2.34  2.00  1.52  6.38  2.75 
      
Number of shares used in per share calculations     
Basic 1,112  1,119  1,121  1,117  1,119 
Diluted 1,121  1,130  1,145  1,127  1,141 


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

As ofJune 2,
2022
March 3,
2022
September 2,
2021
    
Assets   
Cash and equivalents$9,157 $9,116 $7,763 
Short-term investments 1,070  1,006  870 
Receivables 6,229  5,384  5,311 
Inventories 5,629  5,383  4,487 
Assets held for sale 15  13  974 
Other current assets 608  600  502 
Total current assets 22,708  21,502  19,907 
Long-term marketable investments 1,646  1,717  1,765 
Property, plant, and equipment 36,665  36,171  33,213 
Operating lease right-of-use assets 690  587  551 
Intangible assets 415  414  349 
Deferred tax assets 682  762  782 
Goodwill 1,228  1,228  1,228 
Other noncurrent assets 1,262  1,315  1,054 
Total assets$65,296 $63,696 $58,849 
    
Liabilities and equity   
Accounts payable and accrued expenses$5,788 $5,650 $5,325 
Current debt 107  123  155 
Other current liabilities 1,114  1,145  944 
Total current liabilities 7,009  6,918  6,424 
Long-term debt 6,856  6,953  6,621 
Noncurrent operating lease liabilities 629  535  504 
Noncurrent unearned government incentives 663  704  808 
Other noncurrent liabilities 858  741  559 
Total liabilities 16,015  15,851  14,916 
    
Commitments and contingencies   
    
Shareholders’ equity   
Common stock 122  122  122 
Additional capital 9,950  9,816  9,453 
Retained earnings 45,916  43,407  39,051 
Treasury stock (6,343) (5,362) (4,695)
Accumulated other comprehensive income (loss) (364) (138) 2 
Total equity 49,281  47,845  43,933 
Total liabilities and equity$65,296 $63,696 $58,849 


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

Nine months endedJune 2,
2022
June 3,
2021
   
Cash flows from operating activities  
Net income$7,195 $3,141 
Adjustments to reconcile net income to net cash provided by operating activities  
Depreciation expense and amortization of intangible assets 5,234  4,593 
Stock-based compensation 378  285 
(Gain) loss on debt repurchases and conversions 83  1 
Restructure and asset impairments 43  446 
Change in operating assets and liabilities  
Receivables (906) (340)
Inventories (1,146) 814 
Accounts payable and accrued expenses 382  (309)
Other 141  (47)
Net cash provided by operating activities 11,404  8,584 
   
Cash flows from investing activities  
Expenditures for property, plant, and equipment (8,454) (8,015)
Purchases of available-for-sale securities (1,359) (1,919)
Proceeds from sale of Lehi, Utah fab 888   
Proceeds from maturities of available-for-sale securities 964  1,024 
Proceeds from sales of available-for-sale securities 258  473 
Proceeds from government incentives 104  335 
Other (162) 47 
Net cash provided by (used for) investing activities (7,761) (8,055)
   
Cash flows from financing activities  
Repayments of debt (2,008) (1,344)
Repurchases of common stock - repurchase program (1,648) (150)
Payments of dividends to shareholders (335)  
Payments on equipment purchase contracts (132) (139)
Repurchases of common stock - withholdings on employee equity awards (116) (84)
Proceeds from issuance of debt 2,000  1,188 
Other 99  92 
Net cash provided by (used for) financing activities (2,140) (437)
   
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash (71) 44 
   
Net increase (decrease) in cash, cash equivalents, and restricted cash 1,432  136 
Cash, cash equivalents, and restricted cash at beginning of period 7,829  7,690 
Cash, cash equivalents, and restricted cash at end of period$9,261 $7,826 


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)

 3rd Qtr.2nd Qtr.3rd Qtr.
 June 2,
2022
March 3,
2022
June 3,
2021
    
GAAP gross margin$4,035 $3,676 $3,126 
Stock-based compensation 57  44  45 
Other 5  4  14 
Non-GAAP gross margin$4,097 $3,724 $3,185 
    
GAAP operating expenses$1,031 $1,130 $1,327 
Stock-based compensation (78) (75) (53)
Restructure and asset impairments   (5) (453)
Other   (76)  
Non-GAAP operating expenses$953 $974 $821 
    
GAAP operating income$3,004 $2,546 $1,799 
Stock-based compensation 135  119  98 
Restructure and asset impairments   5  453 
Other 5  80  14 
Non-GAAP operating income$3,144 $2,750 $2,364 
    
GAAP net income$2,626 $2,263 $1,735 
Stock-based compensation 135  119  98 
Restructure and asset impairments   5  453 
Amortization of debt discount and other costs 8  8  7 
Other 5  80  15 
Impact of Idaho income tax reform 189     
Estimated tax effects of above and other tax adjustments (24) (31) (135)
Non-GAAP net income$2,939 $2,444 $2,173 
    
GAAP weighted-average common shares outstanding - Diluted 1,121  1,130  1,145 
Adjustment for stock-based compensation 15  13  9 
Non-GAAP weighted-average common shares outstanding - Diluted 1,136  1,143  1,154 
    
GAAP diluted earnings per share$2.34 $2.00 $1.52 
Effects of the above adjustments 0.25  0.14  0.36 
Non-GAAP diluted earnings per share$2.59 $2.14 $1.88 


RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

 3rd Qtr.2nd Qtr.3rd Qtr.
 June 2,
2022
March 3,
2022
June 3,
2021
    
GAAP net cash provided by operating activities$3,838 $3,628 $3,560 
    
Expenditures for property, plant, and equipment (2,578) (2,611) (2,259)
Proceeds from sales of property, plant, and equipment 39  27  74 
Payments on equipment purchase contracts (27) (27) (16)
Amounts funded by partners 38  11  159 
Investments in capital expenditures, net (2,528) (2,600) (2,042)
Adjusted free cash flow$1,310 $1,028 $1,518 


As ofJune 2,
2022
March 3,
2022
September 2,
2021
    
Cash and short-term investments$10,227 $10,122 $8,633 
Current and noncurrent restricted cash 104  108  66 
Long-term marketable investments 1,646  1,717  1,765 
Current and long-term debt (6,963) (7,076) (6,776)
Net cash$5,014 $4,871 $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

FQ4-22GAAP Outlook Adjustments Non-GAAP Outlook
       
Revenue$7.2 billion ± $400 million     $7.2 billion ± $400 million
Gross margin41.5% ± 1.5%  1% A 42.5% ± 1.5%
Operating expenses$1.13 billion ± $25 million $83 millionB $1.05 billion ± $25 million
Diluted earnings per share(1)$1.52 ± $0.20 $0.11 A, B, C $1.63 ± $0.20


Non-GAAP Adjustments
(in millions) 
     
        
AStock-based compensation – cost of goods sold $45 
AOther – cost of goods sold  4 
BStock-based compensation – research and development  48 
BStock-based compensation – sales, general, and administrative  35 
CTax effects of the above items and other tax adjustments  (9)
       $123 

(1)   GAAP earnings per share based on approximately 1.12 billion diluted shares and non-GAAP earnings per share based on approximately 1.13 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
farhanahmad@micron.com
(408) 834-1927

Erica Rodriguez Pompen
Media Relations
epompen@micron.com
(408) 834-1873

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