01—Abstract
Summary
Summary of the 10-K filed October 28, 2009. Cited figures are marked; the original filing is the authoritative source.
Micron Technology Inc.'s fiscal year 2009 filing paints a challenging picture, dominated by a severe downturn in the semiconductor memory market.
The company experienced substantial net losses, reaching $1.8 billiona, largely due to drastic declines in average selling prices for both DRAM and NAND Flash products, which fell significantly more than historical trends. Despite these headwinds, Micron actively managed its operations through restructuring initiatives, including phasing out older manufacturing processes and reducing workforce. Strategic moves were made to strengthen its financial position and technological capabilities, such as acquiring a significant stake in Inotera Memories for DRAM production and selling a majority interest in its Aptina imaging business to focus on its core memory segment.
Looking ahead, the company indicated plans for capital expenditures between $750 millionb and $850 million for 2010, signaling a commitment to maintaining technological competitiveness. However, significant risks remain, including ongoing pricing pressures, the potential inability to reduce manufacturing costs at a pace matching price declines, and the impact of industry consolidation. The company also faces numerous legal proceedings, including patent disputes and antitrust allegations, which could materially affect its financial results.
02—Key points
Key Highlights
- Micron reported a net loss of $1.8 billion for fiscal year 2009, a significant deterioration from previous years, driven by a severe semiconductor memory market downturn.
- Average selling prices for DRAM and NAND Flash products saw dramatic decreases (52% and 56% respectively) in 2009 compared to 2008, significantly outpacing cost reductions.
- The company initiated restructuring plans, including phasing out 200mm DRAM operations and reducing headcount by approximately 20% (4,600 employees).
- Micron acquired a 35.5% stake in Inotera Memories, Inc. in Q1 2009 to enhance its DRAM production capabilities and entered into a supply agreement.
- The company divested a 65% interest in Aptina Imaging Corporation, retaining a 35% stake and focusing its resources on the memory segment.
- Total net sales decreased by 18% year-over-year to $4.8 billion, primarily due to lower sales volumes and prices in the Memory segment.
- Significant goodwill impairments were recorded in 2008 ($463 million for Memory) and 2009 ($58 million for Imaging) due to severe declines in segment performance and market values.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2009, Micron Technology Inc lost $0.39.
- Revenue$4.80B100.0%
- Cost of revenue−$5.24B109.2%
- Gross profit−$440.0M9.2%
- Operating costs−$1.24B25.7%
- Operating income−$1.68B34.9%
- Interest, other & tax−$206.0M4.3%
- Net income−$1.88B39.2%
04—Financials
Financial Highlights
Figures from 10-KFY2009filed October 28, 2009Financial Statements
| Revenue | $4.80B |
| Cost of Revenue | $5.24B |
| Gross Profit | -$440.00M |
| R&D Expenses | $647.00M |
| SG&A Expenses | $354.00M |
| Operating Income | -$1.68B |
| Interest Expense | $182.00M |
| Net Income | -$1.88B |
| EPS (Basic) | $-2.35 |
| EPS (Diluted) | $-2.35 |
| Shares Outstanding (Basic) | 800.70M |
| Shares Outstanding (Diluted) | 800.70M |
05—Questions
Frequently Asked Questions
What was Micron's financial performance in fiscal year 2009?
Micron experienced a challenging fiscal year 2009, reporting a net loss of $1.8 billion. This was primarily driven by a severe downturn in the semiconductor memory market, leading to significant declines in average selling prices for DRAM and NAND Flash products.
What strategic actions did Micron take in response to market conditions?
In response to the downturn, Micron implemented restructuring plans, including workforce reductions and phasing out older manufacturing technologies (200mm DRAM). Strategically, the company acquired a significant interest in Inotera Memories to bolster its DRAM capabilities and sold a majority stake in its Aptina imaging business to concentrate on its core memory operations.
What are the major risks and uncertainties facing Micron going forward?
Key risks include continued pricing pressure in the memory market, the challenge of reducing manufacturing costs at a pace comparable to price declines, potential impacts from industry consolidation, and numerous ongoing legal proceedings related to patents and antitrust allegations, any of which could materially affect the company's financial condition and results of operations.
How did the company's product segments perform?
The Memory segment, comprising 89% of net sales, saw a 17% decrease in sales due to lower DRAM and NAND Flash prices. The Imaging segment's sales decreased by 21%, impacted by lower demand and the sale of a majority stake in Aptina. Both segments reported negative gross margins in 2009.
06—Continue