01—Abstract
Summary
Summary of the 10-Q filed January 11, 2011. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported net sales of $2,252 milliona for the quarter ended December 2, 2010, a significant increase from $1,740 million in the same quarter of the previous year.
This growth was primarily driven by the integration of Numonyx Holdings B.V., acquired in May 2010, which contributed $573 millionb in net sales to the Numonyx segment. Despite the revenue increase, net income attributable to Micron decreased to $155 million ($0.15 per diluted share) from $204 million ($0.23 per diluted share) year-over-year. This was influenced by higher cost of goods sold, increased selling, general, and administrative expenses, and a substantial loss of $114 million in other non-operating income/expense.
The company's balance sheet shows total assets remaining relatively stable at $14,617 millionc. Total liabilities decreased slightly to $4,623 million. Significant changes include a decrease in cash and equivalents to $2,411 million from $2,913 million, and an increase in accounts payable and accrued expenses.
The company also executed a debt restructure in November 2010, exchanging and repurchasing convertible notes, which resulted in a loss of $111 milliond related to these transactions. Micron continues to invest heavily in property, plant, and equipment, with capital expenditures of $465 million in the quarter.
02—Key points
Key Highlights
- Net sales increased by 29% year-over-year to $2,252 million, driven by the Numonyx acquisition.
- Net income attributable to Micron decreased by 24% year-over-year to $155 million, impacting earnings per diluted share to $0.15 from $0.23.
- The company reported a significant gain of $200 million from a patent cross-license agreement with Samsung in the quarter.
- Cash and equivalents decreased by $502 million sequentially to $2,411 million.
- Micron completed a debt restructure involving convertible notes, resulting in a $111 million loss related to these transactions.
- Capital expenditures for property, plant, and equipment totaled $465 million for the quarter, indicating continued investment in infrastructure.
- The company faces ongoing legal proceedings, including antitrust and patent litigation, with potential material impacts on financial condition.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2011, Micron Technology Inc kept $0.03.
- Revenue$2.26B100.0%
- Cost of revenue−$1.82B80.7%
- Gross profit$435.0M19.3%
- Operating costs−$256.0M11.3%
- Operating income$179.0M7.9%
- Interest, other & tax−$107.0M4.7%
- Net income$72.0M3.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2011filed January 11, 2011Financial Statements
Q2 FY2011 against Q2 FY2010
| Line item | Q2 FY2011Q2 FY2010 | Change |
|---|---|---|
| Revenue | $2.26B$1.96B | +15.1% |
| Cost of Revenue | $1.82B$1.32B | +38.1% |
| Gross Profit | $435.00M$642.00M | −32.2% |
| R&D Expenses | $186.00M$148.00M | +25.7% |
| SG&A Expenses | $146.00M$100.00M | +46.0% |
| Operating Income | $179.00M$415.00M | −56.9% |
| Interest Expense | $28.00M$46.00M | −39.1% |
| Net Income | $72.00M$365.00M | −80.3% |
| EPS (Basic) | $0.07$0.43 | −83.7% |
| EPS (Diluted) | $0.07$0.39 | −82.1% |
| Shares Outstanding (Basic) | 988.10M847.60M | +16.6% |
| Shares Outstanding (Diluted) | 1.04B1.01B | +3.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of the revenue increase in this quarter?
The primary driver of the revenue increase was the acquisition and integration of Numonyx Holdings B.V., which contributed significantly to the newly formed Numonyx segment.
Why did net income decrease despite higher revenues?
Net income decreased due to an increase in the cost of goods sold, higher selling, general, and administrative expenses, and a significant other non-operating expense of $114 million. Additionally, a debt restructure resulted in a $111 million loss.
What is the significance of the Samsung patent cross-license agreement?
Micron received a $200 million payment in this quarter from Samsung for a 10-year patent cross-license agreement, which significantly boosted operating income for the quarter. Additional payments are expected in early 2011.
What are the implications of the ongoing legal proceedings mentioned in the filing?
Micron is involved in several significant legal proceedings, including antitrust cases related to DRAM price-fixing and patent litigation, most notably with Rambus. While the company has settled some indirect purchaser cases for approximately $67 million, adverse outcomes in ongoing litigation could result in significant liabilities and materially impact the company's financial condition and results of operations.
06—Continue