10-QPeriod: Q1 FY2013

MICRON TECHNOLOGY INC Quarterly Report for Q1 Ended Nov 29, 2012

Filed January 7, 2013For Securities:MU

Summary

Micron Technology, Inc. reported a net loss of $275 million for the first quarter ended November 29, 2012, a deterioration from the $187 million net loss in the same period of the prior year. Net sales declined to $1.834 billion from $2.090 billion year-over-year. This decline was primarily driven by significant decreases in average selling prices for both NAND Flash and DRAM products, impacted by increased supply and softer demand. While sales volumes saw increases, they were not enough to offset the pricing pressures. The company is actively pursuing strategic initiatives, notably the pending acquisition of Elpida Memory, Inc. and Rexchip, which are expected to close in the first half of calendar 2013, and could significantly alter Micron's market position and financial leverage.

Financial Statements
Beta

Key Highlights

  • 1Net loss widened to $275 million from $187 million year-over-year.
  • 2Net sales decreased by 12% to $1.834 billion, driven by declining average selling prices for key products.
  • 3Gross margin compressed to 12% from 15% year-over-year due to pricing pressures.
  • 4Significant R&D and SG&A expenses continue, with R&D at $224 million and SG&A at $119 million.
  • 5The company is in the process of acquiring Elpida Memory, Inc. and Rexchip, a transaction anticipated to close in the first half of 2013.
  • 6Cash and equivalents stood at $2.102 billion, but the company faces ongoing capital expenditure needs and potential liabilities from acquisitions.

Frequently Asked Questions

Micron Technology reported a net loss of $275 million for the quarter ended November 29, 2012, compared to a net loss of $187 million in the same quarter of the previous year. Net sales decreased to $1.834 billion from $2.090 billion year-over-year, primarily due to lower average selling prices for DRAM and NAND Flash products, despite increased sales volumes.

The primary driver for the revenue decline was a significant decrease in average selling prices for both DRAM and NAND Flash products. This was attributed to increased supply in the market and relatively softer demand growth, particularly for high-volume DDR3 DRAM.

Micron is in the process of acquiring Elpida Memory, Inc. and Rexchip. These transactions are expected to close in the first half of calendar 2013 and are subject to various regulatory and creditor approvals. The acquisitions are aimed at expanding Micron's market position and product offerings.

As of November 29, 2012, Micron had $2.102 billion in cash and equivalents. The company had $3.387 billion in total debt, including convertible notes. Micron's liquidity is primarily generated from operations, but the company expects to pursue additional financing for capital expenditures and potential acquisition-related payments.