FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 2, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1943
For the transition period from to
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Commission file number 1-10658
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Micron Technology, Inc.
------------------------------------
(Exact name as specified in charter)
Delaware 75-1618004
------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2805 East Columbia Road, Boise, Idaho 83707-0006
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(Address of principal executive offices) zip code
Registrant's telephone number, including area code (208) 368-4000
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Indicate by check mark whether the registrant (1) has filed all reports
required to the filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
The number of outstanding shares of the registrant's Common Stock as of
March 16, 1995 was 102,622,620.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
MICRON TECHNOLOGY, INC.
Consolidated Balance Sheets
(Dollars in millions, except for par value amount)
<TABLE>
<CAPTION>
March 2, September 1,
As of 1995 1994
- ----------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 81.5 $ 78.4
Liquid investments 495.2 354.6
Receivables 266.1 235.7
Inventories 142.8 101.1
Prepaid expenses 4.8 3.3
Deferred income taxes 19.6 20.1
-------- --------
Total current assets 1,010.0 793.2
Product and process technology, net 43.9 48.2
Property, plant, and equipment, net 867.6 663.5
Other assets 35.3 24.8
-------- --------
Total assets $1,956.8 $1,529.7
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 238.6 $ 200.2
Deferred income 13.6 13.0
Equipment purchase contracts 23.0 31.2
Current portion of long-term debt 25.8 29.8
-------- --------
Total current liabilities 301.0 274.2
Long-term debt 168.2 124.7
Deferred income taxes 63.6 54.1
Other liabilities 28.4 27.4
-------- --------
Total liabilities 561.2 480.4
-------- --------
Commitments and contingencies
Shareholders' equity:
Common stock, $.10 par value, authorized
300.0 million shares, issued and
outstanding 102.6 million and 101.9
million shares, respectively 10.3 10.2
Additional paid-in capital 386.5 369.7
Retained earnings 1,003.4 670.8
Unamortized stock compensation (4.6) (1.4)
-------- --------
Total shareholders' equity 1,395.6 1,049.3
-------- --------
Total liabilities and shareholders'
equity $1,956.8 $1,529.7
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
MICRON TECHNOLOGY, INC.
Consolidated Statements of Operations
(Amounts in millions, except for per share data)
(Unaudited)
<TABLE>
caption>
March 2, March 3,
For the quarter ended 1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Net sales $ 628.5 $ 390.5
-------- --------
Costs and expenses:
Cost of goods sold 267.5 204.1
Selling, general, and administrative 39.0 33.1
Research and development 28.9 18.7
-------- --------
Total costs and expenses 335.4 255.9
-------- --------
Operating income 293.1 134.6
Interest income, net 6.5 1.0
-------- --------
Income before income taxes 299.6 135.6
Income tax provision 116.1 48.8
-------- --------
Net income $ 183.5 $ 86.8
======== ========
Earnings per share:
Primary $1.72 $0.83
Fully diluted $1.71 $0.83
Number of shares used in per share
calculations:
Primary 106.4 104.3
Fully diluted 107.2 105.1
Cash dividend declared per share $0.05 --
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
MICRON TECHNOLOGY, INC.
Consolidated Statements of Operations
(Amounts in millions, except for per share data)
(Unaudited)
<TABLE>
<CAPTION>
March 2, March 3,
For the six months ended 1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Net sales $1,163.5 $ 710.6
-------- --------
Costs and expenses:
Cost of goods sold 492.0 370.7
Selling, general, and administrative 77.2 67.2
Research and development 55.9 33.0
-------- --------
Total costs and expenses 625.1 470.9
-------- --------
Operating income 538.4 239.7
Interest income, net 10.1 1.4
-------- --------
Income before income taxes 548.5 241.1
Income tax provision 205.7 86.8
-------- --------
Net income $ 342.8 $ 154.3
======== ========
Earnings per share:
Primary $3.24 $1.49
Fully diluted 3.21 1.48
Number of shares used in per share
calculations:
Primary 105.8 103.7
Fully diluted 106.8 104.5
Cash dividend declared per share $0.10 $0.02
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
MICRON TECHNOLOGY, INC.
Consolidated Statements of Cash Flows
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
March 2, March 3,
For the six months ended 1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 342.8 $ 154.3
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 86.6 64.7
Increase in receivables (30.4) (38.2)
Increase in inventories (41.7) (12.4)
Increase in accounts payable and
accrued expenses 38.4 25.0
Other 16.6 36.0
-------- --------
Net cash provided by operating activities 412.3 229.4
-------- --------
Cash flows from investing activities
Purchase of investments (420.6) (109.0)
Proceeds from sale and maturity of
investments 281.8 64.1
Expenditures for property, plant, and
equipment (242.7) (106.7)
Other 9.2 (9.4)
-------- --------
Net cash used for investing activities (372.3) (161.0)
-------- --------
Cash flows from financing activities
Payments on equipment purchase contracts (71.1) (62.5)
Repayments of debt (21.0) (37.5)
Proceeds from issuance of debt 59.7 20.3
Proceeds from issuance of common stock 8.6 6.8
Payment of dividends (10.2) (2.0)
Other (2.9) (0.2)
-------- --------
Net cash used for financing activities (36.9) (75.1)
-------- --------
Net increase (decrease) in cash and
equivalents 3.1 (6.7)
Cash and equivalents at beginning of
period 78.4 47.5
-------- --------
Cash and equivalents at end of period $ 81.5 $ 40.8
======== ========
Supplemental disclosures
Income taxes paid, net $ (214.8) $ (109.8)
Interest paid (4.5) (3.0)
Noncash investing and financing activities:
Equipment acquisitions on contracts
payable and capital leases 62.8 57.0
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
Notes to Consolidated Financial Statements
(All tabular dollar amounts are stated in millions)
1. Unaudited Interim Financial Statements
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly
the consolidated financial position of Micron Technology, Inc., and
subsidiaries (the "Company"), and their consolidated results of operations
and cash flows. During the second quarter of fiscal 1995, the Company
changed its estimate of the effective income tax rate for fiscal 1995 to
37.5% from 36.0%.
This report on Form 10-Q for the quarter and six months ended March 2,
1995, should be read in conjunction with the Company's Annual Report to
Shareholders and/or Form 10-K for the year ended September 1, 1994.
<TABLE>
2. Receivables March 2, September 1,
1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
Trade receivables $ 265.5 $ 227.6
Other 9.7 15.9
Allowance for returns and discounts (5.9) (4.9)
Allowance for doubtful accounts (3.2) (2.9)
-------- --------
$ 266.1 $ 235.7
======== ========
3. Inventories March 2, September 1,
1995 1994
- ----------------------------------------------------------------------
Finished goods $ 3.8 $ 5.2
Work in progress 78.8 64.2
Raw materials and supplies 60.2 31.7
-------- --------
$ 142.8 $ 101.1
======== ========
4. Product and process technology, net March 2, September 1,
1995 1994
- ----------------------------------------------------------------------
Product and process technology,
at cost $ 149.4 $ 148.6
Less accumulated amortization (105.5) (100.4)
-------- --------
$ 43.9 $ 48.2
======== ========
5. Property, plant, and equipment, net March 2, September 1,
1995 1994
- ----------------------------------------------------------------------
Land $ 8.0 $ 7.9
Buildings 308.9 260.0
Machinery and equipment 993.2 825.5
Construction in progress 111.6 68.7
-------- --------
1,421.7 1,162.1
Less accumulated depreciation and
amortization (554.1) (498.6)
-------- --------
$ 867.6 $663.5
======== ========
5
<PAGE>
Notes to Consolidated Financial Statements, continued
6. Accounts payable and accrued expenses March 2, September 1,
1995 1994
- ----------------------------------------------------------------------
Accounts payable $ 76.8 $ 55.3
Salaries, wages, and benefits 75.6 63.5
Product and process technology 40.2 16.6
Income taxes payable 20.4 44.0
Commissions 4.1 4.5
Other 21.5 16.3
-------- --------
$ 238.6 $ 200.2
======== ========
7. Long-term debt March 2, September 1,
1995 1994
- ----------------------------------------------------------------------
Notes payable in periodic installments
through May 1999, weighted average
interest rate of 6.84% and 7.30 %,
respectively $ 99.4 $ 78.7
Notes payable, due at maturity ranging
from April 1996 to December 1997,
weighted average interest rate of
6.10% and 5.11%, respectively 50.0 37.0
Noninterest bearing obligations,
$19.8 million due June 1997 and
$20.5 million due December 1997,
original face amount of $40.3
million (net of discounts based
on imputed interest rate) weighted
average interests rate of 6.90% and
6.50%, respectively 34.0 16.6
Capitalized lease obligations payable
in monthly installments through
April 1998, weighted average
interest rate of 7.91% and 7.93%,
respectively 10.6 12.4
Noninterest bearing obligation, paid
in November 1994, original face
amount of $50.0 million (net of
discount based on imputed interest
rate of 10.25%) -- 9.8
-------- --------
194.0 154.5
Less current portion (25.8) (29.8)
-------- --------
$ 168.2 $ 124.7
======== ========
8. Earnings per share
Earnings per share is computed using the weighted average number of
common and common equivalent shares outstanding. Common equivalent shares
result from the assumed exercise of outstanding stock options and affect
earnings per share when they have a dilutive effect. Share and per share
amounts for the second quarter and first six months of fiscal 1994 have been
restated to reflect a 5 for 2 stock split effected in the form of a stock
dividend in the third quarter of fiscal 1994.
9. Income taxes
During the second quarter of fiscal 1995, the Company changed its
estimate of the effective income tax rate for fiscal 1995 to 37.5% from
36.0%. The effective income tax reflects the statutory corporate income
tax rate and the net effect of state taxation.
6
<PAGE>
Notes to Consolidated Financial Statements, continued
10. Commitments
As of March 2, 1995, the Company had commitments extending into fiscal
1997, of approximately $486.8 million for equipment purchases and $67.1
million for the construction of buildings.
11. Contingencies
Periodically, the Company is made aware that technology used by the
company in the manufacture of some or all of its products may infringe on
product or process technology rights held by others. The Company has
accrued a liability and charged operations for the estimated costs of
settlement or adjudication of asserted and unasserted claims for
infringement prior to the balance sheet date. Management can give no
assurance that the amounts accrued have been adequate and cannot estimate
the range of additional possible loss, if any, from resolution of these
uncertainties. Resolution of whether the Company's manufacture of products
has infringed on valid rights held by others may have a material adverse
effect on the Company's financial position or results of operations, and may
require material changes in production processes and products. The Company
has various product and process technology agreements expiring in the
remainder of 1995. The Company is not able to predict whether these license
agreements can be renewed on terms acceptable to the Company.
The Company is a party to various legal actions arising out of the
normal course of business, none of which is expected to have a material
effect on the Company's financial position or results of operations.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
- ------------------------------------------------------------------------
Results of Operations
- ---------------------
All period references are to the Company's fiscal periods ended March
2, 1995, and March 3, 1994, unless otherwise indicated. Per share amounts
for the second quarter and first six months of 1994 have been restated to
reflect a 5 for 2 stock split effected in the form of a stock dividend
during the third quarter of 1994. All tabular dollar amounts are stated
in millions.
Net sales for the Company's second quarter ended March 2, 1995, were
$628.5 million, compared to net sales of $390.5 million for the same quarter
a year ago. Net income for the second quarter of 1995 was $183.5 million,
or $1.71 per fully diluted share, as compared to net income of $86.8 million,
or $0.83 per fully diluted share, for the second quarter of 1994, and as
compared to $159.3 million, or $1.51 per fully diluted share, for the first
quarter of 1995. For the first six months of 1995, the Company reported net
income of $342.8 million, or $3.21 per fully diluted share, on net sales of
$1,164 million as compared to net income of $154.3 million, or $1.48 per
fully diluted share, on net sales of $710.6 million for the first six months
of 1994.
The merger of Micron Custom Manufacturing Services, Inc., and Micron
Computer, Inc., with ZEOS International, Ltd. ("ZEOS"), a personal computer
manufacturer, is proceeding and is currently anticipated to be completed in
early April following shareholder approval by each respective company. Upon
completion of the merger, the operating results of ZEOS will be consolidated
with the Company's.
Results of Operations
</TABLE>
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
--------------------------- ---------------------------
1995 Change 1994 1995 Change 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 628.5 60.9% $ 390.5 $1,163.5 63.7% $ 710.6
</TABLE>
The strong operating results for 1995 reflect increased production of
semiconductor memory and continued favorable market conditions. Demand for
the 4 Meg DRAM, the Company's largest volume product, continued to be strong
through the second quarter of 1995 resulting in relatively stable pricing for
the eleventh consecutive quarter. In the second quarter of 1995, megabit
production of semiconductor memory produced was approximately 60% higher
than the comparable quarter of 1994 and 8% higher compared to the first
quarter of 1995. The higher volume of memory principally resulted from the
transition to the third generation shrink version of the 4 Meg DRAM with
higher potential die per wafer and from enhanced yields for existing products.
Although the Company has commenced production of its fourth generation 4 Meg
DRAM, the Company expects its third generation product to remain the principal
product through the end of fiscal 1995. The level of total wafer output did
not vary significantly comparing the second quarter of 1995 to both the first
quarter of 1995 and the second quarter of 1994.
Sales of personal computer systems and custom board level products in
the second quarter of 1995 accounted for approximately 12% and 4%,
respectively, of total net sales, excluding the value of the Company's memory
components contained in such products, compared to 3% and 4%, respectively, of
total net sales during the second quarter of 1994. Net sales of PC systems in
future periods are expected to increase as a percentage of total net sales as a
result of the Company's planned acquisition of ZEOS. In its fourth fiscal
quarter ended December 31, 1994, ZEOS reported net sales of approximately $74
million.
8
<PAGE>
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
--------------------------- ---------------------------
1995 Change 1994 1995 Change 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Cost of goods sold $ 267.5 31.1% $ 204.1 $ 492.0 32.7% $ 370.7
Gross margin % 57.4% 47.7% 57.7% 47.8%
</TABLE>
The Company's overall gross margin percentage for both the second
quarter and first six months of 1995 improved significantly compared to the
corresponding periods of 1994 principally due to reductions in cost per unit of
memory sold for DRAM products and continued relatively stable average selling
prices for such products. Reductions in cost per unit were realized primarily
from transition to a further shrink version of the 4 Meg DRAM with higher
potential die per wafer and higher yields on existing products resulting
principally from increased manufacturing efficiencies.
Market conditions during the most recent eleven quarters have resulted
in relatively stable semiconductor memory pricing. This represents a
significant deviation above the semiconductor industry's historical long-term
trend line of declining per megabit pricing. The Company is unable to predict
when or how quickly average selling prices per megabit may return to the
historical long-term trend line.
The Company continues to limit its production of 16 Meg DRAMs in order
to maximize 4 Meg DRAM production consistent with existing customer
preferences. The transition from the 4 Meg DRAM to the 16 Meg DRAM may
adversely impact the Company's gross margin percentage as production capacity
is shifted from a relatively mature device to a next generation device. The
Company believes the market transition to the 16 Meg DRAM as its primary DRAM
product will be largely driven by the timing of when the market price for the 1
Meg x 16 configuration of the 16 Meg DRAM reaches per megabit price parity
with the equivalent 4 Meg DRAM and by the timing of increases in the memory
requirements of personal computers.
Cost of goods sold includes estimated costs of settlement or adjudication
of asserted and unasserted claims for patent infringement prior to the balance
sheet date, and costs of product and process technology licensing arrangements.
The charges for product and process technology decreased as a percentage of net
sales in the second quarter and first six months of 1995 compared to the same
periods of 1994 primarily as a result of a paid-up license agreement that
became fully amortized late in fiscal 1994. Future product and process
technology charges may increase as a result of claims asserted or licenses
acquired in the future. See "Certain Factors".
The Company's gross margin percentage has been negatively impacted by
the increase in net sales of personal computer systems as a percentage of the
Company's total net sales. Gross margin on sales of PC Systems during the
second quarter of 1995 was approximately 8%. Following completion of the
Company's planned acquisition of ZEOS, it is anticipated that net sales of
personal computer systems will continue to increase as a percentage of the
Company's total net sales. ZEOS reported gross margin percentages of
approximately 11% and 8% for its fourth quarter and its fiscal year ended
December 31, 1994.
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
--------------------------- ---------------------------
1995 Change 1994 1995 Change 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Selling, general, and
administrative $ 39.0 17.8% $ 33.1 $ 77.2 14.9% $ 67.2
as a % of net sales 6.2% 8.5% 6.6% 9.5%
</TABLE>
Selling, general, and administrative expenses increased in both the
second quarter and first six months of 1995 compared to the same periods of
1994, but decreased as a percentage of net sales. The higher level of selling,
general, and administrative expenses during the second quarter of 1995 as
compared to 1994 resulted primarily from a higher level of personnel costs as a
result of increased number of employees in administrative areas and increased
costs associated with the profit sharing programs, and to a lesser extent
increased advertising expense incurred in the Company's personal computer
operation. These increases were partially offset by a reduction of legal fees
primarily resulting from settlement of patent litigation.
9
<PAGE>
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
--------------------------- ---------------------------
1995 Change 1994 1995 Change 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Research and
development $ 28.9 54.5% $ 18.7 $ 55.9 69.4% $ 33.0
as a % of net sales 4.6% 4.8% 4.8% 4.6%
</TABLE>
Research and development expenses, which vary primarily with the number
of wafers and personnel dedicated to new product and process development, were
higher in absolute dollars but remained fairly constant as a percentage of net
sales in both the second quarter and first six months of 1995 as compared to
the corresponding periods of 1994. Efforts in the second quarter of 1995 were
focused primarily on design and development of the 64 Meg and 256 Meg DRAMs,
further development of the fourth generation 4 Meg DRAM and of the 16 Meg DRAM,
and design and development of the 4 Meg SRAM shrink. The Company expects
research and development expense for the remainder of fiscal 1995 to be
significantly higher in absolute dollars compared to fiscal 1994 as additional
resources are dedicated to development of the 64 Meg DRAM, and design and
development of the 256 Meg DRAM, as well as design and development of new
technologies including radio frequency identification products, nonvolatile
semiconductor memory devices, and field emission flat panel displays.
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
--------------------------- ---------------------------
1995 Change 1994 1995 Change 1994
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Income tax provision $ 116.1 138% $ 48.8 $ 205.7 137% $ 86.8
</TABLE>
During the second quarter of 1995, the Company changed its estimate
of the effective income tax rate for fiscal 1995 to 37.5% from 36.0%.
Liquidity and Capital Resources
The Company had cash and liquid investments of approximately $577 million
as of March 2, 1995, representing an increase of approximately $144 million
during the first six months of 1995. The Company's principal sources of
liquidity during the first six months of 1995 were cash flows from operations
of $412 million, issuance of long-term debt of $60 million, equipment financing
of $63 million, and $9 million from the issuance of common stock in connection
with the Company's employee stock purchase and stock option plans. The
principal uses of funds in the first six months of 1995 were $306 million for
property, plant, and equipment, $71 million for payments on equipment
contracts, $21 million for payments on long-term debt, and $10 million for
payment of cash dividends on common stock. The Company expects a significant
reduction in cash and liquid investments through the remainder of the fiscal
year as capital expenditures should exceed cash flows from operations.
As of March 2, 1995, the Company had contractual commitments, extending
into fiscal 1997, of approximately $487 million for equipment purchases and
approximately $67 million for the construction of buildings. Anticipated
capital expenditures include the upgrade of manufacturing equipment to 8-inch
wafer processing capability, completion of an additional assembly and test
facility, and remodels and upgrades of existing fabrication facilities. In
addition, the Company recently completed the selection process for a proposed
semiconductor memory manufacturing complex to be located in Utah County, Utah.
Capital expenditures associated with construction and equipment for this
complex are expected to exceed $1 billion. Completion of this long-term
expansion project could take up to four years and will proceed in stages as
future market conditions allow.
The Company's bank credit agreement provides for borrowings of up to
$120 million under a revolving loan expiring January 1997. Substantially all of
the tangible assets of the Company's semiconductor memory manufacturing
operations not otherwise pledged as collateral for other notes payable and
capital leases are pledged as collateral under the agreement. The agreement
contains certain financial covenants. As of March 2, 1995, the Company had no
borrowings outstanding under the agreement.
10
<PAGE>
The Company believes continuing investments in manufacturing technology,
facilities and capital equipment, research and development, and product and
process technology are necessary to support future growth, achieve operating
efficiencies, and maintain product quality. Although the Company has recently
been able to fund its liquidity needs through cash flows from operations and
equipment financings, external sources of cash have been required historically
to supplement the Company's cash flows from operations to fund these ongoing
investments. In order to fund the Company's current capital development
program as scheduled, the Company may be required to pursue external
sources of liquidity. There can be no assurance that external funds will be
available to fund the Company's ongoing operations or capital development on
terms acceptable to the Company.
Certain Factors
The semiconductor memory industry is characterized by rapid technological
change, frequent product introductions and enhancements, difficult product
transitions, relatively short product life cycles, and volatile market
conditions. These characteristics historically have made the semiconductor
industry highly cyclical, particularly in the market for DRAMs, which are the
Company's primary products. Demand for semiconductor memory products has
grown, fueled primarily by growth in the personal computer industry. Many of
the Company's competitors are adding new facilities designed to process 8-inch
wafers, which have approximately 84% greater usable surface area than the
6-inch wafer currently used by the Company. In addition, many competitors are
currently believed to be running their 16 Meg DRAM manufacturing operations at
significantly lower yields than could be expected when such products mature.
Yield improvements by these competitors would dramatically increase worldwide
semiconductor memory capacity. Excess supply as a result of increased
semiconductor manufacturing capacity, adverse market conditions, or currency
fluctuation resulting in a strengthening dollar against the yen, could result
in downward pricing pressure. A decline in the current favorable product
pricing would have a material adverse effect on the Company's results of
operations.
The manufacture of the Company's semiconductor memory products is a
complex process and involves a number of precise steps, including wafer
fabrication, assembly in a variety of packages, burn-in, and final test. From
time to time, the Company has experienced volatility in its manufacturing
yields, as it is not unusual to encounter difficulties in ramping shrink
versions of existing devices or new generation devices to commercial volumes.
The Company's net sales and operating results are highly dependent on
increasing yields at an acceptable rate and to an acceptable level, of which
there can be no assurance. Future results of operations may be adversely
impacted if the Company is unable to transition to future generation products,
in a timely fashion or at gross margin rates comparable to the Company's
current primary products.
11
<PAGE>
Periodically, the Company is made aware that technology used by the
Company in the manufacture of some or all of its products may infringe on
product or process technology rights held by others. The Company has accrued a
liability and charged operations for the estimated costs of settlement or
adjudication of asserted and unasserted claims for infringement prior to the
balance sheet date. Management can give no assurance that the amounts accrued
have been adequate and cannot estimate the range of additional possible loss,
if any, from resolution of these uncertainties. Resolution of whether the
Company's manufacture of products has infringed on valid rights held by others
may have a material adverse effect on the Company's financial position or
results of operations, and may require material changes in production processes
and products. The Company has various product and process technology
agreements expiring in the remainder of 1995. The Company is not able to
predict whether these license agreements can be renewed on terms acceptable to
the Company.
12
<PAGE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Shareholders
- -------------------------------------------------------
The registrant's 1994 Annual Meeting of Shareholders was held on
January 30, 1995 at the Registrant's corporate office. At the meeting, the
following items were submitted to a vote of the shareholders. At the meeting,
102,128,550 shares were entitled to vote.
(a) The following nominees for Directors were elected. Each person
elected as a Director will serve until the next annual meeting of shareholders
or until such person's successor is elected and qualified:
Abstentions /
Votes Votes Broker
Name of Nominee Cast For Cast Against Non-Votes
--------------------- ---------- ------------ -------------
Steven R. Appleton 94,463,128 31,192 7,634,230
Jerry M. Hess 94,458,483 23,237 7,646,830
Robert A. Lothrop 94,460,100 34,120 7,634,330
Tyler A. Lowrey 94,463,410 31,000 7,634,140
Thomas T. Nicholson 94,460,332 21,735 7,646,483
Allen T. Noble 94,461,252 20,668 7,646,630
Don J. Simplot 94,454,231 39,542 7,634,777
John R. Simplot 94,401,999 39,575 7,686,976
Gordon C. Smith 94,401,254 34,282 7,693,014
Wilbur G. Stover, Jr. 94,403,899 32,697 7,691,954
(b) An amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of Common Stock from 150,000,000
shares to 300,000,000 shares was approved with 89,007,160 votes in favor,
5,359,072 votes against, and 7,762,318 representing abstentions and broker
non-votes.
(c) The Company's 1994 Stock Option Plan including the reservation
of 1,000,000 shares of the Company's Common Stock for issuance thereunder was
approved with 62,290,031 votes in favor, 31,843,303 votes against, and
7,995,216 representing abstentions and broker non-votes.
(d) The Company's Executive Bonus Plan was approved with 90,967,298
votes in favor, 2,971,765 votes against, and 8,189,487 representing abstentions
and broker non-votes.
(e) The ratification and appointment of Coopers & Lybrand L.L.P. as
independent public accountants of the Company for the fiscal year ending August
31, 1995 was approved with 93,289,329 votes in favor, 28,666 votes against, and
8,810,555 representing abstentions and broker non-votes.
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The following are filed as a part of this report:
Exhibit Page
Number Description of Exhibit Number
------- --------------------------------------------------- ------
11 Computation of per share earnings for the quarter
and six month periods ended March 2, 1995 and March
3, 1994 16 & 17
27 Financial Data Schedule 18
(b) The registrant did not file any reports on Form 8-K during the
quarter ended March 2, 1995.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Micron Technology, Inc.
--------------------------------------------
(Registrant)
Dated: March 20, 1995 /s/ Wilbur G. Stover, Jr.
--------------------------------------------
Wilbur G. Stover, Jr. Vice President,
Finance, and Chief Financial Officer
(Principal Financial and Accounting Officer)
15
MICRON TECHNOLOGY, INC.
Exhibit 11
Computation of Per Share Amounts
(Amounts in millions except for per share amounts)
<TABLE>
<CAPTION>
March 2, March 3,
Quarter Ended 1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
PRIMARY
Weighted average shares
outstanding 102.3 100.9
Stock options using average market price 4.1 3.4
-------- --------
Total shares 106.4 104.3
======== ========
Net income $ 183.5 $ 86.8
======== ========
Per share amount $1.72 $0.83
===== =====
FULLY DILUTED
Weighted average shares outstanding 102.3 100.9
Stock options using greater of average
or ending market price 4.9 4.2
-------- --------
Total shares 107.2 105.1
======== ========
Net income $ 183.5 $ 86.8
======== ========
Per share amount $1.71 $0.83
===== =====
</TABLE>
16
<PAGE>
MICRON TECHNOLOGY, INC.
Exhibit 11
Computation of Per Share Amounts
(Amounts in millions except for per share amounts)
<TABLE>
<CAPTION>
March 2, March 3,
Six Months Ended 1995 1994
- ----------------------------------------------------------------------
<S> <C> <C>
PRIMARY
Weighted average shares
outstanding 102.2 100.7
Stock options using average market price 3.6 3.0
-------- --------
Total shares 105.8 103.7
======== ========
Net income $ 342.8 $ 154.3
======== ========
Per share amount $3.24 $1.49
===== =====
FULLY DILUTED
Weighted average shares outstanding 102.2 100.7
Stock options using greater of average
or ending market price 4.6 3.8
-------- --------
Total shares 106.8 104.5
======== ========
Net income $ 342.8 $ 154.3
======== ========
Per share amount $3.21 $1.48
===== =====
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the accompanying financial statements and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> MAR-2-1995
<CASH> 82
<SECURITIES> 495
<RECEIVABLES> 275
<ALLOWANCES> 9
<INVENTORY> 143
<CURRENT-ASSETS> 1,010
<PP&E> 1,422
<DEPRECIATION> 554
<TOTAL-ASSETS> 1,957
<CURRENT-LIABILITIES> 301
<BONDS> 0
<COMMON> 10
0
0
<OTHER-SE> 1,386
<TOTAL-LIABILITY-AND-EQUITY> 1,957
<SALES> 1,164
<TOTAL-REVENUES> 1,164
<CGS> 492
<TOTAL-COSTS> 492
<OTHER-EXPENSES> 133
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10)
<INCOME-PRETAX> 549
<INCOME-TAX> 206
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 343
<EPS-PRIMARY> 3.24
<EPS-DILUTED> 3.21
</TABLE>
