Financial: Micron Technology, Inc., Reports Profits for the Second Quarter of Fiscal 1999 - Company Financial Information

Edge: Work-Group Computing Report, March 29, 1999

Micron Technology, Inc., (NYSE:MU) Wednesday reported net income for the second quarter of fiscal 1999, ended March 4, of $22 million, or $0.08 per share-diluted, on net sales of $1,026 million. As previously reported, results for the second fiscal quarter reflect a write down of the Company's flat panel display assets which adversely affected earnings by $0.03 per share-diluted. For the first quarter of fiscal 1999, the Company's net loss was $46 million, or $0.19 per share-diluted on net sales of $794 million. For the second quarter of fiscal 1998, net sales were $763 million and net loss was $51 million, or $0.24 per share-diluted.

Gross margin on semiconductor operations was 32% in the second quarter of fiscal 1999 as compared to 9% in the first quarter. The gross margin percentage increase was primarily attributable to stable pricing and cost per megabit reductions achieved on higher production volumes. In the second fiscal quarter, the Company produced approximately 90% more megabits of memory than in the first fiscal quarter through manufacturing efficiencies achieved on the latest shrink of the 64 Meg SDRAM and resolution of backend production constraints. Resolution of backend production constraints associated with the Company's rapid transition to

.21(mu) devices in the first fiscal quarter accounted for approximately one-third of the second fiscal quarter's production increases. The Company shipped 75% more megabits of memory in the second quarter than in the first quarter of fiscal 1999.

Steve Appleton, Chairman, CEO and President commented, "We're very pleased with the .21(mu) ramp at our Boise site, which was substantially completed early in the second fiscal quarter. The initial transfer of the Company's technology to our international sites is also progressing well."

Unit sales of the Company's PC systems decreased 14% comparing the second quarter to the first quarter of fiscal 1999. While average selling prices for PC systems increased 4%, comparing the second quarter of fiscal 1999 to the first quarter, as a result of a product mix shift to more richly configured systems, all PC systems experienced considerable pricing pressure in the second quarter.

On March 19, the Company announced an agreement to sell certain of its flat panel display assets to PixTech, Inc. Pursuant to the terms of the transaction, which is expected to close in late April, in exchange for the transfer of certain assets and liabilities to PixTech, the Company will receive approximately 7 million shares of PixTech Common Stock and warrants to purchase an additional 310,000 shares of PixTech Common Stock at an approximate exercise price of $2.25. The Company wrote down its flat panel display assets by $15 million ($0.03 per share - diluted) in the second quarter of fiscal 1999.

Micron Technology, Inc., and its subsidiaries manufacture and market DRAMs, very fast SRAMs, Flash, other semiconductor components, memory modules, graphics accelerators, personal computer systems, and radio frequency identification (RFID) products. Micron's common stock is traded on the New York Stock Exchange (NYSE) under the symbol MU. To learn more about Micron Technology, Inc., visit its web site at www.micron.com.

     MICRON TECHNOLOGY, INC. CONSOLIDATED FINANCIAL SUMMARY
           (Amounts in millions except per share data)


SELECTED RESULTS OF OPERATIONS

                           QUARTER ENDED          6 MONTHS ENDED
                         Mar. 4,   Feb. 26,     Mar. 4,   Feb. 26,
                          1999       1998        1999       1998
                       ---------   --------   ---------   --------
Net sales (1)
   Semiconductor memory
 products              $  697.1    $ 283.4    $ 1,106.6   $  723.5
Personal computer
 systems                  309.5      396.5        661.6      841.6
Other                      19.2       83.3         51.2      155.3
Total net sales            1,025.8      763.2      1,819.4    1,720.4
Costs and expenses:
Cost of goods sold        745.1      740.5      1,422.8    1,487.6
Selling, general and
 administrative           125.5      138.6        228.5      264.6
Research and development   85.5       72.0        153.2      139.1
Other operating expense,
 net (2)                   18.4       24.2         26.1       28.8
Total costs and expenses  974.5      975.3      1,830.6    1,920.1
Operating income (loss)    51.3     (212.1)       (11.2)    (199.7)
Gain (loss) on sale of
  subsidiary stock and
  investments, net (3)       --      157.1         (0.1)     157.1
Gain on issuance of
 subsidiary stock, net      0.4        0.5          1.6        0.6
Interest income
 (expense), net           (11.7)       1.8        (19.6)       0.5
Income (loss) before
 income taxes and
 minority interests        40.0      (52.7)       (29.3)     (41.5)
Income tax provision
 (benefit)                 16.1      (10.8)       (11.4)      (6.3)
Minority interests
 in net income (loss)       1.5        9.0          5.8        9.2
Net income (loss)         $22.4     ($50.9)      ($23.7)    ($44.4)

Earnings (loss) per share
Basic                     $0.08     ($0.24)      ($0.09)    ($0.21)
Diluted                   $0.08     ($0.24)      ($0.09)    ($0.21)

Number of shares used in
 per share calculations
Basic                     264.3      215.2        255.0      214.9
Diluted                   272.9      215.2        255.0      214.9


SELECTED CASH FLOW DATA
(For the six months ended)

                                        Mar. 4, 1999  Feb. 26, 1998
                                        ------------  -------------
Depreciation and amortization              $408.9        $283.6
Net cash provided by operating activities   377.9         112.7
Expenditures for property, plant and
 equipment                                 (306.2)       (381.3)
Proceeds from sale of subsidiary stock         --         235.9
Net cash used for investing activities   (1,583.3)       (123.5)
Cash received in conjunction with
 acquisition                                681.1            --
Proceeds from issuance of common stock      576.7           9.9
Payments on equipment purchase contracts   (153.5)        (20.1)
Net cash provided by (used for)
 financing activities                     1,075.5         (48.2)
Net decrease in cash and equivalents       (129.9)        (59.0)
Equipment acquisitions on contracts
 payable and capital leases                  55.8          48.7


SELECTED FINANCIAL DATA              Mar. 4, 1999    Sept. 3, 1998
-----------------------              ------------    -------------

Cash and liquid investments            $1,782.6           $649.6
Receivables                               591.9            489.5
Inventories                               364.9            291.6
Total current assets                    2,824.8          1,500.9
Property, plant and equipment, net      3,581.6          3,035.3
Total assets                            6,771.2          4,703.5

Accounts payable and accrued expenses     560.2            460.7
Short-term debt                              --             10.1
Current portion of long-term debt         102.9             98.6
Total current liabilities                 741.7            745.7
Long-term debt                          1,574.4            758.8
Shareholders' equity                    3,945.1          2,701.3