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Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2022

Micron Technology, Inc.
Micron Technology, Inc.

Multiple end-market and product revenue records reflect broad portfolio momentum

BOISE, Idaho, June 30, 2022 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its third quarter of fiscal 2022, which ended June 2, 2022.

Fiscal Q3 2022 highlights

  • Revenue of $8.64 billion versus $7.79 billion for the prior quarter and $7.42 billion for the same period last year

  • GAAP net income of $2.63 billion, or $2.34 per diluted share

  • Non-GAAP net income of $2.94 billion, or $2.59 per diluted share

  • Operating cash flow of $3.84 billion versus $3.63 billion for the prior quarter and $3.56 billion for the same period last year

“Micron delivered record revenue in the fiscal third quarter driven by our team’s excellent execution across technology, products and manufacturing,” said Micron Technology President and CEO Sanjay Mehrotra. “Recently, the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023. We are confident about the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance.”

Quarterly Financial Results

 

GAAP(1)

 

Non-GAAP(2)

(in millions, except per share amounts)

FQ3-22

FQ2-22

FQ3-21

 

FQ3-22

FQ2-22

FQ3-21

 

 

 

 

 

 

 

 

Revenue

$

8,642

 

$

7,786

 

$

7,422

 

 

$

8,642

 

$

7,786

 

$

7,422

 

Gross margin

 

4,035

 

 

3,676

 

 

3,126

 

 

 

4,097

 

 

3,724

 

 

3,185

 

percent of revenue

 

46.7

%

 

47.2

%

 

42.1

%

 

 

47.4

%

 

47.8

%

 

42.9

%

Operating expenses

 

1,031

 

 

1,130

 

 

1,327

 

 

 

953

 

 

974

 

 

821

 

Operating income

 

3,004

 

 

2,546

 

 

1,799

 

 

 

3,144

 

 

2,750

 

 

2,364

 

percent of revenue

 

34.8

%

 

32.7

%

 

24.2

%

 

 

36.4

%

 

35.3

%

 

31.9

%

Net income

 

2,626

 

 

2,263

 

 

1,735

 

 

 

2,939

 

 

2,444

 

 

2,173

 

Diluted earnings per share

 

2.34

 

 

2.00

 

 

1.52

 

 

 

2.59

 

 

2.14

 

 

1.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in capital expenditures, net(2) were $2.53 billion for the third quarter of 2022, which resulted in adjusted free cash flow(2) of $1.31 billion. Micron repurchased approximately 13.8 million shares of its common stock for $981 million during the third quarter of fiscal 2022 and ended the quarter with cash, marketable investments, and restricted cash of $11.98 billion, for a net cash(2) position of $5.01 billion.

On June 30, 2022, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on July 26, 2022, to shareholders of record as of the close of business on July 11, 2022.

Business Outlook

The following table presents Micron’s guidance for the fourth quarter of 2022:

FQ4-22

GAAP(1) Outlook

Non-GAAP(2) Outlook

 

 

 

Revenue

$7.2 billion ± $400 million

$7.2 billion ± $400 million

Gross margin

41.5% ± 1.5%

42.5% ± 1.5%

Operating expenses

$1.13 billion ± $25 million

$1.05 billion ± $25 million

Diluted earnings per share

$1.52 ± $0.20

$1.63 ± $0.20

 

 

 

Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted at investors.micron.com.

Investor Webcast

Micron will host a conference call on Thursday, June 30, 2022 at 2:30 p.m. Mountain time to discuss its third quarter financial results and provide forward-looking guidance for its fourth quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will be available for one year after the call. For Investor Relations and other company updates, follow @MicronTech on Twitter at twitter.com/MicronTech.

About Micron Technology, Inc.

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.

© 2022 Micron Technology, Inc. All rights reserved. Micron, the Micron logo, and all other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements regarding our industry, demand for our products, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents we file with the Securities and Exchange Commission, specifically our most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at micron.com/certainfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements to conform these statements to actual results.

(1)   GAAP represents U.S. Generally Accepted Accounting Principles.
(2)   Non-GAAP represents GAAP excluding the impact of certain activities, which management excludes in analyzing our operating results and understanding trends in our earnings, adjusted free cash flow, net cash, and business outlook. Further information regarding Micron’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release.


MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

Nine months ended

 

June 2,
2022

March 3,
2022

June 3,
2021

June 2,
2022

June 3,
2021

 

 

 

 

 

 

Revenue

$

8,642

 

$

7,786

 

$

7,422

 

$

24,115

 

$

19,431

 

Cost of goods sold

 

4,607

 

 

4,110

 

 

4,296

 

 

12,839

 

 

12,920

 

Gross margin

 

4,035

 

 

3,676

 

 

3,126

 

 

11,276

 

 

6,511

 

 

 

 

 

 

 

Research and development

 

773

 

 

792

 

 

670

 

 

2,277

 

 

1,958

 

Selling, general, and administrative

 

264

 

 

263

 

 

230

 

 

786

 

 

658

 

Restructure and asset impairments

 

 

 

5

 

 

453

 

 

43

 

 

466

 

Other operating (income) expense, net

 

(6

)

 

70

 

 

(26

)

 

(11

)

 

101

 

Operating income

 

3,004

 

 

2,546

 

 

1,799

 

 

8,181

 

 

3,328

 

 

 

 

 

 

 

Interest income

 

20

 

 

12

 

 

8

 

 

42

 

 

28

 

Interest expense

 

(44

)

 

(55

)

 

(46

)

 

(144

)

 

(136

)

Other non-operating income (expense), net

 

8

 

 

6

 

 

45

 

 

(61

)

 

62

 

 

 

2,988

 

 

2,509

 

 

1,806

 

 

8,018

 

 

3,282

 

 

 

 

 

 

 

Income tax (provision) benefit

 

(358

)

 

(255

)

 

(65

)

 

(832

)

 

(164

)

Equity in net income (loss) of equity method investees

 

(4

)

 

9

 

 

(6

)

 

9

 

 

23

 

Net income

$

2,626

 

$

2,263

 

$

1,735

 

$

7,195

 

$

3,141

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

Basic

$

2.36

 

$

2.02

 

$

1.55

 

$

6.44

 

$

2.81

 

Diluted

 

2.34

 

 

2.00

 

 

1.52

 

 

6.38

 

 

2.75

 

 

 

 

 

 

 

Number of shares used in per share calculations

 

 

 

 

 

Basic

 

1,112

 

 

1,119

 

 

1,121

 

 

1,117

 

 

1,119

 

Diluted

 

1,121

 

 

1,130

 

 

1,145

 

 

1,127

 

 

1,141

 


MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

As of

June 2,
2022

March 3,
2022

September 2,
2021

 

 

 

 

Assets

 

 

 

Cash and equivalents

$

9,157

 

$

9,116

 

$

7,763

 

Short-term investments

 

1,070

 

 

1,006

 

 

870

 

Receivables

 

6,229

 

 

5,384

 

 

5,311

 

Inventories

 

5,629

 

 

5,383

 

 

4,487

 

Assets held for sale

 

15

 

 

13

 

 

974

 

Other current assets

 

608

 

 

600

 

 

502

 

Total current assets

 

22,708

 

 

21,502

 

 

19,907

 

Long-term marketable investments

 

1,646

 

 

1,717

 

 

1,765

 

Property, plant, and equipment

 

36,665

 

 

36,171

 

 

33,213

 

Operating lease right-of-use assets

 

690

 

 

587

 

 

551

 

Intangible assets

 

415

 

 

414

 

 

349

 

Deferred tax assets

 

682

 

 

762

 

 

782

 

Goodwill

 

1,228

 

 

1,228

 

 

1,228

 

Other noncurrent assets

 

1,262

 

 

1,315

 

 

1,054

 

Total assets

$

65,296

 

$

63,696

 

$

58,849

 

 

 

 

 

Liabilities and equity

 

 

 

Accounts payable and accrued expenses

$

5,788

 

$

5,650

 

$

5,325

 

Current debt

 

107

 

 

123

 

 

155

 

Other current liabilities

 

1,114

 

 

1,145

 

 

944

 

Total current liabilities

 

7,009

 

 

6,918

 

 

6,424

 

Long-term debt

 

6,856

 

 

6,953

 

 

6,621

 

Noncurrent operating lease liabilities

 

629

 

 

535

 

 

504

 

Noncurrent unearned government incentives

 

663

 

 

704

 

 

808

 

Other noncurrent liabilities

 

858

 

 

741

 

 

559

 

Total liabilities

 

16,015

 

 

15,851

 

 

14,916

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

Common stock

 

122

 

 

122

 

 

122

 

Additional capital

 

9,950

 

 

9,816

 

 

9,453

 

Retained earnings

 

45,916

 

 

43,407

 

 

39,051

 

Treasury stock

 

(6,343

)

 

(5,362

)

 

(4,695

)

Accumulated other comprehensive income (loss)

 

(364

)

 

(138

)

 

2

 

Total equity

 

49,281

 

 

47,845

 

 

43,933

 

Total liabilities and equity

$

65,296

 

$

63,696

 

$

58,849

 


MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

Nine months ended

June 2,
2022

June 3,
2021

 

 

 

Cash flows from operating activities

 

 

Net income

$

7,195

 

$

3,141

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

Depreciation expense and amortization of intangible assets

 

5,234

 

 

4,593

 

Stock-based compensation

 

378

 

 

285

 

(Gain) loss on debt repurchases and conversions

 

83

 

 

1

 

Restructure and asset impairments

 

43

 

 

446

 

Change in operating assets and liabilities

 

 

Receivables

 

(906

)

 

(340

)

Inventories

 

(1,146

)

 

814

 

Accounts payable and accrued expenses

 

382

 

 

(309

)

Other

 

141

 

 

(47

)

Net cash provided by operating activities

 

11,404

 

 

8,584

 

 

 

 

Cash flows from investing activities

 

 

Expenditures for property, plant, and equipment

 

(8,454

)

 

(8,015

)

Purchases of available-for-sale securities

 

(1,359

)

 

(1,919

)

Proceeds from sale of Lehi, Utah fab

 

888

 

 

 

Proceeds from maturities of available-for-sale securities

 

964

 

 

1,024

 

Proceeds from sales of available-for-sale securities

 

258

 

 

473

 

Proceeds from government incentives

 

104

 

 

335

 

Other

 

(162

)

 

47

 

Net cash provided by (used for) investing activities

 

(7,761

)

 

(8,055

)

 

 

 

Cash flows from financing activities

 

 

Repayments of debt

 

(2,008

)

 

(1,344

)

Repurchases of common stock - repurchase program

 

(1,648

)

 

(150

)

Payments of dividends to shareholders

 

(335

)

 

 

Payments on equipment purchase contracts

 

(132

)

 

(139

)

Repurchases of common stock - withholdings on employee equity awards

 

(116

)

 

(84

)

Proceeds from issuance of debt

 

2,000

 

 

1,188

 

Other

 

99

 

 

92

 

Net cash provided by (used for) financing activities

 

(2,140

)

 

(437

)

 

 

 

Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash

 

(71

)

 

44

 

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

1,432

 

 

136

 

Cash, cash equivalents, and restricted cash at beginning of period

 

7,829

 

 

7,690

 

Cash, cash equivalents, and restricted cash at end of period

$

9,261

 

$

7,826

 


MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)

Lehi, Utah Fab and 3D XPoint

In the second quarter of 2021, we updated our portfolio strategy to further strengthen our focus on memory and storage innovations for the data center market. In connection therewith, we determined that there was insufficient market validation to justify the ongoing investments required to commercialize 3D XPoint at scale. Accordingly, we ceased development of 3D XPoint technology and engaged in discussions with potential buyers for the sale of our facility located in Lehi that was dedicated to 3D XPoint production. As a result, we classified the property, plant, and equipment as held for sale and ceased depreciating the assets. On June 30, 2021, we announced a definitive agreement to sell our Lehi facility to Texas Instruments Incorporated (“TI”) and closed the sale on October 22, 2021.

In the first quarter of 2022, we received $893 million from TI for the sale of the Lehi facility and disposed of $918 million of net assets, consisting primarily of property, plant, and equipment of $921 million; $55 million of other assets, consisting primarily of a receivable for reimbursement of property taxes, equipment spare parts, and raw materials; and $58 million of liabilities, consisting primarily of a finance lease obligation. As a result of the disposition of the Lehi facility, we recognized a loss of $23 million included in restructure and asset impairments in the first quarter of 2022.

In the third quarter of 2021, we recognized a charge of $435 million included in restructure and asset impairments in connection with the definitive agreement with TI (and a tax benefit of $104 million included in income tax (provision) benefit) to write down the assets held for sale to the expected consideration, net of estimated selling costs. In the second quarter of 2021, we also recognized a charge of $49 million in cost of goods sold to write down 3D XPoint inventory in connection with our decision to cease further development of this technology.

Debt Activity

On November 1, 2021, we issued in a public offering $1.00 billion in principal amount of 2.703% senior notes due 2032 (green bonds), $500 million in principal amount of 3.366% senior notes due 2041, and $500 million in principal amount of 3.477% senior notes due 2051, and received aggregate net proceeds of $1.99 billion.

On November 17, 2021, we redeemed $1.25 billion in principal amount of our 2.497% senior notes due 2023 and $600 million in principal amount of our 4.640% senior notes due 2024 for $1.93 billion in cash and recognized a non-operating loss of $83 million.


MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In millions, except per share amounts)

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

 

June 2,
2022

March 3,
2022

June 3,
2021

 

 

 

 

GAAP gross margin

$

4,035

 

$

3,676

 

$

3,126

 

Stock-based compensation

 

57

 

 

44

 

 

45

 

Other

 

5

 

 

4

 

 

14

 

Non-GAAP gross margin

$

4,097

 

$

3,724

 

$

3,185

 

 

 

 

 

GAAP operating expenses

$

1,031

 

$

1,130

 

$

1,327

 

Stock-based compensation

 

(78

)

 

(75

)

 

(53

)

Restructure and asset impairments

 

 

 

(5

)

 

(453

)

Other

 

 

 

(76

)

 

 

Non-GAAP operating expenses

$

953

 

$

974

 

$

821

 

 

 

 

 

GAAP operating income

$

3,004

 

$

2,546

 

$

1,799

 

Stock-based compensation

 

135

 

 

119

 

 

98

 

Restructure and asset impairments

 

 

 

5

 

 

453

 

Other

 

5

 

 

80

 

 

14

 

Non-GAAP operating income

$

3,144

 

$

2,750

 

$

2,364

 

 

 

 

 

GAAP net income

$

2,626

 

$

2,263

 

$

1,735

 

Stock-based compensation

 

135

 

 

119

 

 

98

 

Restructure and asset impairments

 

 

 

5

 

 

453

 

Amortization of debt discount and other costs

 

8

 

 

8

 

 

7

 

Other

 

5

 

 

80

 

 

15

 

Impact of Idaho income tax reform

 

189

 

 

 

 

 

Estimated tax effects of above and other tax adjustments

 

(24

)

 

(31

)

 

(135

)

Non-GAAP net income

$

2,939

 

$

2,444

 

$

2,173

 

 

 

 

 

GAAP weighted-average common shares outstanding - Diluted

 

1,121

 

 

1,130

 

 

1,145

 

Adjustment for stock-based compensation

 

15

 

 

13

 

 

9

 

Non-GAAP weighted-average common shares outstanding - Diluted

 

1,136

 

 

1,143

 

 

1,154

 

 

 

 

 

GAAP diluted earnings per share

$

2.34

 

$

2.00

 

$

1.52

 

Effects of the above adjustments

 

0.25

 

 

0.14

 

 

0.36

 

Non-GAAP diluted earnings per share

$

2.59

 

$

2.14

 

$

1.88

 


RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

 

June 2,
2022

March 3,
2022

June 3,
2021

 

 

 

 

GAAP net cash provided by operating activities

$

3,838

 

$

3,628

 

$

3,560

 

 

 

 

 

Expenditures for property, plant, and equipment

 

(2,578

)

 

(2,611

)

 

(2,259

)

Proceeds from sales of property, plant, and equipment

 

39

 

 

27

 

 

74

 

Payments on equipment purchase contracts

 

(27

)

 

(27

)

 

(16

)

Amounts funded by partners

 

38

 

 

11

 

 

159

 

Investments in capital expenditures, net

 

(2,528

)

 

(2,600

)

 

(2,042

)

Adjusted free cash flow

$

1,310

 

$

1,028

 

$

1,518

 


As of

June 2,
2022

March 3,
2022

September 2,
2021

 

 

 

 

Cash and short-term investments

$

10,227

 

$

10,122

 

$

8,633

 

Current and noncurrent restricted cash

 

104

 

 

108

 

 

66

 

Long-term marketable investments

 

1,646

 

 

1,717

 

 

1,765

 

Current and long-term debt

 

(6,963

)

 

(7,076

)

 

(6,776

)

Net cash

$

5,014

 

$

4,871

 

$

3,688

 

 

 

 

 

 

 

 

 

 

 

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income, net income, diluted shares, diluted earnings per share, adjusted free cash flow, and net cash. The non-GAAP adjustments above may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. We believe this non-GAAP information is helpful in understanding trends and in analyzing our operating results and earnings. We are providing this information to investors to assist in performing analysis of our operating results. When evaluating performance and making decisions on how to allocate our resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. We believe these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of our business, enabling enhanced comparison of our operating results between periods and with peer companies. The presentation of these adjusted amounts varies from amounts presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. Our management excludes the following items in analyzing our operating results and understanding trends in our earnings:

  • Stock-based compensation;

  • Flow-through of business acquisition-related inventory adjustments;

  • Acquisition-related costs;

  • Employee severance;

  • Gains and losses from settlements and patent license charges;

  • Restructure and asset impairments;

  • Amortization of debt discount and other costs;

  • Gains and losses from debt repurchases and conversions;

  • Gains and losses from business acquisition activities; and

  • The estimated tax effects of above, non-cash changes in net deferred income taxes, assessments of tax exposures, certain tax matters related to prior fiscal periods, and significant changes in tax law.

Non-GAAP diluted shares are adjusted for the impact of additional shares resulting from the exclusion of stock-based compensation from non-GAAP income.


MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

FQ4-22

GAAP Outlook

 

Adjustments

 

Non-GAAP Outlook

 

 

 

 

 

 

 

Revenue

$7.2 billion ± $400 million

 

 

 

 

 

$7.2 billion ± $400 million

Gross margin

41.5% ± 1.5%

 

 

1%

 

A

 

42.5% ± 1.5%

Operating expenses

$1.13 billion ± $25 million

 

$83 million

B

 

$1.05 billion ± $25 million

Diluted earnings per share(1)

$1.52 ± $0.20

 

$0.11

 

A, B, C

 

$1.63 ± $0.20


Non-GAAP Adjustments
(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

A

Stock-based compensation – cost of goods sold

 

$

45

 

A

Other – cost of goods sold

 

 

4

 

B

Stock-based compensation – research and development

 

 

48

 

B

Stock-based compensation – sales, general, and administrative

 

 

35

 

C

Tax effects of the above items and other tax adjustments

 

 

(9

)

 

 

 

 

 

 

 

$

123

 

(1)   GAAP earnings per share based on approximately 1.12 billion diluted shares and non-GAAP earnings per share based on approximately 1.13 billion diluted shares.

The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, restructuring activities, balance sheet valuation adjustments, strategic investments, financing transactions, and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control.

CONTACT: Contacts: Farhan Ahmad Investor Relations farhanahmad@micron.com (408) 834-1927 Erica Rodriguez Pompen Media Relations epompen@micron.com (408) 834-1873