GlobeNewswire Inc | Sep 28, 2021 04:01PM EDT

September 28, 2021

BOISE, Idaho, Sept. 28, 2021 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its fourth quarter and full year of fiscal 2021, which ended Sept. 2, 2021.

Fiscal Q4 2021 highlights

-- Revenue of $8.27 billion versus $7.42 billion for the prior quarter and $6.06 billion for the same period last year -- GAAP net income of $2.72 billion, or $2.39 per diluted share -- Non-GAAP net income of $2.78 billion, or $2.42 per diluted share -- Operating cash flow of $3.88 billion versus $3.56 billion for the prior quarter and $2.27 billion for the same period last year

Fiscal 2021 highlights

-- Revenue of $27.71 billion versus $21.44 billion for the prior year -- GAAP net income of $5.86 billion, or $5.14 per diluted share -- Non-GAAP net income of $6.98 billion, or $6.06 per diluted share -- Operating cash flow of $12.47 billion versus $8.31 billion for the prior year

Microns outstanding fourth quarter execution capped a year of several key milestones, said Micron Technology President and CEO Sanjay Mehrotra. In fiscal 2021, we established DRAM and NAND technology leadership, drove record revenues across multiple markets, and initiated a quarterly dividend. The demand outlook for 2022 is strong, and Micron is delivering innovative solutions to our customers, fueling our long-term growth.

Quarterly Financial Results

GAAP^(1) Non-GAAP^(2)(inmillions,except per FQ4-21 FQ3-21 FQ4-20 FQ4-21 FQ3-21 FQ4-20 shareamounts)Revenue $ 8,274 $ 7,422 $ 6,056 $ 8,274 $ 7,422 $ 6,056 Gross margin 3,912 3,126 2,068 3,964 3,185 2,111 percent of 47.3 % 42.1 % 34.1 % 47.9 % 42.9 % 34.9 %revenueOperating 957 1,327 911 891 821 809 expensesOperating 2,955 1,799 1,157 3,073 2,364 1,302 incomepercent of 35.7 % 24.2 % 19.1 % 37.1 % 31.9 % 21.5 %revenueNet incomeattributable 2,720 1,735 988 2,778 2,173 1,229 to MicronDilutedearnings per 2.39 1.52 0.87 2.42 1.88 1.08 share

Annual Financial Results

GAAP^(1) Non-GAAP^(2) (in millions, except per FY 21 FY 20 FY 21 FY 20 share amounts) Revenue $ 27,705 $ 21,435 $ 27,705 $ 21,435 Gross margin 10,423 6,552 10,987 6,718 percent of revenue 37.6 % 30.6 % 39.7 % 31.3 %Operating expenses 4,140 3,549 3,320 3,299 Operating income 6,283 3,003 7,667 3,419 percent of revenue 22.7 % 14.0 % 27.7 % 16.0 %Net income attributable 5,861 2,687 6,976 3,235 to MicronDiluted earnings per 5.14 2.37 6.06 2.83 share

Investments in capital expenditures, net(2) were $2.01 billion for the fourth quarter of 2021 and $9.72 billion for the full year of 2021, which resulted in adjusted free cash flows(2) of $1.88 billion for the fourth quarter of 2021 and $2.75 billion for the full year of 2021. Micron repurchased approximately 13.9 million shares of its common stock for $1.05 billion during the fourth quarter of 2021 and 15.6 million shares of its common stock for $1.20 billion during the full year of 2021 and ended the year with cash, marketable investments, and restricted cash of $10.46 billion, for a net cash(2) position of $3.69 billion.

Business Outlook

The following table presents Microns guidance for the first quarter of 2022:

FQ1-22 GAAP^(1) Outlook Non-GAAP^(2) OutlookRevenue $7.65 billion $200 $7.65 billion $200 million millionGross margin 46.0% 1% 47.0% 1%Operating expenses $986 million $25 million $915 million $25 millionDiluted earnings per $2.00 $0.10 $2.10 $0.10share

Further information regarding Microns 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 Tuesday, Sept. 28, 2021 at 2:30 p.m. MT to discuss its fourth quarter financial results and provide forward-looking guidance for its first 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.

2021 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, our strategic position, the completion of and timing for closing the pending sale of our Lehi facility, 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 www.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 after the date of this release 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 Microns 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)



4th Qtr. 3rd Qtr. 4th Qtr. Year Ended September 2, June 3, September 3, September 2, September 3, 2021 2021 2020 2021 2020 Revenue $ 8,274 $ 7,422 $ 6,056 $ 27,705 $ 21,435 Cost of goods 4,362 4,296 3,988 17,282 14,883 soldGross margin 3,912 3,126 2,068 10,423 6,552 Research and 705 670 630 2,663 2,600 developmentSelling,general, and 236 230 231 894 881 administrativeRestructureand asset 22 453 50 488 60 impairmentsOtheroperating (6 ) (26 ) ? 95 8 (income)expense, netOperating 2,955 1,799 1,157 6,283 3,003 income Interest 9 8 13 37 114 incomeInterest (47 ) (46 ) (50 ) (183 ) (194 )expenseOthernon-operating 19 45 5 81 60 income(expense), net 2,936 1,806 1,125 6,218 2,983 Income tax(provision) (230 ) (65 ) (136 ) (394 ) (280 )benefitEquity in netincome (loss)of equity 14 (6 ) 1 37 7 methodinvesteesNet income 2,720 1,735 990 5,861 2,710 Net incomeattributableto ? ? (2 ) ? (23 )noncontrollinginterestsNet incomeattributable $ 2,720 $ 1,735 $ 988 $ 5,861 $ 2,687 to Micron Earnings per shareBasic $ 2.42 $ 1.55 $ 0.89 $ 5.23 $ 2.42 Diluted 2.39 1.52 0.87 5.14 2.37 Number ofshares used in per sharecalculationsBasic 1,123 1,121 1,111 1,120 1,110 Diluted 1,138 1,145 1,131 1,141 1,131

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

September June 3, September 2, 3,As of 2021 2021 2020 Assets Cash and equivalents $ 7,763 $ 7,759 $ 7,624 Short-term investments 870 590 518 Receivables 5,311 4,231 3,912 Inventories 4,487 4,537 5,373 Assets held for sale 974 966 ? Other current assets 502 478 538 Total current assets 19,907 18,561 17,965 Long-term marketable investments 1,765 1,399 1,048 Property, plant, and equipment 33,213 32,209 31,031 Operating lease right-of-use assets 551 558 584 Intangible assets 349 350 334 Deferred tax assets 782 822 707 Goodwill 1,228 1,228 1,228 Other noncurrent assets 1,054 816 781 Total assets $ 58,849 $ 55,943 $ 53,678 Liabilities and equity Accounts payable and accrued expenses $ 5,325 $ 4,427 $ 5,817 Current debt 155 297 270 Other current liabilities 944 738 548 Total current liabilities 6,424 5,462 6,635 Long-term debt 6,621 6,418 6,373 Noncurrent operating lease liabilities 504 513 533 Noncurrent unearned government incentives 808 722 643 Other noncurrent liabilities 559 569 498 Total liabilities 14,916 13,684 14,682 Commitments and contingencies Shareholders? equityCommon stock 122 120 119 Additional capital 9,453 9,285 8,917 Retained earnings 39,051 36,452 33,384 Treasury stock (4,695 ) (3,645 ) (3,495 )Accumulated other comprehensive income 2 47 71 (loss)Total equity 43,933 42,259 38,996 Total liabilities and equity $ 58,849 $ 55,943 $ 53,678

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

For the year ended September 2, September 3, 2021 2020Cash flows from operating activities Net income $ 5,861 $ 2,710 Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation expense and amortization of 6,214 5,650 intangible assetsAmortization of debt discount and other 30 26 costsNoncash restructure and asset impairment 454 40 Stock-based compensation 378 328 (Gain) loss on debt prepayments, 1 (40 )repurchases, and conversionsChange in operating assets and liabilities Receivables (1,446 ) (723 )Inventories 866 (435 )Accounts payable and accrued expenses 210 725 Deferred income taxes, net (50 ) 79 Other (50 ) (54 )Net cash provided by operating activities 12,468 8,306 Cash flows from investing activities Expenditures for property, plant, and (10,030 ) (8,223 )equipmentPurchases of available-for-sale securities (3,163 ) (1,857 )Proceeds from maturities of 1,250 814 available-for-sale securitiesProceeds from sales of available-for-sale 856 1,458 securitiesProceeds from government incentives 495 262 Other 3 (43 )Net cash provided by (used for) investing (10,589 ) (7,589 )activities Cash flows from financing activities Repayments of debt (1,520 ) (4,366 )Payments to acquire treasury stock (1,294 ) (251 )Payments on equipment purchase contracts (295 ) (63 )Acquisition of noncontrolling interest in ? (744 )IMFTProceeds from issuance of debt 1,188 5,000 Other 140 107 Net cash provided by (used for) financing (1,781 ) (317 )activities Effect of changes in currency exchangerates on cash, cash equivalents, and 41 11 restricted cash Net increase (decrease) in cash, cash 139 411 equivalents, and restricted cashCash, cash equivalents, and restricted cash 7,690 7,279 at beginning of periodCash, cash equivalents, and restricted cash $ 7,829 $ 7,690 at end of period

MICRON TECHNOLOGY, INC. NOTES(Unaudited)

Inventory

Effective as of the beginning of the second quarter of 2021, we changed our method of inventory costing from average cost to FIFO. This change in accounting principle is preferable because in an environment with continuously changing production costs FIFO more closely matches the actual cost of goods sold with the revenues from sales of those specific units, better represents the actual cost of inventories remaining on hand at any period- end, and improves comparability with our semiconductor industry peers. The change to FIFO was not material to any prior periods, nor was the cumulative effect of $133 million material to the second quarter of 2021. As such, prior periods were not retrospectively adjusted, and the cumulative effect was reported as an increase to cost of goods sold for the second quarter of 2021 of $133 million, with an offsetting reduction to beginning inventories. This charge resulted in a corresponding reduction to operating income, a $128 million reduction to net income, and an $0.11 reduction to diluted earnings per share for both the second quarter and the year ended 2021.

Beginning in the second quarter of 2021, we changed the classification of spare parts for equipment to better align with the manner in which they are used in operations. As a result, we now present spare parts as other current assets and no longer as a component of raw materials inventories. This reclassification was applied on a retrospective basis. As a result, $254 million of spare parts were presented in other current assets as of September 2, 2021, and we reclassified $256 million and $234 million of spare parts from inventories to other current assets in the accompanying balance sheets as of June 3, 2021 and September 3, 2020, respectively.

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 XPointat 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 that we have entered into a definitive agreement to sell our Lehi facility to Texas Instruments for cash consideration of$900 million. The sale is anticipated to close later this calendar year.

In the third quarter of 2021, we recognized a charge of $435 million included in restructure and asset impairments (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, to be realized from the sale of these assets and liabilities. The impairment charge was based on Level 3 inputs including expected consideration and the composition of assets included in the sale, which were derived from the agreement with TI. In the second quarter of 2021, we also recognized a charge of $49 million to cost of goods sold to write down 3D XPoint inventory due to our decision to cease further development of this technology.

As of September 2, 2021, the significant balances of assets held for sale in connection with our Lehi facility were as follows:

September 2, As of 2021 Property, plant, and equipment $ 1,334 Other current assets 50 Impairment (435 )Lehi assets held for sale $ 949

As of September 2, 2021, we also had a $50 million finance lease obligation included in the current portion of long- term debt and $11 million of other liabilities that we expect to transfer with the sale. The expected cash consideration, net of estimated selling expenses, approximates the carrying value of the net assets and liabilities expected to transfer in the sale, after giving effect to the impairment charge discussed above.

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

4th Qtr. 3rd Qtr. 4th Qtr. Year Ended September 2, June 3, September 3, September 2, September 3, 2021 2021 2020 2021 2020 GAAP gross $ 3,912 $ 3,126 $ 2,068 $ 10,423 $ 6,552 marginStock-based 43 45 37 186 139 compensationInventoryaccounting ? ? ? 133 ? policy change toFIFOChange ininventory cost ? ? ? 160 ? absorption3D XPointinventory ? ? ? 49 ? write-downOther 9 14 6 36 27 Non-GAAP gross $ 3,964 $ 3,185 $ 2,111 $ 10,987 $ 6,718 margin GAAP operating $ 957 $ 1,327 $ 911 $ 4,140 $ 3,549 expensesStock-based (50 ) (53 ) (52 ) (209 ) (189 )compensationRestructure andasset (22 ) (453 ) (50 ) (488 ) (60 )impairmentsPatent license ? ? ? (128 ) ? chargesOther 6 ? ? 5 (1 )Non-GAAPoperating $ 891 $ 821 $ 809 $ 3,320 $ 3,299 expenses GAAP operating $ 2,955 $ 1,799 $ 1,157 $ 6,283 $ 3,003 incomeStock-based 93 98 89 395 328 compensationInventoryaccounting ? ? ? 133 ? policy change toFIFOChange ininventory cost ? ? ? 160 ? absorption3D XPointinventory ? ? ? 49 ? write-downRestructure andasset 22 453 50 488 60 impairmentsPatent license ? ? ? 128 ? chargesOther 3 14 6 31 28 Non-GAAP $ 3,073 $ 2,364 $ 1,302 $ 7,667 $ 3,419 operating income GAAP net incomeattributable to $ 2,720 $ 1,735 $ 988 $ 5,861 $ 2,687 MicronStock-based 93 98 89 395 328 compensationInventoryaccounting ? ? ? 133 ? policy change toFIFOChange ininventory cost ? ? ? 160 ? absorption3D XPointinventory ? ? ? 49 ? write-downRestructure andasset 22 453 50 488 60 impairmentsPatent license ? ? ? 128 ? chargesAmortization ofdebt discount 8 7 6 30 26 and other costs(Gain) loss ondebt repurchases ? 1 ? 1 (40 )and conversionsOther 3 14 6 31 28 Estimated taxeffects of above (68 ) (135 ) 90 (300 ) 146 and other taxadjustmentsNon-GAAP netincome $ 2,778 $ 2,173 $ 1,229 $ 6,976 $ 3,235 attributable toMicron

GAAP weighted-averagecommon sharesoutstanding - 1,138 1,145 1,131 1,141 1,131 DilutedAdjustment forstock-based compensation andcappedcalls 9 9 11 10 10 Non-GAAPweighted-average common sharesoutstanding - 1,147 1,154 1,142 1,151 1,141 Diluted

GAAPdiluted $ 2.39 $ 1.52 $ 0.87 $ 5.14 $ 2.37earningsper shareEffects ofthe above 0.03 0.36 0.21 0.92 0.46adjustmentsNon-GAAPdiluted $ 2.42 $ 1.88 $ 1.08 $ 6.06 $ 2.83earningsper share

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

4th Qtr. 3rd 4th Qtr. Year Ended Qtr. September 2, June September September September 3, 3, 2, 3, 2021 2021 2020 2021 2020 GAAP net cashprovided by $ 3,884 $ 3,560 $ 2,271 $ 12,468 $ 8,306 operatingactivitiesInvestmentsin capital expenditures,netExpendituresfor property,plant, and (2,011 ) (2,185 ) (2,268 ) (9,922 ) (8,154 )equipment,net^(1)Payments onequipment (156 ) (16 ) (14 ) (295 ) (63 )purchasecontractsAmountsfunded by 160 159 122 502 272 partnersAdjusted free $ 1,877 $ 1,518 $ 111 $ 2,753 $ 361 cash flow

(1)Expenditures for property, plant, and equipment, net include proceeds from sales of property, plant, and equipment of $4 million for the fourth quarter of 2021, $74 million for the third quarter of 2021, $12 million for the fourth quarter of 2020, $108 million for the full year of 2021, and $69 million for the full year of 2020.

September 2, June 3, September 3, As of 2021 2021 2020 Cash andshort-term $ 8,633 $ 8,349 $ 8,142 investmentsCurrent andnoncurrent 66 67 66 restrictedcashLong-termmarketable 1,765 1,399 1,048 investmentsCurrent andlong-term (6,776 ) (6,715 ) (6,643 )debtNet cash $ 3,688 $ 3,100 $ 2,613

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income, net income attributable to Micron, 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; -- Start-up and preproduction costs; -- Employee severance; -- Patent license charges; -- Restructure and asset impairments; -- Amortization of debt discount and other costs, including the accretion of non-cash interest expense associated with our convertible notes and other debt; -- Gains and losses from debt repurchases and conversions; -- Gains and losses from business acquisition activities; -- Initial impact of inventory accounting policy change to FIFO and change in inventory cost absorption in the second quarter of 2021; 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. Non-GAAP diluted shares also include the impact of capped calls, which are anti-dilutive in GAAP earnings per share but are expected to mitigate the dilutive effect of convertible notes, based on the average share price for the period the capped calls were outstanding.

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

FQ1-22 GAAP Outlook Adjustments Non-GAAP OutlookRevenue $7.65 billion ? $7.65 billion $200 million $200 millionGross margin 46.0% 1% 1% A 47.0% 1%Operating expenses $986 million $71 million $915 million $25 million B $25 millionDiluted earnings per share^(1) $2.00 $0.10 $0.10 A, B, $2.10 $0.10 C Non-GAAP Adjustments (in millions)A Stock-based compensation ? $ 43 cost of goods soldA Other ? cost of goods sold 5 B Stock-based compensation ? 39 research and developmentB Stock-based compensation ?sales, general, and 32 administrativeC Tax effects of the above items (4 )and other tax adjustments $ 115

(1)GAAP earnings per share based on approximately 1.13 billion diluted shares and non-GAAP earnings per share based on approximately 1.14 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.

Contacts:

Farhan AhmadInvestor Relationsfarhanahmad@micron.com(408) 834-1927

Erica Rodriguez PompenMedia Relationsepompen@micron.com(408) 834-1873