MU - Micron Technology Inc. Reports Results for the Fourth Quarter and Full Year of Fiscal 2023

September, 27 2023 04:01 PM Micron Technology Inc.

BOISE, Idaho, Sept. 27, 2023 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its fourth quarter and full year of fiscal 2023, which ended August 31, 2023.

Fiscal Q4 2023 highlights

Revenue of $4.01 billion versus $3.75 billion for the prior quarter and $6.64 billion for the same period last year
GAAP net loss of $1.43 billion, or $1.31 per diluted share
Non-GAAP net loss of $1.18 billion, or $1.07 per diluted share
Operating cash flow of $249 million versus $24 million for the prior quarter and $3.78 billion for the same period last year

Fiscal 2023 highlights

Revenue of $15.54 billion versus $30.76 billion for the prior year
GAAP net loss of $5.83 billion, or $5.34 per diluted share
Non-GAAP net loss of $4.86 billion, or $4.45 per diluted share
Operating cash flow of $1.56 billion versus $15.18 billion for the prior year

“During fiscal 2023, amid a challenging environment for the memory and storage industry, Micron sustained technology leadership, launched a significant number of leading-edge products, and took decisive actions on supply and cost,” said Micron Technology President and CEO Sanjay Mehrotra. “Our 2023 performance positions us well as a market recovery takes shape in 2024, driven by increasing demand and disciplined supply. We look forward to record industry TAM revenue in 2025 as AI proliferates from the data center to the edge.”

Quarterly Financial Results
(in millions, except per share amounts)
GAAP ⁽¹⁾

Non-GAAP ⁽²⁾
FQ4-23
FQ3-23
FQ4-22

FQ4-23
FQ3-23
FQ4-22








Revenue
$
4,010

$
3,752

$
6,643


$
4,010

$
3,752

$
6,643

Gross margin

(435
)

(668
)

2,622



(366
)

(603
)

2,676

percent of revenue

(10.8
%)

(17.8
%)

39.5
%


(9.1
%)

(16.1
%)

40.3
%
Operating expenses

1,037


1,093


1,101



842


866


1,014

Operating income (loss)

(1,472
)

(1,761
)

1,521



(1,208
)

(1,469
)

1,662

percent of revenue

(36.7
%)

(46.9
%)

22.9
%


(30.1
%)

(39.2
%)

25.0
%
Net income (loss)

(1,430
)

(1,896
)

1,492



(1,177
)

(1,565
)

1,621

Diluted earnings (loss) per share

(1.31
)

(1.73
)

1.35



(1.07
)

(1.43
)

1.45

Annual Financial Results
(in millions, except per share amounts)
GAAP ⁽¹⁾

Non-GAAP ⁽²⁾
FY 23
FY 22

FY 23
FY 22






Revenue
$
15,540

$
30,758


$
15,540

$
30,758

Gross margin

(1,416
)

13,898



(1,196
)

14,113

percent of revenue

(9.1
%)

45.2
%


(7.7
%)

45.9
%
Operating expenses

4,329


4,196



3,623


3,832

Operating income (loss)

(5,745
)

9,702



(4,819
)

10,281

percent of revenue

(37.0
%)

31.5
%


(31.0
%)

33.4
%
Net income (loss)

(5,833
)

8,687



(4,862
)

9,475

Diluted earnings (loss) per share

(5.34
)

7.75



(4.45
)

8.35

Investments in capital expenditures, net ⁽²⁾ were $1.01 billion for the fourth quarter of 2023 and $7.01 billion for the full year of 2023, which resulted in adjusted free cash flows ⁽²⁾ of negative $758 million for the fourth quarter of 2023 and negative $5.45 billion for the full year of 2023. Micron ended the year with cash, marketable investments, and restricted cash of $10.52 billion. On September 27, 2023, Micron’s Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 25, 2023, to shareholders of record as of the close of business on October 10, 2023.

Business Outlook

The following table presents Micron’s guidance for the first quarter of 2024:

FQ1-24

GAAP ⁽¹⁾ Outlook

Non-GAAP ⁽²⁾ Outlook

Revenue

$4.40 billion ± $200 million

Gross margin

(6.0%) ± 2.0%

(4.0%) ± 2.0%

Operating expenses

$1.01 billion ± $15 million

$900 million ± $15 million

Diluted earnings (loss) per share

($1.24) ± $0.07

($1.07) ± $0.07

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 Wednesday, September 27, 2023 at 2:30 p.m. Mountain Time 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 .

© 2023 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, 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, including 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, 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)


4th Qtr.
3rd Qtr.
4th Qtr.
Year Ended

August 31, 2023
June 1, 2023
September 1, 2022
August 31, 2023
September 1, 2022






Revenue
$
4,010

$
3,752

$
6,643

$
15,540

$
30,758

Cost of goods sold

4,445


4,420


4,021


16,956


16,860

Gross margin

(435
)

(668
)

2,622


(1,416
)

13,898







Research and development

719


758


839


3,114


3,116

Selling, general, and administrative

219


219


280


920


1,066

Restructure and asset impairments

4


68


5


171


48

Other operating (income) expense, net

95


48


(23
)

124


(34
)
Operating income (loss)

(1,472
)

(1,761
)

1,521


(5,745
)

9,702







Interest income

134


127


54


468


96

Interest expense

(129
)

(119
)

(45
)

(388
)

(189
)
Other non-operating income (expense), net

9


—


23


7


(38
)


(1,458
)

(1,753
)

1,553


(5,658
)

9,571







Income tax (provision) benefit

24


(139
)

(56
)

(177
)

(888
)
Equity in net income (loss) of equity method investees

4


(4
)

(5
)

2


4

Net income (loss)
$
(1,430
)
$
(1,896
)
$
1,492

$
(5,833
)
$
8,687







Earnings (loss) per share





Basic
$
(1.31
)
$
(1.73
)
$
1.36

$
(5.34
)
$
7.81

Diluted

(1.31
)

(1.73
)

1.35


(5.34
)

7.75







Number of shares used in per share calculations





Basic

1,095


1,094


1,097


1,093


1,112

Diluted

1,095


1,094


1,106


1,093


1,122

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

As of
August 31, 2023
June 1, 2023
September 1, 2022




Assets



Cash and equivalents
$
8,577

$
9,298

$
8,262

Short-term investments

1,017


1,054


1,069

Receivables

2,443


2,429


5,130

Inventories

8,387


8,238


6,663

Other current assets

820


715


657

Total current assets

21,244


21,734


21,781

Long-term marketable investments

844


973


1,647

Property, plant, and equipment

37,928


38,727


38,549

Operating lease right-of-use assets

666


655


678

Intangible assets

404


410


421

Deferred tax assets

756


708


702

Goodwill

1,150


1,252


1,228

Other noncurrent assets

1,262


1,221


1,277

Total assets
$
64,254

$
65,680

$
66,283





Liabilities and equity



Accounts payable and accrued expenses
$
3,958

$
4,177

$
6,090

Current debt

278


259


103

Other current liabilities

529


668


1,346

Total current liabilities

4,765


5,104


7,539

Long-term debt

13,052


12,986


6,803

Noncurrent operating lease liabilities

603


603


610

Noncurrent unearned government incentives

727


632


589

Other noncurrent liabilities

987


950


835

Total liabilities

20,134


20,275


16,376





Commitments and contingencies







Shareholders’ equity



Common stock

124


124


123

Additional capital

11,036


10,782


10,197

Retained earnings

40,824


42,391


47,274

Treasury stock

(7,552
)

(7,552
)

(7,127
)
Accumulated other comprehensive income (loss)

(312
)

(340
)

(560
)
Total equity

44,120


45,405


49,907

Total liabilities and equity
$
64,254

$
65,680

$
66,283

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

For the year ended
August 31, 2023
September 1, 2022



Cash flows from operating activities


Net income (loss)
$
(5,833
)
$
8,687

Adjustments to reconcile net income (loss) to net cash provided by operating activities:


Depreciation expense and amortization of intangible assets

7,756


7,116

Provision to write down inventories to net realizable value

1,831


—

Stock-based compensation

596


514

Goodwill impairment

101


—

Restructure and asset impairments

11


44

Loss on debt repurchases and conversions

—


83

Change in operating assets and liabilities:


Receivables

2,763


190

Inventories

(3,555
)

(2,179
)
Accounts payable and accrued expenses

(2,104
)

744

Other

(7
)

(18
)
Net cash provided by operating activities

1,559


15,181




Cash flows from investing activities


Expenditures for property, plant, and equipment

(7,676
)

(12,067
)
Purchases of available-for-sale securities

(723
)

(1,770
)
Proceeds from maturities of available-for-sale securities

1,566


1,321

Proceeds from government incentives

710


115

Proceeds from sales of available-for-sale securities

25


294

Proceeds from sale of Lehi, Utah fab

—


888

Other

(93
)

(366
)
Net cash provided by (used for) investing activities

(6,191
)

(11,585
)



Cash flows from financing activities


Proceeds from issuance of debt

6,716


2,000

Repayments of debt

(761
)

(2,032
)
Payments of dividends to shareholders

(504
)

(461
)
Repurchases of common stock - repurchase program

(425
)

(2,432
)
Payments on equipment purchase contracts

(138
)

(141
)
Other

95


86

Net cash provided by (used for) financing activities

4,983


(2,980
)



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

(34
)

(106
)



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

317


510

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

8,339


7,829

Cash, cash equivalents, and restricted cash at end of period
$
8,656

$
8,339

MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)

Inventories

In the third and second quarters of 2023, we recorded charges of $401 million and $1.43 billion, respectively, to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable values (“NRV”). The impact of inventory NRV write-downs for each period reflects (1) inventory write-downs in that period, offset by (2) lower costs in that period on the sale of inventory written down in prior periods. The impacts of inventory NRV write-downs are summarized below:


4th Qtr.
3rd Qtr.
4th Qtr.
Year Ended

August 31, 2023
June 1, 2023
September 1, 2022
August 31, 2023
September 1, 2022






Provision to write down inventory to NRV
$
—
$
(401
)
$
—
$
(1,831
)
$
—
Lower costs from sale of inventory written down in prior periods

563

281


—

844


—

$
563
$
(120
)
$
—
$
(987
)
$
—

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


4th Qtr.
3rd Qtr.
4th Qtr.
Year Ended

August 31, 2023
June 1, 2023
September 1, 2022
August 31, 2023
September 1, 2022






GAAP gross margin
$
(435
)
$
(668
)
$
2,622

$
(1,416
)
$
13,898

Stock-based compensation

64


60


49


201


193

Other

5


5


5


19


22

Non-GAAP gross margin
$
(366
)
$
(603
)
$
2,676

$
(1,196
)
$
14,113







GAAP operating expenses
$
1,037

$
1,093

$
1,101

$
4,329

$
4,196

Stock-based compensation

(87
)

(91
)

(82
)

(363
)

(308
)
Restructure and asset impairments

(4
)

(68
)

(5
)

(171
)

(48
)
Goodwill impairment

(101
)

—


—


(101
)

—

Litigation settlement

—


(68
)

—


(68
)

—

Other

(3
)

—


—


(3
)

(8
)
Non-GAAP operating expenses
$
842

$
866

$
1,014

$
3,623

$
3,832







GAAP operating income (loss)
$
(1,472
)
$
(1,761
)
$
1,521

$
(5,745
)
$
9,702

Stock-based compensation

151


151


131


564


501

Restructure and asset impairments

4


68


5


171


48

Goodwill impairment

101


—


—


101


—

Litigation settlement

—


68


—


68


—

Other

8


5


5


22


30

Non-GAAP operating income (loss)
$
(1,208
)
$
(1,469
)
$
1,662

$
(4,819
)
$
10,281







GAAP net income (loss)
$
(1,430
)
$
(1,896
)
$
1,492

$
(5,833
)
$
8,687

Stock-based compensation

151


151


131


564


501

Restructure and asset impairments

4


68


5


171


48

Goodwill impairment

101


—


—


101


—

Litigation settlement

—


68


—


68


—

Loss on debt repurchases and conversions

—


—


—


—


83

Other

7


7


11


32


61

Impact of Idaho income tax reform

—


—


—


—


189

Estimated tax effects of above and other tax adjustments

(10
)

37


(18
)

35


(94
)
Non-GAAP net income (loss)
$
(1,177
)
$
(1,565
)
$
1,621

$
(4,862
)
$
9,475







GAAP weighted-average common shares outstanding - Diluted

1,095


1,094


1,106


1,093


1,122

Adjustment for stock-based compensation

—


—


15


—


13

Non-GAAP weighted-average common shares outstanding - Diluted

1,095


1,094


1,121


1,093


1,135







GAAP diluted earnings (loss) per share
$
(1.31
)
$
(1.73
)
$
1.35

$
(5.34
)
$
7.75

Effects of the above adjustments

0.24


0.30


0.10


0.89


0.60

Non-GAAP diluted earnings (loss) per share
$
(1.07
)
$
(1.43
)
$
1.45

$
(4.45
)
$
8.35

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued


4th Qtr.
3rd Qtr.
4th Qtr.
Year Ended

August 31, 2023
June 1, 2023
September 1, 2022
August 31, 2023
September 1, 2022






GAAP net cash provided by operating activities
$
249

$
24

$
3,777

$
1,559

$
15,181







Expenditures for property, plant, and equipment

(1,461
)

(1,561
)

(3,613
)

(7,676
)

(12,067
)
Proceeds from sales of property, plant, and equipment

18


34


30


92


117

Payments on equipment purchase contracts

(26
)

(36
)

(9
)

(138
)

(141
)
Amounts funded by partners

462


184


11


710


115

Investments in capital expenditures, net

(1,007
)

(1,379
)

(3,581
)

(7,012
)

(11,976
)
Adjusted free cash flow
$
(758
)
$
(1,355
)
$
196

$
(5,453
)
$
3,205

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income (loss), net income (loss), diluted shares, diluted earnings (loss) per share, and adjusted free cash flow. 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;
Employee severance;
Gains and losses from settlements;
Restructure and asset impairments;
Goodwill impairment;
Gains and losses from debt repurchases and conversions; 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 (loss).

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

FQ1-24

GAAP Outlook

Adjustments

Non-GAAP Outlook

Revenue

$4.40 billion ± $200 million

—

$4.40 billion ± $200 million

Gross margin

(6.0%) ± 2.0%

2.0

(4.0%) ± 2.0%

Operating expenses

$1.01 billion ± $15 million

$113 million

$900 million ± $15 million

Diluted earnings (loss) per share ⁽¹⁾

($1.24) ± $0.07

$0.17

A, B, C

($1.07) ± $0.07

Non-GAAP Adjustments (in millions)














A
Stock-based compensation – cost of goods sold

$
66

A
Other – cost of goods sold


4

B
Stock-based compensation – research and development


69

B
Stock-based compensation – sales, general, and administrative


44

C
Tax effects of the above items and other tax adjustments


(1
)







$
182

⁽¹⁾ GAAP and non-GAAP earnings (loss) per share based on approximately 1.10 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, additional 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:Samir PatodiaInvestor Relationsspatodia@micron.com(408) 834-1947Erica Rodriguez PompenMedia Relationsepompen@micron.com(408) 834-1873

Company Name:	Micron Technology Inc.
Stock Symbol:	MU
Market:	NASDAQ
Website:	micron.com