AMD Reports First Quarter Results; AMD Sales Grow on Record PC Processor Sales.Business/Technology Editors SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif.--(BUSINESS WIRE)--April 18, 2001 AMD (Advanced Micro Devices, Inc., Sunnyvale, CA, www.amd.com) A major manufacturer of semiconductor devices including x86-compatible CPUs, embedded processors, flash memories, programmable logic devices and networking chips. today reported sales of $1,188,747,000 and net income of $124,837,000 for the quarter ended April 1, 2001. Net income amounted to $0.37 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. The company reported record sales and record unit shipments of PC processors, led by strong sales of its seventh-generation AMD Athlon A family of Pentium-compatible CPU chips from AMD. The first 32-bit models were introduced as Pentium III-class CPUs in 1999 with a 200 MHz system bus and CPU speeds up to 650 MHz. (TM) and AMD Duron A value line of 32-bit, Pentium-compatible CPU chips from AMD. Introduced in 2000 to compete with Intel's Celerons, Durons were pin compatible with AMD's Athlon chips, but had less cache and slower frontside buses. (TM) processors. Total sales grew by 9 percent over the like period of 2000 while increasing by 1 percent from the immediate-prior quarter. In the first quarter of 2000, AMD reported sales of $1,092,029,000 and net income of $189,349,000, or $0.55 per diluted share. The company noted the tax rate for the just-completed quarter was 32 percent versus zero in the comparable period of 2000. In the fourth quarter of 2000, AMD reported sales of $1,175,172,000, and net income of $177,968,000, or $0.53 per diluted share, with a 15 percent tax rate. AMD sold more than 7.3 million PC processors, including 6.5 million seventh-generation AMD Athlon and Duron processors. Average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. (ASPs) increased from the immediate-prior quarter on the richer product mix. Total PC processor sales, at $661 million, increased 17 percent from both the comparable quarter of 2000 and the immediate-prior quarter. "AMD had an excellent quarter in a challenging economic environment," said W.J. Sanders San´ders n. 1. An old name of sandalwood, now applied only to the red sandalwood. See under Sandalwood. III, chairman and chief executive officer. "The superiority of our seventh-generation PC processors enabled AMD to achieve record PC processor sales in both dollars and units even as the industry worked through inventory issues in a softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. economy. Our success in the PC processor arena reflects continuing excellent execution as well as our ability to supply products with more delivered performance that enhance the competitiveness of our customers. "New product introductions during the quarter strengthened and broadened our PC processor portfolio," Sanders continued. "We commenced volume shipments of our newest, power-managed AMD Athlon processors, code-named `Palomino Palomino Colour type of horse distinguished by its cream, yellow, or gold coat and a white or silver mane. It is popular in pleasure and parade classes. Palominos may conform to the breed types of several light breeds, including the Arabian horse and the American Quarter Horse. ,' for the mobile PC market segment. Palomino processors feature an enhanced core and our proprietary PowerNow! technology, which dynamically adjusts the frequency and voltage of the processor based on the performance demands of the software, enabling a significant reduction in power consumption in mobile applications. PowerNow! technology is just one example of the better ideas from AMD that have elevated us to contention A condition that arises when two devices attempt to use a single resource at the same time. See contention resolution and CSMA/CD. with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) for the number two global ranking in U.S. patent issuances relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. integration processes and devices in 2000. "AMD also introduced 1.3-gigahertz (GHz) and 1.33-GHz desktop versions of the AMD Athlon processor in the first quarter. Earlier this month, AMD introduced a 900-megahertz version of the AMD Duron processor, the industry's highest-performance processor for the value segment of the desktop market. "With these additions to our PC processor offerings, we have a compelling solution for the performance mobile PC market where we have heretofore lacked a competitive offering while extending our performance leadership for desktop PC applications," Sanders continued. "Sales of flash memory products, reflecting a sharp decline in demand from the communications sector of the economy, declined by approximately 10 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to $411 million," Sanders continued. "Our broad product offering, excellent relationships with major customers, and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. purchase agreements helped to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the effects of this challenging environment and achieve 26
percent growth in flash memory product sales over the like period of
2000."We gained market share last quarter in both PC processors and flash memory, the focal points focal point n. See focus. of our growth strategy," Sanders said. "Sales of our seventh-generation processors (AMD Athlon and AMD Duron processors) grew 27 percent sequentially and 126 percent year-on-year. Demand for our highest-performance AMD Athlon processors remained strong and we shipped more than 2 million 1-GHz and faster devices. Going forward, we plan to continue our aggressive production ramp in Fab 30 in Dresden Dresden (drĕz`dən), city (1994 pop. 479,300), capital of Saxony, E central Germany, on the Elbe River. It is an industrial and cultural center, a rail junction, and a large inland port. , which will be the source of our highest-performance AMD Athlon processors, including the new power-managed versions," Sanders concluded. Current Outlook The company's outlook statements are based on current expectations. The following statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results could differ materially. The company's current outlook is based on the following projections. The company currently expects that, in the seasonally slow second quarter for PC sales, the enhanced competitive position of AMD-based solutions will enable maintenance of PC processor unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. at near-record levels comprised totally of seventh-generation products. The company currently expects PC industry unit growth in the high single-digit range for 2001 as a whole. Uncertainties regarding the level of demand for flash memory products in a continuing soft communications sector makes forecasting memory product sales extremely difficult. The company currently projects that second quarter sales of flash memory products will decline sequentially. AMD's other IC products and foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. services, which currently account for less than 10 percent of corporate revenues, will continue their decline both in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute and as a percentage of total revenues. Accordingly, in this uncertain climate, AMD expects that overall second quarter revenues could decline by as much as 10 percent sequentially, depending on market conditions. For the year as a whole, on modest sales growth in a declining market, the company expects to earn $1.50 per diluted share, consistent with First Call consensus earnings estimates. AMD Teleconference AMD will hold a teleconference for the financial community at 2:30 PM Pacific Standard Time today to discuss first-quarter financial results. AMD will provide a real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. audio broadcast of the teleconference on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page of its web site at http://www.amd.com or http://www.streetfusion.com. The webcast will be available for two weeks after the teleconference. Cautionary Statement This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Investors are cautioned that forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. There can be no assurance that demand for the company's products will continue at currently expected levels, that the company will grow sales for the year, or that it will meet earnings per share estimates. Risks also include the possibility that global business and economic conditions will worsen wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. worsen Verb to make or become worse worsening adjn ; that demand for personal computers and, in turn, demand for the company's PC processors will be lower than currently expected; that Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking pricing, marketing programs, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current PC processor sales plans; that the company will not continue to be successful in ramping production of the company's highest performance processors in Fab 30; that the company will not be able to produce AMD Athlon and AMD Duron processors in the volume, speed mix or with the feature set necessary to meet market requirements and the company's current plans and goals; that third parties may not provide timely or adequate infrastructure solutions to support the AMD Athlon and AMD Duron processors; and that changes in customer needs and the product introductions and capacity expansion of competitors will effect the demand for the company's flash memory products. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2000. About AMD AMD is a global supplier of integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. for the personal and networked computer and communications markets with manufacturing facilities in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Japan, and Asia. AMD, a Fortune
500 and Standard & Poor's 500 company, produces
microprocessors This is a list of microprocessors. Intel
See: New York Stock Exchange : AMD). WORLD WIDE WEB: Press Announcements and other information about AMD are available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via the World Wide Web. Type http://www.amd.com at the URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. prompt. NOTE TO EDITORS: Readers may obtain additional information by calling 1-800-222-9323 or 408-749-3060. Technical Support Email: hw.support@amd.com. AMD, the AMD logo, AMD Athlon, AMD Duron and combinations thereof are trademarks of Advanced Micro Devices, Inc. in the United States and other jurisdictions.
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
Quarter Ended
(Unaudited)
Apr. 1, Dec. 31, Apr. 2,
2001 2000 2000
------- -------- -------
Net sales $ 1,188,747 $ 1,175,172 $ 1,092,029
Cost of sales 714,830 657,303 605,757
Research and development 157,760 162,087 161,297
Marketing, general and
administrative 149,138 160,756 144,306
1,021,728 980,146 911,360
Operating income 167,019 195,026 180,669
Interest income and
other, net 18,823 25,449 21,128
Interest expense (21,645) (19,932) (11,479)
Income before income
taxes, equity in joint
venture and extraordinary
item 164,197 200,543 190,318
Provision for income taxes 52,543 30,081 --
Income before equity in
joint venture and
extraordinary item 111,654 170,462 190,318
Equity in net income
(loss) in joint venture 13,183 7,570 (969)
Income before
extraordinary item 124,837 178,032 189,349
Extraordinary item -
debt retirement,
net of tax benefit -- (64) --
Net income $ 124,837 $ 177,968 $ 189,349
Net income per common share
Basic:
Income before
extraordinary item $ 0.40 $ 0.57 $ 0.63
Net income $ 0.40 $ 0.57 $ 0.63
Diluted:
Income before
extraordinary item $ 0.37 $ 0.53 $ 0.55
Net income $ 0.37 $ 0.53 $ 0.55
Shares used in per
share calculation
- Basic 314,347 313,501 302,257
- Diluted 351,785 349,782 344,381
Advanced Micro Devices, Inc. -- INFORMATION ONLY
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS(b)
(Includes Pre-Tax FASL Investment Equity Income in Operating Income)
(Thousands except per share amounts)
Quarter Ended
(Unaudited)
Apr. 1, Dec. 31, Apr. 2,
2001 2000 2000
------- -------- -------
Net sales $ 1,188,747 $ 1,175,172 $ 1,092,029
Cost of sales 714,830 657,303 605,757
(Income) loss from
equity investment in FASL (22,612) (12,985) 1,659
Research and development 157,760 162,087 161,297
Marketing, general and
administrative 149,138 160,756 144,306
999,116 967,161 913,019
Operating income 189,631 208,011 179,010
Interest income and other, net 18,823 25,449 21,128
Interest expense (21,645) (19,932) (11,479)
Income before income taxes
and extraordinary item 186,809 213,528 188,659
Provision for income taxes 52,543 30,081 --
Provision (benefit) for
taxes on equity income in FASL 9,429 5,415 (690)
Income before
extraordinary item 124,837 178,032 189,349
Extraordinary item - debt
retirement, net of tax
benefit -- (64) --
Net income $ 124,837 $ 177,968 $ 189,349
Net income per common share
Basic:
Income before
extraordinary item $ 0.40 $ 0.57 $ 0.63
Net income $ 0.40 $ 0.57 $ 0.63
Diluted:
Income before
extraordinary item $ 0.37 $ 0.53 $ 0.55
Net income $ 0.37 $ 0.53 $ 0.55
Shares used in per
share calculation
- Basic 314,347 313,501 302,257
- Diluted 351,785 349,782 344,381
(b) The above statements of operations are not in accordance with
generally accepted accounting principles (GAAP) in that the pre-tax
equity income of FASL has been reclassified and included in the
determination of operating income. Net income and related net income
per common share amounts are the same as those reported under GAAP.
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
April 1, December 31,
2001 2000(a)
(unaudited)
Assets
Current assets:
Cash, cash equivalents
and short-term investments $ 1,595,556 $ 1,293,165
Accounts receivable, net 602,067 547,200
Inventories 354,630 343,541
Deferred income taxes 189,185 218,527
Prepaid expenses and other current assets 139,661 255,256
Total current assets 2,881,099 2,657,689
Property, plant and equipment, net 2,663,904 2,636,467
Investment in joint venture 249,866 261,728
Other assets 234,536 211,851
$ 6,029,405 $ 5,767,735
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 377,067 $ 477,369
Accrued compensation and benefits 139,477 172,815
Accrued liabilities 278,092 276,721
Income tax payable 84,286 74,806
Deferred income on
shipments to distributors 99,286 92,828
Current portion of long-term debt,
capital lease obligations and other 183,525 129,570
Total current liabilities 1,161,733 1,224,109
Deferred income taxes 198,066 203,986
Long-term debt, capital
lease obligations and other,
less current portion 1,392,970 1,167,973
Stockholders' equity:
Capital stock:
Common stock, par value 3,160 3,141
Capital in excess of par value 1,422,593 1,406,290
Retained earnings 1,981,098 1,856,261
Accumulated other comprehensive loss (130,215) (94,025)
Total stockholders' equity 3,276,636 3,171,667
$ 6,029,405 $ 5,767,735
(a) Derived from the December 31, 2000 audited financial statements of
Advanced Micro Devices, Inc.
AMD
Selected Corporate Data
Q1 '01 Q4 '00 Q1 '00
------- -------- --------
Segment Breakdown % of % of % of
Sales Revenue Sales Revenue Sales Revenue
----- ------- ----- ------- ----- -------
Core Products segment:
PC Processors Products 55 $661M 48 $566M 52 $563M
Memory Products (Flash) 35 411M 39 458M 30 327M
Other IC Products 6 75M 8 98M 11 122M
Voice Communications segment 0 0 0 0 5 60M
Foundry Services segment 4 42M 5 53M 2 20M
----------------------------------------------------------------------
Other Data Q1 '01 Q4 '00 Q1 '00
----------------------------------------------------------------------
Depreciation
and Amortization $153M $150M $128M
Capital Additions $163M $266M $129M
Headcount 14,838 14,435 13,398
----------------------------------------------------------------------
International Sales 63% 62% 59%
Research and Development $158M $162M $161M
EBITDA $320M $345M $309M
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