AMD Reports First Quarter Results; Company reports sales of $902 million, net loss of $0.03 per share on record PC processor units.Business 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 17, 2002 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 $902,073,000 and a net loss of $9,163,000 for the quarter ended March 31, 2002. The net loss amounted to $0.03 per share. The company reported record 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. of PC processors during the quarter. Total sales declined by 24 percent from the like period of 2001 and by 5 percent from the fourth quarter of 2001. In the first quarter of 2001, AMD reported total sales of $1,188,747,000 and net income of $124,837,000, which 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. In the fourth quarter of 2001, AMD reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $951,873,000, and a net loss of $15,842,000, or $0.05 per share. AMD sold a record 8 million PC processors in the first quarter of 2002. Total PC processor sales of $684 million for the quarter grew by 3 percent compared to $661 million in the like period of 2001. Processor sales declined by 3 percent from the record $703 million reported in the seasonally strong fourth quarter of 2001. Sales of AMD memory products, principally flash memory devices, continued to be weak, amounting to $160 million, compared to $411 million in the like period a year ago and $196 million in the fourth quarter of 2001. "The strength of the 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) XP processor enabled AMD to achieve record unit sales of PC processors," 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. "We believe AMD grew unit market share in PC processors, defined as Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. (R) Windows(R) compatible processors for mobile, desktop, server, and workstation computing computing - computer . Sales of mobile processors grew in both units and dollars from the prior quarter. During the quarter, we began shipping our AMD Athlon XP A family of Pentium-compatible CPU chips from AMD introduced in 2001. Departing from the traditional MHz designation, Athlon XP chips use model numbers that combine clock speed and architectural features into a numerical rating. processor produced on 130-nanometer (nm) technology (code-named "Thoroughbred Thoroughbred Light breed of racing and jumping horse descended from three desert stallions brought to England between 1689 and 1724. Thoroughbreds have a delicate head, slim body, broad chest, and short back. Most are bay, chestnut, brown, black, or gray. ") for mobile applications. "Shipments of the desktop version of the AMD Athlon XP processor on 130-nm technology will commence this quarter," Sanders said. "Our conversion to 130-nm technology is going extremely well, and we now expect to complete the transition to 100 percent of PC processor production on 130-nm technology ahead of our previously announced year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. timetable. "We also achieved substantial growth in sales of AMD Athlon MP processors for servers during the quarter. We have focused our initial sales and marketing efforts for AMD Athlon MP processors in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market, where we believe we have attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. a unit market share of approximately 6 percent. "While sales of flash memory products once again declined substantially, there are signs that the industry flash crash is now behind us," Sanders said. "For the second consecutive quarter, total shipments in both units and bits increased while pricing remained weak. Bookings for flash memory products improved over the prior quarter, and visibility is improving. Demand was strongest for our higher-density flash memory devices, and we are seeing signs of a recovery in the cellular telephone sector, where we are gaining market share at the market leaders. "We will begin sampling flash memory products with our proprietary MirrorBit(TM) technology in the current quarter, and expect that these products will contribute to Memory Group revenues in the second half of the year. MirrorBit technology is a breakthrough in memory cell architecture that enables a flash memory cell to store twice as much data as a standard flash memory cell with no compromise in device performance and reliability," Sanders said. "In January January: see month. we saw working silicon for our Hammer family of processors. We have commenced sampling to key infrastructure partners. Our early results strengthen our confidence in our plans to begin shipments by the end of 2002," 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. Economic and industry conditions remain uncertain, and continue to make it particularly difficult to forecast product demand. The company's current outlook is based on the following projections. The company expects substantial sequential growth in sales of flash memory devices in the second quarter. The company expects that unit sales of PC processors in the second quarter will follow seasonal patterns, which generally show a sequential decline in the range of 5 to 10 percent. The company expects to maintain unit market share at current levels in the PC processor market. The company expects to sell substantially increased volumes of AMD Athlon XP processors manufactured on 130-nm technology in the current quarter. Depending on unpredictable PC processor pricing patterns in a generally weak PC market and the rate of growth in the flash memory market, AMD aggregate sales are expected to be in the range of $820 to $900 million in the second quarter. 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.StreetEvents.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. Risks 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 resulting in lower than expected sales in the second quarter of 2002; 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, product bundling Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), and in the fast , 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 demand for personal computers and, in turn, demand for the company's PC processors will be lower than currently expected; that the company will not continue to be successful in ramping production of the company's AMD Athlon XP processors on 130-nanometer technology 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. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , on the current schedule; that demand for the company's flash memory products will be lower than currently expected; that the company will not achieve substantial sequential growth in sales of flash memory devices in the current quarter; and that the company will not be able to maintain market share in the PC processor market and gain flash memory market share in the cellular telephone sector as expected. 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. 30, 2001. 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). AMD, the AMD Arrow logo, AMD Athlon and combinations thereof, and Mirror Bit are trademarks of Advanced Micro Devices, Inc. Other product names used in this publication are for identification purposes only and may be trademarks of their respective companies.
Advanced Micro Devices, Inc.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(Includes Pre-Tax FASL Investment Equity Income in Operating Income)
(Thousands except per share amounts)
Quarter Ended
(Unaudited)
March 31, Dec. 30, Apr. 1,
2002 2001 2001
Net sales $ 902,073 $ 951,873 $ 1,188,747
Cost of sales 586,874 644,662 714,830
(Income) loss from
equity investment in FASL (5,076) 715 (22,612)
Research and development 171,882 160,871 157,760
Marketing, general and
administrative 156,860 163,684 149,138
-------- -------- --------
910,540 969,932 999,116
Operating income (loss) (8,467) (18,059) 189,631
Interest income and
other, net 9,538 5,784 18,823
Interest expense (12,158) (9,570) (21,645)
Income (loss) before
income taxes (11,087) (21,845) 186,809
Provision (benefit)
for income taxes (4,041) (5,705) 52,543
Provision (benefit)
for taxes on equity
income in FASL 2,117 (298) 9,429
Net income (loss) $ (9,163) $ (15,842) $ 124,837
Net income (loss)
per common share
Basic $ (0.03) $ (0.05) $ 0.40
Diluted $ (0.03) $ (0.05) $ 0.37
Shares used in
per share calculation
- Basic 340,806 340,119 314,347
- Diluted 340,806 340,119 351,785
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
Quarter Ended
(Unaudited)
March 31, Dec. 30, Apr. 1,
2002 2001 2001
Net sales $ 902,073 $ 951,873 $ 1,188,747
Cost of sales 586,874 644,662 714,830
Research and development 171,882 160,871 157,760
Marketing, general and
administrative 156,860 163,684 149,138
-------- -------- ---------
915,616 969,217 1,021,728
Operating income (loss) (13,543) (17,344) 167,019
Interest and other income
(expense), net 9,538 5,784 18,823
Interest expense (12,158) (9,570) (21,645)
Income (loss) before income
taxes and equity in net income
(loss) of joint venture (16,163) (21,130) 164,197
Provision (benefit)
for income taxes (4,041) (5,705) 52,543
Income (loss) before equity
in net income (loss) of
joint venture (12,122) (15,425) 111,654
Equity in net income
(loss) in joint venture 2,959 (417) 13,183
Net income (loss) $ (9,163) $ (15,842) $ 124,837
Net income (loss)
per common share
Basic:
Net income (loss) $ (0.03) $ (0.05) $ 0.40
Diluted:
Net income (loss) $ (0.03) $ (0.05) $ 0.37
Shares used in
per share calculation
- Basic 340,806 340,119 314,347
- Diluted 340,806 340,119 351,785
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
March 31, Dec. 30,
2002 2001(a)
(unaudited)
Assets
Current assets:
Cash, cash equivalents
and short-term investments$ 1,276,723 $ 869,997
Accounts receivable, net 692,165 659,783
Inventories 376,795 380,474
Deferred income taxes 162,820 155,898
Prepaid expenses and
other current assets 151,377 286,957
Total current assets 2,659,880 2,353,109
Property, plant
and equipment, net 2,769,234 2,739,138
Investment in joint venture 353,352 363,611
Other assets 182,476 191,384
----------- -----------
$ 5,964,942 $ 5,647,242
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 383,495 $ 304,990
Accrued compensation
and benefits 133,401 129,042
Accrued liabilities 321,953 443,995
Income tax payable 56,113 56,234
Deferred income on
shipments to
distributors 68,016 47,978
Current portion of
long-term debt, capital
lease obligations and other 264,029 331,698
Total current liabilities 1,227,007 1,313,937
Deferred income taxes 104,661 105,305
Long-term debt, capital
lease obligations and other,
less current portion 1,123,671 672,945
Stockholders' equity:
Capital stock:
Common stock, par value 3,414 3,405
Capital in excess
of par value 1,898,349 1,889,217
Retained earnings 1,786,517 1,795,680
Accumulated other
comprehensive loss (178,677) (133,247)
Total stockholders' equity 3,509,603 3,555,055
----------- -----------
$ 5,964,942 $ 5,647,242
(a) Derived from the December 30, 2001 audited financial
statements of Advanced Micro Devices, Inc.
AMD
Selected Corporate Data
(Unaudited)
Segment Breakdown
Q1 '02 Q4 '01 Q1 '01
% of Sales Revenue % of Sales Revenue % of Sales Revenue
---------- ------- ---------- ------- ---------- -------
Core Products
segment:
PC Processor
Products 76 $684M 74 $703M 55 $661M
Memory Products
(Flash) 18 160M 21 196M 35 411M
Other IC
Products 5 46M 5 51M 6 75M
Foundry Services
segment 1 12M 0 2M 4 42M
----------------------------------------------------------------------
Other Data Q1 '02 Q4 '01 Q1 '01
----------------------------------------------------------------------
Depreciation
and Amortization $174M $150M $153M
Capital Additions $199M $161M $163M
Headcount 14,442 14,757 14,838
----------------------------------------------------------------------
International Sales 65% 73% 63%
Research and
Development $172M $161M $158M
EBITDA $161M $133M $320M
EBITDA (Non-GAAP) $166M $132M $343M
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