AMD Reports First Quarter Results; Record Quarterly Microprocessor Sales and Operating Income.SUNNYVALE, Calif. -- 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. (NYSE NYSE See: New York Stock Exchange :AMD) today reported sales of $1.227 billion and an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $46 million for the quarter ended March 27, 2005. The first quarter net loss of $17 million amounted to $0.04 per share. First quarter sales decreased one percent compared to the first quarter of 2004 and decreased three percent from the fourth quarter of 2004. In the first quarter of 2004, AMD reported sales of $1.236 billion and net income of $45 million, or $0.12 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 2004, AMD reported sales of $1.264 billion and a net loss of $30 million, or $0.08 per share. "Our microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. business delivered record sales in what is typically a seasonally down quarter, driven by increased sales across all product categories," said Robert J. Rivet, AMD's chief financial officer. "We continued to gain momentum with year-over-year sales growth of 31 percent, highlighted by AMD Opteron(TM) and AMD Athlon(TM) 64 processor sales, each of which more than doubled from a year ago. "The NOR Flash memory market continued to experience industry-wide oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies and strong pricing pressure. We experienced a rise in unit shipments, but our average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. (ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). ) declined significantly, resulting in weaker than expected sales." BUSINESS OVERVIEW First quarter operating loss was $46 million as compared to operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $61 million in the first quarter of 2004 and $20 million in the fourth quarter of 2004. First quarter gross margin was 34 percent compared to 41 percent in the fourth quarter of 2004. This decrease was largely due to a weak Flash memory pricing environment. Record Computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. Products Group (CPG CPG central pattern generators. ) sales of $750 million were up 31 percent from the first quarter of 2004 and increased three percent from $730 million in the fourth quarter of 2004. CPG generated record operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $92 million in the first quarter, up from $89 million in the fourth quarter of 2004. CPG's first quarter sales growth was driven by record server and mobile processor sales, and strong overall penetration in high-growth regions, particularly greater China. AMD64 processor sales grew a record 30 percent sequentially and represented 63 percent of CPG sales. AMD's manufacturing conversion for processor products from 130 to 90 nanometers is ahead of schedule and yields are higher than planned. This higher unit capacity will continue to provide AMD the ability to support accelerating customer demand across product segments. Memory Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. of $447 million decreased 29 percent from the first quarter of 2004 and decreased 11 percent from $504 million in the prior quarter. The Memory Group incurred an operating loss of $110 million, as compared to an operating loss of $39 million in the fourth quarter of 2004. Unit volume shipments were up quarter over quarter. Spansion also commenced volume shipments of the industry-leading 256-megabit MirrorBit(TM) Flash memory device to three of the top 10 wireless phone manufacturers. ADDITIONAL HIGHLIGHTS OF THE QUARTER --Several strategic OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and partners launched new platforms based on AMD Opteron processors. HP expanded its enterprise-class offerings with the addition of the ProLiant DL385, the ProLiant BL25p and BL35p Server Blades One blade in a blade server. See blade server. and the HP xw9300 workstation. Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. launched second-generation v20z and v40z servers featuring AMD Opteron processor models 252 and 852. --AMD64 dual-core processor technology leadership was demonstrated on existing Sun, HP and Cray (Cray, Inc., Seattle, WA, www.cray.com) A supercomputer manufacturer founded in 1972 as Cray Research, Inc., by Seymour Cray, a leading designer of large-scale computers at Control Data. In 1976, it shipped its first computer to Los Alamos National Laboratory. servers and workstations with AMD Opteron dual-core processors. --Fifty-five percent of the top 100 global companies or their affiliates as ranked by the Forbes Global 2000 now rely on AMD64 processor-based systems to run enterprise applications. Additional new customers include Akamai, Cable & Wireless, EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. , Goodyear, Honda honda a quick release metal eyelet for the end of a lariat. When the restrained animal is no longer required it is not necessary to slacken off the loop and pull it over the head—a very great advantage when working with wild cattle or unbroken horses. , Lucas Films, MBNA MBNA Monument Builders of North America MBNA Mercedes-Benz North America MBNA Maryland Bank, National Association MBNA Maryland Bank North America MBNA Mount Baker Nurses Association (Bellingham, Washington) , MetLife of Mexico and SingTel EXPAN Data Centers. --AMD launched AMD Turion A version of the Athlon 64 CPU from AMD designed for thin, lightweight laptops. The Turion 64 CPUs dissipate as little as 25 watts compared to 65 for the Athlon. Introduced in 2005, Turion enhanced AMD's line of mobile CPUs, which included the Mobile Athlon 64 for full-sized laptops and (TM) 64 mobile technology, the first 64-bit mobile processor family designed specifically for thin-and-light notebooks. --In the first quarter, AMD received 21 awards for AMD64 technology and products from leading publications and organizations, including: --The U.S. Environmental Protection Agency Environmental Protection Agency (EPA), independent agency of the U.S. government, with headquarters in Washington, D.C. It was established in 1970 to reduce and control air and water pollution, noise pollution, and radiation and to ensure the safe handling and -- awarded AMD's Cool'n'Quiet(TM) technology with an ENERGY STAR(R) Certificate of Recognition for advancing computer energy efficiency. --In-Stat Microprocessor Report's best desktop processor of 2004 was the AMD Athlon(TM) 64 FX-55 processor. --PC Market (China) voted the AMD Athlon 64 processor "PCM (1) See phase change memory. (2) (Plug Compatible Manufacturer) An organization that makes a computer or electronic device that is compatible with an existing machine. Best of IT Award 2004." --Spansion began volume shipments of the only single-die 512-megabit NOR Flash memory device in production for the embedded market Refers to custom-designed, computer-based devices and applications that perform a fixed set of tasks. It may refer to cellphones and other handhelds, network appliances (routers, access points, modems) and myriad consumer electronics products. . --Spansion received a Most Valued Partner award from Samsung Electronics Samsung Electronics (SEC, Hangul:삼성전자; KSE: 005930, KSE: 005935, LSE: SMSN, LSE: SMSD) is a South Korean multinational corporation and the world's largest and leading electronics and information technology company. Co., Ltd. for 2004, and the 2004 Best Supplier award from Lenovo Mobile Communication Technology. --The AMD Alchemy alchemy (ăl`kəmē), ancient art of obscure origin that sought to transform base metals (e.g., lead) into silver and gold; forerunner of the science of chemistry. (TM) Au1200(TM) processor, a low-power, high-performance, system-on-a-chip solution optimized for personal media players (PMP See point-to-multipoint and portable media player. PMP - Portable Media Player ) was launched during the quarter. CURRENT OUTLOOK AMD's outlook statements are based on current expectations. The following statements are forward looking, and actual results could differ materially depending on market conditions. In the typically seasonally down second quarter, AMD expects processor sales to be flat or down slightly. Because of Spansion's SEC Form S-1 filing today, AMD is not providing guidance for the Flash memory business. AMD TELECONFERENCE AMD will hold a conference call for the financial community at 2:30 p.m. PT today to discuss quarterly 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 www.amd.com or www.streetevents.com. The webcast will be available for 10 days after the conference call. 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 uncertainties 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 currently expected sales in the second quarter of 2005; that Intel Corporation's 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 processor sales plans; that demand for personal computers and, in turn, demand for the company's processors will be lower than currently expected; that adoption of AMD64 products by OEMs will not continue to occur as expected; that demand for the company's Flash memory products will be lower than currently expected and that the company will not be able to increase or maintain Flash memory market share; 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 will negatively affect NOR Flash memory prices; that customer acceptance of MirrorBit technology will not continue to increase; that the company may not achieve its current product and technology introduction or implementation schedules; that the company will not be able to raise sufficient capital to enable it to establish leading-edge capacity to maintain its market leadership positions; and that solutions providers will not timely provide the infrastructure, including operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. and applications, to support the company's AMD64 technology. 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 Annual 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 26, 2004. ABOUT AMD AMD (NYSE:AMD) designs and produces innovative microprocessors This is a list of microprocessors. Intel
AMD, the AMD Arrow logo, AMD Athlon, AMD Opteron, AMD Turion, Alchemy and combinations thereof, Cool'n'Quiet and Au1200 are trademarks of Advanced Micro Devices, Inc. Spansion and MirrorBit are trademarks of Spansion LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . ENERGY STAR is a registered trademark of the U.S. Government. Other names used are for informational purposes only and may be trademarks of their respective owners.
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
Quarter Ended
----------------------------------------------------------------------
Mar. 27, Dec. 26, Mar. 28,
2005 2004 2004
(Unaudited)(Unaudited)(Unaudited)
----------------------------------------------------------------------
Net sales $1,226,628 $1,263,706 $1,236,433
Cost of sales 807,449 742,650 768,840
Research and development 253,122 252,767 226,090
Marketing, general and
administrative 211,714 245,622 180,217
Restructuring and other
special charges, net - 2,942 -
----------------------------------------------------------------------
1,272,285 1,243,981 1,175,147
----------------------------------------------------------------------
Operating income (loss) (45,657) 19,725 61,286
Interest income and other, net 3,974 (42,430) 10,981
Interest expense (24,245) (29,070) (30,154)
----------------------------------------------------------------------
Income (loss) before minority
interest and income taxes (65,928) (51,775) 42,113
Minority interest in loss of
subsidiary 46,853 16,831 5,351
Provision (benefit) for income taxes (1,652) (4,981) 2,373
----------------------------------------------------------------------
Net income (loss) (17,423) (29,963) 45,091
----------------------------------------------------------------------
Net income (loss) per common share
Basic $ (0.04) $ (0.08) $ 0.13
Diluted $ (0.04) $ (0.08) $ 0.12
----------------------------------------------------------------------
Shares used in per share calculation
-- Basic 393,077 375,308 351,328
-- Diluted 393,077 375,308 417,963
Advanced Micro Devices, Inc.
----------------------------------------------------------------------
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
(Thousands)
----------------------------------------------------------------------
Quarter Ended
----------------------------------------------------------------------
Mar. 27, Dec. 26, Mar. 28,
2005 2004 2004
(Unaudited)(Unaudited)(Unaudited)
----------------------------------------------------------------------
Net income (loss) $(17,423) $(29,963) $ 45,091
Depreciation and amortization 332,881 329,148 297,980
Interest income (6,885) (6,397) (3,674)
Interest expense 24,245 29,070 30,154
Provision (benefit) for income taxes (1,652) (4,981) 2,373
----------------------------------------------------------------------
EBITDA $331,166 $316,877 $371,924
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
Mar. 27, Dec. 26,
2005 2004(a)
----------------------------------------------------------------------
(unaudited)
Assets
Current assets:
Cash, cash equivalents and short-term
investments $1,084,809 $1,195,559
Accounts receivable, net 698,308 719,572
Inventories 846,152 874,790
Prepaid expenses and other current assets 421,706 350,240
Deferred income taxes 76,499 87,836
----------------------------------------------------------------------
Total current assets 3,127,474 3,227,997
Property, plant and equipment, net 4,316,548 4,233,807
Other assets 377,752 382,406
----------------------------------------------------------------------
Total Assets $7,821,774 $7,844,210
======================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $710,597 $655,123
Accrued compensation and benefits 189,072 191,431
Accrued liabilities 444,144 445,341
Restructuring accruals 18,997 18,997
Income taxes payable 19,779 47,145
Deferred income on shipments to distributors 144,590 141,738
Current portion of long-term debt and capital
lease obligations 248,085 230,828
Other current liabilities 128,210 115,773
----------------------------------------------------------------------
Total current liabilities 1,903,474 1,846,376
Deferred income taxes 85,209 104,246
Long-term debt and capital lease obligations 1,622,046 1,628,268
Other long-term liabilities 488,036 414,626
Minority interest in subsidiary 788,313 840,641
Stockholders' equity:
Capital stock:
Common stock, par value 3,945 3,917
Capital in excess of par value 2,352,133 2,316,669
Retained earnings 290,916 308,497
Accumulated other comprehensive income 287,702 380,970
----------------------------------------------------------------------
Total stockholders' equity 2,934,696 3,010,053
----------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $7,821,774 $7,844,210
======================================================================
(a) Derived from the December 26, 2004 audited financial statements of
Advanced Micro Devices, Inc.
AMD
Selected Corporate Data
(Unaudited)
Quarter Ended
----------------------------------------------------------------------
Mar. 27, Dec. 26, Mar. 28,
Segment Information 2005 2004 2004
----------------------------------------------------------------------
Computation Products (1)
Revenue $ 750 M $ 730 M $ 571 M
Operating Income (Loss) 92 M 89 M 67 M
Memory Products (2)
Revenue 447 M 504 M 628 M
Operating Income (Loss) (110)M (39)M 14 M
Personal Connectivity Solutions
Products (3)
Revenue 30 M 30 M 38 M
Operating Income (Loss) (17)M (20)M (7)M
All Other (4)
Revenue 0 M 0 M 0 M
Operating Income (Loss) (10)M (9)M (13)M
Total AMD
Revenue 1,227 M 1,264 M 1,236 M
Operating Income (Loss) (46)M 20 M 61 M
======================================================================
Mar. 27, Dec. 26, Mar. 28,
Other Data 2005 2004 2004
----------------------------------------------------------------------
Depreciation & Amortization $ 333 M $ 329 M $ 298 M
Capital Additions $ 518 M $ 470 M $ 202 M
Headcount 16,144 15,894 14,370
---------------------------------------------------------------------
International Sales 78% 78% 82%
Research and Development $ 253 M $ 253 M $ 226 M
EBITDA $ 331 M $ 317 M $ 372 M
-------------------------------------------------------------------
(1) Computation Products segment includes PC processors and Chipsets.
(2) Memory Products segment includes Flash memory products of AMD and
Spansion LLC.
(3) The Personal Connectivity Solution Products segment includes
Embedded Processors and Products for global commercial and
consumer markets.
(4) The All Other category includes certain operating expenses and
credits that are not allocated to the operating segments.
Note: Figures may not foot due to rounding
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