AMD Reports Second Quarter Results
Financial Statements AMD Selected Corporate Data
SUNNYVALE, CA --
AMD today reported that the one-time, after-tax gain from the sale of Vantis Corporation offset a substantial operating loss in the just-completed quarter. AMD reported sales of $595,109,000 and net income of $79,896,000, or $0.53 per diluted share, for the second quarter, ended June 27, 1999. The results reflected an operating loss of $173 million, a one-time, after-tax gain of $259 million from the sale of Vantis, the company's programmable logic subsidiary, and restructuring and other special charges of $17.5 million. Excluding the one-time gain from the sale of Vantis and the restructuring and other special charges would result in a net loss of $162 million, or $1.10 per share.
Sales declined by 6 percent from the immediate-prior quarter, while increasing by 13 percent from the second quarter of 1998. The sale of Vantis was concluded on June 15, 1999, and therefore results from the second quarter include only 11 weeks of sales from Vantis Corporation. In the first quarter of 1999, AMD reported sales of $631,593,000, which resulted in a net loss of $128,367,000, or $0.88 per share, including restructuring and other special charges. In the second quarter of 1998, AMD reported sales of $526,538,000, and a net loss of $64,560,000, or $0.45 per share.
For the first six months of 1999, AMD reported total sales of $1,226,702,000 and a net loss of $48,471,000, or a loss of $0.33 per share, including the gain on the sale of Vantis and restructuring and other special charges. For the same period a year ago, AMD reported total sales of $1,067,394,000 and a net loss of $127,287,000, or $0.89 per share.
As the company forecasted several weeks ago, AMD reported sales of 3.7 million AMD-K6™ family processors, down from 4.3 million units in the immediate-prior quarter. Average selling prices for AMD-K6 family processors declined to $67 versus $78 in the first quarter of 1999.
Sales from the company's non-microprocessor product lines increased by 16 percent from the immediate-prior quarter, led by strong sales of flash memory products, driven by demand from cellular telephone customers.
"With the resumption of growth from our memory and communications product lines, AMD's challenge is clear," said W.J. Sanders III, chairman and chief executive officer. "In the face of Intel's intensifying aggression in the consumer sector of the PC market, where our AMD-K6-2 processor family with 3DNow!™ technology has achieved substantial market share in both desktop and portable PCs, further gains in unit market share or revenue growth are unlikely.
"The key to resuming growth and expanding margins is the recently introduced AMD Athlon™ processor. The world's first seventh-generation processor for Microsoft™ Windows™ computing is the highest-performance processor for PCs available today. Initial shipments of AMD Athlon™ processors, including 600-megahertz versions, commenced in June. We are encouraged by early customer reaction to the AMD Athlon™ processor," Sanders concluded
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are generally preceded by words such as "expects," "plans," "believes," "anticipates," or "intends." Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. Forward-looking statements in this release regarding the AMD Athlon™ processor involve the risk that the company will not be able to produce the processor in the volume required by customers on a timely basis; that AMD and third parties may not provide timely infrastructure solutions (motherboards and chipsets) to support the processor; that the processor will not achieve customer and market acceptance; and that the company will not be able to maintain average selling prices because of Intel's competitive reaction to this new product. We urge investors to review in detail the risks and uncertainties detailed in the company's Securities and Exchange Commission filings, including the most recently filed Form-10K.