SUNNYVALE, CA, Apr 21, 2011 (MARKETWIRE via COMTEX) --
AMD (NYSE: AMD)
-- AMD revenue $1.61 billion, 2 percent sequential decrease and 2 percent
increase year-over-year
-- Net income $510 million, earnings per share $0.68, operating income
$54 million
-- Non-GAAP(1),(2) net income $56 million, earnings per share $0.08,
operating income $92 million
-- Gross margin 43 percent, non-GAAP gross margin 45 percent
AMD (NYSE: AMD) today announced revenue for the first quarter of 2011
of $1.61 billion, net income of $510 million, or $0.68 per share, and
operating income of $54 million. The company reported non-GAAP net
income of $56 million, or $0.08 per share, and non-GAAP operating
income of $92 million.
"First quarter operating results were highlighted by strong demand
for our first generation of AMD Fusion Accelerated Processing Units
(APUs)," said Thomas Seifert, CFO and interim CEO. "APU unit
shipments greatly exceeded our expectations, and we are excited to
build on that momentum now that we are shipping our 'Llano' APU."
GAAP Financial Results
Q1-11 Q4-10 Q1-10
----------- ----------- -----------
Revenue $1.61B $1.65B $1.57B
Operating income $54M $413M $182M
Net income / Earnings per share $510M/$0.68 $375M/$0.50 $257M/$0.35
Non-GAAP Financial Results(1)
Q1-11 Q4-10 Q1-10
----------- ----------- -----------
Revenue $1.61B $1.65B $1.57B
Operating income $92M $141M $130M
Net income / Earnings per share $56M/$0.08 $106M/$0.14 $63M/$0.09
Quarterly Summary
-- Gross margin was 43 percent.
-- Non-GAAP gross margin was 45 percent, flat sequentially.
-- Cash, cash equivalents and marketable securities balance at the end of
the quarter was $1.75 billion.
-- Computing Solutions segment revenue decreased 2 percent sequentially
and increased 3 percent year-over-year. The sequential decrease was
driven primarily by lower average selling price (ASP) partially offset
by higher desktop microprocessor sales. The year-over-year increase
was primarily driven by strong microprocessor unit sales in the
channel.
-- Operating income was $100 million, compared with $91 million in
Q410 and $146 million in Q110.
-- Microprocessor ASP decreased sequentially and year-over-year.
-- AMD commenced revenue shipments of AMD's first Fusion APU for
mainstream notebooks (codenamed "Llano") that combines
discrete-class graphics capabilities, personal supercomputing
performance and AMD AllDay(TM) power.
-- Acer, Asus, Dell, Fujitsu, HP, Lenovo, MSI, Sony and Toshiba
shipped sleek new thin-and-light notebooks based on AMD's
low-power APUs capable of delivering high definition visual
experiences and extended battery life.
-- More than 50 applications from software companies including Adobe,
ArcSoft, Corel, CyberLink and Microsoft take advantage of the
incredible compute power found in AMD's APUs and GPUs to
dramatically improve application performance and power efficiency.
-- AMD launched the world's first APU specifically designed for
embedded systems with a record number of embedded partners for the
company. Fujitsu, Kontron, Quixant and Congatec announced
APU-based solutions for graphics-intensive markets like digital
signage, Internet-ready set top boxes, casino gaming machines and
point-of-sale kiosks. Acer, Cray, Dell, HP, SGI and other server
manufacturers launched new or updated systems based on five newly
introduced AMD Opteron(TM) 6100 series processors.
-- In the high performance computing market (HPC), AMD Opteron-based
solutions continue to gain traction based on their greater
scalability. New customer wins include Lockheed Martin's cluster
for the US Department of Defense, and the University of Sao
Paulo's cluster to enable advanced scientific astronomical
research.
-- AMD expanded its enthusiast desktop offerings with the
introduction of its fastest four-core processor, the AMD
Phenom(TM) II X4 975 Black Edition.
-- Graphics segment revenue decreased 3 percent sequentially and was flat
year-over-year. The sequential decrease was driven primarily by a
seasonal decline in royalties received in connection with the sale of
game console systems.
-- Operating income was $19 million, compared with $68 million in
Q410 and $47 million in Q110.
-- GPU ASP decreased sequentially and year-over-year.
-- AMD maintained its graphics performance leadership position with
the launch of the world's fastest graphics card, the AMD
Radeon(TM) HD 6990.
-- Apple refreshed its Macbook Pro line-up with the new AMD Radeon HD
6490M and HD 6750M graphics chips. AMD now provides discrete
graphics solutions across Apple's iMac and Macbook Pro product
lines.
-- Strong industry adoption of AMD's mobile graphics continued, as HP
and Dell launched new designs powered by the new AMD Radeon(TM)
HD6000M family of graphics processors.
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
and the factors set forth under "Cautionary Statement" below.
AMD expects revenue to be flat to slightly down sequentially for the
second quarter of 2011.
For additional detail regarding AMD's results and outlook please see
the CFO commentary posted at quarterlyearnings.amd.com.
AMD Teleconference
AMD will hold a conference call for the financial
community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its first
quarter financial results. AMD will provide a real-time audio
broadcast of the teleconference on the Investor Relations page of its
Web site at AMD. The webcast will be available for 10 days after the
conference call.
Reconciliation of GAAP to Non-GAAP Net Income(1),(3)
(Millions except per share
amounts) Q1-11 Q4-10 Q1-10
------------- ------------- -------------
GAAP net income / Earnings
per share $ 510 $ 0.68 $ 375 $ 0.50 $ 257 $ 0.35
Gross margin benefit due to
deconsolidation of
GLOBALFOUNDRIES - - - - 69 0.09
Gain on the fair value
assessment of investment
in GLOBALFOUNDRIES - - - - 325 0.45
Equity income (loss) and
dilution gain in
investee, net 492 0.66 27 0.05 (183) (0.25)
Payment to GLOBALFOUNDRIES (24) (0.03) - - - -
Non-GAAP net income excluding
GLOBALFOUNDRIES related items 42 0.06 348 0.47 46 0.06
Amortization of acquired
intangible assets (9) (0.01) (11) (0.01) (17) (0.02)
Legal settlements (5) (0.01) 283 0.39 - -
Income tax related to
legal settlements - - (47) (0.06) - -
Gain on investment sale - - 17 0.02 - -
Non-GAAP net income / Earnings
per share $ 56 $ 0.08 $ 106 $ 0.14 $ 63 $ 0.09
Reconciliation of GAAP to Non-GAAP Operating Income(1),(3)
(Millions) Q1-11 Q4-10 Q1-10
----- ----- -----
GAAP operating income $ 54 $ 413 $ 182
Payment to GLOBALFOUNDRIES (24) - -
Gross margin benefit due to deconsolidation
of GLOBALFOUNDRIES - - 69
Amortization of acquired intangible assets (9) (11) (17)
Legal settlements (5) 283 -
Non-GAAP operating income $ 92 $ 141 $ 130
Reconciliation of GAAP to Non-GAAP Gross Margin(1),(3)
(Millions except percentages) Q1-11 Q4-10 Q1-10
----- ----- -----
GAAP Gross Margin $ 691 $ 743 $ 741
GAAP Gross Margin % 43% 45% 47%
Gross margin benefit due to deconsolidation
of GLOBALFOUNDRIES - - 69
Legal settlements (5) - -
Payment to GLOBALFOUNDRIES (24) - -
Non-GAAP Gross Margin $ 720 $ 743 $ 672
Non-GAAP Gross Margin % 45% 45% 43%
About AMD
AMD (NYSE: AMD) is a semiconductor design innovator leading
the next era of vivid digital experiences with its groundbreaking AMD
Fusion Accelerated Processing Units (APUs) that power a wide range of
computing devices. AMD's server computing products are focused on
driving industry-leading cloud computing and virtualization
environments. AMD's superior graphics technologies are found in a
variety of solutions ranging from game consoles, PCs to
supercomputers. For more information, visit http://www.amd.com.
Cautionary Statement
This release contains forward-looking
statements concerning AMD, its second quarter 2011 revenue and demand
for the Company's products, which are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are commonly identified by words
such as "would," "may," "expects," "believes," "plans," "intends,"
"projects," and other terms with similar meaning. Investors are
cautioned that the forward-looking statements in this release are
based on current beliefs, assumptions and expectations, speak only as
of the date of this release and involve risks and uncertainties that
could cause actual results to differ materially from current
expectations. Risks include the possibility that Intel Corporation's
pricing, marketing and rebating programs, product bundling, standard
setting, new product introductions or other activities targeting the
company's business will prevent attainment of the company's current
plans; the company will be unable to develop, launch and ramp new
products and technologies in the volumes and mix required by the
market and at mature yields on a timely basis; GLOBALFOUNDRIES will
be unable to manufacture the company's products on a timely basis in
sufficient quantities and using competitive technologies; the company
will be unable to obtain sufficient manufacturing capacity or
components to meet demand for its products or will under-utilize its
commitment with respect to GLOBALFOUNDRIES' microprocessor
manufacturing facilities; the recent earthquake and tsunami in Japan
may have significant impacts on the company's supply chain or its
customers; the company will be unable to transition its products to
advanced manufacturing process technologies in a timely and effective
way; global business and economic conditions will not continue to
improve or will worsen resulting in lower than currently expected
demand; demand for computers and consumer electronics products and,
in turn, demand for the company's products will be lower than
currently expected; customers stop buying the company's products or
materially reduce their demand for its products; the company will
require additional funding and may not be able to raise funds on
favorable terms or at all; there will be unexpected variations in
market growth and demand for the company's products and technologies
in light of the product mix that it may have available at any
particular time or a decline in demand; and the company will be
unable to maintain the level of investment in research and
development that is required to remain competitive. Investors are
urged 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 for the year ended
December 25, 2010.
AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon, and combinations
thereof, and are trademarks of Advanced Micro Devices, Inc. Other
names are for informational purposes only and used to identify
companies and products and may be trademarks of their respective
owner.
(1) In this press release, in addition to GAAP financial results, the
Company has provided non-GAAP financial measures, including for
non-GAAP net income excluding GLOBALFOUNDRIES related items, non-GAAP
net income, non-GAAP operating income, non-GAAP earnings per share
and non-GAAP gross margin. These non-GAAP financial measures reflect
certain adjustments as presented in the tables in this press release.
The Company also provided Adjusted EBITDA and non-GAAP Adjusted free
cash flow as supplemental measures of its performance. These items
are defined in the footnotes to the selected corporate data tables
provided at the end of this press release. The Company is providing
these financial measures because it believes this non- GAAP
presentation makes it easier for investors to compare its operating
results for current and historical periods and also because the
Company believes it assists investors in comparing the Company's
performance across reporting periods on a consistent basis by
excluding items that it does not believe are indicative of its core
operating performance and for the other reasons described in the
footnotes to the selected data tables.
(2) For the year 2010, the Company accounted for its investment in
GLOBALFOUNDRIES under the equity method of accounting. Starting in
the first quarter of 2011, the Company started accounting for its
investment in GLOBALFOUNDRIES under the cost method of accounting.
(3) Refer to corresponding tables at the end of this press release
for additional AMD data.
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages)
Quarter Ended
-------------------------------
Apr. 2, Dec. 25, Mar. 27,
2011 2010 2010
--------- --------- ---------
Net revenue $ 1,613 $ 1,649 $ 1,574
Cost of sales 922 906 833
--------- --------- ---------
Gross margin 691 743 741
Gross margin % 43% 45% 47%
Research and development 367 352 323
Marketing, general and administrative 261 250 219
Legal settlement - (283) -
Amortization of acquired intangible assets 9 11 17
--------- --------- ---------
Operating income 54 413 182
Interest income 3 2 3
Interest expense (48) (39) (49)
Other income (expense), net 11 14 304
--------- --------- ---------
Income before equity income (loss) and
dilution gain in investee and income
taxes 20 390 440
Provision for income taxes 2 42 -
Equity income (loss) and dilution gain in
investee, net 492 27 (183)
--------- --------- ---------
Net income $ 510 $ 375 $ 257
--------- --------- ---------
Net income per common share
Basic $ 0.71 $ 0.52 $ 0.36
Diluted $ 0.68 $ 0.50 $ 0.35
--------- --------- ---------
Shares used in per share calculation
Basic 720 717 707
Diluted 764 758 754
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED BALANCE SHEETS
(Millions)
Apr. 2, Dec. 25,
2011 2010
--------- ---------
Assets
Current assets:
Cash, cash equivalents and marketable securities $ 1,745 $ 1,789
Accounts receivable, net 797 968
Inventories, net 648 632
Prepaid expenses and other current assets 221 205
--------- ---------
Total current assets 3,411 3,594
Property, plant and equipment, net 676 700
Investment in GLOBALFOUNDRIES 486 -
Acquisition related intangible assets, net 28 37
Goodwill 323 323
Other assets 285 310
--------- ---------
Total Assets $ 5,209 $ 4,964
--------- ---------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 411 $ 376
Accounts payable to GLOBALFOUNDRIES 127 205
Accrued liabilities 605 698
Deferred income on shipments to distributors 165 143
Other short-term obligations 34 229
Current portion of long-term debt and capital
lease obligations 4 4
Other current liabilities 29 19
--------- ---------
Total current liabilities 1,375 1,674
Long-term debt and capital lease obligations, less
current portion 2,192 2,188
Other long-term liabilities 84 82
Accumulated loss in excess of investment in
GLOBALFOUNDRIES - 7
Stockholders' equity:
Capital stock:
Common stock, par value 7 7
Additional paid-in capital 6,611 6,575
Treasury stock, at cost (104) (102)
Accumulated deficit (4,958) (5,468)
Accumulated other comprehensive income 2 1
--------- ---------
Total stockholders' equity 1,558 1,013
--------- ---------
Total Liabilities and Stockholders' Equity $ 5,209 $ 4,964
--------- ---------
ADVANCED MICRO DEVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Quarter
Ended
---------
Apr. 2,
2011
---------
Cash flows from operating activities:
Net income $ 510
Adjustments to reconcile net income to net cash used in
operating activities:
Equity income (loss) and dilution gain in investee (492)
Depreciation and amortization 88
Compensation recognized under employee stock plans 27
Non-cash interest expense 5
Provision (benefit) for deferred income taxes 9
Other 11
Changes in operating assets and liabilities:
Accounts receivable (195)
Inventories (16)
Prepaid expenses and other current assets (11)
Other assets 10
Accounts payable to GLOBALFOUNDRIES (78)
Accounts payable, accrued liabilities and other (36)
---------
Net cash used in operating activities (168)
---------
Cash flows from investing activities:
Purchases of property, plant and equipment (38)
Purchases of available-for-sale securities (393)
Proceeds from sale and maturity of available-for-sale
securities 434
Other (17)
---------
Net cash used in investing activities (14)
---------
Cash flows from financing activities:
Proceeds from borrowings, net of issuance cost 165
Net proceeds from foreign grants 7
Proceeds from issuance of common stock 9
Repayments of debt and capital lease obligations (1)
Other (2)
---------
Net cash provided by financing activities 178
---------
Net decrease in cash and cash equivalents (4)
---------
Cash and cash equivalents at beginning of period 606
---------
Cash and cash equivalents at end of period $ 602
---------
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions except headcount)
Quarter Ended
-------------------------------
Apr. 2, Dec. 25, Mar. 27,
Segment and Category Information 2011 2010 2010
--------- ---------- ---------
Computing Solutions (1)
Net revenue $ 1,200 $ 1,219 $ 1,160
Operating income $ 100 $ 91 $ 146
Graphics (2)
Net revenue 413 424 409
Operating income 19 68 47
All Other (3)
Net revenue - 6 5
Operating income (loss) (65) 254 (11)
Total
Net revenue $ 1,613 $ 1,649 $ 1,574
Operating income $ 54 $ 413 $ 182
--------- ---------- ---------
Other Data
Depreciation and amortization
(excluding amortization of
acquired intangible assets) $ 79 $ 78 $ 83
Capital additions $ 38 $ 38 $ 48
Adjusted EBITDA (4) $ 198 $ 241 $ 302
Cash, cash equivalents and marketable
securities $ 1,745 $ 1,789 $ 1,932
Adjusted free cash flow (5) $ 154 $ 11 $ 177
Total assets $ 5,209 $ 4,964 $ 5,232
Long-term debt and capital lease
obligations, including the current
portion $ 2,196 $ 2,192 $ 2,604
Headcount 11,256 11,068 10,365
(1) Computing Solutions segment includes microprocessors, chipsets and
embedded processors.
(2) Graphics segment includes graphics, video and multimedia products
developed for use in desktop and notebook computers, including home
media PCs, professional workstations, servers and also includes
royalties received in connection with the sale of game console
systems that incorporate the Company's graphics technology.
(3) All Other category includes certain operating expenses and credits
that are not allocated to the operating segments. Also included in
this category are amortization of acquired intangible assets and
restructuring charges. It also includes the results of the Handheld
business unit because the operating results of this business unit
were not material.
(4) AMD reconciliation of GAAP operating income to Adjusted EBITDA*
Quarter Ended
-------------------------------
Apr. 2, Dec. 25, Mar. 27,
2011 2010 2010
--------- --------- ---------
GAAP operating income $ 54 $ 413 $ 182
Payment to GLOBALFOUNDRIES 24 - -
Legal settlement 5 (283) -
Depreciation and amortization 79 78 83
Employee stock-based compensation
expense 27 22 20
Amortization of acquired intangible
assets 9 11 17
--------- --------- ---------
Adjusted EBITDA $ 198 $ 241 $ 302
--------- --------- ---------
(5) Non-GAAP adjusted free cash flow reconciliation**
Quarter Ended
-------------------------------
Apr. 2, Dec. 25, Mar. 27,
2011 2010 2010
--------- --------- ---------
GAAP net cash provided by (used in)
operating activities $ (168) $ (213) $ 23
Non-GAAP adjustment 360 262 202
--------- --------- ---------
Non-GAAP net cash provided by
operating activities 192 49 225
Purchases of property, plant and
equipment (38) (38) (48)
--------- --------- ---------
Non-GAAP adjusted free Cash Flow $ 154 $ 11 $ 177
--------- --------- ---------
* Starting with the quarter ended December 26, 2009, the Company
presented "Adjusted EBITDA" as a supplemental measure of its
performance. Adjusted EBITDA for the Company was determined by
adjusting operating income (loss) for depreciation and amortization,
employee stock-based compensation expense and amortization of
acquired intangible assets. In addition, for the first quarter of
2011, the Company included an adjustment related to a payment to
GLOBALFOUNDRIES and a legal settlement with a third party; and for
the fourth quarter of 2010, the Company included an adjustment
related to its legal settlement with a third party. The Company
calculates and communicates Adjusted EBITDA in the financial schedules
because the Company's management believes it is of importance to
investors and lenders in relation to its overall capital structure
and its ability to borrow additional funds. In addition, the Company
presents Adjusted EBITDA because it believes this measure assists
investors in comparing its performance across reporting periods on a
consistent basis by excluding items that the Company does not believe
are indicative of its core operating performance. The Company's
calculation of Adjusted EBITDA may or may not be consistent with the
calculation of this measure by other companies in the same industry.
Investors should not view Adjusted EBITDA as an alternative to the
GAAP operating measure of operating income (loss) or GAAP liquidity
measures of cash flows from operating, investing and financing
activities. In addition, Adjusted EBITDA does not take into account
changes in certain assets and liabilities as well as interest and
income taxes that can affect cash flows.
** Starting in the first quarter of 2010, the Company presents
non-GAAP adjusted free cash flow as a supplemental measure of its
performance. In 2008 and 2009 the Company and certain of its
subsidiaries (collectively, the "AMD Parties") entered into supplier
agreements with IBM Credit LLC and certain of its subsidiaries,
(collectively, the "IBM Parties"). Pursuant to these supplier
agreements, the AMD Parties sold to the IBM Parties invoices of
selected distributor customers. Because the Company does not
recognize revenue until its distributors sell its products to their
customers, under U.S. GAAP, the Company classifies funds received
from the IBM Parties as debt on the balance sheet. Moreover, for cash
flow purposes, these funds are classified as cash flows from
financing activities. When a distributor pays the applicable
IBM Party, the Company reduces the distributor's accounts receivable
and the corresponding debt resulting in a non-cash accounting entry.
Because the Company does not receive the cash from the distributor
to reduce the accounts receivable, the distributor's payment is never
reflected in the Company's cash flows from operating activities.
Non-GAAP adjusted free cash flow for the Company was determined by
adjusting GAAP net cash provided by (used in) operating activities
by adding the distributors' payments to the IBM Parties to GAAP net
cash provided by (used in) operating activities. This amount is then
further adjusted by subtracting capital expenditures. Generally,
under U.S. GAAP, the reduction in accounts receivable is assumed
to be a source of operating cash flows. Therefore, the Company
believes that treating the payments from its distributor customers
to the IBM Parties as if the Company actually received the cash from
the distributor and then used that cash to pay down the debt is more
reflective of the economic substance of the transaction. On February
11, 2011, the Company terminated its supplier agreements with the
IBM Parties. The Company calculates and communicates non-GAAP
adjusted free cash flow in the financial schedules because the
Company's management believes it is of importance to investors to
understand the nature of these cash flows. The Company's calculation
of non-GAAP Adjusted free cash flow may or may not be consistent with
the calculation of this measure by other companies in the same
industry. Investors should not view non-GAAP Adjusted Free Cash Flow
as an alternative to GAAP liquidity measures of cash flows from
operating or financing activities.
Media Contact
Drew Prairie
512-602-4425
Email Contact
Investor Contact
Ruth Cotter
408-749-3887
Email Contact
SOURCE: Advanced Micro Devices
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