Form: 8-K

Current report filing

June 30, 1999

Documents

8-K: Current report filing

Published on June 30, 1999



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934


Date of Report (date of earliest event reported): June 15, 1999


ADVANCED MICRO DEVICES, INC.
----------------------------
(Exact name of registrant as specified in its charter)

DELAWARE 1-7882 94-1692300
-------- ------ ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)

One AMD Place,
P.O. Box 3453
Sunnyvale, California 94088-3453
--------------------- ----------
(address of principal executive offices) (Zip Code)


Registrant's telephone number,
including area code: (408) 732-2400
--------------

Page 1 of 8

Item 2. Acquisition or Disposition of Assets
- ------- ------------------------------------

On June 15, 1999, Advanced Micro Devices, Inc. (the "Company" or "AMD")
announced the completion of the sale of Vantis Corporation ("Vantis"), a wholly
owned subsidiary of AMD, to Lattice Semiconductor Corporation. Vantis develops
and markets complex and simple, high performance, complementary metal oxide
semiconductor programmable logic devices ("PLDs"). AMD received, net of cash and
short-term investments of approximately $62 million held by Vantis,
approximately $438 million in cash. AMD's preliminary gain on the sale of Vantis
of approximately $436 million, subject to adjustment (if any) based on the final
determination of the net asset value of Vantis at June 15, 1999, will be
recorded in its second quarter ended June 27, 1999. The full text of the press
release relating to the completion of the sale of Vantis is set forth in Exhibit
99 attached hereto and is incorporated in this report as if fully set forth
herein.


Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ------- ------------------------------------------------------------------

(b) Pro Forma Financial Information

On June 15, 1999, AMD announced the completion of the sale of Vantis
to Lattice Semiconductor Corporation. Vantis develops and markets complex and
simple, high performance, complementary metal oxide semiconductor PLDs. AMD
received, net of cash and short-term investments of approximately $62 million
held by Vantis, approximately $438 million in cash. AMD's preliminary gain on
the sale of Vantis of approximately $436 million, subject to adjustment (if any)
based on the final determination of the net asset value of Vantis at June 15,
1999, will be recorded in its second quarter ended June 27, 1999. The full text
of the press release relating to the completion of the sale of Vantis is set
forth in Exhibit 99 attached hereto and is incorporated in this report as if
fully set forth herein.

The following unaudited pro forma condensed consolidated financial
statements present financial information for AMD giving effect to the sale of
Vantis, which was consummated on June 15, 1999. The unaudited pro forma
condensed consolidated balance sheet as of March 28, 1999 is presented as if the
sale had occurred as of that date. The unaudited pro forma condensed
consolidated statements of operations for the quarterly period ended March 28,
1999 and the fiscal year ended December 27, 1998 are presented as if the sale
had occurred at the beginning of the earliest period presented.

The pro forma condensed consolidated financial statements should be read in
conjunction with AMD's unaudited condensed consolidated financial statements and
notes thereto included in the Company's quarterly report on Form 10-Q for the
period ended March 28, 1999 and the audited and consolidated financial
statements and notes thereto incorporated by reference in the Company's annual
report on Form 10-K for the fiscal year ended December 27, 1998. The pro forma
information may not necessarily be indicative of what the Company's results of
operations or financial position would have been had the transaction been in
effect as of and for the periods presented, nor is such information necessarily
indicative of the Company's results of operations or financial position for any
future period or date.

2


ADVANCED MICRO DEVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Thousands)



March 28, 1999
--------------------------------------------------------
Business to be Pro forma
Assets Historical disposed adjustment Pro forma
- ------ ----------- ----------- ---------- -----------

Current assets:
Cash, cash equivalents and short-term investments $ 489,145 $ (76,864) $ 514,772 [A] $ 927,053
Accounts receivable, net 376,360 (24,351) 28,060 [B] 380,069
Inventories:
Raw materials 14,689 -- -- 14,689
Work-in-process 132,516 (5,440) -- 127,076
Finished goods 35,465 (2,906) -- 32,559
----------- ----------- --------- -----------
Total inventories 182,670 (8,346) -- 174,324
Deferred income taxes 206,745 (16,605) (160,103)[C] 30,037
Prepaid expenses and other current assets 73,701 (13,595) -- 60,106
----------- ----------- -----------
Total current assets 1,328,621 (139,761) -- 1,571,589
Property, plant and equipment, at cost 4,771,052 (34,591) -- 4,736,461
Accumulated depreciation and amortization (2,197,561) 28,215 -- (2,169,346)
----------- ----------- -----------
Property, plant and equipment, net 2,573,491 (6,376) 2,567,115
Investment in joint venture 232,313 -- -- 232,313
Other Assets 171,068 (6,198) -- 164,870
----------- ----------- -----------
$ 4,305,493 $(152,335) $ 4,535,887
=========== =========== ===========
Liabilities and Stockholders' Equity
- ------------------------------------

Current liabilities:
Notes payable to banks $ 5,941 $ -- -- $ 5,941
Accounts payable 343,980 (45,497) $ 28,060 [B] 326,543
Accrued compensation and benefits 81,451 (4,383) -- 77,068
Accrued liabilities 133,468 (5,557) -- 127,911
Income tax payable 21,610 (4,712) -- 16,898
Deferred income on shipments to distributors 102,503 (29,096) -- 73,407
Current portion of long-term debt, capital lease
obligations and other 174,663 (2,000) -- 172,663
----------- ----------- -----------
Total current liabilities 863,616 (91,245) 800,431

Deferred income taxes 28,226 (49) -- 28,177
Long-term debt, capital lease obligations and other,
less current portion 1,539,957 (1,250) -- 1,538,707

Commitments and contingencies

Stockholders' equity:
Capital stock:
Common stock, par value 1,478 (442) 447 [A] 1,483
Capital in excess of par value 1,080,729 (33,006) 3,959 [A] 1,051,682
Retained earnings 833,804 (26,303) 350,263 [A] 1,157,764
Accumulated other comprehensive loss (42,317) (40) -- (42,357)
----------- ----------- -----------
Total stockholders' equity 1,873,694 (59,791) 2,168,572
----------- ----------- -----------
$ 4,305,493 $(152,335) $ 4,535,887
=========== =========== ===========


3

ADVANCED MICRO DEVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Thousands except per share amounts)


Quarter ended March 28, 1999
------------------------------------------------------
Historical Business to be Pro forma Pro forma
disposed adjustment
---------- ---------- ---------- ----------

Net sales $ 631,593 $ (47,157) $ 17,176 [B] $ 601,612

Expenses:
Cost of sales 450,431 (20,394) 17,176 [B] 447,213
Research and development 159,946 (8,245) - 151,701
Marketing, general and administrative 127,310 (12,150) - 115,160
Restructuring and other special charges 15,016 -- - 15,016
---------- ---------- ---------- ----------
752,703 (40,789) 17,176 729,090
---------- ---------- ---------- ----------

Operating loss (121,110) (6,368) - (127,478)

Interest income and other, net 10,768 (1,190) - 9,578
Interest expense (20,763) -- - (20,763)
---------- ---------- ---------- ----------

Loss before income taxes and equity in joint venture (131,105) (7,558) - (138,663)
Benefit for income taxes (5,473) (2,761) - (8,234)
---------- ---------- ---------- ----------

Loss before equity in joint venture (125,632) (4,797) - (130,429)
Equity in net loss of joint venture (2,735) -- - (2,735)
---------- ---------- ---------- ----------

Net loss $ (128,367) $ (4,797) $ - $ (133,164)
========== ========== ========== ==========
Net loss per common share:
Basic $ (0.88) $ (0.91)
========== ==========
Diluted $ (0.88) $ (0.91)
========== ==========
Shares used in per share calculation:
Basic 145,909 145,909
========== ==========
Diluted 145,909 145,909
========== ==========


4

ADVANCED MICRO DEVICES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Thousands except per share amounts)


Fiscal year ended December 27, 1998
------------------------------------------------------
Historical Business to be Pro forma Pro forma
disposed adjustment
---------- ---------- ---------- ----------

Net sales $2,542,141 $ (204,997) $ 88,455 [B] $2,425,599

Expenses:
Cost of sales 1,718,703 (101,442) 88,455 [B] 1,705,716
Research and development 567,402 (35,616) - 531,786
Marketing, general and administrative 419,678 (46,339) - 373,339
---------- ---------- ---------- ----------
2,705,783 (183,397) 88,455 2,610,841
---------- ---------- ---------- ----------

Operating loss (163,642) (21,600) - (185,242)

Litigation settlement (11,500) - - (11,500)
Interest income and other, net 34,207 (4,419) - 29,788
Interest expense (66,494) - - (66,494)
---------- ---------- ---------- ----------

Loss before income taxes and equity in joint venture (207,429) (26,019) - (233,448)
Benefit for income taxes (91,878) (8,807) - (100,685)
---------- ---------- ---------- ----------

Loss before equity in joint venture (115,551) (17,212) - (132,763)
Equity in net income of joint venture 11,591 - - 11,591
---------- ---------- ---------- ----------

Net loss $ (103,960) $ (17,212) $ - $ (121,172)
========== ========== ========== ==========
Net loss per common share:
Basic $ (0.72) $ (0.84)
========== ==========
Diluted $ (0.72) $ (0.84)
========== ==========
Shares used in per share calculation:
Basic 143,668 143,668
========== ==========
Diluted 143,668 143,668
========== ==========


5


Notes to Pro Forma Condensed Consolidated Financial Statements

1. Basis of Presentation

The following unaudited pro forma condensed consolidated financial
statements present financial information for the Company giving effect to the
sale of Vantis, which was consummated on June 15, 1999. The unaudited pro
forma condensed consolidated balance sheet as of March 28, 1999 is presented
as if the sale had occurred as of that date. The unaudited pro forma condensed
consolidated statements of operations for the three month period ended March
28, 1999 and for the fiscal year ended December 27, 1998 are presented as if
the sale had occurred at the beginning of the earliest period presented.

2. Unaudited Pro Forma Consolidated Financial Adjustments

[A] Reflects the sale of the Company's wholly owned subsidiary, to Lattice
Semiconductor Corporation ("Lattice") for total cash proceeds of $500,080,000
net of $62,172,000, which represents Vantis' cash and short-term investment
balance as of June 15, 1999. Included in pro forma retained earnings at March
28, 1999 is the resulting estimated gain to be recognized on the sale net of
compensation expense recorded in connection with options to purchase AMD Stock
previously issued to Vantis employees applicable income taxes and as if the sale
occurred on March 28, 1999. The estimated gain on disposition will be recorded
in the second quarter of fiscal 1999. The actual gain amount will be
determined based on the excess of proceeds received over the actual carrying
value of the Vantis net assets as of June 15, 1999 less direct costs
associated with the sale. Pursuant to Article 11 of Regulation S-X, the
preliminary gain to be recognized on the disposition transaction
has been excluded from the pro forma condensed consolidated statement of
operations for the quarter ended March 28, 1999 and the fiscal year ended
December 27, 1998 due to its non-recurring nature.

[B] Subsequent to the Vantis sale, the Company will continue to provide
services to Vantis pursuant to various re-negotiated service contracts.
According to the service contracts, the Company will continue to provide the
wafer fabrication, assembly, test, mark, pack and administrative services to
Vantis. The wafer fabrication and assembly, test, mark and pack service
agreements will continue to September 2003 and the administrative service
agreements will expire between six and 15 months after the closing date. The
pro forma adjustments to the condensed consolidated statement of operations
for the quarter ended March 28, 1999 and the fiscal year ended December 27,
1998 reflect the sales to Vantis and the related expenses pursuant to the
aforementioned service contracts. These intercompany transactions were
previously eliminated for purpose of the Company's historical consolidated
financial statements.

[C] The pro forma adjustment to deferred income taxes in the condensed
consolidated balance sheet as of March 28, 1999 is based on the Company's
actual effective tax rate of 36.7%.


(c) Exhibits


Number Exhibit
------ -------

99 Press release dated June 15, 1999



6


SIGNATURES
----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


ADVANCED MICRO DEVICES, INC.



Date: June 30, 1999 By: /s/ Francis P. Barton
---------------------
Francis P. Barton
Senior Vice President, Chief Financial Officer

7

Exhibit Index
-------------


Number Exhibit
- ------ -------


99 Press release dated June 15, 1999.

8