NEWS RELEASE
CONTACTS:
John Greenagel
Strategic Communications
(408) 749-3310
Toni Beckham
Investor Relations
(408) 749-3127
Exhibit 99.1
AMD REPORTS SECOND QUARTER RESULTS
-- Company Reports Sales of $985 million, Earnings of $0.05 per Share, and
Record PC Processor Unit Sales -
SUNNYVALE, CA - July 12, 2001 - AMD today reported sales of $985,264,000
and net income of $17,352,000 for the quarter ended July 1, 2001. Net income
amounted to $0.05 per diluted share, on 341 million fully diluted shares
outstanding.
Total sales declined by approximately 16 percent, and on continuing
businesses, by approximately 11 percent from the second quarter of 2000. Results
for the second quarter of 2000 included approximately $63 million in sales from
the company's voice communications business, which was sold on August 4, 2000.
Sales declined by approximately 17 percent from the first quarter of 2001,
when AMD reported sales of $1,188,747,000 and net income of $124,837,000, or
$0.37 per diluted share.
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For the first six months of 2001, AMD reported total sales of
$2,174,011,000 and net income of $142,189,000, or $0.43 per diluted share. For
the first six months of 2000, AMD reported sales of $2,262,466,000 and net
income of $396,491,000, or $1.17 per diluted share.
AMD had record unit sales of more than 7.7 million PC processors during the
quarter. Unit sales of seventh-generation AMD Athlon(TM) and AMD Duron(TM)
processors were both at record levels. Average selling prices (ASPs) for PC
processors declined sharply from the first quarter in the face of very
aggressive pricing in a weak PC market.
Sales of AMD memory products declined by 13 percent from the second quarter
of 2000 and by 23 percent sequentially in a continuing weak demand environment.
"In what proved to be a more challenging semiconductor business environment
than anticipated, we believe we gained market share in our two principal product
lines, flash memory devices and PC processors," said W.J. Sanders III, chairman
and chief executive officer.
"Demand for flash memory products continued to reflect severe weakness in
the communications and networking sectors," Sanders continued. "The superiority
of AMD flash memory products coupled with supply agreements with more than two-
dozen leading OEMs have mitigated the impact on AMD of a severe downturn in the
flash memory market. We believe we have gained market share in the flash memory
arena in the first half of 2001.
"In a weak PC market, we experienced strong demand for AMD Athlon and AMD
Duron processors. Continuing the steepest ramp of any AMD processor family, unit
sales of our seventh-generation PC processors grew 16 percent sequentially. The
strength and breadth of our PC processor products and the superior performance
and value proposition of AMD Athlon and AMD Duron processors enabled AMD to
achieve record PC processor unit sales. While responding to aggressive
competitive pricing depressed our revenues and earnings, we believe we continued
to gain unit market share in the PC processor market during the quarter. PC
processor revenues declined 11 percent sequentially, but grew nominally over the
second quarter of 2000," said Sanders.
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Other developments
. AMD expanded its PC processor portfolio during the second quarter
with the introduction of the AMD Athlon 4 processor for mobile
PCs and the AMD Athlon MP(TM) and companion AMD 760 MP(TM)
chipset for workstation and server applications.
. AMD introduced higher-performance AMD Duron and AMD Athlon
processors. The 950-megahertz AMD Duron processor is the
industry's highest-performance processor for the value segment of
the PC market, and the 1.4-gigahertz AMD Athlon processor offers
more delivered performance than any other PC processor.
. AMD announced a breakthrough in flash memory cell architecture,
known as Mirror Bit(TM) architecture that enables a flash memory
device to store twice as much data as a standard flash memory
device while maintaining complete pin and software compatibility
without compromising AMD's industry-leading endurance of one
million read-write cycles.
. AMD retired $517 million of 6 percent convertible debentures.
. The company's Fab 30 in Dresden, Germany was named "Fab of the
Year" by the prestigious industry publication Semiconductor
International, the third time an AMD facility has claimed this
honor.
. NEC Corporation (NEC Japan), Microsoft Co., Ltd. (Microsoft
Japan), and ASCII Network Technology Inc. introduced a jointly
developed streaming content server powered by the 1.33-GHz AMD
Athlon processor that is targeted at commercial applications.
. AMD continued to gain support for its HyperTransport(TM)
technology, enhancing its position as an industry standard. With
a peak data rate of 6.4 gigabytes per second, HyperTransport
technology moves information faster within PCs, networking
systems, and communications devices. More than 100 companies now
support HyperTransport technology.
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Current Outlook
The company's outlook statements are based on current expectations. The
following statements are forward-looking, and actual results could differ
materially. The company's current outlook is based on the following projections.
Demand for flash memory products continues to be weak, driven primarily by
the continued severe weakness in the communications and networking sectors.
Visibility in this product segment is poor, and the company projects a
sequential decline in sales for the third quarter.
PC industry unit growth for 2001 is less than previously forecasted, and
the company now believes that industry unit shipments will be approximately flat
for the year. Based on a normal seasonal pattern, which would show a pick-up in
market demand for PCs in the third quarter, the company expects that unit sales
of its AMD PC processors in the current quarter will again be at record levels
with ASPs under continuing pressure.
Weakness in the communications and networking sectors continues to impact
the company's foundry services and other IC products, and the company projects
that these revenues will continue to decline in the third quarter.
If current conditions prevail, the company expects that overall revenues
could decline in the range of 10 to 15 percent in the current quarter. With a
decline in sales of this magnitude, the company would report an operating loss.
Normal seasonality coupled with a recovery in some of the markets for flash
memory products should enable the company to increase revenues and return to
solid profitability in the fourth quarter.
AMD Teleconference
AMD will hold a teleconference for the financial community at 2:30 PM
Pacific Standard Time today to discuss second-quarter financial results. AMD
will provide a real-time audio broadcast of the teleconference on the Investor
Relations page of its web site at http://www.amd.com or
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http://www.streetfusion.com. The webcast will be available for two weeks after
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the teleconference.
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Cautionary Statement
This release contains forward-looking statements, which are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act 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; that demand for personal computers
and, in turn, demand for the company's seventh-generation PC processors will be
lower than currently expected; that Intel Corporation pricing, marketing
programs, 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 changes in customer needs and the product introductions and
capacity expansion of competitors will continue to effect the demand for the
company's flash memory products; that the company will not continue to be
successful in ramping production of the company's highest-performance AMD Athlon
processors in Fab 30; that the company will not be able to produce seventh-
generation processors in the volume, performance mix or with the feature set
necessary to meet market requirements and the company's current plans and goals;
that third parties may not provide timely or adequate infrastructure solutions
to support the company's seventh-generation processors; and that the company
will not be able to continue to gain market share in its principal product
lines. 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 for the year ended December 31, 2000, and the report
on Form 10-Q for the quarter ended April 1, 2001.
About AMD
AMD is a global supplier of integrated circuits for the personal and
networked computer and communications markets with manufacturing facilities in
the United States, Europe, Japan, and Asia. AMD, a Fortune 500 and Standard &
Poor's 500 company, produces microprocessors, flash memory devices, and support
circuitry for communications and networking applications. Founded in 1969 and
based in Sunnyvale, California, AMD had revenues of $4.6 billion in 2000. (NYSE:
AMD).
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--30--
WORLD WIDE WEB: Press Announcements and other information about AMD are
available on the Internet via the World Wide Web. Type http://www.amd.com at
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the URL prompt.
NOTE TO EDITOR: Readers may obtain additional information by calling 1-800-222-
9323 or 408-749-3060. Technical Support Email: hw.support@amd.com
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AMD, the AMD logo, AMD Athlon, AMD Duron and combinations thereof are trademarks
of Advanced Micro Devices, Inc. in the United States and other jurisdictions.
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
July 1, December 31,
2001 2000*
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(unaudited)
Assets
Current assets:
Cash, cash equivalents and short-term investments $ 1,057,163 1,293,165
Accounts receivable, net 728,356 547,200
Inventories 400,849 343,541
Deferred income taxes 188,946 218,527
Prepaid expenses and other current assets 175,522 255,256
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Total current assets 2,550,836 2,657,689
Property, plant and equipment, net 2,668,271 2,636,467
Investment in joint venture 377,639 261,728
Other assets 234,207 211,851
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$ 5,830,953 $5,767,735
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 314,606 $ 477,369
Accrued compensation and benefits 121,523 172,815
Accrued liabilities 315,928 276,721
Income tax payable 38,184 74,806
Deferred income on shipments to distributors 67,407 92,828
Current portion of long-term debt, capital
lease obligations and other 220,080 129,570
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Total current liabilities 1,077,728 1,224,109
Deferred income taxes 198,203 203,986
Long-term debt, capital lease obligations and other,
less current portion 754,717 1,167,973
Stockholders' equity:
Capital stock:
Common stock, par value 3,464 3,141
Capital in excess of par value 1,955,498 1,406,290
Retained earnings 1,998,450 1,856,261
Accumulated other comprehensive loss (157,107) (94,025)
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Total stockholders' equity 3,800,305 3,171,667
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$ 5,830,953 $5,767,735
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*Derived from the December 31, 2000 audited financial statements of Advanced
Micro Devices, Inc.
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
Quarter Ended Six Months Ended
(Unaudited) (Unaudited)
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July 1, Apr. 1, July 2, July 1, July 2,
2001 2001 2000 2001 2000
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Net sales $985,264 $1,188,747 $1,170,437 $2,174,011 $2,262,466
Cost of sales 636,199 714,830 612,567 1,351,029 1,218,324
Research and development 171,114 157,760 155,651 328,874 316,948
Marketing, general and
administrative 156,291 149,138 152,022 305,429 296,328
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963,604 1,021,728 920,240 1,985,332 1,831,600
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Operating income 21,660 167,019 250,197 188,679 430,866
Interest income and other, net 12,308 18,823 19,935 31,131 41,063
Interest expense (20,199) (21,645) (11,244) (41,844) (22,723)
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Income before income taxes and
equity in joint venture 13,769 164,197 258,888 177,966 449,206
Provision for income taxes 3,717 52,543 51,778 56,260 51,778
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Income before equity in joint
venture 10,052 111,654 207,110 121,706 397,428
Equity in net income (loss) in
joint venture 7,300 13,183 32 20,483 (937)
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Net income $ 17,352 $ 124,837 $ 207,142 $ 142,189 $ 396,491
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Net income per common share
Basic $ 0.05 $ 0.40 $ 0.67 $ 0.44 $ 1.30
Diluted $ 0.05 $ 0.37 $ 0.60 $ 0.43 $ 1.17
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Shares used in per share calculation
- Basic 330,120 314,347 309,116 322,234 305,438
- Diluted 340,533 351,785 352,437 332,183 348,160
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