Delivering on Its Commitments and Transforming to Win
SUNNYVALE, CA--(Marketwired - Apr 17, 2014) - AMD (
Q1 2014 Results
AMD (
"AMD continued our momentum by building on the solid foundation we set in the second half of 2013, further transforming the company," said Rory Read, AMD president and CEO. "Backed by our powerful x86 processor cores and hands-down best graphics experiences, we achieved 28 percent revenue growth from the year-ago quarter. We are well positioned to continue to grow profitably as we diversify our business and enable our customers to drive change and win."
GAAP Financial Results | |||
Q1-14 | Q4-13 | Q1-13 | |
Revenue | $1.40B | $1.59B | $1.09B |
Operating income (loss) | $49M | $135M | $(98)M |
Net income (loss) / Earnings (loss) per share | $(20)M/$(0.03) | $89M/$0.12 | $(146)M/$(0.19) |
Non-GAAP Financial Results (1) | |||
Q1-14 | Q4-13 | Q1-13 | |
Revenue | $1.40B | $1.59B | $1.09B |
Operating income (loss) | $66M | $91M | $(46)M |
Net income (loss) / Earnings (loss) per share | $12M/$0.02 | $45M/$0.06 | $(94)M/$(0.13) |
Quarterly Financial Summary
Recent Highlights
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.
For the second quarter of 2014, AMD expects revenue to increase 3 percent, plus or minus 3 percent, sequentially.
For additional details 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 2:30 p.m. PT (5:30 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 www.amd.com. The webcast will be available for 12 months after the conference call.
Reconciliation of GAAP to Non-GAAP Operating Income (Loss)1
Reconciliation of GAAP to Non-GAAP Operating Income (Loss) | |||||||||
(Millions) | Q1-14 | Q4-13 | Q1-13 | ||||||
GAAP operating income (loss) | $ | 49 | $ | 135 | $ | (98) | |||
Workforce rebalancing severance charges | 14 | - | - | ||||||
Amortization of acquired intangible assets | 3 | 4 | 5 | ||||||
Restructuring and other special charges, net | - | - | 47 | ||||||
Legal settlements, net | - | (48) | - | ||||||
Non-GAAP operating income (loss) | $ | 66 | $ | 91 | $ | (46) | |||
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
Reconciliation of GAAP to Non-GAAP Net Income (Loss) | ||||||||||||||||||
(Millions except per share amounts) | Q1-14 | Q4-13 | Q1-13 | |||||||||||||||
GAAP net income (loss) / Earnings (loss) per share | $ | (20) | $ | (0.03) | $ | 89 | $ | 0.12 | $ | (146) | $ | (0.19) | ||||||
Workforce rebalancing severance charges | 14 | 0.02 | - | - | - | - | ||||||||||||
Loss on debt redemption | 15 | 0.02 | - | - | - | - | ||||||||||||
Amortization of acquired intangible assets | 3 | 0.00 | 4 | - | 5 | 0.01 | ||||||||||||
Restructuring and other special charges, net | - | - | - | - | 47 | 0.06 | ||||||||||||
Legal settlements, net | - | - | (48) | (0.06) | - | - | ||||||||||||
Non-GAAP net income (loss) / Earnings (loss) per share | $ | 12 | $ | 0.02 | $ | 45 | $ | 0.06 | $ | (94) | $ | (0.13) | ||||||
About AMD
AMD (
Cautionary Statement
This release contains forward-looking statements concerning AMD, its ability to grow profitably; its ability to diversify its business; its targeted and optimal cash, cash equivalents and marketable securities, including long-term marketable securities, balances; its expected 2014 payments to GLOBALFOUNDRIES (GF); and its expected second quarter of 2014 revenue; 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 "believes, "expects," "may," "will," "should," "seeks," "intends," "pro forma," "estimates," "anticipates," "plans," "projects," "would" 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 may negatively impact AMD's plans, that AMD will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying AMD's products or materially reduce their operations or demand for AMD's products; that AMD may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that AMD's third-party foundry suppliers will be unable to transition AMD's products to advanced manufacturing process technologies in a timely and effective way or to manufacture AMD's products on a timely basis in sufficient quantities and using competitive process technologies; that AMD will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize its projected manufacturing capacity needs at GF microprocessor manufacturing facilities; that AMD's requirements for wafers will be less than the fixed number of wafers that it agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die it receives from each wafer; that AMD is unable to successfully implement its long-term business strategy; that AMD inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that AMD is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of AMD's products; that AMD may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for AMD's products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions will not improve or worsen; that PC market conditions, will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on AMD's sales or supply chain. Investors are urged to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 28, 2013.
AMD, the AMD Arrow logo, AMD Opteron, AMD Radeon and combinations thereof, 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 release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures, including non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share. These non-GAAP financial measures reflect certain adjustments as presented in the data tables in this press release. AMD also provided Adjusted EBITDA and non-GAAP free cash flow as supplemental measures of its performance. These items are defined in the footnotes to the selected data tables provided at the end of this release. AMD 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 AMD believes it assists investors in comparing AMD'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. Refer to the data tables at the end of this release for additional AMD data. |
ADVANCED MICRO DEVICES, INC. | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
(Millions except per share amounts and percentages) | |||||||||||||
Quarter Ended | |||||||||||||
March 29, | Dec 28, | Mar. 30, | |||||||||||
2014 | 2013 | 2013 | |||||||||||
Net revenue | $ | 1,397 | $ | 1,589 | $ | 1,088 | |||||||
Cost of sales | 910 | 1,036 | 643 | ||||||||||
Gross margin | 487 | 553 | 445 | ||||||||||
Gross margin % | 35 | % | 35 | % | 41 | % | |||||||
Research and development | 279 | 293 | 312 | ||||||||||
Marketing, general and administrative | 156 | 169 | 179 | ||||||||||
Amortization of acquired intangible assets | 3 | 4 | 5 | ||||||||||
Restructuring and other special charges, net | - | - | 47 | ||||||||||
Legal settlements, net | - | (48 | ) | - | |||||||||
Operating income (loss) | 49 | 135 | (98 | ) | |||||||||
Interest income | 1 | 1 | 1 | ||||||||||
Interest expense | (47 | ) | (44 | ) | (44 | ) | |||||||
Other expense, net | (21 | ) | (2 | ) | (3 | ) | |||||||
Income (loss) before income taxes | (18 | ) | 90 | (144 | ) | ||||||||
Provision for income taxes | 2 | 1 | 2 | ||||||||||
Net income (loss) | $ | (20 | ) | $ | 89 | $ | (146 | ) | |||||
Net income (loss) per share | |||||||||||||
Basic | $ | (0.03 | ) | $ | 0.12 | $ | (0.19 | ) | |||||
Diluted | $ | (0.03 | ) | $ | 0.12 | $ | (0.19 | ) | |||||
Shares used in per share calculation | |||||||||||||
Basic | 761 | 759 | 749 | ||||||||||
Diluted | 761 | 766 | 749 | ||||||||||
ADVANCED MICRO DEVICES, INC. | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||
(Millions) | |||||||||||||
Quarter Ended | |||||||||||||
March 29, | Dec 28, | Mar. 30, | |||||||||||
2014 | 2013 | 2013 | |||||||||||
Total comprehensive income (loss) | $ | (21 | ) | $ | 89 | $ | (147 | ) | |||||
ADVANCED MICRO DEVICES, INC. | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(Millions) | |||||||||||||||
March 29, | Dec 28, | Mar. 30, | |||||||||||||
2014 | 2013 | 2013 | |||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 554 | $ | 869 | $ | 441 | |||||||||
Marketable securities | 348 | 228 | 562 | ||||||||||||
Accounts receivable, net | 840 | 832 | 645 | ||||||||||||
Inventories, net | 869 | 884 | 613 | ||||||||||||
Prepaid expenses and other current assets | 79 | 71 | 77 | ||||||||||||
Total current assets | 2,690 | 2,884 | 2,338 | ||||||||||||
Long-term marketable securities | 80 | 90 | 180 | ||||||||||||
Property, plant and equipment, net | 337 | 346 | 411 | ||||||||||||
Acquisition related intangible assets, net | 75 | 78 | 92 | ||||||||||||
Goodwill | 553 | 553 | 553 | ||||||||||||
Other assets | 373 | 386 | 223 | ||||||||||||
Total Assets | $ | 4,108 | $ | 4,337 | $ | 3,797 | |||||||||
Liabilities and Stockholders' Equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Short-term debt | $ | 60 | $ | 60 | $ | 5 | |||||||||
Accounts payable | 483 | 519 | 301 | ||||||||||||
Payable to GLOBALFOUNDRIES | 213 | 364 | 379 | ||||||||||||
Accrued and other current liabilities | 482 | 530 | 504 | ||||||||||||
Deferred income on shipments to distributors | 146 | 145 | 132 | ||||||||||||
Total current liabilities | 1,384 | 1,618 | 1,321 | ||||||||||||
Long-term debt | 2,078 | 1,998 | 2,039 | ||||||||||||
Other long-term liabilities | 135 | 177 | 22 | ||||||||||||
Stockholders' equity: | |||||||||||||||
Capital stock: | |||||||||||||||
Common stock, par value | 8 | 7 | 7 | ||||||||||||
Additional paid-in capital | 6,883 | 6,894 | 6,827 | ||||||||||||
Treasury stock, at cost | (114 | ) | (112 | ) | (109 | ) | |||||||||
Accumulated deficit | (6,263 | ) | (6,243 | ) | (6,306 | ) | |||||||||
Accumulated other comprehensive loss | (3 | ) | (2 | ) | (4 | ) | |||||||||
Total stockholders' equity | 511 | 544 | 415 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,108 | $ | 4,337 | $ | 3,797 |
ADVANCED MICRO DEVICES, INC. | |||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||
(Millions) | |||||
Quarter Ended | |||||
March 29, | |||||
2014 | |||||
Cash flows from operating activities: | |||||
Net loss | $ | (20 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization | 53 | ||||
Employee stock-based compensation expense | 23 | ||||
Non-cash interest expense | 6 | ||||
Loss on debt redemption | 15 | ||||
Other | (4 | ) | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (8 | ) | |||
Inventories | 14 | ||||
Prepaid expenses and other assets | (8 | ) | |||
Payable to GLOBALFOUNDRIES | (151 | ) | |||
Accounts payable, accrued liabilities and other | (124 | ) | |||
Net cash used in operating activities | $ | (204 | ) | ||
Cash flows from investing activities: | |||||
Purchases of property, plant and equipment | (21 | ) | |||
Purchases of available-for-sale securities | (310 | ) | |||
Proceeds from sale and maturity of available-for-sale securities | 200 | ||||
Net cash used in investing activities | $ | (131 | ) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of common stock | 1 | ||||
Proceeds from borrowings, net | 589 | ||||
Repayments of long-term debt and capital lease obligations | (569 | ) | |||
Other | (1 | ) | |||
Net cash provided by financing activities | $ | 20 | |||
Net decrease in cash and cash equivalents | (315 | ) | |||
Cash and cash equivalents at beginning of period | $ | 869 | |||
Cash and cash equivalents at end of period | $ | 554 |
ADVANCED MICRO DEVICES, INC. | ||||||||||||||
SELECTED CORPORATE DATA | ||||||||||||||
(Millions except headcount) | ||||||||||||||
Quarter Ended | ||||||||||||||
March 29, | Dec 28, | Mar. 30, | ||||||||||||
Segment and Category Information | 2014 | 2013 | 2013 | |||||||||||
Computing Solutions (1) | ||||||||||||||
Net revenue | $ | 663 | $ | 722 | $ | 751 | ||||||||
Operating loss | $ | (3 | ) | $ | (7 | ) | $ | (39 | ) | |||||
Graphics and Visual Solutions (2) | ||||||||||||||
Net revenue | 734 | 865 | 337 | |||||||||||
Operating income | 91 | 121 | 16 | |||||||||||
All Other (3) | ||||||||||||||
Net revenue | - | 2 | - | |||||||||||
Operating income (loss) | (39 | ) | 21 | (75 | ) | |||||||||
Total | ||||||||||||||
Net revenue | $ | 1,397 | $ | 1,589 | $ | 1,088 | ||||||||
Operating income (loss) | $ | 49 | $ | 135 | $ | (98 | ) | |||||||
Other Data | ||||||||||||||
Depreciation and amortization, excluding amortization of acquired intangible assets | $ | 50 | $ | 50 | $ | 62 | ||||||||
Capital additions | $ | 21 | $ | 21 | $ | 20 | ||||||||
Adjusted EBITDA (4) | $ | 139 | $ | 165 | $ | 40 | ||||||||
Cash, cash equivalents and marketable securities, including long-term marketable securities | $ | 982 | $ | 1,187 | $ | 1,183 | ||||||||
Non-GAAP free cash flow (5) | $ | (225 | ) | $ | 0 | $ | (175 | ) | ||||||
Total assets | $ | 4,108 | $ | 4,337 | $ | 3,797 | ||||||||
Total debt | $ | 2,138 | $ | 2,058 | $ | 2,044 | ||||||||
Headcount | 10,397 | 10,671 | 9,844 | |||||||||||
(1) | Computing Solutions segment primarily includes x86 microprocessors, as standalone devices or as incorporated as an accelerated processing unit (APU), chipsets, embedded processors and dense servers. | |
(2) | Graphics and Visual Solutions segment primarily includes graphics processing units (GPU), including professional graphics, semi-custom System-on-Chip (SOC) products, development services and technology for game consoles. | |
(3) | All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category are amortization of acquired intangible assets and employee stock-based compensation expense. In addition, the Company also included the following adjustments for the indicated periods: for the first quarter of 2014, the Company included workforce rebalancing severance charges; for the fourth quarter of 2013, the Company included net legal settlements; and for the first quarter of 2013, the Company included net restructuring and other special charges. The Company also reports the results of former businesses in the All Other category because the operating results were not material. | |
(4) | Reconciliation of GAAP operating income (loss) to Adjusted EBITDA* |
Quarter Ended | |||||||||||||||
March 29, | Dec 28, | Mar. 30, | |||||||||||||
2014 | 2013 | 2013 | |||||||||||||
GAAP operating income (loss) | $ | 49 | $ | 135 | $ | (98 | ) | ||||||||
Workforce rebalancing severance charges | 14 | - | - | ||||||||||||
Legal settlements, net | - | (48 | ) | - | |||||||||||
Depreciation and amortization | 50 | 50 | 62 | ||||||||||||
Employee stock-based compensation expense | 23 | 24 | 24 | ||||||||||||
Amortization of acquired intangible assets | 3 | 4 | 5 | ||||||||||||
Restructuring and other special charges, net | - | - | 47 | ||||||||||||
Adjusted EBITDA | $ | 139 | $ | 165 | $ | 40 | |||||||||
(5) | Non-GAAP free cash flow reconciliation** | ||||||||||||||
Quarter Ended | |||||||||||||||
March 29, | Dec 28, | Mar. 30, | |||||||||||||
2014 | 2013 | 2013 | |||||||||||||
GAAP net cash provided by (used in) operating activities | $ | (204 | ) | $ | 21 | $ | (155 | ) | |||||||
Purchases of property, plant and equipment | (21 | ) | (21 | ) | (20 | ) | |||||||||
Non-GAAP free cash flow | $ | (225 | ) | $ | 0 | $ | (175 | ) | |||||||
* The Company presents Adjusted EBITDA as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting operating income (loss) for depreciation and amortization, employee stock-based compensation expense and amortization of acquired intangible assets. In addition, the Company also included the following adjustments for the indicated periods: for the first quarter of 2014, the Company included an adjustment for workforce rebalancing severance charges; for the fourth quarter of 2013, the Company included an adjustment for net legal settlements; and for the first quarter of 2013, the Company included net restructuring and other special charges. The Company calculates and communicates Adjusted EBITDA in the financial earnings press release 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. | |||||||||||||||
** The Company also presents non-GAAP free cash flow in the earnings press release as a supplemental measure of its performance. Non-GAAP free cash flow is determined by adjusting GAAP net cash provided by (used in) operating activities for capital expenditures. The Company calculates and communicates non-GAAP free cash flow in the earnings press release 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 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 free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities. The Company has provided reconciliations within the press earnings release and financial tables of these non-GAAP financial measures to the most directly comparable GAAP financial measures. | |||||||||||||||
Contact Information:
Media Contact
Drew Prairie
512-602-4425
drew.prairie@amd.com
Investor Contact
Ruth Cotter
408-749-3887
ruth.cotter@amd.com