Sun Microsystems, Inc. (NASDAQ:JAVA) reported results today for its fiscal first quarter, which ended September 30, 2007.
SANTA CLARA, Calif. (Business Wire EON) November 5, 2007 --
Sun Microsystems, Inc. (NASDAQ:JAVA) reported results today for its
fiscal first quarter, which ended September 30, 2007.
Revenues for the first quarter of fiscal 2008 were $3.219 billion, an
increase of approximately 1 percent as compared with $3.189 billion for
the first quarter of fiscal 2007. Total gross margin as a percent of
revenues was 48.5, an increase of 5.0 percentage points, as compared
with the first quarter of fiscal 2007.
Net income for the first quarter of fiscal 2008 on a GAAP basis was $89
million, or $0.03 per share on a diluted basis, as compared with a net
loss of $56 million, or ($0.02) per share, for the first quarter of
fiscal 2007. GAAP net income for the first quarter of fiscal 2008
includes a $113 million restructuring charge, which equates to $0.03 per
share.
Cash generated from operations for the first quarter of fiscal 2008 was
$574 million, and cash and marketable debt securities balance at the end
of the quarter was $5.193 billion.
"We showed continued execution and operating discipline and delivered a
very solid first quarter with continued revenue growth, profitability
and gross margin expansion," said Jonathan Schwartz, CEO of Sun
Microsystems. "We saw particular strength in our high-end systems
lineup, good growth in our subscription-based identity management
software offerings, and even more adoption and momentum behind the
award-winning open source SolarisTM 10 Operating
System and our virtualization offerings. Growth remains our top priority
for fiscal 2008 as we look to capitalize on our UltraSPARC®
T2 servers, delivering outstanding Solaris and Linux performance with
extreme energy efficiency."
Sun has scheduled a conference call today to discuss its financial
results for the first quarter fiscal year 2008 at 1:30 p.m. (PT), which
is being broadcast live at www.sun.com/investors.
About Sun Microsystems, Inc.
Sun Microsystems develops the technologies that power the global
marketplace. Guided by a singular vision -- "The Network is the ComputerTM"
-- Sun drives network participation through shared innovation, community
development and open source leadership. Sun can be found in more than
100 countries and on the Web at http://sun.com
Sun, Sun Microsystems, the Sun logo, Solaris, Java and The Network Is
The Computer are trademarks or registered trademarks of Sun
Microsystems, Inc. in the United States and other countries. All SPARC
trademarks are used under license and are trademarks or registered
trademarks of SPARC International, Inc. in the US and other countries.
Products bearing SPARC trademarks are based upon an architecture
developed by Sun Microsystems, Inc.
This press release contains forward-looking statements regarding the
future results and performance of Sun Microsystems, Inc., including
statements regarding Sun's future growth. These forward-looking
statements involve risks and uncertainties and actual results could
differ materially from those predicted in any such forward-looking
statements. Factors that could cause Sun’s
actual results to differ materially from those contained in such
forward-looking statements include: risks associated with developing,
designing, manufacturing and distributing new products; lack of success
in technological advancements; pricing pressures; lack of customer
acceptance and implementation of new products and technologies; the
possibility of errors or defects in new products; a material
acquisition, restructuring or other event that results in significant
charges; competition; adverse business conditions; failure to retain key
employees; the cancellation or delay of projects; Sun's reliance on
single-source suppliers; risks associated with Sun's ability to purchase
a sufficient amount of components to meet demand; inventory risks; risks
associated with Sun's international customers and operations; delays in
product development; Sun's dependence on significant customers and
specific industries; and Sun's dependence on channel partners. Please
also refer to Sun's periodic reports that are filed from time to time
with the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the fiscal year ended June 30, 2007. Sun assumes no
obligation to, and does not currently intend to, update these
forward-looking statements.
SUN MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited)
(in millions, except per share
amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
September 30,
2007
|
|
October 1,
2006
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
Products
|
|
$
|
1,980
|
|
$
|
1,959
|
|
|
Services
|
|
|
1,239
|
|
|
1,230
|
|
|
Total net revenues
|
|
|
3,219
|
|
|
3,189
|
|
|
Cost of sales:
|
|
|
|
|
|
|
|
Cost of sales-products (including stock-based compensation expense
of $3 and $3) (1)
|
|
|
1,029
|
|
|
1,123
|
|
|
Cost of sales-services (including stock-based compensation expense
of $8 and $8) (1)
|
|
|
629
|
|
|
678
|
|
|
Total cost of sales
|
|
|
1,658
|
|
|
1,801
|
|
|
Gross margin
|
|
|
1,561
|
|
|
1,388
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Research and development (including stock-based compensation expense
of $14 and $18) (1)
|
|
|
446
|
|
|
473
|
|
|
Selling, general and administrative (including stock-based
compensation expense of $23 and $29) (1)
|
|
|
939
|
|
|
958
|
|
|
Restructuring and related impairment of long-lived assets
|
|
|
113
|
|
|
21
|
|
|
Total operating expenses
|
|
|
1,498
|
|
|
1,452
|
|
|
Operating profit (loss)
|
|
|
63
|
|
|
(64
|
)
|
|
Gain on equity investments, net
|
|
|
22
|
|
|
-
|
|
|
Interest and other income, net
|
|
|
58
|
|
|
42
|
|
|
Income (loss) before income taxes
|
|
|
143
|
|
|
(22
|
)
|
|
Provision for income taxes
|
|
|
54
|
|
|
34
|
|
|
Net income (loss)
|
|
$
|
89
|
|
$
|
(56
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share-basic and diluted
|
|
$
|
0.03
|
|
$
|
(0.02
|
)
|
|
Shares used in the calculation of net income (loss) per common
share-basic
|
|
|
3,464
|
|
|
3,497
|
|
|
Shares used in the calculation of net income (loss) per common
share-diluted
|
|
|
3,537
|
|
|
3,497
|
|
|
|
|
(1) For the three months ended September 30, 2007 and October 1,
2006, respectively.
|
SUN MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in
millions)
|
|
|
|
|
|
|
|
September 30,
2007
|
|
June 30,
2007(1)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,752
|
|
$
|
3,620
|
|
Short-term marketable debt securities
|
|
|
1,067
|
|
|
962
|
|
Accounts receivable, net
|
|
|
2,203
|
|
|
2,964
|
|
Inventories
|
|
|
571
|
|
|
524
|
|
Deferred and prepaid tax assets
|
|
|
214
|
|
|
200
|
|
Prepaid expenses and other current assets
|
|
|
1,083
|
|
|
1,058
|
|
Total current assets
|
|
|
7,890
|
|
|
9,328
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
1,556
|
|
|
1,533
|
|
Long-term marketable debt securities
|
|
|
1,374
|
|
|
1,360
|
|
Goodwill
|
|
|
2,466
|
|
|
2,514
|
|
Other acquisition-related intangible assets, net
|
|
|
559
|
|
|
633
|
|
Other non-current assets
|
|
|
513
|
|
|
470
|
|
|
|
$
|
14,358
|
|
$
|
15,838
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,140
|
|
$
|
1,381
|
|
Accrued payroll-related liabilities
|
|
|
649
|
|
|
842
|
|
Accrued liabilities and other
|
|
|
1,044
|
|
|
935
|
|
Deferred revenues
|
|
|
1,944
|
|
|
2,073
|
|
Warranty reserve
|
|
|
217
|
|
|
220
|
|
Total current liabilities
|
|
|
4,994
|
|
|
5,451
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,270
|
|
|
1,264
|
|
Long-term deferred revenues
|
|
|
630
|
|
|
659
|
|
Other non-current obligations
|
|
|
1,271
|
|
|
1,285
|
|
Total stockholders’ equity
|
|
|
6,193
|
|
|
7,179
|
|
|
|
$
|
14,358
|
|
$
|
15,838
|
|
|
|
|
|
|
|
|
|
(1) Derived from audited financial statements
|
SUN MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited, in millions)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
September 30,
2007
|
|
October 1,
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
89
|
|
$
|
(56)
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
119
|
|
|
123
|
|
Amortization of other acquisition related intangible assets
|
|
|
74
|
|
|
81
|
|
Deferred taxes
|
|
|
8
|
|
|
(3)
|
|
Impairment of assets
|
|
|
-
|
|
|
8
|
|
Gain on investments and other, net
|
|
|
(17)
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
48
|
|
|
58
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
770
|
|
|
672
|
|
Inventories
|
|
|
(44)
|
|
|
(71)
|
|
Prepaid and other assets
|
|
|
(46)
|
|
|
2
|
|
Accounts payable
|
|
|
(283)
|
|
|
(151)
|
|
Other liabilities
|
|
|
(144)
|
|
|
(540)
|
|
Net cash provided by operating activities
|
|
|
574
|
|
|
123
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Decrease in restricted cash
|
|
|
3
|
|
|
-
|
|
Purchases of marketable debt securities
|
|
|
(637)
|
|
|
(675)
|
|
Proceeds from sales of marketable debt securities
|
|
|
251
|
|
|
515
|
|
Proceeds from maturities of marketable debt securities
|
|
|
269
|
|
|
136
|
|
Proceeds from sales of equity investments, net
|
|
|
30
|
|
|
7
|
|
Purchases and sales of property, plant and equipment
|
|
|
(127)
|
|
|
160
|
|
Net cash provided by (used in) investing activities
|
|
|
(211)
|
|
|
143
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Purchase of common stock under 2007 Stock Repurchase Plan
|
|
|
(1,250)
|
|
|
-
|
|
Proceeds from issuance of common stock, net
|
|
|
23
|
|
|
27
|
|
Principal payments on borrowings and other obligations
|
|
|
(4)
|
|
|
(500)
|
|
Net cash used in financing activities
|
|
|
(1,231)
|
|
|
(473)
|
|
Net decrease in cash and cash equivalents
|
|
|
(868)
|
|
|
(207)
|
|
Cash and cash equivalents, beginning of period
|
|
|
3,620
|
|
|
3,569
|
|
Cash and cash equivalents, end of period
|
|
$
|
2,752
|
|
$
|
3,362
|
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