Delivers $.01 EPS and Posts 10% Sequential Revenue Gain
SANTA CLARA, Calif., July 18 /PRNewswire-FirstCall/ -- Sun Microsystems, Inc. (Nasdaq: SUNW - News) a leader in systems and solutions that make the Net work, reported results today for its fiscal fourth quarter which ended June 30, 2002.
Revenues for the fourth quarter were $3.4 billion, up 10 percent, as compared with $3.1 billion in revenues reported for the third quarter of fiscal year 2002. Net income for the fourth quarter was $28 million and the net income per common share was $.01 (excluding an $18 million loss on equity investments, a $4 million credit for adjustments to restructuring charges, and a $6 million benefit for the related tax effects). Including these amounts, GAAP net income was $20 million and GAAP earnings per share was $.01.
For the full 2002 fiscal year, Sun reported revenues of $12.5 billion, down 32 percent from record high revenues of the prior year. Net loss for the 2002 fiscal year was $255 million and the net loss per common share was $.08 (excluding a $517 million restructuring charge, a $99 million loss on equity investments, a $3 million charge for in-process research and development, and a $246 million benefit for the related tax effects). Including these amounts, GAAP net loss was $628 million and GAAP loss per share was $.19.
Sun's Chairman, CEO, and President Scott McNealy said, "We stated a goal of reporting a profit this quarter and we achieved that goal. I'm immensely proud of my team. They have integrity. They have talent. They have tenacity. And, they achieved this goal while protecting investments in research and development, aggressively managing cash balances, and gaining market share from competitors."
McNealy continued, "We achieved gains in low-end server sales through the continued success of our UltraSPARC® III processor-based products such as the Sun Fire(TM) V880 2-way, 4-way, and 8-way servers and the Sun Fire(TM) 280R, rack-mountable 2-way server. We also increased sales of our high-end UltraSPARC III processor-based products such as the Sun Fire 6800 and Sun Fire 15K mainframe replacement servers. These gains were augmented by strong market acceptance of our newest products such as the Sun Fire V480 4-way server in the low-end space and the Sun Fire 12K server in the high-end space. The Sun Fire 12K server has been particularly well received as it is taking sales from the competition while strengthening and enhancing sales of other Sun high-end products."
McNealy concluded, "We're also pleased that our storage revenues grew with products such as the Sun StorEdge(TM) T3 and Sun StorEdge 3900, 6900, and 9900 families. Finally, we continued to roll-out ground-breaking software offerings such as the Solaris(TM) 9 Operating Environment, StarOffice(TM) 6.0 Office Suite, Sun(TM) ONE Portal Server 6, Sun(TM) Grid Engine, Enterprise Edition 5.3, and a new Sun ONE Application Server 7 product line that will make the core version of the Java(TM) platform-based application server free to enterprises and ISVs on all leading platforms. Along with Sun services, these products continued to reinforce Sun's position as one of the few systems companies capable of developing and integrating hardware, software, and services for enterprise customers."
Steve McGowan, Executive Vice President of Corporate Resources and Chief Financial Officer said, "We were particularly pleased with our strong performance in the U.S. geography which reported 20% revenue growth over the prior quarter. In addition, we continued to generate positive cash flow from operations and ended the quarter with a cash and marketable securities balance of approximately $5.9 billion after repurchasing $226 million in stock during the quarter."
Sun has scheduled a conference call today to discuss its earnings for the fourth quarter of fiscal year 2002 at 1:30 p.m. (PDT), which is being broadcast live at www.sun.com/investors.
This news release contains projections and other forward-looking statements regarding future results and the future performance of Sun Microsystems, Inc., including a statement that the Sun Fire 12K is taking sales from the competition while strengthening and enhancing sales of other Sun high-end products. Such statement is just a prediction about Sun's ability to continue such sales performance and involves risks and uncertainties such that actual results and performance may differ materially. Factors that might cause such a difference include risks associated with increased competition, continued adverse macroeconomic conditions in the U.S. and internationally, including adverse business conditions in the specific markets for Sun's products, lack of success in the timely development, production and acceptance of new products and services, lack of success in technological advancements, and our ability to attract, hire and retain key and qualified employees. These and other risks are detailed from time-to-time in Sun's periodic reports that are filed with the Securities and Exchange Commission, including Sun's annual report on Form 10-K for the fiscal year ended June 30, 2001, and its quarterly reports on Form 10-Q for the fiscal quarters ended September 30, 2001, December 30, 2001 and March 31, 2002.
About Sun Microsystems, Inc.
Since its inception in 1982, a singular vision -- The Network Is The Computer(TM) -- has propelled Sun Microsystems, Inc. to its position as a leading provider of industrial-strength hardware, software and services that power the Internet and allow companies worldwide to take their businesses to the nth. Sun can be found in more than 170 countries and on the World Wide Web at http://www.sun.com .
NOTE: Sun, Sun Microsystems, the Sun logo, Sun Fire, Sun StorEdge,
StarOffice, Java, and The Network Is The Computer are trademarks or registered
trademarks of Sun Microsystems, Inc. in the United States and in other
countries. All SPARC trademarks are used under license and are trademarks or
registered trademarks of SPARC International, Inc. in the United States and
other countries. Products bearing SPARC trademarks are based upon an
architecture developed by Sun Microsystems, Inc.
INVESTOR CONTACT:
Mark Paisley 408-404-8415
mark.paisley@sun.com
MEDIA CONTACT:
Penelope Bruce 650-786-7220
penelope.bruce@sun.com
INDUSTRY ANALYST CONTACT:
Angela Grady 415-972-0522
angela.grady@sun.com
SUN MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Three Months
Ended Fiscal Year Ended
(Unaudited) (Unaudited)
June 30, June 30, June 30, June 30,
2002* 2001 2002* 2001
Net revenues $3,420 $3,995 $12,496 $18,250
Costs and expenses:
Cost of sales 2,014 2,352 7,588 10,041
Research and
development 467 543 1,836 2,016
Selling, general and
administrative 950 1,074 3,868 4,445
Restructuring charges (4) 75 517 75
Goodwill amortization 0 125 0 285
In-process research and
development 0 5 3 77
Total costs and
expenses 3,427 4,174 13,812 16,939
Operating income (loss) (7) (179) (1,316) 1,311
Interest income, net 47 87 299 363
Loss on equity investments (18) (78) (99) (90)
Income (loss) before income
taxes and cumulative effect
of change in
accounting principle 22 (170) (1,116) 1,584
Provision (benefit) for income
taxes 2 (82) (488) 603
Income (loss) before
cumulative effect of change
in accounting principle 20 (88) (628) 981
Cumulative effect of change in
accounting principle 0 0 0 (54)
Net income (loss) $20 ($88) ($628) $927
Calculation of net income
(loss) excluding special
items:
Net income (loss) per above $20 ($88) ($628) $927
In-process research and
development 0 5 3 77
Restructuring charges (4) 75 517 75
Loss on equity investments 18 78 99 90
Related tax effects (6) (60) (246) (64)
Net income (loss) excluding
special items $28 $10 ($255) $1,105
Per share data:
Shares used in the per common
share calculations - basic 3,245 3,248 3,242 3,234
Net income (loss) per common
share - basic:
Income (loss) before
cumulative effect of change
in accounting principle 0.01 (0.03) (0.19) 0.30
Cumulative effect of change in
accounting principle 0 0 0 (0.02)
Net income (loss) per common
share - basic $0.01 ($0.03) ($0.19) $0.28
Net income (loss) excluding
special items per common
share - basic $0.01 $0.00 ($0.08) $0.34
Shares used in the per common
share calculations -
diluted** 3,309 3,248 3,242 3,417
Net income (loss) per common
share - diluted:
Income (loss) before
cumulative effect of change
in accounting principle $0.01 ($0.03) ($0.19) $0.29
Cumulative effect of change in
accounting principle 0 0 0 (0.02)
Net income (loss) per common
share - diluted $0.01 ($0.03) ($0.19) $0.27
Net income (loss) excluding
special items per common
share - diluted** $0.01 $0.00 ($0.08) $0.32
* Excludes amortization of goodwill in accordance with the
Company's adoption of Statement of Financial Accounting
Standards (SFAS) No. 142 "Goodwill and Other Intangible
Assets."
**For the quarter ended June 30, 2001, Sun used 3,383 shares
to calculate the "Net income (loss) excluding special items
per common share-diluted". For all other periods, the number
of shares used to calculate "Net income (loss) per common
share-diluted" and "Net income (loss) excluding special items
per common share-diluted" were the same.
SUN MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
June 30, June 30,
2002 2001*
ASSETS (Unaudited)
Current assets:
Cash, cash equivalents
and short-term
investments $2,885 $1,859
Accounts receivable,
net 2,745 2,955
Inventories 584 1,049
Other current assets 1,556 2,071
Total current
assets 7,770 7,934
Property, plant and
equipment, net 2,453 2,697
Goodwill 2,182 2,126
Long-term marketable debt
securities 2,979 4,312
Other non-current assets,
net 1,158 1,112
$16,542 $18,181
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $205 $3
Accounts payable 1,044 1,050
Accrued liabilities 2,084 2,266
Deferred revenues and
customer deposits 1,785 1,827
Total current
liabilities 5,118 5,146
Long-term debt 1,449 1,565
Other non-current
obligations 215 884
Stockholders' equity 9,760 10,586
$16,542 $18,181
* Derived from audited financial statements
