| 3rd Qtr. | 2nd Qtr. | 3rd Qtr. | |||||||||||||||||||
| June 1, 2017 | March 2, 2017 | June 2, 2016 | |||||||||||||||||||
| Net sales | $ | 5,566 | $ | 4,648 | $ | 2,898 | |||||||||||||||
| Cost of goods sold | 2,957 | 2,944 | 2,400 | ||||||||||||||||||
| GAAP gross margin | 2,609 | 46.9 | % | 1,704 | 36.7 | % | 498 | 17.2 | % | ||||||||||||
| Non-GAAP adjustments | |||||||||||||||||||||
| Flow-through of Inotera inventory step up | 36 | 60 | — | ||||||||||||||||||
| Stock-based compensation | 24 | 23 | 21 | ||||||||||||||||||
| Other | 2 | 2 | 6 | ||||||||||||||||||
| Total non-GAAP adjustments | 62 | 85 | 27 | ||||||||||||||||||
| Non-GAAP gross margin | $ | 2,671 | 48.0 | % | $ | 1,789 | 38.5 | % | $ | 525 | 18.1 | % | |||||||||
The tables above set forth non-GAAP net income (loss) attributable to Micron, diluted shares, diluted earnings (loss) per share, and gross margin. The adjustments above may or may not be infrequent or nonrecurring in nature but are a result of periodic or non-core operating activities of the company. The company believes this non-GAAP information is helpful to understanding trends and in analyzing the company's operating results and earnings. The company is providing this information to investors to assist in performing analyses of the company's operating results. When evaluating performance and making decisions on how to allocate company resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. The company believes these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of its business, enabling enhanced comparison of its operating results between periods and with peer companies. The presentation of these adjusted amounts vary from numbers presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. In the first quarter of fiscal 2017, the company began excluding stock-based compensation and amortization of acquisition-related intangible assets from non-GAAP results. Comparative periods have been restated.
The company's management excludes the following items in analyzing the company's operating results and understanding trends in the company's earnings:
- Flow-through of Inotera inventory step up;
- Stock-based compensation;
- Inotera acquisition costs;
- Restructure and asset impairments, including charges to impair equity method investments;
- Amortization of debt discount and other costs, including the accretion of non-cash interest expense associated with the company's convertible debt and the MMJ installment debt;
- Loss on restructure of debt;
- (Gain) loss from changes in currency exchange rates;
- (Gain) loss from business acquisition activities;
- Amortization of acquisition-related intangible assets; and
- Estimated tax effects of above and non-cash changes in net deferred income taxes.
