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AMD Reports Fourth Quarter Results
Date: Thursday January 20, 2000
Category: Press Release
Manufacturer Link: AMD Discus -- BBS
Led by strong seasonal consumer demand for personal computers, AMD today reported record sales of $968,710,000 and net income of $65,080,000 in the quarter ended December 26, 1999.

SUNNYVALE, CA -- January 19, 2000 -- Led by strong seasonal consumer demand for personal computers, AMD today reported record sales of $968,710,000 and net income of $65,080,000 in the quarter ended December 26, 1999. Net income amounted to $0.43 per diluted share. The company reported strong growth in the just-completed quarter and continuing strong demand in all of its product groups - the Computation Products Group, the Memory Group, and the Communications Group.

Sales grew by 46 percent from the immediate-prior quarter, and by 23 percent from the like period of 1998. In the immediate-prior quarter, AMD reported sales of $662,192,000 and a net loss of $105,545,000, or $0.72 per share. In the fourth quarter of 1998, AMD reported sales $788,820,000, which resulted in net income of $22,321,000, or $0.15 per diluted share.

At $2,857,604,000, AMD sales for 1999 grew by 12 percent and reached a record high for the company. For 1999, AMD reported a net loss of $88,936,000, or $0.60 per share. Results for 1999 include a one-time after-tax gain of $259,236,000 from the sale of Vantis Corporation, the company's programmable logic products subsidiary that was sold during the second quarter of 1999. Sales for AMD continuing product groups - the Computation Products Group, Communications Group, and Memory Group - grew by 17 percent over 1998. In 1998, AMD reported sales of $2,542,141,000, and a net loss of $103,960,000, or $0.72 per share.

"AMD had an outstanding quarter as all of our product groups reported significant growth in sales from the immediate-prior quarter," said W.J. Sanders III, chairman and chief executive officer. "Our results reflected both the seasonal boost in already-robust semiconductor demand and the successful achievement of our aggressive goals for the AMD AthlonT processor. Sales growth of AMD Athlon processors alone contributed more than half of our greater than $300 million sequential sales growth. Seasonal strength in the PC market also enabled us to grow sales sequentially from our AMD-K6r processor family on near-record unit volumes. Total PC processor unit shipments grew by 35 percent to more than 6 million units, a new record. Processor sales grew by 67 percent from the immediate-prior quarter and by 1 percent over the previous record in the comparable period of 1998.

"AMD Athlon processor unit sales surpassed our goal of 800,000 units for the quarter and enabled us to achieve our target of cumulative unit shipments of one million for the year.

"AMD continues to execute well to its processor roadmap," Sanders said. "We accelerated our planned introduction of higher-speed AMD Athlon processors, with 750-megahertz (MHz) devices in the fourth quarter and an 800-MHz version on January 6. Our transition to 180-nanometer (0.18-micron) technology is progressing smoothly. Eighty percent of our wafer output for AMD Athlon processors is currently on 180-nanometer technology, and our wafer output of AMD Athlon processors will be 100 percent on 180-nanometer technology in February."

The company stated that strong demand for AMD high-density, low-power Flash memory devices, driven primarily by cellular telephone applications, resulted in record sales of $275 million for the Memory Group. Sales increased by 33 percent over the immediate-prior quarter's sales of $206 million, and more than doubled from the like period of 1998 when sales were $132 million. Demand for AMD flash memory products continues to exceed capacity.

The Communications Group also benefited from strong demand, as it achieved 34 percent sequential sales growth over the immediate-prior quarter, and 48 percent sales growth over the like period of 1998. Communications Group sales reached $94 million in the fourth quarter compared to $70 million in the third quarter, and $63 million in the fourth quarter of 1998.

In the aggregate, the book-to-bill ratio was significantly over 1:1 in the fourth quarter.

"Our ability to return to solid profitability on substantial growth from all of our product groups is directly attributable to the exemplary performance of the worldwide AMD team. Particularly noteworthy in the quarter was the attainment of record unit market share* in PC processors in the era of AMD proprietary designs highlighted by the award-winning** AMD Athlon processor," Sanders concluded.

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 currently projects sales in the first quarter to be flat to slightly down, reflecting an anticipated seasonal slowdown in the retail sector of the personal computer market following an exceptionally strong fourth quarter in the sector. The company's current overall outlook is based on the following projections for its major product lines:

Based on the normal seasonal patterns of personal computer demand, the company expects its overall PC processor unit shipments will grow substantially from the comparable period of 1999, but will decline modestly from the record level of the fourth quarter. Unit shipments of AMD Athlon processors are expected to increase, resulting in a richer mix and higher blended average selling price for PC processors. For the year, the company anticipates continued growth in personal computer sales and in the PC processors that power them, with the distribution of unit demand skewed to the second half of the year as usual.

Communication Group sales are projected to grow by 50 percent compared to the first quarter of 1999 and by a mid-single-digit percentage sequentially. Demand remains strong.

AMD projects that Memory Group sales will more than double compared to the first quarter of 1999 and will grow by 10 percent sequentially. Demand is expected to continue to exceed supply.

With the Semiconductor Industry Association and others forecasting worldwide industry growth in the range of 20 to 25 percent in 2000, the company believes that it is positioned to grow faster than the industry.

AMD Teleconference
AMD will hold a teleconference for the financial community at 2:30 PM Pacific Standard Time today to discuss fourth-quarter and full-year financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its web site . The webcast will be available for two weeks after the teleconference.

AMD will also provide a telephone recording of the teleconference, which will be available at approximately 4:30 PM PST today. Interested persons may listen to the playback of the teleconference by calling the following toll-free number: 1-800-633-8284 and entering the code number 13853993.

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. Forward-looking statements are generally preceded by words such as "plans," "expects," "believes," "anticipates" or "intends." Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. Forward-looking statements in this release involve the risk that demand for AMD's products will not continue at current or greater levels; that the company will not be able to produce the AMD AthlonT processor using 0.18 micron process technology in the volume, speed mix or with the feature set necessary to meet customer requirements and the company's goals; that Intel Corporation pricing, marketing programs or other activities targeting the company's microprocessor business will prevent achievement of the company's current processor sales plans; that third parties may not provide timely or adequate infrastructure solutions to support the AMD AthlonT processor; and that the company will not be able to grow demand for its PC processors sufficient to utilize fully its processor production capacity. 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-Q for the quarter ended September 26, 1999.

*According to Mercury Research as reported in the Wall Street Journal on January 14, 2000.
** A list of the awards won by the AMD Athlon processor is attached.

AMD Athlon Processor Awards
Analyst's Choice Award - Best PC Processor, Microprocessor Report, January 2000; Technical Excellence - Best Component (Hardware Category), PC Magazine, November 1999; CPU of the Year, Maximum PC, December 1999; Best Product of 1999 (Hardware), Windows NT Systems, January 2000; All-Star Award, Cadalyst, December 1999; Wired for 3D Editors' Choice, 3D Magazine, January 2000; Attaboy Award - Product of the Year, Houston Chronicle, December 1999; Technical Excellence - Best Component (Hardware Category), PC Magazine en Espanol, December 1999; Best Overall Product of the Year, PC Magazine (UK), December 1999; Best System Design - Processor, PC Magazine (UK), December 1999; Product of the Year, PC Expert (France), January 2000; Technical Excellence - Hardware and Component Category, PC Expert (France), January 2000; Year 2000 Star Product (New Technology Category), Info PC (France), January 2000; Overall Product of the Year, Info PC (France), January 2000; Editors' Choice, Generation PC (France), January 2000; Product of the Year, PC Compatibles (France), December 1999; Product of the Year - Processor, PC Direct (France), January 2000; Product of the Year 2000, PC Achat (France), January 2000; Product of the Year, PC World (Denmark), December 1999; Product of the Year, PC World (Norway), December 1999; Best CPU for Desktops, PC World Komputer (Poland), December 1999; Technology Product of the Year, PC Kurier (Poland), January 2000; Millennium Award, Personal Computer Magazine (The Netherlands), January 2000; Best of Comdex (Israel), December 1999; and Best of World PC Expo 99 (Japan), Nikkei BYTE/Nikkei WinPC Magazine, September 1999.

AMD Athlon Processor-based Awards State-of-the-Art Desktop PC: Compaq Presario 5861, PC Computing, November 1999; Editors' Choice Award (Desktop PCs): TCE K7-600, Computer Reseller News, September 1999; #1 Midrange PC: Micro Express's MicroFlex-550B, PC World, January 2000; Best Hardware of 1999: Polywell Poly 800K7-700,, December 1999; System of the Year: Cybermax Enthusiast AP6 650 MHz Athlon, Maximum PC, December 1999; Attaboy Award - Best Consumer PC: Compaq Presario 5900Z, Houston Chronicle, December 1999; Cadalyst Labs 5-Star (out of a possible 5 stars) Highly Recommended Workstation: Polywell 800K7-6501 (with an AMD Athlon 650 MHz processor), Sys Performance 600A (AMD Athlon 600 MHz processor), and XI Computer 650K MTower SP (AMD Athlon 650 MHz processor); and Ultimate Game Machine (co-winner): Falcon Northwest Computers, Computer Gaming World, December 1999.

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