Sun Microsystems Reports Final Results for Full Fiscal Year and Fourth Quarter 2008Announces Additional $1 Billion Share Repurchase Authorization SANTA CLARA, CA August 1, 2008 Sun Microsystems, Inc. (NASDAQ: JAVA) reported results today for its full fiscal year and fourth quarter, which ended June 30, 2008.
For the full fiscal year, Sun reported revenues of $13.880 billion, an increase of 0.1 percent over fiscal year 2007. Revenues for the fourth quarter of fiscal 2008 were $3.780 billion, a decrease of 1.4 percent from $3.835 in the fourth quarter of fiscal 2007. Total gross margin as a percent of revenues for the full fiscal year was 46.5 percent, an increase of 1.3 percentage points over fiscal year 2007. Gross margin for the fourth quarter of fiscal 2008 was 44.3 percent, a decrease of 2.9 percentage points from the fourth quarter of fiscal 2007. Net income on a GAAP basis for the full fiscal year was $403 million, or $0.49 per share on a diluted basis, as compared with net income of $473 million, or $0.52 per share on a diluted basis, for fiscal year 2007. Net income for the fourth quarter of fiscal 2008 was $88 million, or $0.11 per share on a diluted basis, as compared with net income of $329 million, or $0.36 per share on a diluted basis, for the fourth quarter of fiscal 2007. Non-GAAP net income for the full fiscal year was $1.101 billion, or $1.34 per share on a diluted basis, as compared with non-GAAP net income of $1.003 billion, or $1.11 per share on a diluted basis, for fiscal year 2007. Non-GAAP net income for the fourth quarter of fiscal 2008 was $275 million, or $0.35 per share on a diluted basis, as compared with non-GAAP net income of $458 million, or $0.50 per share on a diluted basis, for the fourth quarter of fiscal 2007. Non-GAAP net income excludes purchased-in-process research and development, amortization of acquisition related intangibles, stock-based compensation, restructuring and related impairment of long-lived assets, net gain or loss on equity investments, settlement income and the tax effect of these non-GAAP adjustments. Cash generated from operations for the full fiscal year was $1.3 billion, and the cash and marketable debt securities balance at the end of the year was approximately $3.3 billion. "On a year-over-year basis, we saw significant improvements across a number of key operating metrics ranging from gross margins to non-GAAP earnings per share and cash flow from operations," said Jonathan Schwartz, CEO of Sun Microsystems. "Despite this progress and strong growth in international geographies, slowing performance in the U.S. impacted top line revenue growth. Looking forward, we remain confident in open source innovation as the accelerant to our growth strategy through increased adoption of our open source offerings - from the OpenSolaris operating system and the MySQL database to the Lustre and ZFS storage systems, the foundation of our open storage platforms." Full Fiscal Year & Fourth Quarter 2008 Highlights:
During the fourth quarter, Sun continued to leverage its cash position, spending $464 million to repurchase 35.7 million shares of its common stock. Currently, $36 million remains of the $3 billion share repurchase program announced in Sun's fourth quarter of fiscal 2007. Sun also announced today that its Board of Directors authorized an additional repurchase of up to $1 billion of the company's outstanding common shares. For more information about this share repurchase, please see the press release issued by Sun today which can be found at www.sun.com/investors. Sun has scheduled a conference call today to discuss its financial results for the full fiscal year and fourth quarter 2008 at 5:00 a.m. (PT) / 8:00 a.m. (ET), which is being broadcast live at www.sun.com/investors. Financials
Condensed Consolidated Statements of Operations About Sun Microsystems, Inc.Sun Microsystems develops the technologies that power the global marketplace. Guided by a singular vision -- "The Network is the Computer" -- 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.
This press release contains forward-looking statements regarding the future results and performance of Sun Microsystems, Inc., including statements regarding Sun's confidence in open source innovation as the accelerant to its growth strategy, the rate of adoption of Sun's open source offerings and the offerings constituting the foundation of Sun's open storage platforms. 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 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended September 30, 2007, December 30, 2007 and March 30, 2008. Sun assumes no obligation to, and does not currently intend to, update these forward-looking statements.
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