SUN MICROSYSTEMS REPORTS FIRST QUARTER RESULTSSUN MICROSYSTEMS REPORTS FIRST QUARTER RESULTSAnnounces Workforce and Facilities Reductions
SANTA CLARA, Calif. - October 17, 2002 -- Sun Microsystems, Inc. (NASDAQ: SUNW) a leader in systems and solutions that make the Net work, reported results today for its fiscal first quarter which ended September 29, 2002. Revenues for the first quarter of fiscal year 2003 were $2.7 billion, down 4 percent as compared with $2.9 billion for the first quarter of fiscal year 2002. GAAP net loss for the first quarter of fiscal year 2003 was $111 million and net loss per share was $.04 as compared with a net loss of $180 million and net loss per share of $.06 for the first quarter of fiscal year 2002. For the first quarter of fiscal year 2003, excluding a $31 million loss on equity investments, a $24 million charge in connection with previous restructuring charges, and a $22 million benefit for related tax effects, net loss was $78 million and net loss per share was $.02. Sun plans to reduce its workforce by approximately 11% from its Q1 fiscal year 2003 beginning headcount level and consolidate and eliminate excess space. As a result of these reductions, Sun expects to record a charge of approximately $300 million in the second quarter of fiscal year 2003. Steve McGowan, Sun's Chief Financial Officer and Executive Vice President of Corporate Resources said, "Sun has done an outstanding job in maintaining fiscal discipline but it hasn't been enough to counterbalance revenue shortfalls caused by the protracted economic downturn. We believe the actions announced today are necessary to return Sun to profitability and are in the best interest of our long-term shareholders." McGowan added, "Sun continued to remain cash flow positive from operations this quarter. We paid off $200 million of debt and, as a demonstration of faith in our company, we repurchased nearly $500 million dollars of stock. We ended the quarter with a cash and marketable securities position of over $5.2 billion and total debt of $1.5 billion." Sun's Chairman, President, and CEO Scott McNealy stated, "Despite the challenging economic environment, we continue to broaden our industry footprint and win customers in new markets such as life sciences, healthcare and retail. At the same time, we are protecting our investments in research and development, aggressively managing cash balances, and gaining market share from competitors." McNealy added, "We continue to deliver on our product roadmap and R&D investments with the goal of lowering customer acquisition costs and Total Cost of Ownership. In the last 90 days, we have announced the secure Linux desktop client, Solaris on x86, the Sun ONE software stack for Linux, and the Liberty-enabled Sun ONE Platform for Network Identity. In addition, we announced further advances in our UltraSPARC® processor-based technology and N1 architecture." McNealy concluded, "We are doing our best to manage the company responsibly for our long-term shareholders. Tough times require tough decisions and everyone at Sun is dedicated to returning the company to profitability as soon as possible." Sun has scheduled a conference call today to discuss its earnings for the first quarter of fiscal year 2003 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 statements regarding Sun's plans to reduce its workforce by 11% and consolidate and eliminate excess space; Sun's expectations to record a charge of approximately $300 million in the second quarter of fiscal 2003; Sun's belief that the workforce and facilities reductions are necessary to return the company to profitability; statements that Sun continues to broaden its industry footprint and win customers in new markets; statements regarding protecting its investments in research and development, aggressively managing cash balances and gaining market share from competitors; Sun's belief that it continues to deliver on its product roadmap and R&D investments; Sun's goal of lowering customer acquisition costs and Total Cost of Ownership; Sun's belief that it is doing its best to manage the company responsibly for long-term shareholders; and that everyone at Sun is dedicated to returning the company to profitability as soon as possible. Such statements are just predictions and involve 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, the failure to reduce costs or improve operating efficiencies, 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, 2002. About Sun Microsystems, Inc.Since its inception in 1982, a singular vision -- "The Network Is The Computer" -- has propelled Sun Microsystems, Inc. (Nasdaq: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://sun.com
Sun, Sun Microsystems, the Sun logo, Solaris, 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.PR Contacts for Press and Analysts:
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