Lam Research Corporation's (NASDAQ: LRCX) highlights for the
September 2011 quarter were:
Lam Research Corporation
Financial Highlights for the Quarter
Ended September 25, 2011
(in thousands, except per share data and
percentages)
U.S. GAAP Non-GAAP
--------- ---------
Revenue: $ 680,436 $ 680,436
Operating Margin: 14.6% 14.9%
Net Income: $ 71,838 $ 78,265
Diluted EPS: $ 0.58 $ 0.63
Lam Research Corporation today announced financial results for
the quarter ended September 25, 2011. Revenue for the period was
$680.4 million, gross margin was $283.9 million (41.7%), and net
income was $71.8 million, or $0.58 per diluted share, compared to
revenue of $752.0 million, gross margin of $338.5 million (45.0%),
and net income of $125.9 million, or $1.01 per diluted share, for
the June 2011 quarter. Shipments for the September 2011 quarter
were $580 million compared to $793 million during the June 2011
quarter.
In addition to U.S. Generally Accepted Accounting Principles
(GAAP) results, this commentary contains non-GAAP financial
measures. The Company's non-GAAP results for both the September
2011 and June 2011 quarters exclude certain costs for restructuring
and impairments and the amortization of convertible note discount.
Additionally, the Company's non-GAAP results for the June 2011
quarter exclude tax expense associated with legal entity
restructuring. Management uses non-GAAP operating income, operating
expenses, operating margin, net income, and net income per diluted
share to evaluate the Company's operating and financial results.
The Company believes the presentation of non-GAAP results is useful
to investors for analyzing business trends and comparing
performance to prior periods, along with enhancing the investors'
ability to view the Company's results from management's
perspective. Tables presenting reconciliations of non-GAAP results
to U.S. GAAP results are included at the end of this press release
and on the Company's web site at
http://investor.lamresearch.com.
Non-GAAP net income was $78.3 million, or $0.63 per diluted
share, in the September 2011 quarter compared to non-GAAP net
income of $142.3 million, or $1.14 per diluted share, for the June
2011 quarter. Gross margin for the September 2011 quarter was
$283.9 million, or 41.7%, compared to gross margin of $338.5
million, or 45.0%, for the June 2011 quarter. The sequential
decrease in gross margin was primarily due to less favorable
product mix and reflects the impact of lower factory utilization as
a result of the decline in business volumes. Non-GAAP operating
expenses for the September 2011 quarter were $182.8 million
compared with the June 2011 quarter of $179.5 million resulting
from our continued increase in research and development
activities.
The geographic distribution of shipments and revenue during the
September 2011 quarter is shown in the following table:
Region Shipments Revenue
----------------- ------------ ------------
North America 22% 19%
Europe 10% 11%
Japan 16% 18%
Korea 27% 25%
Taiwan 10% 13%
Asia Pacific 15% 14%
Cash and cash equivalents, short-term investments and restricted
cash and investments balances were $2.2 billion at the end of the
September 2011 quarter, compared to $2.3 billion at the end of the
June 2011 quarter. The decrease in cash and cash equivalents,
short-term investments and restricted cash and investments balances
during the quarter was due to activity related to our stock
repurchase program partially offset by cash flows from operating
activities. Cash flows from operating activities were approximately
$86.9 million or 13% of revenue during the September 2011 quarter.
Deferred revenue and deferred profit balances at the end of the
September 2011 quarter were $179.5 million and $112.5 million,
respectively. Lam's deferred revenue balance does not include
shipments to Japanese customers, to whom title does not transfer
until customer acceptance. Shipments to Japanese customers are
classified as inventory at cost until the time of acceptance. The
anticipated future revenue from shipments to Japanese customers was
approximately $43.4 million as of September 25, 2011.
"As expected, our September quarter results reflect the impact
of ongoing macroeconomic uncertainty on wafer fab equipment
spending," said Steve Newberry, Lam's chief executive officer and
vice chairman. "While customers are currently delaying near-term
expansion plans, they continue to make investments in leading edge
technologies that enhance their competitiveness. We expect that
when advanced technology device demand increases, capacity
expansion will resume. Lam traditionally excels in this
environment, and we remain focused on making the critical strategic
investments that extend our technical leadership, strengthen
customer trust and drive our long-term growth," Newberry
concluded.
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not statements of
historical fact are forward-looking statements and are subject to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements relate, but are
not limited, to the anticipated revenue from shipments to Japanese
customers, our future commitment to our current strategic
priorities, future wafer fab spending, customer investment
decisions, and our ability to sustain technical leadership,
strengthen our customer relationships and drive long term growth.
Some factors that may affect these forward-looking statements
include: business conditions in the consumer electronics industry,
the semiconductor industry and the overall economy; the strength of
the financial performance of our existing and prospective
customers; the introduction of new and innovative technologies; the
occurrence and pace of technology transitions and conversions; the
actions of our competitors, consumers, semiconductor companies and
key suppliers and subcontractors; and the success of research and
development and sales and marketing programs. These forward-looking
statements are based on current expectations and are subject to
uncertainties and changes in condition, significance, value and
effect as well as other risks detailed in documents filed by us
with the Securities and Exchange Commission, including specifically
our report on Form 10-K for the year ended June 26, 2011. These
uncertainties and changes could cause actual results to vary from
expectations. The Company undertakes no obligation to update the
information or statements made in this press release.
Lam Research Corporation is a major provider of wafer
fabrication equipment and services to the world's semiconductor
industry. Lam's common stock trades on The NASDAQ Global Select
Market SM under the symbol LRCX. Lam is a NASDAQ-100® company. For
more information, visit www.lamresearch.com.
Consolidated Financial Tables Follow
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited)
Three Months Ended
-------------------------------------------
September 25, June 26, September 26,
2011 2011 2010
------------- ------------- -------------
Revenue $ 680,436 $ 752,018 $ 805,874
Cost of goods sold 396,553 413,564 428,548
------------- ------------- -------------
Gross margin 283,883 338,454 377,326
Gross margin as a percent of
revenue 41.7% 45.0% 46.8%
Research and development 102,559 99,583 86,353
Selling, general and
administrative 80,200 79,938 72,142
Restructuring and impairments 1,725 16,742 (5,163)
------------- ------------- -------------
Total operating expenses 184,484 196,263 153,332
------------- ------------- -------------
Operating income 99,399 142,191 223,994
Operating margin as a percent
of revenue 14.6% 18.9% 27.8%
Other expense, net (12,073) (5,131) (979)
------------- ------------- -------------
Income before income taxes 87,326 137,060 223,015
Income tax expense 15,488 11,132 29,291
------------- ------------- -------------
Net income $ 71,838 $ 125,928 $ 193,724
============= ============= =============
Net income per share:
Basic net income per share $ 0.58 $ 1.02 $ 1.57
============= ============= =============
Diluted net income per share $ 0.58 $ 1.01 $ 1.55
============= ============= =============
Number of shares used in per
share calculations:
Basic 123,130 123,863 123,665
============= ============= =============
Diluted 124,049 125,086 125,202
============= ============= =============
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 25, June 26,
2011 2011
------------- -------------
(unaudited) (1)
ASSETS
Cash and cash equivalents $ 1,339,318 $ 1,492,132
Short-term investments 713,087 630,115
Accounts receivable, net 523,240 590,568
Inventories 396,301 396,607
Deferred income taxes 78,330 78,435
Other current assets 84,353 88,935
------------- -------------
Total current assets 3,134,629 3,276,792
Property and equipment, net 266,411 270,458
Restricted cash and investments 165,239 165,256
Deferred income taxes 4,718 3,892
Goodwill and intangible assets 212,087 216,616
Other assets 117,870 124,380
------------- -------------
Total assets $ 3,900,954 $ 4,057,394
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 594,594 $ 684,286
------------- -------------
Long-term debt, convertible notes, and capital
leases $ 743,252 $ 738,488
Income taxes payable 116,509 113,582
Other long-term liabilities 56,717 51,193
Stockholders' equity 2,389,882 2,469,845
------------- -------------
Total liabilities and stockholders' equity $ 3,900,954 $ 4,057,394
============= =============
(1) Derived from audited financial statements
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
-------------------------------------------
September 25, June, 26 September 26,
2011 2011 2010
------------- ------------- -------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 71,838 $ 125,928 $ 193,724
Adjustments to reconcile net
income to net cash provided by
(used for) operating
activities:
Depreciation and amortization 21,360 19,972 17,948
Deferred income taxes - (6,166) (783)
Restructuring and impairment
charges, net 1,725 16,742 (5,163)
Equity-based compensation
expense 17,744 14,788 13,009
Income tax benefit on equity-
based compensation plans 659 9,283 5,083
Excess tax benefit on equity-
based compensation plans (1,951) (8,184) (3,939)
Amortization of convertible
note discount 6,593 3,554 -
Impairment of investment 1,724 - -
Other, net 1,423 477 (1,964)
Changes in operating assets
and liabilities: (34,215) 21,714 37,829
------------- ------------- -------------
Net cash provided by
operating activities 86,900 198,108 255,744
------------- ------------- -------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures and
intangible assets (15,732) (34,571) (19,130)
Net sales/maturities
(purchases) of available-for-
sale securities (85,259) (316,789) (24,506)
Transfer of restricted cash and
investments 17 (8) (10)
------------- ------------- -------------
Net cash used for investing
activities (100,974) (351,368) (43,646)
------------- ------------- -------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on long-term
debt and capital lease
obligations (1,564) (81) (3,333)
Net proceeds from issuance of
long-term debt & convertible
notes - 882,831 -
Proceeds from sale of warrants - 133,830 -
Purchase of convertible note
hedge - (181,125) -
Excess tax benefit on equity-
based compensation plans 1,951 8,184 3,939
Net cash received in settlement
(paid in advance for) stock
repurchase contracts (75,000) (99,589) -
Treasury stock purchases (72,053) (53,753) (144,795)
Reissuances of treasury stock
related to employee stock
purchase plan 8,858 7,518 7,155
Proceeds from issuance of
common stock 164 2,179 835
------------- ------------- -------------
Net cash provided by (used
for) financing activities (137,644) 699,994 (136,199)
------------- ------------- -------------
Effect of exchange rate changes
on cash (1,096) 2,688 6,615
Net increase (decrease) in cash
and cash equivalents (152,814) 549,422 82,514
Cash and cash equivalents at
beginning of period 1,492,132 942,710 545,767
------------- ------------- -------------
Cash and cash equivalents at
end of period $ 1,339,318 $ 1,492,132 $ 628,281
============= ============= =============
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income
(in thousands, except per share data)
(unaudited)
Three Months Three Months
Ended Ended
------------- -------------
September 25, June 26,
2011 2011
------------- -------------
U.S. GAAP net income $ 71,838 $ 125,928
Pre-tax non-GAAP items:
Restructuring and impairments - operating
expenses 1,725 16,742
Amortization of convertible note discount -
other income (expense), net 6,593 3,554
Impairment of investment - other
income(expense), net 1,724 -
Net tax benefit on non-GAAP items (3,615) (8,224)
Tax expense associated with legal entity
restructuring - 4,289
------------- -------------
Non-GAAP net income $ 78,265 $ 142,289
============= =============
Non-GAAP net income per diluted share $ 0.63 $ 1.14
============= =============
Number of shares used for diluted per share
calculation 124,049 125,086
Reconciliation of U.S. GAAP Operating Expenses and Operating Income to Non-
GAAP Operating Expenses and Operating Income
(in thousands, except percentages)
(unaudited)
Three Months Three Months
Ended Ended
------------- -------------
September 25, June 26,
2011 2011
------------- -------------
U.S. GAAP gross margin $ 283,883 $ 338,454
U.S. GAAP operating expenses $ 184,484 $ 196,263
Pre-tax non-GAAP items:
Restructuring and impairments - operating
expenses (1,725) (16,742)
------------- -------------
Non-GAAP operating expenses $ 182,759 $ 179,521
============= =============
Non-GAAP operating income $ 101,124 $ 158,933
============= =============
Non-GAAP operating margin as a percent of
revenue 14.9% 21.1%
Lam Research Corporation Contact: Shanye Hudson Director,
Investor Relations phone: 510-572-4589 e-mail: Email Contact
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