Lam Research Corporation (the "Company," "Lam," "Lam Research")
today announced financial results for the quarter ended
September 27, 2020 (the “September 2020 quarter”).
Highlights for the September 2020 quarter were as follows:
- Revenue of $3.18 billion.
- U.S. GAAP gross margin of 47.4%, U.S. GAAP operating income as
a percentage of revenue of 30.2%, and U.S. GAAP diluted EPS of
$5.59.
- Non-GAAP gross margin of 47.5%, non-GAAP operating income as a
percentage of revenue of 31.1%, and non-GAAP diluted EPS of
$5.67.
Key Financial Data for the Quarters
Ended September 27, 2020 and June 28,
2020 (in thousands, except per-share data,
percentages, and basis points)
U.S. GAAP |
|
September 2020 |
|
June 2020 |
|
Change Q/Q |
Revenue |
$ |
3,177,080 |
|
|
$ |
2,791,864 |
|
|
+ 14 |
% |
Gross margin as percentage of
revenue |
47.4 |
% |
|
45.9 |
% |
|
+ 150 bps |
|
Operating income as percentage
of revenue |
30.2 |
% |
|
27.1 |
% |
|
+ 310 bps |
|
Diluted EPS |
$ |
5.59 |
|
|
$ |
4.73 |
|
|
+ 18 |
% |
|
|
|
|
|
|
Non-GAAP |
|
September 2020 |
|
June 2020 |
|
Change Q/Q |
Revenue |
$ |
3,177,080 |
|
|
$ |
2,791,864 |
|
|
+ 14 |
% |
Gross margin as percentage of
revenue |
47.5 |
% |
|
46.1 |
% |
|
+ 140 bps |
|
Operating income as percentage
of revenue |
31.1 |
% |
|
28.5 |
% |
|
+ 260 bps |
|
Diluted EPS |
$ |
5.67 |
|
|
$ |
4.78 |
|
|
+ 19 |
% |
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP Financial Results
For the September 2020 quarter, revenue was $3,177 million,
gross margin was $1,506 million, or 47.4% of revenue, operating
expenses were $545 million, operating income was 30.2% of revenue,
and net income was $823 million, or $5.59 per diluted share on a
U.S. GAAP basis. This compares to revenue of $2,792 million, gross
margin of $1,280 million, or 45.9% of revenue, operating expenses
of $525 million, operating income of 27.1% of revenue, and net
income of $697 million, or $4.73 per diluted share, for the quarter
ended June 28, 2020 (the “June 2020 quarter”).
Non-GAAP Financial Results
For the September 2020 quarter, non-GAAP gross margin was $1,511
million, or 47.5% of revenue, non-GAAP operating expenses were $523
million, non-GAAP operating income was 31.1% of revenue, and
non-GAAP net income was $835 million, or $5.67 per diluted share.
This compares to non-GAAP gross margin of $1,288 million, or 46.1%
of revenue, non-GAAP operating expenses of $493 million, non-GAAP
operating income of 28.5% of revenue, and non-GAAP net income of
$704 million, or $4.78 per diluted share, for the June 2020
quarter.
“Lam generated outstanding results in the September quarter with
record revenues and earnings per share,” said Tim Archer, Lam
Research’s President and Chief Executive Officer. “Our strong
operational execution is enabling the Company to meet our
customers' critical needs, providing a solid foundation to deliver
on our long-term growth objectives.”
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and
restricted cash and investments balances decreased slightly to $6.9
billion at the end of the September 2020 quarter compared to $7.0
billion at the end of the June 2020 quarter. This decrease was
primarily the result of $448.6 million of share
repurchases, including net share settlement on employee stock-based
compensation; $167.1 million of dividends paid to stockholders; and
$62.8 million of capital expenditures, partially offset by $642.5
million of cash generated from operating activities.
Revenue
The geographic distribution of revenue during the September 2020
quarter is shown in the following table:
Region |
Revenue |
China |
37 |
% |
Korea |
24 |
% |
Taiwan |
14 |
% |
Japan |
12 |
% |
Southeast Asia |
7 |
% |
United States |
4 |
% |
Europe |
2 |
% |
|
|
|
The following table presents revenue disaggregated between
system and customer support-related revenue:
|
Three Months Ended |
|
September 27, 2020 |
|
June 28, 2020 |
|
September 29, 2019 |
|
(In thousands) |
System revenue |
$ |
2,148,241 |
|
|
$ |
1,865,249 |
|
|
$ |
1,365,228 |
|
Customer support-related
revenue and other |
1,028,839 |
|
|
926,615 |
|
|
800,518 |
|
|
$ |
3,177,080 |
|
|
$ |
2,791,864 |
|
|
$ |
2,165,746 |
|
|
|
|
|
|
|
|
|
|
|
|
|
System revenue includes sales of new leading-edge equipment in
deposition, etch and clean markets.
Customer support-related revenue includes sales of customer
service, spares, upgrades, and non-leading-edge equipment from our
Reliant product line.
Outlook
For the quarter ended December 27, 2020, Lam is providing the
following guidance:
|
U.S. GAAP |
|
Reconciling Items |
|
Non-GAAP |
Revenue |
$3.3 Billion |
+/- |
$200 Million |
|
— |
|
$3.3 Billion |
+/- |
$200 Million |
Gross margin as a percentage of revenue |
|
46.0 |
% |
+/- |
|
1 |
% |
|
$ |
1 Million |
|
|
|
46.0 |
% |
+/- |
|
1 |
% |
Operating income as a
percentage of revenue |
|
29.1 |
% |
+/- |
|
1 |
% |
|
$ |
14 Million |
|
|
|
29.5 |
% |
+/- |
|
1 |
% |
Net income per diluted
share |
$ |
5.51 |
|
+/- |
$ |
0.40 |
|
|
$ |
13 Million |
|
|
$ |
5.60 |
|
+/- |
$ |
0.40 |
|
Diluted share count |
146 Million |
|
— |
|
146 Million |
|
|
|
|
|
|
The information provided above is only an estimate of what the
Company believes is realizable as of the date of this release and
does not incorporate the potential impact of any business
combinations, asset acquisitions, divestitures, restructuring,
balance sheet valuation adjustments, financing arrangements, other
investments, or other significant arrangements that may be
completed after the date of this release. U.S. GAAP to non-GAAP
reconciling items provided include only those items that are known
and can be estimated as of the date of this release. Actual results
will vary from this model and the variations may be material.
Reconciling items included above are as follows:
- Gross margin as a percentage of revenue - amortization related
to intangible assets acquired through business combinations, $1
million.
- Operating income as a percentage of revenue - amortization
related to intangible assets acquired through business
combinations, $14 million.
- Net income per diluted share - amortization related to
intangible assets acquired though business combinations, $14
million; amortization of note discounts, $1 million; and associated
tax benefit for non-GAAP items ($2 million); totaling $13
million.
Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release also
contains non-GAAP financial results. The Company’s non-GAAP results
for both the September 2020 and June 2020 quarters exclude
amortization related to intangible assets acquired through business
combinations, the effects of elective deferred compensation-related
assets and liabilities, amortization of note discounts, and income
tax expense (benefit) of non-GAAP items. Additionally, the June
2020 quarter non-GAAP results exclude an adjustment to the
previously recognized cumulative income tax benefit reversal
associated with the Ninth Circuit decision to deny a rehearing of
the Altera stock-based compensation case.
Management uses non-GAAP gross margin, operating expense,
operating income, operating income as a percentage of revenue, 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 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
website at http://investor.lamresearch.com.
Caution Regarding Forward-Looking
StatementsStatements made in this press release that are
not of historical fact are forward-looking statements and are
subject to the safe harbor provisions created by the Private
Securities Litigation Reform Act of 1995. Such
forward-looking statements relate to, but are not limited to: our
operational execution; our ability to meet our customers’ critical
needs; and our ability to deliver on our long term growth
objectives. Some factors that may affect these forward-looking
statements include: the severity, magnitude and duration of the
COVID–19 pandemic (and the related governmental, public health,
business and community responses to it), and their impacts on our
business, results of operations and financial condition, are
evolving and are highly uncertain and unpredictable; business,
political and/or regulatory conditions in the consumer electronics
industry, the semiconductor industry and the overall economy may
deteriorate or change; the actions of our customers and competitors
may be inconsistent with our expectations; trade regulations,
export controls, and trade disputes may inhibit our ability to sell
our products; and widespread outbreaks of illness may impact our
operations and revenue in affected areas; as well as the other
risks and uncertainties that are described in the documents filed
or furnished by us with the Securities and Exchange Commission,
including specifically the Risk Factors described in our annual
report on Form 10–K for the fiscal year ended June 28, 2020. These
uncertainties and changes could materially affect the
forward-looking statements and cause actual results to vary from
expectations in a material way. The Company undertakes no
obligation to update the information or statements made in this
release.
Lam Research Corporation is a global supplier of innovative
wafer fabrication equipment and services to the semiconductor
industry. As a trusted, collaborative partner to the world’s
leading semiconductor companies, we combine superior systems
engineering capability, technology leadership, and unwavering
commitment to customer success to accelerate innovation through
enhanced device performance. In fact, today, nearly every advanced
chip is built with Lam technology. Lam Research (Nasdaq: LRCX) is a
FORTUNE 500® company headquartered in Fremont, Calif., with
operations around the globe. Learn more at www.lamresearch.com.
(LRCX-F)
Consolidated Financial Tables Follow.
LAM RESEARCH
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share data and
percentages)(unaudited)
|
Three Months Ended |
|
September 27, 2020 |
|
June 28, 2020 |
|
September 29, 2019 |
Revenue |
$ |
3,177,080 |
|
|
$ |
2,791,864 |
|
|
$ |
2,165,746 |
|
Cost of goods sold |
1,670,901 |
|
|
1,511,532 |
|
|
1,184,036 |
|
Gross margin |
1,506,179 |
|
|
1,280,332 |
|
|
981,710 |
|
Gross margin as a percent of revenue |
47.4 |
% |
|
45.9 |
% |
|
45.3 |
% |
Research and development |
355,367 |
|
|
338,810 |
|
|
286,827 |
|
Selling, general and
administrative |
189,748 |
|
|
185,800 |
|
|
157,428 |
|
Total operating expenses |
545,115 |
|
|
524,610 |
|
|
444,255 |
|
Operating income |
961,064 |
|
|
755,722 |
|
|
537,455 |
|
Operating income as a percent of revenue |
30.2 |
% |
|
27.1 |
% |
|
24.8 |
% |
Other expense, net |
(38,792 |
) |
|
(7,553 |
) |
|
(12,728 |
) |
Income before income taxes |
922,272 |
|
|
748,169 |
|
|
524,727 |
|
Income tax expense |
(98,821 |
) |
|
(51,496 |
) |
|
(58,938 |
) |
Net income |
$ |
823,451 |
|
|
$ |
696,673 |
|
|
$ |
465,789 |
|
Net income per share: |
|
|
|
|
|
Basic |
$ |
5.67 |
|
|
$ |
4.79 |
|
|
$ |
3.22 |
|
Diluted |
$ |
5.59 |
|
|
$ |
4.73 |
|
|
$ |
3.09 |
|
Number of shares used in per
share calculations: |
|
|
|
|
|
Basic |
145,267 |
|
|
145,295 |
|
|
144,673 |
|
Diluted |
147,248 |
|
|
147,416 |
|
|
150,682 |
|
Cash dividend declared per
common share |
$ |
1.30 |
|
|
$ |
1.15 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LAM RESEARCH
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
September 27, 2020 |
|
June 28, 2020 |
|
September 29, 2019 |
|
(unaudited) |
|
(1) |
|
(unaudited) |
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
4,129,067 |
|
|
$ |
4,915,172 |
|
|
$ |
4,607,182 |
|
Investments |
2,528,841 |
|
|
1,795,080 |
|
|
983,650 |
|
Accounts receivable, net |
2,317,922 |
|
|
2,097,099 |
|
|
1,635,643 |
|
Inventories |
2,138,050 |
|
|
1,900,024 |
|
|
1,483,385 |
|
Prepaid expenses and other
current assets |
161,003 |
|
|
146,160 |
|
|
124,755 |
|
Total current assets |
11,274,883 |
|
|
10,853,535 |
|
|
8,834,615 |
|
Property and equipment, net |
1,133,529 |
|
|
1,071,499 |
|
|
1,030,168 |
|
Restricted cash and
investments |
253,458 |
|
|
253,911 |
|
|
254,654 |
|
Goodwill and intangible
assets |
1,646,343 |
|
|
1,652,968 |
|
|
1,690,648 |
|
Other assets |
748,795 |
|
|
727,134 |
|
|
533,417 |
|
Total assets |
$ |
15,057,008 |
|
|
$ |
14,559,047 |
|
|
$ |
12,343,502 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
Current portion of long-term debt
and finance lease obligations |
$ |
834,138 |
|
|
$ |
839,877 |
|
|
$ |
645,158 |
|
Other current liabilities |
2,572,730 |
|
|
2,322,565 |
|
|
1,812,524 |
|
Total current liabilities |
3,406,868 |
|
|
3,162,442 |
|
|
2,457,682 |
|
Long-term debt and finance lease
obligations |
4,993,495 |
|
|
4,970,848 |
|
|
3,788,089 |
|
Income taxes payable |
879,870 |
|
|
909,709 |
|
|
856,895 |
|
Other long-term liabilities |
351,283 |
|
|
332,559 |
|
|
261,890 |
|
Total liabilities |
9,631,516 |
|
|
9,375,558 |
|
|
7,364,556 |
|
Temporary equity, convertible
notes |
6,307 |
|
|
10,995 |
|
|
42,553 |
|
Stockholders’ equity (2) |
5,419,185 |
|
|
5,172,494 |
|
|
4,936,393 |
|
Total liabilities and stockholders’ equity |
$ |
15,057,008 |
|
|
$ |
14,559,047 |
|
|
$ |
12,343,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Derived from audited financial
statements. (2) Common shares issued and
outstanding were 144,593 as of September 27,2020, 145,331 as
of June 28, 2020, and 144,871 as of September 29,2019.
LAM RESEARCH
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(in thousands, unaudited)
|
Three Months Ended |
|
September 27, 2020 |
|
June 28, 2020 |
|
September 29, 2019 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
Net income |
$ |
823,451 |
|
|
$ |
696,673 |
|
|
$ |
465,789 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
72,912 |
|
|
71,083 |
|
|
64,664 |
|
Deferred income taxes |
(1,850 |
) |
|
(92,293 |
) |
|
(2,992 |
) |
Equity-based compensation expense |
55,988 |
|
|
53,153 |
|
|
42,905 |
|
Amortization of note discounts and issuance costs |
1,422 |
|
|
1,329 |
|
|
1,675 |
|
Other, net |
2,917 |
|
|
(10,822 |
) |
|
4,026 |
|
Changes in operating assets and
liabilities |
(312,329 |
) |
|
93,925 |
|
|
(112,020 |
) |
Net cash provided by operating activities |
642,511 |
|
|
813,048 |
|
|
464,047 |
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
Capital expenditures and
intangible assets |
(62,806 |
) |
|
(50,554 |
) |
|
(39,256 |
) |
Net (purchase) sale of
available-for-sale securities |
(737,074 |
) |
|
(354,350 |
) |
|
790,478 |
|
Other, net |
(1,786 |
) |
|
(25,305 |
) |
|
(540 |
) |
Net cash (used for) provided by investing activities |
(801,666 |
) |
|
(430,209 |
) |
|
750,682 |
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
Proceeds from issuance of
long-term debt, net of issuance costs |
— |
|
|
1,974,651 |
|
|
— |
|
Principal payments on debt |
(19,173 |
) |
|
(2,948 |
) |
|
(28,965 |
) |
Repayments of borrowings on
revolving credit facility |
— |
|
|
(1,250,000 |
) |
|
— |
|
Treasury stock purchases |
(448,581 |
) |
|
(41,017 |
) |
|
(78,132 |
) |
Dividends paid |
(167,129 |
) |
|
(167,739 |
) |
|
(158,868 |
) |
Reissuance of treasury stock
related to employee stock purchase plan |
— |
|
|
46,992 |
|
|
— |
|
Proceeds from issuance of common
stock |
5,538 |
|
|
1,869 |
|
|
3,869 |
|
Other, net |
(2,140 |
) |
|
1,592 |
|
|
— |
|
Net cash (used for) provided by financing activities |
(631,485 |
) |
|
563,400 |
|
|
(262,096 |
) |
Effect of exchange rate changes
on cash, cash equivalents, and restricted cash |
4,082 |
|
|
7,103 |
|
|
(4,193 |
) |
Net (decrease) increase in cash,
cash equivalents, and restricted cash |
(786,558 |
) |
|
953,342 |
|
|
948,440 |
|
Cash, cash equivalents, and
restricted cash at beginning of period |
5,169,083 |
|
|
4,215,741 |
|
|
3,913,396 |
|
Cash, cash equivalents, and
restricted cash at end of period |
$ |
4,382,525 |
|
|
$ |
5,169,083 |
|
|
$ |
4,861,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Summary(in thousands, except percentages and per
share data)(unaudited)
|
Three Months Ended |
|
September 27, 2020 |
|
June 28, 2020 |
Revenue |
$ |
3,177,080 |
|
|
$ |
2,791,864 |
|
Gross margin |
$ |
1,510,673 |
|
|
$ |
1,288,339 |
|
Gross margin as percentage of
revenue |
47.5 |
% |
|
46.1 |
% |
Operating expenses |
$ |
523,086 |
|
|
$ |
493,115 |
|
Operating income |
$ |
987,587 |
|
|
$ |
795,224 |
|
Operating income as a
percentage of revenue |
31.1 |
% |
|
28.5 |
% |
Net income |
$ |
835,066 |
|
|
$ |
704,456 |
|
Net income per diluted
share |
$ |
5.67 |
|
|
$ |
4.78 |
|
Shares used in per share
calculation - diluted |
147,248 |
|
|
147,416 |
|
|
|
|
|
|
|
Reconciliation of U.S. GAAP Net Income to
Non-GAAP Net Income(in thousands, except per share
data) (unaudited)
|
Three Months Ended |
|
September 27, 2020 |
|
June 28, 2020 |
U.S. GAAP net income |
$ |
823,451 |
|
|
$ |
696,673 |
|
Pre-tax non-GAAP items: |
|
|
|
Amortization related to intangible assets acquired through certain
business combinations - cost of goods sold |
1,270 |
|
|
1,627 |
|
Loss on elective deferred compensation ("EDC") related liability -
cost of goods sold |
3,224 |
|
|
6,380 |
|
Loss on EDC related liability - research and development |
5,803 |
|
|
11,483 |
|
Amortization related to intangible assets acquired through certain
business combinations - selling, general and administrative |
12,357 |
|
|
12,357 |
|
Loss on EDC related liability - selling, general and
administrative |
3,869 |
|
|
7,655 |
|
Amortization of note discounts - other expense, net |
1,011 |
|
|
935 |
|
Gain on EDC related asset - other expense, net |
(12,927 |
) |
|
(26,135 |
) |
Net income tax benefit on
non-GAAP items |
(2,992 |
) |
|
(5,698 |
) |
Adjustment to cumulative
income tax benefit reversal due to a court ruling |
— |
|
|
(821 |
) |
Non-GAAP net income |
$ |
835,066 |
|
|
$ |
704,456 |
|
Non-GAAP net income per
diluted share |
$ |
5.67 |
|
|
$ |
4.78 |
|
U.S. GAAP net income per
diluted share |
$ |
5.59 |
|
|
$ |
4.73 |
|
U.S. GAAP and non-GAAP number
of shares used for per diluted share calculation |
147,248 |
|
|
147,416 |
|
|
|
|
|
|
|
Reconciliation of U.S. GAAP Gross Margin,
Operating Expenses and Operating Income to Non-GAAP Gross Margin,
Operating Expenses and Operating Income(in
thousands, except
percentages)(unaudited)
|
Three Months Ended |
|
September 27, 2020 |
|
June 28, 2020 |
U.S. GAAP gross margin |
$ |
1,506,179 |
|
|
$ |
1,280,332 |
|
Pre-tax non-GAAP items: |
|
|
|
Amortization related to intangible assets acquired through certain
business combinations |
1,270 |
|
|
1,627 |
|
Loss on EDC related liability |
3,224 |
|
|
6,380 |
|
Non-GAAP gross margin |
$ |
1,510,673 |
|
|
$ |
1,288,339 |
|
U.S. GAAP gross margin as a
percentage of revenue |
47.4 |
% |
|
45.9 |
% |
Non-GAAP gross margin as a
percentage of revenue |
47.5 |
% |
|
46.1 |
% |
U.S. GAAP operating
expenses |
$ |
545,115 |
|
|
$ |
524,610 |
|
Pre-tax non-GAAP items: |
|
|
|
Amortization related to intangible assets acquired through certain
business combinations |
(12,357 |
) |
|
(12,357 |
) |
Loss on EDC related liability |
(9,672 |
) |
|
(19,138 |
) |
Non-GAAP operating
expenses |
$ |
523,086 |
|
|
$ |
493,115 |
|
U.S. GAAP operating
income |
$ |
961,064 |
|
|
$ |
755,722 |
|
Non-GAAP operating income |
$ |
987,587 |
|
|
$ |
795,224 |
|
U.S. GAAP operating income as
percent of revenue |
30.2 |
% |
|
27.1 |
% |
Non-GAAP operating income as a
percent of revenue |
31.1 |
% |
|
28.5 |
% |
|
|
|
|
|
|
Lam Research Corporation Contacts:
Tina Correia, Investor Relations, phone: 510-572-1615, e-mail:
investor.relations@lamresearch.com
Lam Research (NASDAQ:LRCX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Lam Research (NASDAQ:LRCX)
Historical Stock Chart
From Apr 2023 to Apr 2024