Lam Research Corporation Financial Highlights for the Quarter EndedJune 24, 2012 (in thousands, except per share data and percentages) Lam Combined Combined Stand-alone U.S. GAAP Non-GAAP Non-GAAP ------------- ------------- ------------- Revenue: $ 741,814 $ 741,814 $ 715,971 Gross Margin: 40.2% 42.1% 41.9% Operating Margin: 4.4% 13.2% 14.7% Net Income: $ 18,069 $ 80,873 $ 88,164 Diluted EPS: $ 0.13 $ 0.60 $ 0.75
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
Comparative highlights between the
June 2012 March 2012 Quarter Quarter ------------- ------------- Lam Stand-alone Non-GAAP gross margin $ 300,253 $ 269,757 Non-GAAP gross margin as a percentage of revenue 41.9% 40.9% Non-GAAP operating expenses $ 194,678 $ 196,753 Non-GAAP net income $ 88,164 $ 60,621 Non-GAAP net income per diluted share $ 0.75 $ 0.50
Lam Stand-alone non-GAAP gross margin performance improved in the
The geographic distribution of shipments and revenue during the
Shipments Revenue ------------------------- ------------------------- Lam Lam Region Combined Stand-alone Combined Stand-alone ------------------------ ------------ ------------ ------------ ------------ North America 15% 14% 13% 12% Europe 6% 6% 7% 7% Japan 7% 8% 7% 7% Korea 31% 32% 38% 39% Taiwan 29% 28% 24% 25% Asia Pacific 12% 12% 11% 10%
Cash and cash equivalents, short-term investments and restricted cash and investments balances increased to
"Lam delivered solid financial performance in the June quarter, with sequential growth across our core product and service businesses," said
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, the potential for accelerated growth arising from the acquisition of Novellus and the Company's future plans for its business. 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
Consolidated Financial Tables Follow
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data and percentages) Three Months Ended Twelve Months Ended ---------------------------------- ---------------------- June 24, March 25, June 26, June 24, June 26, 2012 2012 2011 2012 2011 ---------- ----------- ----------- ----------- ---------- (unaudited) (unaudited) (unaudited) (unaudited) (1) Total revenue $ 741,814 $ 658,961 $ 752,018 $ 2,665,192 $3,237,693 Cost of goods sold 443,601 391,814 413,564 1,581,982 1,740,461 Cost of goods sold - restructuring and impairments - - - (859) - ---------- ----------- ----------- ----------- ---------- Total costs of goods sold 443,601 391,814 413,564 1,581,123 1,740,461 ---------- ----------- ----------- ----------- ---------- Gross margin 298,213 267,147 338,454 1,084,069 1,497,232 Gross margin as a percent of revenue 40.2% 40.5% 45.0% 40.7% 46.2% Research and development 124,528 113,448 99,583 444,559 373,293 Selling, general and administrative 141,015 95,581 79,938 400,052 308,075 Restructuring and impairments - - 16,742 1,725 11,579 ---------- ----------- ----------- ----------- ---------- Total operating expenses 265,543 209,029 196,263 846,336 692,947 ---------- ----------- ----------- ----------- ---------- Operating income 32,670 58,118 142,191 237,733 804,285 Operating margin as a percent of revenue 4.4% 8.8% 18.9% 8.9% 24.8% Other income (expense), net (9,889) (3,568) (5,131) (33,315) (3,409) ---------- ----------- ----------- ----------- ---------- Income before income taxes 22,781 54,550 137,060 204,418 800,876 Income tax expense 4,712 8,946 11,132 35,695 77,128 ---------- ----------- ----------- ----------- ---------- Net income $ 18,069 $ 45,604 $ 125,928 $ 168,723 $ 723,748 ========== =========== =========== =========== ========== Net income per share: Basic net income per share $ 0.13 $ 0.38 $ 1.02 $ 1.36 $ 5.86 ========== =========== =========== =========== ========== Diluted net income per share $ 0.13 $ 0.38 $ 1.01 $ 1.35 $ 5.79 ========== =========== =========== =========== ========== Number of shares used in per share calculations: Basic 133,997 119,841 123,863 124,176 123,529 ========== =========== =========== =========== ========== Diluted 135,842 120,956 125,086 125,233 125,019 ========== =========== =========== =========== ==========
(1) Derived from audited financial statements
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 24, March 25, June 26, 2012 2012 2011 ----------- ----------- ---------- (unaudited) (unaudited) (1) ASSETS Cash and cash equivalents $ 1,564,752 $ 1,410,267 $1,492,132 Short-term investments 1,297,931 993,696 630,115 Accounts receivable, net 765,818 471,776 590,568 Inventories 632,853 376,126 396,607 Deferred income taxes 47,782 78,719 78,435 Other current assets 105,973 93,325 85,408 ----------- ----------- ---------- Total current assets 4,415,109 3,423,909 3,273,265 Property and equipment, net 584,596 279,955 270,458 Restricted cash and investments 166,335 165,220 165,256 Deferred income taxes - - 3,892 Goodwill and intangible assets 2,686,730 203,276 216,616 Other assets 151,882 120,903 124,380 ----------- ----------- ---------- Total assets $ 8,004,652 $ 4,193,263 $4,053,867 =========== =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 1,426,928 $ 651,655 $ 680,759 ----------- ----------- ---------- Long-term debt and capital leases $ 761,783 $ 755,427 $ 738,488 Income taxes payable 274,240 115,570 113,582 Other long-term liabilities 219,577 61,469 51,193 ----------- ----------- ---------- Total liabilities $ 2,682,528 $ 1,584,121 $1,584,022 =========== =========== ========== Senior convertible notes 190,343 - - Stockholders' equity 5,131,781 2,609,142 2,469,845 ----------- ----------- ---------- Total liabilities and stockholders' equity $ 8,004,652 $ 4,193,263 $4,053,867 =========== =========== ==========
(1) Derived from audited financial statements
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended Twelve Months Ended ---------------------------------- ---------------------- June 24, March 25, June 26, June 24, June 26, 2012 2012 2011 2012 2011 ---------- ----------- ----------- ----------- ---------- (unaudited ) (unaudited) (unaudited) (unaudited) (1) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 18,069 $ 45,604 $ 125,928 $ 168,723 $ 723,748 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 34,576 22,517 19,972 100,825 74,759 Deferred income taxes 39,356 3,723 (6,166) 42,446 (10,721) Restructuring charges, net - - 16,742 866 11,579 Equity-based compensation expense 29,174 16,417 14,788 81,559 53,012 Income tax benefit on equity-based compensation plans 1,429 (1,048) 9,283 1,510 28,775 Excess tax benefit on equity-based compensation plans (394) (137) (8,184) (2,686) (23,290) Impairment of investment - - - 1,724 - Amortization of convertible note discount 7,014 6,750 3,554 27,028 3,554 Other, net 7,206 1,165 477 10,877 (2,341) Changes in operating asset and liabilities: (39,715) 51,406 21,714 66,156 21,953 ---------- ----------- ----------- ----------- ---------- Net cash provided by operating activities 96,715 146,397 198,108 499,028 881,028 ---------- ----------- ----------- ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures and intangible assets (36,880) (27,978) (34,571) (107,272) (127,495) Cash acquired in business acquisition 418,681 - - 418,681 - Purchase of other investments - - - - (417) Net sales/maturities (purchases) of available-for- sale securities 329,689 (282,225) (316,789) (41,989) (353,523) Purchase of equity method investment - - - (10,740) - Receipt of loan payments - - - 8,375 - Proceeds from sale of assets - - - 2,677 1,544 Transfer of restricted cash and investments (29) 3 (8) (6) (22) ---------- ----------- ----------- ----------- ---------- Net cash provided by (used for) investing activities 711,461 (310,200) (351,368) 269,726 (479,913) ---------- ----------- ----------- ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt and capital lease obligations (1,101) (1,024) (81) (5,265) (4,530) Net proceeds from issuance of long-term debt - - 882,831 - 882,831 Proceeds from sale of warrants - - 133,830 - 133,830 Purchase of convertible note hedge - - (181,125) - (181,125) Excess tax benefit on equity-based compensation plans 394 137 8,184 2,686 23,290 Treasury stock purchases (661,059) (18,909) (53,753) (772,663) (211,316) Net cash received in settlement of (paid in advance for) stock repurchase contracts - 79,189 (99,589) 55,194 (149,589) Reissuances of treasury stock 8,765 7,902 7,518 25,525 21,194 Proceeds from issuance of common stock - 301 2,179 1,776 12,401 ---------- ----------- ----------- ----------- ---------- Net cash provided by (used for) financing activities (653,001) 67,596 699,994 (692,747) 526,986 ---------- ----------- ----------- ----------- ---------- Effect of exchange rate changes on cash (690) (454) 2,688 (3,387) 18,264 Net increase (decrease) in cash and cash equivalents 154,485 (96,661) 549,422 72,620 946,365 Cash and cash equivalents at beginning of period 1,410,267 1,506,928 942,710 1,492,132 545,767 ---------- ----------- ----------- ----------- ---------- Cash and cash equivalents at end of period $1,564,752 $ 1,410,267 $ 1,492,132 $ 1,564,752 $1,492,132 ========== =========== =========== =========== ==========
(1) Derived from audited financial statements
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income (in thousands, except per share data) (unaudited) Three Three Months Months Ended Ended --------- --------- June 24, March 25, 2012 2012 --------- --------- U.S. GAAP net income $ 18,069 $ 45,604 Pre-tax non-GAAP items: Costs associated with rationalization of certain product configurations - cost of goods sold 4,045 - Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold 4,540 - Acquisition-related inventory fair value impact - cost of goods sold 5,864 - Costs associated with customer bankruptcy filing - cost of goods sold - 2,610 Acquisition-related costs - operating expenses 37,374 3,195 Integration costs - operating expenses 7,293 8,441 Amortization related to intangible assets acquired in Novellus transaction - operating expenses 4,256 - Costs associated with rationalization of certain product configurations - operating expenses 1,850 - Bad debt and other expenses associated with customer bankruptcy filing - operating expenses - 640 Amortization of convertible note discount, Lam notes - other income (expense), net 6,830 6,750 Amortization of convertible note discount, Novellus assumed notes - other income (expense), net 184 - Acquisition-related costs - other income (expense), net 2,300 - Net tax benefit on non-GAAP items (11,732) (6,619) --------- --------- Non-GAAP net income $ 80,873 $ 60,621 ========= ========= Non-GAAP net income per diluted share $ 0.60 $ 0.50 ========= ========= Number of shares used for diluted per share calculation 135,842 120,956 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 Three Months Months Ended Ended --------- --------- June 24, March 25, 2012 2012 --------- --------- U.S. GAAP gross margin $ 298,213 $ 267,147 Pre-tax non-GAAP items: Costs associated with rationalization of certain product configurations - cost of goods sold 4,045 - Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold 4,540 - Acquisition-related inventory fair value impact - cost of goods sold 5,864 - Costs associated with customer bankruptcy filing - cost of goods sold - 2,610 --------- --------- Non-GAAP gross margin $ 312,662 $ 269,757 ========= ========= U.S. GAAP gross margin as a percentage of revenue 40.2% 40.5% Non-GAAP gross margin as a percentage of revenue 42.1% 40.9% U.S. GAAP operating expenses $ 265,543 $ 209,029 Pre-tax non-GAAP items: Acquisition-related costs - operating expenses (37,374) (3,195) Integration costs - operating expenses (7,293) (8,441) Amortization related to intangible assets acquired in Novellus transaction - operating expenses (4,256) - Costs associated with rationalization of certain product configurations - operating expenses (1,850) - Bad debt and other expenses associated with customer bankruptcy filing - operating expenses - (640) --------- --------- Non-GAAP operating expenses $ 214,770 $ 196,753 ========= ========= Non-GAAP operating income $ 97,892 $ 73,004 ========= ========= Non-GAAP operating margin as a percent of revenue 13.2% 11.1% Reconciliation of U.S. GAAP Other Income (Expense), Net to Non-GAAP Other Income (Expense), Net (in thousands) (unaudited) Three Months Ended -------------------- June 24, March 25, 2012 2012 --------- --------- U.S. GAAP other income (expense), net $ (9,889) $ (3,568) Pre-tax non-GAAP items: Amortization of convertible note discount, Lam notes 6,830 6,750 Amortization of convertible note discount, Novellus assumed notes 184 - Acquisition-related costs 2,300 - --------- --------- Non-GAAP other income (expense), net $ (575) $ 3,182 ========= ========= Reconciliation of Combined Non-GAAP Statement of Operations to Lam Stand- alone Non-GAAP Statement of Operations Three Months Ended June 24, 2012 (in thousands, except per share data and percentages) (unaudited) Less: Non-GAAP Results Lam Combined Attributable Stand-alone Non-GAAP to Novellus Non-GAAP ----------- ------------ -------------- Revenue $ 741,814 $ 25,843 $ 715,971 Cost of goods sold 429,152 13,434 415,718 ----------- ------------ ----------- Gross margin 312,662 12,409 300,253 Gross margin as a percent of revenue 42.1% 41.9% Total operating expenses 214,770 20,092 194,678 ----------- ------------ ----------- Operating income (loss) 97,892 (7,683) 105,575 Operating margin as a percent of revenue 13.2% 14.7% Other income (expense), net (575) (572) (3) ----------- ------------ ----------- Income (loss) before income taxes 97,317 (8,255) 105,572 Income tax expense (benefit) 16,444 (964) 17,408 ----------- ------------ ----------- Net income (loss) $ 80,873 $ (7,291) $ 88,164 =========== ============ =========== Net income per share: Basic net income per share $ 0.60 $ 0.76 =========== =========== Diluted net income per share $ 0.60 $ 0.75 =========== =========== Number of shares used in per share calculations: Basic 133,997 18,167 (1) 115,830 =========== ============ =========== Diluted 135,842 19,027 (2) 116,815 =========== ============ =========== (1) Excludes shares issued as acquisition consideration and acquired stock compensation award activity subsequent to acquisition (2) Excludes dilutive impact of assumed Novellus stock compensation awards and convertible note
Lam Research Corporation Contact:Shanye Hudson Director, Investor Relations phone: 510-572-4589 e-mail: shanye.hudson@lamresearch.com
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