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Lam Research Corporation
Financial Highlights for the Quarter Ended June 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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