View PDF- Reported revenue of
$860.9 million for theDecember 2012 quarter, down 5% from the prior quarter
- Reported GAAP gross margin of 36.6%, GAAP operating margin of 0.5% and GAAP EPS of
$0.04
- Delivered non-GAAP gross margin of 44.2%, operating margin of 11.5%, and EPS of
$0.45
- Repurchased 10 million shares of common stock, completing approximately
$1.4 billion of$1.6 billion in announced buybacks
Lam Research Corporation
Financial Highlights for the Quarter Ended December 23, 2012
(in thousands, except per share data and percentages)
U.S. GAAP Non-GAAP
----------- -----------
Revenue: $ 860,886 $ 860,886
Operating Margin: 0.5% 11.5%
Net Income: $ 6,408 $ 77,278
Diluted EPS: $ 0.04 $ 0.45
Revenue for the period was
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
Non-GAAP Financial Measures
On a non-GAAP basis, net income was
"Lam closed calendar year 2012 by delivering solid financial performance for the December quarter and strong execution against our integration plans," stated
Cash and cash equivalents, short-term investments and restricted cash and investment balances decreased to
The geographic distribution of shipments and revenue during the
Region Shipments Revenue
---------------------------------------------------- ---------- ----------
North America 29% 24%
Europe 9% 8%
Japan 14% 10%
Korea 12% 12%
Taiwan 22% 26%
Asia Pacific 14% 20%
Use of Non-GAAP Financial Measures
Management uses non-GAAP gross margin, 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.
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not 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 to, but are not limited to, the anticipated revenue from shipments to Japanese customers, our expectations for growth and future demand for semiconductor equipment, and our plans pertaining to expense management, funding technology investments and positioning our products with customer as well as our ability to execute on those plans. 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
About
Consolidated Financial Tables Follow.
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited)
Three Months Ended Six Months Ended
---------------------------------- ----------------------
December September December December December
23, 2012 23, 2012 25, 2011 23, 012 25, 2011
---------- ---------- ---------- ---------- ----------
Revenue $ 860,886 $ 906,888 $ 583,981 $1,767,774 $1,264,417
Cost of goods
sold 545,472 573,002 350,014 1,118,474 746,567
Cost of goods
sold -
restructuring
and
impairments - - (859) - (859)
---------- ---------- ---------- ---------- ----------
Total cost
of goods
sold 545,472 573,002 349,155 1,118,474 745,708
---------- ---------- ---------- ---------- ----------
Gross margin 315,414 333,886 234,826 649,300 518,709
Gross margin
as a
percent of
revenue 36.6% 36.8% 40.2% 36.7% 41.0%
Research and
development 165,951 163,311 104,024 329,262 206,583
Selling, general
and
administrative 144,400 153,863 83,256 298,263 163,456
Restructuring
and impairments 1,021 - - 1,021 1,725
---------- ---------- ---------- ---------- ----------
Total
operating
expenses 311,372 317,174 187,280 628,546 371,764
---------- ---------- ---------- ---------- ----------
Operating
income 4,042 16,712 47,546 20,754 146,945
Operating
margin as a
percent of
revenue 0.5% 1.8% 8.1% 1.2% 11.6%
Other income
(expense), net (13,390) (9,938) (7,785) (23,328) (19,858)
---------- ---------- ---------- ---------- ----------
Income
(loss)
before
income
taxes (9,348) 6,774 39,761 (2,574) 127,087
Income tax
expense
(benefit) (15,756) 4,006 6,549 (11,750) 22,037
---------- ---------- ---------- ---------- ----------
Net income $ 6,408 $ 2,768 $ 33,212 $ 9,176 $ 105,050
========== ========== ========== ========== ==========
Net income per
share:
Basic net
income per
share $ 0.04 $ 0.02 $ 0.28 $ 0.05 $ 0.87
========== ========== ========== ========== ==========
Diluted net
income per
share $ 0.04 $ 0.02 $ 0.27 $ 0.05 $ 0.86
========== ========== ========== ========== ==========
Number of shares
used in per
share
calculations:
Basic 170,699 179,928 119,739 175,314 121,435
========== ========== ========== ========== ==========
Diluted 173,027 181,926 120,873 177,490 122,382
========== ========== ========== ========== ==========
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 23, September 23, June 24,
2012 2012 2012
------------- ------------- -------------
(unaudited) (unaudited) (1)
ASSETS
Cash and cash equivalents $ 1,190,189 $ 1,411,466 $ 1,564,752
Short-term investments 1,330,498 1,312,767 1,297,931
Accounts receivable, net 590,925 640,217 765,818
Inventories 530,272 567,920 632,853
Deferred income taxes 139,300 136,556 47,782
Other current assets 65,224 100,490 105,973
------------- ------------- -------------
Total current assets 3,846,408 4,169,416 4,415,109
Property and equipment, net 590,547 593,202 584,596
Restricted cash and investments 166,166 166,196 166,335
Deferred income taxes 344 - -
Goodwill and intangible assets 2,608,221 2,642,770 2,686,730
Other assets 151,478 152,762 151,882
------------- ------------- -------------
Total assets $ 7,363,164 $ 7,724,346 $ 8,004,652
============= ============= =============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $ 825,482 $ 854,257 $ 1,426,928
------------- ------------- -------------
Long-term debt, convertible notes,
and capital leases $ 1,286,729 $ 1,278,792 $ 761,783
Income taxes payable 260,063 282,844 274,240
Other long-term liabilities 294,300 296,807 219,577
------------- ------------- -------------
Total liabilities 2,666,574 2,712,700 2,682,528
============= ============= =============
Senior convertible notes - - 190,343
Stockholders' equity 4,696,590 5,011,646 5,131,781
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 7,363,164 $ 7,724,346 $ 8,004,652
============= ============= =============
(1) Derived from audited financial statements
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
---------------------------------- ----------------------
December September December December December
23, 2012 23, 2012 25, 2011 23, 2012 25, 2011
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net income $ 6,408 $ 2,768 $ 33,212 $ 9,176 $ 105,050
Adjustments to
reconcile net
income to net
cash provided
by operating
activities:
Depreciation
and
amortization 78,388 74,816 22,372 153,204 43,732
Deferred
income taxes (7,320) (12,017) (633) (19,337) (633)
Restructuring
and
impairment
charges, net 1,021 - (859) 1,021 866
Equity-based
compensation
expense 24,027 24,414 18,224 48,441 35,968
Income tax
benefit on
equity-based
compensation
plans - - 470 - 1,129
Excess tax
benefit on
equity-based
compensation
plans - - (204) - (2,155)
Amortization
of
convertible
note discount 7,843 7,752 6,671 15,595 13,264
Impairment of
investment - - - - 1,724
Other, net 13,673 11,050 1,083 24,723 2,506
Changes in
operating
assets and
liabilities: 69,186 140,479 88,680 209,665 54,465
---------- ---------- ---------- ---------- ----------
Net cash
provided by
operating
activities 193,226 249,262 169,016 442,488 255,916
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Capital
expenditures
and intangible
assets (38,924) (43,965) (26,682) (82,889) (42,414)
Cash acquired in
(paid for)
business
acquisition (8,716) - - (8,716) -
Net
sales/maturitie
s (purchases)
of available-
for-sale
securities (23,250) (16,638) (4,194) (39,888) (89,453)
Purchase of
equity method
investment - - (10,740) - (10,740)
Receipt of loan
payment - - 8,375 - 8,375
Proceeds from
sale of assets 660 - 2,677 660 2,677
Transfer of
restricted cash
and investments 33 146 3 179 20
---------- ---------- ---------- ---------- ----------
Net cash
provided by
(used for)
investing
activities (70,197) (60,457) (30,561) (130,654) (131,535)
---------- ---------- ---------- ---------- ----------
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Principal
payments on
long-term debt
and capital
lease
obligations (115) (665) (1,576) (780) (3,140)
Excess tax
benefit on
equity-based
compensation
plans - - 204 - 2,155
Net cash
received in
settlement
(paid in
advance for)
stock
repurchase
contracts - - 51,005 - (23,995)
Treasury stock
purchases (355,010) (355,079) (20,642) (710,089) (92,695)
Reissuances of
treasury stock
related to
employee stock
purchase plan - 9,925 - 9,925 8,858
Proceeds from
issuance of
common stock 6,583 951 1,311 7,534 1,475
---------- ---------- ---------- ---------- ----------
Net cash
used for
financing
activities (348,542) (344,868) 30,302 (693,410) (107,342)
---------- ---------- ---------- ---------- ----------
Effect of
exchange rate
changes on cash 4,236 2,777 (1,147) 7,013 (2,243)
Net increase
(decrease) in
cash and cash
equivalents (221,277) (153,286) 167,610 (374,563) 14,796
Cash and cash
equivalents at
beginning of
period 1,411,466 1,564,752 1,339,318 1,564,752 1,492,132
---------- ---------- ---------- ---------- ----------
Cash and cash
equivalents at
end of period $1,190,189 $1,411,466 $1,506,928 $1,190,189 $1,506,928
========== ========== ========== ========== ==========
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
------------- -------------
December 23, September 23,
2012 2012
------------- -------------
U.S. GAAP net income $ 6,408 $ 2,768
Pre-tax non-GAAP items:
Costs associated with rationalization of
certain product configurations - cost of
goods sold 17,434 3,210
Amortization related to intangible assets
acquired in Novellus transaction - cost of
goods sold 20,745 20,715
Acquisition-related inventory fair value
impact - cost of goods sold 26,882 43,842
Integration costs - cost of goods sold - 694
Integration costs - operating expenses 8,971 13,500
Amortization related to intangible assets
acquired in Novellus transaction -
operating expenses 19,438 19,418
Restructuring charges - operating expenses 1,021 -
Costs associated with rationalization of
certain product configurations - operating
expenses 443 -
Amortization of convertible note discount,
Lam notes - other income (expense), net 6,992 6,910
Amortization of convertible note discount,
Novellus assumed notes - other income
(expense), net 821 842
Net tax benefit on non-GAAP items (14,883) (14,886)
Net tax benefit on successful resolution of
certain tax matters (16,994) -
------------- -------------
Non-GAAP net income $ 77,278 $ 97,013
============= =============
Non-GAAP net income per diluted share $ 0.45 $ 0.53
============= =============
Number of shares used for diluted per share
calculation 173,027 181,926
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 Three Months
Ended Ended
------------- -------------
December 23, September 23,
2012 2012
------------- -------------
U.S. GAAP gross margin $ 315,414 $ 333,886
Pre-tax non-GAAP items:
Costs associated with rationalization of
certain product configurations - cost of
goods sold 17,434 3,210
Amortization related to intangible assets
acquired in Novellus transaction - cost of
goods sold 20,745 20,715
Acquisition-related inventory fair value
impact - cost of goods sold 26,882 43,842
Integration costs - cost of goods sold - 694
------------- -------------
Non-GAAP gross margin $ 380,475 $ 402,347
============= =============
U.S. GAAP gross margin as a percentage of
revenue 36.6% 36.8%
Non-GAAP gross margin as a percentage of
revenue 44.2% 44.4%
U.S. GAAP operating expenses $ 311,372 $ 317,174
Pre-tax non-GAAP items:
Integration costs - operating expenses (8,971) (13,500)
Amortization related to intangible assets
acquired in Novellus transaction -
operating expenses (19,438) (19,418)
Restructuring charges - operating expenses (1,021) -
Costs associated with rationalization of
certain product configurations - operating
expenses (443) -
------------- -------------
Non-GAAP operating expenses $ 281,499 $ 284,256
============= =============
Non-GAAP operating income $ 98,976 $ 118,091
============= =============
Non-GAAP operating margin as a percent of
revenue 11.5% 13.0%
Lam Research Corporation Contact:Shanye Hudson Investor Relations phone: 510-572-4589 e-mail: shanye.hudson@lamresearch.comEd Rebello Corporate Communications phone: 510-572-6603 e-mail: edward.rebello@lamresearch.com
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