- 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 EndedDecember 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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