Highlights for the
- Shipments of
$1,080 million , up 21% from the prior quarter
- Revenue of
$986 million , up 17% from the prior quarter
- GAAP gross margin of 42.0%, GAAP operating margin of 8.8% and GAAP diluted EPS of
$0.50
- Non-GAAP gross margin of 44.5%, non-GAAP operating margin of 14.4%, and non-GAAP diluted EPS of
$0.80
Financial Highlights for the Quarters Ended |
|||||||||||
(in thousands, except per-share data and percentages) | |||||||||||
U.S. GAAP | |||||||||||
June 2013 | March 2013 | Change Q/Q | |||||||||
Revenue | $ | 986,214 | $ | 844,928 | +17 | % | |||||
Gross margin as percentage of revenue | 42.0 | % | 40.2 | % | +180 bps | ||||||
Operating margin as percentage of revenue | 8.8 | % | 1.3 | % | +750 bps | ||||||
Diluted EPS | $ | 0.50 | $ | 0.11 | +355 | % | |||||
Non-GAAP | |||||||||||
June 2013 | March 2013 | Change Q/Q | |||||||||
Revenue | $ | 986,214 | $ | 844,928 | +17 | % | |||||
Gross margin as percentage of revenue | 44.5 | % | 43.9 | % | +60 bps | ||||||
Operating margin as percentage of revenue | 14.4 | % | 8.8 | % | +560 bps | ||||||
Diluted EPS | $ | 0.80 | $ | 0.44 | +82 | % | |||||
GAAP Financial Results
Revenue for the period was
Non-GAAP Financial Results
Non-GAAP gross margin was
"
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investment balances increased to
Deferred revenue and deferred profit balances at the end of the
Geographic Distribution
The geographic distribution of shipments and revenue during the
Region | Shipments | Revenue | ||
13% | 15% | |||
7% | 8% | |||
13% | 11% | |||
20% | 17% | |||
32% | 33% | |||
15% | 16% | |||
Outlook
For the
- Shipments of approximately
$1 billion plus or minus$30 million - Revenue of approximately
$1 billion plus or minus$30 million - Gross margin of approximately 44.0% plus or minus 1.0%
- Operating margin as a percent of revenue of approximately 14.0% plus or minus 1.5%
- Earnings per share of approximately
$0.68 plus or minus$0.07 , based on a diluted share count of 170 million
Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this commentary also contains non-GAAP financial results. The Company's non-GAAP results for both the
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 future competitive positioning, our ability to benefit from market expansion opportunities and next generation technology investments, and our guidance for shipments, revenue, gross margin, operating margin, and earnings per share. 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) | ||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (1) | ||||||||||||||||||
Revenue | $ | 986,214 | $ | 844,928 | $ | 741,814 | $ | 3,598,916 | $ | 2,665,192 | ||||||||||||
Cost of goods sold | 572,287 | 505,096 | 443,601 | 2,195,857 | 1,581,982 | |||||||||||||||||
Cost of goods sold - restructuring and impairments | - | - | - | - | (859 | ) | ||||||||||||||||
Total costs of goods sold | 572,287 | 505,096 | 443,601 | 2,195,857 | 1,581,123 | |||||||||||||||||
Gross margin | 413,927 | 339,832 | 298,213 | 1,403,059 | 1,084,069 | |||||||||||||||||
Gross margin as a percent of revenue | 42.0 | % | 40.2 | % | 40.2 | % | 39.0 | % | 40.7 | % | ||||||||||||
Research and development | 180,220 | 174,206 | 124,528 | 683,688 | 444,559 | |||||||||||||||||
Selling, general and administrative | 146,417 | 154,807 | 141,015 | 599,487 | 400,052 | |||||||||||||||||
Restructuring and impairments | 792 | - | - | 1,813 | 1,725 | |||||||||||||||||
Total operating expenses | 327,429 | 329,013 | 265,543 | 1,284,988 | 846,336 | |||||||||||||||||
Operating income | 86,498 | 10,819 | 32,670 | 118,071 | 237,733 | |||||||||||||||||
Operating margin as a percent of revenue | 8.8 | % | 1.3 | % | 4.4 | % | 3.3 | % | 8.9 | % | ||||||||||||
Other expense, net | (12,251 | ) | (15,834 | ) | (9,889 | ) | (51,413 | ) | (33,315 | ) | ||||||||||||
Income (loss) before income taxes | 74,247 | (5,015 | ) | 22,781 | 66,658 | 204,418 | ||||||||||||||||
Income tax expense (benefit) | (11,460 | ) | (24,011 | ) | 4,712 | (47,221 | ) | 35,695 | ||||||||||||||
Net income | $ | 85,707 | $ | 18,996 | $ | 18,069 | $ | 113,879 | $ | 168,723 | ||||||||||||
Net income per share: | ||||||||||||||||||||||
Basic net income per share | $ | 0.53 | $ | 0.12 | $ | 0.13 | $ | 0.67 | $ | 1.36 | ||||||||||||
Diluted net income per share | $ | 0.50 | $ | 0.11 | $ | 0.13 | $ | 0.66 | $ | 1.35 | ||||||||||||
Number of shares used in per share calculations: | ||||||||||||||||||||||
Basic | 162,520 | 163,034 | 133,997 | 168,932 | 124,176 | |||||||||||||||||
Diluted | 169,722 | 168,504 | 135,842 | 173,430 | 125,233 | |||||||||||||||||
(1) Derived from audited financial statements |
LAM RESEARCH CORPORATION | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands) | ||||||||||
2013 | 2013 | 2012 | ||||||||
(unaudited) | (unaudited) | (1) | ||||||||
ASSETS | ||||||||||
Cash and cash equivalents | $ | 1,162,473 | $ | 1,019,109 | $ | 1,564,752 | ||||
Short-term investments | 1,334,745 | 1,337,819 | 1,297,931 | |||||||
Accounts receivable, net | 602,624 | 544,070 | 765,818 | |||||||
Inventories | 559,317 | 545,036 | 632,853 | |||||||
Deferred income taxes | 27,674 | 137,729 | 47,782 | |||||||
Other current assets | 106,996 | 86,156 | 105,973 | |||||||
Total current assets | 3,793,829 | 3,669,919 | 4,415,109 | |||||||
Property and equipment, net | 603,910 | 594,916 | 584,596 | |||||||
Restricted cash and investments | 166,536 | 166,196 | 166,335 | |||||||
Goodwill and intangible assets | 2,526,541 | 2,562,986 | 2,686,730 | |||||||
Other assets | 159,499 | 152,285 | 151,882 | |||||||
Total assets | $ | 7,250,315 | $ | 7,146,302 | $ | 8,004,652 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities | $ | 1,404,475 | $ | 801,013 | $ | 1,426,928 | ||||
Long-term debt and capital leases | $ | 789,256 | $ | 1,294,599 | $ | 761,783 | ||||
Income taxes payable | 246,479 | 250,339 | 274,240 | |||||||
Other long-term liabilities | 134,313 | 258,151 | 219,577 | |||||||
Total liabilities | $ | 2,574,523 | $ | 2,604,102 | $ | 2,682,528 | ||||
Senior convertible notes | 186,920 | - | 190,343 | |||||||
Stockholders' equity (2) | 4,488,872 | 4,542,200 | 5,131,781 | |||||||
Total liabilities and stockholders' equity | $ | 7,250,315 | $ | 7,146,302 | $ | 8,004,652 | ||||
(1) Derived from audited financial statements | ||||||||||
(2) Common shares issued and outstanding were 162,873 as of |
||||||||||
LAM RESEARCH CORPORATION | ||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (1) | ||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||
Net income | $ | 85,707 | $ | 18,996 | $ | 18,069 | $ | 113,879 | $ | 168,723 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||
Depreciation and amortization | 76,051 | 74,861 | 34,576 | 304,116 | 100,825 | |||||||||||||||||
Deferred income taxes | (22,884 | ) | (27,934 | ) | 39,356 | (70,155 | ) | 42,446 | ||||||||||||||
Restructuring charges, net | 792 | - | - | 1,813 | 866 | |||||||||||||||||
Equity-based compensation expense | 25,241 | 25,648 | 29,174 | 99,330 | 81,559 | |||||||||||||||||
Income tax benefit on equity-based compensation plans | 364 | (847 | ) | 1,429 | (483 | ) | 1,510 | |||||||||||||||
Excess tax benefit on equity-based compensation plans | (364 | ) | 903 | (394 | ) | 539 | (2,686 | ) | ||||||||||||||
Impairment of investment | - | 3,711 | - | 3,711 | 1,724 | |||||||||||||||||
Amortization of convertible note discount | 8,028 | 7,935 | 7,014 | 31,558 | 27,028 | |||||||||||||||||
Other, net | 4,550 | 6,115 | 7,206 | 35,388 | 10,877 | |||||||||||||||||
Changes in operating asset and liabilities: | (2,497 | ) | (6,931 | ) | (39,715 | ) | 200,237 | 66,156 | ||||||||||||||
Net cash provided by operating activities | 174,988 | 102,457 | 96,715 | 719,933 | 499,028 | |||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||
Capital expenditures and intangible assets | (43,140 | ) | (34,766 | ) | (36,880 | ) | (160,795 | ) | (107,272 | ) | ||||||||||||
Cash acquired in (paid for) business acquisition | (800 | ) | (400 | ) | 418,681 | (9,916 | ) | 418,681 | ||||||||||||||
Net sales/maturities (purchases) of available-for-sale securities | (6,442 | ) | (12,075 | ) | 329,689 | (58,405 | ) | (41,989 | ) | |||||||||||||
Purchase of equity method investment | - | - | - | - | (10,740 | ) | ||||||||||||||||
(Issuance) repayments of notes receivable | (10,000 | ) | - | - | (10,000 | ) | 8,375 | |||||||||||||||
Proceeds from sale of assets | - | - | - | 660 | 2,677 | |||||||||||||||||
Transfer of restricted cash and investments | (328 | ) | (32 | ) | (29 | ) | (181 | ) | (6 | ) | ||||||||||||
Net cash provided by (used for) investing activities | (60,710 | ) | (47,273 | ) | 711,461 | (238,637 | ) | 269,726 | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||
Principal payments on long-term debt and capital lease obligations | (698 | ) | (756 | ) | (1,101 | ) | (2,234 | ) | (5,265 | ) | ||||||||||||
Excess tax benefit on equity-based compensation plans | 364 | (903 | ) | 394 | (539 | ) | 2,686 | |||||||||||||||
Treasury stock purchases | (2,275 | ) | (243,297 | ) | (661,059 | ) | (955,661 | ) | (772,663 | ) | ||||||||||||
Net cash received in settlement of stock repurchase contracts | - | - | - | - | 55,194 | |||||||||||||||||
Reissuances of treasury stock related to employee stock purchase plan | 12,846 | 8,494 | 8,765 | 31,265 | 25,525 | |||||||||||||||||
Proceeds from issuance of common stock | 16,713 | 15,132 | - | 39,379 | 1,776 | |||||||||||||||||
Net cash provided by (used for) financing activities | 26,950 | (221,330 | ) | (653,001 | ) | (887,790 | ) | (692,747 | ) | |||||||||||||
Effect of exchange rate changes on cash | 2,136 | (4,934 | ) | (690 | ) | 4,215 | (3,387 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | 143,364 | (171,080 | ) | 154,485 | (402,279 | ) | 72,620 | |||||||||||||||
Cash and cash equivalents at beginning of period | 1,019,109 | 1,190,189 | 1,410,267 | 1,564,752 | 1,492,132 | |||||||||||||||||
Cash and cash equivalents at end of period | $ | 1,162,473 | $ | 1,019,109 | $ | 1,564,752 | $ | 1,162,473 | $ | 1,564,752 | ||||||||||||
(1) Derived from audited financial statements |
Non-GAAP Financial Summary | ||||||||
(in thousands, except percentages and per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended | Three Months Ended | |||||||
2013 | 2013 | |||||||
Revenue | $ | 986,214 | $ | 844,928 | ||||
Gross margin | $ | 438,823 | $ | 370,658 | ||||
Gross margin as percentage of revenue | 44.5 | % | 43.9 | % | ||||
Operating expenses | $ | 297,048 | $ | 296,002 | ||||
Operating income | $ | 141,775 | $ | 74,656 | ||||
Operating margin as a percentage of revenue | 14.4 | % | 8.8 | % | ||||
Net income | $ | 136,440 | $ | 74,474 | ||||
Net income per diluted share | $ | 0.80 | $ | 0.44 | ||||
Shares used in per share calculation - diluted | 169,722 | 168,504 | ||||||
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income | |||||||||
(in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Three Months Ended | Three Months Ended | ||||||||
2013 | 2013 | ||||||||
U.S. GAAP net income | $ | 85,707 | $ | 18,996 | |||||
Pre-tax non-GAAP items: | |||||||||
Costs associated with rationalization of certain product configurations - cost of goods sold | (896 | ) | 207 | ||||||
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | 20,748 | 20,763 | |||||||
Acquisition-related inventory fair-value impact - cost of goods sold | 4,266 | 7,448 | |||||||
Integration costs - cost of goods sold | 778 | 2,408 | |||||||
Integration costs - operating expenses | 9,579 | 13,123 | |||||||
Amortization related to intangible assets acquired in Novellus transaction - operating expenses | 18,888 | 19,445 | |||||||
Restructuring charges - operating expenses | 792 | - | |||||||
Costs associated with rationalization of certain product configurations - operating expenses | 1,122 | 443 | |||||||
Amortization of convertible note discount, Lam notes - other expense, net | 7,159 | 7,075 | |||||||
Amortization of convertible note discount, Novellus assumed notes - other expense, net | 781 | 893 | |||||||
Impairment of investment - other expense, net | - | 3,711 | |||||||
Net tax benefit on non-GAAP items | (10,252 | ) | (11,700 | ) | |||||
Net tax benefit on successful resolution of certain tax matters | (2,699 | ) | - | ||||||
Tax benefit on reinstatement of R&D tax credit | - | (11,493 | ) | ||||||
Tax expense associated with legal-entity integration | 467 | 3,155 | |||||||
Non-GAAP net income | $ | 136,440 | $ | 74,474 | |||||
Non-GAAP net income per diluted share | $ | 0.80 | $ | 0.44 | |||||
Number of shares used for diluted per share calculation | 169,722 | 168,504 | |||||||
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 | Three Months Ended | ||||||||
2013 | 2013 | ||||||||
U.S. GAAP gross margin | $ | 413,927 | $ | 339,832 | |||||
Pre-tax non-GAAP items: | |||||||||
Costs associated with rationalization of certain product configurations - cost of goods sold | (896 | ) | 207 | ||||||
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | 20,748 | 20,763 | |||||||
Acquisition-related inventory fair-value impact - cost of goods sold | 4,266 | 7,448 | |||||||
Integration costs - cost of goods sold | 778 | 2,408 | |||||||
Non-GAAP gross margin | $ | 438,823 | $ | 370,658 | |||||
U.S. GAAP gross margin as a percentage of revenue | 42.0 | % | 40.2 | % | |||||
Non-GAAP gross margin as a percentage of revenue | 44.5 | % | 43.9 | % | |||||
U.S. GAAP operating expenses | $ | 327,429 | $ | 329,013 | |||||
Pre-tax non-GAAP items: | |||||||||
Integration costs - operating expenses | (9,579 | ) | (13,123 | ) | |||||
Amortization related to intangible assets acquired in Novellus transaction - operating expenses | (18,888 | ) | (19,445 | ) | |||||
Restructuring charges - operating expenses | (792 | ) | - | ||||||
Costs associated with rationalization of certain product configurations - operating expenses | (1,122 | ) | (443 | ) | |||||
Non-GAAP operating expenses | $ | 297,048 | $ | 296,002 | |||||
Non-GAAP operating income | $ | 141,775 | $ | 74,656 | |||||
Non-GAAP operating margin as a percent of revenue | 14.4 | % | 8.8 | % | |||||
Lam Research Corporation Contacts:
Investor Relations
phone: 510-572-4589
e-mail: shanye.hudson@lamresearch.com
Corporate Communications
phone: 510-572-6603
e-mail: edward.rebello@lamresearch.com
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