Highlights for the
- Shipments of
$1,616 million , up 8% from the prior quarter - Revenue of
$1,481 million , up 6% from the prior quarter - GAAP gross margin of 43.3%, GAAP operating margin of 12.9% and GAAP diluted EPS of
$0.74 - Non-GAAP gross margin of 45.5%, non-GAAP operating margin of 21.6%, and non-GAAP diluted EPS of
$1.50
Financial Highlights for the Quarters Ended |
|||||||||||
(in thousands, except per-share data, percentages, and basis points) | |||||||||||
U.S. GAAP | |||||||||||
June 2015 | March 2015 | Change Q/Q | |||||||||
Revenue | $ | 1,481,370 | $ | 1,393,333 | +6 | % | |||||
Gross margin as percentage of revenue | 43.3 | % | 43.1 | % | +20bps | ||||||
Operating margin as percentage of revenue | 12.9 | % | 17.2 | % | -430 bps | ||||||
Diluted EPS | $ | 0.74 | $ | 1.16 | -36 | % | |||||
Non-GAAP | |||||||||||
June 2015 | March 2015 | Change Q/Q | |||||||||
Revenue | $ | 1,481,370 | $ | 1,393,333 | +6 | % | |||||
Gross margin as percentage of revenue | 45.5 | % | 44.7 | % | +80 bps | ||||||
Operating margin as percentage of revenue | 21.6 | % | 19.9 | % | +170 bps | ||||||
Diluted EPS | $ | 1.50 | $ | 1.40 | +7 | % | |||||
GAAP Financial Results
For the
Non-GAAP Financial Results
For the
"Lam posted record June quarter results and concluded the strongest fiscal year in our history by delivering over
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investment balances increased to
Deferred revenue and profit balances at the end of
Geographic Distribution
The geographic distribution of shipments and revenue during the
Region | Shipments | Revenue | ||
23% | 28% | |||
24% | 19% | |||
12% | 17% | |||
13% | 14% | |||
20% | 14% | |||
4% | 4% | |||
4% | 4% | |||
Outlook
For the
GAAP | Reconciling Items | Non-GAAP | ||||||
Shipments | +/- | - | +/- | |||||
Revenue | +/- | - | +/- | |||||
Gross margin | 44.2% | +/- | 1% | 45.5% | +/- | 1% | ||
Operating margin | 20.2% | +/- | 1% | 22.5% | +/- | 1% | ||
Net income per diluted share | +/- | +/- | ||||||
Diluted share count | 177 Million | 174 Million | ||||||
The information provided above is only an estimate of what the Company believes is realizable as of the date of this release, and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, financing arrangements, other investments, or other significant transactions that may be completed after the date of this release. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:
- Gross margin -- amortization related to intangible assets acquired in the Novellus transaction,
$21 million . - Operating margin -- amortization related to intangible assets acquired in the Novellus transaction,
$37 million . - Earnings per share -- amortization related to intangible assets acquired in the Novellus transaction,
$37 million ; amortization of note discounts,$9 million ; and associated tax benefit for non-GAAP items($8) million ; totaling$38 million . - Diluted share count -- impact of a note hedge issued contemporaneously with the convertible notes due in 2016 and 2018, 3 million shares.
Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release 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 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 ability to continue to successfully execute our growth strategy, our ability to continue to successfully collaborate closely with and to support our customers and their long term success, our ability to achieve market growth and share gains at key inflections, our ability to continue to outperform, our ability to deliver growth and value for our customers and our stockholders, the extent of inflection driven expansion in our served available market, and our guidance for shipments, revenue, gross margin, operating margin, earnings per share, and diluted earnings per share and share count. 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 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 | |||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (1) | ||||||||||||||
Revenue | $ | 1,481,370 | $ | 1,393,333 | $ | 1,248,797 | $ | 5,259,312 | $ | 4,607,309 | ||||||||
Cost of goods sold | 839,832 | 792,731 | 691,761 | 2,974,976 | 2,599,828 | |||||||||||||
Gross margin | 641,538 | 600,602 | 557,036 | 2,284,336 | 2,007,481 | |||||||||||||
Gross margin as a percent of revenue | 43.3 | % | 43.1 | % | 44.6 | % | 43.4 | % | 43.6 | % | ||||||||
Research and development | 221,675 | 217,865 | 185,449 | 825,242 | 716,471 | |||||||||||||
Selling, general and administrative | 149,384 | 142,772 | 155,737 | 591,611 | 613,341 | |||||||||||||
Goodwill impairment | 79,444 | - | - | 79,444 | - | |||||||||||||
Total operating expenses | 450,503 | 360,637 | 341,186 | 1,496,297 | 1,329,812 | |||||||||||||
Operating income | 191,035 | 239,965 | 215,850 | 788,039 | 677,669 | |||||||||||||
Operating margin as a percent of revenue | 12.9 | % | 17.2 | % | 17.3 | % | 15.0 | % | 14.7 | % | ||||||||
Gain on sale of real estate | - | - | 83,090 | - | 83,090 | |||||||||||||
Other expense, net | (20,353 | ) | (11,389 | ) | (9,442 | ) | (47,189 | ) | (37,396 | ) | ||||||||
Income (loss) before income taxes | 170,682 | 228,576 | 289,498 | 740,850 | 723,363 | |||||||||||||
Income tax expense (benefit) | 39,411 | 22,291 | 56,103 | 85,273 | 91,074 | |||||||||||||
Net income | $ | 131,271 | $ | 206,285 | $ | 233,395 | $ | 655,577 | $ | 632,289 | ||||||||
Net income per share: | ||||||||||||||||||
Basic net income per share | $ | 0.83 | $ | 1.30 | $ | 1.44 | $ | 4.11 | $ | 3.84 | ||||||||
Diluted net income per share | $ | 0.74 | $ | 1.16 | $ | 1.35 | $ | 3.70 | $ | 3.62 | ||||||||
Number of shares used in per share calculations: | ||||||||||||||||||
Basic | 158,590 | 158,992 | 162,215 | 159,629 | 164,741 | |||||||||||||
Diluted | 176,575 | 177,531 | 173,345 | 177,067 | 174,503 | |||||||||||||
Cash dividend declared per share | $ | 0.30 | $ | 0.18 | $ | 0.18 | $ | 0.84 | $ | 0.18 |
(1) | Derived from audited financial statements | |
LAM RESEARCH CORPORATION | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands) | ||||||||||
2015 | 2015 | 2014 | ||||||||
(unaudited) | (unaudited) | (1) | ||||||||
ASSETS | ||||||||||
Cash and cash equivalents | $ | 1,501,539 | $ | 1,635,636 | $ | 1,452,677 | ||||
Short-term investments | 2,574,947 | 2,313,495 | 1,612,967 | |||||||
Accounts receivable, net | 1,093,582 | 1,046,800 | 800,616 | |||||||
Inventories | 943,346 | 919,679 | 740,503 | |||||||
Other current assets | 157,435 | 145,357 | 176,899 | |||||||
Total current assets | 6,270,849 | 6,060,967 | 4,783,662 | |||||||
Property and equipment, net | 621,418 | 579,824 | 543,496 | |||||||
Restricted cash and investments | 170,969 | 164,300 | 146,492 | |||||||
Goodwill and intangible assets | 2,115,649 | 2,242,977 | 2,360,303 | |||||||
Other assets | 185,763 | 190,473 | 159,353 | |||||||
Total assets | $ | 9,364,648 | $ | 9,238,541 | $ | 7,993,306 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current portion of long-term debt, convertible notes, and capital leases | $ | 1,359,650 | $ | 518,267 | $ | 520,686 | ||||
Other current liabilities | 1,271,711 | 1,216,729 | 1,061,315 | |||||||
Total current liabilities | 2,631,361 | 1,734,996 | 1,582,001 | |||||||
Long-term debt and capital leases | $ | 1,001,382 | $ | 1,831,094 | $ | 817,202 | ||||
Income taxes payable | 202,930 | 205,536 | 258,357 | |||||||
Other long-term liabilities | 184,023 | 189,291 | 122,662 | |||||||
Total liabilities | $ | 4,019,696 | $ | 3,960,917 | $ | 2,780,222 | ||||
Senior convertible notes | 241,808 | 180,569 | 183,349 | |||||||
Stockholders' equity (2) | 5,103,144 | 5,097,055 | 5,029,735 | |||||||
Total liabilities and stockholders' equity | $ | 9,364,648 | $ | 9,238,541 | $ | 7,993,306 |
(1) | Derived from audited financial statements | |
(2) | Common shares issued and outstanding were 158,531 as of |
LAM RESEARCH CORPORATION | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (1) | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||
Net income | $ | 131,271 | $ | 206,285 | $ | 233,395 | $ | 655,577 | $ | 632,289 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 70,177 | 70,322 | 71,115 | 277,920 | 292,254 | |||||||||||||
Deferred income taxes | (2,694 | ) | 1,739 | (4,104 | ) | 5,551 | 7,537 | |||||||||||
Impairment of long-lived assets | 9,821 | - | - | 9,821 | 11,632 | |||||||||||||
Equity-based compensation expense | 39,734 | 32,948 | 33,085 | 135,354 | 103,700 | |||||||||||||
Income tax benefit (expense) on equity-based compensation plans | (2,124 | ) | 2,438 | 6,269 | 11,316 | 5,973 | ||||||||||||
Excess tax (benefit) expense on equity-based compensation plans | 1,809 | (2,204 | ) | (6,361 | ) | (11,398 | ) | (6,065 | ) | |||||||||
Amortization of note discounts and issuance costs | 11,023 | 9,409 | 9,002 | 37,550 | 35,482 | |||||||||||||
Gain on sale of business | - | - | - | (7,431 | ) | - | ||||||||||||
Gain on sale of real estate | - | - | (83,090 | ) | - | (83,090 | ) | |||||||||||
Goodwill impairment | 79,444 | - | - | 79,444 | - | |||||||||||||
Other, net | 3,621 | 1,902 | 8,241 | 12,656 | 12,669 | |||||||||||||
Changes in operating asset and liabilities: | (50,016 | ) | (131,802 | ) | (21,661 | ) | (420,857 | ) | (295,332 | ) | ||||||||
Net cash provided by operating activities | 292,066 | 191,037 | 245,891 | 785,503 | 717,049 | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||
Capital expenditures and intangible assets | (63,133 | ) | (31,898 | ) | (41,764 | ) | (198,265 | ) | (145,503 | ) | ||||||||
Cash paid for business acquisition | - | - | (11,839 | ) | (1,137 | ) | (30,227 | ) | ||||||||||
Net purchases of available-for-sale securities | (278,379 | ) | (359,416 | ) | (155,035 | ) | (949,740 | ) | (283,966 | ) | ||||||||
Proceeds from sale of business | - | - | - | 41,212 | - | |||||||||||||
Purchase of other investment | - | (2,500 | ) | - | (2,500 | ) | - | |||||||||||
Repayments of notes receivable | - | - | - | 3,978 | 10,000 | |||||||||||||
Proceeds from sale of assets | - | - | 134,762 | - | 156,397 | |||||||||||||
Transfer of restricted cash and investments | 1,056 | (822 | ) | (637 | ) | 356 | 28,085 | |||||||||||
Net cash used for investing activities | (340,456 | ) | (394,636 | ) | (74,513 | ) | (1,106,096 | ) | (265,214 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||
Principal payments on long-term debt and capital lease obligations | (615 | ) | (119 | ) | (739 | ) | (1,515 | ) | (1,658 | ) | ||||||||
Proceeds from issuance of long-term debt, net issuance costs and captial lease obligations | 345 | 991,880 | - | 992,225 | - | |||||||||||||
Excess tax benefit (expense) on equity-based compensation plans | (1,809 | ) | 2,204 | 6,361 | 11,398 | 6,065 | ||||||||||||
Treasury stock purchases | (74,339 | ) | (124,943 | ) | (40,249 | ) | (573,240 | ) | (244,859 | ) | ||||||||
Dividends paid | (28,714 | ) | (28,724 | ) | - | (116,059 | ) | - | ||||||||||
Reissuances of treasury stock related to employee stock purchase plan | 16,950 | 14,934 | 14,597 | 48,803 | 42,926 | |||||||||||||
Proceeds from issuance of common stock | 1,285 | 7,403 | 8,657 | 17,520 | 34,791 | |||||||||||||
Other | (660 | ) | - | - | (660 | ) | - | |||||||||||
Net cash provided by (used for) financing activities | (87,557 | ) | 862,635 | (11,373 | ) | 378,472 | (162,735 | ) | ||||||||||
Effect of exchange rate changes on cash | 1,850 | (4,675 | ) | 371 | (9,017 | ) | 1,104 | |||||||||||
Net increase (decrease) in cash and cash equivalents | (134,097 | ) | 654,361 | 160,376 | 48,862 | 290,204 | ||||||||||||
Cash and cash equivalents at beginning of period | 1,635,636 | 981,275 | 1,292,301 | 1,452,677 | 1,162,473 | |||||||||||||
Cash and cash equivalents at end of period | $ | 1,501,539 | $ | 1,635,636 | $ | 1,452,677 | $ | 1,501,539 | $ | 1,452,677 |
(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 | |||||||
2015 | 2015 | |||||||
Revenue | $ | 1,481,370 | $ | 1,393,333 | ||||
Gross margin | $ | 673,837 | $ | 622,196 | ||||
Gross margin as percentage of revenue | 45.5 | % | 44.7 | % | ||||
Operating expenses | $ | 354,542 | $ | 345,049 | ||||
Operating income | $ | 319,295 | $ | 277,147 | ||||
Operating margin as a percentage of revenue | 21.6 | % | 19.9 | % | ||||
Net income | $ | 260,023 | $ | 244,911 | ||||
Net income per diluted share | $ | 1.50 | $ | 1.40 | ||||
Shares used in per share calculation - diluted | 173,641 | 174,471 |
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non-GAAP number of dilutive shares | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
Three Months Ended | Three Months Ended | ||||||
2015 | 2015 | ||||||
U.S. GAAP net income | $ | 131,271 | $ | 206,285 | |||
Pre-tax non-GAAP items: | |||||||
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | 21,286 | 21,286 | |||||
Acquisition-related inventory fair value impact - cost of goods sold | 1,192 | 308 | |||||
Impairment of long lived asset - cost of goods sold | 9,821 | - | |||||
Amortization related to intangible assets acquired in Novellus transaction - operating expenses | 16,083 | 16,083 | |||||
Restructuring charges/(benefits) - operating expenses | 434 | (495 | ) | ||||
Goodwill impairment - operating expenses | 79,444 | - | |||||
Amortization of note discounts - other expense, net | 9,019 | 8,749 | |||||
Net tax benefit on non-GAAP items | (9,605 | ) | (7,181 | ) | |||
Net income tax expense (benefit) on resolution or additional accrual for certain tax matters | 1,078 | (124 | ) | ||||
Non-GAAP net income | $ | 260,023 | $ | 244,911 | |||
Non-GAAP net income per diluted share | $ | 1.50 | $ | 1.40 | |||
U.S. GAAP number of shares used for diluted per share calculation | 176,575 | 177,531 | |||||
Effect of convertible note hedge | (2,934 | ) | (3,060 | ) | |||
Non-GAAP number of shares used for diluted per share calculation | 173,641 | 174,471 | |||||
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||
2015 | 2015 | 2014 | 2014 | ||||||||||||||
U.S. GAAP gross margin | $ | 641,538 | $ | 600,602 | $ | 536,657 | $ | 505,539 | |||||||||
Pre-tax non-GAAP items: | |||||||||||||||||
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | 21,286 | 21,286 | 21,286 | 20,893 | |||||||||||||
Acquisition-related inventory fair value impact - cost of goods sold | 1,192 | 308 | 2,101 | - | |||||||||||||
Impairment of long lived asset - cost of goods sold | 9,821 | - | - | - | |||||||||||||
Costs associted with rationalization of certain product configurations - cost of goods sold | - | - | - | 1,600 | |||||||||||||
Non-GAAP gross margin | $ | 673,837 | $ | 622,196 | $ | 560,044 | $ | 528,032 | |||||||||
U.S. GAAP gross margin as a percentage of revenue | 43.3 | % | 43.1 | % | 43.6 | % | 43.9 | % | |||||||||
Non-GAAP gross margin as a percentage of revenue | 45.5 | % | 44.7 | % | 45.4 | % | 45.8 | % | |||||||||
U.S. GAAP operating expenses | $ | 450,503 | $ | 360,637 | $ | 347,916 | $ | 337,241 | |||||||||
Pre-tax non-GAAP items: | |||||||||||||||||
Amortization related to intangible assets acquired in Novellus transaction - operating expenses | (16,083 | ) | (16,083 | ) | (16,083 | ) | (16,083 | ) | |||||||||
Restructuring (charges)/benefits - operating expenses | (434 | ) | 495 | (1,620 | ) | - | |||||||||||
Goodwill impairment - operating expenses | (79,444 | ) | - | - | - | ||||||||||||
Non-GAAP operating expenses | $ | 354,542 | $ | 345,049 | $ | 330,213 | $ | 321,158 | |||||||||
Non-GAAP operating income | $ | 319,295 | $ | 277,147 | $ | 229,831 | $ | 206,874 | |||||||||
GAAP operating margin as percent of revenue | 12.9 | % | 17.2 | % | 15.3 | % | 14.6 | % | |||||||||
Non-GAAP operating margin as a percent of revenue | 21.6 | % | 19.9 | % | 18.7 | % | 18.0 | % |
Lam Research Corporation Contacts:
Investor Relations
phone: 510-572-1615
e-mail: audrey.charles@lamresearch.com
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