Press Releases

FREMONT, Calif., April 18, 2017 (GLOBE NEWSWIRE) -- Lam Research Corp. (Nasdaq:LRCX) today announced financial results for the quarter ended March 26, 2017 (the "March 2017 quarter").

Highlights for the March 2017 quarter were as follows:

• Shipments of $2.41 billion and revenue of $2.15 billion.
• U.S. GAAP gross margin of 45.1%, U.S. GAAP operating margin of 25.0%, and U.S. GAAP diluted EPS of $3.10.
• Non-GAAP gross margin of 46.1%, non-GAAP operating margin of 26.9%, and non-GAAP diluted EPS of $2.80.

U.S. GAAP Financial Results

For the March 2017 quarter, revenue was $2,154 million, gross margin was $971 million, or 45.1% of revenue, operating expenses were $433 million, operating margin was 25.0% of revenue, and net income was $575 million, or $3.10 per diluted share on a U.S. GAAP basis. This compares to revenue of $1,882 million, gross margin of $847 million, or 45.0% of revenue, operating expenses of $407 million, operating margin of 23.4% of revenue, and net income of $333 million, or $1.81 per diluted share, for the quarter ended December 25, 2016 (the "December 2016 quarter"). March 2017 earnings per diluted share also benefited from an income tax benefit on the conclusion of tax matters primarily related to a prior business combination.

Non-GAAP Financial Results

For the March 2017 quarter, non-GAAP gross margin was $993 million or 46.1% of revenue, non-GAAP operating expenses were $414 million, non-GAAP operating margin was 26.9% of revenue, and non-GAAP net income was $508 million, or $2.80 per diluted share. This compares to non-GAAP gross margin of $874 million or 46.4% of revenue, non-GAAP operating expenses of $384 million, non-GAAP operating margin of 26.0% of revenue, and non-GAAP net income of $405 million, or $2.24 per diluted share for the December 2016 quarter.

"The company continues to perform extremely well, again setting new records of financial performance with underlying business levels almost 70% higher than the year ago equivalent quarter. This accomplishment is made possible by our broad competitive strength, with products and services increasingly enabling the success of our customers," said Martin Anstice, Lam Research's President and Chief Executive Officer. "Our outlook for the year has improved, and we are increasingly convinced by the potential for sustainable value creation from long-term diverse and secular technology demand trends."

Balance Sheet and Cash Flow Results

Cash and cash equivalents, short-term investments, and restricted cash and investments balances remained steady at $6.1 billion at the end of the March 2017 compared to the end of the December 2016 quarter. Cash flows from operating activities during the March 2017 quarter of $423 million were primarily utilized for approximately $216 million of share repurchases, including net share settlement on employee stock-based compensation;  approximately $69 million of principal payments on debt, primarily related to our convertible notes; approximately $73 million of dividends paid to stockholders; and approximately $44 million of capital expenditures.

Deferred revenue at the end of the March 2017 quarter increased to $842 million as compared to $673 million at the end of the December 2016 quarter. Deferred profit at the end of the March 2017 quarter increased to $527 million as compared to $408 million at the end of the December 2016 quarter. Lam's deferred revenue balance does not include shipments to Japanese customers, to whom title does not transfer until customer acceptance. Shipments to Japanese customers are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to Japanese customers was approximately $260 million as of March 26, 2017 and $129 million as of December 25, 2016.

Geographic Distribution

The geographic distribution of shipments and revenue during the March 2017 quarter is shown in the following table:

Outlook

For the June 2017 quarter, Lam is providing the following guidance:

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, balance sheet valuation adjustments, financing arrangements, other investments, or other significant transactions that may be completed or determined after the date of this release. U.S. 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; costs associated with business process reengineering, $2 million; totaling $39 million.
• Earnings per share - amortization related to intangible assets acquired in the Novellus transaction, $37 million; amortization of note discounts, $6 million; costs associated with business process reengineering, $2 million; and associated tax benefit for non-GAAP items ($7) million; totaling $38 million.
• Diluted share count - impact of a note hedge issued contemporaneously with the convertible notes due 2018, 4 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 March 2017 and December 2016 quarters exclude amortization related to intangible assets acquired in the Novellus transaction, the amortization of note discounts, and tax benefit of non-GAAP items. Additionally, the March 2017 quarter non-GAAP results exclude costs associated with business process reengineering, and income tax benefit on the conclusion of tax matters related to a prior business combination; and the December 2016 quarter non-GAAP results exclude costs associated with campus consolidation, product rationalization charges, litigation settlement, KLA-Tencor acquisition funding net interest expense, and costs related to the early termination of the KLA-Tencor acquisition funding.

Management uses non-GAAP gross margin, operating expense, operating income, 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 website 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 created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to; the estimated future revenue from shipments to Japanese customers; our revenue, industry, performance and general outlooks, and their drivers; the potential for value creation; technology demand trends; our ability to transform atomic-scale engineering and enable our customers to shape the future of technology; the legal and business factors that may affect our future tax rate; and our guidance for shipments, revenue, gross margin, operating margin, net income or earnings per diluted share, and diluted 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 may deteriorate or change; and the actions of our customers and competitors may be inconsistent with our expectations, as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10-K for the fiscal year ended June 26, 2016 and our quarterly report on Form 10-Q for the period ended December 25, 2016. These uncertainties and changes could materially affect the forward looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.

About Lam Research

Lam Research Corp. (Nasdaq:LRCX) is a trusted global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam's broad portfolio of market-leading deposition, etch, and clean solutions helps customers achieve success on the wafer by enabling device features that are 1,000 times smaller than a grain of sand, resulting in smaller, faster, more powerful, and more power-efficient chips. Through collaboration, continuous innovation, and delivering on commitments, Lam is transforming atomic-scale engineering and enabling its customers to shape the future of technology. Based in Fremont, Calif., Lam Research is a Nasdaq-100 Index® and S&P 500® company whose common stock trades on the Nasdaq Global Select Market^SM under the symbol LRCX. For more information, please visit http://www.lamresearch.com. (LRCX-F).

Consolidated Financial Tables Follow.

Lam Research Corporation Contacts:



Satya Kumar, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com

Source:  Lam Research

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