Lam Research Corporation Reports Financial Results for the Quarter Ended December 23, 2012
FREMONT, CA -- (Marketwire) -- 01/23/13 --
Lam Research Corp. (NASDAQ: LRCX)
Reported revenue of $860.9 million for the December 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 Corp. (NASDAQ: LRCX) today announced financial results for the quarter ended December 23, 2012. Highlights for the quarter were as follows:
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 $860.9 million, gross margin was $315.4 million, or 36.6% of revenue, operating expenses were $311.4 million, and net income was $6.4 million, or $0.04 per diluted share on a GAAP basis. This compares to revenue of $906.9 million, gross margin of $333.9 million, or 36.8%, operating expenses of $317.2 million, and net income of $2.8 million, or $0.02 per diluted share, for the September 2012 quarter. Shipments for the December 2012 quarter were $803 million, compared to $935 million during the September 2012 quarter.
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 December 2012 and September 2012 quarters exclude costs associated with the fair value impact of acquisition-related inventory, amortization related to intangible assets acquired in the Novellus transaction, certain acquisition and integration-related costs, the amortization of convertible note discounts, and rationalization of certain product configurations. Additionally, the December 2012 quarter non-GAAP results exclude restructuring charges and tax benefits on successful resolution of certain tax matters. See "Use of Non-GAAP Financial Measures" below for additional information.
Non-GAAP Financial Measures
On a non-GAAP basis, net income was $77.3 million, or $0.45 per diluted share, in the December 2012 quarter compared to $97.0 million, or $0.53 per diluted share, for the September 2012 quarter. Gross margin for the December 2012 quarter was $380.5 million, or 44.2%, compared to $402.3 million, or 44.4%, for the September 2012 quarter. Gross margin performance reflected unfavorable factory utilization as well as product and customer-mix changes. Non-GAAP operating expenses for the December 2012 quarter decreased to $281.5 million compared with the September quarter of $284.3 million. This was primarily due to lower incentive compensation stemming from decreased business volumes and reductions in field and support-group spending.
"Lam closed calendar year 2012 by delivering solid financial performance for the December quarter and strong execution against our integration plans," stated Martin Anstice, Lam's president and chief executive officer. "In the latter part of 2012, demand for semiconductor equipment declined, particularly in the NAND memory segment. Although we expect these conditions will continue in the near-term we remain optimistic in the long-term about the catalysts and inflections for growth. In this environment, we remain committed to funding new technology investments and positioning next-generation products with customers, and at the same time, retaining day-to-day discipline necessary to deliver predictable operating performance."
Cash and cash equivalents, short-term investments and restricted cash and investment balances decreased to $2.7 billion as planned at the end of the December 2012 quarter, compared to $2.9 billion at the end of the September 2012 quarter. This decrease was primarily the result of approximately $355 million of stock repurchases, offset by approximately $193 million in cash flow from operating activities during the December 2012 quarter. Deferred revenue and deferred profit balances at the end of the December 2012 quarter decreased to $282.0 million and $169.0 million, respectively, as compared to $363.5 million and $208.1 million, respectively, at the end of the September 2012 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 anticipated future revenue from shipments to Japanese customers was approximately $45.7 million as of December 23, 2012.
The geographic distribution of shipments and revenue during the December 2012 quarter is shown in the following table:
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 Securities and Exchange Commission, including specifically our report on Form 10-K for the year ended June 24, 2012 and Form 10-Q for the three months ended September 23, 2012. These uncertainties and changes could cause actual results to vary from expectations. The Company undertakes no obligation to update the information or statements made in this press release.
About Lam Research
Lam Research Corp. is a major supplier of innovative wafer fabrication equipment and services to the worldwide semiconductor industry. For more than 30 years, the Company has driven continuous improvements in chip performance, power consumption, and cost, contributing to the global proliferation of smartphones, computers, tablets, and other electronic products. Lam Research has been the leading supplier of high-throughput plasma etch equipment for more than a decade and expanded its product offerings in 2008 to include single-wafer clean systems. The Company added thin-film deposition and wafer surface preparation technologies to its product portfolio in 2012 with the acquisition of Novellus Systems, Inc. Headquartered in Fremont, Calif., Lam Research maintains a global network of service facilities throughout North America, Asia, and Europe to rapidly meet the needs of its global customer base. It is an 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.
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.com
Ed Rebello
Corporate Communications
phone: 510-572-6603
e-mail: edward.rebello@lamresearch.com
Press Release $LRCX Lam Research Corporation
FREMONT, CA -- (Marketwire) -- 01/23/13 -- Lam Research Corp. (NASDAQ: LRCX)
Lam Research Corp. (NASDAQ: LRCX) today announced financial results for the quarter ended December 23, 2012. Highlights for the quarter were as follows:
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 $ 0.45Revenue for the period was $860.9 million, gross margin was $315.4 million, or 36.6% of revenue, operating expenses were $311.4 million, and net income was $6.4 million, or $0.04 per diluted share on a GAAP basis. This compares to revenue of $906.9 million, gross margin of $333.9 million, or 36.8%, operating expenses of $317.2 million, and net income of $2.8 million, or $0.02 per diluted share, for the September 2012 quarter. Shipments for the December 2012 quarter were $803 million, compared to $935 million during the September 2012 quarter.
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 December 2012 and September 2012 quarters exclude costs associated with the fair value impact of acquisition-related inventory, amortization related to intangible assets acquired in the Novellus transaction, certain acquisition and integration-related costs, the amortization of convertible note discounts, and rationalization of certain product configurations. Additionally, the December 2012 quarter non-GAAP results exclude restructuring charges and tax benefits on successful resolution of certain tax matters. See "Use of Non-GAAP Financial Measures" below for additional information.
Non-GAAP Financial Measures
On a non-GAAP basis, net income was $77.3 million, or $0.45 per diluted share, in the December 2012 quarter compared to $97.0 million, or $0.53 per diluted share, for the September 2012 quarter. Gross margin for the December 2012 quarter was $380.5 million, or 44.2%, compared to $402.3 million, or 44.4%, for the September 2012 quarter. Gross margin performance reflected unfavorable factory utilization as well as product and customer-mix changes. Non-GAAP operating expenses for the December 2012 quarter decreased to $281.5 million compared with the September quarter of $284.3 million. This was primarily due to lower incentive compensation stemming from decreased business volumes and reductions in field and support-group spending.
"Lam closed calendar year 2012 by delivering solid financial performance for the December quarter and strong execution against our integration plans," stated Martin Anstice, Lam's president and chief executive officer. "In the latter part of 2012, demand for semiconductor equipment declined, particularly in the NAND memory segment. Although we expect these conditions will continue in the near-term we remain optimistic in the long-term about the catalysts and inflections for growth. In this environment, we remain committed to funding new technology investments and positioning next-generation products with customers, and at the same time, retaining day-to-day discipline necessary to deliver predictable operating performance."
Cash and cash equivalents, short-term investments and restricted cash and investment balances decreased to $2.7 billion as planned at the end of the December 2012 quarter, compared to $2.9 billion at the end of the September 2012 quarter. This decrease was primarily the result of approximately $355 million of stock repurchases, offset by approximately $193 million in cash flow from operating activities during the December 2012 quarter. Deferred revenue and deferred profit balances at the end of the December 2012 quarter decreased to $282.0 million and $169.0 million, respectively, as compared to $363.5 million and $208.1 million, respectively, at the end of the September 2012 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 anticipated future revenue from shipments to Japanese customers was approximately $45.7 million as of December 23, 2012.
The geographic distribution of shipments and revenue during the December 2012 quarter is shown in the following table:
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 Securities and Exchange Commission, including specifically our report on Form 10-K for the year ended June 24, 2012 and Form 10-Q for the three months ended September 23, 2012. These uncertainties and changes could cause actual results to vary from expectations. The Company undertakes no obligation to update the information or statements made in this press release.
About Lam Research
Lam Research Corp. is a major supplier of innovative wafer fabrication equipment and services to the worldwide semiconductor industry. For more than 30 years, the Company has driven continuous improvements in chip performance, power consumption, and cost, contributing to the global proliferation of smartphones, computers, tablets, and other electronic products. Lam Research has been the leading supplier of high-throughput plasma etch equipment for more than a decade and expanded its product offerings in 2008 to include single-wafer clean systems. The Company added thin-film deposition and wafer surface preparation technologies to its product portfolio in 2012 with the acquisition of Novellus Systems, Inc. Headquartered in Fremont, Calif., Lam Research maintains a global network of service facilities throughout North America, Asia, and Europe to rapidly meet the needs of its global customer base. It is an 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.
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%Source: Lam Research Corporation