FREMONT, CA--(Marketwire - Jul 27, 2011) - Lam Research Corporation's (
| Lam Research Corporation | ||||||||
| Financial Highlights for the Quarter Ended June 26, 2011 | ||||||||
| (in thousands, except per share data and percentages) | ||||||||
| U.S. GAAP | Non-GAAP | |||||||
| • Revenue: | $ | 752,018 | $ | 752,018 | ||||
| • Operating Margin: | 18.9 | % | 21.1 | % | ||||
| • Net Income: | $ | 125,928 | $ | 142,289 | ||||
| • Diluted EPS: | $ | 1.01 | $ | 1.14 | ||||
Lam Research Corporation today announced financial results for the quarter ended June 26, 2011. Revenue for the period was $752.0 million, gross margin was $338.5 million (45.0%), and net income was $125.9 million, or $1.01 per diluted share, compared to revenue of $809.1 million, gross margin of $374.0 million (46.2%), and net income of $182.2 million, or $1.45 per diluted share, for the March 2011 quarter. Shipments for the June 2011 quarter were $793 million compared to $813 million during the March 2011 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 the June 2011 quarter exclude certain costs for restructuring and impairments, the non-cash portion of convertible debt interest expense, and tax expense associated with legal entity restructuring. There were no adjustments to U.S. GAAP results to determine "non-GAAP" results for the March 2011 quarter. Management uses non-GAAP 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.
Non-GAAP net income was $142.3 million, or $1.14 per diluted share, in the June 2011 quarter compared to non-GAAP net income of $182.2 million, or $1.45 per diluted share, for the March 2011 quarter. Gross margin for the June 2011 quarter was $338.5 million or 45.0%, compared to gross margin of $374.0 million or 46.2%, for the March 2011 quarter. The sequential decrease in gross margin was primarily due to lower factory and field utilization as a result of the decline in volume from the March to the June quarter. Non-GAAP operating expenses for the June 2011 quarter were $179.5 million compared with the March 2011 quarter of $177.0 million and reflect our continued investments in strategic development activities.
The geographic distribution of shipments and revenue during the June 2011 quarter is shown in the following table:
| Region | Shipments | Revenue | ||||
| North America | 15 | % | 15 | % | ||
| Europe | 12 | % | 11 | % | ||
| Japan | 19 | % | 15 | % | ||
| Korea | 18 | % | 21 | % | ||
| Taiwan | 17 | % | 21 | % | ||
| Asia Pacific | 19 | % | 17 | % | ||
Cash and cash equivalents, short-term investments and restricted cash and investments balances were $2.3 billion at the end of the June 2011 quarter, compared to $1.4 billion at the end of the March 2011 quarter. Cash flows from operating activities were approximately $198.1 million or 26% of revenue during the June 2011 quarter. Additionally, during the quarter the Company completed a convertible debt financing and generated $835.5 million in net cash, which includes proceeds from warrant sales, offset by issuance fees and purchase of a convertible note hedge. Deferred revenue and deferred profit balances at the end of the June 2011 quarter were $257.6 million and $157.2 million, respectively. 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 $70.4 million as of June 26, 2011.
"Lam delivered solid operating performance and financial results for the June quarter," said Steve Newberry, Lam's chief executive officer and vice chairman. "We are seeing significant near term declines in wafer fab equipment spending, and as result our September quarter shipments, revenues and earnings per share will be well below our June quarter results. Even in this environment, we continue to execute to our strategic priorities and make key R&D investments that position the company for future growth opportunities. Longer term, we continue to believe that on a rolling average basis, twelve-month wafer fab equipment spending should be healthy over the next several years and our outstanding product portfolio, supported by our solid balance sheet and strong cash generation capabilities enable the company to deliver increased value to our customers and our shareholders in that environment," Newberry concluded.
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not statements 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, but are not limited, to the anticipated revenue from shipments to Japanese customers; our future commitment to our current strategic priorities; the return on our R&D investments, the market success of our product portfolio, our cash generation capability, future spending in the wafer fab equipment sector, and our ability to meet customers' future technology needs and our future market position. 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 27, 2010 and the reports on Form 10-Q for the three months ended September 26, 2010, December 26, 2010, and March 27, 2011. 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.
Lam Research Corporation is a major provider of wafer fabrication equipment and services to the world's semiconductor industry. Lam's common stock trades on The NASDAQ Global Select Market(SM) under the symbol LRCX. Lam is a NASDAQ-100® company. For more information, visit www.lamresearch.com.
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 | ||||||||||||||||
| June 26, | March 27, | June 27, | June 26, | June 27, | |||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (1) | |||||||||||||
| Total revenue | $ | 752,018 | $ | 809,087 | $ | 695,289 | $ | 3,237,693 | $ | 2,133,776 | |||||||
| Cost of goods sold | 413,564 | 435,068 | 370,409 | 1,740,461 | 1,166,219 | ||||||||||||
| Cost of goods sold - restructuring and impairments | - | - | 3,438 | - | 3,438 | ||||||||||||
| Cost of goods sold - 409A expense | - | - | - | - | (5,816 | ) | |||||||||||
| Total costs of goods sold | 413,564 | 435,068 | 373,847 | 1,740,461 | 1,163,841 | ||||||||||||
| Gross margin | 338,454 | 374,019 | 321,442 | 1,497,232 | 969,935 | ||||||||||||
| Gross margin as a percent of revenue | 45.0 | % | 46.2 | % | 46.2 | % | 46.2 | % | 45.5 | % | |||||||
| Research and development | 99,583 | 96,880 | 85,644 | 373,293 | 320,859 | ||||||||||||
| Selling, general and administrative | 79,938 | 80,143 | 66,779 | 308,075 | 240,942 | ||||||||||||
| Restructuring and impairments | 16,742 | - | 13,302 | 11,579 | 21,314 | ||||||||||||
| 409A expense | - | - | - | - | (38,590 | ) | |||||||||||
| Total operating expenses | 196,263 | 177,023 | 165,725 | 692,947 | 544,525 | ||||||||||||
| Operating income | 142,191 | 196,996 | 155,717 | 804,285 | 425,410 | ||||||||||||
| Operating margin as a percent of revenue | 18.9 | % | 24.3 | % | 22.4 | % | 24.8 | % | 19.9 | % | |||||||
| Other income (expense), net | (5,131 | ) | 1,663 | 3,541 | (3,409 | ) | 4,731 | ||||||||||
| Income before income taxes | 137,060 | 198,659 | 159,258 | 800,876 | 430,141 | ||||||||||||
| Income tax expense | 11,132 | 16,419 | 19,261 | 77,128 | 83,472 | ||||||||||||
| Net income | $ | 125,928 | $ | 182,240 | $ | 139,997 | $ | 723,748 | $ | 346,669 | |||||||
| Net income per share: | |||||||||||||||||
| Basic net income per share | $ | 1.02 | $ | 1.47 | $ | 1.11 | $ | 5.86 | $ | 2.73 | |||||||
| Diluted net income per share | $ | 1.01 | $ | 1.45 | $ | 1.10 | $ | 5.79 | $ | 2.71 | |||||||
| Number of shares used in per share calculations: | |||||||||||||||||
| Basic | 123,863 | 123,674 | 126,339 | 123,529 | 126,933 | ||||||||||||
| Diluted | 125,086 | 125,293 | 127,786 | 125,019 | 128,126 | ||||||||||||
1 Derived from audited financial statements
| LAM RESEARCH CORPORATION | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (in thousands) | ||||||||||
| June 26, | March 27, | June 27, | ||||||||
| 2011 | 2011 | 2010 | ||||||||
| (unaudited) | (unaudited) | (1) | ||||||||
| ASSETS | ||||||||||
| Cash and cash equivalents | $ | 1,492,132 | $ | 942,710 | $ | 545,767 | ||||
| Short-term investments | 630,115 | 312,879 | 280,690 | |||||||
| Accounts receivable, net | 590,568 | 637,795 | 499,890 | |||||||
| Inventories | 396,607 | 355,734 | 318,479 | |||||||
| Deferred income taxes | 78,435 | 45,934 | 46,158 | |||||||
| Other current assets | 88,935 | 77,722 | 65,677 | |||||||
| Total current assets | 3,276,792 | 2,372,774 | 1,756,661 | |||||||
| Property and equipment, net | 270,458 | 251,954 | 200,336 | |||||||
| Restricted cash and investments | 165,256 | 165,248 | 165,234 | |||||||
| Deferred income taxes | 3,892 | 29,578 | 26,218 | |||||||
| Goodwill and intangible assets | 216,616 | 221,146 | 236,906 | |||||||
| Other assets | 124,380 | 107,795 | 102,037 | |||||||
| Total assets | $ | 4,057,394 | $ | 3,148,495 | $ | 2,487,392 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities | $ | 684,286 | $ | 667,391 | $ | 558,657 | ||||
| Long-term debt and capital leases | $ | 738,488 | $ | 15,949 | $ | 17,645 | ||||
| Income taxes payable | 113,582 | 116,911 | 110,462 | |||||||
| Other long-term liabilities | 51,193 | 25,088 | 32,493 | |||||||
| Stockholders' equity | 2,469,845 | 2,323,156 | 1,768,135 | |||||||
| Total liabilities and stockholders' equity | $ | 4,057,394 | $ | 3,148,495 | $ | 2,487,392 | ||||
1 Derived from audited financial statements
| LAM RESEARCH CORPORATION | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| June 26, | March 27, | June 27, | June 26, | June 27, | |||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (1) | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
| Net income | $ | 125,928 | $ | 182,240 | $ | 139,997 | $ | 723,748 | $ | 346,669 | |||||||
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: |
|||||||||||||||||
| Depreciation and amortization | 19,972 | 18,176 | 17,664 | 74,759 | 71,401 | ||||||||||||
| Deferred income taxes | (6,166 | ) | (733 | ) | (8,633 | ) | (10,721 | ) | 13,718 | ||||||||
| Restructuring charges, net | 16,742 | - | 16,740 | 11,579 | 24,752 | ||||||||||||
| Non-cash interest expense | 3,554 | - | - | 3,554 | - | ||||||||||||
| Equity-based compensation expense | 14,788 | 12,456 | 12,329 | 53,012 | 50,463 | ||||||||||||
| Income tax benefit on equity-based compensation plans | 9,283 | 15,327 | 9,944 | 28,775 | 10,635 | ||||||||||||
| Excess tax benefit on equity-based compensation plans | (8,184 | ) | (11,878 | ) | (9,261 | ) | (23,290 | ) | (10,234 | ) | |||||||
| Other, net | 477 | 746 | 648 | (2,341 | ) | 3,190 | |||||||||||
| Changes in operating asset and liabilities: | 21,714 | 25,259 | (13,995 | ) | 21,953 | (159,881 | ) | ||||||||||
| Net cash provided by operating activities | 198,108 | 241,593 | 165,433 | 881,028 | 350,713 | ||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
| Capital expenditures and intangible assets | (34,571 | ) | (35,769 | ) | (12,042 | ) | (127,495 | ) | (35,590 | ) | |||||||
| Net sales/maturities (purchases) of available-for-sale securities | (316,789 | ) | (11,068 | ) | (63,958 | ) | (353,523 | ) | (77,987 | ) | |||||||
| Purchase of other investments | - | (417 | ) | (1,223 | ) | (417 | ) | (2,184 | ) | ||||||||
| Proceeds from sale of assets | - | - | - | 1,544 | - | ||||||||||||
| Transfer of restricted cash and investments | (8 | ) | (4 | ) | 50 | (22 | ) | 13,205 | |||||||||
| Other | - | - | (800 | ) | - | (800 | ) | ||||||||||
| Net cash used for investing activities | (351,368 | ) | (47,258 | ) | (77,973 | ) | (479,913 | ) | (103,356 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
| Principal payments on long-term debt and capital lease obligations | (81 | ) | (1,038 | ) | (616 | ) | (4,530 | ) | (21,040 | ) | |||||||
| Net proceeds from issuance of long-term debt | 882,831 | - | - | 882,831 | 336 | ||||||||||||
| Proceeds from sale of warrants | 133,830 | - | - | 133,830 | - | ||||||||||||
| Purchase of convertible note hedge | (181,125 | ) | - | - | (181,125 | ) | - | ||||||||||
| Excess tax benefit on equity-based compensation plans | 8,184 | 11,878 | 9,261 | 23,290 | 10,234 | ||||||||||||
| Treasury stock purchases | (53,753 | ) | (8,617 | ) | (17,860 | ) | (211,316 | ) | (93,032 | ) | |||||||
| Net cash received in settlement of (paid in advance for) stock repurchase contracts | (99,589 | ) | - | - | (149,589 | ) | - | ||||||||||
| Reissuances of treasury stock | 7,518 | 6,521 | 6,173 | 21,194 | 17,452 | ||||||||||||
| Proceeds from issuance of common stock | 2,179 | 5,980 | 5,563 | 12,401 | 13,386 | ||||||||||||
| Net cash provided by (used for) financing activities | 699,994 | 14,724 | 2,521 | 526,986 | (72,664 | ) | |||||||||||
| Effect of exchange rate changes on cash | 2,688 | 4,591 | (5,583 | ) | 18,264 | (3,093 | ) | ||||||||||
| Net increase in cash and cash equivalents | 549,422 | 213,650 | 84,398 | 946,365 | 171,600 | ||||||||||||
| Cash and cash equivalents at beginning of period | 942,710 | 729,060 | 461,369 | 545,767 | 374,167 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 1,492,132 | $ | 942,710 | $ | 545,767 | $ | 1,492,132 | $ | 545,767 | |||||||
1 Derived from audited financial statements
| 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 | ||||||
| June 26, | March 27, | ||||||
| 2011 | 2011 | ||||||
| U.S. GAAP net income | $ | 125,928 | $ | 182,240 | |||
| Pre-tax non-GAAP items: | |||||||
| Restructuring and impairments - operating expenses | 16,742 | - | |||||
| Non-cash convertible debt interest expense - other income (expense), net | 3,554 | - | |||||
| Net tax benefit on non-GAAP items | (8,224 | ) | - | ||||
| Tax expense associated with legal entity restructuring | 4,289 | - | |||||
| Non-GAAP net income | $ | 142,289 | $ | 182,240 | |||
| Non-GAAP net income per diluted share | $ | 1.14 | $ | 1.45 | |||
| Number of shares used for diluted per share calculation | 125,086 | 125,293 | |||||
| Reconciliation of U.S. GAAP Operating Expenses and Operating Income to Non-GAAP Operating Expenses and Operating Income | |||||||
| (in thousands, except percentages) | |||||||
| (unaudited) | |||||||
| Three Months Ended | Three Months Ended | ||||||
| June 26, | March 27, | ||||||
| 2011 | 2011 | ||||||
| U.S. GAAP gross margin | $ | 338,454 | $ | 374,019 | |||
| U.S. GAAP operating expenses | $ | 196,263 | $ | 177,023 | |||
| Pre-tax non-GAAP items: | |||||||
| Restructuring and impairments - operating expenses | (16,742 | ) | - | ||||
| Non-GAAP operating expenses | $ | 179,521 | $ | 177,023 | |||
| Non-GAAP operating income | $ | 158,933 | $ | 196,996 | |||
| Non-GAAP operating margin as a percent of revenue | 21.1 | % | 24.3 | % | |||
1 Derived from audited financial statements
Contact Information:
Lam Research Corporation Contact:
Shanye Hudson
Director, Investor Relations
phone: 510/572-4589
e-mail: