KLA-TENCOR CORPORATION | ||||
(Exact name of registrant as specified in its charter) | ||||
Delaware | 000-09992 | 04-2564110 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
One Technology Drive, Milpitas, California | 95035 | |||
(Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (408) 875-3000 | ||||
(Former name or former address, if changed since last report) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Description | |
99.1 | Text of press release issued by KLA-Tencor Corporation dated July 30, 2015 |
KLA-TENCOR CORPORATION | |||||||
Date: July 30, 2015 | By: | /s/ BRIAN M. MARTIN | |||||
Name: | Brian M. Martin | ||||||
Title: | Executive Vice President and General Counsel |
Exhibit No. | Description | |
99.1 | Text of press release issued by KLA-Tencor Corporation dated July 30, 2015 |
Investor Relations: | Media Relations: | |
Ed Lockwood | Meggan Powers | |
Sr. Director, Investor Relations | Sr. Director, Corporate Communications | |
(408) 875-9529 | (408) 875-8733 | |
ed.lockwood@kla-tencor.com | meggan.powers@kla-tencor.com |
GAAP Results | |||
Q4 FY 2015 | Q3 FY 2015 | Q4 FY 2014 | |
Revenues | $756 million | $738 million | $734 million |
Net Income | $142 million | $132 million | $129 million |
Earnings per Diluted Share | $0.89 | $0.81 | $0.77 |
Non-GAAP Results | |||
Q4 FY 2015 | Q3 FY 2015 | Q4 FY 2014 | |
Net Income | $159 million | $137 million | $133 million |
Earnings per Diluted Share | $0.99 | $0.84 | $0.80 |
KLA-Tencor Corporation | |||||||
Condensed Consolidated Unaudited Balance Sheets | |||||||
(In thousands) | June 30, 2015 | June 30, 2014 | |||||
ASSETS | |||||||
Cash, cash equivalents and marketable securities | $ | 2,387,111 | $ | 3,152,637 | |||
Accounts receivable, net | 585,494 | 492,863 | |||||
Inventories | 617,904 | 656,457 | |||||
Other current assets | 314,067 | 284,138 | |||||
Land, property and equipment, net | 314,591 | 330,263 | |||||
Goodwill | 335,263 | 335,355 | |||||
Purchased intangibles, net | 11,895 | 27,697 | |||||
Other non-current assets | 259,687 | 256,436 | |||||
Total assets | $ | 4,826,012 | $ | 5,535,846 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 103,342 | $ | 103,422 | |||
Deferred system profit | 148,691 | 147,923 | |||||
Unearned revenue | 71,335 | 59,176 | |||||
Current portion of long term debt | 16,981 | — | |||||
Other current liabilities | 661,414 | 585,090 | |||||
Total current liabilities | 1,001,763 | 895,611 | |||||
Non-current liabilities: | |||||||
Long-term debt | 3,173,435 | 745,101 | |||||
Unearned revenue | 47,145 | 57,500 | |||||
Other non-current liabilities | 182,230 | 168,288 | |||||
Total liabilities | 4,404,573 | 1,866,500 | |||||
Stockholders’ equity: | |||||||
Common stock and capital in excess of par value | 474,374 | 1,220,504 | |||||
Retained earnings (accumulated deficit) | (12,362 | ) | 2,479,113 | ||||
Accumulated other comprehensive income (loss) | (40,573 | ) | (30,271 | ) | |||
Total stockholders’ equity | 421,439 | 3,669,346 | |||||
Total liabilities and stockholders’ equity | $ | 4,826,012 | $ | 5,535,846 |
KLA-Tencor Corporation | |||||||||||||||
Condensed Consolidated Unaudited Statements of Operations | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
(In thousands, except per share amounts) | June 30, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||
Revenues: | |||||||||||||||
Product | $ | 579,733 | $ | 570,431 | $ | 2,125,396 | $ | 2,286,437 | |||||||
Service | 176,599 | 163,912 | 688,653 | 642,971 | |||||||||||
Total revenues | 756,332 | 734,343 | 2,814,049 | 2,929,408 | |||||||||||
Costs and expenses: | |||||||||||||||
Costs of revenues | 323,267 | 326,665 | 1,215,229 | 1,232,962 | |||||||||||
Engineering, research and development | 128,839 | 138,448 | 530,616 | 539,469 | |||||||||||
Selling, general and administrative | 101,739 | 96,216 | 406,864 | 384,907 | |||||||||||
Loss on extinguishment of debt and other, net | — | — | 131,669 | — | |||||||||||
Interest expense and other, net | 27,549 | 6,408 | 95,540 | 37,609 | |||||||||||
Income before income taxes | 174,938 | 166,606 | 434,131 | 734,461 | |||||||||||
Provision for income taxes | 32,919 | 37,875 | 67,973 | 151,706 | |||||||||||
Net income | $ | 142,019 | $ | 128,731 | $ | 366,158 | $ | 582,755 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.90 | $ | 0.78 | $ | 2.26 | $ | 3.51 | |||||||
Diluted | $ | 0.89 | $ | 0.77 | $ | 2.24 | $ | 3.47 | |||||||
Cash dividends declared per share (including a special cash dividend of $16.50 per share declared during the three months ended December 31, 2014) | $ | 0.50 | $ | 0.45 | $ | 18.50 | $ | 1.80 | |||||||
Weighted-average number of shares: | |||||||||||||||
Basic | 158,635 | 165,510 | 162,282 | 166,016 | |||||||||||
Diluted | 159,965 | 167,345 | 163,701 | 168,118 |
Three months ended | |||||||
June 30, | |||||||
(In thousands) | 2015 | 2014 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 142,019 | $ | 128,731 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 19,966 | 22,010 | |||||
Asset impairment charges | 428 | — | |||||
Non-cash stock-based compensation expense | 12,204 | 14,128 | |||||
Excess tax benefit from equity awards | (217 | ) | (367 | ) | |||
Net gain on sale of marketable securities and other investments | (143 | ) | (4,192 | ) | |||
Changes in assets and liabilities: | |||||||
Decrease in accounts receivable, net | 43,714 | 66,784 | |||||
Decrease in inventories | 16,498 | 21,308 | |||||
Decrease (increase) in other assets | 49,382 | (17,559 | ) | ||||
Increase (decrease) in accounts payable | 148 | (17,454 | ) | ||||
Increase (decrease) in deferred system profit | 2,337 | (25,672 | ) | ||||
Increase in other liabilities | 31,143 | 60,923 | |||||
Net cash provided by operating activities | 317,479 | 248,640 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures, net | (9,237 | ) | (13,066 | ) | |||
Proceeds from sale of assets | — | 3,836 | |||||
Purchase of available-for-sale securities | (297,695 | ) | (678,116 | ) | |||
Proceeds from sale of available-for-sale securities | 328,498 | 264,287 | |||||
Proceeds from maturity of available-for-sale securities | 134,825 | 140,952 | |||||
Purchase of trading securities | (11,859 | ) | (11,007 | ) | |||
Proceeds from sale of trading securities | 13,309 | 12,390 | |||||
Net cash provided by (used in) investing activities | 157,841 | (280,724 | ) | ||||
Cash flows from financing activities: | |||||||
Repayment of debt | (29,375 | ) | — | ||||
Issuance of common stock | 17,430 | 20,121 | |||||
Tax withholding payments related to vested and released restricted stock units | (439 | ) | (392 | ) | |||
Common stock repurchases | (167,858 | ) | (60,157 | ) | |||
Payment of dividends to stockholders | (79,653 | ) | (74,466 | ) | |||
Excess tax benefit from equity awards | 217 | 367 | |||||
Net cash used in financing activities | (259,678 | ) | (114,527 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 491 | 1,249 | |||||
Net increase (decrease) in cash and cash equivalents | 216,133 | (145,362 | ) | ||||
Cash and cash equivalents at beginning of period | 621,892 | 776,223 | |||||
Cash and cash equivalents at end of period | $ | 838,025 | $ | 630,861 | |||
Supplemental cash flow disclosures: | |||||||
Income taxes paid, net | $ | 3,851 | $ | 40,471 | |||
Interest paid | $ | 55,413 | $ | 26,038 | |||
Non-cash activities: | |||||||
Purchase of land, property and equipment - investing activities | $ | 1,843 | $ | 3,457 | |||
Dividends payable - financing activities | $ | 42,002 | $ | — |
Three months ended | Twelve months ended | |||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||||||
GAAP net income | $ | 142,019 | $ | 131,638 | $ | 128,731 | $ | 366,158 | $ | 582,755 | ||||||||||
Adjustments to reconcile GAAP net income to non-GAAP net income | ||||||||||||||||||||
Acquisition related charges | a | 3,578 | 3,928 | 4,216 | 15,336 | 15,812 | ||||||||||||||
Restructuring, severance and other related charges | b | 22,417 | 3,636 | 2,459 | 33,409 | 5,698 | ||||||||||||||
Debt extinguishment loss and recapitalization charges | c | — | — | — | 134,147 | — | ||||||||||||||
Income tax effect of non-GAAP adjustments | d | (9,159 | ) | (1,840 | ) | (2,168 | ) | (61,258 | ) | (6,810 | ) | |||||||||
Non-GAAP net income | $ | 158,855 | $ | 137,362 | $ | 133,238 | $ | 487,792 | $ | 597,455 | ||||||||||
GAAP net income per diluted share | $ | 0.89 | $ | 0.81 | $ | 0.77 | $ | 2.24 | $ | 3.47 | ||||||||||
Non-GAAP net income per diluted share | $ | 0.99 | $ | 0.84 | $ | 0.80 | $ | 2.98 | $ | 3.55 | ||||||||||
Shares used in diluted shares calculation | 159,965 | 162,794 | 167,345 | 163,701 | 168,118 |
Acquisition related charges | Restructuring, severance and other related charges | Total pre-tax GAAP to non-GAAP adjustment | |||||||||
Three months ended June 30, 2015 | |||||||||||
Costs of revenues | $ | 2,282 | $ | 7,458 | $ | 9,740 | |||||
Engineering, research and development | 650 | 6,310 | 6,960 | ||||||||
Selling, general and administrative | 646 | 8,649 | 9,295 | ||||||||
Total in three months ended June 30, 2015 | $ | 3,578 | $ | 22,417 | $ | 25,995 | |||||
Three months ended March 31, 2015 | |||||||||||
Costs of revenues | $ | 2,507 | $ | 211 | $ | 2,718 | |||||
Engineering, research and development | 700 | 680 | 1,380 | ||||||||
Selling, general and administrative | 721 | 2,745 | 3,466 | ||||||||
Total in three months ended March 31, 2015 | $ | 3,928 | $ | 3,636 | $ | 7,564 | |||||
Three months ended June 30, 2014 | |||||||||||
Costs of revenues | $ | 2,623 | $ | 245 | $ | 2,868 | |||||
Engineering, research and development | 872 | 1,811 | 2,683 | ||||||||
Selling, general and administrative | 721 | 403 | 1,124 | ||||||||
Total in three months ended June 30, 2014 | $ | 4,216 | $ | 2,459 | $ | 6,675 |
a. | Acquisition related charges includes amortization of intangible assets associated with acquisitions. Management believes that the expense associated with the amortization of acquisition related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives, and exclusion of these expenses allows comparisons of operating results that are consistent over time for both KLA-Tencor’s newly acquired and long-held businesses. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies. |
b. | Restructuring, severance and other related charges include costs associated with employee severance and other exit costs, impairment of certain long lived assets. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies. |
c. | Debt extinguishment loss and recapitalization charges include a pre-tax loss on early extinguishment of debt related to the 6.900% Senior Notes due in 2018, net and certain other expenses incurred in connection with the leveraged recapitalization plan which was completed in the second quarter of the fiscal year ended June 30, 2015. Management believes that it is appropriate to exclude these items as they are not indicative of ongoing operating results and, therefore, limit comparability and excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies. |
d. | Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above as well as additional true up adjustment to the tax rate arising from the tax impacts associated with the pre-tax loss on extinguishment of debt that was recognized in the three months ended December 31, 2014. Management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income. |