Delaware | 0-12933 | 94-2634797 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
¨ | 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 |
Date: | April 24, 2019 | LAM RESEARCH CORPORATION | |
(Registrant) | |||
/s/ Douglas R. Bettinger | |||
Douglas R. Bettinger | |||
Executive Vice President, Chief Financial Officer | |||
(Principal Financial Officer and Principal Accounting Officer) |
• | Revenue of $2.44 billion. |
• | U.S. GAAP gross margin of 44.0%, U.S. GAAP operating income as a percentage of revenue of 23.2%, and U.S. GAAP diluted EPS of $3.47. |
• | Non-GAAP gross margin of 45.1%, non-GAAP operating income as a percentage of revenue of 25.1%, and non-GAAP diluted EPS of $3.70. |
U.S. GAAP | ||||||||||
March 2019 | December 2018 | Change Q/Q | ||||||||
Revenue | $ | 2,439,048 | $ | 2,522,673 | - 3% | |||||
Gross margin as percentage of revenue | 44.0 | % | 45.4 | % | - 140 bps | |||||
Operating income as percentage of revenue | 23.2 | % | 27.4 | % | - 420 bps | |||||
Diluted EPS | $ | 3.47 | $ | 3.51 | - 1% | |||||
Non-GAAP | ||||||||||
March 2019 | December 2018 | Change Q/Q | ||||||||
Revenue | $ | 2,439,048 | $ | 2,522,673 | - 3% | |||||
Gross margin as percentage of revenue | 45.1 | % | 46.3 | % | - 120 bps | |||||
Operating income as percentage of revenue | 25.1 | % | 28.8 | % | - 370 bps | |||||
Diluted EPS | $ | 3.70 | $ | 3.87 | - 4% |
Region | Revenue |
Korea | 25% |
Taiwan | 23% |
Japan | 17% |
China | 17% |
United States | 9% |
Southeast Asia | 5% |
Europe | 4% |
U.S. GAAP | Reconciling Items | Non-GAAP | ||||||||||
Revenue | $2.35 Billion | +/- | $150 Million | — | $2.35 Billion | +/- | $150 Million | |||||
Gross margin as a percentage of revenue | 45.4% | +/- | 1% | $ | 3 | Million | 45.5% | +/- | 1% | |||
Operating income as a percentage of revenue | 25.3% | +/- | 1% | $ | 16 | Million | 26.0% | +/- | 1% | |||
Net income per diluted share | $3.31 | +/- | $0.20 | $ | 14 | Million | $3.40 | +/- | $0.20 | |||
Diluted share count | 155 Million | — | 155 Million |
• | Gross margin as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $3 million. |
• | Operating income as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $16 million. |
• | Earnings per share - amortization related to intangible assets acquired though business combinations, $16 million; amortization of note discounts, $1 million; and associated tax benefit for non-GAAP items ($3 million); totaling $14 million. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
March 31, 2019 | December 23, 2018 | March 25, 2018 | March 31, 2019 | March 25, 2018 | |||||||||||||||
Revenue | $ | 2,439,048 | $ | 2,522,673 | $ | 2,892,115 | $ | 7,292,412 | $ | 7,951,070 | |||||||||
Cost of goods sold | 1,364,711 | 1,377,640 | 1,561,401 | 4,014,844 | 4,265,446 | ||||||||||||||
Gross margin | 1,074,337 | 1,145,033 | 1,330,714 | 3,277,568 | 3,685,624 | ||||||||||||||
Gross margin as a percent of revenue | 44.0 | % | 45.4 | % | 46.0 | % | 44.9 | % | 46.4 | % | |||||||||
Research and development | 318,514 | 285,556 | 305,412 | 895,742 | 861,801 | ||||||||||||||
Selling, general and administrative | 190,306 | 169,098 | 197,791 | 534,179 | 565,719 | ||||||||||||||
Total operating expenses | 508,820 | 454,654 | 503,203 | 1,429,921 | 1,427,520 | ||||||||||||||
Operating income | 565,517 | 690,379 | 827,511 | 1,847,647 | 2,258,104 | ||||||||||||||
Operating income as a percent of revenue | 23.2 | % | 27.4 | % | 28.6 | % | 25.3 | % | 28.4 | % | |||||||||
Other income (expense), net | 20,532 | (30,649 | ) | (55,810 | ) | (10,494 | ) | (64,464 | ) | ||||||||||
Income before income taxes | 586,049 | 659,730 | 771,701 | 1,837,153 | 2,193,640 | ||||||||||||||
Income tax (expense) benefit | (38,659 | ) | (90,875 | ) | 7,099 | (187,548 | ) | (834,105 | ) | ||||||||||
Net income | $ | 547,390 | $ | 568,855 | $ | 778,800 | $ | 1,649,605 | $ | 1,359,535 | |||||||||
Net income per share: | |||||||||||||||||||
Basic | $ | 3.62 | $ | 3.67 | $ | 4.80 | $ | 10.72 | $ | 8.40 | |||||||||
Diluted | $ | 3.47 | $ | 3.51 | $ | 4.33 | $ | 10.20 | $ | 7.45 | |||||||||
Number of shares used in per share calculations: | |||||||||||||||||||
Basic | 151,201 | 155,022 | 162,378 | 153,891 | 161,885 | ||||||||||||||
Diluted | 157,849 | 162,170 | 179,779 | 161,683 | 182,565 | ||||||||||||||
Cash dividend declared per common share | $ | 1.10 | $ | 1.10 | $ | 0.50 | $ | 3.30 | $ | 1.45 |
March 31, 2019 | December 23, 2018 | June 24, 2018 | |||||||||
(unaudited) | (unaudited) | (1) | |||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 4,931,611 | $ | 3,359,793 | $ | 4,512,257 | |||||
Investments | 1,209,315 | 275,670 | 437,338 | ||||||||
Accounts receivable, net | 1,522,273 | 1,868,842 | 2,176,936 | ||||||||
Inventories | 1,622,242 | 1,703,307 | 1,876,162 | ||||||||
Prepaid expenses and other current assets | 156,800 | 148,233 | 147,218 | ||||||||
Total current assets | 9,442,241 | 7,355,845 | 9,149,911 | ||||||||
Property and equipment, net | 1,040,329 | 1,013,306 | 902,547 | ||||||||
Restricted cash and investments | 255,774 | 255,292 | 256,301 | ||||||||
Goodwill and intangible assets | 1,707,930 | 1,736,468 | 1,802,740 | ||||||||
Other assets | 448,988 | 407,547 | 367,979 | ||||||||
Total assets | $ | 12,895,262 | $ | 10,768,458 | $ | 12,479,478 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current portion of convertible notes, capital leases and commercial paper | $ | 964,107 | $ | 187,102 | $ | 610,030 | |||||
Other current liabilities | 1,841,521 | 1,979,735 | 2,540,278 | ||||||||
Total current liabilities | 2,805,628 | 2,166,837 | 3,150,308 | ||||||||
Long-term debt and capital leases | 3,801,514 | 1,813,190 | 1,806,562 | ||||||||
Income taxes payable | 863,155 | 859,232 | 851,936 | ||||||||
Other long-term liabilities | 83,986 | 87,827 | 90,629 | ||||||||
Total liabilities | 7,554,283 | 4,927,086 | 5,899,435 | ||||||||
Temporary equity, convertible notes | 49,783 | 57,009 | 78,192 | ||||||||
Stockholders’ equity (2) | 5,291,196 | 5,784,363 | 6,501,851 | ||||||||
Total liabilities and stockholders’ equity | $ | 12,895,262 | $ | 10,768,458 | $ | 12,479,478 |
(1) | Derived from audited financial statements. |
(2) | Common shares issued and outstanding were 149,886 as of March 31, 2019, 153,961 as of December 23, 2018, and 156,892 as of June 24, 2018. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
March 31, 2019 | December 23, 2018 | March 25, 2018 | March 31, 2019 | March 25, 2018 | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||
Net income | $ | 547,390 | $ | 568,855 | $ | 778,800 | $ | 1,649,605 | $ | 1,359,535 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation and amortization | 82,274 | 81,794 | 82,236 | 243,873 | 241,276 | ||||||||||||||
Deferred income taxes | (12,401 | ) | 20,797 | 19,060 | (75,105 | ) | (209,214 | ) | |||||||||||
Equity-based compensation expense | 53,240 | 38,806 | 41,095 | 142,389 | 125,002 | ||||||||||||||
Impairment of investment | — | — | 42,456 | — | 42,456 | ||||||||||||||
Amortization of note discounts and issuance costs | 2,861 | 1,031 | 4,342 | 5,137 | 13,469 | ||||||||||||||
Other, net | (1,494 | ) | (1,343 | ) | 17,866 | (646 | ) | 23,327 | |||||||||||
Changes in operating assets and liabilities | 260,951 | (67,521 | ) | 64,524 | 330,273 | 341,538 | |||||||||||||
Net cash provided by operating activities | 932,821 | 642,419 | 1,050,379 | 2,295,526 | 1,937,389 | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||
Capital expenditures and intangible assets | (75,522 | ) | (105,923 | ) | (49,057 | ) | (237,543 | ) | (193,814 | ) | |||||||||
Business acquisition, net of cash acquired | — | — | — | — | (115,697 | ) | |||||||||||||
Net (purchase) sale of available-for-sale securities | (931,380 | ) | 773,223 | 2,134,886 | (770,740 | ) | 1,811,411 | ||||||||||||
Other, net | (1,269 | ) | (369 | ) | 638 | (5,288 | ) | (14,358 | ) | ||||||||||
Net cash (used for) provided by investing activities | (1,008,171 | ) | 666,931 | 2,086,467 | (1,013,571 | ) | 1,487,542 | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||
Principal payments on debt | (30,225 | ) | (6,440 | ) | (228,166 | ) | (116,496 | ) | (577,415 | ) | |||||||||
Net proceeds (repayments) from issuance of commercial paper | 297,850 | (359,518 | ) | 199,024 | (61,754 | ) | 997,971 | ||||||||||||
Proceeds from borrowings on revolving credit facility | — | — | — | — | 750,000 | ||||||||||||||
Repayments of borrowings on revolving credit facility | — | — | — | — | (750,000 | ) | |||||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | 2,476,720 | — | — | 2,476,720 | — | ||||||||||||||
Treasury stock purchases | (934,637 | ) | (1,519 | ) | (80,105 | ) | (2,672,051 | ) | (1,346,940 | ) | |||||||||
Dividends paid | (171,196 | ) | (167,907 | ) | (79,739 | ) | (513,475 | ) | (225,604 | ) | |||||||||
Reissuance of treasury stock related to employee stock purchase plan | — | 32,920 | — | 32,920 | 34,057 | ||||||||||||||
Proceeds from issuance of common stock | 5,010 | 109 | 2,517 | 5,119 | 6,632 | ||||||||||||||
Other, net | — | (13,198 | ) | 7 | (13,207 | ) | 11 | ||||||||||||
Net cash provided by (used for) financing activities | 1,643,522 | (515,553 | ) | (186,462 | ) | (862,224 | ) | (1,111,288 | ) | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 4,128 | (2,721 | ) | 4,041 | (904 | ) | 8,200 | ||||||||||||
Net increase in cash, cash equivalents, and restricted cash | 1,572,300 | 791,076 | 2,954,425 | 418,827 | 2,321,843 | ||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 3,615,085 | 2,824,009 | 2,001,157 | 4,768,558 | 2,633,739 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 5,187,385 | $ | 3,615,085 | $ | 4,955,582 | $ | 5,187,385 | $ | 4,955,582 |
Three Months Ended | |||||||
March 31, 2019 | December 23, 2018 | ||||||
Revenue | $ | 2,439,048 | $ | 2,522,673 | |||
Gross margin | $ | 1,099,550 | $ | 1,167,375 | |||
Gross margin as percentage of revenue | 45.1 | % | 46.3 | % | |||
Operating expenses | $ | 488,389 | $ | 439,808 | |||
Operating income | $ | 611,161 | $ | 727,567 | |||
Operating income as a percentage of revenue | 25.1 | % | 28.8 | % | |||
Net income | $ | 584,350 | $ | 628,196 | |||
Net income per diluted share | $ | 3.70 | $ | 3.87 | |||
Shares used in per share calculation - diluted | 157,849 | 162,170 |
Three Months Ended | |||||||
March 31, 2019 | December 23, 2018 | ||||||
U.S. GAAP net income | $ | 547,390 | $ | 568,855 | |||
Pre-tax non-GAAP items: | |||||||
Amortization related to intangible assets acquired through certain business combinations - cost of goods sold | 22,342 | 22,342 | |||||
Restructuring charges - cost of goods sold | 2,871 | — | |||||
Restructuring charges - research and development | 4,698 | — | |||||
Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative | 12,446 | 12,490 | |||||
Restructuring charges - selling, general and administrative | 3,287 | 2,356 | |||||
Amortization of note discounts - other expense, net | 956 | 886 | |||||
Net income tax benefit on non-GAAP items | (6,718 | ) | (5,704 | ) | |||
Income tax benefit on the conclusion of certain tax matters | (2,922 | ) | (1,635 | ) | |||
Income tax expense associated with U.S. tax reform | — | 28,606 | |||||
Non-GAAP net income | $ | 584,350 | $ | 628,196 | |||
Non-GAAP net income per diluted share | $ | 3.70 | $ | 3.87 | |||
GAAP net income per diluted share | $ | 3.47 | $ | 3.51 | |||
U.S. GAAP number of shares used for per diluted share calculation | 157,849 | 162,170 |
Three Months Ended | |||||||
March 31, 2019 | December 23, 2018 | ||||||
U.S. GAAP gross margin | $ | 1,074,337 | $ | 1,145,033 | |||
Pre-tax non-GAAP items: | |||||||
Amortization related to intangible assets acquired through certain business combinations | 22,342 | 22,342 | |||||
Restructuring charges | 2,871 | — | |||||
Non-GAAP gross margin | $ | 1,099,550 | $ | 1,167,375 | |||
U.S. GAAP gross margin as a percentage of revenue | 44.0 | % | 45.4 | % | |||
Non-GAAP gross margin as a percentage of revenue | 45.1 | % | 46.3 | % | |||
U.S. GAAP operating expenses | $ | 508,820 | $ | 454,654 | |||
Pre-tax non-GAAP items: | |||||||
Amortization related to intangible assets acquired through certain business combinations | (12,446 | ) | (12,490 | ) | |||
Restructuring charges | (7,985 | ) | (2,356 | ) | |||
Non-GAAP operating expenses | $ | 488,389 | $ | 439,808 | |||
U.S. GAAP operating income | $ | 565,517 | $ | 690,379 | |||
Non-GAAP operating income | $ | 611,161 | $ | 727,567 | |||
U.S. GAAP operating income as percent of revenue | 23.2 | % | 27.4 | % | |||
Non-GAAP operating income as a percent of revenue | 25.1 | % | 28.8 | % |