8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 18, 2006

LAM RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of Incorporation)

0-12933
(Commission File Number) 94-2634797
(IRS Employer Identification Number)

4650 Cushing Parkway
Fremont, California 94538
(Address of principal executive offices including zip code)

(510) 572-0200
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
Exhibit Index
EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition

On January 18, 2006, Lam Research Corporation (the Company) issued a press release announcing its earnings for the fiscal quarter ended December 25, 2005, the text of which is attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in the Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

99.1 Press Release dated January 18, 2006 announcing earnings for the fiscal quarter ended December 25, 2005

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 18, 2006

LAM RESEARCH CORPORATION
By:	/s/ Martin B. Anstice
	Martin B. Anstice
	Group Vice President, Finance, Chief Financial Officer, and Chief Accounting Officer

Exhibit Index

99.1 Press Release dated January 18, 2006 announcing earnings for the fiscal quarter ended December 25, 2005

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contact:
Kathleen Bela, Investor Relations, phone: 510/572-4566, e-mail: kathleen.bela@lamrc.com

Lam Research Corporation Announces Earnings for the Quarter Ended December 25, 2005

FREMONT, Calif., January 18, 2006—Lam Research Corporation (NASDAQ: LRCX) today announced earnings for the quarter ended December 25, 2005. Revenue for the period was $358.2 million, and net income was $77.8 million, or $0.55 per diluted share, compared to revenue of $320.9 million, and net income of $49.5 million, or $0.35 per diluted share, for the September 2005 quarter. Gross margin was $177.5 million and operating expenses were $100.6 million for the December 2005 quarter compared to gross margin of $156.1 million and operating expenses of $96.4 million for the September 2005 quarter.

Gross margin as a percent of revenue for the December quarter was 49.5 percent compared to 48.6 percent in the September quarter. The increase in operating expenses was primarily the result of increases in R&D spending, including equity and incentive-based compensation expense.

The income tax expense of $8.4 million in the December 2005 quarter reflects a fiscal year 2006 effective tax rate assumption of 21.5 percent.

~more~

Lam Announces Earnings for the December 2005 Quarter Page 2 of 7

New orders recorded in backlog increased 24 percent sequentially to $403 million. The geographic distribution of new orders as well as revenue during the December quarter is shown in the following table:

Region	New Orders			Revenue
North America		13	%		13	%
Europe		12	%		13	%
Japan		23	%		25	%
Korea		23	%		20	%
Asia Pacific		29	%		29	%

Cash, short-term investments and restricted cash balances were $977.3 million at the end of December, and cash flows provided by operating activities were $111.4 million during the quarter. Condensed Consolidated Statements of Cash Flows are included at the end of this press release. Deferred revenue and deferred profit balances were $161.4 million and $98.0 million, respectively. At the end of the period, unshipped orders in backlog were approximately $404 million, and the anticipated future revenue value of orders shipped from backlog to Japanese customers that are not recorded as deferred revenue was approximately $46 million.

“Business conditions continued to strengthen in the December quarter,” stated Steve Newberry, president and chief executive officer of Lam. “Improving demand for wafer processing equipment and services coupled with recent market share gains have resulted in a significant increase in new orders. We believe the continued increase in selection of our equipment into today’s most advanced wafer processing fabs as well as recent next-generation technology wins is a reflection of the Company’s ongoing competitiveness.”

“The rise in new orders is among several achievements during the quarter. Profitability was strong, resulting in gross margins of 49.5 percent and operating margins of 21.5 percent. In addition, for calendar year 2005, we have generated $375 million of net free cash flow, which is 27 percent of revenue. Results achieved during the December quarter, and the year, illustrate our employees’ outstanding performance and the Company’s commitment to setting the standard of excellence for the wafer fab equipment industry,” Newberry concluded.

~more~

Lam Announces Earnings for the December 2005 Quarter Page 3 of 7

The Company believes the presentation of net free cash flows, which is derived by subtracting capital expenditures from net cash provided by operating activities, is useful for analyzing the Company’s financial performance as a reflection of the Company’s ability to generate cash exclusive of capital expenditures. A table that provides a calculation of net free cash flows is included at the end of this press release.

Statements made in this press release which are not statements 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, but are not limited, to the levels of demand for wafer processing equipment and services and our customers’ continuing selection of our equipment. Some factors that may affect these forward-looking statements include: changing business conditions in the semiconductor industry and the overall economy and our plans for reacting to those changes, changing customer demands, the level of demand for new consumer products, our competitors’ development of new technologies that could affect our market share, and the success of our research and development 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 with the Securities and Exchange Commission, including specifically the report on Form 10-K for the year ended June 26, 2005, and Form 10-Q for the quarter ended September 25, 2005, which 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 National Market^® under the symbol LRCX. Lam is a NASDAQ-100^® company. The Company’s World Wide Web address is http://www.lamresearch.com.

Consolidated Financial Tables Follow

###

Lam Announces Earnings for the December 2005 Quarter Page 4 of 7

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited)

	Three Months Ended									Six Months Ended
	December 25,			September 25,			December 26,			December 25,			December 26,
	2005			2005			2004			2005			2004
Total revenue	$	358,245		$	320,907		$	379,800		$	679,152		$	799,349
Cost of goods sold		180,735			164,828			180,898			345,563			385,686
Gross margin		177,510			156,079			198,902			333,589			413,663
Gross margin as a percent of revenue		49.5	%		48.6	%		52.4	%		49.1	%		51.7	%
Research and development		55,742			51,242			47,057			106,984			97,415
Selling, general and administrative		44,859			45,155			43,275			90,014			86,402
Total operating expenses		100,601			96,397			90,332			196,998			183,817
Operating income		76,909			59,682			108,570			136,591			229,846
Operating margin as a percent of revenue		21.5	%		18.6	%		28.6	%		20.1	%		28.8	%
Other income, net		9,308			8,488			1,298			17,796			1,306
Income before income taxes		86,217			68,170			109,868			154,387			231,152
Income tax expense		8,439			18,679			26,254			27,118			57,788
Net income	$	77,778		$	49,491		$	83,614		$	127,269		$	173,364
Net income per share:
Basic	$	0.57		$	0.36		$	0.61		$	0.93		$	1.27
Diluted	$	0.55		$	0.35		$	0.59		$	0.89		$	1.23
Number of shares used in per share calculations:
Basic		136,572			136,453			137,255			136,499			136,366
Diluted		142,525			141,430			142,268			142,209			141,108

Lam Announces Earnings for the December 2005 Quarter Page 5 of 7

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	December 25,		September 25,		June 26,
	2005		2005		2005
	(unaudited)		(unaudited)		(1)
Assets:
Cash and cash equivalents	$	633,782	$	514,818	$	482,250
Short-term investments		258,463		273,998	$	327,003
Accounts receivable, net		279,185		220,955		232,005
Inventories		114,051		113,702		110,051
Other current assets		95,012		99,463		93,527
Total current assets		1,380,493		1,222,936		1,244,836
Property and equipment, net		41,652		40,010		41,082
Restricted cash		85,038		85,038		85,038
Other assets		75,088		76,690		77,859
Total assets	$	1,582,271	$	1,424,674	$	1,448,815
Liabilities and stockholders’ equity:
Current liabilities	$	439,191	$	364,649	$	379,133
Other long-term liabilities	$	1,279	$	1,364	$	2,786
Stockholders’ equity		1,141,801		1,058,661		1,066,896
Total liabilities and stockholders’ equity	$	1,582,271	$	1,424,674	$	1,448,815

(1) Derived from audited financial statements.

Lam Announces Earnings for the December 2005 Quarter Page 6 of 7

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Three Months Ended									Six Months Ended
	December 25,			September 25,			December 26,			December 25,			December 26,
	2005			2005			2004			2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	77,778		$	49,491		$	83,614		$	127,269		$	173,364
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,995			6,032			6,694			11,027			12,888
Deferred income taxes		(647	)		15,374			21,954			14,727			51,578
Stock-based compensation		6,044			5,246			266			11,290			293
Other, net		109			1,842			129			1,951			1,323
Change in working capital accounts		23,126			(30,604	)		37,708			(7,478	)		(48,699	)
Net cash provided by operating activities		111,405			47,381			150,365			158,786			190,747
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(5,036	)		(4,658	)		(8,845	)		(9,694	)		(13,983	)
Net sales (purchases) of available-for-sale securities		14,191			51,598			(41,412	)		65,789			(58,720	)
Net cash provided by/(used for) investing activities		9,155			46,940			(50,257	)		56,095			(72,703	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury stock purchases		(61,917	)		(78,690	)		—			(140,607	)		—
Reissuances of treasury stock		—			5,137			—			5,137			—
Proceeds from issuance of common stock		61,926			12,174			30,986			74,100			41,925
Net cash provided by/(used for) financing activities		9			(61,379	)		30,986			(61,370	)		41,925
Effect of exchange rate changes on cash		(1,605	)		(374	)		2,350			(1,979	)		2,801
Net increase in cash and cash equivalents		118,964			32,568			133,444			151,532			162,770
Cash and cash equivalents at beginning of period		514,818			482,250			192,729			482,250			163,403
Cash and cash equivalents at end of period	$	633,782		$	514,818		$	326,173		$	633,782		$	326,173

Lam Announces Earnings for the December 2005 Quarter Page 7 of 7

Lam Research Corporation
Calculation of Net Free Cash Flows
(in thousands)
(unaudited)

	Three Months Ended												Twelve Months Ended
	March 27,			June 26,			September 25,			December 25,			December 25,
	2005			2005			2005			2005			2005
Net cash provided by operating activities	$	101,299		$	133,884		$	47,381		$	111,405		$	393,969
Capital expenditures		(4,640	)		(4,226	)		(4,658	)		(5,036	)		(18,560	)
Free cash flow	$	96,659		$	129,658		$	42,723		$	106,369		$	375,409