EX-99.1 2 f16224exv99w1.htm EXHIBIT 99.1 exv99w1
 

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