EX-99.1 2 f22153exv99w1.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@lamresearch.com
Lam Research Corporation Announces Earnings for the Quarter Ended
June 25, 2006
FREMONT, Calif., July 19, 2006—Lam Research Corporation (NASDAQ: LRCX) highlights for the June 2006 quarter were:
                     
•
  Revenue:   $525.6 million            
 
                    
•
  Operating Margin:   30.3%            
 
                    
•
  Net Income: U.S. GAAP:  $122.1 million   •   Ongoing:   $139.0 million
 
                    
•
  Diluted EPS: U.S. GAAP:  $0.84   •   Ongoing:   $0.96
Lam Research Corporation today announced earnings for the quarter ended June 25, 2006. Revenue for the period was $525.6 million and net income was $122.1 million, or $0.84 per diluted share, compared to revenue of $437.4 million and net income of $86.3 million, or $0.60 per diluted share for the March 2006 quarter. Ongoing net income increased to $139.0 million, or $0.96 per diluted share in the June 2006 quarter compared with ongoing net income of $93.7 million, or $0.65 per diluted share, for the March 2006 quarter.
Gross margin for the June 2006 quarter was $274.2 million compared to gross margin of $219.7 million for the March 2006 quarter. Gross margin as a percent of revenue for the June 2006 quarter increased to 52.2 percent compared to 50.2 percent in the March 2006 quarter primarily due to product mix, revenue growth, and improved utilization of factory and field resources. Operating expenses increased during the quarter as planned to $114.7 million compared to operating expenses of $109.4 million for the March 2006 quarter. Equity compensation expense in the June 2006 quarter recorded in cost of goods sold and operating expenses was $1.2 million and $4.2 million, respectively.
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Lam Announces Earnings for the June 2006 Quarter   Page 2 of 7
The Company believes the presentation of ongoing results, which excludes certain special items, is useful for analyzing ongoing business trends. A table presenting a reconciliation of ongoing performance to results under U.S. GAAP is included at the end of this press release and on the Company’s web site. The June and March 2006 quarters’ ongoing presentation removes the effect of tax expense associated with the Company’s decision to repatriate foreign earnings of $350 million and $150 million, respectively, under the provisions of the American Jobs Creation Act.
New orders recorded in backlog increased 23 percent sequentially to $640 million. The geographic distribution of new orders and revenue during the June 2006 quarter is shown in the following table:
                 
Region   New Orders   Revenue
North America
     12 %     15 %
Europe
     16 %     13 %
Japan
     17 %     22 %
Korea
     11 %     22 %
Asia Pacific
     44 %     28 %
Cash and cash equivalents, short-term investments and restricted cash and investments balances were $1.5 billion at the end of June, and cash flows provided by operating activities were $92.3 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 $229.7 million and $140.1 million, respectively. At the end of the period, unshipped orders in backlog were approximately $521 million, and the anticipated future revenue value of orders shipped from backlog to Japanese customers that are not recorded as deferred revenue was approximately $74 million.
“We are pleased with the results for the June quarter,” stated Steve Newberry, Lam’s president and chief executive officer. “Our market share gains and the increased capital investment by our customers drove our new orders substantially above expectations. Our financial results in June demonstrate our commitment to delivering profitable market share growth, with operating margins at 30 percent for the quarter. In addition, our total net cash balance at $1.2 billion is at the highest level ever recorded by the Company.”
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Lam Announces Earnings for the June 2006 Quarter   Page 3 of 7
“The Company hosted an Analyst and Investor Meeting during last week’s SEMICON® West industry trade show. During that meeting, we outlined our key areas of focus: executing to the near-term needs of our customers, extending our market leadership in etch, leveraging our global etch knowledge into adjacent markets, and delivering best-in-class financial performance. We believe we are well positioned to deliver strong results in all four areas as we go forward over the next few years,” Newberry concluded.
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 expectations of future market share gains in etch and adjacent markets, additional opportunities for growth, the level of our financial performance in relation to comparable companies, our key areas of focus and our ability to deliver strong results in the future. 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, success of our competitors’ strategies including development of new technologies by our competitors that could affect our market share, our ability to compete successfully in the market segments adjacent to etch, 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 March 26, 2006, 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 Global Select Marketsm 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
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Lam Announces Earnings for the June 2006 Quarter   Page 4 of 7
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
                                         
    Three Months Ended     Twelve Months Ended  
    June 25,     March 26,     June 26,     June 25,     June 26,  
    2006     2006     2005     2006     2005  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)     (1)  
Total revenue
   $ 525,596     $ 437,423     $ 353,767     $ 1,642,171     $ 1,502,453  
Cost of goods sold
     251,445       217,769       177,908       814,777       738,361  
 
                              
Gross margin
     274,151       219,654       175,859       827,394       764,092  
Gross margin as a percent of revenue
     52.2 %     50.2 %     49.7 %     50.4 %     50.9 %
Research and development
     60,824       61,083       49,474       228,891       194,115  
Selling, general and administrative
     53,921       48,303       43,854       192,238       164,774  
Restructuring charges, net
     —       —       —       —       14,201  
 
                              
Total operating expenses
     114,745       109,386       93,328       421,129       373,090  
Operating income
     159,406       110,268       82,531       406,265       391,002  
Operating margin as a percent of revenue
     30.3 %     25.2 %     23.3 %     24.7 %     26.0 %
Other income, net
     9,398       7,828       6,171       35,022       8,120  
 
                              
Income before income taxes
     168,804       118,096       88,702       441,287       399,122  
Income tax expense
     46,655       31,759       22,176       105,532       99,781  
 
                              
Net income
   $ 122,149     $ 86,337     $ 66,526     $ 335,755     $ 299,341  
 
                              
Net income per share:
                                        
Basic
   $ 0.87     $ 0.62     $ 0.48     $ 2.42     $ 2.17  
 
                              
Diluted
   $ 0.84     $ 0.60     $ 0.47     $ 2.34     $ 2.10  
 
                              
Number of shares used in per share calculations:
                                        
Basic
     141,168       140,122       138,208       138,581       137,727  
 
                              
Diluted
     144,683       144,846       142,518       143,732       142,417  
 
                              
 
(1)   Derived from audited financial statements

 

 

Lam Announces Earnings for the June 2006 Quarter   Page 5 of 7
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                         
    June 25,     March 26,     June 26,  
    2006     2006     2005  
    (unaudited)     (unaudited)     (1)  
Assets:
                        
Cash and cash equivalents
   $ 910,815     $ 757,845     $ 482,250  
Short-term investments
     139,524       233,528       327,003  
Accounts receivable, net
     407,347       319,150       232,005  
Inventories
     168,714       144,259       110,051  
Other current assets
     79,969       84,986       93,527  
 
                  
Total current assets
     1,706,369       1,539,768       1,244,836  
Property and equipment, net
     49,893       43,903       41,082  
Restricted cash and investments
     470,038       85,038       85,038  
Other assets
     87,044       70,116       77,859  
 
                  
Total assets
   $ 2,313,344     $ 1,738,825     $ 1,448,815  
 
                  
 
                        
Liabilities and stockholders’ equity:
                        
Current liabilities
   $ 566,226     $ 507,309     $ 379,133  
 
                  
 
                        
Long-term debt
   $ 350,000     $ —     $ —  
Other long-term liabilities
   969     1,605     2,786  
Stockholders’ equity
     1,396,149       1,229,911       1,066,896  
 
                  
Total liabilities and stockholders’ equity
   $ 2,313,344     $ 1,738,825     $ 1,448,815  
 
                  
 
(1)   Derived from audited financial statements.

 

 

Lam Announces Earnings for the June 2006 Quarter   Page 6 of 7
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                         
    Three Months Ended     Twelve Months Ended  
    June 25,     March 26,     June 26,     June 25,     June 26,  
    2006     2006     2005     2006     2005  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)     (1)  
CASH FLOWS FROM OPERATING ACTIVITIES:
                                        
Net income
   $ 122,149     $ 86,337     $ 66,526     $ 335,755     $ 299,341  
Adjustments to reconcile net income to net cash provided by operating activities:
                                        
Depreciation and amortization
     5,765       5,208       6,305       22,000       25,517  
Deferred income taxes
     (4,936 )     17,935       51,187       27,726       89,352  
Restructuring charges, net
     —       —       —       —       14,201  
Equity-based compensation
     5,449       6,029       497       22,768       864  
Income tax benefit on equity-based compensation plans
     27,786       —       (28,303 )     27,786       2,050  
Excess tax benefit on equity-based compensation plans
     (17,805 )     —       —       (17,805 )     —  
Other, net
     1,270       (864 )     223       2,357       2,854  
Change in working capital accounts
     (47,412 )     (5,010 )     37,449       (59,900 )     (8,249 )
 
                              
Net cash provided by operating activities
     92,266       109,635       133,884       360,687       425,930  
 
                              
 
                                        
CASH FLOWS FROM INVESTING ACTIVITIES:
                                        
Capital expenditures and intangible assets
     (25,939 )     (6,447 )     (4,226 )     (42,080 )     (22,849 )
Transfer of restricted cash and investments
     (385,000 )     —       27,430       (385,000 )     27,430  
Net sales (purchases) of available-for-sale securities
     90,296       26,703       (35,565 )     182,788       (63,309 )
 
                              
Net cash provided by/(used for) investing activities
     (320,643 )     20,256       (12,361 )     (244,292 )     (58,728 )
 
                              
 
                                        
CASH FLOWS FROM FINANCING ACTIVITIES:
                                        
Payments on capital lease
     (45 )     (67 )     —       (112 )     —  
Net proceeds from issuance of long-term debt
     349,632       —       —       349,632       —  
Excess tax benefit on equity-based compensation plans
     17,805       —       —       17,805       —  
Treasury stock purchases
     (37,002 )     (73,602 )     (99,288 )     (251,211 )     (167,081 )
Reissuances of treasury stock
     5,519       4,515       458       15,171       458  
Proceeds from issuance of common stock
     43,698       61,602       23,456       179,400       114,304  
 
                              
Net cash provided by/(used for) financing activities
     379,607       (7,552 )     (75,374 )     310,685       (52,319 )
 
                              
Effect of exchange rate changes on cash
     1,740       1,724       (361 )     1,485       3,964  
Net increase in cash and cash equivalents
     152,970       124,063       45,788       428,565       318,847  
Cash and cash equivalents at beginning of period
     757,845       633,782       436,462       482,250       163,403  
 
                              
Cash and cash equivalents at end of period
   $ 910,815     $ 757,845     $ 482,250     $ 910,815     $ 482,250  
 
                              
 
(1)   Derived from audited financial statements

 

 

Lam Announces Earnings for the June 2006 Quarter   Page 7 of 7
Reconciliation of U.S. GAAP Net Income to Ongoing Net Income
(in thousands, except per share data and percentages)
                 
    Three Months Ended  
    June 25,     March 26,  
    2006     2006  
U.S. GAAP net income
   $ 122,149     $ 86,337  
Tax expense on repatriation of foreign earnings
     16,810       7,397  
 
            
Ongoing net income
   $ 138,959     $ 93,734  
 
            
Ongoing net income per diluted share
   $ 0.96     $ 0.65  
 
            
Number of shares used for diluted per share calculation
     144,683       144,846  
U.S. GAAP income tax rate
     27.6 %     26.9 %
Ongoing income tax rate
     17.7 %     20.6 %