EX-99.1 2 d616330dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contacts:

Shanye Hudson, Investor Relations, phone: 510-572-4589, e-mail: shanye.hudson@lamresearch.com

Lam Research Corporation Reports Financial Results for the Quarter Ended September 29, 2013

FREMONT, Calif., October 23, 2013—Lam Research Corp. (NASDAQ: LRCX) today announced financial results for the quarter ended September 29, 2013.

Highlights for the September 2013 quarter were as follows:

 

  •   Shipments of $987 million, down 9% from the prior quarter

 

  •   Revenue of $1,015 million, up 3% from the prior quarter

 

  •   GAAP gross margin of 42.5%, GAAP operating margin of 10.4% and GAAP diluted EPS of $0.50

 

  •   Non-GAAP gross margin of 45.0%, non-GAAP operating margin of 16.2%, and non-GAAP diluted EPS of $0.81

Lam Research Corporation

Financial Highlights for the Quarters Ended September 29, 2013 and June 30, 2013

(in thousands, except per share data and percentages)

 

U.S. GAAP

  
     September 2013     June 2013     Change Q/Q  

Revenue

    $ 1,015,059      $ 986,214        +3 % 

Gross margin as percentage of revenue

      42.5 %      42.0 %      +50 bps   

Operating margin as percentage of revenue

      10.4 %      8.8 %      +160 bps   

Diluted EPS

    $ 0.50      $ 0.50        —     

Non-GAAP

  
     September 2013     June 2013     Change Q/Q  

Revenue

    $ 1,015,059      $ 986,214        +3 % 

Gross margin as percentage of revenue

      45.0 %      44.5 %      +50 bps   

Operating margin as percentage of revenue

      16.2 %      14.4 %      +180 bps   

Diluted EPS

    $ 0.81      $ 0.80        +1 % 

GAAP Financial Results

Revenue for the period was $1,015 million, gross margin was $431.9 million, or 42.5% of revenue, operating expenses were $326.5 million, and net income was $85.5 million, or $0.50 per diluted share on a GAAP basis. This compares to revenue of $986.2 million, gross margin of $413.9 million, or 42.0% of revenue, operating expenses of $327.4 million, and net income of $85.7 million, or $0.50 per diluted share, for the June 2013 quarter.

Non-GAAP Financial Results

Non-GAAP gross margin was $456.7 million, or 45.0% of revenue, non-GAAP operating expenses were $291.9 million, and non-GAAP net income was $139.2 million, or $0.81 per diluted share. This compares to non-GAAP gross margin of $438.8 million, or 44.5% of revenue, non-GAAP operating expenses of $297.0 million, and non-GAAP net income of $136.4 million, or $0.80 per diluted share, for the June 2013 quarter.

“Lam Research posted financial results that met or exceeded our guidance ranges across all key metrics, including our second consecutive quarter of record revenue and solid profit growth,” said Martin Anstice, Lam’s president and chief executive officer. “Our performance reflects the substance of our vision and strong execution across the entire company. We continue to be excited about the opportunities for growth and remain confident in the depth of our strategies and support from our customers.”

~more~

 

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Balance Sheet and Cash Flow Results

Cash and cash equivalents, short-term investments, and restricted cash and investment balances decreased to $2.6 billion at the end of the September 2013 quarter compared to $2.7 billion at the end of the June 2013 quarter due to stock repurchases of approximately $100 million. Cash flows from operating activities were approximately $52 million during the September 2013 quarter, adding to our overall cash position.

Deferred revenue and deferred profit balances at the end of the September 2013 quarter decreased to $334.0 million and $188.4 million, respectively, as compared to $389.2 million and $225.0 million, respectively, at the end of the June 2013 quarter. Lam’s deferred revenue balance does not include shipments to Japanese customers, to whom title does not transfer until customer acceptance. Shipments to Japanese customers are classified as inventory at cost until the time of acceptance. The anticipated future revenue from shipments to Japanese customers was approximately $84.2 million as of September 29, 2013.

Geographic Distribution

The geographic distribution of shipments and revenue during the September 2013 quarter is shown in the following table:

 

Region

    Shipments     Revenue  

North America

      17 %      14 % 

Europe

      8 %      9 % 

Japan

      17 %      13 % 

Korea

      18 %      23 % 

Taiwan

      21 %      24 % 

Asia Pacific

      19 %      17 % 

Outlook

For the December 2013 quarter, Lam is providing the following guidance on a non-GAAP basis:

 

  •   Shipments of approximately $1.125 billion plus or minus $30 million

 

  •   Revenue of approximately $1.1 billion plus or minus $30 million

 

  •   Gross margin of approximately 46.0% plus or minus 1.0%

 

  •   Operating margin as a percent of revenue of approximately 18.5% plus or minus 1.0%

 

  •   Earnings per share of approximately $1.02 plus or minus $0.05, assuming a diluted share count of 174 million

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this commentary also contains non-GAAP financial results. The Company’s non-GAAP results for both the September 2013 and June 2013 quarters exclude costs associated with the fair-value impact of acquisition-related inventory, amortization related to intangible assets acquired in the Novellus transaction, certain integration-related costs, restructuring charges, rationalization of certain product configurations, the amortization of convertible note discounts, the tax benefit on successful resolution of certain tax matters, and tax expense associated with legal-entity integration. Additionally, the September 2013 quarter non-GAAP results excluded the impairment of a long-lived asset.

Management uses non-GAAP gross margin, operating income, operating expenses, operating margin, net income, and net income per diluted share to evaluate the Company’s operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing the investors’ ability to view the Company’s results from management’s perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company’s web site at http://investor.lamresearch.com.

~more~

 

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Lam Announces Financial Results for the September 2013 Quarter

Caution Regarding Forward-Looking Statements

Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to, the anticipated revenue from shipments to Japanese customers, our opportunities for growth, the depth of our strategies, the support from our customers, and our guidance for shipments, revenue, gross margin, operating margin, and earnings per share. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy; the strength of the financial performance of our existing and prospective customers; the introduction of new and innovative technologies; the occurrence and pace of technology transitions and conversions; the actions of our competitors, consumers, semiconductor companies and key suppliers and subcontractors; and the success of research and development and sales and marketing 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 by us with the Securities and Exchange Commission, including specifically our report on Form 10-K for the year ended June 30, 2013. These uncertainties and changes could cause actual results to vary from expectations. The Company undertakes no obligation to update the information or statements made in this press release.

About Lam Research

Lam Research Corp. (NASDAQ:LRCX) is a trusted global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam’s broad portfolio of market-leading etch, deposition, strip, and wafer cleaning solutions help customers achieve success on the wafer by enabling device features that are 1,000 times smaller than a grain of sand, resulting in smaller, faster, and more power-efficient chips. Through collaboration, continuous innovation and delivering on commitments, Lam is transforming atomic-scale engineering and enabling our customers to shape the future of technology. Based in Fremont, Calif., Lam Research is an S&P 500 ® company whose common stock trades on the NASDAQ Global Select Market under the symbol LRCX. For more information, please visit http://www.lamresearch.com.

Consolidated Financial Tables Follow.

###

 

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Lam Announces Financial Results for the September 2013 Quarter

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data and percentages)

(unaudited)

 

     Three Months Ended  
     September 29,     June 30,     September 23,  
     2013     2013     2012  

Revenue

    $ 1,015,059      $ 986,214      $ 906,888   

Cost of goods sold

      583,201        572,287        573,002   
  

 

 

    

 

 

    

 

 

  

Gross margin

      431,858        413,927        333,886   

Gross margin as a percent of revenue

      42.5 %      42.0 %      36.8 % 

Research and development

      170,567        180,220        163,311   

Selling, general and administrative

      155,883        147,209        153,863   
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      326,450        327,429        317,174   
  

 

 

    

 

 

    

 

 

  

Operating income

      105,408        86,498        16,712   

Operating margin as a percent of revenue

      10.4 %      8.8 %      1.8 % 

Other expense, net

      (14,262 )      (12,251 )      (9,938 ) 
  

 

 

    

 

 

    

 

 

  

Income before income taxes

      91,146        74,247        6,774   

Income tax expense (benefit)

      5,640        (11,460 )      4,006   
  

 

 

    

 

 

    

 

 

  

Net income

    $ 85,506      $ 85,707      $ 2,768   
  

 

 

    

 

 

    

 

 

  

Net income per share:

       

Basic net income per share

    $ 0.52      $ 0.53      $ 0.02   
  

 

 

    

 

 

    

 

 

  

Diluted net income per share

    $ 0.50      $ 0.50      $ 0.02   
  

 

 

    

 

 

    

 

 

  

Number of shares used in per share calculations:

       

Basic

      162,896        162,520        179,928   
  

 

 

    

 

 

    

 

 

  

Diluted

      171,363        169,722        181,926   
  

 

 

    

 

 

    

 

 

  

 

page 4 of 8

Lam Announces Financial Results for the September 2013 Quarter

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     September 29,      June 30,  
     2013      2013  
     (unaudited)      (1)  

ASSETS

      

Cash and cash equivalents

    $ 1,156,184       $ 1,162,473   

Short-term investments

      1,300,031         1,334,745   

Accounts receivable, net

      713,524         602,624   

Inventories

      614,790         559,317   

Deferred income taxes

      29,090         27,674   

Other current assets

      110,633         106,996   
  

 

 

     

 

 

  

Total current assets

      3,924,252         3,793,829   

Property and equipment, net

      564,845         603,910   

Restricted cash and investments

      166,385         166,536   

Goodwill and intangible assets

      2,484,900         2,526,541   

Other assets

      149,963         159,499   
  

 

 

     

 

 

  

Total assets

    $ 7,290,345       $ 7,250,315   
  

 

 

     

 

 

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current liabilities

    $ 1,402,890       $ 1,404,475   
  

 

 

     

 

 

  

Long-term debt, convertible notes, and capital leases

    $ 796,373       $ 789,256   

Income taxes payable

      248,462         246,479   

Other long-term liabilities

      129,306         134,313   
  

 

 

     

 

 

  

Total liabilities

      2,577,031         2,574,523   
  

 

 

     

 

 

  

Senior convertible notes

      186,042         186,920   

Stockholders’ equity (2)

      4,527,272         4,488,872   
  

 

 

     

 

 

  

Total liabilities and stockholders’ equity

    $ 7,290,345       $ 7,250,315   
  

 

 

     

 

 

  

 

(1) Derived from audited financial statements
(2) Common shares issued and outstanding were 162,217 shares as of September 29, 2013 and 162,873 shares as of June 30, 2013.

 

page 5 of 8

Lam Announces Financial Results for the September 2013 Quarter

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

     Three Months Ended  
     September 29,     June 30,     September 23,  
     2013     2013     2012  

CASH FLOWS FROM OPERATING ACTIVITIES:

       

Net income

    $ 85,506      $ 85,707      $ 2,768   

Adjustments to reconcile net income to net cash provided by operating activities:

       

Depreciation and amortization

      74,331        76,051        74,816   

Deferred income taxes

      —          (22,884 )      (12,017 ) 

Impairment of long-lived asset

      7,004        —          —     

Equity-based compensation expense

      23,235        25,241        24,414   

Income tax benefit on equity-based compensation plans

      —          364        —     

Excess tax benefit on equity-based compensation plans

      —          (364 )      —     

Amortization of convertible note discount

      8,122        8,028        7,752   

Other, net

      4,115        5,342        8,406   

Changes in operating assets and liabilities:

      (150,388 )      (2,497 )      143,123   
  

 

 

    

 

 

    

 

 

  

Net cash provided by operating activities

      51,925        174,988        249,262   
  

 

 

    

 

 

    

 

 

  

CASH FLOWS FROM INVESTING ACTIVITIES:

       

Capital expenditures and intangible assets

      (23,778 )      (43,140 )      (43,965 ) 

Cash paid for business acquisition

      —          (800 )      —     

Net sales/maturities (purchases) of available-for-sale securities

      42,567        (6,442 )      (16,638 ) 

(Issuance) repayments of notes receivable

      —          (10,000 )      —     

Transfer of restricted cash and investments

      150        (328 )      146   
  

 

 

    

 

 

    

 

 

  

Net cash provided by (used for) investing activities

      18,939        (60,710 )      (60,457 ) 
  

 

 

    

 

 

    

 

 

  

CASH FLOWS FROM FINANCING ACTIVITIES:

       

Principal payments on long-term debt and capital lease obligations

      (88 )      (698 )      (665 ) 

Excess tax benefit on equity-based compensation plans

      —          364        —     

Treasury stock purchases

      (104,285 )      (2,275 )      (355,079 ) 

Reissuances of treasury stock related to employee stock purchase plan

      15,154        12,846        9,925   

Proceeds from issuance of common stock

      12,574        16,713        951   
  

 

 

    

 

 

    

 

 

  

Net cash provided by (used for) financing activities

      (76,645 )      26,950        (344,868 ) 
  

 

 

    

 

 

    

 

 

  

Effect of exchange rate changes on cash

      (508 )      2,136        2,777   

Net decrease in cash and cash equivalents

      (6,289 )      143,364        (153,286 ) 

Cash and cash equivalents at beginning of period

      1,162,473        1,019,109        1,564,752   
  

 

 

    

 

 

    

 

 

  

Cash and cash equivalents at end of period

    $ 1,156,184      $ 1,162,473      $ 1,411,466   
  

 

 

    

 

 

    

 

 

  

 

page 6 of 8

Lam Announces Financial Results for the September 2013 Quarter

 

Non-GAAP Financial Summary

(in thousands, except percentages and per share data)

(unaudited)

 

     Three Months Ended     Three Months Ended  
     September 29,     June 30,  
     2013     2013  

Revenue

    $ 1,015,059      $ 986,214   

Gross margin

    $ 456,709      $ 438,823   

Gross margin as percentage of revenue

      45.0 %      44.5 % 

Operating expenses

    $ 291,887      $ 297,048   

Operating income

    $ 164,822      $ 141,775   

Operating margin as a percentage of revenue

      16.2 %      14.4 % 

Net income

    $ 139,227      $ 136,440   

Net income per diluted share

    $ 0.81      $ 0.80   

Shares used in per share calculation - diluted

      171,363        169,722   

Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Three Months Ended  
     September 29,     June 30,  
     2013     2013  

U.S. GAAP net income

    $ 85,506      $ 85,707   

Pre-tax non-GAAP items:

     

Costs associated with rationalization of certain product configurations - cost of goods sold

      —          (896 ) 

Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold

      21,480        20,748   

Acquisition-related inventory fair value impact - cost of goods sold

      2,047        4,266   

Integration costs - cost of goods sold

      1,324        778   

Integration costs - operating expenses

      8,063        9,579   

Amortization related to intangible assets acquired in Novellus transaction - operating expenses

      16,947        18,888   

Restructuring charges - operating expenses

      1,705        792   

Costs associated with rationalization of certain product configurations - operating expenses

      844        1,122   

Impairment of long lived asset

      7,004        —     

Amortization of convertible note discount, Lam notes - other expense, net

      7,243        7,159   

Amortization of convertible note discount, Novellus assumed notes - other expense, net

      859        781   

Net tax benefit on non-GAAP items

      (11,646 )      (10,252 ) 

Net tax benefit on successful resolution of certain tax matters

      (2,286 )      (2,699 ) 

Tax expense associated with legal-entity integration

      137        467   
  

 

 

    

 

 

  

Non-GAAP net income

    $ 139,227      $ 136,440   
  

 

 

    

 

 

  

Non-GAAP net income per diluted share

    $ 0.81      $ 0.80   
  

 

 

    

 

 

  

Number of shares used for diluted per share calculation

      171,363        169,722   

 

page 7 of 8

Lam Announces Financial Results for the September 2013 Quarter

 

Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income

(in thousands, except percentages)

(unaudited)

 

     Three Months Ended     Three Months Ended  
     September 29,     June 30,  
     2013     2013  

U.S. GAAP gross margin

    $ 431,858      $ 413,927   

Pre-tax non-GAAP items:

     

Costs associated with rationalization of certain product configurations - cost of goods sold

      —          (896 ) 

Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold

      21,480        20,748   

Acquisition-related inventory fair value impact - cost of goods sold

      2,047        4,266   

Integration costs - cost of goods sold

      1,324        778   
  

 

 

    

 

 

  

Non-GAAP gross margin

    $ 456,709      $ 438,823   
  

 

 

    

 

 

  

U.S. GAAP gross margin as a percentage of revenue

      42.5 %      42.0 % 

Non-GAAP gross margin as a percentage of revenue

      45.0 %      44.5 % 

U.S. GAAP operating expenses

    $ 326,450      $ 327,429   

Pre-tax non-GAAP items:

     

Integration costs - operating expenses

      (8,063 )      (9,579 ) 

Amortization related to intangible assets acquired in Novellus transaction - operating expenses

      (16,947 )      (18,888 ) 

Restructuring charges - operating expenses

      (1,705 )      (792 ) 

Costs associated with rationalization of certain product configurations - operating expenses

      (844 )      (1,122 ) 

Impairment of long lived asset

      (7,004 )      —     
  

 

 

    

 

 

  

Non-GAAP operating expenses

    $ 291,887      $ 297,048   
  

 

 

    

 

 

  

Non-GAAP operating income

    $ 164,822      $ 141,775   
  

 

 

    

 

 

  

Non-GAAP operating margin as a percent of revenue

      16.2 %      14.4 % 

 

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