LAM RESEARCH CORP - FORM 8-K - EX-99.1 - PRESS RELEASE

Attached files

file	filename
8-K - FORM 8-K - LAM RESEARCH CORP	d8k.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contact:

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

Lam Research Corporation Announces Financial Results for the Quarter Ended June 26, 2011

FREMONT, Calif., July 27, 2011—Lam Research Corporation’s (NASDAQ: LRCX) highlights for the June 2011 quarter were:

Lam Research Corporation

Financial Highlights for the Quarter Ended June 26, 2011

(in thousands, except per share data and percentages)


	U.S. GAAP			Non-GAAP
• Revenue:	$	752,018		$	752,018

• Operating Margin:		18.9	%		21.1	%

• Net Income:	$	125,928		$	142,289

• Diluted EPS:	$	1.01		$	1.14

Lam Research Corporation today announced financial results for the quarter ended June 26, 2011. Revenue for the period was $752.0 million, gross margin was $338.5 million (45.0%), and net income was $125.9 million, or $1.01 per diluted share, compared to revenue of $809.1 million, gross margin of $374.0 million (46.2%), and net income of $182.2 million, or $1.45 per diluted share, for the March 2011 quarter. Shipments for the June 2011 quarter were $793 million compared to $813 million during the March 2011 quarter.

In addition to U.S. Generally Accepted Accounting Principles (GAAP) results, this commentary contains non-GAAP financial measures. The Company’s non-GAAP results for the June 2011 quarter exclude certain costs for restructuring and impairments, the non-cash portion of convertible debt interest expense, and tax expense associated with legal entity restructuring. There were no adjustments to U.S. GAAP results to determine “non-GAAP” results for the March 2011 quarter. Management uses non-GAAP 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.

Non-GAAP net income was $142.3 million, or $1.14 per diluted share, in the June 2011 quarter compared to non-GAAP net income of $182.2 million, or $1.45 per diluted share, for the March 2011 quarter. Gross margin for the June 2011 quarter was $338.5 million or 45.0%, compared to gross margin of $374.0 million or 46.2%, for the March 2011 quarter. The sequential decrease in gross margin was primarily due to lower factory and field utilization as a result of the decline in volume from the March to the June quarter. Non-GAAP operating expenses for the June 2011 quarter were $179.5 million compared with the March 2011 quarter of $177.0 million and reflect our continued investments in strategic development activities.

~more~

Lam Announces Financial Results for the June 2011 Quarter

The geographic distribution of shipments and revenue during the June 2011 quarter is shown in the following table:


Region	Shipments			Revenue
North America		15	%		15	%
Europe		12	%		11	%
Japan		19	%		15	%
Korea		18	%		21	%
Taiwan		17	%		21	%
Asia Pacific		19	%		17	%

Cash and cash equivalents, short-term investments and restricted cash and investments balances were $2.3 billion at the end of the June 2011 quarter, compared to $1.4 billion at the end of the March 2011 quarter. Cash flows from operating activities were approximately $198.1 million or 26% of revenue during the June 2011 quarter. Additionally, during the quarter the Company completed a convertible debt financing and generated $835.5 million in net cash, which includes proceeds from warrant sales, offset by issuance fees and purchase of a convertible note hedge. Deferred revenue and deferred profit balances at the end of the June 2011 quarter were $257.6 million and $157.2 million, respectively. 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 $70.4 million as of June 26, 2011.

“Lam delivered solid operating performance and financial results for the June quarter,” said Steve Newberry, Lam’s chief executive officer and vice chairman. “We are seeing significant near term declines in wafer fab equipment spending, and as result our September quarter shipments, revenues and earnings per share will be well below our June quarter results. Even in this environment, we continue to execute to our strategic priorities and make key R&D investments that position the company for future growth opportunities. Longer term, we continue to believe that on a rolling average basis, twelve-month wafer fab equipment spending should be healthy over the next several years and our outstanding product portfolio, supported by our solid balance sheet and strong cash generation capabilities enable the company to deliver increased value to our customers and our shareholders in that environment,” Newberry concluded.

~more~

page 2 of 7

Lam Announces Financial Results for the June 2011 Quarter

Caution Regarding Forward-Looking Statements

Statements made in this press release that are not statements 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, but are not limited, to the anticipated revenue from shipments to Japanese customers; our future commitment to our current strategic priorities; the return on our R&D investments, the market success of our product portfolio, our cash generation capability, future spending in the wafer fab equipment sector, and our ability to meet customers’ future technology needs and our future market position. 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 27, 2010 and the reports on Form 10-Q for the three months ended September 26, 2010, December 26, 2010, and March 27, 2011. 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.

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 Market^SM under the symbol LRCX. Lam is a NASDAQ-100® company. For more information, visit www.lamresearch.com.

Consolidated Financial Tables Follow

###

page 3 of 7

Lam Announces Financial Results for the June 2011 Quarter

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data and percentages)


	Three Months Ended									Twelve Months Ended
	June 26,			March 27,			June 27,			June 26,			June 27,
	2011			2011			2010			2011			2010
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(1)
Total revenue	$	752,018		$	809,087		$	695,289		$	3,237,693		$	2,133,776

Cost of goods sold		413,564			435,068			370,409			1,740,461			1,166,219
Cost of goods sold - restructuring and impairments		—			—			3,438			—			3,438
Cost of goods sold - 409A expense		—			—			—			—			(5,816	)

Total costs of goods sold		413,564			435,068			373,847			1,740,461			1,163,841

Gross margin		338,454			374,019			321,442			1,497,232			969,935
Gross margin as a percent of revenue		45.0	%		46.2	%		46.2	%		46.2	%		45.5	%
Research and development		99,583			96,880			85,644			373,293			320,859
Selling, general and administrative		79,938			80,143			66,779			308,075			240,942
Restructuring and impairments		16,742			—			13,302			11,579			21,314
409A expense		—			—			—			—			(38,590	)

Total operating expenses		196,263			177,023			165,725			692,947			544,525

Operating income		142,191			196,996			155,717			804,285			425,410
Operating margin as a percent of revenue		18.9	%		24.3	%		22.4	%		24.8	%		19.9	%
Other income (expense), net		(5,131	)		1,663			3,541			(3,409	)		4,731

Income before income taxes		137,060			198,659			159,258			800,876			430,141
Income tax expense		11,132			16,419			19,261			77,128			83,472

Net income	$	125,928		$	182,240		$	139,997		$	723,748		$	346,669

Net income per share:
Basic net income per share	$	1.02		$	1.47		$	1.11		$	5.86		$	2.73

Diluted net income per share	$	1.01		$	1.45		$	1.10		$	5.79		$	2.71

Number of shares used in per share calculations:
Basic		123,863			123,674			126,339			123,529			126,933

Diluted		125,086			125,293			127,786			125,019			128,126

1	Derived from audited financial statements

page 4 of 7

Lam Announces Financial Results for the June 2011 Quarter

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


	June 26,		March 27,		June 27,
	2011		2011		2010
	(unaudited)		(unaudited)		(1)
ASSETS
Cash and cash equivalents	$	1,492,132	$	942,710	$	545,767
Short-term investments		630,115		312,879		280,690
Accounts receivable, net		590,568		637,795		499,890
Inventories		396,607		355,734		318,479
Deferred income taxes		78,435		45,934		46,158
Other current assets		88,935		77,722		65,677

Total current assets		3,276,792		2,372,774		1,756,661
Property and equipment, net		270,458		251,954		200,336
Restricted cash and investments		165,256		165,248		165,234
Deferred income taxes		3,892		29,578		26,218
Goodwill and intangible assets		216,616		221,146		236,906
Other assets		124,380		107,795		102,037

Total assets	$	4,057,394	$	3,148,495	$	2,487,392


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities	$	684,286	$	667,391	$	558,657


Long-term debt and capital leases	$	738,488	$	15,949	$	17,645
Income taxes payable		113,582		116,911		110,462
Other long-term liabilities		51,193		25,088		32,493
Stockholders’ equity		2,469,845		2,323,156		1,768,135

Total liabilities and stockholders’ equity	$	4,057,394	$	3,148,495	$	2,487,392

1	Derived from audited financial statements

page 5 of 7

Lam Announces Financial Results for the June 2011 Quarter

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Three Months Ended									Twelve Months Ended
	June 26,			March 27,			June 27,			June 26,			June 27,
	2011			2011			2010			2011			2010
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(1)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	125,928		$	182,240		$	139,997		$	723,748		$	346,669
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization		19,972			18,176			17,664			74,759			71,401
Deferred income taxes		(6,166	)		(733	)		(8,633	)		(10,721	)		13,718
Restructuring charges, net		16,742			—			16,740			11,579			24,752
Non-cash interest expense		3,554			—			—			3,554			—
Equity-based compensation expense		14,788			12,456			12,329			53,012			50,463
Income tax benefit on equity-based compensation plans		9,283			15,327			9,944			28,775			10,635
Excess tax benefit on equity-based compensation plans		(8,184	)		(11,878	)		(9,261	)		(23,290	)		(10,234	)
Other, net		477			746			648			(2,341	)		3,190
Changes in operating asset and liabilities:		21,714			25,259			(13,995	)		21,953			(159,881	)

Net cash provided by operating activities		198,108			241,593			165,433			881,028			350,713


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets		(34,571	)		(35,769	)		(12,042	)		(127,495	)		(35,590	)
Net sales/maturities (purchases) of available-for-sale securities		(316,789	)		(11,068	)		(63,958	)		(353,523	)		(77,987	)
Purchase of other investments		—			(417	)		(1,223	)		(417	)		(2,184	)
Proceeds from sale of assets		—			—			—			1,544			—
Transfer of restricted cash and investments		(8	)		(4	)		50			(22	)		13,205
Other		—			—			(800	)		—			(800	)

Net cash used for investing activities		(351,368	)		(47,258	)		(77,973	)		(479,913	)		(103,356	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt and capital lease obligations		(81	)		(1,038	)		(616	)		(4,530	)		(21,040	)
Net proceeds from issuance of long-term debt		882,831			—			—			882,831			336
Proceeds from sale of warrants		133,830			—			—			133,830			—
Purchase of convertible note hedge		(181,125	)		—			—			(181,125	)		—
Excess tax benefit on equity-based compensation plans		8,184			11,878			9,261			23,290			10,234
Treasury stock purchases		(53,753	)		(8,617	)		(17,860	)		(211,316	)		(93,032	)
Net cash received in settlement of (paid in advance for) stock repurchase contracts		(99,589	)		—			—			(149,589	)		—
Reissuances of treasury stock		7,518			6,521			6,173			21,194			17,452
Proceeds from issuance of common stock		2,179			5,980			5,563			12,401			13,386

Net cash provided by (used for) financing activities		699,994			14,724			2,521			526,986			(72,664	)

Effect of exchange rate changes on cash		2,688			4,591			(5,583	)		18,264			(3,093	)
Net increase in cash and cash equivalents		549,422			213,650			84,398			946,365			171,600
Cash and cash equivalents at beginning of period		942,710			729,060			461,369			545,767			374,167

Cash and cash equivalents at end of period	$	1,492,132		$	942,710		$	545,767		$	1,492,132		$	545,767

1	Derived from audited financial statements

page 6 of 7

Lam Announces Financial Results for the June 2011 Quarter

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
	June 26,			March 27,
	2011			2011
U.S. GAAP net income	$	125,928		$	182,240
Pre-tax non-GAAP items:
Restructuring and impairments - operating expenses		16,742			—
Non-cash convertible debt interest expense - other income (expense), net		3,554			—
Net tax benefit on non-GAAP items		(8,224	)		—
Tax expense associated with legal entity restructuring		4,289			—

Non-GAAP net income	$	142,289		$	182,240

Non-GAAP net income per diluted share	$	1.14		$	1.45

Number of shares used for diluted per share calculation		125,086			125,293

Reconciliation of U.S. GAAP Operating Expenses and Operating Income to Non-GAAP Operating Expenses and Operating Income
(in thousands, except percentages)
(unaudited)

	Three Months Ended			Three Months Ended
	June 26,			March 27,
	2011			2011
U.S. GAAP gross margin	$	338,454		$	374,019

U.S. GAAP operating expenses	$	196,263		$	177,023
Pre-tax non-GAAP items:
Restructuring and impairments - operating expenses		(16,742	)		—

Non-GAAP operating expenses	$	179,521		$	177,023

Non-GAAP operating income	$	158,933		$	196,996

Non-GAAP operating margin as a percent of revenue		21.1	%		24.3	%

page 7 of 7

LAM RESEARCH CORP - FORM 8-K - EX-99.1 - PRESS RELEASE - July 27, 2011

Attached files

LAM RESEARCH CORP Reports