(Source: Business Wire)
KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its fourth quarter and fiscal year ended on June 30, 2009. KLA-Tencor reported GAAP net loss of $26 million and GAAP loss per share of $0.15 on revenue of $282 million for the fourth quarter of fiscal year 2009. For the year ended June 30, 2009, the company reported GAAP net loss of $523 million and GAAP loss per diluted share of $3.07 on revenue of $1.5 billion.
"We are encouraged by investments in technology development programs by customers at the leading edge as well as improved demand from our foundry customers," commented Rick Wallace, president and CEO of KLA-Tencor. "We continue to manage our business to align our cost structure with projected revenue levels and are focused on achieving non-GAAP breakeven by the end of calendar year 2009, while at the same time maintaining a high level of R&D investment to support our customers' next-generation process control needs."
GAAP Results Q4 FY 2009 Q3 FY 2009 Q4 FY 2008 Revenues $ 282 million $ 310 million $ 591 million Net (Loss) Income $(26) million $(83) million $76 million (Loss) Earnings per Share $ (0.15) $ (0.49) $ 0.43 Non-GAAP Results Q4 FY 2009 Q3 FY 2009 Q4 FY 2008 Net (Loss) Income $ (15) million $ (58) million $ 107 million (Loss) Earnings per Share $ (0.09) $ (0.34) $ 0.60 -------------------------------------------------------------------------------
A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release. Non-GAAP results include the impact of stock-based compensation, but exclude the impact of acquisition, goodwill and intangible asset impairment, restatement, and restructuring related items.
KLA-Tencor will discuss the results for its fourth quarter and fiscal year 2009, along with its outlook, on a conference call today beginning at 2:00 p.m. Pacific Daylight Time. A webcast of the call will be available at: www.kla-tencor.com
Forward-Looking Statements:
Statements in this press release other than historical facts, such as statements regarding the encouragement derived from the investment in technology development programs witnessed in the June quarter (including without limitation the potential success of such technology development programs and whether such programs will result in future sales for KLA-Tencor) and from the improved demand seen in the June quarter from foundry customers (including without limitation the possibility that such improved demand will be sustained in future periods); the company's ability to align its cost structure with projected revenue levels so as to achieve non-GAAP breakeven operating results by the end of the calendar year; future levels of investment in research and development by KLA-Tencor; and KLA-Tencor's ability to successfully innovate, develop and sell new technologies and products that meet customer demands, are forward-looking statements, and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations, and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: the demand for semiconductors; the financial condition of the global capital markets and the general macroeconomic environment; new and enhanced product offerings by competitors; cancellation of orders by customers; the ability of KLA-Tencor's research and development teams to successfully innovate and develop technology that is responsive to customer demands; the impact of local labor and employment laws on KLA-Tencor's ability to complete, and realize the anticipated cost savings from, its recent global workforce reductions; unanticipated delays in the completion of KLA-Tencor's facilities consolidation efforts or the implementation of other cost-reduction efforts; KLA-Tencor's ability to successfully integrate and manage businesses that it acquires; and changing customer demands. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this release, please refer to KLA-Tencor's Annual Report on Form 10-K for the year ended June 30, 2008, subsequently filed Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA-Tencor assumes no obligation to, and does not currently intend to, update these forward-looking statements.
About KLA-Tencor:
KLA-Tencor Corporation (NASDAQ: KLAC), a leading provider of process control and yield management solutions, partners with customers around the world to develop state-of-the-art inspection and metrology technologies. These technologies serve the semiconductor, data storage, compound semiconductor, photovoltaic, and other related nanoelectronics industries.With a portfolio of industry-standard products and a team of world-class engineers and scientists, the company has created superior solutions for its customers for over 30 years. Headquartered in Milpitas, California, KLA-Tencor has dedicated customer operations and service centers around the world. Additional information may be found at www.kla-tencor.com. (KLAC-F)
Use of Non-GAAP Financial Information:
The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA-Tencor's financial results presented in accordance with United States GAAP.
To supplement KLA-Tencor's condensed consolidated financial statements presented in accordance with GAAP, the company provides certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of KLA-Tencor's operating performance and its prospects in the future. Specifically, KLA-Tencor believes the non-GAAP information provides useful measures to both management and investors regarding financial and business trends relating to KLA-Tencor's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP.
KLA-Tencor Corporation Condensed Consolidated Unaudited Balance Sheets (In thousands) June 30, 2009 June 30, 2008 ASSETS Cash and short- and long-term investments $ 1,329,884 $ 1,579,383 Accounts receivable, net 210,143 492,488 Inventories, net 370,206 459,449 Other current assets 488,384 546,591 Land, property and equipment, net 291,878 355,474 Goodwill 329,379 601,882 Purchased intangibles, net 149,080 297,778 Other long-term assets 440,584 515,345 Total assets $ 3,609,538 $ 4,848,390 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 63,485 $ 104,315 Deferred system profit 95,820 150,797 Unearned revenue 63,237 56,692 Other current liabilities 341,441 638,528 Total current liabilities 563,983 950,332 Non-current liabilities: Income tax payable 49,738 63,634 Unearned revenue 6,058 31,745 Other non-current liabilities 60,163 76,288 Long-term debt 745,204 744,661 Total liabilities 1,425,146 1,866,660 Stockholders' equity: Common stock and capital in excess of par value 835,477 729,629 Retained earnings 1,370,132 2,204,417 Accumulated other comprehensive income (loss) (21,217 ) 47,684 Total stockholders' equity 2,184,392 2,981,730 Total liabilities and stockholders' equity $ 3,609,538 $ 4,848,390 -------------------------------------------------------------------------------
KLA-Tencor Corporation Condensed Consolidated Unaudited Statements of Operations Three months ended Twelve months ended (In thousands, except per share data) June 30,2009 June 30,2008 June 30,2009 June 30,2008 Revenues: Product $ 176,226 $ 462,069 $ 1,062,126 $ 2,030,224 Service 105,276 128,625 458,090 491,492 Total revenues 281,502 590,694 1,520,216 2,521,716 Costs and operating expenses: Costs of revenues 164,621 264,146 864,824 1,134,856 Engineering, research and development 79,227 116,470 371,463 409,973 Selling, general and administrative 72,621 100,209 415,126 464,890 Goodwill and intangible asset impairment - 6,458 446,744 12,621 Total costs and operating expenses 316,469 487,283 2,098,157 2,022,340 Income (loss) from operations (34,967 ) 103,411 (577,941 ) 499,376 Interest income and other, net (11,409 ) (5,894 ) (24,590 ) 60,858 Income (loss) before income taxes (46,376 ) 97,517 (602,531 ) 560,234 Provision (benefit) for income taxes (20,800 ) 21,507 (79,163 ) 201,151 Net income (loss) $ (25,576 ) $ 76,010 $ (523,368 ) $ 359,083 Net income (loss) per share: Basic $ (0.15 ) $ 0.43 $ (3.07 ) $ 1.99 Diluted $ (0.15 ) $ 0.43 $ (3.07 ) $ 1.95 Cash dividend paid per share $ 0.15 $ 0.15 $ 0.60 $ 0.60 Weighted average number of shares: Basic 169,981 175,143 170,253 180,594 Diluted 169,981 178,090 170,253 184,259 -------------------------------------------------------------------------------
KLA-Tencor Corporation Condensed Consolidated Unaudited Statements of Cash Flows Three months ended June 30, (In thousands) 2009 2008 Cash flows from operating activities: Net income (loss) $ (25,576 ) $ 76,010 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 25,732 46,469 Goodwill, intangible assets and long-lived asset impairment 638 7,522 Provision for doubtful accounts (818 ) - Non-cash, stock-based compensation 26,092 29,279 Tax benefit from stock-based compensation (13,223 ) (924 ) Excess tax benefit from stock-based compensation - (354 ) Net loss on sale of marketable securities and other investments 160 12,813 Net gain on sale of real estate assets (353 ) (2,480 ) Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations: Decrease in accounts receivable, net 37,261 93,081 Decrease in inventories 53,111 13,059 Increase in other assets (40,943 ) (73,548 ) Increase (decrease) in accounts payable 6,720 (5,730 ) Increase (decrease) in deferred system profit 21,632 (37,503 ) Increase (decrease) in other liabilities (16,995 ) 29,121 Net cash provided by operating activities 73,438 186,815 Cash flows from investing activities: Proceeds from restricted cash - 581,540 Acquisition of business, net of cash received - (488,545 ) Capital expenditures, net (1,980 ) (9,629 ) Proceeds from sale of real estate assets - 5,497 Purchase of available-for-sale securities (349,358 ) (406,210 ) Proceeds from sale and maturity of available-for-sale securities 137,127 87,008 Purchase of trading securities (20,402 ) (33,618 ) Proceeds from sale of trading securities 27,525 35,177 Net cash used in investing activities (207,088 ) (228,780 ) Cash flows from financing activities: Issuance of common stock 12,971 24,607 Tax withholding payments related to released restricted stock units (549 ) - Common stock repurchases - (121,510 ) Issuance of long term debt, net of discount - 744,570 Debt issuance costs - (7,351 ) Payment of dividends to stockholders (25,490 ) (26,354 ) Excess tax benefit from stock-based compensation - 354 Net cash provided by (used in) financing activities (13,068 ) 614,316 Effect of exchange rate changes on cash and cash equivalents 6,756 (7,727 ) Net increase (decrease) in cash and cash equivalents (139,962 ) 564,624 Cash and cash equivalents at beginning of period 664,929 563,482 Cash and cash equivalents at end of period $ 524,967 $ 1,128,106 Supplemental cash flow disclosures Income taxes paid, net (5,274 ) 59,720 Interest paid $ 26,474 $ 417 -------------------------------------------------------------------------------
KLA-Tencor Corporation Condensed Consolidated Unaudited Supplemental Information (In thousands, except per share data) Reconciliation of GAAPNet Income (Loss) to Non-GAAPNet Income (Loss) Three months ended Twelve months ended June 30,2009 March 31,2009 June 30,2008 June 30,2009 June 30,2008 GAAP net income (loss) $ (25,576 ) $ (82,827 ) $ 76,010 $ (523,368 ) $ 359,083 Adjustments to reconcile GAAP net income (loss) to non-GAAP net income (loss) Acquisition related charges a 11,561 16,718 43,919 79,287 69,852 Restructuring, severance and other b 7,007 19,330 (1,391 ) 54,119 8,379 Restatement related charges c (1,731 ) 2,018 2,660 13,261 76,940 Goodwill and intangible asset impairment d - - 6,458 446,744 12,621 Income tax effect of non-GAAP adjustments e (5,883 ) (13,524 ) (12,038 ) (107,503 ) (53,315 ) Non-recurring tax item f - - (8,438 ) - 38,175 Non-GAAP net income (loss) $ (14,622 ) $ (58,285 ) $ 107,180 $ (37,460 ) $ 511,735 GAAP net income (loss) per diluted share $ (0.15 ) $ (0.49 ) $ 0.43 $ (3.07 ) $ 1.95 Non-GAAP net income (loss) per diluted share $ (0.09 ) $ (0.34 ) $ 0.60 $ (0.22 ) $ 2.78 Shares used in diluted shares calculation 169,981 169,934 178,090 170,253 184,259 -------------------------------------------------------------------------------
Impact of items included in Condensed Consolidated Unaudited Statements of Operations: Acquisitionrelatedcharges Restructuring,severance andother Restatementrelated charges Goodwillandintangibleassetimpairment Total pre-taxGAAP tonon-GAAPadjustment Costs of revenues $ 9,314 $ 3,662 $ - $ - $ 12,976 Engineering, research and development 742 4 - - 746 Selling, general and administrative 1,505 3,341 (1,731 ) - 3,115 Goodwill and intangible asset impairment - - - - - Total in three months ended June 30, 2009 $ 11,561 $ 7,007 $ (1,731 ) $ - $ 16,837 Total in three months ended March 31, 2009 $ 16,718 $ 19,330 $ 2,018 $ - $ 38,066 Total in three months ended June 30, 2008 $ 43,919 $ (1,391 ) $ 2,660 $ 6,458 $ 51,646 -------------------------------------------------------------------------------
Three months ended June 30, 2009 March 31, 2009 June 30, 2008 Stock-based compensation Costs of revenues $ 5,091 $ 4,706 $ 5,417 Engineering, research and development 8,650 7,524 8,870 Selling, general and administrative 12,351 10,528 14,992 Total $ 26,092 $ 22,758 $ 29,279 -------------------------------------------------------------------------------
To supplement our condensed consolidated financial statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of our operating performance and our prospects in the future. Specifically, we believe the non-GAAP information provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP.
a Acquisition related charges include amortization of intangible assets, inventory fair value adjustments, in-process research and development associated with acquisitions, and realized and unrealized gains resulting from Euro call option contracts entered into in connection with our acquisition of ICOS Vision Systems Corporation NV. Management believes that the expense associated with the amortization of acquisition related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives, and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both KLA-Tencor's newly acquired and long-held businesses. Management believes that it is appropriate to exclude inventory fair value adjustments, in-process research and development and gains and losses on foreign exchange contracts associated with business acquisitions as they are not indicative of ongoing operating results and therefore limit comparability. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.
b Restructuring, severance and other includes gains and costs associated with the company's facilities divestment and consolidation program, reductions in force, entry into a severance and consulting agreement with the company's former president/chief operating officer, and gains from sale of facilities, one-time inventory write off associated with the disposal of service inventory in excess of future need, and asset impairment (other than impairment of goodwill and intangible assets, which is included within the category described in note (d) below) from discontinuing or making available for sale certain acquired product lines. Management believes that it is appropriate to exclude those items as they are not indicative of ongoing operating results and therefore limit comparability. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.
c Restatement related charges include compensation related to reimbursement payments by KLA-Tencor to non-executive employees for penalty taxes under section 409A of the Internal Revenue Code, as well as legal and other expenses related to the stock option investigation, shareholder litigation and related matters. Management believes that it is appropriate to exclude those items as they are not indicative of ongoing operating results and therefore limit comparability. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.
d Goodwill and intangible asset impairment includes non-cash expense recognized as a result of the company's annual testing for goodwill impairment performed in the second quarter of every fiscal year and testing for intangible asset impairment driven by certain macroeconomic and company-specific triggering events, as well as the impairment of goodwill and intangible assets as a result of discontinuing acquired products and making acquired products available for sale. Management believes that it is appropriate to exclude those items as they are not indicative of ongoing operating results and therefore limit comparability. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.
e Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above. Management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income.
f Non-recurring tax item includes the U.S. tax impact associated with the implementation of our global manufacturing strategy and a benefit from revision of the amount of undistributed earnings of foreign subsidiaries considered to be permanently reinvested outside the United States. Management believes that it is appropriate to exclude these items as they are not indicative of ongoing operating results and therefore limit comparability. Management believes excluding these items help investors compare our operating performance with our results in prior periods as well as with the performance of other companies.
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