(Source: Business Wire)
Lam Research Corporation (NASDAQ: LRCX) highlights for the June 2009 quarter were:
(in thousands, except per share data and percentages) ? Revenue: $ 217,764 ? Operating Margin: U.S. GAAP: -29.9 % Ongoing: -21.4 % ? Net Loss: U.S. GAAP: $ (88,490 ) Ongoing: $ (57,005 ) ? Diluted EPS: U.S. GAAP: $ (0.70 ) Ongoing: $ (0.45 ) -------------------------------------------------------------------------------
Lam Research Corporation today announced financial results for the quarter ended June 28, 2009. Revenue for the period was $217.8million, gross margin was $67.8million and net loss was $(88.5) million, or $(0.70) per diluted share, compared to revenue of $174.4million, gross margin of $36.5million and net loss of $(198.4)million, or $(1.58) per diluted share, for the March 2009 quarter. Shipments for the June 2009 quarter were $246million compared to $159million during the March 2009 quarter.
The Company's ongoing results for the June 2009 quarter exclude certain costs for previously announced restructuring activities and asset impairments, a legal judgment, a non-cash goodwill impairment charge, certain one-time contract termination costs, a net tax expense for valuation allowance, net tax expense on resolution of certain tax matters, and interest and legal fees related to Internal Revenue Code Section 409A tax expenses. The Company's ongoing results for the March 2009 quarter excluded certain costs for previously announced restructuring activities and asset impairments, a non-cash goodwill impairment charge, a net tax expense for a change in state tax law, a net tax expense and an exchange rate gain associated with the Company's accelerated tax planning strategy, an investment impairment, and interest on Internal Revenue Code Section 409A tax expenses. Management uses the presentation of ongoing gross margin, ongoing operating expenses, ongoing operating loss, ongoing operating margin, ongoing net loss, and ongoing net loss per diluted share to evaluate the Company's operating and financial results. The Company believes the presentation of ongoing results is useful to investors for analyzing ongoing business trends and comparing performance to prior periods, and enhances the investor's ability to view the Company's results from management's perspective. A table presenting a reconciliation of ongoing results to results under U.S. GAAP is included at the end of this press release and on the Company's web site.
Ongoing net loss was $(57.0) million, or $(0.45) per diluted share in the June 2009 quarter compared to ongoing net loss of $(89.8)million, or $(0.71) per diluted share, for the March 2009 quarter. Ongoing gross margin for the June 2009 quarter was $67.8million or 31.1%, compared to ongoing gross margin of $46.7million, or 26.8%, for the March 2009 quarter. The sequential increase in gross margin was primarily due to improved factory and field utilization due to increased business volume. Ongoing operating expenses for the June 2009 quarter decreased to $114.3million compared with the March2009 quarter of $128.9million. This decrease was driven by a full quarter savings in employee-related expenses and other cost reduction measures that were a part of the March 2009 quarter restructuring. In addition, in the March 2009 quarter, the Company recorded accounts receivable reserves for specific distressed customers that did not recur in the June 2009 quarter.
The geographic distribution of shipments and revenue during the June 2009 quarter is shown in the following table:
Region Shipments Revenue North America 16% 18% Europe 8% 10% Japan 17% 17% Korea 16% 14% Taiwan 30% 29% Asia Pacific 13% 12% -------------------------------------------------------------------------------
Cash and cash equivalents, short-term investments and restricted cash and investments balances were $757.8million at the end of the June 2009 quarter, compared to $806.4 million at the end of the March 2009 quarter. Cash flows from operating activities were approximately $(58.1) million during the June 2009 quarter. Deferred revenue and deferred profit balances at the end of the June 2009 quarter were $64.7million and $45.8million, respectively. Our 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 $13million as of June 28, 2009.
"Relative to the March quarter, business conditions improved in the June quarter, contributing to Lam's ability to show improved financial results for the quarter. Shipments and revenues increased as a result of customer investments to add wafer starts at the leading edge in both foundry and memory, as well as higher fab utilization contributing to improvement in the customer service business," said Steve Newberry, Lam's president and chief executive officer. "While we are encouraged that our customers have increased spending on equipment, we plan to maintain our focus on cash management while continuing our strategic investments in leading-edge solutions for our customers' current and next-generation wafer fabrication needs," 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 the anticipated revenue from shipments to Japanese customers, the potential uses of our cash and other assets, our business focus on minimizing cash expenditures and making strategic investments in providing leading-edge solutions, and our projections for future business conditions. Some factors that may affect these forward-looking statements include: difficult business conditions in the semiconductor industry and the overall economy and the efficacy of our plans for reacting to those conditions, changing customer demands, the actions of our competitors, and the challenges presented by the development and marketing of our new products. 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 June29, 2008, and the reports on Form 10-Q for the quarters ended September28, 2008, December28, 2008, and March 29, 2009, 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. For more information, visit www.lamresearch.com.
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data and percentages) Three Months Ended Twelve Months Ended June 28, March 29, June 29, June 28, June 29, 2009 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) (1) Total revenue $ 217,764 $ 174,412 $ 566,160 $ 1,115,946 $ 2,474,911 Cost of goods sold 150,007 127,680 318,900 706,219 1,282,494 Cost of goods sold - restructuring and asset impairments - 10,217 12,610 20,993 12,610 Cost of goods sold - 409A expense - - - - 6,401 Total cost of goods sold 150,007 137,897 331,510 727,212 1,301,505 Gross margin 67,757 36,515 234,650 388,734 1,173,406 Gross margin as a percent of revenue 31.1 % 20.9 % 41.4 % 34.8 % 47.4 % Research and development 67,491 70,434 86,652 288,269 323,759 Selling, general and administrative 47,248 58,515 76,994 233,061 287,282 Goodwill impairment 7,179 89,076 - 96,255 - Restructuring and asset impairments 5,396 13,028 6,366 44,513 6,366 409A expense 982 646 710 3,232 44,494 Legal judgment 4,647 - - 4,647 - In-process research and development - - - - 2,074 Total operating expenses 132,943 231,699 170,722 669,977 663,975 Operating income (loss) (65,186 ) (195,184 ) 63,928 (281,243 ) 509,431 Operating margin as a percent of revenue -29.9 % -111.9 % 11.3 % -25.2 % 20.6 % Other income, net 2,869 13,497 10,344 18,150 67,545 Income (loss) before income taxes (62,317 ) (181,687 ) 74,272 (263,093 ) 576,976 Income tax expense 26,173 16,672 2,094 39,055 137,627 Net income (loss) $ (88,490 ) $ (198,359 ) $ 72,178 $ (302,148 ) $ 439,349 Net income (loss) per share: Basic net income (loss) per share $ (0.70 ) $ (1.58 ) $ 0.58 $ (2.41 ) $ 3.52 Diluted net income (loss) per share $ (0.70 ) $ (1.58 ) $ 0.57 $ (2.41 ) $ 3.47 Number of shares used in per share calculations: Basic 126,273 125,566 125,046 125,595 124,647 Diluted 126,273 125,566 126,657 125,595 126,504 (1) Derived from audited financial statements -------------------------------------------------------------------------------
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 28, March 29, June 29, 2009 2009 2008 (unaudited) (unaudited) (1) ASSETS Cash and cash equivalents $ 374,167 $ 374,648 $ 732,537 Short-term investments 205,221 248,500 326,199 Accounts receivable, net 253,585 196,842 412,356 Inventories 233,410 260,667 282,218 Deferred income taxes 69,043 90,541 96,748 Other current assets 60,401 82,273 67,649 Total current assets 1,195,827 1,253,471 1,917,707 Property and equipment, net 215,666 225,864 235,735 Restricted cash and investments 178,439 183,277 146,072 Deferred income taxes 17,007 15,281 19,793 Goodwill and intangible assets 260,787 268,249 403,187 Other assets 84,145 87,340 84,261 Total assets $ 1,951,871 $ 2,033,482 $ 2,806,755 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 340,763 $ 369,998 $ 637,679 Long-term debt and capital leases $ 40,886 $ 40,708 $ 276,503 Income taxes payable 102,999 99,807 85,611 Other long-term liabilities 14,134 19,711 23,018 Minority interests - - 5,347 Stockholders' equity 1,453,089 1,503,258 1,778,597 Total liabilities and stockholders' equity $ 1,951,871 $ 2,033,482 $ 2,806,755 (1) Derived from audited financial statements -------------------------------------------------------------------------------
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended Twelve Months Ended June 28, March 29, June 29, June 28, June 29, 2009 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) (1) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (88,490 ) $ (198,359 ) $ 72,178 $ (302,148 ) $ 439,349 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization 17,694 19,650 19,227 72,417 54,704 Deferred income taxes 19,913 12,929 (4,652 ) 30,545 (26,661 ) Equity-based compensation expense 13,358 10,227 11,629 53,042 42,516 Income tax benefit on equity-based compensation plans (1,173 ) (11,115 ) 26,815 (14,294 ) 83,472 Excess tax benefit on equity-based compensation plans (237 ) 7,027 (21,666 ) 6,273 (58,904 ) Net gain on settlement of call option - - 399 - (33,839 ) Goodwill impairment 7,179 89,076 - 96,255 - Restructuring and asset impairments 5,396 23,245 18,976 65,506 18,976 Other, net 2,535 953 (996 ) 9,353 (3,319 ) Changes in operating asset accounts (34,295 ) 22,215 78,537 (95,078 ) 74,025 Net cash provided by (used for) operating activities (58,120 ) (24,152 ) 200,447 (78,129 ) 590,319 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures and intangible assets (5,848 ) (10,866 ) (18,951 ) (44,282 ) (76,803 ) Acquisitions of businesses, net of cash acquired - (11,706 ) (6,918 ) (19,457 ) (482,574 ) Net sales (purchases) of available-for-sale securities 93,056 33,961 (32,494 ) 173,764 18,822 Purchase of call option - - - - (13,506 ) Proceeds from settlement of call option - - 383 - 47,345 Purchase of other investments - - - (3,439 ) (4,560 ) Transfer of restricted cash and investments (44,458 ) 558 17,233 (92,206 ) 15,471 Other 2,000 (8,375 ) - (8,375 ) - Net cash provided by (used for) investing activities 44,750 3,572 (40,747 ) 6,005 (495,805 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt and capital lease obligations (911 ) (239,703 ) (1,500 ) (256,047 ) (251,714 ) Net proceeds from issuance of long-term debt - - 1,915 625 251,915 Excess tax benefit on equity-based compensation plans 237 (7,027 ) 21,666 (6,273 ) 58,904 Treasury stock purchases (3,197 ) (546 ) (3,590 ) (30,946 ) (14,552 ) Reissuances of treasury stock 6,271 5,942 1,262 19,797 8,563 Proceeds from issuance of common stock 6,287 1,283 2,588 12,014 12,694 Net cash provided by (used for) financing activities 8,687 (240,051 ) 22,341 (260,830 ) 65,810 Effect of exchange rate changes on cash 4,202 (17,634 ) (1,857 ) (25,416 ) (1,754 ) Net increase (decrease) in cash and cash equivalents (481 ) (278,265 ) 180,184 (358,370 ) 158,570 Cash and cash equivalents at beginning of period 374,648 652,913 552,353 732,537 573,967 Cash and cash equivalents at end of period $ 374,167 $ 374,648 $ 732,537 $ 374,167 $ 732,537 (1) Derived from audited financial statements -------------------------------------------------------------------------------
Reconciliation of U.S. GAAP Net Loss to Ongoing Net Loss (in thousands, except per share data and percentages) Three Months Ended Three Months Ended June 28, March 29, 2009 2009 U.S. GAAP net loss $ (88,490 ) $ (198,359 ) Pre-tax non-ongoing items: Goodwill impairment - operating expenses 7,179 89,076 Legal judgment - operating expenses 4,647 - Restructuring and asset impairments - cost of goods sold - 10,217 Restructuring and asset impairments - operating expenses 5,396 13,028 409A expense - operating expenses 982 646 One-time contract termination costs - operating expenses 413 - Impairment of investment - other income, net - 1,543 Exchange rate gain associated with accelerated tax planning strategy - other income, net - (6,674 ) Net tax benefit on non-ongoing items (4,556 ) (5,506 ) Net tax expense on resolution of certain tax matters 3,637 - Net tax expense for valuation allowance 13,787 - Net tax expense on change in state tax law - 5,244 Net tax expense on accelerated tax planning strategy - 1,014 Ongoing net loss $ (57,005 ) $ (89,771 ) Ongoing net loss per diluted share $ (0.45 ) $ (0.71 ) Number of shares used for diluted per share calculation 126,273 125,566 -------------------------------------------------------------------------------
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Loss toOngoing Gross Margin, Operating Expenses and Operating Loss (in thousands, except percentages) Three Months Ended Three Months Ended June 28, March 29, 2009 2009 U.S. GAAP gross margin $ 67,757 $ 36,515 Pre-tax non-ongoing items: Pre-tax restructuring and asset impairments - cost of goods sold - $ 10,217 Ongoing gross margin $ 67,757 $ 46,732 U.S. GAAP gross margin as a percent of revenue 31.1 % 20.9 % Ongoing gross margin as a percent of revenue 31.1 % 26.8 % U.S. GAAP operating expenses $ 132,943 $ 231,699 Pre-tax non-ongoing items: Goodwill impairment - operating expenses (7,179 ) (89,076 ) Legal judgment - operating expenses (4,647 ) - Restructuring and asset impairments - operating expenses (5,396 ) (13,028 ) One-time contract termination costs - operating expenses (413 ) - 409A expense - operating expenses (982 ) (646 ) Ongoing operating expenses $ 114,326 $ 128,949 Ongoing operating loss $ (46,569 ) $ (82,217 ) Ongoing operating margin as a percent of revenue -21.4 % -47.1 % -------------------------------------------------------------------------------
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