UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 2015
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KLA-TENCOR CORPORATION |
(Exact name of registrant as specified in its charter) |
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Delaware | 000-09992 | 04-2564110 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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One Technology Drive, Milpitas, California | 95035 |
(Address of principal executive offices) | (Zip Code) |
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Registrant’s telephone number, including area code: (408) 875-3000 |
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(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 | Results of Operations and Financial Condition. |
On April 23, 2015, KLA-Tencor Corporation (the "Company") issued a press release announcing selected operating results for its third quarter of fiscal year 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 2.02 of this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
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Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On April 23, 2015, the Company announced a plan to reduce its global employee workforce by up to 10 percent to streamline its organization and business processes in response to changing customer requirements in its industry. The goal of this reduction is to enable continued innovation and direct the Company’s resources toward its best opportunities. The Company expects to substantially complete the employee reduction by the end of the first quarter of fiscal year 2016, but the timing of certain employee reductions may vary by country, based on local legal requirements. At this time, the Company is unable to make a good faith determination of the cost estimates, or ranges of cost estimates, associated with all of the activities under the global employee workforce reduction plan as set forth in paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K. In accordance with paragraph (d) of Item 2.05, the Company will timely file an amendment to this Current Report on Form 8-K after its determination of such cost estimates or ranges of cost estimates.
Forward-Looking Statements: Statements in this Current Report on Form 8-K and in the press release attached as Exhibit 99.1 hereto other than historical facts, such as statements regarding the Company’s ability to benefit from its market leadership position, the anticipated size of the Company’s global employee workforce reduction and the expected timing of the completion of such employee reduction, 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 and technology offerings by competitors; cancellation of orders by customers; the ability of the Company’s research and development teams to successfully innovate and develop technologies and products that are responsive to customer demands; the Company’s ability to successfully manage its costs; market acceptance of the Company’s existing and newly issued products; changing customer demands; industry transitions; the costs and delays related to compliance with U.S. and international labor laws and other applicable laws, including the notification procedures required thereby; and the disruption resulting from the employee reduction and its potential impact on the Company’s relationships with customers and vendors. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this Current Report on Form 8-K and in the press release attached as Exhibit 99.1 hereto, please refer to the Company’s Annual Report on Form 10-K for the year ended June 30, 2014, 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). The Company assumes no obligation to, and does not currently intend to, update these forward-looking statements.
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Item 9.01 | Financial Statements and Exhibits. |
The following exhibit is furnished herewith:
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Exhibit No. | | Description |
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99.1 | | Text of press release issued by KLA-Tencor Corporation dated April 23, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | | KLA-TENCOR CORPORATION |
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Date: April 23, 2015 | | | | By: | | /s/ BRIAN M. MARTIN | |
| | | | Name: | | Brian M. Martin | |
| | | | Title: | | Executive Vice President and General Counsel |
EXHIBIT INDEX
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Exhibit No. | | Description |
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99.1 | | Text of press release issued by KLA-Tencor Corporation dated April 23, 2015 |
FOR IMMEDIATE RELEASE
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Investor Relations: | | Media Relations: |
Ed Lockwood | | Meggan Powers |
Sr. Director, Investor Relations | | Sr. Director, Corporate Communications |
(408) 875-9529 | | (408) 875-8733 |
ed.lockwood@kla-tencor.com | | meggan.powers@kla-tencor.com |
KLA-TENCOR REPORTS FISCAL 2015 THIRD QUARTER RESULTS
MILPITAS, Calif., April 23, 2015 - KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its third quarter of fiscal year 2015, which ended on March 31, 2015, and reported GAAP net income of $132 million and GAAP earnings per diluted share of $0.81 on revenues of $738 million.
“KLA-Tencor delivered solid results in the third quarter,” said Rick Wallace, President and Chief Executive Officer of KLA-Tencor. “As the market leader in process control, we believe our technology leadership and strong product portfolio create a unique opportunity for KLA-Tencor to benefit from the 3D device and multi-patterning industry transitions currently underway in the industry, and deliver long-term value for our customers and stockholders.”
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GAAP Results |
| Q3 FY 2015 | Q2 FY 2015 | Q3 FY 2014 |
Revenues | $738 million | $676 million | $832 million |
Net Income | $132 million | $20 million | $204 million |
Earnings per Diluted Share | $0.81 | $0.12 | $1.21 |
| | | |
Non-GAAP Results |
| Q3 FY 2015 | Q2 FY 2015 | Q3 FY 2014 |
Net Income | $137 million | $113 million | $206 million |
Earnings per Diluted Share | $0.84 | $0.68 | $1.23 |
KLA-Tencor also announced a plan to reduce its global employee workforce by up to 10 percent to streamline its organization and business processes in response to changing customer requirements in its industry. The goal of this reduction is to enable continued innovation and direct KLA-Tencor’s resources toward its best opportunities. KLA-Tencor expects to substantially complete the employee reduction by the end of the first quarter of fiscal year 2016, but the timing of certain employee reductions may vary by country, based on local legal requirements.
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 acquisitions, restructuring, severance and other charges and debt extinguishment loss and recapitalization charges. KLA-Tencor will discuss the results for its fiscal year 2015 third quarter, 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 KLA-Tencor’s ability to benefit from its market leadership position, the anticipated size of KLA-Tencor’s global employee workforce reduction and the expected timing of the completion of such employee reduction, 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 and technology offerings by competitors; cancellation of orders by customers; the ability of KLA-Tencor’s research and development teams to successfully innovate and develop technologies and products that are responsive to customer demands; KLA-Tencor’s ability to successfully manage its costs; market acceptance of KLA-Tencor’s existing and newly issued products; changing customer demands; industry transitions; the costs and delays related to compliance with U.S. and international labor laws and other applicable laws, including the notification procedures required thereby; and the disruption resulting from the employee reduction and its potential impact on KLA-Tencor’s relationships with customers and vendors. For other factors that m
ay 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, 2014, 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, LED 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 more than 35 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 that 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. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. 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.
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KLA-Tencor Corporation | | | |
Condensed Consolidated Unaudited Balance Sheets | | | |
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(In thousands) | March 31, 2015 | | June 30, 2014 |
ASSETS | | | |
Cash, cash equivalents and marketable securities | $ | 2,339,785 |
| | $ | 3,152,637 |
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Accounts receivable, net | 631,608 |
| | 492,863 |
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Inventories | 632,353 |
| | 656,457 |
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Other current assets | 363,365 |
| | 284,873 |
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Land, property and equipment, net | 321,081 |
| | 330,263 |
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Goodwill | 335,291 |
| | 335,355 |
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Purchased intangibles, net | 15,548 |
| | 27,697 |
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Other non-current assets | 263,189 |
| | 258,519 |
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Total assets | $ | 4,902,220 |
| | $ | 5,538,664 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 103,189 |
| | $ | 103,422 |
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Deferred system profit | 146,355 |
| | 147,923 |
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Unearned revenue | 58,295 |
| | 59,176 |
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Current portion of long-term debt | 37,500 |
| | — |
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Other current liabilities | 631,276 |
| | 585,090 |
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Total current liabilities | 976,615 |
| | 895,611 |
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Non-current liabilities: | | | |
Long-term debt | 3,199,299 |
| | 747,919 |
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Unearned revenue | 52,500 |
| | 57,500 |
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Other non-current liabilities | 179,865 |
| | 168,288 |
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Total liabilities | 4,408,279 |
| | 1,869,318 |
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Stockholders’ equity: | | | |
Common stock and capital in excess of par value | 534,330 |
| | 1,220,504 |
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Retained earnings | (2,582 | ) | | 2,479,113 |
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Accumulated other comprehensive income (loss) | (37,807 | ) | | (30,271 | ) |
Total stockholders’ equity | 493,941 |
| | 3,669,346 |
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Total liabilities and stockholders’ equity | $ | 4,902,220 |
| | $ | 5,538,664 |
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KLA-Tencor Corporation | | | | | | | |
Condensed Consolidated Unaudited Statements of Operations | | | |
| | | | | | | |
| Three months ended March 31, | | Nine months ended March 31, |
(In thousands, except per share amounts) | 2015 | | 2014 | | 2015 | | 2014 |
Revenues: | | | | | | | |
Product | $ | 565,181 |
| | $ | 670,083 |
| | $ | 1,545,663 |
| | $ | 1,716,006 |
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Service | 173,278 |
| | 161,516 |
| | 512,054 |
| | 479,059 |
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Total revenues | 738,459 |
| | 831,599 |
| | 2,057,717 |
| | 2,195,065 |
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Costs and operating expenses: | | | | | | | |
Costs of revenues | 320,282 |
| | 342,826 |
| | 891,962 |
| | 906,297 |
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Engineering, research and development | 124,583 |
| | 134,161 |
| | 401,777 |
| | 401,021 |
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Selling, general and administrative | 98,608 |
| | 93,449 |
| | 305,125 |
| | 288,691 |
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Total costs and operating expenses | 543,473 |
| | 570,436 |
| | 1,598,864 |
| | 1,596,009 |
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Income from operations | 194,986 |
| | 261,163 |
| | 458,853 |
| | 599,056 |
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Interest expense and other, net | 28,532 |
| | 9,917 |
| | 67,991 |
| | 31,201 |
|
Loss on extinguishment of debt and other, net | — |
| | — |
| | 131,669 |
| | — |
|
Income before income taxes | 166,454 |
| | 251,246 |
| | 259,193 |
| | 567,855 |
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Provision for income taxes | 34,816 |
| | 47,665 |
| | 35,054 |
| | 113,831 |
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Net income | $ | 131,638 |
| | $ | 203,581 |
| | $ | 224,139 |
| | $ | 454,024 |
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Net income per share: | | | | | | | |
Basic | $ | 0.81 |
| | $ | 1.22 |
| | $ | 1.37 |
| | $ | 2.73 |
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Diluted | $ | 0.81 |
| | $ | 1.21 |
| | $ | 1.36 |
| | $ | 2.70 |
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Cash dividends declared per share (including a special cash dividend of $16.50 per share declared during the three months ended December 31, 2014) | $ | 0.50 |
| | $ | 0.45 |
| | $ | 18.00 |
| | $ | 1.35 |
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Weighted-average number of shares: | | | | | | | |
Basic | 161,559 |
| | 166,253 |
| | 163,494 |
| | 166,184 |
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Diluted | 162,794 |
| | 167,989 |
| | 164,930 |
| | 168,355 |
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KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
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| Three months ended |
March 31, |
(In thousands) | 2015 | | 2014 |
Cash flows from operating activities: | | | |
Net income | $ | 131,638 |
| | $ | 203,581 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 20,510 |
| | 20,614 |
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Asset impairment charges | 1,698 |
| | — |
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Non-cash stock-based compensation expense | 12,767 |
| | 12,723 |
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Excess tax benefit from equity awards | (398 | ) | | (657 | ) |
Net gain on sale of marketable securities and other investments | (60 | ) | | (281 | ) |
Changes in assets and liabilities, net of impact of acquisition of business: | | | |
Decrease (increase) in accounts receivable, net | (1,213 | ) | | 16,598 |
|
Decrease (increase) in inventories | 23,745 |
| | (14,738 | ) |
Decrease in other assets | 20,096 |
| | 48,463 |
|
Decrease in accounts payable | (5,054 | ) | | (20,818 | ) |
Decrease in deferred system profit | (21,732 | ) | | (70,008 | ) |
Increase in other liabilities | 60,420 |
| | 42,250 |
|
Net cash provided by operating activities | 242,417 |
| | 237,727 |
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Cash flows from investing activities: | | | |
Acquisition of non-marketable securities | — |
| | (1,345 | ) |
Acquisition of business | — |
| | (18,000 | ) |
Capital expenditures, net | (10,326 | ) | | (18,220 | ) |
Purchase of available-for-sale securities | (339,580 | ) | | (359,299 | ) |
Proceeds from sale of available-for-sale securities | 223,438 |
| | 202,650 |
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Proceeds from maturity of available-for-sale securities | 181,151 |
| | 60,035 |
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Purchase of trading securities | (9,383 | ) | | (20,939 | ) |
Proceeds from sale of trading securities | 13,765 |
| | 22,521 |
|
Net cash provided by (used in) investing activities | 59,065 |
| | (132,597 | ) |
Cash flows from financing activities: | | | |
Repayment of debt | (9,375 | ) | | — |
|
Issuance of common stock | 175 |
| | 13,334 |
|
Tax withholding payments related to vested and released restricted stock units | (1,990 | ) | | (2,347 | ) |
Common stock repurchases | (168,670 | ) | | (59,880 | ) |
Payment of dividends to stockholders | (82,250 | ) | | (74,805 | ) |
Excess tax benefit from equity awards | 398 |
| | 657 |
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Net cash used in financing activities | (261,712 | ) | | (123,041 | ) |
Effect of exchange rate changes on cash and cash equivalents | (2,743 | ) | | 752 |
|
Net increase (decrease) in cash and cash equivalents | 37,027 |
| | (17,159 | ) |
Cash and cash equivalents at beginning of period | 584,865 |
| | 793,382 |
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Cash and cash equivalents at end of period | $ | 621,892 |
| | $ | 776,223 |
|
Supplemental cash flow disclosures: | | | |
Income taxes paid, net | $ | 8,101 |
| | $ | 9,636 |
|
Interest paid | $ | 4,341 |
| | $ | 135 |
|
Non-cash activities: | | | |
Purchase of land, property and equipment - investing activities | $ | 2,255 |
| | $ | 4,103 |
|
Dividends payable - financing activities | $ | 41,412 |
| | $ | — |
|
KLA-Tencor Corporation
Condensed Consolidated Unaudited Supplemental Information
(In thousands, except per share amounts)
Reconciliation of GAAP Net Income to Non-GAAP Net Income
|
| | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
| | March 31, 2015 | | December 31, 2014 | | March 31, 2014 | | March 31, 2015 | | March 31, 2014 |
GAAP net income | | $ | 131,638 |
| | $ | 20,268 |
| | $ | 203,581 |
| | $ | 224,139 |
| | $ | 454,024 |
|
Adjustments to reconcile GAAP net income to non-GAAP net income | | | | | | | | | | |
Acquisition related charges | a | 3,928 |
| | 3,832 |
| | 3,828 |
| | 11,758 |
| | 11,596 |
|
Restructuring, severance and other related charges | b | 3,636 |
| | 3,299 |
| | — |
| | 10,992 |
| | 3,239 |
|
Debt extinguishment loss and recapitalization charges | c | — |
| | 134,147 |
| | — |
| | 134,147 |
| | — |
|
Income tax effect of non-GAAP adjustments | d | (1,840 | ) | | (48,720 | ) | | (1,193 | ) | | (52,099 | ) | | (4,642 | ) |
Non-GAAP net income | | $ | 137,362 |
| | $ | 112,826 |
| | $ | 206,216 |
| | $ | 328,937 |
| | $ | 464,217 |
|
GAAP net income per diluted share | | $ | 0.81 |
| | $ | 0.12 |
| | $ | 1.21 |
| | $ | 1.36 |
| | $ | 2.70 |
|
Non-GAAP net income per diluted share | | $ | 0.84 |
| | $ | 0.68 |
| | $ | 1.23 |
| | $ | 1.99 |
| | $ | 2.76 |
|
Shares used in diluted shares calculation | | 162,794 |
| | 165,317 |
| | 167,989 |
| | 164,930 |
| | 168,355 |
|
Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations
|
| | | | | | | | | | | | | | | |
| Acquisition related charges | | Restructuring, severance and other related charges | | Debt extinguishment loss and recapitalization charges | | Total pre-tax GAAP to non-GAAP adjustments |
Three months ended March 31, 2015 | | | | | | | |
Costs of revenues | $ | 2,507 |
| | $ | 211 |
| | $ | — |
| | $ | 2,718 |
|
Engineering, research and development | 700 |
| | 680 |
| | — |
| | 1,380 |
|
Selling, general and administrative | 721 |
| | 2,745 |
| | — |
| | 3,466 |
|
Total in three months ended March 31, 2015 | $ | 3,928 |
| | $ | 3,636 |
| | $ | — |
| | $ | 7,564 |
|
Three months ended December 31, 2014 | | | | | | | |
Costs of revenues | $ | 2,577 |
| | $ | — |
| | $ | — |
| | $ | 2,577 |
|
Engineering, research and development | 700 |
| | 1,289 |
| | — |
| | 1,989 |
|
Selling, general and administrative | 555 |
| | 2,010 |
| | 2,478 |
| | 5,043 |
|
Loss on extinguishment of debt and other, net | — |
| | — |
| | 131,669 |
| | 131,669 |
|
Total in three months ended December 31, 2014 | $ | 3,832 |
| | $ | 3,299 |
| | $ | 134,147 |
| | $ | 141,278 |
|
Three months ended March 31, 2014 | | | | | | | |
Costs of revenues | $ | 1,921 |
| | $ | — |
| | $ | — |
| | $ | 1,921 |
|
Engineering, research and development | 836 |
| | — |
| | — |
| | 836 |
|
Selling, general and administrative | 1,071 |
| | — |
| | — |
| | 1,071 |
|
Total in three months ended March 31, 2014 | $ | 3,828 |
| | $ | — |
| | $ | — |
| | $ | 3,828 |
|
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 that 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. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. 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.
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a. | Acquisition related charges includes amortization of intangible assets associated with acquisitions. Management believes that the expense associated with the amortization of acquisition related intangible assets are 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 these expenses allows comparisons of operating results that are consistent over time for both KLA-Tencor’s newly acquired and long-held businesses. 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. |
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b. | Restructuring, severance and other related charges include costs associated with employee severance and other exit costs, impairment of certain long-lived assets. 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. |
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c. | Debt extinguishment loss and recapitalization charges include a pre-tax loss on early extinguishment of debt related to the 6.900% Senior Notes due in 2018, net and certain other expenses incurred in connection with the leveraged recapitalization plan which was completed in the second quarter of the fiscal year ending June 30, 2015. Management believes that it is appropriate to exclude these items as they are not indicative of ongoing operating results and therefore limit comparability and excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies. |
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d. | Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above as well as additional true up adjustment to the tax rate arising from the tax impacts associated with the pre-tax loss on extinguishment of debt that was recognized in the three months ended December 31, 2014. 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. |
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