MILPITAS, Calif., Jan. 26, 2017 /PRNewswire/ -- KLA-Tencor
Corporation (NASDAQ: KLAC) today announced operating results for
its second quarter of fiscal year 2017, which ended on
December 31, 2016, and reported GAAP net income of
$238 million and GAAP earnings per
diluted share of $1.52 on revenues of
$877 million.
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"I am pleased to announce that KLA-Tencor's business continues
to perform at a very high level, as we delivered another quarter of
outstanding results in Q2 of fiscal 2017, exceeding our
guidance for shipments, revenue and Non-GAAP earnings per diluted
share for the period," commented Rick
Wallace, President and Chief Executive Officer of
KLA-Tencor. "In addition, new orders topped $1 billion for the first time in the December
quarter, reflecting KLA-Tencor's market leadership and the critical
role process control plays in enabling our customers' success at
the leading edge. These outstanding results are against the
backdrop of a healthy overall demand environment for wafer fab
equipment in the marketplace today, and position KLA-Tencor with
good momentum heading into calendar 2017."
GAAP
Results
|
|
Q2 FY
2017
|
Q1 FY
2017
|
Q2 FY
2016
|
Revenues
|
$877 million
|
$751 million
|
$710 million
|
Net Income
|
$238 million
|
$178 million
|
$152 million
|
Earnings per Diluted
Share
|
$1.52
|
$1.13
|
$0.98
|
|
|
|
|
Non-GAAP
Results
|
|
Q2 FY
2017
|
Q1 FY
2017
|
Q2 FY
2016
|
Net Income
|
$238 million
|
$182 million
|
$162 million
|
Earnings per Diluted
Share
|
$1.52
|
$1.16
|
$1.04
|
A reconciliation between GAAP operating results and non-GAAP
operating results is provided following the financial statements
included in this release. Non-GAAP results include the impact of
stock-based compensation, but exclude the impact of acquisitions,
restructuring, severance, merger and other related charges and
certain discrete tax items. KLA-Tencor will discuss the results for
its fiscal year 2017 second quarter, along with its
outlook, on a conference call today beginning at 2:00 p.m. Pacific Standard Time. A webcast of the
call will be available at: www.kla-tencor.com.
About KLA-Tencor:
KLA-Tencor Corporation, 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 40 years. Headquartered in Milpitas, Calif., KLA-Tencor has dedicated
customer operations and service centers around the world.
Additional information may be found at http://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
(benefits), 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 (benefits) 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 (benefits) 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.
KLA-Tencor
Corporation
|
Condensed
Consolidated Unaudited Balance Sheets
|
|
|
|
|
(In
thousands)
|
December 31,
2016
|
|
June 30,
2016
|
ASSETS
|
|
|
|
Cash, cash
equivalents and marketable securities
|
$
|
2,592,977
|
|
|
$
|
2,491,294
|
|
Accounts receivable,
net
|
663,852
|
|
|
613,233
|
|
Inventories
|
671,172
|
|
|
698,635
|
|
Other current
assets
|
103,638
|
|
|
64,870
|
|
Land, property and
equipment, net
|
279,966
|
|
|
278,014
|
|
Goodwill
|
335,170
|
|
|
335,177
|
|
Deferred income
taxes, non-current
|
259,507
|
|
|
302,219
|
|
Purchased
intangibles, net
|
2,551
|
|
|
4,331
|
|
Other non-current
assets
|
185,623
|
|
|
174,659
|
|
Total
assets
|
$
|
5,094,456
|
|
|
$
|
4,962,432
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
116,163
|
|
|
$
|
106,517
|
|
Deferred system
profit
|
193,942
|
|
|
174,551
|
|
Unearned
revenue
|
56,750
|
|
|
59,147
|
|
Current portion of
long-term debt
|
249,958
|
|
|
—
|
|
Other current
liabilities
|
570,923
|
|
|
662,208
|
|
Total current
liabilities
|
1,187,736
|
|
|
1,002,423
|
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
2,729,239
|
|
|
3,057,936
|
|
Unearned
revenue
|
62,619
|
|
|
56,336
|
|
Other non-current
liabilities
|
149,766
|
|
|
156,623
|
|
Total
liabilities
|
4,129,360
|
|
|
4,273,318
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
capital in excess of par value
|
483,077
|
|
|
452,974
|
|
Retained
earnings
|
534,175
|
|
|
284,825
|
|
Accumulated other
comprehensive income (loss)
|
(52,156)
|
|
|
(48,685)
|
|
Total stockholders'
equity
|
965,096
|
|
|
689,114
|
|
Total liabilities and
stockholders' equity
|
$
|
5,094,456
|
|
|
$
|
4,962,432
|
|
KLA-Tencor
Corporation
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Six months ended
December 31,
|
(In thousands,
except per share amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
Product
|
$
|
683,733
|
|
|
$
|
527,780
|
|
|
$
|
1,245,486
|
|
|
$
|
988,519
|
|
Service
|
193,152
|
|
|
182,465
|
|
|
382,072
|
|
|
364,370
|
|
Total
revenues
|
876,885
|
|
|
710,245
|
|
|
1,627,558
|
|
|
1,352,889
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Costs of
revenues
|
318,507
|
|
|
280,980
|
|
|
596,343
|
|
|
551,224
|
|
Research and
development
|
130,912
|
|
|
118,272
|
|
|
260,145
|
|
|
238,215
|
|
Selling, general and
administrative
|
93,532
|
|
|
96,532
|
|
|
187,920
|
|
|
188,195
|
|
Interest expense and
other, net
|
27,089
|
|
|
28,986
|
|
|
54,085
|
|
|
55,481
|
|
Income before income
taxes
|
306,845
|
|
|
185,475
|
|
|
529,065
|
|
|
319,774
|
|
Provision for income
taxes
|
68,594
|
|
|
33,268
|
|
|
112,713
|
|
|
62,670
|
|
Net income
|
$
|
238,251
|
|
|
$
|
152,207
|
|
|
$
|
416,352
|
|
|
$
|
257,104
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.52
|
|
|
$
|
0.98
|
|
|
$
|
2.66
|
|
|
$
|
1.65
|
|
Diluted
|
$
|
1.52
|
|
|
$
|
0.98
|
|
|
$
|
2.65
|
|
|
$
|
1.64
|
|
Cash dividends
declared per share
|
$
|
0.54
|
|
|
$
|
0.52
|
|
|
$
|
1.06
|
|
|
$
|
1.04
|
|
Weighted-average
number of shares:
|
|
|
|
|
|
|
|
Basic
|
156,335
|
|
|
155,252
|
|
|
156,232
|
|
|
156,036
|
|
Diluted
|
157,123
|
|
|
155,996
|
|
|
157,071
|
|
|
156,971
|
|
KLA-Tencor
Corporation
|
Condensed
Consolidated Unaudited Statements of Cash Flows
|
|
|
|
Three months
ended
|
December
31,
|
(In
thousands)
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
238,251
|
|
|
$
|
152,207
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
14,892
|
|
|
16,529
|
|
Asset impairment
charges
|
—
|
|
|
358
|
|
Non-cash stock-based
compensation expense
|
12,444
|
|
|
11,325
|
|
Excess tax benefit
from equity awards
|
—
|
|
|
(1,382)
|
|
Net gain on sales of
marketable securities and other investments
|
(681)
|
|
|
(25)
|
|
Changes in assets and
liabilities:
|
|
|
|
Decrease (increase)
in accounts receivable, net
|
(24,386)
|
|
|
32,098
|
|
Decrease (increase)
in inventories
|
13,132
|
|
|
(36,668)
|
|
Increase in other
assets
|
(28,315)
|
|
|
(38,044)
|
|
Increase in accounts
payable
|
11,786
|
|
|
15,047
|
|
Increase (decrease)
in deferred system profit
|
8,302
|
|
|
(2,339)
|
|
Decrease in other
liabilities
|
(23,012)
|
|
|
(48,782)
|
|
Net cash provided by
operating activities
|
222,413
|
|
|
100,324
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisition of
non-marketable securities
|
(900)
|
|
|
—
|
|
Capital expenditures,
net
|
(8,629)
|
|
|
(7,938)
|
|
Proceeds from sale of
assets
|
2,582
|
|
|
1,215
|
|
Purchases of
available-for-sale securities
|
(372,950)
|
|
|
(281,503)
|
|
Proceeds from sale of
available-for-sale securities
|
78,136
|
|
|
284,734
|
|
Proceeds from
maturity of available-for-sale securities
|
159,077
|
|
|
141,362
|
|
Purchases of trading
securities
|
(20,813)
|
|
|
(16,738)
|
|
Proceeds from sale of
trading securities
|
23,164
|
|
|
20,036
|
|
Net cash provided by
(used in) investing activities
|
(140,333)
|
|
|
141,168
|
|
Cash flows from
financing activities:
|
|
|
|
Repayment of
debt
|
(40,000)
|
|
|
(20,000)
|
|
Issuance of common
stock
|
23,694
|
|
|
21,908
|
|
Tax withholding
payments related to vested and released restricted stock
units
|
(79)
|
|
|
(495)
|
|
Common stock
repurchases
|
—
|
|
|
(39,119)
|
|
Payment of dividends
to stockholders
|
(84,529)
|
|
|
(81,380)
|
|
Excess tax benefit
from equity awards
|
—
|
|
|
1,382
|
|
Net cash used in
financing activities
|
(100,914)
|
|
|
(117,704)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(10,458)
|
|
|
(894)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(29,292)
|
|
|
122,894
|
|
Cash and cash
equivalents at beginning of period
|
966,325
|
|
|
763,697
|
|
Cash and cash
equivalents at end of period
|
$
|
937,033
|
|
|
$
|
886,591
|
|
Supplemental cash
flow disclosures:
|
|
|
|
Income taxes paid,
net
|
$
|
71,164
|
|
|
$
|
51,631
|
|
Interest
paid
|
$
|
56,773
|
|
|
$
|
56,711
|
|
Non-cash
activities:
|
|
|
|
Purchase of land,
property and equipment - investing activities
|
$
|
1,985
|
|
|
$
|
2,253
|
|
Dividends payable -
financing activities
|
$
|
12,763
|
|
|
$
|
20,284
|
|
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
|
|
Six months
ended
|
|
|
|
December
31, 2016
|
|
September
30, 2016
|
|
December
31, 2015
|
|
December
31, 2016
|
|
December
31, 2015
|
GAAP net
income
|
|
$
|
238,251
|
|
|
$
|
178,101
|
|
|
$
|
152,207
|
|
|
$
|
416,352
|
|
|
$
|
257,104
|
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
513
|
|
|
1,267
|
|
|
1,309
|
|
|
1,780
|
|
|
4,890
|
|
|
Restructuring,
severance and other related charges
|
b
|
—
|
|
|
—
|
|
|
1,742
|
|
|
—
|
|
|
8,808
|
|
|
Merger-related
charges
|
c
|
4,069
|
|
|
3,605
|
|
|
8,820
|
|
|
7,674
|
|
|
8,820
|
|
|
Income tax effect of
non-GAAP adjustments
|
d
|
(1,580)
|
|
|
(1,259)
|
|
|
(2,321)
|
|
|
(2,839)
|
|
|
(5,669)
|
|
|
Discrete tax
items
|
e
|
(3,064)
|
|
|
—
|
|
|
—
|
|
|
(3,064)
|
|
|
—
|
|
Non-GAAP net
income
|
|
$
|
238,189
|
|
|
$
|
181,714
|
|
|
$
|
161,757
|
|
|
$
|
419,903
|
|
|
$
|
273,953
|
|
GAAP net income per
diluted share
|
|
$
|
1.52
|
|
|
$
|
1.13
|
|
|
$
|
0.98
|
|
|
$
|
2.65
|
|
|
$
|
1.64
|
|
Non-GAAP net income
per diluted share
|
|
$
|
1.52
|
|
|
$
|
1.16
|
|
|
$
|
1.04
|
|
|
$
|
2.67
|
|
|
$
|
1.75
|
|
Shares used in
diluted shares calculation
|
|
157,123
|
|
|
157,021
|
|
|
155,996
|
|
|
157,071
|
|
|
156,971
|
|
Pre-tax impact of
items included in Condensed Consolidated Unaudited Statements of
Operations
|
|
|
|
|
|
|
|
|
|
Acquisition-
related charges
|
|
Restructuring,
severance and
other related charges
|
|
Merger-related
charges
|
|
Total pre-tax
GAAP to non-
GAAP
adjustments
|
Three months ended
December 31, 2016
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
348
|
|
|
$
|
848
|
|
Research and
development
|
—
|
|
|
—
|
|
|
1,054
|
|
|
1,054
|
|
Selling, general and
administrative
|
13
|
|
|
—
|
|
|
2,667
|
|
|
2,680
|
|
Total in three months
ended December 31, 2016
|
$
|
513
|
|
|
$
|
—
|
|
|
$
|
4,069
|
|
|
$
|
4,582
|
|
Three months ended
September 30, 2016
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
|
650
|
|
|
$
|
—
|
|
|
$
|
260
|
|
|
$
|
910
|
|
Research and
development
|
—
|
|
|
—
|
|
|
982
|
|
|
982
|
|
Selling, general and
administrative
|
617
|
|
|
—
|
|
|
2,363
|
|
|
2,980
|
|
Total in three months
ended September 30, 2016
|
$
|
1,267
|
|
|
$
|
—
|
|
|
$
|
3,605
|
|
|
$
|
4,872
|
|
Three months ended
December 31, 2015
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
|
663
|
|
|
$
|
470
|
|
|
$
|
67
|
|
|
$
|
1,200
|
|
Research and
development
|
—
|
|
|
479
|
|
|
—
|
|
|
479
|
|
Selling, general and
administrative
|
646
|
|
|
793
|
|
|
8,753
|
|
|
10,192
|
|
Total in three months
ended December 31, 2015
|
$
|
1,309
|
|
|
$
|
1,742
|
|
|
$
|
8,820
|
|
|
$
|
11,871
|
|
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.
- 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 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 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.
- Restructuring, severance and other related charges include
costs associated with employee severance and other exit costs, and
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.
- Merger-related charges associated with the terminated merger
agreement between KLA-Tencor and Lam Research Corporation ("Lam")
primarily includes employee retention-related expenses, legal
expenses and other costs. 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.
- 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.
- Discrete tax items includes the tax impact of certain
merger-related charges that only became deductible during the three
months ended December 31, 2016 as a
result of the termination of the proposed merger between KLA-Tencor
and Lam. 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 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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SOURCE KLA-Tencor Corporation