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): January 27, 2016
LAM RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
|
| | | | |
Delaware | | 0-12933 | | 94-2634797 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification Number) |
4650 Cushing Parkway
Fremont, California 94538
(Address of principal executive offices including zip code)
(510) 572-0200
(Registrant’s telephone number, including area code)
Not Applicable
(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 (see General Instruction A.2. below):
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| | |
x
| | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | |
¨
| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | |
¨
| | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | |
¨
| | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| | |
Table of Contents
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| | | | |
| | | | |
Item 2.02. | | Results of Operations and Financial Condition | | 3 |
Item 9.01. | | Financial Statements and Exhibits | | 3 |
SIGNATURES | | 4 |
EXHIBIT INDEX | | 5 |
EX-99.1 | | |
|
| |
Item 2.02. | Results of Operations and Financial Condition |
On January 27, 2016, Lam Research Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended December 27, 2015, the text of which is attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the 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. Furthermore, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
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| |
Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
99.1 Press Release dated January 27, 2016 announcing financial results for the fiscal quarter ended December 27, 2015
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 27, 2016 LAM RESEARCH CORPORATION
(Registrant)
|
| |
|
| /s/ Douglas R. Bettinger |
| Douglas R. Bettinger |
| Executive Vice President, Chief Financial Officer |
| (Principal Financial Officer and Principal Accounting Officer) |
EXHIBIT INDEX
99.1 Press Release dated January 27, 2016 announcing financial results for the fiscal quarter ended December 27, 2015
Exhibit 99.1
FOR IMMEDIATE RELEASE
Lam Research Corporation Contacts:
Satya Kumar, Investor Relations, phone: 510-572-3232, e-mail: satya.kumar@lamresearch.com
Lam Research Corporation Reports Financial Results for the Quarter Ended December 27, 2015
FREMONT, Calif., January 27, 2016 - Lam Research Corp. (Nasdaq: LRCX) today announced financial results for the quarter ended December 27, 2015 (the "December 2015 quarter").
Highlights for the December 2015 quarter were as follows:
| |
• | Shipments of $1,288 million and revenue of $1,426 million. |
| |
• | GAAP gross margin of 43.9%, GAAP operating margin of 16.8%, and GAAP diluted EPS of $1.28. |
| |
• | Non-GAAP gross margin of 45.5%, non-GAAP operating margin of 20.8%, and non-GAAP diluted EPS of $1.57. |
Key Financial Data for the Quarters Ended December 27, 2015 and September 27, 2015
(in thousands, except per-share data, percentages, and basis points)
|
| | | | | | | | | | |
U.S. GAAP |
| | December 2015 | | September 2015 | | Change Q/Q |
Shipments | | $ | 1,287,893 |
| | $ | 1,579,298 |
| | - 18% |
Revenue | | $ | 1,425,534 |
| | $ | 1,600,043 |
| | - 11% |
Gross margin as percentage of revenue | | 43.9 | % | | 45.1 | % | | - 120 bps |
Operating margin as percentage of revenue | | 16.8 | % | | 21.0 | % | | - 420 bps |
Diluted EPS | | $ | 1.28 |
| | $ | 1.66 |
| | - 23% |
|
Non-GAAP |
| | December 2015 | | September 2015 | | Change Q/Q |
Shipments | | $ | 1,287,893 |
| | $ | 1,579,298 |
| | - 18% |
Revenue | | $ | 1,425,534 |
| | $ | 1,600,043 |
| | - 11% |
Gross margin as percentage of revenue | | 45.5 | % | | 46.5 | % | | - 100 bps |
Operating margin as percentage of revenue | | 20.8 | % | | 23.8 | % | | - 300 bps |
Diluted EPS | | $ | 1.57 |
| | $ | 1.82 |
| | - 14% |
U.S. GAAP Financial Results
For the December 2015 quarter, revenue was $1,426 million, gross margin was $627 million, or 43.9% of revenue, operating expenses were $388 million, operating margin was 16.8% of revenue, and net income was $223 million, or $1.28 per diluted share on a GAAP basis. This compares to revenue of $1,600 million, gross margin of $722 million, or 45.1% of revenue, operating expenses of $387 million, operating margin of 21.0% of revenue, and net income of $289 million, or $1.66 per diluted share, for the quarter ended September 27, 2015 (the “September 2015 quarter”).
Non-GAAP Financial Results
For the December 2015 quarter, non-GAAP gross margin was $648 million or 45.5% of revenue, non-GAAP operating expenses were $352 million, non-GAAP operating margin was 20.8% of revenue, and non-GAAP net income was $270 million, or $1.57 per diluted share. This compares to non-GAAP gross margin of $744 million or 46.5% of revenue, non-GAAP operating expenses of $364 million, non-GAAP operating margin of 23.8% of revenue, and non-GAAP net income of $313 million, or $1.82 per diluted share for the September 2015 quarter.
“Lam’s strong December quarter concludes a historic year for Lam, headlined by the delivery of nearly $6 billion in shipments and revenue, and over six dollars in EPS,” said Martin Anstice, Lam Research’s president and chief executive officer. “Strong execution combined with our ability to capitalize on the inflection-driven market expansion continued to drive outperformance in profitable growth. We remain
committed to invest proactively and broadly to create enabling value for our customers and growth for Lam. We are excited about our proposed business combination with KLA-Tencor, which upon completion will deliver a new and unmatched capability to the benefit of the global semiconductor industry.”
~more~
page 1 of 8
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances increased to $4.7 billion at the end of the December 2015 quarter compared to $4.5 billion at the end of the September 2015 quarter. This increase was primarily the result of approximately $295 million in cash flows from operating activities which was partially offset by approximately $13 million of treasury stock repurchases related to net share settlement on employee stock-based compensation; approximately $28 million of capital expenditures; and approximately $48 million of dividends paid to stockholders during the December 2015 quarter.
Deferred revenue at the end of the December 2015 quarter decreased to $395 million as compared to $517 million at the end of the September 2015 quarter. Deferred profit at the end of the December 2015 quarter decreased to $261 million as compared to $325 million at the end of the September 2015 quarter. 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 estimated future revenue from shipments to Japanese customers was approximately $109 million as of December 27, 2015.
Geographic Distribution
The geographic distribution of shipments and revenue during the December 2015 quarter is shown in the following table:
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| | | | | |
Region | Shipments | | Revenue |
Taiwan | 38 | % | | 31 | % |
Japan | 21 | % | | 22 | % |
China | 9 | % | | 17 | % |
Korea | 15 | % | | 15 | % |
United States | 8 | % | | 7 | % |
Southeast Asia | 5 | % | | 5 | % |
Europe | 4 | % | | 3 | % |
Outlook
For the March 2016 quarter, Lam is providing the following guidance:
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| | | | | | | | | | | | |
| U.S. GAAP | | Reconciling Items | | Non-GAAP |
Shipments | $1.43 Billion | +/- | $75 Million | | — | | $1.43 Billion | +/- | $75 Million |
Revenue | $1.30 Billion | +/- | $75 Million | | — | | $1.30 Billion | +/- | $75 Million |
Gross margin | 42.4% | +/- | 1% | | $ | 21 |
| Million | | 44.0% | +/- | 1% |
Operating margin | 14.2% | +/- | 1% | | $ | 37 |
| Million | | 17.0% | +/- | 1% |
Net income per diluted share | $0.77 | +/- | $0.10 | | $ | 50 |
| Million | | $1.07 | +/- | $0.10 |
Diluted share count | 174.5 Million | | 2 |
| Million | | 172.5 Million |
The information provided above is only an estimate of what the Company believes is realizable as of the date of this release, and does not incorporate the potential impact of any KLA-Tencor related acquisition or integration expenses, business combinations, asset acquisitions, divestitures, financing arrangements, other investments, or other significant transactions that may be completed after the date of this release. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:
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• | Gross Margin - amortization related to intangible assets acquired in the Novellus transaction, $21 million. |
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• | Operating margin - amortization related to intangible assets acquired in the Novellus transaction, $37 million. |
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• | Earnings per share - amortization related to intangible assets acquired in the Novellus transaction, $37 million; amortization of note discounts, $9 million; amortization of bridge loan issuance costs associated with the KLA-Tencor acquisition, $18 million and associated tax benefit for non-GAAP items ($14) million; totaling $50 million. |
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• | Diluted share count - impact of a note hedge issued contemporaneously with the convertible notes due 2016 and 2018, 2 million shares. |
Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company’s non-GAAP results for both the December 2015 and September 2015 quarters exclude amortization related to intangible assets acquired in the Novellus transaction, restructuring impacts, the amortization of notes discounts, and tax expense (benefit) of non-GAAP items. Additionally, the December 2015 quarter non-GAAP results exclude costs associated with the KLA-Tencor acquisition, amortization of bridge loan issuance costs associated with the KLA-Tencor acquisition, and income tax benefit from tax extenders primarily the research and development credit; and the September 2015 quarter non-GAAP results exclude cumulative income tax benefits due to a court ruling.
Management uses non-GAAP gross margin, 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 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 website at http://investor.lamresearch.com .
~more~
page 2 of 8
Cautionary Statement Regarding Forward-Looking Statements
Statements made in this press release that are not 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 to, but are not limited to; the estimated future revenue from shipments to Japanese customers, our expected revenue growth, our ability to continue to successfully execute our growth strategy and solve our customers’ critical challenges through the delivery of differentiated products and services in market expanding technology inflections, our ability to achieve market growth gains at key inflections, our ability to continue to outperform, our commitment and ability to deliver growth and value for our customers and our stockholders; the nature of the capabilities we deliver for the benefit of the global semiconductor industry following our proposed acquisition of KLA-Tencor Corporation ("KLA-Tencor")(the "proposed transaction"); the extent of inflection driven expansion in our served available market, and our guidance for shipments, revenue, gross margin, operating margin, earnings per share, and diluted earnings per share and share count. Some factors that may affect these forward-looking statements include: the proposed transaction may not close and if it does close we may not receive the expected benefits of the proposed transaction, such as the scale and breadth of critical technologies and better financial performance for our stockholders; our stockholders and the KLA-Tencor stockholders may not support the proposed transaction; business conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate; and the strength of the financial position reflected in documents filed or furnished by us with the Securities and Exchange Commission, including specifically our annual report on Form 10-K for the fiscal year ended June 28, 2015 and quarterly report on Form 10-Q for the fiscal quarter ended September 27, 2015, may not be as anticipated. 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. Nothing contained herein constitutes or will be deemed to constitute a forecast, projection or estimate of the future financial performance of Lam, KLA-Tencor, or the merged company, following the implementation of the proposed transaction or otherwise. No statement contained herein should be interpreted to mean that the revenue, margins, earnings per share, cash flows or other financial performance metrics of Lam Research or the merged company for the current or future financial years would necessarily match or exceed the historical published figures.
Additional Information and Where to Find It
This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The proposed transaction will be submitted to the stockholders of each of Lam and KLA-Tencor for their consideration. On December 7, 2015, Lam and KLA-Tencor filed with the SEC a Registration Statement on Form S-4 that includes a preliminary joint proxy statement of Lam and KLA-Tencor and a prospectus for Lam. The Registration Statement on Form S-4 was amended on January 12, 2016 and declared effective by the SEC on January 13, 2016. Each of Lam and KLA-Tencor mailed the definitive joint proxy statement/prospectus to their respective stockholders on or about January 19, 2016. Lam and KLA-Tencor also plan to file other documents with the SEC regarding the proposed transaction. This document is not a substitute for any prospectus, proxy statement or any other document that Lam or KLA-Tencor may file with the SEC in connection with the proposed transaction. Investors and security holders of Lam and KLA-Tencor are urged to read the joint proxy statement/prospectus and any other relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they contain, or will contain, important information about the proposed transaction. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). In addition, investors and stockholders are able to obtain free copies of the joint proxy statement/prospectus and other documents filed with the SEC by Lam on Lam’s Investor Relations website (investor.lamresearch.com) or by writing to Lam Research Corporation, Investor Relations, 4650 Cushing Parkway, Fremont, CA 94538-6401 (for documents filed with the SEC by Lam), or by KLA-Tencor on KLA-Tencor’s Investor Relations website (ir.kla-tencor.com) or by writing to KLA-Tencor Corporation, Investor Relations, One Technology Drive, Milpitas, California 95035 (for documents filed with the SEC by KLA-Tencor).
Participants in the Solicitation
Lam, KLA-Tencor, their respective directors, and certain of their respective executive officers, other members of management and employees, may, under SEC rules, be deemed to be participants in the solicitation of proxies from Lam and KLA-Tencor stockholders in connection with the proposed transaction. Information regarding the persons who, under SEC rules, are or may be deemed to be participants in the solicitation of Lam and KLA-Tencor stockholders in connection with the proposed transaction is set forth in the definitive joint proxy statement/prospectus that was filed with the SEC on January 13, 2016.
About Lam Research
Lam Research Corp. (Nasdaq: LRCX) is a trusted global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam’s broad portfolio of market-leading deposition, etch, and clean solutions helps customers achieve success on
the wafer by enabling device features that are 1,000 times smaller than a grain of sand, resulting in smaller, faster, more powerful, and more power-efficient chips. Through collaboration, continuous innovation, and delivering on commitments, Lam is transforming atomic-scale engineering and enabling its customers to shape the future of technology. Based in Fremont, Calif., Lam Research is a Nasdaq-100 Index ® and S&P 500 ® company whose common stock trades on the Nasdaq Global Select Market(SM) under the symbol LRCX. For more information, please visit http://www.lamresearch.com . (LRCX-F)
Consolidated Financial Tables Follow.
###
page 3 of 8
Lam Announces Financial Results for the December 2015 Quarter
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
|
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| December 27,
2015 | | September 27,
2015 | | December 28,
2014 | | December 27,
2015 | | December 28,
2014 |
| (unaudited) |
Revenue | $ | 1,425,534 |
| | $ | 1,600,043 |
| | $ | 1,232,241 |
| | $ | 3,025,577 |
| | $ | 2,384,609 |
|
Cost of goods sold | 799,024 |
| | 877,680 |
| | 695,584 |
| | 1,676,704 |
| | 1,342,413 |
|
Gross margin | 626,510 |
| | 722,363 |
| | 536,657 |
| | 1,348,873 |
| | 1,042,196 |
|
Gross margin as a percent of revenue | 43.9 | % | | 45.1 | % | | 43.6 | % | | 44.6 | % | | 43.7 | % |
Research and development | 220,754 |
| | 234,209 |
| | 196,768 |
| | 454,963 |
| | 385,702 |
|
Selling, general and administrative | 166,922 |
| | 152,726 |
| | 151,148 |
| | 319,648 |
| | 299,455 |
|
Total operating expenses | 387,676 |
| | 386,935 |
| | 347,916 |
| | 774,611 |
| | 685,157 |
|
Operating income | 238,834 |
| | 335,428 |
| | 188,741 |
| | 574,262 |
| | 357,039 |
|
Operating income as a percent of revenue | 16.8 | % | | 21.0 | % | | 15.3 | % | | 19.0 | % | | 15.0 | % |
Other expense, net | (29,935 | ) | | (27,121 | ) | | (9,799 | ) | | (57,056 | ) | | (15,447 | ) |
Income before income taxes | 208,899 |
| | 308,307 |
| | 178,942 |
| | 517,206 |
| | 341,592 |
|
Income tax benefit (expense) | 14,081 |
| | (19,628 | ) | | (2,002 | ) | | (5,547 | ) | | (23,571 | ) |
Net income | $ | 222,980 |
| | $ | 288,679 |
| | $ | 176,940 |
| | $ | 511,659 |
| | $ | 318,021 |
|
Net income per share: | | | | | | | | | |
Basic | $ | 1.41 |
| | $ | 1.82 |
| | $ | 1.11 |
| | $ | 3.23 |
| | $ | 1.98 |
|
Diluted | $ | 1.28 |
| | $ | 1.66 |
| | $ | 1.00 |
| | $ | 2.94 |
| | $ | 1.80 |
|
Number of shares used in per share calculations: | | | | | | | | | |
Basic | 158,424 |
| | 158,352 |
| | 159,248 |
| | 158,388 |
| | 160,467 |
|
Diluted | 174,242 |
| | 174,374 |
| | 177,046 |
| | 174,308 |
| | 177,082 |
|
Cash dividend declared per common share | $ | 0.30 |
| | $ | 0.30 |
| | $ | 0.18 |
| | $ | 0.60 |
| | $ | 0.36 |
|
page 4 of 8
Lam Announces Financial Results for the December 2015 Quarter
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
|
| | | | | | | | | | | |
| December 27,
2015 | | September 27,
2015 | | June 28,
2015 |
| (unaudited) | | (unaudited) | | (1) |
ASSETS | | | | | |
Cash and cash equivalents | $ | 1,967,873 |
| | $ | 1,744,325 |
| | $ | 1,501,539 |
|
Investments | 2,507,607 |
| | 2,587,474 |
| | 2,574,947 |
|
Accounts receivable, net | 1,089,850 |
| | 1,088,942 |
| | 1,093,582 |
|
Inventories | 879,821 |
| | 916,683 |
| | 943,346 |
|
Other current assets | 225,046 |
| | 178,557 |
| | 157,435 |
|
Total current assets | 6,670,197 |
| | 6,515,981 |
| | 6,270,849 |
|
Property and equipment, net | 643,746 |
| | 636,769 |
| | 621,418 |
|
Restricted cash and investments | 207,568 |
| | 183,455 |
| | 170,969 |
|
Goodwill and intangible assets | 2,039,213 |
| | 2,076,164 |
| | 2,115,649 |
|
Other assets | 189,697 |
| | 182,062 |
| | 185,763 |
|
Total assets | $ | 9,750,421 |
| | $ | 9,594,431 |
| | $ | 9,364,648 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current portion of convertible notes and capital leases | $ | 973,697 |
| | $ | 969,392 |
| | $ | 1,359,650 |
|
Other current liabilities | 1,249,283 |
| | 1,312,549 |
| | 1,271,711 |
|
Total current liabilities | 2,222,980 |
| | 2,281,941 |
| | 2,631,361 |
|
Long-term debt and capital leases | 1,404,683 |
| | 1,400,615 |
| | 1,001,382 |
|
Income taxes payable | 257,502 |
| | 247,448 |
| | 202,930 |
|
Other long-term liabilities | 135,303 |
| | 127,607 |
| | 184,023 |
|
Total liabilities | 4,020,468 |
| | 4,057,611 |
| | 4,019,696 |
|
Temporary equity, convertible notes | 177,662 |
| | 178,665 |
| | 241,808 |
|
Stockholders’ equity (2) | 5,552,291 |
| | 5,358,155 |
| | 5,103,144 |
|
Total liabilities and stockholders’ equity | $ | 9,750,421 |
| | $ | 9,594,431 |
| | $ | 9,364,648 |
|
|
| |
(1) | Derived from audited financial statements |
(2) | Common shares issued and outstanding were 158,568 as of December 27, 2015, 158,101 as of September 27, 2015, and 158,531 as of June 28, 2015. |
page 5 of 8
Lam Announces Financial Results for the December 2015 Quarter
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) |
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| December 27,
2015 | | September 27,
2015 | | December 28,
2014 | | December 27,
2015 | | December 28,
2014 |
| (unaudited) |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | |
Net income | $ | 222,980 |
| | $ | 288,679 |
| | $ | 176,940 |
| | $ | 511,659 |
| | $ | 318,021 |
|
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
Depreciation and amortization | 71,798 |
| | 70,590 |
| | 69,536 |
| | 142,388 |
| | 137,421 |
|
Deferred income taxes | 8,176 |
| | (5,563 | ) | | 3,320 |
| | 2,613 |
| | 6,506 |
|
Equity-based compensation expense | 32,570 |
| | 35,774 |
| | 30,632 |
| | 68,344 |
| | 62,672 |
|
Income tax benefit on equity-based compensation plans | 2,168 |
| | 3,545 |
| | 1,141 |
| | 5,713 |
| | 11,002 |
|
Excess tax benefit on equity-based compensation plans | (2,181 | ) | | (3,572 | ) | | (599 | ) | | (5,753 | ) | | (11,003 | ) |
Amortization of note discounts and issuance costs | 23,649 |
| | 9,831 |
| | 9,199 |
| | 33,480 |
| | 18,299 |
|
Gain on sale of business | — |
| | — |
| | — |
| | — |
| | (7,431 | ) |
Other, net | 10,592 |
| | 10,011 |
| | 1,607 |
| | 20,603 |
| | 7,133 |
|
Changes in operating assets and liabilities | (75,207 | ) | | 39,702 |
| | (130,537 | ) | | (35,505 | ) | | (240,220 | ) |
Net cash provided by operating activities | 294,545 |
| | 448,997 |
| | 161,239 |
| | 743,542 |
| | 302,400 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | |
Capital expenditures and intangible assets | (28,143 | ) | | (49,454 | ) | | (61,363 | ) | | (77,597 | ) | | (103,234 | ) |
Business acquisitions, net of cash acquired | — |
| | — |
| | — |
| | — |
| | (1,137 | ) |
Net sale (purchase) of available-for-sale securities | 39,202 |
| | (28,203 | ) | | (321,590 | ) | | 10,999 |
| | (311,945 | ) |
Repayment of notes receivable | 8,082 |
| | — |
| | 3,978 |
| | 8,082 |
| | 3,978 |
|
Proceeds from sale of business | — |
| | — |
| | — |
| | — |
| | 41,212 |
|
Other, net | (4,746 | ) | | (1,500 | ) | | 100 |
| | (6,246 | ) | | 122 |
|
Net cash provided by (used for) investing activities | 14,395 |
| | (79,157 | ) | | (378,875 | ) | | (64,762 | ) | | (371,004 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | |
Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs | (28,374 | ) | | (96 | ) | | (674 | ) | | (28,470 | ) | | (781 | ) |
Excess tax benefit on equity-based compensation plans | 2,181 |
| | 3,572 |
| | 599 |
| | 5,753 |
| | 11,003 |
|
Treasury stock purchases | (12,798 | ) | | (98,385 | ) | | (65,536 | ) | | (111,183 | ) | | (373,958 | ) |
Dividends paid | (47,896 | ) | | (47,659 | ) | | (29,381 | ) | | (95,555 | ) | | (58,621 | ) |
Re-issuance of treasury stock related to employee stock purchase plan | — |
| | 19,245 |
| | — |
| | 19,245 |
| | 16,919 |
|
Proceeds from issuance of common stock | 1,173 |
| | 377 |
| | 4,223 |
| | 1,550 |
| | 8,832 |
|
Other, net | (22 | ) | | (300 | ) | | — |
| | (322 | ) | | — |
|
Net cash used for financing activities | (85,736 | ) | | (123,246 | ) | | (90,769 | ) | | (208,982 | ) | | (396,606 | ) |
Effect of exchange rate changes on cash and cash equivalents | 344 |
| | (3,808 | ) | | (3,998 | ) | | (3,464 | ) | | (6,192 | ) |
Net increase (decrease) in cash and cash equivalents | 223,548 |
| | 242,786 |
| | (312,403 | ) | | 466,334 |
| | (471,402 | ) |
Cash and cash equivalents at beginning of period | 1,744,325 |
| | 1,501,539 |
| | 1,293,678 |
| | 1,501,539 |
| | 1,452,677 |
|
Cash and cash equivalents at end of period | $ | 1,967,873 |
| | $ | 1,744,325 |
| | $ | 981,275 |
| | $ | 1,967,873 |
| | $ | 981,275 |
|
page 6 of 8
Lam Announces Financial Results for the December 2015 Quarter
Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)
|
| | | | | | | |
| Three Months Ended |
| December 27,
2015 | | September 27,
2015 |
Revenue | $ | 1,425,534 |
| | $ | 1,600,043 |
|
Gross margin | $ | 648,409 |
| | $ | 743,984 |
|
Gross margin as percentage of revenue | 45.5 | % | | 46.5 | % |
Operating expenses | $ | 352,135 |
| | $ | 363,596 |
|
Operating income | $ | 296,274 |
| | $ | 380,388 |
|
Operating margin as a percentage of revenue | 20.8 | % | | 23.8 | % |
Net income | $ | 270,313 |
| | $ | 313,045 |
|
Net income per diluted share | $ | 1.57 |
| | $ | 1.82 |
|
Shares used in per share calculation - diluted | 171,796 |
| | 172,046 |
|
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non-GAAP number of dilutive shares
(in thousands, except per share data)
(unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months ended |
| December 27,
2015 | | September 27,
2015 | | June 28,
2015 | | March 29,
2015 |
U.S. GAAP net income | $ | 222,980 |
| | $ | 288,679 |
| | $ | 131,271 |
| | $ | 206,285 |
|
Pre-tax non-GAAP items: | | | | | | | |
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | 21,250 |
| | 21,250 |
| | 21,286 |
| | 21,286 |
|
Acquisition-related inventory fair value impact - cost of goods sold | 649 |
| | — |
| | 1,192 |
| | 308 |
|
Impairment of long lived asset - cost of goods sold | — |
| | — |
| | 9,821 |
| | — |
|
Restructuring charges - cost of goods sold | — |
| | 371 |
| | — |
| | — |
|
Restructuring charges - research and development | 34 |
| | 4,206 |
| | — |
| | — |
|
Acquisition costs - selling, general and administrative | 17,392 |
| | — |
| | — |
| | — |
|
Amortization related to intangible assets acquired in Novellus transaction -selling, general and administrative | 16,083 |
| | 16,083 |
| | 16,083 |
| | 16,083 |
|
Restructuring charges - selling, general and administrative | 2,032 |
| | 3,050 |
| | 434 |
| | (495 | ) |
Goodwill impairment - selling, general and administrative | — |
| | — |
| | 79,444 |
| | — |
|
Amortization of note discounts - other expense, net | 9,258 |
| | 9,122 |
| | 9,019 |
| | 8,749 |
|
Amortization of bridge loan issuance costs - other expense, net | 13,573 |
| | — |
| | — |
| | — |
|
Net income tax benefit on non-GAAP items | (19,335 | ) | | (7,791 | ) | | (9,605 | ) | | (7,181 | ) |
Cumulative income tax benefit due to a court ruling | — |
| | (21,925 | ) | | — |
| | — |
|
Income tax expense (benefit) on resolution or additional accrual for certain tax matters | — |
| | — |
| | 1,078 |
| | (124 | ) |
Income tax benefit from tax extenders, primarily the research and development credit | (13,603 | ) | | — |
| | — |
| | — |
|
Non-GAAP net income | $ | 270,313 |
| | $ | 313,045 |
| | $ | 260,023 |
| | $ | 244,911 |
|
Non-GAAP net income per diluted share | $ | 1.57 |
| | $ | 1.82 |
| | $ | 1.50 |
| | $ | 1.40 |
|
U.S. GAAP number of shares used for per diluted share calculation | 174,242 |
| | 174,374 |
| | 176,575 |
| | 177,531 |
|
Effect of convertible note hedge | (2,446 | ) | | (2,328 | ) | | (2,934 | ) | | (3,060 | ) |
Non-GAAP number of shares used for per diluted share calculation | 171,796 |
| | 172,046 |
| | 173,641 |
| | 174,471 |
|
page 7 of 8
Lam Announces Financial Results for the December 2015 Quarter
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income
(unaudited)
|
| | | | | | | |
| Three Months Ended |
| December 27,
2015 | | September 27,
2015 |
U.S. GAAP gross margin | $ | 626,510 |
| | $ | 722,363 |
|
Pre-tax non-GAAP items: | | | |
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | 21,250 |
| | 21,250 |
|
Acquisition-related inventory fair value impact - cost of goods sold | 649 |
| | — |
|
Restructuring charges - cost of goods sold | — |
| | 371 |
|
Non-GAAP gross margin | $ | 648,409 |
| | $ | 743,984 |
|
U.S. GAAP gross margin as a percentage of revenue | 43.9 | % | | 45.1 | % |
Non-GAAP gross margin as a percentage of revenue | 45.5 | % | | 46.5 | % |
U.S. GAAP operating expenses | $ | 387,676 |
| | $ | 386,935 |
|
Pre-tax non-GAAP items: | | | |
Restructuring charges - research and development | (34 | ) | | (4,206 | ) |
Acquisition costs - selling, general and administrative | (17,392 | ) | | — |
|
Amortization related to intangible assets acquired in Novellus transaction -selling, general and administrative | (16,083 | ) | | (16,083 | ) |
Restructuring charges - selling, general and administrative | (2,032 | ) | | (3,050 | ) |
Non-GAAP operating expenses | $ | 352,135 |
| | $ | 363,596 |
|
Non-GAAP operating income | $ | 296,274 |
| | $ | 380,388 |
|
GAAP operating margin as percent of revenue | 16.8 | % | | 21.0 | % |
Non-GAAP operating margin as a percent of revenue | 20.8 | % | | 23.8 | % |
page 8 of 8
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