Lam Research Corporation

Lam Research Corporation Announces Financial Results for the Quarter Ended September 25, 2011

FREMONT, CA -- (MARKET WIRE) -- 10/19/11 -- Lam Research Corporation's (NASDAQ: LRCX) highlights for the September 2011 quarter were:




         Lam Research Corporation

   Financial Highlights for the Quarter

         Ended September 25, 2011

 (in thousands, except per share data and

               percentages)



                     U.S. GAAP   Non-GAAP

                     ---------  ---------



Revenue:             $ 680,436  $ 680,436



Operating Margin:         14.6%      14.9%



Net Income:          $  71,838  $  78,265



Diluted EPS:         $    0.58  $    0.63



Lam Research Corporation today announced financial results for the quarter ended September 25, 2011. Revenue for the period was $680.4 million, gross margin was $283.9 million (41.7%), and net income was $71.8 million, or $0.58 per diluted share, compared to revenue of $752.0 million, gross margin of $338.5 million (45.0%), and net income of $125.9 million, or $1.01 per diluted share, for the June 2011 quarter. Shipments for the September 2011 quarter were $580 million compared to $793 million during the June 2011 quarter.

In addition to U.S. Generally Accepted Accounting Principles (GAAP) results, this commentary contains non-GAAP financial measures. The Company's non-GAAP results for both the September 2011 and June 2011 quarters exclude certain costs for restructuring and impairments and the amortization of convertible note discount. Additionally, the Company's non-GAAP results for the June 2011 quarter exclude tax expense associated with legal entity restructuring. Management uses non-GAAP 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 the 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 web site at http://investor.lamresearch.com.

Non-GAAP net income was $78.3 million, or $0.63 per diluted share, in the September 2011 quarter compared to non-GAAP net income of $142.3 million, or $1.14 per diluted share, for the June 2011 quarter. Gross margin for the September 2011 quarter was $283.9 million, or 41.7%, compared to gross margin of $338.5 million, or 45.0%, for the June 2011 quarter. The sequential decrease in gross margin was primarily due to less favorable product mix and reflects the impact of lower factory utilization as a result of the decline in business volumes. Non-GAAP operating expenses for the September 2011 quarter were $182.8 million compared with the June 2011 quarter of $179.5 million resulting from our continued increase in research and development activities.

The geographic distribution of shipments and revenue during the September 2011 quarter is shown in the following table:




      Region        Shipments      Revenue

----------------- ------------  ------------

North America               22%           19%

Europe                      10%           11%

Japan                       16%           18%

Korea                       27%           25%

Taiwan                      10%           13%

Asia Pacific                15%           14%



Cash and cash equivalents, short-term investments and restricted cash and investments balances were $2.2 billion at the end of the September 2011 quarter, compared to $2.3 billion at the end of the June 2011 quarter. The decrease in cash and cash equivalents, short-term investments and restricted cash and investments balances during the quarter was due to activity related to our stock repurchase program partially offset by cash flows from operating activities. Cash flows from operating activities were approximately $86.9 million or 13% of revenue during the September 2011 quarter. Deferred revenue and deferred profit balances at the end of the September 2011 quarter were $179.5 million and $112.5 million, respectively. 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 anticipated future revenue from shipments to Japanese customers was approximately $43.4 million as of September 25, 2011.

"As expected, our September quarter results reflect the impact of ongoing macroeconomic uncertainty on wafer fab equipment spending," said Steve Newberry, Lam's chief executive officer and vice chairman. "While customers are currently delaying near-term expansion plans, they continue to make investments in leading edge technologies that enhance their competitiveness. We expect that when advanced technology device demand increases, capacity expansion will resume. Lam traditionally excels in this environment, and we remain focused on making the critical strategic investments that extend our technical leadership, strengthen customer trust and drive our long-term growth," Newberry concluded.

Caution Regarding Forward-Looking Statements

Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the safe harbor provisions of 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, our future commitment to our current strategic priorities, future wafer fab spending, customer investment decisions, and our ability to sustain technical leadership, strengthen our customer relationships and drive long term growth. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy; the strength of the financial performance of our existing and prospective customers; the introduction of new and innovative technologies; the occurrence and pace of technology transitions and conversions; the actions of our competitors, consumers, semiconductor companies and key suppliers and subcontractors; and the success of research and development and sales and marketing programs. 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 by us with the Securities and Exchange Commission, including specifically our report on Form 10-K for the year ended June 26, 2011. 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.

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 Market SM under the symbol LRCX. Lam is a NASDAQ-100® company. For more information, visit www.lamresearch.com.

Consolidated Financial Tables Follow




                          LAM RESEARCH CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

           (in thousands, except per share data and percentages)

                                (unaudited)



                                             Three Months Ended

                                -------------------------------------------

                                September 25,     June 26,    September 26,

                                     2011           2011           2010

                                -------------  -------------  -------------

Revenue                         $     680,436  $     752,018  $     805,874



Cost of goods sold                    396,553        413,564        428,548

                                -------------  -------------  -------------

  Gross margin                        283,883        338,454        377,326

  Gross margin as a percent of

   revenue                               41.7%          45.0%          46.8%

Research and development              102,559         99,583         86,353

Selling, general and

 administrative                        80,200         79,938         72,142

Restructuring and impairments           1,725         16,742         (5,163)

                                -------------  -------------  -------------

  Total operating expenses            184,484        196,263        153,332

                                -------------  -------------  -------------

  Operating income                     99,399        142,191        223,994

  Operating margin as a percent

   of revenue                            14.6%          18.9%          27.8%

Other expense, net                    (12,073)        (5,131)          (979)

                                -------------  -------------  -------------

  Income before income taxes           87,326        137,060        223,015

Income tax expense                     15,488         11,132         29,291

                                -------------  -------------  -------------

  Net income                    $      71,838  $     125,928  $     193,724

                                =============  =============  =============

Net income per share:

  Basic net income per share    $        0.58  $        1.02  $        1.57

                                =============  =============  =============

  Diluted net income per share  $        0.58  $        1.01  $        1.55

                                =============  =============  =============

Number of shares used in per

 share calculations:

  Basic                               123,130        123,863        123,665

                                =============  =============  =============

  Diluted                             124,049        125,086        125,202

                                =============  =============  =============










                          LAM RESEARCH CORPORATION

                    CONDENSED CONSOLIDATED BALANCE SHEETS

                               (in thousands)



                                                 September 25,    June 26,

                                                      2011          2011

                                                 ------------- -------------

                                                  (unaudited)       (1)

ASSETS

Cash and cash equivalents                        $   1,339,318 $   1,492,132

Short-term investments                                 713,087       630,115

Accounts receivable, net                               523,240       590,568

Inventories                                            396,301       396,607

Deferred income taxes                                   78,330        78,435

Other current assets                                    84,353        88,935

                                                 ------------- -------------

  Total current assets                               3,134,629     3,276,792

Property and equipment, net                            266,411       270,458

Restricted cash and investments                        165,239       165,256

Deferred income taxes                                    4,718         3,892

Goodwill and intangible assets                         212,087       216,616

Other assets                                           117,870       124,380

                                                 ------------- -------------

  Total assets                                   $   3,900,954 $   4,057,394

                                                 ============= =============



LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities                              $     594,594 $     684,286

                                                 ------------- -------------



Long-term debt, convertible notes, and capital

 leases                                          $     743,252 $     738,488

Income taxes payable                                   116,509       113,582

Other long-term liabilities                             56,717        51,193

Stockholders' equity                                 2,389,882     2,469,845

                                                 ------------- -------------

  Total liabilities and stockholders' equity     $   3,900,954 $   4,057,394

                                                 ============= =============



(1) Derived from audited financial statements








                          LAM RESEARCH CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                               (in thousands)

                                (unaudited)



                                             Three Months Ended

                                -------------------------------------------

                                September 25,     June, 26    September 26,

                                     2011           2011           2010

                                -------------  -------------  -------------

CASH FLOWS FROM OPERATING

 ACTIVITIES:

Net income                      $      71,838  $     125,928  $     193,724

Adjustments to reconcile net

 income to net cash provided by

 (used for) operating

 activities:

  Depreciation and amortization        21,360         19,972         17,948

  Deferred income taxes                     -         (6,166)          (783)

  Restructuring and impairment

   charges, net                         1,725         16,742         (5,163)

  Equity-based compensation

   expense                             17,744         14,788         13,009

  Income tax benefit on equity-

   based compensation plans               659          9,283          5,083

  Excess tax benefit on equity-

   based compensation plans            (1,951)        (8,184)        (3,939)

  Amortization of convertible

   note discount                        6,593          3,554              -

  Impairment of investment              1,724              -              -

  Other, net                            1,423            477         (1,964)

  Changes in operating assets

   and liabilities:                   (34,215)        21,714         37,829

                                -------------  -------------  -------------

    Net cash provided by

     operating activities              86,900        198,108        255,744

                                -------------  -------------  -------------



CASH FLOWS FROM INVESTING

 ACTIVITIES:

Capital expenditures and

 intangible assets                    (15,732)       (34,571)       (19,130)

Net sales/maturities

 (purchases) of available-for-

 sale securities                      (85,259)      (316,789)       (24,506)

Transfer of restricted cash and

 investments                               17             (8)           (10)

                                -------------  -------------  -------------

    Net cash used for investing

     activities                      (100,974)      (351,368)       (43,646)

                                -------------  -------------  -------------



CASH FLOWS FROM FINANCING

 ACTIVITIES:

Principal payments on long-term

 debt and capital lease

 obligations                           (1,564)           (81)        (3,333)

Net proceeds from issuance of

 long-term debt & convertible

 notes                                      -        882,831              -

Proceeds from sale of warrants              -        133,830              -

Purchase of convertible note

 hedge                                      -       (181,125)             -

Excess tax benefit on equity-

 based compensation plans               1,951          8,184          3,939

Net cash received in settlement

 (paid in advance for) stock

 repurchase contracts                 (75,000)       (99,589)             -

Treasury stock purchases              (72,053)       (53,753)      (144,795)

Reissuances of treasury stock

 related to employee stock

 purchase plan                          8,858          7,518          7,155

Proceeds from issuance of

 common stock                             164          2,179            835

                                -------------  -------------  -------------

    Net cash provided by (used

     for) financing activities       (137,644)       699,994       (136,199)

                                -------------  -------------  -------------

Effect of exchange rate changes

 on cash                               (1,096)         2,688          6,615

Net increase (decrease) in cash

 and cash equivalents                (152,814)       549,422         82,514

Cash and cash equivalents at

 beginning of period                1,492,132        942,710        545,767

                                -------------  -------------  -------------

Cash and cash equivalents at

 end of period                  $   1,339,318  $   1,492,132  $     628,281

                                =============  =============  =============








       Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income

                   (in thousands, except per share data)

                                (unaudited)



                                                Three Months   Three Months

                                                   Ended          Ended

                                               -------------  -------------

                                               September 25,     June 26,

                                                    2011           2011

                                               -------------  -------------

U.S. GAAP net income                           $      71,838  $     125,928

Pre-tax non-GAAP items:

  Restructuring and impairments - operating

   expenses                                            1,725         16,742

  Amortization of convertible note discount -

   other income (expense), net                         6,593          3,554

  Impairment of investment - other

   income(expense), net                                1,724              -

Net tax benefit on non-GAAP items                     (3,615)        (8,224)

Tax expense associated with legal entity

 restructuring                                             -          4,289

                                               -------------  -------------

Non-GAAP net income                            $      78,265  $     142,289

                                               =============  =============

Non-GAAP net income per diluted share          $        0.63  $        1.14

                                               =============  =============

Number of shares used for diluted per share

 calculation                                         124,049        125,086








Reconciliation of U.S. GAAP Operating Expenses and Operating Income to Non-

                GAAP Operating Expenses and Operating Income

                     (in thousands, except percentages)

                                (unaudited)



                                                Three Months   Three Months

                                                   Ended          Ended

                                               -------------  -------------

                                               September 25,     June 26,

                                                    2011           2011

                                               -------------  -------------

U.S. GAAP gross margin                         $     283,883  $     338,454



U.S. GAAP operating expenses                   $     184,484  $     196,263

Pre-tax non-GAAP items:

  Restructuring and impairments - operating

   expenses                                           (1,725)       (16,742)

                                               -------------  -------------

Non-GAAP operating expenses                    $     182,759  $     179,521

                                               =============  =============

Non-GAAP operating income                      $     101,124  $     158,933

                                               =============  =============

Non-GAAP operating margin as a percent of

 revenue                                                14.9%          21.1%



Lam Research Corporation Contact:

Shanye Hudson

Director, Investor Relations

phone: 510-572-4589

e-mail: Email Contact



Source: Lam Research Corporation

News Provided by Acquire Media