Lam Research Corporation
LAM RESEARCH CORP (Form: 8-K, Received: 01/25/2012 16:17:41)

 

 

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 25, 2012

 

 

LAM RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

  Delaware  
 

(State or Other Jurisdiction

of Incorporation)

 
0-12933     94-2634797

(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):

 

¨ 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))

 

 

 


Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99.1


Item 2.02. Results of Operations and Financial Condition

On January 25, 2012, Lam Research Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended December 25, 2011, 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, or otherwise subject to the liabilities under that Section. Furthermore, the information in the 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.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

 

99.1    Press Release dated January 25, 2012 announcing financial results for the fiscal quarter ended December 25, 2011


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 25, 2012

 

LAM RESEARCH CORPORATION
By:  

/ S /    E RNEST E. M ADDOCK

 

Ernest E. Maddock

Senior Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


EXHIBIT INDEX

 

99.1    Press Release dated January 25, 2012 announcing financial results for the fiscal quarter ended December 25, 2011

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contact:

Shanye Hudson, Director, Investor Relations, phone: 510/572-4589, e-mail: shanye.hudson@lamresearch.com

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

FREMONT, Calif., January 25, 2012—Lam Research Corporation’s (NASDAQ: LRCX) highlights for the December 2011 quarter were:

Lam Research Corporation

Financial Highlights for the Quarter Ended December 25, 2011

(in thousands, except per share data and percentages)

 

     U.S. GAAP     Non-GAAP  

Revenue:

   $ 583,981      $ 583,981   

Operating Margin:

     8.1     9.2

Net Income:

   $ 33,212      $ 41,013   

Diluted EPS:

   $ 0.27      $ 0.34   

Lam Research Corporation today announced financial results for the quarter ended December 25, 2011. Revenue for the period was $584.0 million, gross margin was $234.8 million, or 40.2%, operating expenses were $187.3 million, and net income was $33.2 million, or $0.27 per diluted share, compared to revenue of $680.4 million, gross margin of $283.9 million, or 41.7%, operating expenses of $184.5 million, and net income of $71.8 million, or $0.58 per diluted share, for the September 2011 quarter. Shipments for the December 2011 quarter were $563 million compared to $580 million during the September 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 December 2011 and September 2011 quarters exclude the amortization of convertible note discounts and certain costs for restructuring and impairments. Additionally, the Company’s non-GAAP results for the December 2011 quarter exclude certain acquisition related costs. 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 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 $41.0 million, or $0.34 per diluted share, in the December 2011 quarter compared to non-GAAP net income of $78.3 million, or $0.63 per diluted share, for the September 2011 quarter. Non-GAAP gross margin for the December 2011 quarter was $234.0 million, or 40.1%, compared to non-GAAP gross margin of $283.9 million, or 41.7%, for the September 2011 quarter. The sequential decrease in gross margin was due to both lower factory and field utilization as a result of the decline in business volumes and product mix. Non-GAAP operating expenses for the December 2011 quarter decreased to $180.4 million compared with the September 2011 quarter of $182.8 million as a result of reductions in variable compensation associated with the operating income level.

~more~


Lam Announces Financial Results for the December 2011 Quarter

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

 

Region

   Shipments     Revenue  

North America

     19     18

Europe

     8     9

Japan

     10     14

Korea

     37     34

Taiwan

     18     17

Asia Pacific

     8     8

Cash and cash equivalents, short-term investments and restricted cash and investments balances were $2.4 billion at the end of the December 2011 quarter, compared to $2.2 billion at the end of the September 2011 quarter. The increase in cash and cash equivalents, short-term investments and restricted cash and investments balances during the quarter was primarily due to operating activities and the cash settlement of a stock repurchase agreement. Cash flows from operating activities were approximately $169.0 million or 29% of revenue during the December 2011 quarter. Deferred revenue and deferred profit balances at the end of the December 2011 quarter increased to $191.8 million and $117.3 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 $15.5 million as of December 25, 2011.

“Lam delivered solid financial results in the December quarter consistent with expectations, supported by initial leading edge capacity shipments across all segments,” said Martin Anstice, Lam’s president and chief executive officer. “Throughout 2011, we executed on our long-term growth strategy by investing in the technology and productivity solutions that address our customers’ most critical needs and position Lam to solidify and grow its position in etch and single-wafer clean. In addition, as announced in December, we plan to extend our product and services portfolio and leadership in wafer fab equipment via the acquisition of Novellus Systems. We believe that the complementary market positions, technologies, product capabilities and leadership of both companies will provide more comprehensive and faster solutions to our customers and provide improved financial performance for our shareholders,” Anstice concluded.

~more~

 

page 2 of 7


Lam Announces Financial Results for the December 2011 Quarter

Participants in the Solicitation

The directors and executive officers of Lam Research and Novellus Systems, Inc. (“Novellus,” and together with Lam Research and their subsidiaries, the “Merged Company”) may be deemed to be participants in the solicitation of proxies in connection with the approval of the proposed merger of Lam Research and Novellus (the “Merger”). Lam Research plans to file the registration statement that includes the joint proxy statement/prospectus with the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies to approve the proposed transaction. Information regarding Lam Research’s directors and executive officers and their respective interests in Lam Research by security holdings or otherwise is available in its Annual Report on Form 10-K filed with the SEC on August 19, 2011 and its Proxy Statement on Schedule 14A filed with the SEC on September 19, 2011. Information regarding Novellus Systems’ directors and executive officers and their respective interests in Novellus Systems by security holdings or otherwise is available in its Annual Report on Form 10-K filed with the SEC on February 25, 2011 and its Proxy Statement on Schedule 14A filed with the SEC on April 8, 2011. Additional information regarding the interests of such potential participants is or will be included in the joint proxy statement/prospectus and registration statement, and other relevant materials to be filed with the SEC, when they become available, including in connection with the solicitation of proxies to approve the proposed transaction and to elect directors.

How to Find Further Information

This communication 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. In connection with the proposed merger, Lam Research intends to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Lam Research and Novellus Systems that also constitutes a prospectus of Lam Research. Lam Research and Novellus Systems will furnish the joint proxy statement/prospectus and other relevant documents to their respective security holders in connection with the proposed merger of Lam Research and Novellus Systems. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, WE URGE SECURITY HOLDERS AND INVESTORS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LAM RESEARCH AND NOVELLUS SYSTEMS AND THE PROPOSED MERGER. The proposals for the merger will be made solely through the joint proxy statement/prospectus. In addition, a copy of the joint proxy statement/prospectus (when it becomes available) may be obtained free of charge from Lam Research Corporation, Investor Relations, 4650 Cushing Parkway, Fremont, CA 94538-6401, or from Novellus Systems, Investor Relations, 4000 North First Street, San Jose, CA 95134. Security holders will be able to obtain, free of charge, copies of the joint proxy statement/prospectus and S-4 Registration Statement and any other documents filed by Lam Research or Novellus Systems with the SEC in connection with the proposed Merger at the SEC’s website at http://www.sec.gov, and at the companies’ websites at www.Lam Research.com and www.Novellus.com, respectively.

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, the closure of our acquisition of Novellus Systems and the benefits of that acquisition, such as faster customer solutions and better financial performance for our shareholders. Some factors that may affect these forward-looking statements include: the shareholder votes on the planned Novellus acquisition, 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 and the report on Form 10-Q for the three months ended September 25, 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.

Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of Lam Research, Novellus Systems, or the Merged Company, following the implementation of the Merger or otherwise. No statement in this announcement should be interpreted to mean that the earnings per share, profits, margins or cash flows of Lam Research or the Merged Company for the current or future financial years would necessarily match or exceed the historical published figures.

Lam Research Corporation is a major supplier of wafer fabrication equipment and services to the world’s semiconductor industry, where the company has been advancing semiconductor manufacturing for more than 30 years. As a technology and market share leader in plasma etch and single-wafer clean, Lam Research is leveraging its combined expertise to address some of today’s most advanced semiconductor processing challenges. Headquartered in Fremont, Calif., Lam Research maintains a global network of service facilities throughout North America, Asia, and Europe to meet the complex and changing needs of its global customer base. Lam’s common stock trades on The NASDAQ Global Select MarketSM under the symbol LRCX. Lam is a NASDAQ-100 ® company. For more information, visit http://www.lamresearch.com.

Consolidated Financial Tables Follow

###

 

page 3 of 7


Lam Announces Financial Results for the December 2011 Quarter

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data and percentages)

(unaudited)

 

    Three Months Ended     Six Months Ended  
    December  25,
2011
    September  25,
2011
    December  26,
2010
    December  25,
2011
    December  26,
2010
 
         

Revenue

  $ 583,981      $ 680,436      $ 870,714      $ 1,264,417      $ 1,676,588   

Cost of goods sold

    350,014        396,553        463,281        746,567        891,829   

Cost of goods sold - restructuring and asset impairments

    (859     —          —          (859     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs of goods sold

    349,155        396,553        463,281        745,708        891,829   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

    234,826        283,883        407,433        518,709        784,759   

Gross margin as a percent of revenue

    40.2     41.7     46.8     41.0     46.8

Research and development

    104,024        102,559        90,477        206,583        176,830   

Selling, general and administrative

    83,256        80,200        75,852        163,456        147,994   

Restructuring and impairments

    —          1,725        —          1,725        (5,163
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    187,280        184,484        166,329        371,764        319,661   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    47,546        99,399        241,104        146,945        465,098   

Operating margin as a percent of revenue

    8.1     14.6     27.7     11.6     27.7

Other income (expense), net

    (7,785     (12,073     1,038        (19,858     59   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    39,761        87,326        242,142        127,087        465,157   

Income tax expense

    6,549        15,488        20,286        22,037        49,577   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 33,212      $ 71,838      $ 221,856      $ 105,050      $ 415,580   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

         

Basic net income per share

  $ 0.28      $ 0.58      $ 1.80      $ 0.87      $ 3.37   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per share

  $ 0.27      $ 0.58      $ 1.78      $ 0.86      $ 3.32   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Number of shares used in per share calculations:

         

Basic

    119,739        123,130        123,101        121,435        123,384   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

    120,873        124,049        124,786        122,382        124,999   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

page 4 of 7


Lam Announces Financial Results for the December 2011 Quarter

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     December  25,
2011
     September  25,
2011
     June  26,
2011
 
        
     (unaudited)      (unaudited)      (1)  

ASSETS

        

Cash and cash equivalents

   $ 1,506,928       $ 1,339,318       $ 1,492,132   

Short-term investments

     712,856         713,087         630,115   

Accounts receivable, net

     462,243         523,240         590,568   

Inventories

     373,130         396,301         396,607   

Deferred income taxes

     78,479         78,330         78,435   

Other current assets

     79,215         81,740         85,408   
  

 

 

    

 

 

    

 

 

 

Total current assets

     3,212,851         3,132,016         3,273,265   

Property and equipment, net

     272,409         266,411         270,458   

Restricted cash and investments

     165,217         165,239         165,256   

Deferred income taxes

     4,184         4,718         3,892   

Goodwill and intangible assets

     207,568         212,087         216,616   

Other assets

     115,918         117,870         124,380   
  

 

 

    

 

 

    

 

 

 

Total assets

   $ 3,978,147       $ 3,898,341       $ 4,053,867   
  

 

 

    

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

        

Current liabilities

   $ 593,605       $ 591,981       $ 680,759   
  

 

 

    

 

 

    

 

 

 

Long-term debt, convertible notes, and capital leases

   $ 749,078       $ 743,252       $ 738,488   

Income taxes payable

     115,616         116,509         113,582   

Other long-term liabilities

     57,104         56,717         51,193   

Stockholders’ equity

     2,462,744         2,389,882         2,469,845   
  

 

 

    

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 3,978,147       $ 3,898,341       $ 4,053,867   
  

 

 

    

 

 

    

 

 

 

(1)    Derived from audited financial statements

        

 

page 5 of 7


Lam Announces Financial Results for the December 2011 Quarter

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

     Three Months Ended     Six Months Ended  
     December  25,
2011
    September  25,
2011
    December  26,
2010
    December  25,
2011
    December  26,
2010
 
          

CASH FLOWS FROM OPERATING ACTIVITIES:

          

Net income

   $ 33,212      $ 71,838      $ 221,856      $ 105,050      $ 415,580   

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

          

Depreciation and amortization

     22,372        21,360        18,663        43,732        36,611   

Deferred income taxes

     (633     —          (3,039     (633     (3,822

Restructuring and impairment charges, net

     (859     1,725        —          866        (5,163

Equity-based compensation expense

     18,224        17,744        12,759        35,968        25,768   

Income tax benefit on equity-based compensation plans

     470        659        (918     1,129        4,165   

Excess tax benefit on equity-based compensation plans

     (204     (1,951     711        (2,155     (3,228

Amortization of convertible note discount

     6,671        6,593        —          13,264        —     

Impairment of investment

     —          1,724        —          1,724        —     

Loss on equity method investment

     202        —          —          202        —     

Other, net

     881        1,423        (1,600     2,304        (3,564

Changes in operating assets and liabilities:

     88,680        (34,215     (62,849     54,465        (25,020
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     169,016        86,900        185,583        255,916        441,327   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

          

Capital expenditures and intangible assets

     (26,682     (15,732     (38,025     (42,414     (57,155

Net sales/maturities (purchases) of available-for-sale securities

     (4,194     (85,259     (1,160     (89,453     (25,666

Purchase of equity method investment

     (10,740     —          —          (10,740     —     

Receipt of loan payments

     8,375        —          —          8,375        —     

Proceeds from sale of assets

     2,677        —          1,544        2,677        1,544   

Transfer of restricted cash and investments

     3        17        —          20        (10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for investing activities

     (30,561     (100,974     (37,641     (131,535     (81,287
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

          

Principal payments on long-term debt and capital lease obligations

     (1,576     (1,564     (78     (3,140     (3,411

Excess tax benefit on equity-based compensation plans

     204        1,951        (711     2,155        3,228   

Net cash received in settlement (paid in advance for) stock repurchase contracts

     51,005        (75,000     (50,000     (23,995     (50,000

Treasury stock purchases

     (20,642     (72,053     (4,151     (92,695     (148,946

Reissuances of treasury stock related to employee stock purchase plan

     —          8,858        —          8,858        7,155   

Proceeds from issuance of common stock

     1,311        164        3,407        1,475        4,242   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) financing activities

     30,302        (137,644     (51,533     (107,342     (187,732
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (1,147     (1,096     4,370        (2,243     10,985   

Net increase (decrease) in cash and cash equivalents

     167,610        (152,814     100,779        14,796        183,293   

Cash and cash equivalents at beginning of period

     1,339,318        1,492,132        628,281        1,492,132        545,767   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,506,928      $ 1,339,318      $ 729,060      $  1,506,928      $ 729,060   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

page 6 of 7


Lam Announces Financial Results for the December 2011 Quarter

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

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Three Months Ended  
     December  25,
2011
    September  25,
2011
 
    

U.S. GAAP net income

   $ 33,212      $ 71,838   

Pre-tax non-GAAP items:

    

Restructuring and impairments - cost of goods sold

     (859     —     

Restructuring and impairments - operating expenses

     —          1,725   

Acquisition costs - operating expenses

     6,860        —     

Amortization of convertible note discount - other income (expense), net

     6,671        6,593   

Impairment of investment - other income (expense), net

     —          1,724   

Net tax benefit on non-GAAP items

     (4,871     (3,615
  

 

 

   

 

 

 

Non-GAAP net income

   $ 41,013      $ 78,265   
  

 

 

   

 

 

 

Non-GAAP net income per diluted share

   $ 0.34      $ 0.63   
  

 

 

   

 

 

 

Number of shares used for diluted per share calculation

     120,873        124,049   

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

Operating Expenses and Operating Income

(in thousands, except percentages)

(unaudited)

 

     Three Months Ended     Three Months Ended  
     December  25,
2011
    September  25,
2011
 
    

U.S. GAAP gross margin

   $ 234,826      $ 283,883   

Pre-tax non-GAAP items:

    

Restructuring and impairments - cost of goods sold

     (859     —     
  

 

 

   

 

 

 

Non-GAAP gross margin

   $ 233,967      $ 283,883   
  

 

 

   

 

 

 

U.S. GAAP gross margin as a percentage of revenue

     40.2     41.7

Non-GAAP gross margin as a percentage of revenue

     40.1     41.7

U.S. GAAP operating expenses

   $ 187,280      $ 184,484   

Pre-tax non-GAAP items:

    

Restructuring and impairments - operating expenses

     —          (1,725

Acquisition costs - operating expenses

     (6,860     —     
  

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 180,420      $ 182,759   
  

 

 

   

 

 

 

Non-GAAP operating income

   $ 53,547      $ 101,124   
  

 

 

   

 

 

 

Non-GAAP operating margin as a percent of revenue

     9.2     14.9

 

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