Lam Research Corporation
LAM RESEARCH CORP (Form: 8-K, Received: 10/17/2012 16:27:33)
Table of Contents

 

 

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): October 17, 2012

 

 

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):

 

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


Table of Contents

Item 2.02. Results of Operations and Financial Condition

On October 17, 2012, Lam Research Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 23, 2012, 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 October 17, 2012 announcing financial results for the fiscal quarter ended September 23, 2012


Table of Contents

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: October 17, 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)


Table of Contents

EXHIBIT INDEX

 

99.1    Press Release dated October 17, 2012 announcing financial results for the fiscal quarter ended September 23, 2012

Exhibit 99.1

FOR IMMEDIATE RELEASE

Lam Research Corporation Contact:

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

Ed Rebello, Corporate Communications, phone: 510-572-6603, e-mail: edward.rebello@lamresearch.com

Lam Research Corporation Reports Financial Results for the Quarter Ended September 23, 2012

 

   

Achieved revenue of $906.9 million, up 22.3% from prior quarter, in first full quarter of consolidated results with Novellus

 

   

Reported GAAP gross margin of 36.8%, GAAP operating margin of 1.8% and GAAP EPS of $0.02

 

   

Exceeded earnings guidance across multiple non-GAAP metrics: gross margin of 44.4%, operating margin of 13.0%, EPS of $0.53

 

   

Delivered targeted progress toward integration and synergies

FREMONT, Calif., October 17, 2012—Lam Research Corporation’s (NASDAQ: LRCX) highlights for the September 2012 quarter were:

Lam Research Corporation

Financial Highlights for the Quarter Ended September 23, 2012

(in thousands, except per share data and percentages)

 

     U.S. GAAP     Non-GAAP  

Revenue:

   $ 906,888      $ 906,888   

Operating Margin:

     1.8     13.0

Net Income:

   $ 2,768      $ 97,013   

Diluted EPS:

   $ 0.02      $ 0.53   

Lam Research Corporation today announced financial results for the quarter ended September 23, 2012. Revenue for the period was $906.9 million, gross margin was $333.9 million, or 36.8%, operating expenses were $317.2 million, and net income was $2.8 million, or $0.02 per diluted share, compared to revenue of $741.8 million, gross margin of $298.2 million, or 40.2%, operating expenses of $265.5 million, and net income of $18.1 million, or $0.13 per diluted share, for the June 2012 quarter. Shipments for the September 2012 quarter were $935 million compared to $816 million during the June 2012 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 2012 and June 2012 quarters exclude costs associated with acquisition-related inventory fair value impact, amortization related to intangible assets acquired in the Novellus transaction, certain acquisition and integration-related costs, the amortization of convertible note discounts, and rationalization of certain product configurations. See “Use of Non-GAAP Financial Measures” below for additional information.

Non-GAAP net income was $97.0 million, or $0.53 per diluted share, in the September 2012 quarter compared to non-GAAP net income of $80.9 million, or $0.60 per diluted share, for the June 2012 quarter. Non-GAAP gross margin for the September 2012 quarter was $402.3 million, or 44.4%, compared to non-GAAP gross margin of $312.7 million, or 42.1%, for the June 2012 quarter. Gross margin performance reflected solid execution combined with more favorable customer and product mix. Non-GAAP operating expenses for the September 2012 quarter increased to $284.3 million compared with the June quarter of $214.8 million primarily reflecting a full quarter of post-acquisition activity as a combined company.

“Despite a more uncertain industry environment, Lam Research achieved strong financial performance in the September quarter, delivering gross margin and operating profits above the high end of our guidance,” said Martin Anstice, Lam’s president and chief executive officer. “Our results reflect strong operational execution and solid progress towards the synergy targets that we’ve outlined. While the near-term outlook for semiconductor equipment demand has softened, we are committed to achieving the appropriate balance between cost management and continued investment in next-generation solutions for our customers. We believe that these activities will drive profitable growth for Lam when industry conditions improve,” Anstice concluded.

~more~

 

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Cash and cash equivalents, short-term investments and restricted cash and investments balances decreased to $2.9 billion at the end of the September 2012 quarter, compared to $3.0 billion at the end of the June 2012 quarter. This decrease was primarily the result of stock repurchases during the quarter, offset by cash flows from operating activities, which were approximately $249 million during the September 2012 quarter. Deferred revenue and deferred profit balances at the end of the September 2012 quarter increased to $363.5 million and $208.1 million, respectively, as compared to $335.4 million and $164.8 million, respectively, at the end of the June 2012 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 anticipated future revenue from shipments to Japanese customers was approximately $20.7 million as of September 23, 2012.

The geographic distribution of shipments and revenue during the September 2012 quarter is shown in the following table:

 

Region

   Shipments     Revenue  

North America

     18     18

Europe

     7     7

Japan

     8     8

Korea

     16     24

Taiwan

     29     28

Asia Pacific

     22     15

Use of Non-GAAP Financial Measures

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.

~more~

 

page 2 of 7


Lam Announces Financial Results for the September 2012 Quarter

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, industry conditions, our ability to make progress towards our synergy targets for the Novellus transaction, our ability to achieve the appropriate balance between cost management and continued investment in next-generation solutions for our customers, and our ability to realize profitable growth for Lam. 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 24, 2012. 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 supplier of innovative wafer fabrication equipment and services to the worldwide semiconductor industry. For more than 30 years, the Company has driven continuous improvements in chip performance, power consumption, and cost, contributing to the global proliferation of smartphones, computers, tablets, and other electronic products. Lam Research has been the leading supplier of high-throughput plasma etch equipment for more than a decade and expanded its product offerings in 2008 to include single-wafer clean systems. The Company added thin-film deposition and wafer surface preparation technologies to its product portfolio in 2012 with the acquisition of Novellus Systems, Inc. Headquartered in Fremont, Calif., Lam Research maintains a global network of service facilities throughout North America, Asia, and Europe to rapidly meet the needs of its global customer base. It is an S&P 500 ® company and NASDAQ-100 ® 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 .

Consolidated Financial Tables Follow

###

 

page 3 of 7


Lam Announces Financial Results for the September 2012 Quarter

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data and percentages)

(unaudited)

 

     Three Months Ended  
     September 23,
2012
    June 24,
2012
    September 25,
2011
 

Revenue

   $ 906,888      $ 741,814      $ 680,436   

Cost of goods sold

     573,002        443,601        396,553   
  

 

 

   

 

 

   

 

 

 

Gross margin

     333,886        298,213        283,883   

Gross margin as a percent of revenue

     36.8     40.2     41.7

Research and development

     163,311        124,528        102,559   

Selling, general and administrative

     153,863        141,015        80,200   

Restructuring and impairments

     —          —          1,725   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     317,174        265,543        184,484   
  

 

 

   

 

 

   

 

 

 

Operating income

     16,712        32,670        99,399   

Operating margin as a percent of revenue

     1.8     4.4     14.6

Other income (expense), net

     (9,938     (9,889     (12,073
  

 

 

   

 

 

   

 

 

 

Income before income taxes

     6,774        22,781        87,326   

Income tax expense

     4,006        4,712        15,488   
  

 

 

   

 

 

   

 

 

 

Net income

   $ 2,768      $ 18,069      $ 71,838   
  

 

 

   

 

 

   

 

 

 

Net income per share:

      

Basic net income per share

   $ 0.02      $ 0.13      $ 0.58   
  

 

 

   

 

 

   

 

 

 

Diluted net income per share

   $ 0.02      $ 0.13      $ 0.58   
  

 

 

   

 

 

   

 

 

 

Number of shares used in per share calculations:

      

Basic

     179,928        133,997        123,130   
  

 

 

   

 

 

   

 

 

 

Diluted

     181,926        135,842        124,049   
  

 

 

   

 

 

   

 

 

 

 

page 4 of 7


Lam Announces Financial Results for the September 2012 Quarter

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     September 23,
2012
     June 24,
2012
 
     (unaudited)      (1)  

ASSETS

     

Cash and cash equivalents

   $ 1,411,466       $ 1,564,752   

Short-term investments

     1,312,767         1,297,931   

Accounts receivable, net

     640,217         765,818   

Inventories

     567,920         632,853   

Deferred income taxes

     136,556         47,782   

Other current assets

     100,490         105,973   
  

 

 

    

 

 

 

Total current assets

     4,169,416         4,415,109   

Property and equipment, net

     593,202         584,596   

Restricted cash and investments

     166,196         166,335   

Goodwill and intangible assets

     2,642,770         2,686,730   

Other assets

     152,762         151,882   
  

 

 

    

 

 

 

Total assets

   $ 7,724,346       $ 8,004,652   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities

   $ 854,257       $ 1,426,928   
  

 

 

    

 

 

 

Long-term debt, convertible notes, and capital leases

   $ 1,278,792       $ 761,783   

Income taxes payable

     282,844         274,240   

Other long-term liabilities

     296,807         219,577   
  

 

 

    

 

 

 

Total liabilities

     2,712,700         2,682,528   
  

 

 

    

 

 

 

Senior convertible notes

     —           190,343   

Stockholders’ equity

     5,011,646         5,131,781   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 7,724,346       $ 8,004,652   
  

 

 

    

 

 

 

 

(1) Derived from audited financial statements

 

page 5 of 7


Lam Announces Financial Results for the September 2012 Quarter

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

     Three Months Ended  
     September 23,
2012
    June 24,
2012
    September 25,
2011
 

CASH FLOWS FROM OPERATING ACTIVITIES:

      

Net income

   $ 2,768      $ 18,069      $ 71,838   

Adjustments to reconcile net income to net cash provided by operating activities:

      

Depreciation and amortization

     74,816        34,576        21,360   

Deferred income taxes

     (12,017     39,356        —     

Restructuring and impairment charges, net

     —          —          1,725   

Equity-based compensation expense

     24,414        29,174        17,744   

Income tax benefit on equity-based compensation plans

     —          1,429        659   

Excess tax benefit on equity-based compensation plans

     —          (394     (1,951

Amortization of convertible note discount

     7,752        7,014        6,593   

Impairment of investment

     —          —          1,724   

Other, net

     8,406        7,206        1,423   

Changes in operating assets and liabilities:

     143,123        (39,715     (34,215
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     249,262        96,715        86,900   
  

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

      

Capital expenditures and intangible assets

     (43,965     (36,880     (15,732

Cash acquired in business acquisition

     —          418,681        —     

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

     (16,638     329,689        (85,259

Transfer of restricted cash and investments

     146        (29     17   
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) investing activities

     (60,457     711,461        (100,974
  

 

 

   

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

      

Principal payments on long-term debt and capital lease obligations

     (665     (1,101     (1,564

Excess tax benefit on equity-based compensation plans

     —          394        1,951   

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

     —          —          (75,000

Treasury stock purchases

     (355,079     (661,059     (72,053

Reissuances of treasury stock related to employee stock purchase plan

     9,925        8,765        8,858   

Proceeds from issuance of common stock

     951        —          164   
  

 

 

   

 

 

   

 

 

 

Net cash used for financing activities

     (344,868     (653,001     (137,644
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash

     2,777        (690     (1,096

Net increase (decrease) in cash and cash equivalents

     (153,286     154,485        (152,814

Cash and cash equivalents at beginning of period

     1,564,752        1,410,267        1,492,132   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,411,466      $ 1,564,752      $ 1,339,318   
  

 

 

   

 

 

   

 

 

 

 

page 6 of 7


Lam Announces Financial Results for the September 2012 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  
     September 23,
2012
    June 24,
2012
 

U.S. GAAP net income

   $ 2,768      $ 18,069   

Pre-tax non-GAAP items:

    

Costs associated with rationalization of certain product configurations - cost of goods sold

     3,210        4,045   

Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold

     20,715        4,540   

Acquisition-related inventory fair value impact - cost of goods sold

     43,842        5,864   

Integration costs - cost of goods sold

     694        —     

Acquisition-related costs - operating expenses

     —          37,374   

Integration costs - operating expenses

     13,500        7,293   

Amortization related to intangible assets acquired in Novellus transaction - operating expenses

     19,418        4,256   

Costs associated with rationalization of certain product configurations - operating expenses

     —          1,850   

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

     6,910        6,830   

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

     842        184   

Acquisition-related costs - other income (expense), net

     —          2,300   

Net tax benefit on non-GAAP items

     (14,886     (11,732
  

 

 

   

 

 

 

Non-GAAP net income

   $ 97,013      $ 80,873   
  

 

 

   

 

 

 

Non-GAAP net income per diluted share

   $ 0.53      $ 0.60   
  

 

 

   

 

 

 

Number of shares used for diluted per share calculation

     181,926        135,842   

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  
     September 23,
2012
    June 24,
2012
 

U.S. GAAP gross margin

   $ 333,886      $ 298,213   

Pre-tax non-GAAP items:

    

Costs associated with rationalization of certain product configurations - cost of goods sold

     3,210        4,045   

Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold

     20,715        4,540   

Acquisition-related inventory fair value impact - cost of goods sold

     43,842        5,864   

Integration costs - cost of goods sold

     694        —     
  

 

 

   

 

 

 

Non-GAAP gross margin

   $ 402,347      $ 312,662   
  

 

 

   

 

 

 

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

     36.8     40.2

Non-GAAP gross margin as a percentage of revenue

     44.4     42.1

U.S. GAAP operating expenses

   $ 317,174      $ 265,543   

Pre-tax non-GAAP items:

    

Acquisition-related costs - operating expenses

     —          (37,374

Integration costs - operating expenses

     (13,500     (7,293

Amortization related to intangible assets acquired in Novellus transaction - operating expenses

     (19,418     (4,256

Costs associated with rationalization of certain product configurations - operating expenses

     —          (1,850
  

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 284,256      $ 214,770   
  

 

 

   

 

 

 

Non-GAAP operating income

   $ 118,091      $ 97,892   
  

 

 

   

 

 

 

Non-GAAP operating margin as a percent of revenue

     13.0     13.2

 

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