Lam Research Corporation Reports Financial Results for the Quarter Ended June 27, 2021

FREMONT, Calif., July 28, 2021 (GLOBE NEWSWIRE) -- Lam Research Corporation (the "Company," "Lam," "Lam Research") today announced financial results for the quarter ended June 27, 2021 (the “June 2021 quarter”).

Highlights for the June 2021 quarter were as follows:

  • Revenue of $4.15 billion.
  • U.S. GAAP gross margin of 46.2%, U.S. GAAP operating income as a percentage of revenue of 31.7%, and U.S. GAAP diluted EPS of $7.98.
  • Non-GAAP gross margin of 46.5%, non-GAAP operating income as a percentage of revenue of 32.6%, and non-GAAP diluted EPS of $8.09.

Key Financial Data for the Quarters Ended
June 27, 2021 and March 28, 2021 
(in thousands, except per-share data, percentages, and basis points) 

U.S. GAAP
    June 2021   March 2021   Change Q/Q
Revenue   $ 4,145,179     $ 3,847,654     +8%
Gross margin as percentage of revenue   46.2 %   46.3 %   - 10 bps
Operating income as percentage of revenue   31.7 %   31.1 %   + 60 bps
Diluted EPS   $ 7.98     $ 7.41     +8%
             
Non-GAAP
    June 2021   March 2021   Change Q/Q
Revenue   $ 4,145,179     $ 3,847,654     +8%
Gross margin as percentage of revenue   46.5 %   46.3 %   + 20 bps
Operating income as percentage of revenue   32.6 %   31.6 %   + 100 bps
Diluted EPS   $ 8.09     $ 7.49     +8%

U.S. GAAP Financial Results

For the June 2021 quarter, revenue was $4,145 million, gross margin was $1,915 million, or 46.2% of revenue, operating expenses were $599 million, operating income was 31.7% of revenue, and net income was $1,145 million, or $7.98 per diluted share on a U.S. GAAP basis. This compares to revenue of $3,848 million, gross margin of $1,780 million, or 46.3% of revenue, operating expenses of $585 million, operating income of 31.1% of revenue, and net income of $1,071 million, or $7.41 per diluted share, for the quarter ended March 28, 2021 (the “March 2021 quarter”).

Non-GAAP Financial Results

For the June 2021 quarter, non-GAAP gross margin was $1,926 million, or 46.5% of revenue, non-GAAP operating expenses were $574 million, non-GAAP operating income was 32.6% of revenue, and non-GAAP net income was $1,161 million, or $8.09 per diluted share. This compares to non-GAAP gross margin of $1,783 million, or 46.3% of revenue, non-GAAP operating expenses of $567 million, non-GAAP operating income of 31.6% of revenue, and non-GAAP net income of $1,084 million, or $7.49 per diluted share, for the March 2021 quarter.

“Lam continued its record performance in the June quarter, capping a fiscal 2021 with more than 45% revenue growth and an increase of over 70% in earnings per share,” said Tim Archer, Lam Research’s President and Chief Executive Officer. “The combination of strong semiconductor demand and rising device complexity is driving higher levels of wafer fabrication equipment investment. Our technology differentiation and deep collaboration with customers position Lam to extend our leadership across all market segments.”

Balance Sheet and Cash Flow Results

Cash and cash equivalents, short-term investments, and restricted cash and investments balances remained flat at $6.0 billion at the end of the June 2021 quarter compared to the end of the March 2021 quarter. Cash generated from operating activities totaling $1,435.9 million was offset by repayment of $822.0 million of borrowings; $431.3 million of share repurchases, including net share settlement on employee stock-based compensation; and $185.4 million of dividends paid to stockholders.

Revenue

The geographic distribution of revenue during the June 2021 quarter is shown in the following table:

Region Revenue
China 37%
Korea 30%
Taiwan 13%
Japan 9%
United States 5%
Southeast Asia 3%
Europe 3%

The following table presents revenue disaggregated between system and customer support-related revenue:

  Three Months Ended   Twelve Months Ended
  June 27,
2021
  March 28,
2021
  June 28,
2020
  June 27,
2021
  June 28,
2020
  (In thousands)
Systems revenue $ 2,763,877     $ 2,545,306     $ 1,865,249     $ 9,764,845     $ 6,625,130  
Customer support-related revenue and other 1,381,302     1,302,348     926,615     4,861,305     3,419,606  
  $ 4,145,179     $ 3,847,654     $ 2,791,864     $ 14,626,150     $ 10,044,736  

System revenue includes sales of new leading-edge equipment in deposition, etch and clean markets.

Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from our Reliant® product line.

Outlook

For the quarter ended September 26, 2021, Lam is providing the following guidance:

  U.S. GAAP   Reconciling Items   Non-GAAP
Revenue $4.3 Billion +/- $250 Million     $4.3 Billion +/- $250 Million
Gross margin as a percentage of revenue   46.0%   +/-   1%     $ 1   Million     46.0%   +/-   1%  
Operating income as a percentage of revenue   31.7%   +/-   1%     $ 13   Million     32.0%   +/-   1%  
Net income per diluted share   $8.02   +/-   $0.50     $ 12   Million     $8.10   +/-   $0.50  
Diluted share count 143 Million     143 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 business combinations, asset acquisitions, divestitures, restructuring, balance sheet valuation adjustments, financing arrangements, gains or losses on equity investments, other investments, or other significant arrangements that may be completed or realized after the date of this release. U.S. 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:

  • Gross margin as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $1 million.
  • Operating income as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $13 million.
  • Net income per diluted share - amortization related to intangible assets acquired though business combinations, $13 million; amortization of note discounts, $1 million; and associated tax benefit for non-GAAP items ($2 million); totaling $12 million.

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 June 2021 and March 2021 quarters exclude amortization related to intangible assets acquired through business combinations, the effects of elective deferred compensation-related assets and liabilities, amortization of note discounts, and the income tax benefit of non-GAAP items. Additionally, the June 2021 quarter non-GAAP results exclude product rationalization charges.

Management uses non-GAAP gross margin, operating expense, operating income, operating income as a percentage of revenue, 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.

Caution 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: our outlook and guidance for future financial results, including revenue, gross margins, operating income and net income; the factors affecting wafer fabrication equipment investment or the future levels of such investment; the extent to which our technology is differentiated and the extent to which we will collaborate with customers; and our ability to maintain or extend our leadership across any or all market segments. Some factors that may affect these forward-looking statements include: the severity, magnitude and duration of the COVID–19 pandemic (and the related governmental, public health, business and community responses to it), and their impacts on our business, results of operations and financial condition, are evolving and are highly uncertain and unpredictable; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; supply chain disruptions or manufacturing capacity constraints may limit our ability to manufacture and sell our products; the actions of our customers and competitors may be inconsistent with our expectations; trade regulations, export controls, trade disputes, and other geopolitical tensions may inhibit our ability to sell our products; and widespread outbreaks of illness may impact our operations and revenue in affected areas; as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10–K for the fiscal year ended June 28, 2020, and our quarterly reports on Form 10–Q for the fiscal quarters ended September 27, 2020, December 27, 2020 and March 28, 2021. These uncertainties and changes could materially affect the forward-looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.

Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. As a trusted, collaborative partner to the world’s leading semiconductor companies, we combine superior systems engineering capability, technology leadership, and unwavering commitment to customer success to accelerate innovation through enhanced device performance. In fact, today, nearly every advanced chip is built with Lam technology. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)

Consolidated Financial Tables Follow.


LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)

  Three Months Ended   Twelve Months Ended
  June 27,
2021
  March 28,
2021
  June 28,
2020
  June 27,
2021
  June 28,
2020
  (unaudited)   (unaudited)   (unaudited)   (unaudited)   (1)
Revenue $ 4,145,179       $ 3,847,654       $ 2,791,864       $ 14,626,150       $ 10,044,736    
Cost of goods sold 2,229,978       2,067,523       1,511,532       7,820,844       5,436,043    
Gross margin 1,915,201       1,780,131       1,280,332       6,805,306       4,608,693    
Gross margin as a percent of revenue 46.2   %   46.3   %   45.9   %   46.5   %   45.9   %
Research and development 381,749       381,120       338,810       1,493,408       1,252,412    
Selling, general and administrative 217,525       203,703       185,800       829,875       682,479    
Total operating expenses 599,274       584,823       524,610       2,323,283       1,934,891    
Operating income 1,315,927       1,195,308       755,722       4,482,023       2,673,802    
Operating income as a percent of revenue 31.7   %   31.1   %   27.1   %   30.6   %   26.6   %
Other expense, net (7,166 )     (35,320 )     (7,553 )     (111,219 )     (98,824 )  
Income before income taxes 1,308,761       1,159,988       748,169       4,370,804       2,574,978    
Income tax expense (164,104 )     (88,867 )     (51,496 )     (462,346 )     (323,225 )  
Net income $ 1,144,657       $ 1,071,121       $ 696,673       $ 3,908,458       $ 2,251,753    
Net income per share:                  
Basic $ 8.02       $ 7.51       $ 4.79       $ 27.22       $ 15.55    
Diluted $ 7.98       $ 7.41       $ 4.73       $ 26.90       $ 15.10    
Number of shares used in per share calculations:                  
Basic 142,662       142,676       145,295       143,609       144,814    
Diluted 143,514       144,609       147,416       145,320       149,090    
Cash dividend declared per common share $ 1.30       $ 1.30       $ 1.15       $ 5.20       $ 4.60    
                                                 
(1) Derived from audited financial statements.                                                


LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

  June 27,
2021
  March 28,
2021
  June 28,
2020
  (unaudited)   (unaudited)   (1)
ASSETS          
Cash and cash equivalents $ 4,418,263     $ 3,673,366     $ 4,915,172  
Investments 1,310,872     2,116,101     1,795,080  
Accounts receivable, net 3,026,430     2,809,068     2,097,099  
Inventories 2,689,294     2,552,032     1,900,024  
Prepaid expenses and other current assets 207,528     171,703     146,160  
Total current assets 11,652,387     11,322,270     10,853,535  
Property and equipment, net 1,303,479     1,279,836     1,071,499  
Restricted cash and investments 252,487     253,460     253,911  
Goodwill and intangible assets 1,622,499     1,633,254     1,652,968  
Other assets 1,061,300     796,093     727,134  
Total assets $ 15,892,152     $ 15,284,913     $ 14,559,047  
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current portion of long-term debt and finance lease obligations $ 11,349     $ 825,434     $ 839,877  
Other current liabilities 3,516,518     2,786,899     2,322,565  
Total current liabilities 3,527,867     3,612,333     3,162,442  
Long-term debt and finance lease obligations 4,990,333     4,991,613     4,970,848  
Income taxes payable 948,037     924,629     909,709  
Other long-term liabilities 398,727     381,505     332,559  
Total liabilities 9,864,964     9,910,080     9,375,558  
Temporary equity, convertible notes     3,217     10,995  
Stockholders’ equity (2) 6,027,188     5,371,616     5,172,494  
Total liabilities and stockholders’ equity $ 15,892,152     $ 15,284,913     $ 14,559,047  
                       
(1) Derived from audited financial statements.                      
(2) Common shares issued and outstanding were 142,501 as of June 27, 2021, 142,607 as of March 28, 2021, and 145,331 as of June 28, 2020                      



LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

  Three Months Ended   Twelve Months Ended
  June 27,
2021
  March 28,
2021
  June 28,
2020
  June 27,
2021
  June 28,
2020
  (unaudited)   (unaudited)   (unaudited)   (unaudited)   (1)
CASH FLOWS FROM OPERATING ACTIVITIES:                  
Net income 1,144,657       1,071,121       696,673       3,908,458       2,251,753    
Adjustments to reconcile net income to net cash provided by operating activities:                  
Depreciation and amortization 78,397       79,453       71,083       307,151       268,525    
Deferred income taxes (146,029 )     (1,136 )     (92,293 )     (151,477 )     (17,777 )  
Equity-based compensation expense 56,321       55,746       53,153       220,164       189,197    
Other, net (27,786 )     (635 )     (9,493 )     (17,392 )     6,628    
Changes in operating assets and liabilities 330,375       (39,469 )     93,925       (678,741 )     (571,875 )  
Net cash provided by operating activities 1,435,935       1,165,080       813,048       3,588,163       2,126,451    
CASH FLOWS FROM INVESTING ACTIVITIES:                  
Capital expenditures and intangible assets (104,622 )     (89,596 )     (50,554 )     (349,096 )     (203,239 )  
Net sale (purchase) of available-for-sale securities 799,965       233,529       (354,350 )     464,522       (15,000 )  
Other, net (6,282 )     (27,997 )     (25,305 )     (42,155 )     (25,845 )  
Net cash provided by (used for) investing activities 689,061       115,936       (430,209 )     73,271       (244,084 )  
CASH FLOWS FROM FINANCING ACTIVITIES:                  
Proceeds from issuance of long-term debt, net of issuance costs             1,974,651             1,974,651    
Principal payments on debt (822,046 )     (16,245 )     (2,948 )     (862,060 )     (667,537 )  
Proceeds from borrowings on revolving credit facility                         1,250,000    
Repayments of borrowings on revolving credit facility             (1,250,000 )           (1,250,000 )  
Treasury stock purchases (431,255 )     (1,094,571 )     (41,017 )     (2,697,704 )     (1,369,649 )  
Dividends paid (185,385 )     (186,551 )     (167,739 )     (726,992 )     (656,838 )  
Reissuance of treasury stock related to employee stock purchase plan 56,330             46,992       97,764       85,439    
Proceeds from issuance of common stock 851       9,626       1,869       24,123       8,084    
Other, net (269 )     (665 )     1,592       (2,113 )     1,920    
Net cash (used for) provided by financing activities (1,381,774 )     (1,288,406 )     563,400       (4,166,982 )     (623,930 )  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 702       (5,756 )     7,103       7,215       (2,750 )  
Net increase (decrease) in cash, cash equivalents, and restricted cash 743,924       (13,146 )     953,342       (498,333 )     1,255,687    
Cash, cash equivalents, and restricted cash at beginning of period 3,926,826       3,939,972       4,215,741       5,169,083       3,913,396    
Cash, cash equivalents, and restricted cash at end of period $ 4,670,750       $ 3,926,826       $ 5,169,083       $ 4,670,750       $ 5,169,083    
                                                 
(1) Derived from audited financial statements.                                                

                          

Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)

  Three Months Ended
  June 27,
2021
  March 28,
2021
Revenue $ 4,145,179     $ 3,847,654  
Gross margin $ 1,926,323     $ 1,783,209  
Gross margin as percentage of revenue 46.5 %   46.3 %
Operating expenses $ 573,707     $ 566,507  
Operating income $ 1,352,616     $ 1,216,702  
Operating income as a percentage of revenue 32.6 %   31.6 %
Net income $ 1,161,211     $ 1,083,532  
Net income per diluted share $ 8.09     $ 7.49  
Shares used in per share calculation - diluted 143,514     144,609  


Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income
(in thousands, except per share data)
(unaudited) 

  Three Months Ended
  June 27,
2021
  March 28,
2021
U.S. GAAP net income $ 1,144,657       $ 1,071,121    
Pre-tax non-GAAP items:      
Amortization related to intangible assets acquired through certain business combinations - cost of goods sold 1,092       1,092    
Elective deferred compensation ("EDC") related liability valuation increase - cost of goods sold 4,256       1,986    
Product rationalization - cost of goods sold 5,774          
EDC related liability valuation increase - research and development 7,661       3,575    
Product rationalization - research and development 426          
Amortization related to intangible assets acquired through certain business combinations -selling, general and administrative 12,357       12,357    
EDC related liability valuation increase - selling, general and administrative 5,123       2,384    
Amortization of note discounts - other expense, net 923       998    
Gain on EDC related asset - other expense, net (17,184 )     (7,520 )  
Net income tax benefit on non-GAAP items (3,874 )     (2,461 )  
Non-GAAP net income $ 1,161,211       $ 1,083,532    
Non-GAAP net income per diluted share $ 8.09       $ 7.49    
U.S. GAAP net income per diluted share $ 7.98       $ 7.41    
U.S. GAAP and non-GAAP number of shares used for per diluted share calculation 143,514       144,609    


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
  June 27,
2021
  March 28,
2021
U.S. GAAP gross margin $ 1,915,201       $ 1,780,131    
Pre-tax non-GAAP items:      
Amortization related to intangible assets acquired through certain business combinations 1,092       1,092    
EDC related liability valuation increase 4,256       1,986    
Product rationalization 5,774          
Non-GAAP gross margin $ 1,926,323       $ 1,783,209    
U.S. GAAP gross margin as a percentage of revenue 46.2   %   46.3   %
Non-GAAP gross margin as a percentage of revenue 46.5   %   46.3   %
U.S. GAAP operating expenses $ 599,274       $ 584,823    
Pre-tax non-GAAP items:      
Amortization related to intangible assets acquired through certain business combinations (12,357 )     (12,357 )  
EDC related liability valuation increase (12,784 )     (5,959 )  
Product rationalization (426 )        
Non-GAAP operating expenses $ 573,707       $ 566,507    
U.S. GAAP operating income $ 1,315,927       $ 1,195,308    
Non-GAAP operating income $ 1,352,616       $ 1,216,702    
U.S. GAAP operating income as percent of revenue 31.7   %   31.1   %
Non-GAAP operating income as a percent of revenue 32.6   %   31.6   %

Lam Research Corporation Contact:

Tina Correia, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com


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Source: Lam Research Corporation

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