FREMONT, Calif.--(BUSINESS WIRE)-- Lam Research Corporation (NASDAQ: LRCX) highlights for the December 2010 quarter were:

Lam Research Corporation
Financial Highlights for the Quarter Ended December 26, 2010
(in thousands, except per share data and percentages)
		U.S. GAAP				Ongoing
• Revenue:		$	870,714			$	870,714
• Operating Margin:			27.7	%			27.7	%
• Net Income:		$	221,856			$	217,093
• Diluted EPS:		$	1.78			$	1.74

Lam Research Corporation today announced financial results for the quarter ended December 26, 2010. Revenue for the period was $870.7 million, gross margin was $407.4 million (46.8%), and net income was $221.9 million, or $1.78 per diluted share, compared to revenue of $805.9 million, gross margin of $377.3 million (46.8%), and net income of $193.7 million, or $1.55 per diluted share, for the September 2010 quarter. Shipments for the December 2010 quarter were $892 million compared to $808 million during the September 2010 quarter.

The Company's ongoing results for the December 2010 quarter exclude certain benefits for research and development tax credits. The Company's ongoing results for the September 2010 quarter exclude certain benefits for restructuring activities and asset impairments. Management uses the presentation of ongoing operating income, ongoing operating expenses, ongoing operating margin, ongoing net income, and ongoing net income per diluted share to evaluate the Company's operating and financial results. The Company believes the presentation of ongoing results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing the investor's ability to view the Company's results from management's perspective. A table presenting a reconciliation of ongoing net income, ongoing operating income, ongoing operating expenses, and ongoing operating margin results to results under U.S. GAAP is included at the end of this press release and on the Company's web site at http://investor.lamrc.com.

Ongoing net income was $217.1 million, or $1.74 per diluted share in the December 2010 quarter compared to ongoing net income of $190.6 million, or $1.52 per diluted share, for the September 2010 quarter. Ongoing operating expenses for the December 2010 quarter were $166.3 million compared with the September 2010 quarter of $158.5 million. This change is primarily due to increased research and development activities and enhanced levels of sales and marketing expense associated with customer joint development projects.

The geographic distribution of shipments and revenue during the December 2010 quarter is shown in the following table:

Region		Shipments			Revenue
North America		11	%		6	%
Europe		13	%		13	%
Japan		10	%		11	%
Korea		18	%		18	%
Taiwan		29	%		38	%
Asia Pacific		19	%		14	%

Cash and cash equivalents, short-term investments and restricted cash and investments balances were $1.2 billion at the end of the December 2010 quarter, compared to $1.1 billion at the end of the September 2010 quarter. Cash flows from operating activities were approximately $185.6 million during the December 2010 quarter. Deferred revenue and deferred profit balances at the end of the December 2010 quarter were $222.9 million and $135.1 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 $47.7 million as of December 26, 2010.

"Lam delivered record shipments, revenues and earnings per share for the December quarter. In calendar year 2010, our system shipments grew by nearly 200%, significantly outperforming the 120% growth in wafer fab equipment spending and leading to record levels of revenue and earnings at $3 billion and $5.35 per share respectively," stated Steve Newberry, chief executive officer and vice chairman of the board. "Our performance reflects the strong market share gains we achieved in 2010 across both etch and clean product lines. Looking ahead, we are focused on further strengthening our market positions by increasing our investments in field-based customer technology and productivity solutions, as well as core R&D programs targeted at meeting our customers' future technology needs."

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 anticipated continued investments in field-based customer technology and productivity solutions as well as our core R&D programs, our ability to meet customers' future technology needs and our future market position. Some factors that may affect these forward-looking statements include: business conditions in 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 27, 2010 and the report on Form 10-Q for the three months ended September 26, 2010. 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.

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited)
		Three Months Ended												Six Months Ended
		December 26,				September 26,				December 27,				December 26,				December 27,
		2010				2010				2009				2010				2009
Revenue		$	870,714			$	805,874			$	487,176			$	1,676,588			$	805,724
Cost of goods sold			463,281				428,548				268,685				891,829				455,918
Cost of goods sold - 409A expense			-				-				(2,696	)			-				(5,816	)
Total costs of goods sold			463,281				428,548				265,989				891,829				450,102
Gross margin			407,433				377,326				221,187				784,759				355,622
Gross margin as a percent of revenue			46.8	%			46.8	%			45.4	%			46.8	%			44.1	%
Research and development			90,477				86,353				82,171				176,830				153,370
Selling, general and administrative			75,852				72,142				60,111				147,994				112,230
Restructuring and asset impairments			-				(5,163	)			5,919				(5,163	)			8,012
409A expense			-				-				(18,362	)			-				(38,590	)
Total operating expenses			166,329				153,332				129,839				319,661				235,022
Operating income			241,104				223,994				91,348				465,098				120,600
Operating margin as a percent of revenue			27.7	%			27.8	%			18.8	%			27.7	%			15.0	%
Other income (expense), net			1,038				(979	)			(58	)			59				(426	)
Income before income taxes			242,142				223,015				91,290				465,157				120,174
Income tax expense			20,286				29,291				21,716				49,577				33,803
Net income		$	221,856			$	193,724			$	69,574			$	415,580			$	86,371
Net income per share:
Basic net income per share		$	1.80			$	1.57			$	0.55			$	3.37			$	0.68
Diluted net income per share		$	1.78			$	1.55			$	0.54			$	3.32			$	0.67
Number of shares used in per share calculations:
Basic			123,101				123,665				127,296				123,384				127,035
Diluted			124,786				125,202				128,829				124,999				128,389

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
		December 26,			September 26,			June 27,
		2010			2010			2010
		(unaudited)			(unaudited)			(1)
ASSETS
Cash and cash equivalents		$	729,060		$	628,281		$	545,767
Short-term investments			303,038			304,992			280,690
Accounts receivable, net			689,400			526,904			499,890
Inventories			333,874			338,335			318,479
Deferred income taxes			47,380			46,191			46,158
Other current assets			76,993			74,728			65,677
Total current assets			2,179,745			1,919,431			1,756,661
Property and equipment, net			229,769			206,238			200,336
Restricted cash and investments			165,244			165,244			165,234
Deferred income taxes			28,030			26,968			26,218
Goodwill and intangible assets			225,671			231,688			236,906
Other assets			104,758			102,727			102,037
Total assets		$	2,933,217		$	2,652,296		$	2,487,392
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities		$	689,871		$	612,397		$	558,657
Long-term debt and capital leases		$	16,524		$	15,077		$	17,645
Income taxes payable			118,323			114,946			110,462
Other long-term liabilities			23,720			23,248			32,493
Stockholders' equity			2,084,779			1,886,628			1,768,135
Total liabilities and stockholders' equity		$	2,933,217		$	2,652,296		$	2,487,392
1 Derived from audited financial statements

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
		Three Months Ended												Six Months Ended
		December 26,				September 26,				December 27,				December 26,				December 27,
		2010				2010				2009				2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	221,856			$	193,724			$	69,574			$	415,580			$	86,371
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization			18,663				17,948				18,184				36,611				35,865
Deferred income taxes			(3,039	)			(783	)			9,229				(3,822	)			21,711
Restructuring charges, net			-				(5,163	)			5,919				(5,163	)			8,012
Equity-based compensation expense			12,759				13,009				13,259				25,768				27,217
Income tax benefit on equity-based compensation plans			(918	)			5,083				303				4,165				214
Excess tax benefit on equity-based compensation plans			711				(3,939	)			(235	)			(3,228	)			(603	)
Other, net			(1,600	)			(1,964	)			173				(3,564	)			1,332
Changes in operating assets and liabilities:			(62,849	)			37,829				(43,096	)			(25,020	)			(104,105	)
Net cash provided by operating activities			185,583				255,744				73,310				441,327				76,014
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets			(38,025	)			(19,130	)			(6,893	)			(57,155	)			(12,725	)
Net sales/maturities (purchases) of available-for-sale securities			(1,160	)			(24,506	)			(1,016	)			(25,666	)			(10,791	)
Purchase of other investments			-				-				-				-				(961	)
Proceeds from sale of assets			1,544				-				-				1,544				-
Transfer of restricted cash and investments			-				(10	)			97				(10	)			(6,474	)
Net cash used for investing activities			(37,641	)			(43,646	)			(7,812	)			(81,287	)			(30,951	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt and capital lease obligations			(78	)			(3,333	)			(689	)			(3,411	)			(2,604	)
Net proceeds from issuance of long-term debt			-				-				52				-				336
Excess tax benefit on equity-based compensation plans			(711	)			3,939				235				3,228				603
Cash paid in advance for stock repurchase contracts			(50,000	)			-				-				(50,000	)			-
Treasury stock purchases			(4,151	)			(144,795	)			(576	)			(148,946	)			(2,932	)
Reissuances of treasury stock			-				7,155				-				7,155				5,761
Proceeds from issuance of common stock			3,407				835				4,126				4,242				6,382
Net cash provided by (used for) financing activities			(51,533	)			(136,199	)			3,148				(187,732	)			7,546
Effect of exchange rate changes on cash			4,370				6,615				357				10,985				3,390
Net increase in cash and cash equivalents			100,779				82,514				69,003				183,293				55,999
Cash and cash equivalents at beginning of period			628,281				545,767				361,163				545,767				374,167
Cash and cash equivalents at end of period		$	729,060			$	628,281			$	430,166			$	729,060			$	430,166

Reconciliation of U.S. GAAP Net Income to Ongoing Net Income
(in thousands, except per share data)
(unaudited)
		Three Months Ended				Three Months Ended
		December 26,				September 26,
		2010				2010
U.S. GAAP net income		$	221,856			$	193,724
Pre-tax non-ongoing items:
Restructuring and asset impairments - operating expenses			-				(5,163	)
Net tax expense on non-ongoing item			-				2,061
Net tax benefit of R&D credit			(4,763	)			-
Ongoing net income		$	217,093			$	190,622
Ongoing net income per diluted share		$	1.74			$	1.52
Number of shares used for diluted per share calculation			124,786				125,202
Reconciliation of U.S. GAAP Operating Expenses and Operating Income to Ongoing Operating Expenses and Operating Income
(in thousands, except percentages)
(unaudited)
		Three Months Ended				Three Months Ended
		December 26,				September 26,
		2010				2010
U.S. GAAP gross margin		$	407,433			$	377,326
U.S. GAAP operating expenses		$	166,329			$	153,332
Pre-tax non-ongoing items:
Restructuring and asset impairments - operating expenses			-				5,163
Ongoing operating expenses		$	166,329			$	158,495
Ongoing operating income		$	241,104			$	218,831
Ongoing operating margin as a percent of revenue			27.7	%			27.2	%

Reconciliation of U.S. GAAP Earnings to Ongoing Earnings Per Share
(in thousands, except per share data)
(unaudited)
		Twelve Months Ended
		December 26,
		2010
U.S. GAAP net income		$	675,878
Pre-tax non-ongoing items:
Restructuring and asset impairments - cost of goods sold			3,438
Restructuring and asset impairments - operating expenses			8,139
Net tax expense on non-ongoing items			(5,606	)
Net tax benefit of R&D credit			(4,763	)
Ongoing net income		$	677,086
Ongoing net income per diluted share		$	5.35
Number of shares used for diluted per share calculation*			126,590

* Shares for twelve months ended December 26, 2010 calculated using diluted share count for March through December 2010 quarters divided by four.

Lam Research Corporation
Shanye Hudson, 510-572-4589
Director, Investor Relations
shanye.hudson@lamresearch.com

Source: Lam Research Corporation

News Provided by Acquire Media