Lam Research Corporation Reports Financial Results for the Quarter Ended March 31, 2019
GLOBENEWSWIRE 4:05 PM ET 4/24/2019
Symbol Last Price Change | LRCX | 195.44 | +0.66 (+0.34%) | | QUOTES AS OF 04:00:00 PM ET 04/24/2019 |
FREMONT, Calif., April 24, 2019 (GLOBE NEWSWIRE) -- Lam Research Corporation(LRCX) (the "Company," "Lam," "Lam Research") today announced financial results for the quarter ended March 31, 2019 (the “March 2019 quarter”).
Highlights for the March 2019 quarter were as follows:
- Revenue of $2.44 billion.
- U.S. GAAP gross margin of 44.0%, U.S. GAAP operating income as a percentage of revenue of 23.2%, and U.S. GAAP diluted EPS of $3.47.
- Non-GAAP gross margin of 45.1%, non-GAAP operating income as a percentage of revenue of 25.1%, and non-GAAP diluted EPS of $3.70.
Key Financial Data for the Quarters Ended
March 31, 2019 and December 23, 2018
(in thousands, except per-share data, percentages, and basis points)
| U.S. GAAP | | | | March 2019 | | December 2018 | | Change Q/Q | | Revenue | | $ | 2,439,048 | | | $ | 2,522,673 | | | - 3 | % | | Gross margin as percentage of revenue | | 44.0 | % | | 45.4 | % | | - 140 | bps | | Operating income as percentage of revenue | | 23.2 | % | | 27.4 | % | | - 420 | bps | | Diluted EPS | | $ | 3.47 | | | $ | 3.51 | | | - 1 | % | | | | | | | | | | Non-GAAP | | | | March 2019 | | December 2018 | | Change Q/Q | | Revenue | | $ | 2,439,048 | | | $ | 2,522,673 | | | - 3 | % | | Gross margin as percentage of revenue | | 45.1 | % | | 46.3 | % | | - 120 | bps | | Operating income as percentage of revenue | | 25.1 | % | | 28.8 | % | | - 370 | bps | | Diluted EPS | | $ | 3.70 | | | $ | 3.87 | | | - 4 | % |
U.S. GAAP Financial Results
For the March 2019 quarter, revenue was $2,439 million, gross margin was $1,074 million, or 44.0% of revenue, operating expenses were $509 million, operating income was 23.2% of revenue, and net income was $547 million, or $3.47 per diluted share on a U.S. GAAP basis. This compares to revenue of $2,523 million, gross margin of $1,145 million, or 45.4% of revenue, operating expenses of $455 million, operating income of 27.4% of revenue, and net income of $569 million, or $3.51 per diluted share, for the quarter ended December 23, 2018 (the “December 2018 quarter”). The March 2019 quarter included 14 weeks; the December 2018 quarter included 13 weeks.
Non-GAAP Financial Results
For the March 2019 quarter, non-GAAP gross margin was $1,100 million or 45.1% of revenue, non-GAAP operating expenses were $488 million, non-GAAP operating income was 25.1% of revenue, and non-GAAP net income was $584 million, or $3.70 per diluted share. This compares to non-GAAP gross margin of $1,167 million or 46.3% of revenue, non-GAAP operating expenses of $440 million, non-GAAP operating income of 28.8% of revenue, and non-GAAP net income of $628 million, or $3.87 per diluted share for the December 2018 quarter.
“Lam’s March quarter results demonstrate strong execution in a challenging near-term industry environment,” said Timothy Archer, Lam Research’s President and Chief Executive Officer. “By continuing to focus on customer needs and investing to extend differentiation in our product and services portfolio, Lam is well positioned to emerge stronger as market conditions improve.”
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances increased to $6.4 billion at the end of the March 2019 quarter as compared to $3.9 billion at the end of the December 2018 quarter. This increase was primarily the result of approximately $2.5 billion of proceeds from issuance of senior notes during the March 2019 quarter.
Deferred revenue and deferred profit at the end of the March 2019 quarter decreased to $441 million and $378 million, respectively, as compared to $493 million and $432 million, respectively, at the end of the December 2018 quarter. Lam’s deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptance. Shipments to customers in Japan are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to customers in Japan was approximately $80 million as of March 31, 2019 and $262 million as of December 23, 2018.
Geographic Distribution
The geographic distribution of revenue during the March 2019 quarter is shown in the following table:
| Region | Revenue | | Korea | 25 | % | | Taiwan | 23 | % | | Japan | 17 | % | | China | 17 | % | | United States | 9 | % | | Southeast Asia | 5 | % | | Europe | 4 | % | Outlook
For the June 2019 quarter, Lam is providing the following guidance:
| | U.S. GAAP | | Reconciling Items | | Non-GAAP | | Revenue | $2.35 Billion | +/- | $150 Million | | — | | $2.35 Billion | +/- | $150 Million | | Gross margin as a percentage of revenue | | 45.4 | % | +/- | | 1 | % | | $ | 3 | | Million | | | 45.5 | % | +/- | | 1 | % | | Operating income as a percentage of revenue | | 25.3 | % | +/- | | 1 | % | | $ | 16 | | Million | | | 26.0 | % | +/- | | 1 | % | | Net income per diluted share | $ | 3.31 | | +/- | $ | 0.20 | | | $ | 14 | | Million | | $ | 3.40 | | +/- | $ | 0.20 | | | Diluted share count | 155 Million | | — | | 155 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, other investments, or other significant transactions that may be completed 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, $3 million.
- Operating income as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $16 million.
- Earnings per share - amortization related to intangible assets acquired though business combinations, $16 million; amortization of note discounts, $1 million; and associated tax benefit for non-GAAP items ($3 million); totaling $14 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 March 2019 and December 2018 quarters exclude amortization related to intangible assets acquired through business combinations, restructuring charges, amortization of note discounts, income tax benefit of non-GAAP items, and income tax benefit on the conclusion of tax matters related to a prior business combination. Additionally, the December 2018 quarter non-GAAP results exclude estimated income tax impacts associated with U.S. tax reform.
Management uses non-GAAP gross margin, operating expense, operating income, 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 investor.lamresearch.com. |
