Lam Research Corporation Announces Earnings for the Quarter Ended December 28, 2003
Wednesday January 21, 4:10 pm ET
FREMONT, Calif.--(BUSINESS WIRE)--Jan. 21, 2004--Lam Research Corporation (Nasdaq:LRCX - News) today announced earnings for the quarter ended December 28, 2003. Revenue for the period was $191.5 million, and net income was $6.4 million, or $0.05 per diluted share, compared to revenue of $183.7 million and net income of $4.8 million, or $0.04 per diluted share, for the September 2003 quarter. Gross margin and operating expenses for the December 2003 quarter were $87.2 million and $79.2 million, respectively.
The Company believes the presentation of ongoing results, which excludes certain special items, is useful for analyzing the business because it enables comparisons for ongoing operations by removing the effects of expense recognition connected with its outsourcing strategy and consolidation. Tables that provide reconciliations of ongoing results to results under U.S. Generally Accepted Accounting Principles (GAAP) are included.
Ongoing net income for the December 2003 quarter was $10.0 million, or $0.07 per diluted share, versus ongoing net income of $5.4 million, or $0.04 per diluted share for the previous quarter. Ongoing gross margin for the December 2003 quarter was $86.1 million, or 45 percent of revenue, representing a sequential improvement of 2.4 percentage points. Improved utilization of factory resources and assets was the major contributor to the stronger gross margin performance.
New orders of approximately $271 million grew 28 percent over the prior quarter, accelerating the positive momentum started early in the calendar year and yielding an ending backlog of $375 million. The geographic distribution of new orders as well as revenue is shown in the following table:
-0-
Region New Orders Revenue
North America 9% 20%
Europe 20% 17%
Japan 20% 12%
Asia Pacific 51% 51%
Total cash (cash equivalents, short-term investments, and restricted cash) increased by $61.5 million to $704.5 million at the end of the December quarter. Focus on efficient use of working capital, including accounts receivable and inventory, supplemented the $31 million received from the exercise of employee stock options. Deferred revenue and profit were $47.6 million and $29.0 million, respectively at quarter end.
"I am pleased with the results for the December quarter," stated James W. Bagley, Lam's chairman and chief executive officer. "The Company's performance during the quarter reflects the inherent benefits of our new business model, and underscores the strength in our market position. New orders were higher than previously expected, and the business environment continues to be robust for Lam. Clearly, industry fundamentals have improved, and we are pleased that our flagship product set, the 2300(TM) Etch Series, is the first choice for many of the world's largest semiconductor makers," Bagley concluded.
Statements made in this press release which are not statements 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, but are not limited, to the benefits of the Company's business model, future market conditions (including the strength of the Company's market position, the business environment and industry fundamentals), and the prospective momentum of orders for Lam's equipment.
Such 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 with the Securities and Exchange Commission, including specifically the reports on Form 10-K for the year ended June 29, 2003, and the Form 10-Q for the quarter ended September 28, 2003, which 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 leading supplier of wafer processing equipment and services to the worldwide semiconductor manufacturing industry. The Company's common stock trades on the Nasdaq National Market under the symbol "LRCX." Lam's World Wide Web address is lamrc.com.
Consolidated Financial Tables to Follow
-0-
Reconciliation of U.S. GAAP Net Income to Ongoing Net Income
(in thousands, except per share data and percentages)
Three Months Ended
------------------
Dec. 28, Sept.28,
2003 2003
-------- ---------
U.S. GAAP net income $6,391 $4,786
Pre-tax restructuring recoveries - cost of goods
sold (1,079) (250)
Pre-tax net restructuring charges - operating
expenses 5,948 1,062
Tax benefit on net restructuring charges (1,217) (203)
-------- ---------
Ongoing net income $10,043 $5,395
======== =========
Ongoing net income per diluted share $0.07 $0.04
======== =========
Number of shares used for diluted per share
calculation 139,658 134,886
Income tax rate 25% 25%
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and
Operating Income to Ongoing Gross Margin, Operating Expenses
and Operating Income
(in thousands)
Three Months Ended
------------------
Dec. 28, Sept.28,
2003 2003
-------- ---------
U.S. GAAP gross margin $87,215 $78,518
Restructuring recoveries - cost of goods sold (1,079) (250)
-------- ---------
Ongoing gross margin $86,136 $78,268
U.S. GAAP operating expenses $79,167 $73,581
Net restructuring charges - operating expenses (5,948) (1,062)
-------- ---------
Ongoing operating expenses $73,219 $72,519
-------- ---------
Ongoing operating income $12,917 $5,749
======== =========
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data and percentages)
(unaudited)
Three Months Ended Six Months Ended
----------------------------- -------------------
Dec. 28, Sept. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2003 2002 2003 2002
--------- --------- --------- --------- ---------
Total revenue $191,508 $183,738 $184,569 $375,246 $382,089
Cost of goods sold 105,372 105,470 112,380 210,842 230,906
Cost of goods sold
- restructuring
recoveries (1,079) (250) (301) (1,329) (301)
--------- --------- --------- --------- ---------
Total cost of
goods sold 104,293 105,220 112,079 209,513 230,605
Gross margin 87,215 78,518 72,490 165,733 151,484
Gross margin as
a percent of
revenue 45.5% 42.7% 39.3% 44.2% 39.6%
Research and
development 39,078 38,526 39,739 77,604 81,121
Selling, general
and administrative 34,141 33,993 31,715 68,134 65,074
Restructuring
charges, net 5,948 1,062 2,053 7,010 2,053
--------- --------- --------- --------- ---------
Total operating
expenses 79,167 73,581 73,507 152,748 148,248
Operating income
(loss) 8,048 4,937 (1,017) 12,985 3,236
Other income
(expense):
Loss on equity derivative
contracts in Company
stock - - - - (16,407)
Other income, net 473 1,444 2,989 1,917 2,327
--------- --------- --------- --------- ---------
Income (loss) before
income taxes 8,521 6,381 1,972 14,902 (10,844)
Income tax expense 2,130 1,595 493 3,725 1,391
--------- --------- --------- --------- ---------
Net income (loss) $6,391 $4,786 $1,479 $11,177 $(12,235)
========= ========= ========= ========= =========
Net income (loss)
per share:
Basic $0.05 $0.04 $0.01 $0.09 $(0.10)
========= ========= ========= ========= =========
Diluted (1) $0.05 $0.04 $0.01 $0.08 $(0.10)
========= ========= ========= ========= =========
Number of shares
used in per share
calculations:
Basic 131,020 128,351 125,411 129,688 126,171
========= ========= ========= ========= =========
Diluted (1) 139,658 134,886 128,537 137,502 126,171
========= ========= ========= ========= =========
(1) For the three and six-month periods ended December 28, 2003 and
the three-month period ended September 28, 2003, diluted net income
per share includes the assumed exercise of employee stock options and
outstanding warrant, but excludes the assumed conversion of the
convertible subordinated 4% notes because the effect would have been
antidilutive. For the three-month period ended December 29, 2002,
diluted net income per share includes the assumed exercise of
employee stock options, but excludes the assumed exercise of the
outstanding warrant and conversion of the convertible subordinated 4%
notes because the effect would have been antidilutive. Outstanding
options, warrant, and convertible subordinated 4% and 5% notes for
the six-month period ended December 29, 2002 are excluded from the
computations of diluted net loss per share because the effects would
have been antidilutive due to the net loss for the period.
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Dec. 28, Sept. 28, June 29,
2003 2003 2003
(unaudited) (unaudited) (1)
----------- ----------- -----------
Assets:
Cash, cash equivalents and short-
term investments $586,009 $524,472 $507,413
Accounts receivable, net 114,811 113,975 107,602
Inventories 98,836 102,274 112,016
Other current assets 142,817 151,331 145,745
----------- ----------- -----------
Total current assets 942,473 892,052 872,776
Property and equipment, net 40,067 43,371 48,771
Restricted cash 118,468 118,468 118,468
Other assets 146,896 152,211 158,260
----------- ----------- -----------
Total assets $1,247,904 $1,206,102 $1,198,275
=========== =========== ===========
Liabilities and stockholders'
equity:
Other current liabilities $209,093 $203,680 $216,982
----------- ----------- -----------
Total current liabilities 209,093 203,680 216,982
Long-term debt and other
liabilities 322,555 325,239 332,209
Stockholders' equity 716,256 677,183 649,084
----------- ----------- -----------
Total liabilities and
stockholders' equity $1,247,904 $1,206,102 $1,198,275
=========== =========== ===========
(1) Derived from audited financial statements |
