Lam Research Corporation Announces Earnings for the Quarter Ended September 25, 2005
Wednesday October 12, 4:05 pm ET
FREMONT, Calif.--(BUSINESS WIRE)--Oct. 12, 2005--Lam Research Corporation (NASDAQ: LRCX - News) today announced earnings for the quarter ended September 25, 2005. Revenue for the period was $320.9 million, and net income was $49.5 million, or $0.35 per diluted share, compared to revenue of $353.8 million and net income of $66.5 million, or $0.47 per diluted share, for the June 2005 quarter. Gross margin was $156.1 million and operating expenses were $96.4 million for the September 2005 quarter compared to gross margin of $175.9 million and operating expenses of $93.3 million for the June 2005 quarter.
Beginning in the September 2005 quarter, the Company included equity-based compensation expense in cost of goods sold and operating expenses of $1.1 million and $4.1 million, respectively, or $0.03 per diluted share after income tax expense. Gross margin as a percent of revenue for the September quarter was 48.6 percent compared to 49.7 percent in the June quarter. In the period, operating expenses, including the previously mentioned equity-based compensation expense, increased at a slower pace than originally planned.
New orders recorded in backlog increased 3 percent sequentially to $326 million. The geographic distribution of new orders as well as revenue during the September quarter is shown in the following table:
Region New Orders Revenue
-------------- -------------- --------------
North America 17% 16%
Europe 15% 12%
Japan 22% 26%
Korea 13% 17%
Asia Pacific 33% 29%
Cash, short-term investments and restricted cash balances were $873.9 million at the end of September, and cash flows provided by operating activities were $47.4 million during the quarter. Condensed Consolidated Statements of Cash Flows are included at the end of this press release. Deferred revenue and deferred profit balances were $107.4 million and $63.7 million, respectively. At the end of the period, unshipped orders in backlog were approximately $382 million, and the anticipated future revenue value of orders shipped from backlog to Japanese customers that are not recorded as deferred revenue was approximately $54 million.
"We are pleased with the results for the September quarter and proud of the performance our employees consistently deliver," stated Steve Newberry, Lam's president and chief executive officer. "Market share gains reflect the strength of our product portfolio and supported growth in new orders in the quarter. Looking forward, we are encouraged by signs that business is strengthening, driven by increased demand for production of leading-edge devices that are vital to a variety of new consumer products. We believe this will result in improved demand for our equipment and services through the balance of 2005."
"The Company continues to deliver excellent financial performance. Cash flows from operations represented the eighth consecutive quarter of positive operational cash generation. The Company was active in its commitment to its share repurchase program during the quarter, buying approximately 2.6 million shares for a total cash outlay of $78.7 million. We remain well positioned to continue delivering a level of performance that reflects our commitment to excellence in every facet of our business," Newberry 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 outlook for our business, the levels of demand for our equipment and services, our future financial performance, the continuing strength of our product portfolio, management's plans for continuation of our share repurchase program, our ability to execute to market share and profitability objectives, and our future ability to develop and produce leading-edge applications and deliver expertise that meet our customers' requirements. Some factors that may affect these forward-looking statements include: changing business conditions in the semiconductor industry and the overall economy and our plans for reacting to those changes, changing customer demands, the level of demand for new consumer products, our competitors' development of new technologies that could affect our market share, the success of our research and development programs, and management's determinations of the continued value of a share repurchase program. 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 with the Securities and Exchange Commission, including specifically the report on Form 10-K for the year ended June 26, 2005, 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 major provider of wafer fabrication equipment and services to the world's semiconductor industry. Lam's common stock trades on The NASDAQ National Market® under the symbol LRCX. Lam is a NASDAQ-100® company. The Company's World Wide Web address is lamresearch.com.
Consolidated Financial Tables Follow
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited)
Three Months Ended
--------------------------------------
September 25, June 26, September 26,
2005 2005 2004
----------- ---------- -------------
Total revenue $320,907 $353,767 $419,549
Cost of goods sold 164,828 177,908 204,788
----------- ---------- -------------
Gross margin 156,079 175,859 214,761
Gross margin as a percent
of revenue 48.6% 49.7% 51.2%
Research and development 51,242 49,474 50,358
Selling, general and
administrative 45,155 43,854 43,127
----------- ---------- -------------
Total operating expenses 96,397 93,328 93,485
Operating income 59,682 82,531 121,276
Operating margin as a percent
of revenue 18.6% 23.3% 28.9%
Other income, net 8,488 6,171 8
----------- ---------- -------------
Income before income taxes 68,170 88,702 121,284
Income tax expense 18,679 22,176 31,534
----------- ---------- -------------
Net income $ 49,491 $ 66,526 $ 89,750
=========== ========== =============
Net income per share:
Basic $ 0.36 $ 0.48 $ 0.66
=========== ========== =============
Diluted $ 0.35 $ 0.47 $ 0.64
=========== ========== =============
Number of shares used in per
share calculations:
Basic 136,453 138,208 135,478
=========== ========== =============
Diluted 141,430 142,518 139,808
=========== ========== =============
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 25, June 26,
2005 2005
(unaudited) (1)
----------- ----------
Assets:
Cash, cash equivalents and short-term
investments $ 788,816 $ 809,253
Accounts receivable, net 220,955 232,005
Inventories 113,702 110,051
Other current assets 99,463 93,527
---------- ----------
Total current assets 1,222,936 1,244,836
Property and equipment, net 40,010 41,082
Restricted cash 85,038 85,038
Other assets 76,690 77,859
---------- ----------
Total assets $1,424,674 $1,448,815
========== ==========
Liabilities and stockholders' equity:
Current liabilities $ 364,649 $ 379,133
---------- ----------
Other long-term liabilities $ 1,364 $ 2,786
Stockholders' equity 1,058,661 1,066,896
---------- ----------
Total liabilities and stockholders'
equity $1,424,674 $1,448,815
========== ==========
(1) Derived from audited financial statements.
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
--------------------------------------
September 25, June 26, September 26,
2005 2005 2004
----------- ---------- -------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 49,491 $ 66,526 $ 89,750
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 6,032 6,305 6,194
Deferred income taxes 15,374 51,187 29,624
Stock-based compensation 5,246 497 27
Tax benefit from employee stock
options - (28,303) -
Other, net 1,842 223 1,194
Change in working capital
accounts (30,604) 37,449 (86,407)
----------- ---------- -------------
Net cash provided by
operating activities 47,381 133,884 40,382
----------- ---------- -------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures (4,658) (4,226) (5,138)
Net sales (purchases) of
available-for-sale securities 51,598 (35,565) (17,308)
Transfer of restricted cash - 27,430 -
----------- ---------- -------------
Net cash provided by/
(used for) investing
activities 46,940 (12,361) (22,446)
----------- ---------- -------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Treasury stock purchases (78,690) (99,288) -
Reissuances of treasury stock 5,137 458 -
Proceeds from issuance of common
stock 12,174 23,456 10,939
----------- ---------- -------------
Net cash provided by/
(used for) financing
activities (61,379) (75,374) 10,939
----------- ---------- -------------
Effect of exchange rate changes
on cash (374) (361) 451
Net increase in cash and cash
equivalents 32,568 45,788 29,326
Cash and cash equivalents at
beginning of period 482,250 436,462 163,403
----------- ---------- -------------
Cash and cash equivalents at
end of period $514,818 $482,250 $192,729
=========== ========== =============
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Source: Lam Research Corporation |
