Here is Lam's report:
Lam Research Corporation Reports Financial Results for the Quarter Ended December 24, 2017
FREMONT, Calif., Jan. 24, 2018 (GLOBE NEWSWIRE) -- Lam Research Corp. (Nasdaq:LRCX) today announced financial results for the quarter ended December 24, 2017 (the "December 2017 quarter").
Highlights for the December 2017 quarter were as follows:
- Shipments of $2.63 billion and revenue of $2.58 billion.
- U.S. GAAP gross margin of 46.7%, U.S. GAAP operating margin of 28.6%, and U.S. GAAP diluted EPS of $(0.06).
- Non-GAAP gross margin of 47.6%, non-GAAP operating margin of 30.2%, and non-GAAP diluted EPS of $4.34.
Key Financial Data for the Quarters Ended
December 24, 2017 and September 24, 2017
(in thousands, except per-share data, percentages, and basis points)
| U.S. GAAP | | | | December 2017 | | September 2017 | | Change Q/Q | | Shipments | | $ | 2,631,723 | | | $ | 2,381,565 | | | 11% | | Revenue | | $ | 2,580,815 | | | $ | 2,478,140 | | | + 4% | | Gross margin as percentage of revenue | | 46.7 | % | | 46.4 | % | | + 30 bps
| | Operating margin as percentage of revenue | | 28.6 | % | | 28.0 | % | | + 60 bps
| | Diluted EPS | | $ | (0.06 | ) | | $ | 3.21 | | | - 102% | | | | Non-GAAP | | | | December 2017 | | September 2017 | | Change Q/Q | | Shipments | | $ | 2,631,723 | | | $ | 2,381,565 | | | 11% | | Revenue | | $ | 2,580,815 | | | $ | 2,478,140 | | | + 4% | | Gross margin as percentage of revenue | | 47.6 | % | | 47.2 | % | | + 40 bps | | Operating margin as percentage of revenue | | 30.2 | % | | 29.6 | % | | + 60 bps | | Diluted EPS | | $ | 4.34 | | | $ | 3.46 | | | + 25% |
U.S. GAAP Financial Results
For the December 2017 quarter, revenue was $2,581 million, gross margin was $1,206 million, or 46.7% of revenue, operating expenses were $468 million, operating margin was 28.6% of revenue, and net loss was $(10) million, or $(0.06) per diluted share on a U.S. GAAP basis. This compares to revenue of $2,478 million, gross margin of $1,149 million, or 46.4% of revenue, operating expenses of $456 million, operating margin of 28.0% of revenue, and net income of $591 million, or $3.21 per diluted share, for the quarter ended September 24, 2017 (the "September 2017 quarter"). The December 2017 results were negatively impacted by a one-time provisional charge of $757 million associated with the recently enacted U.S. tax reform, which the Company will continue to evaluate during the measurement period.
Non-GAAP Financial Results
For the December 2017 quarter, non-GAAP gross margin was $1,228 million or 47.6% of revenue, non-GAAP operating expenses were $449 million, non-GAAP operating margin was 30.2% of revenue, and non-GAAP net income was $788 million, or $4.34 per diluted share. This compares to non-GAAP gross margin of $1,171 million or 47.2% of revenue, non-GAAP operating expenses of $438 million, non-GAAP operating margin of 29.6% of revenue, and non-GAAP net income of $628 million, or $3.46 per diluted share for the September 2017 quarter.
"Lam delivered another record quarter to conclude an extraordinary calendar year where we reached new milestones including nearly ten billion dollars in shipments and over thirteen dollars in non-GAAP earnings per share," said Martin Anstice, Lam Research's Chief Executive Officer. "Semiconductor innovation is contributing increased value in a data-driven economy and we believe that trend is quite fundamental, exciting and sustainable: in 2018 we expect record levels of customer equipment spending and another year of outperformance opportunity for the company."
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances decreased to $6.0 billion at the end of the December 2017 quarter compared to $6.4 billion at the end of the September 2017 quarter. Cash flow from operating activities during the December 2017 quarter total $29 million. Uses of cash during the quarter included: approximately $1,111 million of share repurchases, including net share settlement on employee stock-based compensation; approximately $206 million of purchases of available-for-sale securities, approximately $85 million of capital expenditures, and approximately $73 million of dividends paid to stockholders; partially offset by approximately $799 million of net proceeds on short-term borrowings.
Deferred revenue at the end of the December 2017 quarter increased to $1.1 billion as compared to $938 million at the end of the September 2017 quarter. Deferred profit at the end of the December 2017 quarter increased to $749 million as compared to $598 million at the end of the September 2017 quarter. 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 estimated future revenue from shipments to Japanese customers was approximately $289 million as of December 24, 2017 and $344 million as of September 24, 2017.
Geographic Distribution
The geographic distribution of shipments and revenue during the December 2017 quarter is shown in the following table:
| Region | Shipments | | Revenue | | Korea | 32% | | 30% | | Taiwan | 15% | | 15% | | Japan | 14% | | 16% | | China | 14% | | 11% | | United States | 10% | | 11% | | Southeast Asia | 10% | | 11% | | Europe | 5% | | 6% |
Outlook
For the March 2018 quarter, Lam is providing the following guidance:
| | U.S. GAAP | | Reconciling Items | | Non-GAAP | | Shipments | $3.175 Billion | +/- | $125 Million | | — | | $3.175 Billion | +/- | $125 Million | | Revenue | $2.850 Billion | +/- | $125 Million | | — | | $2.850 Billion | +/- | $125 Million | | Gross margin | 45.2% | +/- | 1% | | $22 | Million | | 46.0% | +/- | 1% | | Operating margin | 27.6% | +/- | 1% | | $39 | Million | | 29.0% | +/- | 1% | | Net income per diluted share | $4.10 | +/- | $0.15 | | $37 | Million | | $4.35 | +/- | $0.15 | | Diluted share count | 183 Million | | 2 | Million | | 181 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, balance sheet valuation adjustments, financing arrangements, other investments, measurement period adjustments associated with U.S. tax reform, 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 - amortization related to intangible assets acquired through business combinations, $22 million.
- Operating margin - amortization related to intangible assets acquired through business combinations, $39 million.
- Earnings per share - amortization related to intangible assets acquired though business combinations, $39 million; amortization of note discounts, $3 million; and associated tax benefit for non-GAAP items ($5 million); totaling $37 million.
- Diluted share count - impact of a note hedge issued contemporaneously with the convertible notes due 2018, 2 million shares.
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 December 2017 and September 2017 quarters exclude amortization related to intangible assets acquired through business combinations, costs associated with business process reengineering, acquisition and integration costs associated with a business combination, the amortization of note discounts, and tax benefit of non-GAAP items. Additionally, the December 2017 quarter results exclude estimated income tax expense associated with U.S. tax reform and the September 2017 quarter non-GAAP results exclude income tax benefit on the conclusion of tax matters related to a prior business combination.
Management uses non-GAAP gross margin, operating expense, operating income, operating margin, 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.
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; the estimated future revenue from shipments to Japanese customers; our revenue, industry, performance and general outlooks, and their drivers; our future strategic relevance to customers; our vision of the Company's future; technology demand trends; the legal and business factors that may affect our future tax rate; and our guidance for shipments, revenue, gross margin, operating margin, net income or earnings per diluted share, provisional tax estimate, and diluted share count. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; and the actions of our customers and competitors may be inconsistent with our expectations, 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 25, 2017 and our quarterly report on Form 10-Q for the fiscal quarter ended September 24, 2017 . 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.
About Lam Research
Lam Research Corp. 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.
continues at investor.lamresearch.com |
