Exhibit 99.1
FOR IMMEDIATE RELEASE
Lam Research Corporation Contacts:
Carol Raeburn, Investor Relations, phone: 510-572-4450, e-mail:carol.raeburn@lamresearch.com
Lam Research Corporation Reports Financial Results for the Quarter Ended June 29, 2014
FREMONT, Calif., July 30, 2014 - Lam Research Corp. (NASDAQ: LRCX) today announced financial results for the quarter ended June 29, 2014.
Highlights for the June 2014 quarter were as follows:
| | • | | Revenue of $1,249 million, up 2% from the prior quarter |
| | • | | GAAP gross margin of 44.6%, GAAP operating margin of 17.3% and GAAP diluted EPS of $1.35 |
| | • | | Non-GAAP gross margin of 46.4%, non-GAAP operating margin of 20.6%, and non-GAAP diluted EPS of $1.25 |
Financial Highlights for the Quarters Ended June 29, 2014 and March 30, 2014
(in thousands, except per-share data and percentages)
| | | | | | | | | | | | |
U.S. GAAP | |
| | | June 2014 | | | March 2014 | | | Change Q/Q | |
Revenue | | $ | 1,248,797 | | | $ | 1,227,392 | | | | +2% | |
Gross margin as percentage of revenue | | | 44.6 | % | | | 43.2 | % | | | +140 bps | |
Operating margin as percentage of revenue | | | 17.3 | % | | | 15.6 | % | | | +170 bps | |
Diluted EPS | | $ | 1.35 | | | $ | 0.96 | | | | +41% | |
|
Non-GAAP | |
| | | June 2014 | | | March 2014 | | | Change Q/Q | |
Revenue | | $ | 1,248,797 | | | $ | 1,227,392 | | | | +2% | |
Gross margin as percentage of revenue | | | 46.4 | % | | | 45.5 | % | | | +90 bps | |
Operating margin as percentage of revenue | | | 20.6 | % | | | 20.2 | % | | | +40 bps | |
Diluted EPS | | $ | 1.25 | | | $ | 1.26 | | | | -1% | |
GAAP Financial Results
Revenue for the period was $1,249 million, gross margin was $557.0 million, or 44.6% of revenue, operating expenses were $341.2 million, operating margin was 17.3% of revenue, and net income was $233.4 million, or $1.35 per diluted share on a GAAP basis. This compares to revenue of $1,227 million, gross margin of $530.8 million, or 43.2% of revenue, operating expenses of $338.9 million, operating margin of 15.6% of revenue, and net income of $164.4 million, or $0.96 per diluted share, for the March 2014 quarter. Our June 2014 results benefited from an $83 million gain on sale of non-essential real estate.
Non-GAAP Financial Results
Non-GAAP gross margin was $579.9 million or 46.4% of revenue, non-GAAP operating expenses were $322.2 million, non-GAAP operating margin was 20.6% of revenue, and non-GAAP net income was $217.2 million, or $1.25 per diluted share. This compares to non-GAAP gross margin of $558.9 million or 45.5% of revenue, non-GAAP operating expenses of $311.0 million, non-GAAP operating margin of 20.2% of revenue, and non-GAAP net income of $216.4 million, or $1.26 per diluted share for the March 2014 quarter.
“Lam’s June quarter and fiscal year results demonstrate strong execution of our growth strategy during a transformative period for the Company,” stated Martin Anstice, Lam Research’s president and chief executive officer. “Fiscal year results included record revenues in each successive quarter and operating income more than doubled year-over-year. Central to our financial and operational outperformance is our close collaboration with our customers in addressing the technical and economic challenges of scaling. We believe these efforts provide opportunities to build upon this foundation with market growth and share gains at the key inflections that will drive wafer fab equipment investment for the foreseeable future.”
~more~
page 1 of 8
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investment balances increased to $3.2 billion at the end of the June 2014 quarter compared to $2.9 billion at the end of the March 2014 quarter. This increase was primarily the result of approximately $246 million in cash flows from operating activities and approximately $135 million of cash proceeds on sale of assets during the June 2014 quarter and was partially offset by approximately $42 million of capital expenditures and approximately $40 million of stock repurchases.
Deferred revenue and deferred profit balances at the end of the June 2014 quarter decreased to $361.6 million and $235.9 million, respectively, as compared to $431.5 million and $257.3 million, respectively, at the end of the March 2014 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 anticipated future revenue from shipments to Japanese customers was approximately $34.0 million as of June 29, 2014.
Geographic Distribution
The geographic distribution of shipments and revenue during the June 2014 quarter is shown in the following table:
| | | | | | | | |
Region | | Shipments | | | Revenue | |
United States | | | 23 | % | | | 18 | % |
Europe | | | 7 | % | | | 6 | % |
Japan | | | 14 | % | | | 14 | % |
Korea | | | 25 | % | | | 28 | % |
Taiwan | | | 18 | % | | | 20 | % |
Southeast Asia | | | 4 | % | | | 3 | % |
China | | | 9 | % | | | 11 | % |
Outlook
For the September 2014 quarter, Lam is providing the following guidance:
| | | | | | | | |
| | | GAAP | | Reconciling
Items | | | Non-GAAP |
Shipments | | $1.11 Billion +/- $50 Million | | | — | | | $1.11 Billion +/- $50 Million |
Revenue | | $1.15 Billion +/- $50 Million | | | — | | | $1.15 Billion +/- $50 Million |
Gross margin | | 43.7% +/- 1% | | | $21 Million | | | 45.5% +/- 1% |
Operating margin | | 14.3% +/- 1% | | | $37 Million | | | 17.5% +/- 1% |
Earnings per share | | $0.71 +/- $0.07 | | | $38 Million | | | $0.92 +/- $0.07 |
Diluted share count | | 177 Million | | | | | | 177 Million |
The information provided above is only an estimate of what the Company believes is realizable as of the date of this release. 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 in the Novellus transaction, $21 million. |
| | • | | Operating margin - amortization related to intangible assets acquired in the Novellus transaction, $37 million. |
| | • | | Earnings per share - amortization related to intangible assets acquired in the Novellus transaction, $37 million; the amortization of convertible note discounts, $8 million; and the associated tax benefit for non-GAAP items ($7) million, totaling $38 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 June 2014 and March 2014 quarters exclude rationalization of certain product configurations, amortization related to intangible assets acquired in the Novellus transaction, the amortization of convertible note discounts, and tax expense (benefit) of non-GAAP items. Additionally, the June 2014 quarter non-GAAP results exclude the release of acquisition-related inventory fair value impacts, restructuring charges, cost associated with the disposition of business, gain on sale of real estate, and tax benefit on successful resolution of certain tax matters. The March 2014 quarter non-GAAP results also exclude the impairment of a long-lived asset and expenses associated with the synthetic lease impairment.
Management uses non-GAAP gross margin, operating income, operating expenses, 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 web site athttp://investor.lamresearch.com .
~more~
page 2 of 8
Lam Announces Financial Results for the June 2014 Quarter
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 of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to, the anticipated revenue from shipments to Japanese customers, our ability to continue to successfully execute our growth strategy during transformative periods, our ability to continue to successfully collaborate closely with customers, our ability to address the technical and economic challenges of scaling, our ability to achieve market growth and share gains at key inflections, our ability to obtain and maintain market share in wafer fab equipment investment, our ability to deliver growth and value for our customers and our shareholders, and our guidance for shipments, revenue, gross margin, operating margin, and earnings per share. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, 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 30, 2013 and Forms 10-Q for the three months ended September 29, 2013, December 29, 2013 and March 30, 2014. 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.
About Lam Research
Lam Research Corp. (NASDAQ:LRCX) is a trusted global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam’s broad portfolio of market-leading etch, deposition, strip, and wafer cleaning solutions help customers achieve success on the wafer by enabling device features that are 1,000 times smaller than a grain of sand, resulting in smaller, faster, and more power-efficient chips. Through collaboration, continuous innovation and delivering on commitments, Lam is transforming atomic-scale engineering and enabling our customers to shape the future of technology. Based in Fremont, Calif., Lam Research is an S&P 500® company whose common stock trades on the NASDAQ Global Select Market under the symbol LRCX. For more information, please visithttp://www.lamresearch.com.
Consolidated Financial Tables Follow.
###
page 3 of 8
Lam Announces Financial Results for the June 2014 Quarter
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | June 29,
2014 | | | March 30,
2014 | | | June 30,
2013 | | | June 29,
2014 | | | June 30,
2013 | |
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (1) | |
Revenue | | $ | 1,248,797 | | | $ | 1,227,392 | | | $ | 986,214 | | | $ | 4,607,309 | | | $ | 3,598,916 | |
Cost of goods sold | | | 691,761 | | | | 696,594 | | | | 572,287 | | | | 2,599,828 | | | | 2,195,857 | |
Gross margin | | | 557,036 | | | | 530,798 | | | | 413,927 | | | | 2,007,481 | | | | 1,403,059 | |
Gross margin as a percent of revenue | | | 44.6 | % | | | 43.2 | % | | | 42.0 | % | | | 43.6 | % | | | 39.0 | % |
Research and development | | | 185,449 | | | | 185,978 | | | | 180,220 | | | | 716,471 | | | | 683,688 | |
Selling, general and administrative | | | 155,737 | | | | 152,883 | | | | 147,209 | | | | 613,341 | | | | 601,300 | |
| | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 341,186 | | | | 338,861 | | | | 327,429 | | | | 1,329,812 | | | | 1,284,988 | |
| | | | | | | | | | | | | | | | | | | | |
Operating income | | | 215,850 | | | | 191,937 | | | | 86,498 | | | | 677,669 | | | | 118,071 | |
Operating margin as a percent of revenue | | | 17.3 | % | | | 15.6 | % | | | 8.8 | % | | | 14.7 | % | | | 3.3 | % |
Gain on sale of real estate | | | 83,090 | | | | — | | | | — | | | | 83,090 | | | | — | |
Other expense, net | | | (9,442 | ) | | | (9,855 | ) | | | (12,251 | ) | | | (37,396 | ) | | | (51,413 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 289,498 | | | | 182,082 | | | | 74,247 | | | | 723,363 | | | | 66,658 | |
Income tax expense (benefit) | | | 56,103 | | | | 17,686 | | | | (11,460 | ) | | | 91,074 | | | | (47,221 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 233,395 | | | $ | 164,396 | | | $ | 85,707 | | | $ | 632,289 | | | $ | 113,879 | |
| | | | | | | | | | | | | | | | | | | | |
Net income per share: | | | | | | | | | | | | | | | | | | | | |
Basic net income per share | | $ | 1.44 | | | $ | 1.01 | | | $ | 0.53 | | | $ | 3.84 | | | $ | 0.67 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted net income per share | | $ | 1.35 | | | $ | 0.96 | | | $ | 0.50 | | | $ | 3.62 | | | $ | 0.66 | |
| | | | | | | | | | | | | | | | | | | | |
Number of shares used in per share calculations: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 162,215 | | | | 162,238 | | | | 162,520 | | | | 164,741 | | | | 168,932 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 173,345 | | | | 171,636 | | | | 169,722 | | | | 174,503 | | | | 173,430 | |
| | | | | | | | | | | | | | | | | | | | |
Cash dividend declared per share | | $ | 0.18 | | | $ | — | | | $ | — | | | $ | 0.18 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | |
| (1) | Derived from audited financial statements |
page 4 of 8
Lam Announces Financial Results for the June 2014 Quarter
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| | | | | | | | | | | | |
| | | June 29,
2014 | | | March 30,
2014 | | | June 30,
2013 | |
| | | (unaudited) | | | (unaudited) | | | (1) | |
ASSETS | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 1,452,677 | | | $ | 1,292,301 | | | $ | 1,162,473 | |
Short-term investments | | | 1,612,967 | | | | 1,462,171 | | | | 1,334,745 | |
Accounts receivable, net | | | 800,616 | | | | 818,390 | | | | 602,624 | |
Inventories | | | 740,503 | | | | 717,356 | | | | 559,317 | |
Other current assets | | | 176,899 | | | | 157,131 | | | | 134,670 | |
| | | | | | | | | | | | |
Total current assets | | | 4,783,662 | | | | 4,447,349 | | | | 3,793,829 | |
Property and equipment, net | | | 543,496 | | | | 552,591 | | | | 603,910 | |
Restricted cash and investments | | | 146,492 | | | | 143,914 | | | | 166,536 | |
Goodwill and intangible assets | | | 2,360,303 | | | | 2,408,913 | | | | 2,526,541 | |
Other assets | | | 159,353 | | | | 154,600 | | | | 159,499 | |
| | | | | | | | | | | | |
Total assets | | $ | 7,993,306 | | | $ | 7,707,367 | | | $ | 7,250,315 | |
| | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
Current liabilities | | $ | 1,582,001 | | | $ | 1,542,705 | | | $ | 1,404,475 | |
| | | | | | | | | | | | |
Long-term debt and capital leases | | $ | 817,202 | | | $ | 810,688 | | | $ | 789,256 | |
Income taxes payable | | | 258,357 | | | | 251,080 | | | | 246,479 | |
Other long-term liabilities | | | 122,662 | | | | 111,346 | | | | 134,313 | |
| | | | | | | | | | | | |
Total liabilities | | $ | 2,780,222 | | | $ | 2,715,819 | | | $ | 2,574,523 | |
| | | | | | | | | | | | |
Senior convertible notes | | | 183,349 | | | | 184,256 | | | | 186,920 | |
Stockholders’ equity(2) | | | 5,029,735 | | | | 4,807,292 | | | | 4,488,872 | |
| | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 7,993,306 | | | $ | 7,707,367 | | | $ | 7,250,315 | |
| | | | | | | | | | | | |
| (1) | Derived from audited financial statements |
| (2) | Common shares issued and outstanding were 162,350 as of June 29, 2014, 161,988 shares as of March 30, 2014, and 162,873 shares as of June 30, 2013. |
page 5 of 8
Lam Announces Financial Results for the June 2014 Quarter
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | June 29,
2014 | | | March 30,
2014 | | | June 30,
2013 | | | June 29,
2014 | | | June 30,
2013 | |
| | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (unaudited) | | | (1) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 233,395 | | | $ | 164,396 | | | $ | 85,707 | | | $ | 632,289 | | | $ | 113,879 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 71,115 | | | | 73,256 | | | | 76,051 | | | | 292,254 | | | | 304,116 | |
Deferred income taxes | | | (4,104 | ) | | | (816 | ) | | | (22,884 | ) | | | 7,537 | | | | (70,155 | ) |
Impairment of long-lived assets | | | — | | | | 4,000 | | | | — | | | | 11,632 | | | | — | |
Equity-based compensation expense | | | 33,085 | | | | 24,334 | | | | 25,241 | | | | 103,700 | | | | 99,330 | |
Impairment of investment | | | — | | | | — | | | | — | | | | — | | | | 3,711 | |
Income tax benefit on equity-based compensation plans | | | 6,269 | | | | (296 | ) | | | 364 | | | | 5,973 | | | | (483 | ) |
Excess tax benefit on equity-based compensation plans | | | (6,361 | ) | | | 296 | | | | (364 | ) | | | (6,065 | ) | | | 539 | |
Amortization of convertible note discount | | | 8,411 | | | | 8,313 | | | | 8,028 | | | | 33,063 | | | | 31,558 | |
Gain on sale of real estate | | | (83,090 | ) | | | — | | | | — | | | | (83,090 | ) | | | — | |
Other, net | | | 8,241 | | | | 2,741 | | | | 5,342 | | | | 12,669 | | | | 37,201 | |
Changes in operating asset and liabilities: | | | (21,070 | ) | | | 13,986 | | | | (2,497 | ) | | | (292,913 | ) | | | 200,237 | |
| | | | | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | | | 245,891 | | | | 290,210 | | | | 174,988 | | | | 717,049 | | | | 719,933 | |
| | | | | | | | | | | | | | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | | | | | |
Capital expenditures and intangible assets | | | (41,764 | ) | | | (41,638 | ) | | | (43,140 | ) | | | (145,503 | ) | | | (160,795 | ) |
Cash paid for business acquisition | | | (11,839 | ) | | | — | | | | (800 | ) | | | (30,227 | ) | | | (9,916 | ) |
Net purchases of available-for-sale securities | | | (155,035 | ) | | | (82,744 | ) | | | (6,442 | ) | | | (283,966 | ) | | | (58,405 | ) |
(Issuance) repayments of notes receivable | | | — | | | | — | | | | (10,000 | ) | | | 10,000 | | | | (10,000 | ) |
Proceeds from sale of assets | | | 134,762 | | | | — | | | | — | | | | 156,397 | | | | 660 | |
Transfer of restricted cash and investments | | | (637 | ) | | | 28,572 | | | | (328 | ) | | | 28,085 | | | | (181 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net cash used for investing activities | | | (74,513 | ) | | | (95,810 | ) | | | (60,710 | ) | | | (265,214 | ) | | | (238,637 | ) |
| | | | | | | | | | | | | | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | | | | | |
Principal payments on long-term debt and capital lease obligations | | | (739 | ) | | | (112 | ) | | | (698 | ) | | | (1,658 | ) | | | (2,234 | ) |
Excess tax benefit on equity-based compensation plans | | | 6,361 | | | | (296 | ) | | | 364 | | | | 6,065 | | | | (539 | ) |
Treasury stock purchases | | | (40,249 | ) | | | (52,415 | ) | | | (2,275 | ) | | | (244,859 | ) | | | (955,661 | ) |
Reissuances of treasury stock related to employee stock purchase plan | | | 14,597 | | | | 13,210 | | | | 12,846 | | | | 42,926 | | | | 31,265 | |
Proceeds from issuance of common stock | | | 8,657 | | | | 5,111 | | | | 16,713 | | | | 34,791 | | | | 39,379 | |
| | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used for) financing activities | | | (11,373 | ) | | | (34,502 | ) | | | 26,950 | | | | (162,735 | ) | | | (887,790 | ) |
| | | | | | | | | | | | | | | | | | | | |
Effect of exchange rate changes on cash | | | 371 | | | | (152 | ) | | | 2,136 | | | | 1,104 | | | | 4,215 | |
Net increase (decrease) in cash and cash equivalents | | | 160,376 | | | | 159,746 | | | | 143,364 | | | | 290,204 | | | | (402,279 | ) |
Cash and cash equivalents at beginning of period | | | 1,292,301 | | | | 1,132,555 | | | | 1,019,109 | | | | 1,162,473 | | | | 1,564,752 | |
| | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | | $ | 1,452,677 | | | $ | 1,292,301 | | | $ | 1,162,473 | | | $ | 1,452,677 | | | $ | 1,162,473 | |
| | | | | | | | | | | | | | | | | | | | |
| (1) | Derived from audited financial statements |
page 6 of 8
Lam Announces Financial Results for the June 2014 Quarter
Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)
| | | | | | | | |
| | | Three Months Ended | | | Three Months Ended | |
| | | June 29,
2014 | | | March 30,
2014 | |
Revenue | | $ | 1,248,797 | | | $ | 1,227,392 | |
Gross margin | | $ | 579,888 | | | $ | 558,881 | |
Gross margin as percentage of revenue | | | 46.4 | % | | | 45.5 | % |
Operating expenses | | $ | 322,155 | | | $ | 311,046 | |
Operating income | | $ | 257,733 | | | $ | 247,835 | |
Operating margin as a percentage of revenue | | | 20.6 | % | | | 20.2 | % |
Net income | | $ | 217,228 | | | $ | 216,384 | |
Net income per diluted share | | $ | 1.25 | | | $ | 1.26 | |
Shares used in per share calculation - diluted | | | 173,345 | | | | 171,636 | |
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income
(in thousands, except per share data)
(unaudited)
| | | | | | | | |
| | | Three Months Ended | | | Three Months Ended | |
| | | June 29,
2014 | | | March 30,
2014 | |
U.S. GAAP net income | | $ | 233,395 | | | $ | 164,396 | |
Pre-tax non-GAAP items: | | | | | | | | |
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | | | 21,685 | | | | 21,670 | |
Costs associated with rationalization of certain product configurations - cost of goods sold | | | — | | | | 4,855 | |
Acquisition-related inventory fair value impact - cost of goods sold | | | 1,167 | | | | — | |
Synthetic lease impairment - cost of goods sold | | | — | | | | 1,558 | |
Amortization related to intangible assets acquired in Novellus transaction - operating expenses | | | 16,547 | | | | 16,537 | |
Restructuring charges - operating expenses | | | 295 | | | | — | |
Costs associated with rationalization of certain product configurations - operating expenses | | | 1,086 | | | | 1,922 | |
Cost associated with disposition of business - operating expense | | | 1,103 | | | | — | |
Impairment of long lived asset - operating expense | | | — | | | | 4,000 | |
Synthetic lease impairment - operating expense | | | — | | | | 5,356 | |
Amortization of convertible note discount, Lam notes - other expense, net | | | 7,504 | | | | 7,416 | |
Amortization of convertible note discount, Novellus assumed notes - other expense, net | | | 763 | | | | 999 | |
Gain on sale of real estate | | | (83,090 | ) | | | — | |
Net tax expense (benefit) on non-GAAP items | | | 17,075 | | | | (12,325 | ) |
Net income tax benefit on successful resolution of certain tax matters | | | (302 | ) | | | — | |
| | | | | | | | |
Non-GAAP net income | | $ | 217,228 | | | $ | 216,384 | |
| | | | | | | | |
Non-GAAP net income per diluted share | | $ | 1.25 | | | $ | 1.26 | |
| | | | | | | | |
Number of shares used for diluted per share calculation | | | 173,345 | | | | 171,636 | |
page 7 of 8
Lam Announces Financial Results for the June 2014 Quarter
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income
(in thousands, except percentages)
(unaudited)
| | | | | | | | |
| | | Three Months Ended | | | Three Months Ended | |
| | | June 29,
2014 | | | March 30,
2014 | |
U.S. GAAP gross margin | | $ | 557,036 | | | $ | 530,798 | |
Pre-tax non-GAAP items: | | | | | | | | |
Amortization related to intangible assets acquired in Novellus transaction - cost of goods sold | | | 21,685 | | | | 21,670 | |
Costs associated with rationalization of certain product configurations - cost of goods sold | | | — | | | | 4,855 | |
Acquisition-related inventory fair value impact - cost of goods sold | | | 1,167 | | | | — | |
Synthetic lease impairment - cost of goods sold | | | — | | | | 1,558 | |
| | | | | | | | |
Non-GAAP gross margin | | $ | 579,888 | | | $ | 558,881 | |
| | | | | | | | |
U.S. GAAP gross margin as a percentage of revenue | | | 44.6 | % | | | 43.2 | % |
Non-GAAP gross margin as a percentage of revenue | | | 46.4 | % | | | 45.5 | % |
U.S. GAAP operating expenses | | $ | 341,186 | | | $ | 338,861 | |
Pre-tax non-GAAP items: | | | | | | | | |
Amortization related to intangible assets acquired in Novellus transaction - operating expenses | | | (16,547 | ) | | | (16,537 | ) |
Restructuring charges - operating expenses | | | (295 | ) | | | — | |
Costs associated with rationalization of certain product configurations - operating expenses | | | (1,086 | ) | | | (1,922 | ) |
Cost associated with disposition of business - operating expense | | | (1,103 | ) | | | — | |
Impairment of long lived asset - operating expense | | | — | | | | (4,000 | ) |
Synthetic lease impairment - operating expense | | | — | | | | (5,356 | ) |
| | | | | | | | |
Non-GAAP operating expenses | | $ | 322,155 | | | $ | 311,046 | |
| | | | | | | | |
Non-GAAP operating income | | $ | 257,733 | | | $ | 247,835 | |
| | | | | | | | |
Non-GAAP operating margin as a percent of revenue | | | 20.6 | % | | | 20.2 | % |
page 8 of 8
