EXHIBIT 99.1
FOR IMMEDIATE RELEASE
LAM RESEARCH CORPORATION CONTACT:
Kathleen Bela, Investor Relations, phone: 510/572-4566, e-mail:
kathleen.bela@lamrc.com
LAM RESEARCH CORPORATION ANNOUNCES 2003 FOURTH QUARTER EARNINGS
FREMONT, Calif., July 23, 2003 -- Lam Research Corporation (Nasdaq: LRCX) today
announced earnings for the fourth quarter and year ended June 29, 2003. Revenue
for the June 2003 quarter was $186.1 million, and net income was $3.7 million,
or $0.03 per diluted share, compared to revenue of $187.1 million and net income
of $0.8 million, or $0.01 per diluted share, for the March 2003 quarter.
The company believes the presentation of ongoing results, which excludes the
effects of significant net tax benefits and net restructuring charges, is useful
for analyzing the business because it better enables comparisons for ongoing
operations and removes the effects of expense recognition connected with our
outsourcing strategy and consolidation. Tables that provide reconciliations of
ongoing results to results under Generally Accepted Accounting Principles (GAAP)
are included. Ongoing net income in the June 2003 quarter was $2.5 million, or
$0.02 per diluted share, versus ongoing net income of $3.8 million, or $0.03 per
diluted share, for the March 2003 quarter.
New orders of $192 million in the June 2003 quarter reached levels recorded in
the prior quarter; the geographic distribution of new orders as well as revenue
is shown in the following table:
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LAM ANNOUNCES 2003 FOURTH QUARTER EARNINGS...........................PAGE 2 OF 6
Region New Orders Revenue
- ------ ---------- -------
North America 22% 34%
Europe 16% 19%
Japan 8% 8%
Asia Pacific 54% 39%
Ongoing gross margin for the June 2003 quarter was $76.5 million, or 41.1
percent of revenue, a sequential improvement from 40.2 percent of revenue. The
improved performance includes the contribution of our outsourcing strategy and
other cost reduction initiatives. Ongoing operating expenses were $74.9 million
compared to $72.2 million in the March 2003 quarter, the result of an increased
number of working days and higher employee compensation costs. Production output
for the period was approximately $175 million.
Owing to focused asset management initiatives, operating cash generation in the
period was approximately $32 million, driving total cash (cash equivalents,
short-term investments, and restricted cash) up $41 million to $626 million at
the end of the fiscal year.
"The results for the June quarter highlighted our progress on a number of key
metrics," stated James W. Bagley, Lam's chairman and chief executive officer.
"Notably, our market share gains in dielectric etch and 300 mm contributed to a
positive book-to-bill in a difficult business environment. In addition, our
outsourcing initiatives and cost reduction efforts continue to improve our gross
margin," continued Bagley.
"Lam employees have made significant contributions to our success, and their
efforts have resulted in a suite of compelling products and services for our
customers, and increasing returns for our shareholders," 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 future market
conditions (including market share gains), ongoing reductions in operating
expenses, and the Company's future financial performance, ability to deliver
customer solutions and shareholder returns.
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LAM ANNOUNCES 2003 FOURTH QUARTER EARNINGS...........................PAGE 3 OF 6
Such statements are based on current expectations and are subject to risks,
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 30, 2002, and the Form 10-Q for the quarter ended March 30, 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 http://www.lamrc.com.
Consolidated Financial Tables to Follow
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LAM ANNOUNCES 2003 FOURTH QUARTER EARNINGS...........................PAGE 4 OF 6
RECONCILIATION OF US GAAP NET INCOME TO ONGOING NET INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
June 29, March 30,
2003 2003
-------------- -------------
U.S. GAAP net income $ 3,699 $ 797
Pre-tax restructuring recoveries - cost of goods sold (663) -
Pre-tax net restructuring charges - operating expenses 9,805 4,043
Tax benefit on net restructuring charges (2,286) (1,011)
Other net tax benefits (8,097) -
------------- -------------
Ongoing net income $ 2,458 $ 3,829
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Ongoing net income per diluted share $ 0.02 $ 0.03
============= =============
Number of shares used for diluted per share calculation 131,420 129,550
Income tax rate 25% 25%
RECONCILIATION OF US GAAP GROSS MARGIN, OPERATING EXPENSES AND OPERATING LOSS
TO ONGOING GROSS MARGIN, OPERATING EXPENSES AND OPERATING INCOME
(IN THOUSANDS)
Three Months Ended
June 29, March 30,
2003 2003
------------- -------------
U.S. GAAP Gross Margin $ 77,124 $ 75,221
Restructuring recoveries - cost of goods sold (663) -
------------- -------------
Ongoing gross margin $ 76,461 $ 75,221
U.S. GAAP Operating Expenses $ 84,697 $ 76,269
Net restructuring charges - operating expenses (9,805) (4,043)
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Ongoing operating expenses $ 74,892 $ 72,226
------------- -------------
Ongoing operating income $ 1,569 $ 2,995
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LAM ANNOUNCES 2003 FOURTH QUARTER EARNINGS...........................PAGE 5 OF 6
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
JUNE 29, MARCH 30, JUNE 30, JUNE 29, JUNE 30,
2003 2003 2002 2003 2002
----------- ----------- ----------- --------- ---------
(unaudited) (unaudited) (unaudited)
Total revenue $ 186,086 $ 187,059 $ 180,256 $ 755,234 $ 943,114
Cost and expenses:
Cost of goods sold 109,625 111,838 115,587 452,369 632,319
Cost of goods sold - restructuring charges (recoveries) (663) - (1,674) (964) 5,926
Cost of goods sold - patent settlement - - - - 38,780
--------- --------- --------- --------- ---------
Total cost of goods sold 108,962 111,838 113,913 451,405 677,025
Gross margin 77,124 75,221 66,343 303,829 266,089
Gross margin as a percent of revenue 41.4% 40.2% 36.8% 40.2% 28.2%
Research and development 40,391 38,981 41,701 160,493 179,217
Selling, general and administrative 34,501 33,245 34,322 132,820 161,860
Restructuring charges, net 9,805 4,043 (2,371) 15,901 44,850
--------- --------- --------- --------- ---------
Total operating expenses 84,697 76,269 73,652 309,214 385,927
Operating loss (7,573) (1,048) (7,309) (5,385) (119,838)
Other income (expense):
Loss on equity derivative contracts in Lam Stock - - (25,954) (16,407) (8,236)
Other income, net 1,710 2,110 35 6,147 79
--------- --------- --------- --------- ---------
Income (loss) before income taxes (5,863) 1,062 (33,228) (15,645) (127,995)
Income tax expense (benefit) (9,562) 265 (2,183) (7,906) (37,944)
--------- --------- --------- --------- ---------
Net income (loss) $ 3,699 $ 797 $ (31,045) $ (7,739) $ (90,051)
========= ========= ========= ========= =========
Net income (loss) per share:
Basic $ 0.03 $ 0.01 $ (0.24) $ (0.06) $ (0.71)
========= ========= ========= ========= =========
Diluted (1) $ 0.03 $ 0.01 $ (0.24) $ (0.06) $ (0.71)
========= ========= ========= ========= =========
Number of shares used in per share calculations:
Basic 126,872 125,988 127,661 126,300 126,356
========= ========= ========= ========= =========
Diluted (1) 131,420 129,550 127,661 126,300 126,356
========= ========= ========= ========= =========
(1) For the three-month periods ended June 29, 2003 and March 30, 2003, diluted
net income per share includes the assumed exercise of employee stock options,
but excludes the assumed conversion of the outstanding warrant and convertible
subordinated 4% notes because the effect would have been antidilutive.
Outstanding options, warrant, and convertible subordinated 4% notes for the
twelve-month period ended June 29, 2003, and outstanding options, warrant, and
convertible subordinated 4% and 5% notes for the three- and twelve-month periods
ended June 30, 2002, were excluded from the computations of diluted net loss per
share because the effects would have been antidilutive due to the net losses for
the periods.
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LAM ANNOUNCES 2003 FOURTH QUARTER EARNINGS...........................PAGE 6 OF 6
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JUNE 29, MARCH 30, JUNE 30,
2003 2003 2002
(1) (UNAUDITED) (1)
----------- ----------- -----------
Assets:
Cash, cash equivalents and short-term investments $ 507,413 $ 465,866 $ 874,205
Accounts receivable, net 107,602 133,110 132,113
Inventories 112,016 126,690 180,799
Other current assets 145,745 146,327 168,307
----------- ----------- -----------
Total current assets 872,776 871,993 1,355,424
Property and equipment, net 48,771 53,242 67,496
Restricted cash 118,468 119,438 70,983
Other assets 158,260 151,187 138,388
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Total assets $ 1,198,275 $ 1,195,860 $ 1,632,291
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Liabilities and stockholders' equity:
Other current liabilities $ 216,982 $ 244,527 $ 287,781
5% convertible debenture - - 309,763
----------- ----------- -----------
Total current liabilities 216,982 244,527 597,544
Long-term debt and other liabilities 332,209 321,718 359,691
Stockholders' equity 649,084 629,615 675,056
Total liabilities and ----------- ----------- -----------
stockholders' equity $ 1,198,275 $ 1,195,860 $ 1,632,291
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(1) Derived from audited financial statements