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 EARNINGS FOR THE QUARTER ENDED
MARCH 28, 2004
FREMONT, Calif., April 14, 2004 -- Lam Research Corporation (Nasdaq: LRCX) today
announced earnings for the quarter ended March 28, 2004. Revenue for the period
was $231.1 million, and net income was $19.2 million, or $0.13 per diluted
share, compared to revenue of $191.5 million and net income of $6.4 million, or
$0.05 per diluted share, for the December 2003 quarter. Gross margin and
operating expenses for the March 2004 quarter were $106.1 million and $81.4
million, respectively.
The Company believes the presentation of ongoing results, which excludes certain
special items, is useful for analyzing the ongoing business trends by removing
the effects of expense recognition connected with its outsourcing strategy and
consolidation. Tables that provide reconciliations of ongoing performance to
results under U.S. Generally Accepted Accounting Principles (GAAP) are included
at the end of this press release.
Sequentially, revenue growth in excess of 20 percent combined with the leverage
from the Company's business model almost doubled ongoing net income. Ongoing
gross margin for the March 2004 quarter was 45.8 percent of revenue as expense
control and improved utilization of factory and field resources more than offset
the impact of planned compensation increases. Ongoing operating expenses
increased in line with expectations to approximately $80 million for the period.
Ongoing net income of $19.9 million, or $0.14 per diluted share, in the March
2004 quarter compares with ongoing net income of $10.0 million, or $0.07 per
diluted share, for the previous quarter.
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LAM ANNOUNCES EARNINGS FOR THE MARCH 2004 QUARTER...................PAGE 2 OF 6
Consistent with the recent acceleration in capital investment by semiconductor
manufacturers, new orders of $350 million represent 29 percent growth over the
prior period. The geographic distribution of new orders as well as revenue is
shown in the following table:
REGION NEW ORDERS REVENUE
North America 17% 15%
Europe 11% 19%
Japan 12% 13%
Asia Pacific 60% 53%
Total cash (cash equivalents, short-term investments, and restricted cash) rose
by $47.1 million to $751.5 million at the end of March. Continued emphasis on
working capital management and increased profits were the primary sources of
cash generation. Deferred revenue and profit balances were $101.4 million and
$56.6 million, respectively, and backlog reached $423 million at the end of the
quarter.
"We are pleased with the results for the March quarter. Our continuing focus on
cost management, coupled with our revenue growth, resulted in improved
profitability. Our operations excellence initiative, which includes management
of receivables and inventory control, is enhancing our cash generation. As a
result, we will retire our 4% convertible notes early by repaying them in full
during the June 2004 quarter," stated James W. Bagley, Lam's chairman and chief
executive officer.
"The wafer fabrication equipment industry is in the early stages of a cyclical
recovery. We expect demand to be robust over the next several quarters as
semiconductor customers purchase equipment to produce their newest, most complex
devices. We are winning next-generation applications with our etch product
portfolio and believe our market position will continue to strengthen," 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), revenue growth, cash generation, early retirement of the
Company's 4% convertible notes, and the Company's demand expectations.
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LAM ANNOUNCES EARNINGS FOR THE MARCH 2004 QUARTER....................PAGE 3 OF 6
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 December 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 major 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 Follow
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LAM ANNOUNCES EARNINGS FOR THE MARCH 2004 QUARTER....................PAGE 4 OF 6
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------------- ----------------------
MARCH 28, DECEMBER 28, MARCH 30, MARCH 28, MARCH 30,
2004 2003 2003 2004 2003
--------- ------------ --------- --------- ---------
Total revenue $ 231,128 $ 191,508 $ 187,059 $ 606,374 $ 569,148
Cost of goods sold 125,337 105,372 111,838 336,179 342,744
Cost of goods sold - restructuring recoveries (322) (1,079) - (1,651) (301)
--------- ---------- --------- --------- ---------
Total cost of goods sold 125,015 104,293 111,838 334,528 342,443
Gross margin 106,113 87,215 75,221 271,846 226,705
Gross margin as a percent of revenue 45.9% 45.5% 40.2% 44.8% 39.8%
Research and development 42,914 39,078 38,981 120,518 120,102
Selling, general and administrative 37,218 34,141 33,245 105,352 98,319
Restructuring charges, net 1,317 5,948 4,043 8,327 6,096
--------- ---------- --------- --------- ---------
Total operating expenses 81,449 79,167 76,269 234,197 224,517
Operating income (loss) 24,664 8,048 (1,048) 37,649 2,188
Other income (expense):
Loss on equity derivative contracts in Company
stock - - - - (16,407)
Other income, net 877 473 2,110 2,794 4,437
--------- ---------- --------- --------- ---------
Income (loss) before income taxes 25,541 8,521 1,062 40,443 (9,782)
Income tax expense 6,385 2,130 265 10,110 1,656
--------- ---------- --------- --------- ---------
Net income (loss) $ 19,156 $ 6,391 $ 797 $ 30,333 $ (11,438)
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Net income (loss) per share:
Basic $ 0.14 $ 0.05 $ 0.01 $ 0.23 $ (0.09)
========= ========= ========= ========= =========
Diluted (1) $ 0.13 $ 0.05 $ 0.01 $ 0.22 $ (0.09)
========= ========= ========= ========= =========
Number of shares used in per share calculations:
Basic 133,251 131,020 125,988 130,893 126,110
========= ========= ========= ========= =========
Diluted (1) 147,365 139,658 129,550 138,527 126,110
========= ========= ========= ========= =========
(1) The following table provides a reconciliation of the denominator of the
basic and diluted computations for net income (loss) per share:
(IN THOUSANDS)
Basic average shares outstanding 133,251 131,020 125,988 130,893 126,110
Employee stock plans 6,958 8,107 3,562 7,238 -
Warrant 479 531 - 396 -
Assumed conversion of convertible
subordinated 4% notes 6,677 - - - -
------- ------- ------- ------- -------
Diluted average shares outstanding 147,365 139,658 129,550 138,527 126,110
======= ======= ======= ======= =======
Employee stock options, warrant and assumed conversion of convertible 4% and 5%
notes were excluded from diluted net income per share calculations for the nine
months ended March 30, 2003, because the effect was antidilutive due to the net
loss for the period. Employee stock options, warrant and assumed conversion of
convertible 4% notes were excluded from diluted net income per share
calculations in other periods because the effect would have been antidilutive.
Diluted net income per share for the three months ended March 28, 2004, includes
the assumed conversion of the convertible 4% notes. Accordingly, interest
expense, net of taxes, of $0.4 million must be added back to net income for
computing diluted earnings per share.
LAM ANNOUNCES EARNINGS FOR THE MARCH 2004 QUARTER....................PAGE 5 OF 6
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 28, DECEMBER 28, JUNE 29,
2004 2003 2003
(UNAUDITED) (UNAUDITED) (1)
---------- ---------- ----------
Assets:
Cash, cash equivalents and short-term investments $ 633,070 $ 586,009 $ 507,413
Accounts receivable, net 179,606 114,811 107,602
Inventories 110,746 98,836 112,016
Other current assets 147,440 142,817 145,745
---------- ---------- ----------
Total current assets 1,070,862 942,473 872,776
Property and equipment, net 37,477 40,067 48,771
Restricted cash 118,468 118,468 118,468
Other assets 143,887 146,896 158,260
---------- ---------- ----------
Total assets $1,370,694 $1,247,904 $1,198,275
========== ========== ==========
Liabilities and stockholders' equity:
Current liabilities $ 300,069 $ 209,093 $ 216,982
---------- ---------- ----------
Long-term debt and other liabilities $ 322,944 $ 322,555 $ 332,209
Stockholders' equity 747,681 716,256 649,084
---------- ---------- ----------
Total liabilities and stockholders' equity $1,370,694 $1,247,904 $1,198,275
========== ========== ==========
(1) Derived from audited financial statements
LAM ANNOUNCES EARNINGS FOR THE MARCH 2004 QUARTER....................PAGE 6 OF 6
RECONCILIATION OF U.S. GAAP NET INCOME TO ONGOING NET INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
THREE MONTHS ENDED
------------------------------
MARCH 28, DECEMBER 28,
2004 2003
--------- ------------
U.S. GAAP net income $ 19,156 $ 6,391
Pre-tax restructuring recoveries - cost of goods sold (322) (1,079)
Pre-tax net restructuring charges - operating expenses 1,317 5,948
Tax benefit on net restructuring charges (249) (1,217)
--------- ---------
Ongoing net income $ 19,902 $ 10,043
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Ongoing net income per diluted share $ 0.14 $ 0.07
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Number of shares used for diluted per share calculation 147,365 139,658
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
-----------------------------
MARCH 28, DECEMBER 28,
2004 2003
--------- ------------
U.S. GAAP gross margin $ 106,113 $ 87,215
Restructuring recoveries - cost of goods sold (322) (1,079)
--------- ---------
Ongoing gross margin $ 105,791 $ 86,136
U.S. GAAP operating expenses $ 81,449 $ 79,167
Net restructuring charges - operating expenses (1,317) (5,948)
--------- ---------
Ongoing operating expenses $ 80,132 $ 73,219
--------- ---------
Ongoing operating income $ 25,659 $ 12,917
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