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
SEPTEMBER 26, 2004
FREMONT, Calif., October 13, 2004 -- Lam Research Corporation (Nasdaq: LRCX)
today announced earnings for the quarter ended September 26, 2004. Revenue for
the period was $419.5 million, and net income was $89.8 million, or $0.64 per
diluted share, compared to revenue of $329.6 million and net income of $52.7
million, or $0.38 per diluted share, for the June 2004 quarter. Gross margin and
operating expenses for the September 2004 quarter were $214.8 million and $93.5
million, respectively.
The Company believes the presentation of ongoing results, which excludes certain
special items, is useful for analyzing ongoing business trends. In the September
2004 quarter, there are no significant differences between the ongoing results
and the results under U.S. Generally Accepted Accounting Principles (GAAP). The
June 2004 quarter presentation removes the effects of CMP impairment charges and
net gains associated with the early retirement of the Company's 4% notes and the
related interest rate swap. Tables that provide reconciliations of ongoing
performance to results under GAAP are included at the end of this press release.
Ongoing net income increased by 74 percent, driven by sequential revenue growth
in excess of 27 percent combined with the leverage from the Company's business
model. Ongoing gross margin for the September 2004 quarter was over 51 percent
of revenue primarily due to volume growth, driving improved utilization of
factory and field resources. In addition, the results reflect continued expense
control and efficient asset management. In the period, ongoing operating
expenses increased as planned to $93.5 million, primarily due to increases in
variable compensation and employee benefits expenses. Ongoing net income of
$89.8 million, or $0.64 per diluted share, in the September 2004 quarter
compares with ongoing net income of $51.5 million, or $0.37 per diluted share,
for the previous quarter.
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LAM ANNOUNCES EARNINGS FOR THE SEPTEMBER 2004 QUARTER................PAGE 2 OF 6
New orders recorded in backlog for Lam equipment increased 5 percent over the
prior period to approximately $429 million. The geographic distribution of new
orders as well as revenue is shown in the following table:
REGION NEW ORDERS REVENUE
------ ---------- -------
North America 20% 16%
Europe 19% 8%
Japan 20% 10%
Asia Pacific 41% 66%
Cash, short-term investments and restricted cash balances increased to $589.1
million at the end of September, and cash flows from operating activities were
approximately $40 million during the quarter. Deferred revenue and profit
balances were $195.4 million and $115.5 million, respectively, and unshipped
orders in backlog were $415 million at the end of the quarter.
"The financial results this quarter include significant achievements for the
Company," stated James W. Bagley, chairman and chief executive officer of Lam.
"Our gross margin percentage exceeded 51 percent, resulting in record operating
margins and record net income."
"While we expect wafer fab equipment to remain a growth-cyclical industry, we
believe our business model provides the Company the flexibility to address
changing business conditions. Although our customers' investment activity may
slow, we believe our product portfolio is particularly well positioned, and we
expect to expand our market share in next-generation applications. We intend to
build on these financial and market successes, which we believe will result in
long-term value for our shareholders, customers, and employees," Bagley
concluded.
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LAM ANNOUNCES EARNINGS FOR THE SEPTEMBER 2004 QUARTER................PAGE 3 OF 6
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 our expectations of
the business cycle for the wafer fab equipment industry, the capability of our
business model to adapt to changing conditions or deliver profitable results,
market demand and market share projections, technology developments, the future
success of our products in the market place, and the future market and financial
performance of our Company, including our ability to deliver shareholder,
customer and employee value.
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 report on Form 10-K for the year ended
June 27, 2004, 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 fabrication equipment and
services to the world's semiconductor industry. Lam's common stock trades on the
Nasdaq National Market under the symbol LRCX. The Company's World Wide Web
address is http://www.lamrc.com.
Consolidated Financial Tables Follow
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LAM ANNOUNCES EARNINGS FOR THE SEPTEMBER 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
----------------------------------------
SEPTEMBER 26, JUNE 27, SEPTEMBER 28,
2004 2004 2003
------------- --------- -------------
Total revenue $ 419,549 $ 329,572 $ 183,738
Cost of goods sold 204,788 170,369 105,470
Cost of goods sold - restructuring recoveries - - (250)
--------- --------- ---------
Total cost of goods sold 204,788 170,369 105,220
Gross margin 214,761 159,203 78,518
Gross margin as a percent of revenue 51.2% 48.3% 42.7%
Research and development 50,358 49,961 38,526
Selling, general and administrative 43,127 40,711 33,993
Restructuring charges, net - - 1,062
--------- --------- ---------
Total operating expenses 93,485 90,672 73,581
Operating income 121,276 68,531 4,937
Other income, net 8 1,676 1,444
--------- --------- ---------
Income before income taxes 121,284 70,207 6,381
Income tax expense 31,534 17,552 1,595
--------- --------- ---------
Net income $ 89,750 $ 52,655 $ 4,786
========= ========= =========
Net income per share:
Basic $ 0.66 $ 0.39 $ 0.04
========= ========= =========
Diluted $ 0.64 $ 0.38 $ 0.04
========= ========= =========
Number of shares used in per share calculations:
Basic 135,478 134,414 128,351
========= ========= =========
Diluted 139,808 139,820 134,886
========= ========= =========
LAM ANNOUNCES EARNINGS FOR THE SEPTEMBER 2004 QUARTER................PAGE 5 OF 6
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
SEPTEMBER 26, JUNE 27,
2004 2004
(UNAUDITED) (1)
----------- --------
Assets:
Cash, cash equivalents and short-term investments $ 476,672 $ 429,472
Accounts receivable, net 333,397 245,508
Inventories 112,784 108,249
Other current assets 60,751 113,159
---------- ----------
Total current assets 983,604 896,388
Property and equipment, net 41,950 42,444
Restricted cash 112,468 112,468
Other assets 172,777 147,326
---------- ----------
Total assets $1,310,799 $1,198,626
========== ==========
Liabilities and stockholders' equity:
Current liabilities $ 387,986 $ 376,606
---------- ----------
Other long-term liabilities $ 8,138 $ 9,554
Stockholders' equity 914,675 812,466
---------- ----------
Total liabilities and stockholders' equity $1,310,799 $1,198,626
========== ==========
(1) Derived from audited financial statements
LAM ANNOUNCES EARNINGS FOR THE SEPTEMBER 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
-------------------------
SEPTEMBER 26, JUNE 27,
2004 2004
------------ ---------
U.S. GAAP net income $ 89,750 $ 52,655
Pre-tax adjustments:
CMP impairment - cost of goods sold - 2,425
CMP impairment - operating expenses - 600
Net gain on notes and swap - other income, net - (4,505)
Tax expense on net reconciling items - 370
--------- ---------
Ongoing net income $ 89,750 $ 51,545
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Ongoing net income per diluted share $ 0.64 $ 0.37
========= =========
Number of shares used for diluted per share calculation 139,808 139,820
Income tax rate 26% 25%
RECONCILIATION OF U.S. GAAP GROSS MARGIN, OPERATING EXPENSES AND OPERATING
INCOME TO ONGOING GROSS MARGIN, OPERATING EXPENSES AND OPERATING INCOME
(IN THOUSANDS, EXCEPT PERCENTAGES)
THREE MONTHS ENDED
------------------------
SEPTEMBER 26, JUNE 27,
2004 2004
------------ ---------
U.S. GAAP gross margin $ 214,761 $ 159,203
CMP impairment - cost of goods sold - 2,425
--------- ---------
Ongoing gross margin $ 214,761 $ 161,628
U.S. GAAP operating expenses $ 93,485 $ 90,672
CMP impairment - operating expenses - (600)
--------- ---------
Ongoing operating expenses $ 93,485 $ 90,072
--------- ---------
Ongoing operating income $ 121,276 $ 71,556
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Ongoing gross margin as a percent of revenue 51.2% 49.0%