UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1996
Commission File No. 0-12933
LAM RESEARCH CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 94-2634797
-------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4650 CUSHING PARKWAY, FREMONT, CALIFORNIA 94538
- --------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 659-0200
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- -----
As of September 30, 1996 there were 30,482,280 shares of Registrant's Common
Stock outstanding.
INDEX
Page
No.
----
PART I. FINANCIAL INFORMATION ................................ 3
Item 1. Financial Statements (unaudited)....................... 3
Condensed Consolidated Balance Sheets............. 3
Condensed Consolidated Statements of Income....... 4
Condensed Consolidated Statements of Cash Flows... 5
Notes to Condensed Consolidated Financial
Statements................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 8
Results of Operations............................. 8
Liquidity and Capital Resources................... 10
Risk Factors...................................... 11
PART II. OTHER INFORMATION..................................... 14
Item 1. Legal Proceedings..................................... 14
Item 6. Exhibits and Reports on Form 8-K...................... 14
2
ITEM 1. FINANCIAL STATEMENTS
--------------------
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)
September 30, June 30,
1996 1996
(Unaudited) (Note)
------------- --------
Assets
Cash and cash equivalents $ 22,930 $ 62,879
Short-term investments 107,465 67,605
Accounts receivable, net 230,338 256,767
Inventories 282,910 322,366
Prepaid expenses and other assets 19,120 17,193
Deferred income taxes 50,035 50,035
-------- --------
Total Current Assets 712,798 776,845
Equipment and leasehold improvements, net 208,352 170,839
Other assets 22,434 21,681
-------- --------
Total Assets $943,584 $969,365
======== ========
Liabilities and Stockholders' Equity
Trade accounts payable $ 58,032 $112,883
Accrued expenses and other
current liabilities 147,352 155,874
Line of credit borrowings 35,000 25,000
Current portion of long-term debt and
capital lease obligations 13,952 12,896
-------- --------
Total Current Liabilities 254,336 306,653
Long-term debt and capital lease
obligations, less current portion 67,408 52,926
-------- --------
Total Liabilities 321,744 359,579
Preferred stock: 5,000 shares authorized;
none outstanding
Common Stock at par value of $.001 per share
Authorized -- 90,000 shares; issued and
outstanding 30,482 shares at September 30,
1996 and 30,266 shares at June 30, 1996 30 30
Additional paid-in capital 299,604 298,160
Retained earnings 322,206 311,596
-------- --------
Total Stockholders' Equity 621,840 609,786
-------- --------
$943,584 $969,365
======== ========
- --------------------------
Note -- The Condensed Consolidated Balance Sheet at June 30, 1996 has
been derived from the audited financial statements at that
date.
See Notes to condensed consolidated financial statements.
3
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended
--------------------
September 30,
-------------
1996 1995
-------- ---------
Net sales $276,200 $257,747
Royalty income 6,559 5,497
-------- --------
Total revenue 282,759 263,244
Costs and expenses:
Cost of goods sold 167,653 134,707
Research and development 41,525 35,983
Selling, general and
administrative 48,882 47,584
Restructuring charge 9,021 -
-------- --------
Operating income 15,678 44,970
Other expense, net 515 172
-------- --------
Income before income taxes 15,163 44,798
Income taxes 4,553 14,331
-------- --------
Net income $ 10,610 $ 30,467
======== ========
Net income per share
Primary $ 0.35 $ 1.07
======== ========
Fully diluted $ 0.35 $ 1.00
======== ========
Number of shares used in
per share calculations
Primary 30,600 28,400
======== ========
Fully diluted 30,600 31,125
======== ========
See Notes to condensed consolidated financial statements.
4
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
----------------------------
September 30, September 30,
1996 1995
------------- -------------
Cash flows from operating activities:
Net income $ 10,610 $ 30,467
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 12,023 7,153
Change in certain working capital
accounts 585 (12,566)
-------- --------
Net cash provided by operating
activities 23,218 25,054
Cash flows from investing activities:
Capital expenditures (30,202) (18,206)
Purchase of short-term investments (161,297) (95,759)
Sale of short-term investments 121,437 54,123
Proceeds from sales of securities - 12,038
Other (753) (2,470)
-------- --------
Net cash used in investing activities (70,815) (50,274)
======== ========
Cash flows from financing activities:
Proceeds from borrowings under
line of credit 35,000 -
Repayments of borrowings under
line of credit (25,000) -
Sale of stock, net of issuance
costs 1,444 618
Principal payments on long-term debt
and capital lease obligations (3,796) (6,541)
-------- --------
Net cash provided by (used in)
financing activities 7,648 (5,923)
-------- --------
Net decrease in cash and
cash equivalents (39,949) (31,143)
Cash and cash equivalents at beginning
of period 62,879 43,675
-------- --------
Cash and cash equivalents at end of
period $ 22,930 $ 12,532
======== ========
5
LAM RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring adjustments) considered necessary for a fair
presentation have been included. The accompanying unaudited condensed
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements of Lam Research Corporation (the "Company")
for the year ended June 30, 1996, which are included in the Annual Report on
Form 10-K, File number 0-12933.
The results of operations for the three months ended September 30, 1996 are
not necessarily indicative of the results that may be expected for the entire
fiscal year ending June 30, 1997.
NOTE B -- INVENTORIES
Inventories consist of the following:
September 30, June 30,
1996 1996
---------------- -----------
(in thousands)
Raw materials $160,936 $167,513
Work-in-process 98,029 122,828
Finished goods 23,945 32,025
-------- --------
$282,910 $322,366
======== ========
NOTE C -- EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements consist of the following:
September 30, June 30,
1996 1996
---------------- -----------
(in thousands)
Equipment $152,746 $120,770
Furniture & fixtures 49,568 45,740
Leasehold improvements 101,628 88,131
-------- --------
303,942 254,641
Accumulated depreciation and
amortization (95,590) (83,802)
$208,352 $170,839
======== ========
6
NOTE D -- OTHER EXPENSE, NET
The significant components of other expense, net are as follows
(in thousands):
Three Months Ended
------------------
September 30,
1996 1995
------- -------
Interest Expense $ 1,536 $ 1,968
Interest Income (1,119) (1,375)
Other 98 (421)
------- -------
$ 515 $ 172
======= =======
NOTE E -- LINE OF CREDIT
During fiscal 1996, the Company entered into a syndicated bank line of
credit totaling $210.0 million, which expires in December 1998. At September 30,
1996, the Company had outstanding borrowings of $35.0 million against the line
of credit.
NOTE F -- NET INCOME PER SHARE
For the three month periods ended September 30, 1996 and 1995, primary net
income per share is calculated using the weighted average number of shares of
common stock and common stock equivalents outstanding during the period. The
common stock equivalents include shares issuable upon the assumed exercise of
stock options reflected under the treasury stock method. In addition, fully
diluted net income per share for the three month period ended September 30, 1995
reflects the assumed conversion of the Company's convertible subordinated
debentures at the beginning of that period, and also adds the interest expense
incurred on the debentures, net of income tax effect, to the net income amount
for use in the fully diluted calculation. The convertible subordinated
debentures were called by the Company during the fourth quarter of fiscal 1996,
and therefore the impact of the assumed conversion is not included in the fully
diluted net income per share for the three month period ended September 30,
1996.
NOTE G -- RESTRUCTURING
During the first quarter of fiscal 1997, the Company restructured its
operations by consolidating its previous business unit structure into a more
centralized functional organization. As a result of the restructuring, and in
response to industry conditions, the Company reduced its work force by
approximately 11%. The Company recorded a restructuring charge of $9.0 million
for costs related primarily to severance compensation and consolidation of
facilities.
NOTE H -- LITIGATION
See Part II, item 1 for discussion of litigation.
7
ITEM 2. Management's Discussion and Analysis of Financial
--------------------------------------------------
Condition and Results of Operations
-----------------------------------
The information in this discussion contains forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and is subject to the Safe Harbor provisions created by that statute.
Such statements are subject to certain risks and uncertainties, including those
discussed below, that could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof. Forward-looking
statements are indicated by an asterisk (*). The Company undertakes no
obligation to publicly release the results of any revisions to these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
The components of the Company's statements of income, expressed as a percentage
of total revenue, are as follows:
Three Months Ended
September 30,
1996 1995
----- -----
Net Sales 97.7% 97.9%
Royalty income 2.3 2.1
----- -----
100.0 100.0
Cost of goods sold 59.3 51.2
Research and development 14.7 13.6
Selling, general
& administrative 17.3 18.1
Restructuring charge 3.2 -
----- -----
Operating income 5.5 17.1
Other expense, net 0.1 0.1
----- -----
Income before taxes 5.4 17.0
Income taxes 1.6 5.4
----- -----
Net income 3.8% 11.6%
===== ====
Results of Operations
- ---------------------
Net sales for the three month period ended September 30, 1996, were 7%
higher compared to the year-ago period but were 25% lower than the preceding
quarter. Alliance(tm) cluster systems continued to increase as a percentage of
total revenue. The increased Alliance sales were offset by a reduction in
Advanced Capability Rainbow(tm) system revenue due in part to a softening demand
(related to current semiconductor industry-wide market conditions) for these
single-chamber etch products. Transformer Coupled Plasma(tm) (TCP(tm)) etch
system revenue remained flat as a percentage of total machine revenue when
compared to the year-ago period but decreased slightly when compared to the
preceding quarter. This decrease in stand alone TCP systems was due in part to
increasing customer preference for Alliance cluster systems which
8
utilize from one to four TCP etch chambers each. Total export sales were 68% of
total revenue during the first quarter of fiscal 1997 compared to 61% and 67% of
total revenue, respectively, for the year-ago period and the preceding quarter.
Asia Pacific region net sales increased 39% when comparing first quarter fiscal
1997 against first quarter fiscal 1996, but decreased 28% when compared to the
fourth quarter of fiscal 1996. Total spares and service revenue for the first
quarter of fiscal 1997 increased 11% and decreased 7%, respectively, compared to
the year-ago period and preceding quarter. The worldwide semiconductor market is
presently experiencing a slowdown in product demand and volatility in product
pricing. This slowdown and volatility have caused a reduction in demand for
semiconductor processing equipment. Accordingly, during the first quarter of
fiscal 1997, the Company's revenue was adversely affected by the worldwide
slowdown in the semiconductor market. The Company anticipates that its sales
will continue to be adversely affected by this slowdown and therefore the
revenue levels achieved for the remaining quarters of fiscal 1997 may be lower
than the revenue levels achieved in the first quarter of fiscal 1997.*
Royalty income increased 19% from the year-ago period and remained flat
compared to the preceding quarter. The Company expects that royalty income will
decrease in subsequent quarters as the current royalty agreement with Tokyo
Electron Limited which was due to expire in December 1996, has been renewed at a
significantly lower royalty rate.*
The Company's gross margin percentage declined to 40.7% in the first
quarter of fiscal 1997 compared with 48.8% and 46.5%, respectively, for the
year-ago period and the preceding quarter. Approximately half of the decline
in the Company's gross margin can be attributed to a change in product mix; and
the remaining half to a combination of excess manufacturing capacity costs,
increased warranty and installation costs and charges related to an inventory
reduction program. During the first quarter of fiscal 1997, the Company's
product mix continued to shift to a higher percentage of the less mature, lower
margin Alliance cluster products. During fiscal 1996 the Company sold a higher
percentage of the higher margin Rainbow products. As a result of reduced
manufacturing volumes and increased facilities-related costs the Company
experienced substantial excess manufacturing capacity during the first quarter
of fiscal 1997 that contributed to the decline in gross margin. Warranty and
installation costs continued to increase as a percentage of the reduced sales
levels. Also contributing to the decline in gross margin were costs incurred in
relation to a first quarter fiscal 1997 inventory reduction program involving
the return of certain inventory to suppliers. During the first quarter of fiscal
1997, the Company also incurred lower gross margins on its spares and service
revenue due to increasing service contract costs and increasing spare parts
costs. The Company anticipates that the slowdown in the worldwide semiconductor
industry will continue to negatively impact its gross margins for the remainder
of fiscal 1997.*
Research and development (R&D) expenses for the quarter ended September 30,
1996 were 15.4% higher than the year-ago period but 18.8% lower than the
preceding quarter. During the first quarter of fiscal 1997, the Company
implemented a restructuring of its operations which eliminated the prior
business unit structure. As a result, the Company centralized its R&D activities
and eliminated certain duplicate functions. The Company believes that in order
to remain competitive it must continue to substantially invest in R&D. The
Company continues to
9
invest in advanced etch applications, chemical vapor deposition (CVD)
technologies, flat panel display technology and continued enhancements of the
Alliance and TCP products.
Selling, general and administrative (SG&A) expenses increased 2.7% during
the first quarter of fiscal 1997 compared to the year-ago period but decreased
23.9% compared to the preceding quarter. During fiscal 1996, the Company added
new employees in all areas to accommodate the increase in sales volume. However,
as a result of the slowdown in the industry, the Company implemented a
restructuring of its operations during the first quarter of fiscal 1997, and
implemented programs to reduce expenses and capital spending.
As part of the restructuring, the Company recorded a charge of $9.0 million
related primarily to severance compensation and consolidation of facilities. The
Company expects that operating expenses may continue to decline on a dollar
basis in fiscal 1997 compared to fiscal 1996 but may be slightly higher as a
percentage of revenue.*
The effective tax rate for the fiscal 1997 period is 30% compared to 32%
for the prior year period due primarily to the reinstatement of the federal
research and development tax credit for fiscal 1997.
Liquidity and Capital Resources
- -------------------------------
Net cash provided by operating activities was $23.2 million for the three
months ended September 30, 1996, derived primarily from net income before
depreciation and amortization expenses totaling $22.6 million. The decline in
system shipments contributed to decreases in receivables, inventory and accounts
payable. Also contributing to the decrease in inventory was the impact of a
Company-wide inventory reduction program. During the first quarter of fiscal
1997, an additional $35.0 million was provided from the sale of yen-denominated
Japanese receivables to a bank (under an amended agreement whereby the Company
increased the amount of yen-denominated Japanese receivables it may sell to the
bank from 6 billion yen to 9 billion). At September 30, 1996, $70.8 million of
the total receivables sold under this agreement remained uncollected by the bank
and subject to recourse provisions. Capital expenditures for the three month
period ended September 30, 1996 were $30.2 million, primarily for capitalization
of Alliance demonstration machines, and the completion of facility leasehold
improvements and furnishings. Also contributing to the cash used in investing
activities were net purchases of short-term investments of $39.9 million. Net
cash provided from financing was $7.6 million.
As of September 30, 1996, the Company had $130.4 million in cash, cash
equivalents and short-term investments compared with $130.5 million at June 30,
1996. The Company has a total of $210.0 million available under a syndicated
bank line of credit which is due to expire in December 1998. Borrowings under
the line of credit bear interest at the bank's prime rate or 0.7% to 0.9% over
London Interbank Offered Rate. Borrowings under the line of credit are subject
to the Company's compliance with financial covenants. At September 30, 1996, the
Company had borrowings against the syndicated bank line of credit of $35.0
million.
The Company's cash, cash equivalents, short-term investments and available
lines of credit at the end of the first quarter of fiscal 1997 are considered
adequate to support current levels of operations for at least the next twelve
months.*
10
Risk Factors
- ------------
CURRENT VOLATILITY IN THE SEMICONDUCTOR INDUSTRY
The Company's business depends upon the capital expenditures of
semiconductor manufacturers, which in turn depend on the current and anticipated
market demand for integrated circuits and products utilizing integrated
circuits. The semiconductor industry has been cyclical in nature and
historically experienced periodic downturns. The semiconductor industry has
recently followed such cyclicality and is presently experiencing such a downturn
in product demand and pricing. This slowdown has had an adverse effect on the
semiconductor industry's demand for semiconductor processing equipment which has
had an adverse effect on the Company's operating results in the first quarter of
fiscal 1997. The Company anticipates that the current slowdown in demand for
semiconductor equipment will continue to adversely impact the Company's
operating results through fiscal 1997.* No assurance can be given that the
Company's revenue and operating results will not continue to be adversely
affected for longer or by future downturns. In addition, the need for continued
investments in R&D, substantial capital equipment requirements and extensive
ongoing worldwide customer service and support capability may limit the
Company's ability to reduce expenses. Accordingly, there is no assurance that
the Company will be able to remain profitable in the future.
HIGHLY COMPETITIVE INDUSTRY
The semiconductor processing equipment industry is highly competitive. The
Company faces substantial competition throughout the world. The Company
believes that to remain competitive, it will require significant financial
resources in order to offer a broad range of products, to maintain customer
service and support centers worldwide, and to invest in product and process
research and development. In addition, the Company intends to continue to
invest substantial resources into its effort to increase sales of its systems to
Japanese semiconductor manufacturers, who represent a substantial portion of the
worldwide semiconductor market and whose market is difficult for non-Japanese
equipment companies to penetrate.* The Company believes that the semiconductor
equipment industry is becoming increasingly dominated by large manufacturers who
have the resources to support customers on a worldwide basis, and certain of the
Company's competitors have substantially greater financial resources and more
extensive engineering, manufacturing, marketing and customer service and support
capabilities than the Company. In addition, there are smaller emerging
semiconductor equipment companies which provide innovative technology. The
Company expects its competitors to continue to improve the design and
performance of their current products and processes and to introduce new
products and processes with improved price and performance characteristics.*
If the Company's competitors enter into strategic relationships with leading
semiconductor manufacturers covering etch or deposition products similar to
those sold by the Company, its ability to sell its products to those
manufacturers could be adversely affected. Although no such alliances have yet
been formed which have negatively impacted the Company's business. No assurance
can be given that the Company will continue to compete successfully in the
United States or worldwide.
11
DEPENDENCE ON NEW PRODUCTS AND PROCESSES; RAPID TECHNOLOGICAL CHANGE
Semiconductor manufacturing equipment and processes are subject to rapid
technological change. The Company believes that its future success will depend
in part upon its ability to continue to enhance its existing products and their
process capabilities and to develop and manufacture new products with improved
process capabilities. As a result, the Company expects to continue to make
significant investments in R&D.* The Company also must manage product
transitions successfully, as introductions of new products could adversely
affect sales of existing products. There can be no assurance that future
technologies, processes or product developments will not render the Company's
current product offerings obsolete or that the Company will be able to develop
and introduce new products or enhancements to its existing products and
processes in a timely manner which satisfy customer needs or achieve market
acceptance. The failure to do so could adversely affect the Company's business.
Furthermore, if the Company is not successful in the development of advanced
processes or equipment for manufacturers with whom it has formed strategic
alliances, its ability to sell its products to those manufacturers will be
adversely affected. In addition, in connection with the development of the
Company's new products, the Company invests in high levels of preproduction
inventory, and the failure to complete development and commercialization of
these new products in a timely manner could result in inventory obsolescence,
which could have an adverse effect on the Company's financial results.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's revenue and operating results may fluctuate from quarter to
quarter. The Company derives its revenue primarily from the sale of a relatively
small number of high-priced systems which can range in price from $300,000 to
over $2 million. Some of these systems are ordered and shipped during the same
quarter. The Company's results of operations for a particular quarter could be
adversely affected if anticipated orders for even a small number of systems were
not received in time to enable shipment during the quarter, if anticipated
shipments were delayed or cancelled by one or more customers or if shipments
were delayed due to manufacturing difficulties. In particular, during the first
quarter of fiscal 1997 the Company has experienced certain cases of rescheduling
or cancellation of orders, which has had an adverse effect on the Company's
operating results. The Company's revenue and operating results may also
fluctuate due to the mix of products sold, the channel of distribution or the
level of royalty income from the Company's Japanese licensees. The Company
generally realizes a higher margin on sales of its mature etch products and on
revenue from service and spare parts than on sales of new Alliance and chemical
vapor deposition products. Newer products usually have lower margins in the
initial phase of production. Increases or decreases in royalty income will also
have a disproportionate impact on operating income and will continue to
fluctuate on a quarterly basis. Specifically, the Company's royalty agreement
with Tokyo Electron Limited, which was due to expire in December 1996, has been
renewed at a significantly lower royalty rate. The impact of these and other
factors on the Company's revenues and operating results in any future periods is
difficult for the Company to forecast.
12
DEPENDENCE ON KEY SUPPLIERS
Certain of the components and subassemblies included in the Company's
products are obtained from a single supplier or a limited group of suppliers.
The Company believes that alternative sources could be obtained and qualified to
supply these products. Nevertheless, a prolonged inability to obtain certain
components could have an adverse effect on the Company's operating results and
could result in damage to customer relationships.
ENVIRONMENTAL REGULATIONS
The Company is subject to a variety of governmental regulations related to
the discharge or disposal of toxic, volatile, or otherwise hazardous chemicals
used in the manufacturing process. The Company believes that it is in
compliance with these regulations and that it has obtained all necessary
environmental permits to conduct its business, which permits generally relate to
the disposal of hazardous wastes. Nevertheless, the failure to comply with
present or future regulations could result in fines being imposed on the
Company, suspension of production or cessation of operations. Such regulations
could require the Company to acquire significant equipment or to incur
substantial other expenses to comply with environmental regulations. Any
failure by the Company to control the use of, or adequately restrict the
discharge or disposal of hazardous substances could subject the Company to
future liabilities.
INTERNATIONAL SALES
The Company anticipates that export sales will continue to account for a
significant portion of its net sales. Additionally, the Company continues to
expand its international operations, including expansion of its facilities in
Asia. As a result, a significant portion of the Company's sales and operations
will be subject to certain risks, including tariffs and other barriers,
difficulties in staffing and managing foreign subsidiary and branch operations,
difficulties in managing distributors, potentially adverse tax consequences and
the possibility of difficulty in accounts receivable collection. There can be
no assurance that any of these factors will not have a material adverse effect
on the Company's business, financial condition and results of operations.
INTELLECTUAL PROPERTY MATTERS
From time to time, the Company is notified that it may be in violation of
certain patents. In such cases, the Company's policy is to defend against the
claims or negotiate licenses where considered appropriate. However, no
assurance can be given that it will be able to obtain necessary licenses on
commercially reasonable terms or at all. Any failure to obtain such licenses on
commercially reasonable terms, or at all, or litigation resulting from such
claims could have a material adverse effect on the Company's business and
financial condition.
13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
- ------- -----------------
In October 1993, Varian Associates, Inc. ("Varian") brought suit against
the Company in the United States District Court, Northern District of
California, seeking monetary damages and injunctive relief based on the
Company's alleged infringement of certain patents held by Varian. The lawsuit is
in the late stages of discovery and was reassigned a new judge. The Company has
asserted defenses of invalidity and unenforceability of the patents that are the
subject of the lawsuit, as well as noninfringement of such patents by the
Company's products. While litigation is subject to inherent uncertainties and no
assurance can be given that the Company will prevail in such litigation or will
obtain a license under such patents on commercially reasonable terms or at all
if such patents are held valid and infringed by the Company's products, the
Company believes that the Varian lawsuit will not have a material adverse effect
on the Company's consolidated financial statements.
In addition, the Company is from time to time notified by various parties
that it may be in violation of certain patents. In such cases, it is the
Company's intention to seek negotiated licenses where it is considered
appropriate. The outcome of these matters will not, in management's opinion,
have a material impact on the Company's consolidated financial position,
operating results or cash flows.
ITEM 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
Exhibit 10.33 Employment contract for Roger D. Emerick, effective
July 1, 1996
Exhibit 11.1 Statement Re: Computation of Earnings Per
Share
Exhibit 27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Registrant during
the quarter ended September 30, 1996.
14
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 13, 1996
LAM RESEARCH CORPORATION
By: /s/ Henk J. Evenhuis
-----------------------------------
Henk J. Evenhuis, Executive Vice
President, Finance & Chief
Financial Officer
15