Exhibit 99.1
KLA-Tencor Reports $137 Million in Net Income on Revenue of $1.32
Billion for Fiscal Year 2003; Net Income and Earnings Up On
Quarter-Over-Quarter Basis
SAN JOSE, Calif.--(BUSINESS WIRE)--July 24, 2003--KLA-Tencor
Corporation (Nasdaq:KLAC) today announced operating results for its
fourth quarter and 2003 fiscal year. For the quarter ending June 30,
2003, the company reported improvement on a quarter-over-quarter
basis. Net income of $29 million and earnings per share of $0.15 in
the June 2003 fiscal quarter were a 7 percent improvement over net
income of $27 million and earnings per share of $0.14 posted in the
March quarter. Revenue of $308 million in the June quarter was up
slightly from revenue of $304 million in the March quarter. The June
2003 quarter results compare to net income of $47 million and earnings
per share of $0.23 on revenues of $373 million for the same period
last year. For the full 2003 fiscal year, KLA-Tencor reported net
income of $137 million and earnings per share of $0.70 on revenue of
$1.32 billion compared, to fiscal year 2002 net income of $216 million
and earnings per share of $1.10 on revenues of $1.64 billion.
Ken Schroeder, Chief Executive Officer of KLA-Tencor, stated that
while the company continues to streamline its operations to increase
profitability, it is taking equal care to preserve its ability to
capitalize on an industry upturn. "Although the increase in business
activity is not broad based, we are definitely seeing a number of our
customers reporting an upturn in their business," Schroeder observed.
"As the recovery occurs, we believe that the twin forces of rising
demand for leading-edge chips and an under-investment in leading-edge
capacity will contribute to stronger sales for semiconductor process
control equipment. During the year, KLA-Tencor worked closely with
semiconductor manufacturers to overcome the yield challenges of
next-generation processes, including copper interconnects, sub-130-nm
design rules and 300-mm wafers. We are now well positioned to benefit
from future industry growth with solutions that have proven critical
to ramping and sustaining yields of next-generation chips."
KLA-Tencor reported that it ended the year with approximately six
months of backlog at current shipping levels. Geographically, during
the quarter, the strongest order activity originated from Japan which
was above its historical share. China and Singapore were also above
historical levels while the United States, Europe, Taiwan and Korea
fell below historical levels during the quarter.
Gross margins improved from 48.5 percent in the third quarter of
fiscal year 2003 to 49.0 percent in the fourth quarter. Cost
reductions in service and manufacturing expenses contributed to the
improvement in gross margins. Operating expenses were unchanged at
$122 million; a decrease in selling, general and administrative
expense offset a $3 million increase in engineering expense.
The company increased total cash, cash equivalents and marketable
securities by $90 million to $1.49 billion, while the balance sheet
remained free of long-term debt. Inventory and accounts receivables
decreased during the quarter. Inventory was reduced by $10 million to
$259 million, and accounts receivable were lowered by $8 million to
$224 million.
Forward Looking Statements: Statements in this press release
regarding the company's positioning for future industry growth,
potential economic recovery, upturn in customer business, current
order backlog, rising demand for semiconductor process control
equipment and cost-saving measures are forward-looking statements, and
are subject to the Safe Harbor provisions created by the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current information and expectations, and
involve a number of risks and uncertainties. Actual results may differ
materially from those projected in such statements due to various
factors, including but not limited to: delays or cancellations of
orders by customers; shipments or acceptances; inability by the
company to meet its production and/or product development schedules;
the demand for semiconductors; and new and enhanced product offerings
by competitors. For other factors that may cause actual results to
differ from those projected, please refer to the company's Form 10-K,
Forms 10-Q and other filings with the Securities and Exchange
Commission. Actual results could differ materially from those
anticipated in forward-looking statements in this release as a result
of certain factors, including those set forth in the risk factors
described in the company's SEC filings.
About KLA-Tencor: KLA-Tencor is the world leader in yield
management and process control solutions for semiconductor
manufacturing and related industries. Headquartered in San Jose,
Calif., with operations around the world, KLA-Tencor ranked #6 on
S&P's 2002 index of the top 500 companies in the U.S. KLA-Tencor is
traded on the Nasdaq National Market under the symbol KLAC. Additional
information about the company is available on the Internet at
http://www.kla-tencor.com.
KLA-Tencor Corporation
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
June 30, June 30,
2003 2002
(In thousands)
ASSETS
Cash, short-term investments and marketable
securities $1,487,883 $ 1,333,583
Accounts receivable, net 223,535 277,006
Inventories 258,799 323,016
Land, property and equipment, net 382,729 300,560
Other assets 513,651 483,553
--------- ---------
Total assets $2,866,597 $2,717,718
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 33,893 $ 52,988
Deferred system profit 177,486 193,852
Unearned revenue 48,203 54,886
Other current liabilities 391,474 385,764
--------- --------
Total current liabilities 651,056 687,490
--------- --------
Stockholders' equity:
Common stock and capital in excess of par
value 814,968 765,946
Retained earnings 1,396,886 1,259,695
Accumulated other comprehensive income 3,687 4,587
--------- ---------
Total stockholders' equity 2,215,541 2,030,228
--------- ---------
Total liabilities and stockholders'
equity $2,866,597 $2,717,718
========= =========
KLA-Tencor Corporation
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
Three months ended Twelve months ended
June 30, June 30,
2003 2002 2003 2002
(In thousands, except
per share data)
Revenues:
Product $240,638 $ 312,519 $ 1060,142 $1,428,107
Service 67,675 60,675 262,907 209,175
-------- ---------- ---------- ----------
Total revenues 308,313 373,194 1,323,049 1,637,282
Costs and operating
expenses:
Costs of goods sold 157,292 186,112 671,505 814,393
Research and
development 64,084 68,945 268,291 287,408
Selling, general and
administrative 57,855 70,914 253,933 290,588
Non-recurring
acquisition,
restructuring
and other, net -- -- (9,402) --
-------- ---------- ---------- ----------
Total costs and
operating expenses 279,231 325,971 1,184,327 1,392,389
-------- ---------- ---------- ----------
Income from
operations 29,082 47,223 138,722 244,893
Interest income and
other, net 9,552 10,960 41,796 42,563
======== ========== ========== ==========
Income before income
taxes 38,634 58,183 180,518 287,456
Provision for income
taxes 9,275 11,679 43,327 71,290
======== ========== ========== ==========
Net income $ 29,359 $ 46,504 $ 137,191 $ 216,166
======== ========== ========== ==========
Basic earning per
share:
Net income $ 0.15 $ 0.25 $ 0.72 $ 1.15
======== ========== ========== ==========
Diluted earnings per
share:
Net income $ 0.15 $ 0.23 $ 0.70 $ 1.10
======== ========== ========== ==========
Weighted average
number of shares:
Basic 190,670 189,218 189,817 187,667
======== ========== ========== ==========
Diluted 196,630 198,452 194,785 196,594
======== ========== ========== ==========
CONTACT: KLA-Tencor Corporation
John Kispert, 408-875-6224
Chief Financial Officer
john.kispert@kla-tencor.com
or
Cary Halsted, 408-875-4094 (Investment Community)
Vice President, Investor Relations
cary.halsted@kla-tencor.com
or
Kern Beare, 408-875-7039 (Media)
Vice President, Corporate Communications
kern.beare@kla-tencor.com