Exhibit 99.1
KLA-Tencor Reports Earnings of $244 Million on Revenues of $1.5 Billion for
Fiscal Year 2004; Fourth Quarter Earnings and Revenues Reach New Highs for the
Fiscal Year
SAN JOSE, Calif.--(BUSINESS WIRE)--July 29, 2004--KLA-Tencor Corporation
(Nasdaq:KLAC) today announced operating results for its fourth quarter and 2004
fiscal year ended June 30, 2004. The company reported strong gains for both the
quarter and full fiscal year. For the quarter, the company reported net income
of $96 million and earnings per diluted share of $0.48 on revenues of $450
million, which represented an increase on both a sequential and year-over-year
basis. Revenues rose 16 percent from $390 million in the prior quarter and 46
percent from $308 million compared to the same period last year. Net income was
also significantly higher, increasing from $66 million or $0.33 per diluted
share in the prior quarter and $29 million or $0.15 per diluted share in the
fourth quarter of fiscal 2003. For the full 2004 fiscal year, KLA-Tencor
reported net income of $244 million or $1.21 per diluted share on revenues of
$1.5 billion versus net income of $137 million or $0.70 per diluted share on
revenues of $1.3 billion in its 2003 fiscal year.
"Our strong financial performance for both the quarter and the year is the
direct result of our customers' escalating investments in process control to
help them stay on Moore's law and become the low cost producer of advanced
chips," stated Ken Schroeder, President and Chief Executive Officer of
KLA-Tencor. "This trend is intensifying with each new device generation since
process control helps semiconductor manufacturers speed technology ramps,
increase manufacturing yields and lower their capital costs by extending the
life of their existing process toolsets. As a result, process control continues
to represent a larger portion of our customers' capital budgets."
During the quarter, orders for wafer inspection systems rose sharply, while
demand for reticle inspection and metrology systems remained strong.
Geographically, Japan and Taiwan represented the largest sequential order
increases and were above their historical average share of total orders. The
U.S. was within its historical average, while Europe, Korea, China and Singapore
were below their historical averages.
Gross margins improved during the quarter, rising another two percent
sequentially to 58 percent compared to 56 percent in the third quarter. This
improvement was primarily driven by cost reduction initiatives. Cash, cash
equivalents and marketable securities increased by $156 million to $1.88
billion. Accounts receivable increased $10 million to $373 million on higher
product shipments. Inventory increased by $27 million to $337 million, as the
company continued to ramp production to meet customer demand.
Forward Looking Statements: Statements in this press release regarding
customers' escalating investments in process control and trend of escalating
investments in process control 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: the demand for semiconductors
and new and enhanced product offerings by competitors. For other factors that
may cause actual results to differ materially 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,
2004 2003
- ----------------------------------------------------------------------
(In thousands)
ASSETS
Cash, short-term investments and marketable
securities $ 1,876,356 $1,487,883
Accounts receivable, net 372,773 223,535
Inventories 337,414 258,799
Land, property and equipment, net 376,052 382,729
Other assets 576,584 513,651
------------- -----------
Total assets $ 3,539,179 $2,866,597
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 63,991 $ 33,893
Deferred system profit 284,813 177,486
Unearned revenue 57,318 48,203
Other current liabilities 505,507 391,474
------------- -----------
Total current liabilities 911,629 651,056
------------- -----------
Stockholders' equity:
Common stock and capital in excess of par
value 984,804 814,968
Retained earnings 1,640,587 1,396,886
Accumulated other comprehensive income 2,159 3,687
------------- -----------
Total stockholders' equity 2,627,550 2,215,541
------------- -----------
Total liabilities and stockholders'
equity $ 3,539,179 $2,866,597
============= ===========
KLA-Tencor Corporation
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
Three months ended Fiscal year ended
June 30, June 30,
2004 2003 2004 2003
- ----------------------------------------------------------------------
(In thousands, except per share data)
Revenues:
Product $372,546 $240,638 $1,200,160 $1,060,142
Service 77,892 67,675 296,558 262,907
--------- --------- ---------- -----------
Total revenues 450,438 308,313 1,496,718 1,323,049
Costs and operating
expenses:
Costs of goods sold 187,498 157,292 670,013 671,505
Research and development 77,110 64,084 280,641 268,291
Selling, general and
administrative 64,255 57,855 248,706 253,933
Non-recurring acquisition,
restructuring
and other, net -- -- -- (9,402)
--------- --------- ---------- -----------
Total costs and
operating expenses 328,863 279,231 1,199,360 1,184,327
--------- --------- ---------- -----------
Income from operations 121,575 29,082 297,358 138,722
Interest income and other,
net 6,716 9,552 27,358 41,796
--------- --------- ---------- -----------
Income before income taxes 128,291 38,634 324,716 180,518
Provision for income taxes 32,124 9,275 81,015 43,327
--------- --------- ---------- -----------
Net income $ 96,167 $ 29,359 $ 243,701 $ 137,191
========= ========= ========== ===========
Basic earning per share:
Net income $ 0.49 $ 0.15 $ 1.25 $ 0.72
========= ========= ========== ===========
Diluted earnings per share:
Net income $ 0.48 $ 0.15 $ 1.21 $ 0.70
========= ========= ========== ===========
Weighted average number of
shares:
Basic 196,529 190,670 194,976 189,817
========= ========= ========== ===========
Diluted 201,669 196,630 201,799 194,785
========= ========= ========== ===========
CONTACT: KLA-Tencor
John Kispert, 408-875-6224 (Chief Financial Officer)
john.kispert@kla-tencor.com
Cary Halsted, 408-875-4094 (Investment Community)
cary.halsted@kla-tencor.com
Kern Beare, 408-875-7039 (Media)
kern.beare@kla-tencor.com