KLA-Tencor Reports Fiscal Year 2010 Second Quarter Results
MILPITAS, Calif., Jan. 28 /PRNewswire-FirstCall/ -- KLA-Tencor Corporation (Nasdaq: KLAC) today announced operating results for its second quarter of fiscal year 2010, which ended on December 31, 2009, and reported GAAP net income of $22 million and GAAP earnings per diluted share of $0.13 on revenues of $440 million.
"KLA-Tencor delivered strong results for the quarter from improved demand from foundry customers ramping leading edge capacity and continued investment by logic and memory customers pursuing technology transition roadmaps," said Rick Wallace, KLA-Tencor's president and chief executive officer. "We see growing momentum in our financial performance as we execute our strategy of delivering high-performance process control solutions that create value for our customers and help them solve their mission-critical production challenges."
GAAP Results
Q2 FY 2010 Q1 FY 2010 Q2 FY 2009
Revenues $440 million $343 million $397 million
Net Income (Loss) $22 million $20 million $(434) million
Earnings (Loss) per
Diluted Share $0.13 $0.12 $(2.57)
Non-GAAP Results
Q2 FY 2010 Q1 FY 2010 Q2 FY 2009
Net Income (Loss) $49 million $26 million $(20) million
Earnings (Loss) per
Diluted Share $0.28 $0.15 $(0.12)
A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements that are part of this release. Non-GAAP results include the impact of stock-based compensation, but exclude the impact of acquisition, goodwill and intangible asset impairment, restatement, restructuring related, and certain discrete tax items.
KLA-Tencor will discuss the results for its fiscal year 2010 second quarter, along with its outlook, on a conference call today beginning at 2:00 p.m. Pacific Standard Time. A webcast of the call will be available at: www.kla-tencor.com
Forward-Looking Statements:
Statements in this press release other than historical facts, such as statements regarding perceived momentum in KLA-Tencor's financial performance and KLA-Tencor's ability to successfully innovate, develop and sell new technologies and products that meet customer demands 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; the financial condition of the global capital markets and the general macroeconomic environment; new and enhanced product offerings by competitors; cancellation of orders by customers; the ability of KLA-Tencor's research and development teams to successfully innovate and develop technology that is responsive to customer demands; KLA-Tencor's ability to successfully integrate and manage businesses that it acquires; and changing customer demands. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this release, please refer to KLA-Tencor's Annual Report on Form 10-K for the year ended June 30, 2009 and other subsequent filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA-Tencor assumes no obligation to, and does not currently intend to, update these forward-looking statements.
About KLA-Tencor:
KLA-Tencor Corporation (NASDAQ: KLAC), a leading provider of process control and yield management solutions, partners with customers around the world to develop state-of-the-art inspection and metrology technologies. These technologies serve the semiconductor, data storage, compound semiconductor, photovoltaic, and other related nanoelectronics industries. With a portfolio of industry-standard products and a team of world-class engineers and scientists, the company has created superior solutions for its customers for over 30 years. Headquartered in Milpitas, California, KLA-Tencor has dedicated customer operations and service centers around the world. Additional information may be found at www.kla-tencor.com. (KLAC-F)
Use of Non-GAAP Financial Information:
The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA-Tencor's financial results presented in accordance with United States GAAP.
To supplement KLA-Tencor's condensed consolidated financial statements presented in accordance with GAAP, the company provides certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of KLA-Tencor's operating performance and its prospects in the future. Specifically, KLA-Tencor believes that the non-GAAP information provides useful measures to both management and investors regarding financial and business trends relating to KLA-Tencor's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP.
KLA-Tencor Corporation
Condensed Consolidated Unaudited Balance Sheets
(In thousands) December 31, 2009 June 30, 2009
----------------- -------------
ASSETS
Cash and short-term investments $1,522,344 $1,329,884
Accounts receivable, net 298,071 210,143
Inventories, net 352,241 370,206
Other current assets 414,605 488,384
Land, property and equipment, net 261,942 291,878
Goodwill 333,984 329,379
Purchased intangibles, net 132,462 149,080
Other non-current assets 410,092 440,584
------- -------
Total assets $3,725,741 $3,609,538
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $87,632 $63,485
Deferred system profit 147,578 95,820
Unearned revenue 38,811 46,236
Other current liabilities 339,084 341,441
------- -------
Total current liabilities 613,105 546,982
Non-current liabilities:
Income tax payable 51,787 49,738
Unearned revenue 24,589 23,059
Other non-current liabilities 63,851 60,163
Long-term debt 745,475 745,204
------- -------
Total liabilities 1,498,807 1,425,146
Stockholders' equity:
Common stock and capital in excess
of par value 886,860 835,477
Retained earnings 1,357,049 1,370,132
Accumulated other comprehensive loss (16,975) (21,217)
------- -------
Total stockholders' equity 2,226,934 2,184,392
--------- ---------
Total liabilities and stockholders' equity $3,725,741 $3,609,538
========== ==========
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended Six months ended
--------------------- --------------------
(In thousands, except per Dec. 31, Dec. 31, Dec. 31, Dec. 31,
share data) 2009 2008 2009 2008
--------- ---------- --------- ---------
Revenues:
Product $314,946 $273,072 $544,197 $678,568
Service 125,409 123,517 238,845 250,534
------- ------- ------- -------
Total revenues 440,355 396,589 783,042 929,102
Costs and operating expenses:
Costs of revenues 207,286 238,167 379,178 490,980
Engineering, research and
development 83,301 95,266 161,510 209,627
Selling, general and
administrative 102,673 133,954 180,309 252,444
Goodwill and purchased
intangible asset impairment - 434,833 - 446,744
--- ------- --- -------
Total costs and operating
expenses 393,260 902,220 720,997 1,399,795
Income (loss) from
operations 47,095 (505,631) 62,045 (470,693)
Interest income and other,
net (9,079) (12,472) (1,237) (8,295)
------ ------- ------ ------
Income (loss) before income
taxes 38,016 (518,103) 60,808 (478,988)
Provision for (benefit from)
income taxes 16,222 (83,849) 18,609 (64,023)
Net income (loss) $21,794 $(434,254) $42,199 $(414,965)
======= ========= ======= =========
Net income (loss) per share:
Basic $0.13 $(2.57) $0.25 $(2.43)
----- ------ ----- ------
Diluted $0.13 $(2.57) $0.24 $(2.43)
----- ------ ----- ------
Cash dividend paid per share $0.15 $0.15 $0.30 $0.30
----- ----- ----- -----
Weighted average number of
shares:
Basic 171,408 169,022 171,053 170,552
Diluted 173,808 169,022 173,292 170,552
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
December 31,
(In thousands) 2009 2008
---- ----
Cash flows from operating activities:
Net income (loss) $21,794 $(434,254)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 23,240 35,646
Goodwill, purchased intangible
asset and long-lived asset
impairment charges 10,592 436,833
Provision for doubtful accounts - 23,887
Non-cash stock-based compensation 20,855 22,303
Tax charge from equity awards - (3,294)
Excess tax benefit from equity awards - (2)
Net loss (gain) on sale of
marketable securities and
other investments (1,582) 641
Gain on sale of real estate assets (160) (1,997)
Changes in assets and liabilities,
net of assets acquired and liabilities
assumed in business combinations:
Decrease (increase) in accounts
receivable, net (55,564) 31,119
Decrease (increase) in inventories (2,621) 30,322
Decrease (increase) in other assets 101,550 (16,314)
Increase in accounts payable 12,328 736
Increase in deferred system profit 32,856 1,302
Increase (decrease) in other
liabilities 313 (162,528)
--- --------
Net cash provided by (used in)
operating activities 163,601 (35,600)
Cash flows from investing activities:
Acquisitions of businesses, net
of cash received - (13,952)
Capital expenditures, net (10,735) (6,967)
Proceeds from sale of long-lived assets 5,878 19,348
Purchase of available-for-sale
securities (337,025) (124,775)
Proceeds from sale and maturity
of available-for-sale securities 182,799 129,770
Purchase of trading securities (15,001) (19,206)
Proceeds from sale of trading
securities 17,476 18,707
------ ------
Net cash provided by (used in)
investing activities (156,608) 2,925
Cash flows from financing activities:
Issuance of common stock 20,545 21,164
Tax withholding payments related to
vested and released restricted stock
units (10,371) (46)
Common stock repurchases - (49,046)
Payment of dividends to stockholders (25,686) (25,335)
Excess tax benefit from stock-based
compensation - 2
--- ---
Net cash used in financing
activities (15,512) (53,261)
Effect of exchange rate changes on cash and
cash equivalents (876) 8,807
Net decrease in cash and cash equivalents (9,395) (77,129)
Cash and cash equivalents at beginning of
period 540,839 733,459
Cash and cash equivalents at end of period $531,444 $656,330
======== ========
Supplemental cash flow disclosures:
Income tax refunds (received), net $(68,491) $(7,176)
Interest paid $26,084 $28,887
KLA-Tencor Corporation
Condensed Consolidated Unaudited Supplemental Information
(In thousands, except per share data)
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
----------------------------------------------------------------------
Three months ended Six months ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
GAAP net income
(loss) $21,794 $20,405 $(434,254) $42,199 $(414,965)
Adjustments to
reconcile GAAP net
income (loss) to
non-GAAP net
income (loss)
-------------------
Acquisition related
charges a 8,104 8,095 22,590 16,199 51,008
Restructuring,
severance and other
related charges b 14,450 (4,409) 23,621 10,041 27,782
Restatement related
charges c 7,077 5,188 9,190 12,265 12,974
Goodwill and purchased
intangible asset
impairment d - - 434,833 - 446,744
Income tax effect of
non-GAAP adjustments e (10,762) (3,121) (75,882) (13,883) (88,096)
Discrete tax items f 8,693 - - 8,693 -
------ ----- ------ ------ ------
Non-GAAP net income
(loss) $49,356 $26,158 $(19,902) $75,514 $35,447
======= ======= ======== ======= =======
GAAP net income (loss)
per diluted share $0.13 $0.12 $(2.57) $0.24 $(2.43)
===== ===== ====== ===== ======
Non-GAAP net income
(loss) per diluted share $0.28 $0.15 $(0.12) $0.44 $0.21
===== ===== ====== ===== =====
Shares used in diluted
Shares calculation 173,808 172,718 169,022 173,292 170,552
======= ======= ======= ======= =======
Pre-tax impact of items included in Condensed Consolidated Unaudited
Statements of Operations:
--------------------------------------------------------------------
Restructuring, Goodwill
severance and Total
and Restate- purchased pre-tax
Acquisition other ment intangible GAAP to
related related related asset non-GAAP
charges charges charges impairment adjustment
------- ------- ------- ---------- ----------
Costs of revenues $5,727 $2,052 $- $- $7,779
Engineering, research and
development 898 566 - - 1,464
Selling, general and
administrative 1,479 11,832 7,077 - 20,388
----- ------ ----- --- ------
Total in three months
ended Dec. 31, 2009 $8,104 $14,450 $7,077 $- $29,631
====== ======= ====== === =======
Total in three months
Ended Sept. 30, 2009 $8,095 $(4,409) $5,188 $- $8,874
====== ======= ====== === ======
Total in three months
ended Dec. 31, 2008 $22,590 $23,621 $9,190 $434,833 $490,234
======= ======= ====== ======== ========
Three months ended
------------------
December 31, September 30, December 31,
2009 2009 2008
------------ ------------- ------------
Stock-based compensation
------------------------
Costs of revenues $3,325 $3,288 $4,679
Engineering, research and
development 6,667 6,603 6,981
Selling, general and
administrative 10,863 10,308 10,643
------ ------ ------
Total $20,855 $20,199 $22,303
======= ======= =======
To supplement our condensed consolidated financial statements presented in
accordance with GAAP, we provide certain non-GAAP financial information,
which is adjusted from results based on GAAP to exclude certain costs and
expenses, as well as other supplemental information. The non-GAAP and
supplemental information is provided to enhance the user's overall
understanding of our operating performance and our prospects in the
future. Specifically, we believe that the non-GAAP information provides
useful measures to both management and investors regarding financial and
business trends relating to our financial performance by excluding certain
costs and expenses that we believe are not indicative of our core
operating results. The non-GAAP information is among the budgeting and
planning tools that management uses for future forecasting. The
presentation of non-GAAP and supplemental information is not meant to be
considered in isolation or as a substitute for results prepared and
presented in accordance with United States GAAP.
a Acquisition related charges include amortization of intangible assets,
inventory fair value adjustments, and in-process research and
development associated with acquisitions. Management believes that the
expense associated with the amortization of acquisition related
intangible assets is appropriate to be excluded because a significant
portion of the purchase price for acquisitions may be allocated to
intangible assets that have short lives, and exclusion of the
amortization expense allows comparisons of operating results that are
consistent over time for both KLA-Tencor's newly acquired and long-held
businesses. Management believes that it is appropriate to exclude
acquisition related inventory fair value adjustments and in-process
research and development as they are not indicative of ongoing
operating results and therefore limit comparability. Management
believes excluding these items helps investors compare our operating
performance with our results in prior periods as well as with the
performance of other companies.
b Restructuring, severance and other related charges include gains and
costs associated with the company's facilities divestment and
consolidation program, reductions in force, entry into a severance and
consulting agreement with the company's former president/chief
operating officer, gains and losses from sales of facilities, and asset
impairment (other than impairment of goodwill and purchased intangible
assets, which is included within the category described in note (d)
below) from discontinuing or making available for sale certain acquired
product lines. Management believes that it is appropriate to exclude
those items as they are not indicative of ongoing operating results and
therefore limit comparability. Management believes excluding these
items helps investors compare our operating performance with our
results in prior periods as well as with the performance of other
companies.
c Restatement related charges include legal and other expenses related to
the stock option investigation, shareholder litigation and related
matters. Management believes that it is appropriate to exclude those
items as they are not indicative of ongoing operating results and
therefore limit comparability. Management believes excluding these
items helps investors compare our operating performance with our
results in prior periods as well as with the performance of other
companies.
d Goodwill and purchased intangible asset impairment includes non-cash
expense recognized as a result of the company's annual evaluation of
goodwill or the testing for intangible asset impairment driven by
certain company-specific triggering events, as well as the impairment
of goodwill and intangible assets as a result of discontinuing acquired
products and making acquired products available for sale. Management
believes that it is appropriate to exclude those items as they are not
indicative of ongoing operating results and therefore limit
comparability. Management believes excluding these items helps
investors compare our operating performance with our results in prior
periods as well as with the performance of other companies.
e Income tax effect of non-GAAP adjustments includes the income tax
effects of the excluded items noted above. Management believes that it
is appropriate to exclude the tax effects of the items noted above in
order to present a more meaningful measure of non-GAAP net income.
f Discrete tax items include the tax impact of shortfalls in excess of
cumulative windfall tax benefits recorded as provision for income taxes
during the quarter. Windfall tax benefits arise when a company's tax
deductions for employee stock activity exceeds book compensation for
the same activity. A shortfall arises when the tax deduction is less
than book compensation. Windfalls are recorded as increases to capital
in excess of par value. Shortfalls are recorded as decreases to
capital in excess of par value to the extent that cumulative windfalls
exceed cumulative shortfalls. Shortfalls in excess of cumulative
windfalls are recorded as provision for income taxes. Management
believes that it is appropriate to exclude these items as they are not
indicative of ongoing operating results and therefore limit
comparability. Management believes excluding these items helps
investors compare our operating performance with our results in prior
periods as well as with the performance of other companies.
SOURCE KLA-Tencor Corporation
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