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KLA-Tencor Reports Fiscal 2013 Second Quarter Results
Submitted by admin on 1/24/2013 @ 1:15 PM
Companies mentioned in this article:
KLA-Tencor
MILPITAS, Calif., Jan. 24, 2013 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its second quarter of fiscal year 2013, which ended on December 31, 2012, and reported GAAP net income of $107 million and GAAP earnings per diluted share of $0.63 on revenues of $673 million.
"In the second quarter, KLA-Tencor delivered revenue and earnings per share at or above the upper end of our range of guidance in the face of a challenging demand environment," said Rick Wallace, president and CEO of KLA-Tencor. "We believe that the accelerated pace of innovation by our customers at the leading edge, and the essential role that process control plays in the success of that innovation, will continue to provide long-term opportunities for KLA-Tencor to advance our market leadership and to deliver superior financial performance."
GAAP Results
Q2 FY 2013 Q1 FY 2013 Q2 FY 2012
Revenues $673 million $721 million $642 million
Net Income $107 million $135 million $111 million
Earnings per
Diluted Share $0.63 $0.80 $0.66
-------------- ----- ----- -----
Non-GAAP Results
Q2 FY 2013 Q1 FY 2013 Q2 FY 2012
Net Income $106 million $142 million $122 million
Earnings per
Diluted Share $0.63 $0.84 $0.72
-------------- ----- ----- -----
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 acquisitions, restatement and restructuring related items, and certain discrete tax items.
KLA-Tencor will discuss the results for its fiscal year 2013 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 market conditions in the semiconductor equipment industry, anticipated innovation efforts by customers, expected trends and focus areas in customers' capital investment, the importance of process control in the success of future innovation, KLA-Tencor's ability to preserve and extend its market leadership position and KLA-Tencor's future financial performance, 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 and technology offerings by competitors; cancellation of orders by customers; the ability of KLA-Tencor's research and development teams to successfully innovate and develop technologies and products that are responsive to customer demands; KLA-Tencor's ability to successfully manage its costs; market acceptance of the company's existing and newly issued products; 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, 2012, subsequently filed Quarterly Reports on Form 10-Q and other 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, LED 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 more than 35 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. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. 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, 2012 June 30, 2012
------------- ----------------- -------------
ASSETS
Cash, cash equivalents and
marketable securities $2,578,253 $2,534,444
Accounts receivable, net 606,115 701,280
Inventories 662,735 650,802
Other current assets 289,197 277,517
Land, property and equipment, net 292,394 277,686
Goodwill 326,779 327,716
Purchased intangibles, net 43,514 55,636
Other non-current assets 269,776 275,227
Total assets $5,068,763 $5,100,308
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $103,575 $139,183
Deferred system profit 156,775 147,218
Unearned revenue 53,257 63,095
Other current liabilities 468,130 513,411
------- -------
Total current liabilities 781,737 862,907
Non-current liabilities:
Long-term debt 747,104 746,833
Income tax payable 54,910 50,839
Unearned revenue 31,742 34,899
Other non-current liabilities 92,134 89,235
------ ------
Total liabilities 1,707,627 1,784,713
Stockholders' equity:
Common stock and capital in
excess of par value 1,123,422 1,089,480
Retained earnings 2,252,772 2,247,258
Accumulated other comprehensive
income (loss) (15,058) (21,143)
------- -------
Total stockholders' equity 3,361,136 3,315,595
Total liabilities and
stockholders' equity $5,068,763 $5,100,308
========== ==========
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended December 31, Six months ended December 31,
------------------------------- -----------------------------
(In thousands, except
per share data) 2012 2011 2012 2011
--------------------- ---- ---- ---- ----
Revenues:
Product $523,023 $500,659 $1,097,101 $1,150,915
Service 149,988 141,823 296,619 288,043
------- ------- ------- -------
Total revenues 673,011 642,482 1,393,720 1,438,958
Costs and operating
expenses:
Costs of revenues 303,915 272,855 621,140 613,204
Engineering, research
and development 121,608 116,363 241,350 224,125
Selling, general and
administrative 94,241 93,801 191,426 187,877
------ ------ ------- -------
Total costs and
operating expenses 519,764 483,019 1,053,916 1,025,206
Income from operations 153,247 159,463 339,804 413,752
Interest income and
other, net (8,373) (12,556) (18,388) (19,583)
------ ------- ------- -------
Income before income
taxes 144,874 146,907 321,416 394,169
Provision for income
taxes 38,244 36,110 79,419 91,377
------ ------ ------
Net income $106,630 $110,797 $241,997 $302,792
======== ======== ======== ========
Net income per share:
Basic $0.64 $0.67 $1.45 $1.82
Diluted $0.63 $0.66 $1.43 $1.78
Cash dividends declared
per share $0.40 $0.35 $0.80 $0.70
----- ----- ----- -----
Weighted average number
of shares:
Basic 166,268 166,343 166,632 166,513
Diluted 169,076 169,103 169,702 169,650
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
December 31,
------------
(In thousands) 2012 2011
------------- ---- ----
Cash flows from operating
activities:
Net income $106,630 $110,797
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 21,925 23,267
Asset impairment
charges - 1,378
Net gain on sale
of assets (1,160) -
Non-cash stock-
based
compensation
expense 14,958 19,646
Excess tax
benefit from
equity awards (6,067) -
Net loss (gain)
on sale of
marketable
securities and
other
investments (1,048) 106
Changes in assets and
liabilities:
Increase in
accounts
receivable, net (77,272) (83,819)
Decrease
(increase) in
inventories 28,822 (33,142)
Decrease
(increase) in
other assets (19,062) 31,658
Increase
(decrease) in
accounts
payable (12,314) 14,580
Increase in
deferred system
profit 14,849 54,596
Increase in
other
liabilities 7,182 48,165
----- ------
Net cash
provided by
operating
activities 77,443 187,232
Cash flows from investing
activities:
Capital
expenditures,
net (17,091) (14,918)
Proceeds from
sale of assets 1,838 2,228
Purchase of
available-for-
sale securities (341,496) (287,987)
Proceeds from
sale and
maturity of
available-for-
sale securities 453,096 287,236
Purchase of
trading
securities (8,744) (16,852)
Proceeds from
sale of trading
securities 10,116 18,353
------ ------
Net cash
provided by
(used in)
investing
activities 97,719 (11,940)
Cash flows from financing
activities:
Issuance of
common stock 23,607 39,396
Tax withholding
payments
related to
vested and
released
restricted
stock units (9,471) (11,544)
Common stock
repurchases (68,283) (63,580)
Payment of
dividends to
stockholders (66,522) (58,101)
Excess tax
benefit from
equity awards 6,067 -
----- ---
Net cash used in
financing
activities (114,602) (93,829)
Effect of
exchange rate
changes on cash
and cash
equivalents (3,189) (2,424)
------ ------
Net increase in
cash and cash
equivalents 57,371 79,039
Cash and cash
equivalents at
beginning of
period 709,942 745,947
------- -------
Cash and cash
equivalents at
end of period $767,313 $824,986
======== ========
Supplemental cash flow
disclosures:
Income taxes
paid, net $48,295 $(29,746)
Interest paid $26,682 $26,904
KLA-Tencor Corporation
Condensed Consolidated Unaudited Supplemental Information
(In thousands, except per share data)
Reconciliation of GAAP Net Income to Non-GAAP Net Income
--------------------------------------------------------
Three months ended Six months ended
------------------ ----------------
December 31, 2012 September 30,
2012 December 31, 2011 December 31, 2012 December 31, 2011
----------------- -------------- ----------------- ----------------- -----------------
GAAP net income $106,630 $135,367 $110,797 $241,997 $302,792
Adjustments to reconcile GAAP net income to
non-GAAP net income
-------------------------------------------
Acquisition related charges a 4,242 6,886 7,406 11,128 15,034
Restructuring, severance and other
related charges b - 3,134 1,476 3,134 4,032
Restatement related charges c - - - - 135
Income tax effect of non-GAAP
adjustments d (1,392) (2,979) (2,886) (4,371) (6,949)
Discrete tax items e (3,514) - 5,079 (3,514) 5,079
---
Non-GAAP net income $105,966 $142,408 $121,872 $248,374 $320,123
======== ======== ======== ======== ========
GAAP net income per diluted share $0.63 $0.80 $0.66 $1.43 $1.78
===== ===== ===== ===== =====
Non-GAAP net income per diluted share $0.63 $0.84 $0.72 $1.46 $1.89
===== ===== ===== ===== =====
Shares used in diluted shares calculation 169,076 169,824 169,103 169,702 169,650
======= ======= ======= ======= =======
Pre-tax impact of items included in Consolidated Statements of Operations
-------------------------------------------------------------------------
Acquisition Restructuring, Restatement Total pre-tax
related severance and related GAAP to non-
charges other related charges GAAP
charges adjustment
------------ --------------- ------------ --------------
Three months ended
December 31, 2012
------------------
Costs of revenues $1,921 $ - $ - $1,921
Engineering,
research and
development 835 - - 835
Selling, general
and administrative 1,486 - - 1,486
----- --- --- -----
Total in three
months ended
December 31, 2012 $4,242 $ - $ - $4,242
====== === === === === ======
Three months ended
September 30, 2012
-------------------
Costs of revenues $4,560 $ - $ - $4,560
Engineering,
research and
development 836 - - 836
Selling, general
and administrative 1,490 3,134 - 4,624
----- ----- --- -----
Total in three
months ended
September 30, 2012 $6,886 $3,134 $ - $10,020
====== ====== === === =======
Three months ended
December 31, 2011
------------------
Costs of revenues $5,018 $243 $ - $5,261
Engineering,
research and
development 898 241 - 1,139
Selling, general
and administrative 1,490 992 - 2,482
----- --- --- -----
Total in three
months ended
December 31, 2011 $7,406 $1,476 $ - $8,882
====== ====== === === ======
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. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. 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
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 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 costs
associated with the company's
decision in the first quarter of
fiscal year 2013 to exit from the
solar inspection business, as well
as those associated with
reductions in force. 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.
c. Restatement related charges include
legal and other expenses related
to the investigation regarding the
company's historical stock option
granting process and related
stockholder litigation and other
matters. KLA-Tencor has paid or
reimbursed legal expenses incurred
by a number of its current and
former directors, officers and
employees in connection with the
investigation of the company's
historical stock option practices
and the related litigation and
government inquiries. 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.
d. 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.
e. Discrete tax items include the tax
impact of shortfalls in excess of
cumulative windfall tax benefits
recorded as provision for income
taxes during the period. Windfall
tax benefits arise when a
company's tax deduction for
employee stock activity exceeds
book compensation for the same
activity and are generally
recorded as increases to capital
in excess of par value.
Shortfalls arise when the tax
deduction is less than book
compensation and 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. When there are
shortfalls recorded as provision
for income taxes during an earlier
quarter, windfalls arising in
subsequent quarters within the
same fiscal year are recorded as a
reduction to income taxes to the
extent of the shortfalls recorded.
Management believes that it is
appropriate to exclude these or
other adjustments to the
cumulative windfall tax benefit
that are not indicative of ongoing
operating results and 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