KLA-TENCOR MILPITAS, Calif., Jan. 28, 2016 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its second quarter of fiscal year 2016, which ended on December 31, 2015, and reported GAAP net income of $152 million and GAAP earnings per diluted share of $0.98 on revenues of $710 million.
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GAAP Results
Q2 FY 2016 Q1 FY 2016 Q2 FY 2015
Revenues $710 million $643 million $676 million
-------- ------------ ------------ ------------
Net Income $152 million $105 million $20 million
------------ -----------
Earnings per Diluted
Share $0.98 $0.66 $0.12
-------------------- ----- ----- -----
Non-GAAP Results
Q2 FY 2016 Q1 FY 2016 Q2 FY 2015
Net Income $162 million $112 million $113 million
------------ ------------
Earnings per Diluted
Share $1.04 $0.71 $0.68
-------------------- ----- ----- -----
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, restructuring, severance and other related charges, merger-related charges, and debt extinguishment loss and recapitalization charges.
In light of the pending merger transaction with Lam Research Corporation, KLA-Tencor will discontinue conducting quarterly earnings conference calls to discuss financial results, but instead publish a quarterly stockholder letter and other supplemental data on the Investor Relations section of the KLA-Tencor website.
About KLA-Tencor:
KLA-Tencor Corporation, 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 nearly 40 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,
2015 June 30, 2015
-------------- ------------- -------------
ASSETS
Cash, cash
equivalents and
marketable
securities $2,241,425 $2,387,111
Accounts
receivable, net 427,115 585,494
Inventories 691,786 617,904
Other current
assets 324,379 314,067
Land, property and
equipment, net 292,393 314,591
Goodwill 335,205 335,263
Purchased
intangibles, net 6,934 11,895
Other non-current
assets 253,279 259,687
Total assets $4,572,516 $4,826,012
========== ==========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Accounts payable $122,314 $103,342
Deferred system
profit 131,848 148,691
Unearned revenue 63,587 71,335
Current portion of
long-term debt - 16,981
Other current
liabilities 540,581 661,414
------- -------
Total current
liabilities 858,330 1,001,763
Non-current
liabilities:
Long-term debt 3,131,676 3,173,435
Unearned revenue 49,360 47,145
Other non-current
liabilities 167,525 182,230
------- -------
Total liabilities 4,206,891 4,404,573
Stockholders'
equity:
Common stock and
capital in excess
of par value 416,144 474,374
Accumulated deficit - (12,362)
Accumulated other
comprehensive
income (loss) (50,519) (40,573)
------- -------
Total stockholders'
equity 365,625 421,439
-------
Total liabilities
and stockholders'
equity $4,572,516 $4,826,012
========== ==========
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended December 31, Six months ended December 31,
------------------------------- -----------------------------
(In thousands, except
per share amounts) 2015 2014 2015 2014
--------------------- ---- ---- ---- ----
Revenues:
Product $527,780 $503,884 $988,519 $980,482
Service 182,465 172,473 364,370 338,776
------- ------- ------- -------
Total revenues 710,245 676,357 1,352,889 1,319,258
Costs and expenses:
Costs of revenues 280,980 283,213 551,224 571,680
Engineering, research
and development 118,272 133,557 238,215 277,194
Selling, general and
administrative 96,532 104,873 188,195 206,517
Interest expense and
other, net 28,986 29,313 55,481 39,459
Loss on extinguishment
of debt and other, net - 131,669 - 131,669
--- ------- --- -------
Income (loss) before
income taxes 185,475 (6,268) 319,774 92,739
Provision for (benefit
from) income taxes 33,268 (26,536) 62,670 238
------ ---
Net income $152,207 $20,268 $257,104 $92,501
======== ======= ======== =======
Net income per share:
Basic $0.98 $0.12 $1.65 $0.56
Diluted $0.98 $0.12 $1.64 $0.56
Cash dividends declared
per share (including a
special cash dividend
of $16.50 per share
declared during the
three months ended
December 31, 2014) $0.52 $17.00 $1.04 $17.50
----- ------ ----- ------
Weighted-average
number of shares:
Basic 155,252 164,036 156,036 164,440
Diluted 155,996 165,317 156,971 165,950
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
December 31,
------------
(In thousands) 2015 2014
------------- ---- ----
Cash flows from operating
activities:
Net income $152,207 $20,268
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 16,529 18,901
Asset impairment
charges 358 -
Loss on
extinguishment of
debt and other,
net - 131,669
Non-cash stock-
based compensation
expense 11,325 14,848
Excess tax benefit
from equity awards (1,382) (565)
Net gain on sales
of marketable
securities and
other investments (25) (281)
Changes in assets and liabilities
Decrease (increase)
in accounts
receivable, net 32,098 (200,282)
Decrease (increase)
in inventories (36,668) 10,702
Increase in other
assets (38,044) (79,856)
Increase in
accounts payable 15,047 478
Increase (decrease)
in deferred system
profit (2,339) 79,285
Increase (decrease)
in other
liabilities (48,782) 15,917
------- ------
Net cash provided
by operating
activities 100,324 11,084
Cash flows from investing
activities:
Capital
expenditures, net (7,938) (12,783)
Proceeds from sale
of assets 1,215 -
Purchases of
available-for-
sale securities (281,503) (469,416)
Proceeds from sale
of available-for-
sale securities 284,734 709,123
Proceeds from
maturity of
available-for-
sale securities 141,362 248,035
Purchases of
trading securities (16,738) (16,999)
Proceeds from sale
of trading
securities 20,036 17,807
------ ------
Net cash provided
by investing
activities 141,168 475,767
Cash flows from financing
activities:
Proceeds from
issuance of debt,
net of issuance
costs - 3,224,906
Repayment of debt (20,000) (877,367)
Issuance of common
stock 21,908 24,726
Tax withholding
payments related
to vested and
released
restricted stock
units (495) (632)
Common stock
repurchases (39,119) (141,521)
Payment of
dividends to
stockholders (81,380) (2,796,739)
Excess tax benefit
from equity awards 1,382 565
----- ---
Net cash used in
financing
activities (117,704) (566,062)
Effect of exchange
rate changes on
cash and cash
equivalents (894) (5,607)
---- ------
Net increase
(decrease) in cash
and cash
equivalents 122,894 (84,818)
Cash and cash
equivalents at
beginning of
period 763,697 669,683
Cash and cash
equivalents at end
of period $886,591 $584,865
======== ========
Supplemental cash flow
disclosures:
Income taxes paid,
net $51,631 $37,368
Interest paid $56,711 $33,092
Non-cash activities:
Purchase of land,
property and
equipment -
investing
activities $2,253 $3,962
Unsettled common
stock repurchase -
financing
activities $ - $12,589
Dividends payable -
financing
activities $20,284 $42,829
KLA-Tencor Corporation
Condensed Consolidated Unaudited Supplemental Information
(In thousands, except per share amounts)
Reconciliation of GAAP Net Income to Non-GAAP Net Income
--------------------------------------------------------
Three months ended Six months ended
------------------ ----------------
December 31, September 30, December 31, December 31, December 31,
2015 2015 2014 2015 2014
------------- -------------- ------------- ------------- -------------
GAAP net income $152,207 $104,897 $20,268 $257,104 $92,501
Adjustments to reconcile GAAP net income
to non-GAAP net income
----------------------------------------
Acquisition-related charges a 1,309 3,581 3,832 4,890 7,830
Restructuring, severance and other
related charges b 1,742 7,066 3,299 8,808 7,356
Merger-related charges c 8,820 - - 8,820 -
Debt extinguishment loss and
recapitalization charges d - - 134,147 - 134,147
Income tax effect of non-GAAP
adjustments e (2,321) (3,348) (48,720) (5,669) (50,259)
Non-GAAP net income $161,757 $112,196 $112,826 $273,953 $191,575
======== ======== ======== ======== ========
GAAP net income per diluted share $0.98 $0.66 $0.12 $1.64 $0.56
===== ===== ===== ===== =====
Non-GAAP net income per diluted share $1.04 $0.71 $0.68 $1.75 $1.15
===== ===== ===== ===== =====
Shares used in diluted shares
calculation 155,996 157,984 165,317 156,971 165,950
======= ======= ======= ======= =======
Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations
---------------------------------------------------------------------------------------------
Acquisition Restructuring, Merger-related Debt extinguishment Total pre-tax
related charges severance and other charges loss and
recapitalization GAAP to non-GAAP
related charges charges adjustments
--------------- ------- -----------
Three months ended
December 31, 2015
------------------
Costs of revenues $663 $470 $67 $ - $1,200
Engineering, research
and development - 479 - - 479
Selling, general and
administrative 646 793 8,753 - 10,192
Total in three months
ended December 31,
2015 $1,309 $1,742 $8,820 $ - $11,871
====== ====== ====== === === =======
Three months ended
September 30, 2015
-------------------
Costs of revenues $2,285 $2,770 $ - $ - $5,055
Engineering, research
and development 650 1,010 - - 1,660
Selling, general and
administrative 646 3,286 - - 3,932
--- ----- --- ---
Total in three months
ended September 30,
2015 $3,581 $7,066 $ - $ - $10,647
====== ====== === === === === =======
Three months ended
December 31, 2014
------------------
Costs of revenues $2,577 $ - $ - $ - $2,577
Engineering, research
and development 700 1,289 - - 1,989
Selling, general and
administrative 555 2,010 - 2,478 5,043
Loss on
extinguishment of
debt and other, net - - - 131,669 131,669
--- ---
Total in three months
ended December 31,
2014 $3,832 $3,299 $ - $134,147 $141,278
====== ====== === === ======== ========
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
includes 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 these expenses 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 employee severance
and other exit costs, impairment of
certain long-lived assets.
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. Merger-related charges that are
directly related to the pending
merger between KLA-Tencor and Lam
as announced on October 21, 2015.
Charges primarily includes costs
for advisory services, appraisals,
legal services and auditing
services. Management believes that
it is appropriate to exclude these
items as they are not indicative of
ongoing operating results and
therefore limit comparability and
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. Debt extinguishment loss and
recapitalization charges include a
pre-tax loss on early
extinguishment of debt related to
the 6.900% Senior Notes due in
2018, net and certain other
expenses incurred in connection
with the leveraged recapitalization
plan which was completed in the
second quarter of fiscal year ended
June 30, 2015. Management believes
that it is appropriate to exclude
these items as they are not
indicative of ongoing operating
results and therefore limit
comparability and 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.
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SOURCE KLA-Tencor Corporation
