KLA-TENCOR MILPITAS, Calif., April 26, 2016 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its third quarter of fiscal year 2016, which ended on March 31, 2016, reporting GAAP net income of $176 million and GAAP earnings per diluted share of $1.12 on revenues of $712 million.
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GAAP Results
Q3 FY 2016 Q2 FY 2016 Q3 FY 2015
Revenues $712 million $710 million $738 million
-------- ------------ ------------ ------------
Net Income $176 million $152 million $132 million
------------ ------------
Earnings per
Diluted
Share $1.12 $0.98 $0.81
------------ ----- ----- -----
Non-GAAP Results
Q3 FY 2016 Q2 FY 2016 Q3 FY 2015
Net Income $179 million $162 million $137 million
------------ ------------
Earnings per
Diluted
Share $1.15 $1.04 $0.84
------------ ----- ----- -----
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 has discontinued 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) March 31, 2016 June 30, 2015
------------- -------------- -------------
ASSETS
Cash, cash
equivalents
and
marketable
securities $2,241,310 $2,387,111
Accounts
receivable,
net 624,818 585,494
Inventories 721,493 617,904
Other current
assets 318,852 314,067
Land, property
and
equipment,
net 287,874 314,591
Goodwill 335,205 335,263
Purchased
intangibles,
net 5,625 11,895
Other non-
current
assets 246,925 259,687
Total assets $4,782,102 $4,826,012
========== ==========
LIABILITIES
AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Accounts
payable $126,322 $103,342
Deferred
system profit 193,219 148,691
Unearned
revenue 51,820 71,335
Current
portion of
long-term
debt - 16,981
Other current
liabilities 626,331 661,414
------- -------
Total current
liabilities 997,692 1,001,763
Non-current
liabilities:
Long-term debt 3,097,306 3,173,435
Unearned
revenue 51,065 47,145
Other non-
current
liabilities 159,467 182,230
------- -------
Total
liabilities 4,305,530 4,404,573
Stockholders'
equity:
Common stock
and capital
in excess of
par value 424,474 474,374
Retained
earnings
(accumulated
deficit) 95,121 (12,362)
Accumulated
other
comprehensive
income (loss) (43,023) (40,573)
------- -------
Total
stockholders'
equity 476,572 421,439
-------
Total
liabilities
and
stockholders'
equity $4,782,102 $4,826,012
========== ==========
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended March 31, Nine months ended March 31,
---------------------------- ---------------------------
(In thousands, except per
share amounts) 2016 2015 2016 2015
------------------------- ---- ---- ---- ----
Revenues:
Product $530,623 $565,181 $1,519,142 $1,545,663
Service 181,810 173,278 546,180 512,054
------- ------- ------- -------
Total revenues 712,433 738,459 2,065,322 2,057,717
Costs and expenses:
Costs of revenues 274,599 320,282 825,823 891,962
Engineering, research and
development 115,589 124,583 353,804 401,777
Selling, general and
administrative 87,407 98,608 275,602 305,125
Interest expense and
other, net 24,907 28,532 80,388 67,991
Loss on extinguishment of
debt and other, net - - - 131,669
--- --- --- -------
Income before income
taxes 209,931 166,454 529,705 259,193
Provision for income
taxes 34,154 34,816 96,824 35,054
------ ------
Net income $175,777 $131,638 $432,881 $224,139
======== ======== ======== ========
Net income per share:
Basic $1.13 $0.81 $2.78 $1.37
Diluted $1.12 $0.81 $2.76 $1.36
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 $0.50 $1.56 $18.00
----- ----- ----- ------
Weighted-average number
of shares:
Basic 155,690 161,559 155,921 163,494
Diluted 156,429 162,794 156,797 164,930
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
March 31,
---------
(In thousands) 2016 2015
------------- ---- ----
Cash flows from operating activities:
Net income $175,777 $131,638
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 15,780 20,510
Asset impairment charges 1,038 1,698
Non-cash stock-based
compensation expense 9,185 12,767
Excess tax benefit from equity
awards (635) (398)
Net gain on sales of marketable
securities and other
investments (2,847) (60)
Changes in assets and liabilities:
Increase in accounts receivable,
net (186,715) (1,213)
Decrease (increase) in
inventories (26,065) 23,745
Decrease in other assets 8,322 20,096
Increase (decrease) in accounts
payable 3,751 (5,054)
Increase (decrease) in deferred
system profit 61,371 (21,732)
Increase in other liabilities 52,535 60,420
------ ------
Net cash provided by operating
activities 111,497 242,417
Cash flows from investing activities:
Capital expenditures, net (8,954) (10,326)
Proceeds from sale of assets 2,811 -
Purchases of available-for-
sale securities (249,126) (339,580)
Proceeds from sale of available-
for-sale securities 147,120 223,438
Proceeds from maturity of
available-for-sale securities 146,102 181,151
Purchases of trading securities (13,243) (9,383)
Proceeds from sale of trading
securities 16,162 13,765
------ ------
Net cash provided by investing
activities 40,872 59,065
Cash flows from financing activities:
Repayment of debt (35,000) (9,375)
Issuance of common stock 2 175
Tax withholding payments related
to vested and released
restricted stock units (1,702) (1,990)
Common stock repurchases - (168,670)
Payment of dividends to
stockholders (82,109) (82,250)
Excess tax benefit from equity
awards 635 398
--- ---
Net cash used in financing
activities (118,174) (261,712)
Effect of exchange rate changes
on cash and cash equivalents 5,188 (2,743)
----- ------
Net increase in cash and cash
equivalents 39,383 37,027
Cash and cash equivalents at
beginning of period 886,591 584,865
Cash and cash equivalents at end
of period $925,974 $621,892
======== ========
Supplemental cash flow disclosures:
Income taxes paid, net $22,304 $8,101
Interest paid $3,482 $4,341
Non-cash activities:
Purchase of land, property and
equipment -investing
activities $2,311 $2,255
Unsettled common stock
repurchase -financing
activities $ - $12,862
Dividends payable -financing
activities $18,827 $41,412
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 Nine months ended
------------------ -----------------
March 31, 2016 December 31, 2015 March 31, 2015 March 31, 2016 March 31, 2015
-------------- ----------------- -------------- -------------- --------------
GAAP net income $175,777 $152,207 $131,638 $432,881 $224,139
Adjustments to reconcile GAAP net income
to non-GAAP net income
----------------------------------------
Acquisition-related charges a 1,309 1,309 3,928 6,199 11,758
Restructuring, severance and other
related charges b 137 1,742 3,636 8,945 10,992
Merger-related charges c 3,582 8,820 - 12,402 -
Debt extinguishment loss and
recapitalization charges d - - - - 134,147
Income tax effect of non-GAAP
adjustments e (1,535) (2,321) (1,840) (7,204) (52,099)
Non-GAAP net income $179,270 $161,757 $137,362 $453,223 $328,937
======== ======== ======== ======== ========
GAAP net income per diluted share $1.12 $0.98 $0.81 $2.76 $1.36
===== ===== ===== ===== =====
Non-GAAP net income per diluted share $1.15 $1.04 $0.84 $2.89 $1.99
===== ===== ===== ===== =====
Shares used in diluted shares calculation 156,429 155,996 162,794 156,797 164,930
======= ======= ======= ======= =======
Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations
---------------------------------------------------------------------------------------------
Acquisition- Restructuring, Merger- Total pre-tax
related severance and related GAAP to non-
charges other related charges GAAP
charges adjustments
------------ -------------- ------- -------------
Three months ended March 31, 2016
---------------------------------
Costs of revenues $663 $121 $238 $1,022
Engineering, research and development - 5 508 513
Selling, general and administrative 646 11 2,836 3,493
Total in three months ended March 31, 2016 $1,309 $137 $3,582 $5,028
====== ==== ====== ======
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 March 31, 2015
---------------------------------
Costs of revenues $2,507 $211 $ - $2,718
Engineering, research and development 700 680 - 1,380
Selling, general and administrative 721 2,745 - 3,466
Total in three months ended March 31, 2015 $3,928 $3,636 $ - $7,564
====== ====== === === ======
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, employee-related expense
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
