KLA-TENCOR MILPITAS, Calif., July 24, 2014 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its fourth quarter and fiscal year ended June 30, 2014. KLA-Tencor reported GAAP net income of $129 million and GAAP earnings per diluted share of $0.77 on revenues of $734 million for the fourth quarter of fiscal year 2014. For the year ended June 30, 2014, the company reported GAAP net income of $583 million and GAAP earnings per diluted share of $3.47 on revenues of $2.9 billion.
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"KLA-Tencor's fourth quarter results culminate a year of strong operating and financial performance for the company, as well as solid execution of our strategic objectives," said Rick Wallace, KLA-Tencor's President and Chief Executive Officer. "Our market leadership was highlighted by the second-highest net bookings result in the company's history in fiscal year 2014, including record bookings for our Wafer Inspection products. This demonstrates our customer focus and market leadership, as well as the critical role KLA-Tencor plays in helping our customers address the higher cost and complexity associated with competing at the leading edge."
GAAP Results
Q4 FY 2014 Q3 FY 2014 Q4 FY 2013
Revenues $734 million $832 million $720 million
------------ ------------
Net
Income $129 million $204 million $135 million
Earnings
per
Diluted
Share $0.77 $1.21 $0.80
-------- ----- ----- -----
Non-GAAP Results
Q4 FY 2014 Q3 FY 2014 Q4 FY 2013
Net
Income $133 million $206 million $139 million
Earnings
per
Diluted
Share $0.80 $1.23 $0.82
-------- ----- ----- -----
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 charges, and certain discrete tax items.
KLA-Tencor will discuss the results for its fiscal year 2014 fourth quarter and full year, along with its outlook, on a conference call today beginning at 2:00 p.m. Pacific Daylight 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 KLA-Tencor's ability to maintain, and benefit from, its market leadership position; technological challenges and focus areas of KLA-Tencor's customers; and KLA-Tencor's ability to meet its customers' needs, 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, 2013, 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) June 30, 2014 June 30, 2013
----------- ------------- -------------
ASSETS
Cash, cash
equivalents
and
marketable
securities $3,152,637 $2,918,881
Accounts
receivable,
net 492,863 524,610
Inventories 656,457 634,448
Other
current
assets 284,873 273,564
Land,
property
and
equipment,
net 330,263 305,281
Goodwill 335,355 326,635
Purchased
intangibles,
net 27,697 34,515
Other non-
current
assets 258,519 269,423
------- -------
Total
assets $5,538,664 $5,287,357
========== ==========
LIABILITIES
AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Accounts
payable $103,422 $115,680
Deferred
system
profit 147,923 157,965
Unearned
revenue 59,176 60,838
Other
current
liabilities 585,090 527,049
------- -------
Total
current
liabilities 895,611 861,532
Non-
current
liabilities:
Long-term
debt 747,919 747,376
Pension
liabilities 59,908 57,959
Income
taxes
payable 59,575 59,494
Unearned
revenue 57,500 42,228
Other non-
current
liabilities 48,805 36,616
------
Total
liabilities 1,869,318 1,805,205
Stockholders'
equity:
Common
stock and
capital in
excess of
par value 1,220,504 1,159,565
Retained
earnings 2,479,113 2,359,233
Accumulated
other
comprehensive
income
(loss) (30,271) (36,646)
------- -------
Total
stockholders'
equity 3,669,346 3,482,152
--------- ---------
Total
liabilities
and
stockholders'
equity $5,538,664 $5,287,357
========== ==========
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended Twelve months ended
------------------ -------------------
(In thousands, except
per share data) June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013
--------------------- ------------- ------------- ------------- -------------
Revenues:
Product $570,431 $570,300 $2,286,437 $2,247,147
Service 163,912 149,732 642,971 595,634
------- ------- ------- -------
Total revenues 734,343 720,032 2,929,408 2,842,781
Costs and operating
expenses:
Costs of revenues 326,665 306,804 1,232,962 1,237,452
Engineering, research
and development 138,448 127,694 539,469 487,832
Selling, general and
administrative 96,216 97,899 384,907 387,812
------ ------ ------- -------
Total costs and
operating expenses 561,329 532,397 2,157,338 2,113,096
Income from operations 173,014 187,635 772,070 729,685
Interest income and
other, net (6,408) (10,545) (37,609) (39,064)
------ ------- ------- -------
Income before income
taxes 166,606 177,090 734,461 690,621
Provision for income
taxes 37,875 42,320 151,706 147,472
Net income $128,731 $134,770 $582,755 $543,149
======== ======== ======== ========
Net income per share:
Basic $0.78 $0.81 $3.51 $3.27
----- ----- ----- -----
Diluted $0.77 $0.80 $3.47 $3.21
----- ----- ----- -----
Cash dividends declared
per share $0.45 $0.40 $1.80 $1.60
----- ----- ----- -----
Weighted-average number
of shares:
Basic 165,510 165,463 166,016 166,089
Diluted 167,345 168,685 168,118 169,260
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
June 30,
(In thousands) 2014 2013
------------- ---- ----
Cash flows from operating
activities:
Net income $128,731 $134,770
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 22,010 20,425
Non-cash stock-
based
compensation
expense 14,128 17,606
Net gain on sale
of marketable
securities and
other
investments (4,192) (218)
Excess tax
benefit from
equity awards (367) (233)
Changes in assets and
liabilities:
Decrease
(increase) in
accounts
receivable, net 66,784 (73,102)
Decrease in
inventories 21,308 14,116
Decrease
(increase) in
other assets (17,559) 7,200
Increase
(decrease) in
accounts
payable (17,454) 8,054
Increase
(decrease) in
deferred system
profit (25,672) 21,150
Increase in
other
liabilities 60,923 25,801
------ ------
Net cash
provided by
operating
activities 248,640 175,569
Cash flows from investing
activities:
Capital
expenditures,
net (13,066) (18,910)
Proceeds from
sale of assets 3,836 -
Purchase of
available-for-
sale securities (678,116) (304,916)
Proceeds from
sale of
available-for-
sale securities 264,287 206,976
Proceeds from
maturity of
available-for-
sale securities 140,952 99,356
Purchase of
trading
securities (11,007) (6,933)
Proceeds from
sale of trading
securities 12,390 8,019
------ -----
Net cash used in
investing
activities (280,724) (16,408)
Cash flows from financing
activities:
Issuance of
common stock 20,121 30,579
Tax withholding
payments
related to
vested and
released
restricted
stock units (392) (522)
Excess tax
benefit from
equity awards 367 233
Common stock
repurchases (60,157) (68,311)
Payment of
dividends to
stockholders (74,466) (66,181)
------- -------
Net cash used in
financing
activities (114,527) (104,202)
Effect of
exchange rate
changes on cash
and cash
equivalents 1,249 (3,770)
Net increase
(decrease) in
cash and cash
equivalents (145,362) 51,189
Cash and cash
equivalents at
beginning of
period 776,223 934,201
Cash and cash
equivalents at
end of period $630,861 $985,390
======== ========
Supplemental cash flow
disclosures:
Income taxes
paid, net $40,471 $33,097
Interest paid $26,038 $26,574
Non-cash investing activities:
Purchase of
land, property
and equipment $3,457 $6,839
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 Twelve months ended
------------------ -------------------
June 30, 2014 March 31, 2014 June 30, 2013 June 30, 2014 June 30, 2013
------------- -------------- ------------- ------------- -------------
GAAP net income $128,731 $203,581 $134,770 $582,755 $543,149
Adjustments to reconcile GAAP
net income to non-GAAP net
income
-----------------------------
Acquisition related
charges a 4,216 3,828 4,169 15,812 19,477
Restructuring,
severance and other
related charges b 2,459 - 1,418 5,698 7,397
Income tax effect of
non-GAAP
adjustments c (2,168) (1,193) (1,776) (6,810) (8,359)
Discrete tax items d - - - - (3,514)
---
Non-GAAP net income $133,238 $206,216 $138,581 $597,455 $558,150
======== ======== ======== ======== ========
GAAP net income per diluted
share $0.77 $1.21 $0.80 $3.47 $3.21
===== ===== ===== ===== =====
Non-GAAP net income per
diluted share $0.80 $1.23 $0.82 $3.55 $3.30
===== ===== ===== ===== =====
Shares used in diluted shares
calculation 167,345 167,989 168,685 168,118 169,260
======= ======= ======= ======= =======
Pre-tax impact of items included in Consolidated Statements of Operations
---
Acquisition Restructuring, Total pre-tax
related severance and GAAP to non-
charges other related GAAP
charges adjustment
------------ --------------- --------------
Three months ended June 30,
2014
---------------------------
Costs of revenues $2,623 $245 $2,868
Engineering,
research and
development 872 1,811 2,683
Selling, general
and administrative 721 403 1,124
Total in three
months ended June
30, 2014 $4,216 $2,459 $6,675
====== ====== ======
Three months ended March 31,
2014
----------------------------
Costs of revenues $1,921 $ - $1,921
Engineering,
research and
development 836 - 836
Selling, general
and administrative 1,071 - 1,071
Total in three
months ended March
31, 2014 $3,828 $ - $3,828
====== === === ======
Three months ended June 30,
2013
---------------------------
Costs of revenues $1,921 $950 $2,871
Engineering,
research and
development 836 514 1,350
Selling, general
and administrative 1,412 (46) 1,366
Total in three
months ended June
30, 2013 $4,169 $1,418 $5,587
====== ====== ======
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
and transaction costs associated
with acquisitions. Management
believes that the expense
associated with the amortization
of acquisition related intangible
assets and acquisition related
costs are 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 our 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. 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.
d. 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 Corporation
