KLA-TENCOR MILPITAS, Calif., Jan. 22, 2015 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its second quarter of fiscal year 2015, which ended on December 31, 2014, and reported GAAP net income of $20 million and GAAP earnings per diluted share of $0.12 on revenues of $676 million.
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"We are pleased with the Company's performance in the second quarter," commented Rick Wallace, President and Chief Executive Officer of KLA-Tencor. "Continued market leadership and good execution led to revenue growth and strong gross margins in the period."
GAAP Results
Q2 FY 2015 Q1 FY 2015 Q2 FY 2014
Revenues $676 million $643 million $705 million
------------ ------------
Net Income $20 million $72 million $139 million
----------- -----------
Earnings per
Diluted
Share $0.12 $0.43 $0.83
------------ ----- ----- -----
Non-GAAP Results
Q2 FY 2015 Q1 FY 2015 Q2 FY 2014
Net Income $113 million $79 million $143 million
----------- -----------
Earnings per
Diluted
Share $0.68 $0.47 $0.85
------------ ----- ----- -----
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 debt extinguishment loss and recapitalization charges.
KLA-Tencor will discuss the results for its fiscal year 2015 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 KLA-Tencor's ability to benefit from its market leadership position, 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, 2014, 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, 2014 June 30,
2014
-------------- ----------------- ---------
ASSETS
Cash, cash
equivalents and
marketable
securities $2,366,833 $3,152,637
Accounts
receivable, net 632,089 492,863
Inventories 662,799 656,457
Other current
assets 384,527 284,873
Land, property and
equipment, net 323,353 330,263
Goodwill 335,273 335,355
Purchased
intangibles, net 19,551 27,697
Other non-current
assets 262,941 258,519
Total assets $4,987,366 $5,538,664
========== ==========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Accounts payable $108,307 $103,422
Deferred system
profit 168,086 147,923
Unearned revenue 64,257 59,176
Current portion of
long-term debt 37,500 -
Other current
liabilities 564,190 585,090
------- -------
Total current
liabilities 942,340 895,611
Non-current
liabilities:
Long-term debt 3,208,571 747,919
Unearned revenue 54,900 57,500
Other non-current
liabilities 179,416 168,288
------- -------
Total liabilities 4,385,227 1,869,318
Stockholders'
equity:
Common stock and
capital in excess
of par value 613,122 1,220,504
Retained earnings 24,770 2,479,113
Accumulated other
comprehensive
income (loss) (35,753) (30,271)
------- -------
Total
stockholders'
equity 602,139 3,669,346
Total liabilities
and stockholders'
equity $4,987,366 $5,538,664
========== ==========
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) 2014 2013 2014 2013
--------------------- ---- ---- ---- ----
Revenues:
Product $503,884 $544,183 $980,482 $1,045,923
Service 172,473 160,946 338,776 317,543
------- ------- ------- -------
Total revenues 676,357 705,129 1,319,258 1,363,466
Costs and operating
expenses:
Costs of revenues 283,213 285,814 571,680 563,471
Engineering, research
and development 133,557 134,587 277,194 266,860
Selling, general and
administrative 104,873 96,746 206,517 195,242
------- ------ ------- -------
Total costs and
operating expenses 521,643 517,147 1,055,391 1,025,573
Income from operations 154,714 187,982 263,867 337,893
Interest expense and
other, net 29,313 11,237 39,459 21,284
Loss on extinguishment
of debt and other, net 131,669 - 131,669 -
Income (loss) before
income taxes (6,268) 176,745 92,739 316,609
Provision for (benefit
from) income taxes (26,536) 37,499 238 66,166
--- ------
Net income $20,268 $139,246 $92,501 $250,443
======= ======== ======= ========
Net income per share:
Basic $0.12 $0.84 $0.56 $1.51
Diluted $0.12 $0.83 $0.56 $1.49
Cash dividends declared
per share (including a
special cash dividend
of $16.50 per share
declared during the
three months ended
December 31, 2014) $17.00 $0.45 $17.50 $0.90
------ ----- ------ -----
Weighted-average
number of shares:
Basic 164,036 166,414 164,440 166,150
Diluted 165,317 168,206 165,950 168,478
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
December 31,
------------
(In thousands) 2014 2013
------------- ---- ----
Cash flows from operating
activities:
Net income $20,268 $139,246
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 18,901 19,811
Asset impairment
charges - 1,374
Loss on
extinguishment
of debt and
other, net 131,669 -
Non-cash stock-
based
compensation
expense 14,848 14,870
Excess tax
benefit from
equity awards (565) (925)
Net gain on sale
of marketable
securities and
other
investments (281) (1,213)
Changes in assets and
liabilities:
Increase in
accounts
receivable, net (200,282) (136,562)
Decrease
(increase) in
inventories 10,702 (2,938)
Increase in other
assets (79,856) (30,567)
Increase in
accounts payable 478 26,997
Increase in
deferred system
profit 79,285 77,672
Increase in other
liabilities 15,917 7,506
------ -----
Net cash provided
by operating
activities 11,084 115,271
Cash flows from investing
activities:
Capital
expenditures,
net (12,783) (14,465)
Purchase of
available-for-
sale securities (469,416) (448,777)
Proceeds from
sale of
available-for-
sale securities 709,123 317,034
Proceeds from
maturity of
available-for-
sale securities 248,035 18,831
Purchase of
trading
securities (16,999) (11,256)
Proceeds from
sale of trading
securities 17,807 12,513
------ ------
Net cash provided
by (used in)
investing
activities 475,767 (126,120)
Cash flows from financing
activities:
Proceeds from
issuance of
debt, net of
issuance costs 3,224,906 -
Repayment of debt (877,367) -
Issuance of
common stock 24,726 37,719
Tax withholding
payments related
to vested and
released
restricted stock
units (632) (945)
Common stock
repurchases (141,521) (60,302)
Payment of
dividends to
stockholders (2,796,739) (74,983)
Excess tax
benefit from
equity awards 565 925
--- ---
Net cash used in
financing
activities (566,062) (97,586)
Effect of
exchange rate
changes on cash
and cash
equivalents (5,607) (3,132)
------ ------
Net decrease in
cash and cash
equivalents (84,818) (111,567)
Cash and cash
equivalents at
beginning of
period 669,683 904,949
------- -------
Cash and cash
equivalents at
end of period $584,865 $793,382
======== ========
Supplemental cash flow
disclosures:
Income taxes
paid, net $37,368 $48,189
Interest paid $33,092 $26,084
Non-cash activities:
Purchase of land,
property and
equipment -
investing
activities $3,962 $5,923
Dividends payable
-financing
activities $42,829 $ -
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, September 30, December 31, December 31, December 31,
2014 2014 2013 2014 2013
------------- ------------- ------------- ------------- -------------
GAAP net income $20,268 $72,233 $139,246 $92,501 $250,443
Adjustments to reconcile GAAP
net income to non-GAAP net
income
-----------------------------
Acquisition related
charges a 3,832 3,998 3,599 7,830 7,768
Restructuring,
severance and other
related charges b 3,299 4,057 2,002 7,356 3,239
Debt extinguishment
loss and
recapitalization
charges c 134,147 - - 134,147 -
Income tax effect of
non-GAAP adjustments d (48,720) (1,539) (1,777) (50,259) (3,449)
---
Non-GAAP net income $112,826 $78,749 $143,070 $191,575 $258,001
======== ======= ======== ======== ========
GAAP net income per diluted
share $0.12 $0.43 $0.83 $0.56 $1.49
===== ===== ===== ===== =====
Non-GAAP net income per diluted
share $0.68 $0.47 $0.85 $1.15 $1.53
===== ===== ===== ===== =====
Shares used in diluted shares
calculation 165,317 166,580 168,206 165,950 168,478
======= ======= ======= ======= =======
Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations
---------------------------------------------------------------------------------------------
Acquisition Restructuring, Debt Total pre-
related severance and extinguishment tax GAAP to
charges other related loss and non-GAAP
charges recapitalization adjustments
charges
------------ --------------- ---------------- -----------
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
====== ====== ======== ========
Three months ended
September 30, 2014
-------------------
Costs of revenues $2,577 $355 $ - $2,932
Engineering, research
and development 700 2,933 - 3,633
Selling, general and
administrative 721 769 - 1,490
--- --- --- -----
Total in three months
ended September 30,
2014 $3,998 $4,057 $ - $8,055
====== ====== === === ======
Three months ended
December 31, 2013
------------------
Costs of revenues $1,921 $469 $ - $2,390
Engineering, research
and development 836 1,132 - 1,968
Selling, general and
administrative 842 401 - 1,243
--- --- --- -----
Total in three months
ended December 31,
2013 $3,599 $2,002 $ - $5,601
====== ====== === === ======
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
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 employee severance
and other exit costs. 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. 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 ending
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.
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.
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SOURCE KLA-Tencor Corporation
