KLA-Tencor Reports Fiscal 2011 Fourth Quarter and Full Year Results
MILPITAS, Calif., July 28, 2011 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its fourth quarter and fiscal year ended June 30, 2011. KLA-Tencor reported GAAP net income of $245 million and GAAP earnings per diluted share of $1.43 on revenues of $892 million for the fourth quarter of fiscal year 2011. For the year ended June 30, 2011, the company reported GAAP net income of $794 million and GAAP earnings per diluted share of $4.66 on revenues of $3.2 billion.
"KLA-Tencor delivered record levels of revenue, earnings and cash flow from operations in the fourth quarter and the year, reflecting the successful execution of our long term strategies," commented Rick Wallace, KLA-Tencor's president and CEO. "These outstanding results are the product of the tremendous efforts of our employees, our leading technology and our strong partnerships with our customers, all of which have us well-positioned for future success."
GAAP Results
Q4 FY 2011 Q3 FY 2011 Q4 FY 2010
Revenues $ 892 million $ 834 million $ 559 million
Net Income $ 245 million $ 210 million $ 113 million
Earnings per Diluted Share $ 1.43 $ 1.22 $ 0.66
Non-GAAP Results
Q4 FY 2011 Q3 FY 2011 Q4 FY 2010
Net Income $ 256 million $ 225 million $ 120 million
Earnings per Diluted Share $ 1.50 $ 1.31 $ 0.70
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 2011 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 the ability of KLA-Tencor to maintain its technological advantages and its strong customer partnerships, as well as the company's ability to leverage those advantages and partnerships into future successful results, 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; 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, 2010, 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, data storage, LED, photovoltaic, 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 over 30 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, 2011 June 30, 2010 ASSETS Cash, cash equivalents and marketable securities $ 2,038,535 $ 1,534,044 Accounts receivable, net 583,270 440,125 Inventories, net 575,730 401,730 Other current assets 478,475 459,566 Land, property and equipment, net 257,358 236,752 Goodwill 328,156 328,006 Purchased intangibles, net 85,902 117,336 Other non-current assets 328,095 389,497 Total assets $ 4,675,521 $ 3,907,056 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 142,945 $ 107,938 Deferred system profit 192,338 204,764 Unearned revenue 44,264 37,026 Other current liabilities 502,471 422,059 Total current liabilities 882,018 771,787 Non-current liabilities: Long-term debt 746,290 745,747 Income tax payable 78,337 53,492 Unearned revenue 34,905 20,354 Other non-current liabilities 73,078 69,065 Total liabilities 1,814,628 1,660,445 Stockholders' equity: Common stock and capital in excess of par value 1,010,659 921,460 Retained earnings 1,852,633 1,356,454 Accumulated other comprehensive income (loss) (2,399) (31,303) Total stockholders' equity 2,860,893 2,246,611 Total liabilities and stockholders' equity $ 4,675,521 $ 3,907,056
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended Twelve months ended
(In thousands,
except per
share data) June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
Revenues:
Product $ 743,702 $ 430,286 $ 2,613,438 $ 1,324,270
Service 148,737 129,133 561,729 496,490
Total revenues 892,439 559,419 3,175,167 1,820,760
Costs and
operating
expenses:
Costs of
revenues 356,180 227,919 1,259,243 815,662
Engineering,
research and
development 100,929 83,309 386,163 329,560
Selling,
general and
administrative 91,261 87,349 369,431 361,372
Total costs and
operating
expenses 548,370 398,577 2,014,837 1,506,594
Income from
operations 344,069 160,842 1,160,330 314,166
Interest income
and other, net (10,026) (10,740) (50,264) (22,985)
Income before
income taxes 334,043 150,102 1,110,066 291,181
Provision for
income taxes 89,026 37,017 315,578 78,881
Net income $ 245,017 $ 113,085 $ 794,488 $ 212,300
Net income per
share:
Basic $ 1.46 $ 0.67 $ 4.75 $ 1.24
Diluted $ 1.43 $ 0.66 $ 4.66 $ 1.23
Cash dividend
declared per
share $ 0.25 $ 0.15 $ 1.00 $ 0.60
Weighted
average number
of shares:
Basic 167,350 168,986 167,261 170,652
Diluted 170,884 171,275 170,352 173,034
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
June 30,
(In thousands) 2011 2010
Cash flows from operating activities:
Net income $ 245,017 $ 113,085
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 22,533 19,554
Asset impairment charges 3,183 4,557
Provision for doubtful accounts - (2,888)
Non-cash stock-based compensation expense 18,939 23,459
Net gain on sale of marketable securities and other
investments (580) (1,388)
Changes in assets and liabilities, net of assets
acquired and liabilities assumed in business
combinations:
Increase in accounts receivable, net (13,918) (113,496)
Increase in inventories (20,125) (26,461)
Decrease in other assets 14,366 26,734
Increase in accounts payable 585 15,922
Increase (decrease) in deferred system profit (37,731) 37,807
Increase (decrease) in other liabilities 57,533 (13,607)
Net cash provided by operating activities 289,802 83,278
Cash flows from investing activities:
Capital expenditures, net (14,607) (5,791)
Purchase of available-for-sale securities (385,226) (217,123)
Proceeds from sale and maturity of available-for-sale
securities 259,044 211,008
Purchase of trading securities (14,183) (22,740)
Proceeds from sale of trading securities 16,106 35,622
Net cash provided by (used in) investing activities (138,866) 976
Cash flows from financing activities:
Issuance of common stock 17,925 12,054
Tax withholding payments related to vested and released
restricted stock units (411) (601)
Common stock repurchases (57,974) (81,645)
Payment of dividends to stockholders (41,862) (25,386)
Net cash used in financing activities (82,322) (95,578)
Effect of exchange rate changes on cash and cash
equivalents 3,957 (2,263)
Net increase (decrease) in cash and cash equivalents 72,571 (13,587)
Cash and cash equivalents at beginning of period 638,758 543,505
Cash and cash equivalents at end of period $ 711,329 $ 529,918
Supplemental cash flow disclosures:
Income taxes paid, net $ 64,595 $ 28,982
Interest paid $ 26,231 $ 26,006
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, March 31, June 30, June 30, June 30,
2011 2011 2010 2011 2010
GAAP net income $ 245,017 $ 209,783 $ 113,085 $ 794,488 $ 212,300
Adjustments to reconcile
GAAP net income to
non-GAAP net income
Acquisition related
charges a 7,628 7,720 8,280 31,704 32,849
Restructuring, severance
and other related charges b 1,915 - 3,311 941 17,778
Restatement related
charges c 4,133 2,501 (866) 7,781 16,149
Income tax effect of
non-GAAP adjustments d (4,295) (3,632) (3,824) (13,705) (24,124)
Discrete tax items e 1,715 8,385 - 15,548 11,858
Non-GAAP net income $ 256,113 $ 224,757 $ 119,986 $ 836,757 $ 266,810
GAAP net income per
diluted share $ 1.43 $ 1.22 $ 0.66 $ 4.66 $ 1.23
Non-GAAP net income per
diluted share $ 1.50 $ 1.31 $ 0.70 $ 4.91 $ 1.54
Shares used in diluted
shares calculation 170,884 171,313 171,275 170,352 173,034
Pre-tax impact of items included in Consolidated Statements of Operations
Acquisition Restructuring, Restatement Total pre-tax
related severance and related charges GAAP to non-
charges other related GAAP
charges adjustment
Three months ended
June 30, 2011
Costs of revenues $ 5,240 $ 435 $ - $ 5,675
Engineering, research
and development 898 969 - 1,867
Selling, general and
administrative 1,490 511 4,133 6,134
Total in three months
ended June 30, 2011 $ 7,628 $ 1,915 $ 4,133 $ 13,676
Three months ended
March 31, 2011
Costs of revenues $ 5,332 $ - $ - $ 5,332
Engineering, research
and development 898 - - 898
Selling, general and
administrative 1,490 - 2,501 3,991
Total in three months
ended March 31, 2011 $ 7,720 $ - $ 2,501 $ 10,221
Three months ended
June 30, 2010
Costs of revenues $ 5,790 $ (57) $ - $ 5,733
Engineering, research
and development 898 - - 898
Selling, general and
administrative 1,592 3,368 (866) 4,094
Total in three months
ended June 30, 2010 $ 8,280 $ 3,311 $ (866) $ 10,725
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 inventory fair value adjustments 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 that it is appropriate to exclude acquisition related inventory fair value adjustments 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. b Restructuring, severance and other related charges include gains and costs associated with the company's facilities divestment and consolidation program, reductions in force, and gains and losses from sales of facilities. 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. KLA-Tencor is currently paying defense costs for one former officer and employee facing an SEC civil action to which the company is not a party, and the company is also obligated to pay the attorneys' fees and expenses incurred by former employees in connection with discovery undertaken in that case. The company is further incurring costs associated with retaining counsel to respond to discovery requests and otherwise representing the company in that litigation. 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 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.
SOURCE KLA-Tencor Corporation
Released July 28, 2011