KLA-Tencor Reports of Fiscal 2007 Second Quarter Results
Revenue of $649 Million and EPS of $0.44
SAN JOSE, Calif.--(BUSINESS WIRE)--
KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its second quarter of fiscal 2007, ended December 31, 2006. The Company reported net income of $90 million (including share-based compensation and the other charges described below) and earnings per diluted share of $0.44 on revenue of $649 million in the second quarter, compared to net income of $136 million or $0.67 per diluted share on revenue of $629 million in the first quarter of fiscal 2007, and compared to net income of $77 million or $0.38 per diluted share on revenue of $488 million in the second quarter of fiscal 2006.
Net income for the second quarter of fiscal 2007 reflects $117 million pre-tax charges, as follows:
-- One-time charges of $67 million, including $57 million for the
write-down of buildings and related assets, and $10 million
for severance charges related to a reduction in force.
-- Acquisition-related charges of $19 million for in-process R&D
and amortization of intangible assets primarily related to the
acquisition of ADE Corporation.
-- Net stock-based compensation charges of $16 million, net of a
credit of $20 million related to the cancellation of a former
executive's stock options and restricted stock units that had
been previously expensed. Stock-based compensation for first
quarter of fiscal 2007 was $37 million and for second quarter
of fiscal 2006 was $39 million.
-- Restatement-related charges of $15 million, including
compensation expense of $11 million related to the
reimbursement of non-executive employees for penalty taxes
under Section 409A of the Internal Revenue Code and legal and
other expenses of $4 million related to the stock options
investigation, shareholder litigation and related matters.
Other restatement-related charges for first quarter of fiscal
2007 were $3 million.
"With the restatement of our financials recently completed, we return to regular quarterly reporting and move forward with our business with confidence. We remain focused on introducing new products that help our customers meet their mission critical production challenges," stated Rick Wallace, Chief Executive Officer of KLA-Tencor.
KLA-Tencor ended the second quarter of fiscal 2007 with more than eight months of product-related shipment and revenue backlog. The geographic breakdown of orders in the quarter was:
Percent of Orders
Region ------------------------------------
Current Quarter Historical Average
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United States 22% 25%
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Japan 21% 25%
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Taiwan 25% 20%
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Korea, China, & Singapore 23% 20%
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Europe 9% 10%
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KLA-Tencor completed its acquisition of ADE Corporation in the second quarter at a net cost of $0.4 billion. As a result, cash, cash equivalents and marketable securities ended the quarter at $2.1 billion, down $0.3 billion.
As previously announced, on January 31, 2007, the Nasdaq Listing Qualifications Panel notified KLA-Tencor that the Company has regained compliance with the Nasdaq requirement relating to the filing of periodic reports with the Securities and Exchange Commission and has evidenced compliance with all other Nasdaq Marketplace Rules. Accordingly, the Panel determined to continue the listing of the Company's Common Stock on the Nasdaq Global Select Market, and the review of the Company's listing status has been closed.
KLA-Tencor will discuss its fiscal 2007 second quarter results, along with its outlook for the third quarter of 2007, on a conference call today beginning at 5:00 a.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 the benefit to customers of KLA-Tencor's products, demand for KLA-Tencor's products and the Company's future financial performance, 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: our ability to successfully address and resolve all issues arising from the discovery that we had retroactively priced stock options (primarily from July 1, 1997 to June 30, 2002) and had not accounted for them correctly; the demand for semiconductors; new and enhanced product offerings by competitors; cancellation of orders by customers; 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 the Company's Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein).
About KLA-Tencor: KLA-Tencor is the world leader in yield management and process control solutions for semiconductor manufacturing and related industries. Headquartered in San Jose, Calif., the Company has sales and service offices around the world. An S&P 500 Company, KLA-Tencor was named one of the Best Managed Companies in America for 2005 by Forbes Magazine and is the only Company in the semiconductor industry to receive the accolade for this year. KLA-Tencor is traded on the Nasdaq National Market under the symbol KLAC. Additional information about the Company is available on the Internet at http://www.kla-tencor.com
KLA-TENCOR CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands) December 31, June 30,
2006 2006
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 863,384 $ 1,129,191
Marketable securities 1,279,506 1,196,605
Accounts receivable, net 448,520 439,899
Inventories 564,566 449,156
Deferred income taxes 262,206 253,811
Other current assets 73,323 74,581
------------ ------------
Total current assets 3,491,505 3,543,243
Land, property and equipment, net 355,057 395,412
Other assets 996,166 637,256
------------ ------------
Total assets $ 4,842,728 $ 4,575,911
============ ============
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 104,204 $ 95,192
Deferred system profit 233,393 226,142
Unearned revenue 87,352 80,543
Other current liabilities 585,220 600,604
------------ ------------
Total current liabilities 1,010,169 1,002,481
------------ ------------
Commitments and contingencies (Note 10)
Minority interest in subsidiary $ 3,010 $ 5,439
Stockholders' equity:
Common stock and capital in excess of par
value 1,492,696 1,421,373
Retained earnings 2,315,554 2,137,710
Accumulated other comprehensive income 21,299 8,908
------------ ------------
Total stockholders' equity 3,829,549 3,567,991
------------ ------------
Total liabilities, minority interest
and stockholders' equity $ 4,842,728 $ 4,575,911
============ ============
KLA-TENCOR CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended Six months ended
December 31, December 31,
(in thousands except per 2006 2005 2006 2005
share data) As As
restated restated
----------------------------------------------------------------------
Revenues:
Product $ 544,302 $ 402,132 $1,075,229 $ 801,133
Service 104,968 85,550 203,404 170,810
--------- --------- ---------- ---------
Total revenues 649,270 487,682 1,278,633 971,943
--------- --------- ---------- ---------
Costs and operating
expenses:
Costs of revenues(1) 295,997 216,215 566,116 431,352
Engineering, research
and development(1) 106,106 98,807 205,399 197,577
Selling, general and
administrative(1) 168,808 97,666 274,769 193,030
--------- --------- ---------- ---------
Total costs and operating
expenses 570,911 412,688 1,046,284 821,959
--------- --------- ---------- ---------
Income from operations 78,359 74,994 232,349 149,984
Interest income and other,
net 22,657 16,685 45,114 30,761
--------- --------- ---------- ---------
Income before income taxes
and minority interest 101,016 91,679 277,463 180,745
Provision for income taxes 11,637 16,329 53,005 30,653
--------- --------- ---------- ---------
Income before minority
interest 89,379 75,350 224,458 150,092
Minority interest 670 1,255 1,513 2,000
--------- --------- ---------- ---------
Net income $ 90,049 $ 76,605 $ 225,971 $ 152,092
========= ========= ========== =========
Net income per share:
Basic $ 0.45 $ 0.39 $ 1.13 0.77
========= ========= ========== =========
Diluted $ 0.44 $ 0.38 $ 1.11 0.75
========= ========= ========== =========
Weighted average number of
shares:
Basic 199,789 198,236 199,603 197,824
========= ========= ========== =========
Diluted 204,955 203,926 203,826 203,634
========= ========= ========== =========
(1) includes the following
stock-based compensation
charges:
Costs of revenues $ 8,002 $ 6,273 $ 16,589 $ 13,451
Engineering, research
and development 11,243 12,502 22,948 25,531
Selling, general and
administrative (3,177) 20,063 13,578 39,583
Provision for Incomes
Taxes (4,858) (15,682) (16,247) (31,073)
Source: KLA-Tencor Corporation
Released February 5, 2007