KLA-TENCOR MILPITAS, Calif., Oct. 20, 2016 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its first quarter of fiscal year 2017, which ended on September 30, 2016, and reported GAAP net income of $178 million and GAAP earnings per diluted share of $1.13 on revenues of $751 million.
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"KLA-Tencor's Q1 results finished above the midpoint of the range of guidance for shipments and revenue for the quarter, and exceeded the range for Non-GAAP diluted earnings per share," commented Rick Wallace, President and Chief Executive Officer of KLA-Tencor. "Our performance in Q1 was fueled by strong customer acceptance of new products and a business model that consistently delivers superior operating leverage, providing the resources to rank KLA-Tencor among the top tier of all companies in tech in terms of cash returns to stockholders."
GAAP Results
Q1 FY 2017 Q4 FY 2016 Q1 FY 2016
Revenues $751 million $919 million $643 million
-------- ------------ ------------ ------------
Net
Income $178 million $272 million $105 million
------------ ------------ ------------
Earnings
per
Diluted
Share $1.13 $1.73 $0.66
-------- ----- ----- -----
Non-GAAP Results
Q1 FY 2017 Q4 FY 2016 Q1 FY 2016
Net
Income $182 million $277 million $112 million
------------ ------------ ------------
Earnings
per
Diluted
Share $1.16 $1.77 $0.71
-------- ----- ----- -----
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, and merger-related charges. KLA-Tencor will discuss the results for its fiscal year 2017 first quarter, 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.
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 40 years. Headquartered in Milpitas, Calif., KLA-Tencor has dedicated customer operations and service centers around the world. Additional information may be found at http://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) September 30, 2016 June 30, 2016
------------- ------------------ -------------
ASSETS
Cash, cash equivalents and
marketable securities $2,494,621 $2,491,294
Accounts receivable, net 654,699 613,233
Inventories 703,262 698,635
Other current assets 76,580 64,870
Land, property and equipment,
net 272,351 278,014
Goodwill 335,198 335,177
Deferred income taxes, non-
current 267,793 302,219
Purchased intangibles, net 3,065 4,331
Other non-current assets 188,529 174,659
Total assets $4,996,098 $4,962,432
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $105,066 $106,517
Deferred system profit 185,640 174,551
Unearned revenue 54,841 59,147
Other current liabilities 629,194 662,208
------- -------
Total current liabilities 974,741 1,002,423
Non-current liabilities:
Long-term debt 3,018,567 3,057,936
Unearned revenue 60,279 56,336
Other non-current liabilities 161,002 156,623
------- -------
Total liabilities 4,214,589 4,273,318
Stockholders' equity:
Common stock and capital in
excess of par value 447,018 452,974
Retained earnings 381,124 284,825
Accumulated other
comprehensive income (loss) (46,633) (48,685)
------- -------
Total stockholders' equity 781,509 689,114
------- -------
Total liabilities and
stockholders' equity $4,996,098 $4,962,432
========== ==========
KLA-Tencor
Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended September 30,
--------------------------------
(In thousands,
except per
share
amounts) 2016 2015
-------------- ---- ----
Revenues:
Product $561,753 $460,739
Service 188,920 181,905
------- -------
Total revenues 750,673 642,644
Costs and
expenses:
Costs of
revenues 277,836 270,244
Research and
development 129,233 119,943
Selling,
general and
administrative 94,388 91,663
Interest
expense and
other, net 26,996 26,495
------ ------
Income before
income taxes 222,220 134,299
Provision for
income taxes 44,119 29,402
Net income $178,101 $104,897
======== ========
Net income per
share:
Basic $1.14 $0.67
Diluted $1.13 $0.66
Cash dividends
declared per
share $0.52 $0.52
----- -----
Weighted-
average
number of
shares:
Basic 156,129 156,820
Diluted 157,021 157,984
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
September 30,
-------------
(In
thousands) 2016 2015
----------- ---- ----
Cash flows from operating
activities:
Net income $178,101 $104,897
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation
and
amortization 14,422 19,735
Asset
impairment
charges 358 -
Non-cash
stock-based
compensation
expense 11,478 12,248
Excess tax
benefit from
equity
awards - (10,159)
Net gain on
sales of
marketable
securities
and other
investments (204) (1,233)
Changes in assets and
liabilities:
Decrease
(increase)
in accounts
receivable,
net (38,241) 124,925
Decrease
(increase)
in
inventories 1,187 (31,243)
Decrease in
other assets 19,477 34,381
Increase
(decrease)
in accounts
payable (1,547) 4,158
Increase
(decrease)
in deferred
system
profit 11,089 (14,504)
Decrease in
other
liabilities (26,343) (49,423)
------- -------
Net cash
provided by
operating
activities 169,777 193,782
Cash flows from investing
activities:
Acquisition
of non-
marketable
securities (1,470) -
Capital
expenditures,
net (9,883) (7,341)
Purchases of
available-
for-sale
securities (457,512) (343,358)
Proceeds from
sale of
available-
for-sale
securities 111,106 200,353
Proceeds from
maturity of
available-
for-sale
securities 197,100 184,973
Purchases of
trading
securities (52,465) (18,267)
Proceeds from
sale of
trading
securities 45,301 15,540
------ ------
Net cash
provided by
(used in)
investing
activities (167,823) 31,900
Cash flows from financing
activities:
Repayment of
debt (40,000) (40,000)
Tax
withholding
payments
related to
vested and
released
restricted
stock units (17,376) (21,526)
Common stock
repurchases - (142,592)
Payment of
dividends to
stockholders (89,313) (101,674)
Excess tax
benefit from
equity
awards - 10,159
--- ------
Net cash used
in financing
activities (146,689) (295,633)
Effect of
exchange
rate changes
on cash and
cash
equivalents 2,572 (4,377)
----- ------
Net decrease
in cash and
cash
equivalents (142,163) (74,328)
Cash and cash
equivalents
at beginning
of period 1,108,488 838,025
--------- -------
Cash and cash
equivalents
at end of
period $966,325 $763,697
======== ========
Supplemental cash flow
disclosures:
Income taxes
paid, net $39,411 $7,844
Interest paid $3,243 $3,149
Non-cash activities:
Purchase of
land,
property and
equipment -
investing
activities $1,974 $1,490
Unsettled
common stock
repurchase -
financing
activities $ - $9,610
Dividends
payable -
financing
activities $12,045 $20,892
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
------------------
September 30, 2016 June 30, 2016 September 30, 2015
------------------ ------------- ------------------
GAAP net income $178,101 $271,541 $104,897
Adjustments to reconcile GAAP net
income to non-GAAP net income:
---------------------------------
Acquisition-related charges a 1,267 1,294 3,581
Restructuring, severance and other
related charges b - - 7,066
Merger-related charges c 3,605 5,795 -
Income tax effect of non-GAAP
adjustments d (1,259) (1,795) (3,348)
Non-GAAP net income $181,714 $276,835 $112,196
======== ======== ========
GAAP net income per diluted share $1.13 $1.73 $0.66
===== ===== =====
Non-GAAP net income per diluted share $1.16 $1.77 $0.71
===== ===== =====
Shares used in diluted shares
calculation 157,021 156,618 157,984
======= ======= =======
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
September 30, 2016
-------------------
Costs of revenues $650 $ - $260 $910
Research and
development - - 982 982
Selling, general
and administrative 617 - 2,363 2,980
Total in three
months ended
September 30, 2016 $1,267 $ - $3,605 $4,872
====== === === ====== ======
Three months ended
June 30, 2016
------------------
Costs of revenues $658 $ - $346 $1,004
Research and
development - - 1,223 1,223
Selling, general
and administrative 636 - 4,226 4,862
--- --- -----
Total in three
months ended June
30, 2016 $1,294 $ - $5,795 $7,089
====== === === ====== ======
Three months ended
September 30, 2015
-------------------
Costs of revenues $2,285 $2,770 $ - $5,055
Research and
development 650 1,010 - 1,660
Selling, general
and administrative 646 3,286 - 3,932
Total in three
months ended
September 30, 2015 $3,581 $7,066 $ - $10,647
====== ====== === === =======
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. 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 proposed merger between KLA-Tencor and Lam that was terminated on October 5, 2016. Charges primarily includes employee-related expenses, legal expenses and other costs. 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.To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kla-tencor-reports-fiscal-2017-first-quarter-results-300348624.html
SOURCE KLA-Tencor Corporation
