KLA-TENCOR MILPITAS, Calif., Jan. 26, 2017 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its second quarter of fiscal year 2017, which ended on December 31, 2016, and reported GAAP net income of $238 million and GAAP earnings per diluted share of $1.52 on revenues of $877 million.
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"I am pleased to announce that KLA-Tencor's business continues to perform at a very high level, as we delivered another quarter of outstanding results in Q2 of fiscal 2017, exceeding our guidance for shipments, revenue and Non-GAAP earnings per diluted share for the period," commented Rick Wallace, President and Chief Executive Officer of KLA-Tencor. "In addition, new orders topped $1 billion for the first time in the December quarter, reflecting KLA-Tencor's market leadership and the critical role process control plays in enabling our customers' success at the leading edge. These outstanding results are against the backdrop of a healthy overall demand environment for wafer fab equipment in the marketplace today, and position KLA-Tencor with good momentum heading into calendar 2017."
GAAP Results
Q2 FY 2017 Q1 FY 2017 Q2 FY 2016
Revenues $877 million $751 million $710 million
-------- ------------ ------------ ------------
Net Income $238 million $178 million $152 million
------------ ------------ ------------
Earnings per Diluted
Share $1.52 $1.13 $0.98
-------------------- ----- ----- -----
Non-GAAP Results
Q2 FY 2017 Q1 FY 2017 Q2 FY 2016
Net Income $238 million $182 million $162 million
------------ ------------ ------------
Earnings per Diluted
Share $1.52 $1.16 $1.04
-------------------- ----- ----- -----
A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. Non-GAAP results include the impact of stock-based compensation, but exclude the impact of acquisitions, restructuring, severance, merger and other related charges and certain discrete tax items. KLA-Tencor will discuss the results for its fiscal year 2017 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.
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 (benefits), 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 (benefits) 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 (benefits) 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, 2016 June 30, 2016
------------- ----------------- -------------
ASSETS
Cash, cash equivalents and
marketable securities $2,592,977 $2,491,294
Accounts receivable, net 663,852 613,233
Inventories 671,172 698,635
Other current assets 103,638 64,870
Land, property and equipment,
net 279,966 278,014
Goodwill 335,170 335,177
Deferred income taxes, non-
current 259,507 302,219
Purchased intangibles, net 2,551 4,331
Other non-current assets 185,623 174,659
Total assets $5,094,456 $4,962,432
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $116,163 $106,517
Deferred system profit 193,942 174,551
Unearned revenue 56,750 59,147
Current portion of long-term
debt 249,958 -
Other current liabilities 570,923 662,208
------- -------
Total current liabilities 1,187,736 1,002,423
Non-current liabilities:
Long-term debt 2,729,239 3,057,936
Unearned revenue 62,619 56,336
Other non-current liabilities 149,766 156,623
------- -------
Total liabilities 4,129,360 4,273,318
Stockholders' equity:
Common stock and capital in
excess of par value 483,077 452,974
Retained earnings 534,175 284,825
Accumulated other
comprehensive income (loss) (52,156) (48,685)
------- -------
Total stockholders' equity 965,096 689,114
------- -------
Total liabilities and
stockholders' equity $5,094,456 $4,962,432
========== ==========
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Operations
Three months ended December 31, Six months ended December 31,
(In thousands,
except per share
amounts) 2016 2015 2016 2015
----------------- ---- ---- ---- ----
Revenues:
Product $683,733 $527,780 $1,245,486 $988,519
Service 193,152 182,465 382,072 364,370
------- ------- ------- -------
Total revenues 876,885 710,245 1,627,558 1,352,889
Costs and expenses:
Costs of revenues 318,507 280,980 596,343 551,224
Research and
development 130,912 118,272 260,145 238,215
Selling, general and
administrative 93,532 96,532 187,920 188,195
Interest expense and
other, net 27,089 28,986 54,085 55,481
------ ------ ------ ------
Income before income
taxes 306,845 185,475 529,065 319,774
Provision for income
taxes 68,594 33,268 112,713 62,670
------- ------
Net income $238,251 $152,207 $416,352 $257,104
======== ======== ======== ========
Net income per
share:
Basic $1.52 $0.98 $2.66 $1.65
Diluted $1.52 $0.98 $2.65 $1.64
Cash dividends
declared per share $0.54 $0.52 $1.06 $1.04
----- ----- ----- -----
Weighted-average
number of shares:
Basic 156,335 155,252 156,232 156,036
Diluted 157,123 155,996 157,071 156,971
KLA-Tencor Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three months ended
December 31,
(In
thousands) 2016 2015
----------- ---- ----
Cash flows from operating
activities:
Net income $238,251 $152,207
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation
and
amortization 14,892 16,529
Asset
impairment
charges - 358
Non-cash
stock-based
compensation
expense 12,444 11,325
Excess tax
benefit from
equity
awards - (1,382)
Net gain on
sales of
marketable
securities
and other
investments (681) (25)
Changes in assets and
liabilities:
Decrease
(increase)
in accounts
receivable,
net (24,386) 32,098
Decrease
(increase)
in
inventories 13,132 (36,668)
Increase in
other assets (28,315) (38,044)
Increase in
accounts
payable 11,786 15,047
Increase
(decrease)
in deferred
system
profit 8,302 (2,339)
Decrease in
other
liabilities (23,012) (48,782)
------- -------
Net cash
provided by
operating
activities 222,413 100,324
Cash flows from investing
activities:
Acquisition
of non-
marketable
securities (900) -
Capital
expenditures,
net (8,629) (7,938)
Proceeds from
sale of
assets 2,582 1,215
Purchases of
available-
for-sale
securities (372,950) (281,503)
Proceeds from
sale of
available-
for-sale
securities 78,136 284,734
Proceeds from
maturity of
available-
for-sale
securities 159,077 141,362
Purchases of
trading
securities (20,813) (16,738)
Proceeds from
sale of
trading
securities 23,164 20,036
------ ------
Net cash
provided by
(used in)
investing
activities (140,333) 141,168
Cash flows from financing
activities:
Repayment of
debt (40,000) (20,000)
Issuance of
common stock 23,694 21,908
Tax
withholding
payments
related to
vested and
released
restricted
stock units (79) (495)
Common stock
repurchases - (39,119)
Payment of
dividends to
stockholders (84,529) (81,380)
Excess tax
benefit from
equity
awards - 1,382
--- -----
Net cash used
in financing
activities (100,914) (117,704)
Effect of
exchange
rate changes
on cash and
cash
equivalents (10,458) (894)
------- ----
Net increase
(decrease)
in cash and
cash
equivalents (29,292) 122,894
Cash and cash
equivalents
at beginning
of period 966,325 763,697
------- -------
Cash and cash
equivalents
at end of
period $937,033 $886,591
======== ========
Supplemental cash flow
disclosures:
Income taxes
paid, net $71,164 $51,631
Interest paid $56,773 $56,711
Non-cash activities:
Purchase of
land,
property and
equipment -
investing
activities $1,985 $2,253
Dividends
payable -
financing
activities $12,763 $20,284
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 Six months ended
December September December December December
31, 2016 30, 2016 31, 2015 31, 2016 31, 2015
-------- -------- -------- -------- --------
GAAP net income $238,251 $178,101 $152,207 $416,352 $257,104
Adjustments to reconcile GAAP net
income to non-GAAP net income:
---------------------------------
Acquisition-related charges a 513 1,267 1,309 1,780 4,890
Restructuring, severance and other
related charges b - - 1,742 - 8,808
Merger-related charges c 4,069 3,605 8,820 7,674 8,820
Income tax effect of non-GAAP
adjustments d (1,580) (1,259) (2,321) (2,839) (5,669)
Discrete tax items e (3,064) - - (3,064) -
Non-GAAP net income $238,189 $181,714 $161,757 $419,903 $273,953
======== ======== ======== ======== ========
GAAP net income per diluted share $1.52 $1.13 $0.98 $2.65 $1.64
===== ===== ===== ===== =====
Non-GAAP net income per diluted share $1.52 $1.16 $1.04 $2.67 $1.75
===== ===== ===== ===== =====
Shares used in diluted shares
calculation 157,123 157,021 155,996 157,071 156,971
======= ======= ======= ======= =======
Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations
---------------------------------------------------------------------------------------------
Acquisition- Restructuring, Merger-related Total pre-tax
related
charges severance and charges GAAP to non-
other related
charges GAAP
adjustments
-----------
Three months ended
December 31, 2016
------------------
Costs of revenues $500 $ - $348 $848
Research and
development - - 1,054 1,054
Selling, general
and administrative 13 - 2,667 2,680
Total in three
months ended
December 31, 2016 $513 $ - $4,069 $4,582
==== === === ====== ======
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
December 31, 2015
------------------
Costs of revenues $663 $470 $67 $1,200
Research and
development - 479 - 479
Selling, general
and administrative 646 793 8,753 10,192
Total in three
months ended
December 31, 2015 $1,309 $1,742 $8,820 $11,871
====== ====== ====== =======
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, and impairment of certain long-lived assets. 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 associated with the terminated merger agreement between KLA-Tencor and Lam Research Corporation ("Lam") primarily includes employee retention-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. e. Discrete tax items includes the tax impact of certain merger-related charges that only became deductible during the three months ended December 31, 2016 as a result of the termination of the proposed merger between KLA-Tencor and Lam. 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.To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kla-tencor-reports-fiscal-2017-second-quarter-results-300397637.html
SOURCE KLA-Tencor Corporation
