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