Lam Research Corporation Reports Financial Results for the Quarter Ended March 25, 2018
FREMONT, Calif., April 17, 2018 (GLOBE NEWSWIRE) -- Lam Research Corp. (Nasdaq: LRCX) today announced financial results for the quarter ended March 25, 2018 (the “March 2018 quarter”).
Highlights for the March 2018 quarter were as follows:
- Shipments of $3.13 billion and revenue of $2.89 billion.
- U.S. GAAP gross margin of 46.0%, U.S. GAAP operating margin of 28.6%, and U.S. GAAP diluted EPS of $4.33.
- Non-GAAP gross margin of 46.8%, non-GAAP operating margin of 30.0%, and non-GAAP diluted EPS of $4.79.
| Key Financial Data for the Quarters Ended | ||||||||||||
| March 25, 2018 and December 24, 2017 | ||||||||||||
| (in thousands, except per-share data, percentages, and basis points) | ||||||||||||
| U.S. GAAP | ||||||||||||
| March 2018 | December 2017 | Change Q/Q | ||||||||||
| Shipments | $ | 3,134,677 | $ | 2,631,723 | + 19% | |||||||
| Revenue | $ | 2,892,115 | $ | 2,580,815 | + 12% | |||||||
| Gross margin as percentage of revenue | 46.0 | % | 46.7 | % | - 70 bps | |||||||
| Operating margin as percentage of revenue | 28.6 | % | 28.6 | % | — | |||||||
| Diluted EPS | $ | 4.33 | $ | (0.06 | ) | 7317% | ||||||
| Non-GAAP | ||||||||||||
| March 2018 | December 2017 | Change Q/Q | ||||||||||
| Shipments | $ | 3,134,677 | $ | 2,631,723 | + 19% | |||||||
| Revenue | $ | 2,892,115 | $ | 2,580,815 | + 12% | |||||||
| Gross margin as percentage of revenue | 46.8 | % | 47.6 | % | - 80 bps | |||||||
| Operating margin as percentage of revenue | 30.0 | % | 30.2 | % | - 20 bps | |||||||
| Diluted EPS | $ | 4.79 | $ | 4.34 | + 10% | |||||||
U.S. GAAP Financial Results
For the March 2018 quarter, revenue was $2,892 million, gross margin was $1,331 million, or 46.0% of revenue, operating expenses were $503 million, operating margin was 28.6% of revenue, and net income was $779 million, or $4.33 per diluted share on a U.S. GAAP basis. This compares to revenue of $2,581 million, gross margin of $1,206 million, or 46.7% of revenue, operating expenses of $468 million, operating margin of 28.6% of revenue, and net loss of $(10) million, or $(0.06) per diluted share, for the quarter ended December 24, 2017 (the “December 2017 quarter”). The December 2017 results were negatively impacted by a one-time provisional charge of $757 million associated with the recently enacted U.S. tax reform, which the Company will continue to evaluate during the measurement period.
Non-GAAP Financial Results
For the March 2018 quarter, non-GAAP gross margin was $1,353 million or 46.8% of revenue, non-GAAP operating expenses were $486 million, non-GAAP operating margin was 30.0% of revenue, and non-GAAP net income was $852 million, or $4.79 per diluted share. This compares to non-GAAP gross margin of $1,228 million or 47.6% of revenue, non-GAAP operating expenses of $449 million, non-GAAP operating margin of 30.2% of revenue, and non-GAAP net income of $788 million, or $4.34 per diluted share for the December 2017 quarter.
“Lam continues to deliver strong performance, again setting new records highlighted by shipments exceeding three billion dollars in the March quarter. Fundamental to this achievement is increased strategic relevance enabling primary technology inflections now critical to our customers’ success,” said Martin Anstice, Lam Research’s Chief Executive Officer. “We remain focused on delivering long-term outperformance and making the right investments for our future.”
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances increased to $6.7 billion at the end of the March 2018 quarter compared to $6.0 billion at the end of the December 2017 quarter. This increase was primarily the result of approximately $1.1 billion of cash generated from operating activities, partially offset by approximately $80 million of net share settlement on employee stock-based compensation, $80 million of dividends paid to stockholders, $49 million of capital expenditures, and $29 million of net repayments of debt.
Deferred revenue and deferred profit at the end of the March 2018 quarter remained steady at $1.1 billion and $749 million, respectively, as compared to the end of the December 2017 quarter. Lam’s deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptance. Shipments to customers in Japan are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to customers in Japan was approximately $526 million as of March 25, 2018 and $289 million as of December 24, 2017.
Geographic Distribution
The geographic distribution of shipments and revenue during the March 2018 quarter is shown in the following table:
| Region | Shipments | Revenue | |||
| Korea | 36% | 36% | |||
| China | 14% | 17% | |||
| Japan | 20% | 14% | |||
| Taiwan | 11% | 12% | |||
| Southeast Asia | 8% | 8% | |||
| United States | 6% | 8% | |||
| Europe | 5% | 5% | |||
Outlook
For the June 2018 quarter, Lam is providing the following guidance:
| U.S. GAAP | Reconciling Items | Non-GAAP | ||||||||||||||||||
| Shipments | $3.000 Billion | +/- | $150 Million | — | $3.000 Billion | +/- | $150 Million | |||||||||||||
| Revenue | $3.100 Billion | +/- | $150 Million | — | $3.100 Billion | +/- | $150 Million | |||||||||||||
| Gross margin | 46.8% | +/- | 1% | $ | 22 | Million | 47.5% | +/- | 1% | |||||||||||
| Operating margin | 29.7% | +/- | 1% | $ | 39 | Million | 31.0% | +/- | 1% | |||||||||||
| Net income per diluted share | $4.77 | +/- | $0.20 | $ | 36 | Million | $5.00 | +/- | $0.20 | |||||||||||
| Diluted share count | 179 Million | 1 | Million | 178 Million | ||||||||||||||||
The information provided above is only an estimate of what the Company believes is realizable as of the date of this release, and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, balance sheet valuation adjustments, financing arrangements, other investments, measurement period adjustments associated with U.S. tax reform, or other significant transactions that may be completed after the date of this release. U.S. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:
- Gross margin - amortization related to intangible assets acquired through business combinations, $22 million.
- Operating margin - amortization related to intangible assets acquired through business combinations, $39 million.
- Earnings per share - amortization related to intangible assets acquired though business combinations, $39 million; amortization of note discounts, $2 million; and associated tax benefit for non-GAAP items ($5 million); totaling $36 million.
- Diluted share count - impact of a note hedge issued contemporaneously with the convertible notes due 2018, 1 million shares.
Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company’s non-GAAP results for both the March 2018 and December 2017 quarters exclude amortization related to intangible assets acquired through business combinations, acquisition and integration costs associated with a business combination, amortization of note discounts, and tax benefit of non-GAAP items. Additionally, the March 2018 quarter non-GAAP results exclude realized loss on sale or impairment of investments associated with repatriation and tax benefit on the conclusion of tax matters related to a prior business combination. The December 2017 quarter non-GAAP results exclude costs associated with business process reengineering and estimated income tax expense associated with U.S. tax reform.
Management uses non-GAAP gross margin, operating expense, operating income, operating margin, net income, and net income per diluted share to evaluate the Company’s operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability to view the Company’s results from management’s perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company’s website at http://investor.lamresearch.com.
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to: the estimated future revenue from shipments to customers in Japan; our revenue, industry, performance and general outlooks, and their drivers; our future strategic relevance to customers; our vision of the Company's future; technology demand trends; the legal and business factors that may affect our future tax rate; and our guidance for shipments, revenue, gross margin, operating margin, net income or earnings per diluted share, provisional tax estimate, and diluted share count. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; and the actions of our customers and competitors may be inconsistent with our expectations, as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10-K for the fiscal year ended June 25, 2017 and our quarterly report on Form 10-Q for the fiscal quarters ended September 24, 2017 and December 24, 2017. These uncertainties and changes could materially affect the forward looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.
About Lam Research
Lam Research Corp. is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. As a trusted, collaborative partner to the world’s leading semiconductor companies, we combine superior systems engineering capability, technology leadership, and unwavering commitment to customer success to accelerate innovation through enhanced device performance. In fact, today, nearly every advanced chip is built with Lam technology. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)
Consolidated Financial Tables Follow.
| LAM RESEARCH CORPORATION | |||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share data and percentages) | |||||||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
| March 25, 2018 | December 24, 2017 | March 26, 2017 | March 25, 2018 | March 26, 2017 | |||||||||||||||||||||||||||||||||||||
| Revenue | $ | 2,892,115 | $ | 2,580,815 | $ | 2,153,995 | $ | 7,951,070 | $ | 5,668,713 | |||||||||||||||||||||||||||||||
| Cost of goods sold | 1,561,401 | 1,375,248 | 1,182,591 | 4,265,446 | 3,134,315 | ||||||||||||||||||||||||||||||||||||
| Gross margin | 1,330,714 | 1,205,567 | 971,404 | 3,685,624 | 2,534,398 | ||||||||||||||||||||||||||||||||||||
| Gross margin as a percent of revenue | 46.0 | % | 46.7 | % | 45.1 | % | 46.4 | % | 44.7 | % | |||||||||||||||||||||||||||||||
| Research and development | 305,412 | 281,311 | 265,986 | 861,801 | 748,030 | ||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 197,791 | 186,885 | 167,000 | 565,719 | 492,175 | ||||||||||||||||||||||||||||||||||||
| Total operating expenses | 503,203 | 468,196 | 432,986 | 1,427,520 | 1,240,205 | ||||||||||||||||||||||||||||||||||||
| Operating income | 827,511 | 737,371 | 538,418 | 2,258,104 | 1,294,193 | ||||||||||||||||||||||||||||||||||||
| Operating income as a percent of revenue | 28.6 | % | 28.6 | % | 25.0 | % | 28.4 | % | 22.8 | % | |||||||||||||||||||||||||||||||
| Other expense, net | (55,810 | ) | (3,152 | ) | (7,838 | ) | (64,464 | ) | (86,015 | ) | |||||||||||||||||||||||||||||||
| Income before income taxes | 771,701 | 734,219 | 530,580 | 2,193,640 | 1,208,178 | ||||||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | 7,099 | (744,174 | ) | 44,133 | (834,105 | ) | (36,839 | ) | |||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 778,800 | $ | (9,955 | ) | $ | 574,713 | $ | 1,359,535 | $ | 1,171,339 | ||||||||||||||||||||||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 4.80 | $ | (0.06 | ) | $ | 3.52 | $ | 8.40 | $ | 7.22 | ||||||||||||||||||||||||||||||
| Diluted | $ | 4.33 | $ | (0.06 | ) | $ | 3.10 | $ | 7.45 | $ | 6.40 | ||||||||||||||||||||||||||||||
| Number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||||||||||
| Basic | 162,378 | 161,135 | 163,408 | 161,885 | 162,225 | ||||||||||||||||||||||||||||||||||||
| Diluted | 179,779 | 161,135 | 185,094 | 182,565 | 182,885 | ||||||||||||||||||||||||||||||||||||
| Cash dividend declared per common share | $ | 0.50 | $ | 0.50 | $ | 0.45 | $ | 1.45 | $ | 1.20 | |||||||||||||||||||||||||||||||
| LAM RESEARCH CORPORATION | |||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| March 25, 2018 | December 24, 2017 | June 25, 2017 | |||||||||||||||
| (unaudited) | (unaudited) | (1) | |||||||||||||||
| ASSETS | |||||||||||||||||
| Cash and cash equivalents | $ | 4,698,995 | $ | 1,745,173 | $ | 2,377,534 | |||||||||||
| Investments | 1,785,976 | 3,954,526 | 3,663,628 | ||||||||||||||
| Accounts receivable, net | 2,082,632 | 2,279,044 | 1,673,398 | ||||||||||||||
| Inventories | 1,693,128 | 1,507,435 | 1,232,916 | ||||||||||||||
| Other current assets | 165,066 | 179,944 | 195,022 | ||||||||||||||
| Total current assets | 10,425,797 | 9,666,122 | 9,142,498 | ||||||||||||||
| Property and equipment, net | 826,500 | 807,340 | 685,595 | ||||||||||||||
| Restricted cash and investments | 256,587 | 255,984 | 256,205 | ||||||||||||||
| Goodwill and intangible assets | 1,825,891 | 1,866,159 | 1,796,668 | ||||||||||||||
| Other assets | 328,724 | 316,660 | 241,799 | ||||||||||||||
| Total assets | $ | 13,663,499 | $ | 12,912,265 | $ | 12,122,765 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Current portion of debt and capital leases | $ | 1,423,265 | $ | 1,401,660 | $ | 908,439 | |||||||||||
| Other current liabilities | 2,525,155 | 2,510,035 | 2,041,676 | ||||||||||||||
| Total current liabilities | 3,948,420 | 3,911,695 | 2,950,115 | ||||||||||||||
| Long-term debt and capital leases | 1,781,731 | 1,789,958 | 1,784,974 | ||||||||||||||
| Income taxes payable | 818,700 | 818,880 | 120,178 | ||||||||||||||
| Other long-term liabilities | 230,620 | 118,177 | 280,186 | ||||||||||||||
| Total liabilities | 6,779,471 | 6,638,710 | 5,135,453 | ||||||||||||||
| Temporary equity, convertible notes | 80,973 | 130,424 | 169,861 | ||||||||||||||
| Stockholders’ equity (2) | 6,803,055 | 6,143,131 | 6,817,451 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 13,663,499 | $ | 12,912,265 | $ | 12,122,765 | |||||||||||
| (1 | ) | Derived from audited financial statements. |
| (2 | ) | Common shares issued and outstanding were 164,100 as of March 25, 2018, 159,451 as of December 24, 2017, and 161,723 as of June 25, 2017. |
| LAM RESEARCH CORPORATION | |||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||||||||||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
| March25, 2018 | December 24, 2017 | March 26, 2017 | March 25, 2018 | March 26, 2017 | |||||||||||||||||||||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 778,800 | $ | (9,955 | ) | $ | 574,713 | $ | 1,359,535 | $ | 1,171,339 | ||||||||||||||||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 82,236 | 79,898 | 76,242 | 241,276 | 227,869 | ||||||||||||||||||||||||||||||||||||
| Deferred income taxes | 19,060 | (271,478 | ) | 27,619 | (209,214 | ) | 69,867 | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | 41,095 | 42,124 | 35,323 | 125,002 | 106,173 | ||||||||||||||||||||||||||||||||||||
| Impairment of investment | 42,456 | — | — | 42,456 | — | ||||||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | 36,325 | ||||||||||||||||||||||||||||||||||||
| Amortization of note discounts and issuance costs | 4,342 | 4,539 | 6,136 | 13,469 | 19,168 | ||||||||||||||||||||||||||||||||||||
| Other, net | 17,866 | (1,108 | ) | (4,738 | ) | 23,327 | 10,777 | ||||||||||||||||||||||||||||||||||
| Changes in operating assets and liabilities | 64,524 | 184,684 | (292,607 | ) | 341,538 | (341,508 | ) | ||||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | 1,050,379 | 28,704 | 422,688 | 1,937,389 | 1,300,010 | ||||||||||||||||||||||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||||||||||||||||
| Capital expenditures and intangible assets | (49,057 | ) | (84,693 | ) | (44,116 | ) | (193,814 | ) | (122,608 | ) | |||||||||||||||||||||||||||||||
| Business acquisitions, net of cash acquired | — | (84 | ) | — | (115,697 | ) | — | ||||||||||||||||||||||||||||||||||
| Net sale (purchase) of available-for-sale securities | 2,134,886 | (205,701 | ) | (418,566 | ) | 1,811,411 | (1,977,744 | ) | |||||||||||||||||||||||||||||||||
| Transfers of restricted cash and investments | (603 | ) | 61 | (982 | ) | (382 | ) | (5,736 | ) | ||||||||||||||||||||||||||||||||
| Other, net | 638 | (4,396 | ) | (3,586 | ) | (14,358 | ) | (11,627 | ) | ||||||||||||||||||||||||||||||||
| Net cash provided by (used for) investing activities | 2,085,864 | (294,813 | ) | (467,250 | ) | 1,487,160 | (2,117,715 | ) | |||||||||||||||||||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||||||||||||||||||||||
| Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs | (228,166 | ) | (47,522 | ) | (69,227 | ) | (577,415 | ) | (1,685,868 | ) | |||||||||||||||||||||||||||||||
| Net proceeds from issuance of commercial paper | 199,024 | 798,947 | — | 997,971 | — | ||||||||||||||||||||||||||||||||||||
| Proceeds from borrowings on revolving credit facility | — | 750,000 | — | 750,000 | — | ||||||||||||||||||||||||||||||||||||
| Repayments of borrowings on revolving credit facility | — | (750,000 | ) | — | (750,000 | ) | — | ||||||||||||||||||||||||||||||||||
| Treasury stock purchases | (80,105 | ) | (1,111,450 | ) | (216,373 | ) | (1,346,940 | ) | (285,894 | ) | |||||||||||||||||||||||||||||||
| Dividends paid | (79,739 | ) | (73,127 | ) | (73,337 | ) | (225,604 | ) | (169,786 | ) | |||||||||||||||||||||||||||||||
| Reissuance of treasury stock related to employee stock purchase plan | — | 34,057 | 17,223 | 34,057 | 36,543 | ||||||||||||||||||||||||||||||||||||
| Proceeds from issuance of common stock | 2,517 | 3,073 | 7,964 | 6,632 | 12,544 | ||||||||||||||||||||||||||||||||||||
| Other, net | 7 | — | (70 | ) | 11 | (124 | ) | ||||||||||||||||||||||||||||||||||
| Net cash used for financing activities | (186,462 | ) | (396,022 | ) | (333,820 | ) | (1,111,288 | ) | (2,092,585 | ) | |||||||||||||||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 4,041 | 842 | 2,992 | 8,200 | (462 | ) | |||||||||||||||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 2,953,822 | (661,289 | ) | (375,390 | ) | 2,321,461 | (2,910,752 | ) | |||||||||||||||||||||||||||||||||
| Cash and cash equivalents at beginning of period | 1,745,173 | 2,406,462 | 2,503,960 | 2,377,534 | 5,039,322 | ||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 4,698,995 | $ | 1,745,173 | $ | 2,128,570 | $ | 4,698,995 | $ | 2,128,570 | |||||||||||||||||||||||||||||||
| Non-GAAP Financial Summary | |||||||||||||||
| (in thousands, except percentages and per share data) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 25, 2018 | December 24, 2017 | ||||||||||||||
| Revenue | $ | 2,892,115 | $ | 2,580,815 | |||||||||||
| Gross margin | $ | 1,353,056 | $ | 1,227,961 | |||||||||||
| Gross margin as percentage of revenue | 46.8 | % | 47.6 | % | |||||||||||
| Operating expenses | $ | 486,022 | $ | 448,667 | |||||||||||
| Operating income | $ | 867,034 | $ | 779,294 | |||||||||||
| Operating margin as a percentage of revenue | 30.0 | % | 30.2 | % | |||||||||||
| Net income | $ | 851,795 | $ | 787,863 | |||||||||||
| Net income per diluted share | $ | 4.79 | $ | 4.34 | |||||||||||
| Shares used in per share calculation - diluted | 177,786 | 181,655 | |||||||||||||
| Reconciliation of U.S. GAAP Net Income (Loss) to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non- | |||||||||||||||
| GAAP number of dilutive shares | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 25, 2018 | December 24, 2017 | ||||||||||||||
| U.S. GAAP net income (loss) | $ | 778,800 | $ | (9,955 | ) | ||||||||||
| Pre-tax non-GAAP items: | |||||||||||||||
| Amortization related to intangible assets acquired through certain business combinations - cost of goods sold | 22,342 | 22,394 | |||||||||||||
| Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative | 17,074 | 17,074 | |||||||||||||
| Costs associated with business process reengineering - selling, general and administrative | — | 1,362 | |||||||||||||
| Business combination acquisition and integration related costs - selling, general and administrative | 107 | 1,093 | |||||||||||||
| Amortization of note discounts - other expense, net | 2,860 | 3,410 | |||||||||||||
| Realized loss on sale or impairment of investments - other expense, net | 46,641 | — | |||||||||||||
| Net income tax benefit on non-GAAP items | (11,518 | ) | (4,404 | ) | |||||||||||
| Income tax benefit on the conclusion of certain tax matters | (4,511 | ) | — | ||||||||||||
| Income tax expense associated with U.S. tax reform | — | 756,889 | |||||||||||||
| Non-GAAP net income | $ | 851,795 | $ | 787,863 | |||||||||||
| Non-GAAP net income per diluted share | $ | 4.79 | $ | 4.34 | |||||||||||
| GAAP net income (loss) per diluted share | $ | 4.33 | $ | (0.06 | ) | ||||||||||
| U.S. GAAP number of shares used for per diluted share calculation | 179,779 | 161,135 | |||||||||||||
| Effect of potentially dilutive securities: | |||||||||||||||
| Employee stock plans | — | 2,757 | |||||||||||||
| Convertible notes | — | 15,423 | |||||||||||||
| Warrants | — | 4,721 | |||||||||||||
| Effect of convertible note hedge | (1,993 | ) | (2,381 | ) | |||||||||||
| Non-GAAP number of shares used for per diluted share calculation | 177,786 | 181,655 | |||||||||||||
| Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating | |||||||||||||||
| Expenses and Operating Income | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 25, 2018 | December 24, 2017 | ||||||||||||||
| U.S. GAAP gross margin | $ | 1,330,714 | $ | 1,205,567 | |||||||||||
| Pre-tax non-GAAP items: | |||||||||||||||
| Amortization related to intangible assets acquired through certain business combinations | 22,342 | 22,394 | |||||||||||||
| Non-GAAP gross margin | $ | 1,353,056 | $ | 1,227,961 | |||||||||||
| U.S. GAAP gross margin as a percentage of revenue | 46.0 | % | 46.7 | % | |||||||||||
| Non-GAAP gross margin as a percentage of revenue | 46.8 | % | 47.6 | % | |||||||||||
| U.S. GAAP operating expenses | $ | 503,203 | $ | 468,196 | |||||||||||
| Pre-tax non-GAAP items: | |||||||||||||||
| Amortization related to intangible assets acquired through certain business combinations | (17,074 | ) | (17,074 | ) | |||||||||||
| Costs associated with business process reengineering | — | (1,362 | ) | ||||||||||||
| Business combination acquisition and integration related costs | (107 | ) | (1,093 | ) | |||||||||||
| Non-GAAP operating expenses | $ | 486,022 | $ | 448,667 | |||||||||||
| Non-GAAP operating income | $ | 867,034 | $ | 779,294 | |||||||||||
| U.S. GAAP operating margin as percent of revenue | 28.6 | % | 28.6 | % | |||||||||||
| Non-GAAP operating margin as a percent of revenue | 30.0 | % | 30.2 | % | |||||||||||
Lam Research Corporation Contacts:
Satya Kumar, Investor Relations, phone: 510-572-1615, e-mail: [email protected]