KLA-Tencor Reports Fiscal 2017 Fourth Quarter And Full Year Results
MILPITAS, Calif., July 27, 2017 /PRNewswire/ -- KLA-Tencor Corporation (NASDAQ: KLAC) today announced operating results for its fourth quarter and fiscal year ended June 30, 2017. KLA-Tencor reported GAAP net income of $256 million and GAAP earnings per diluted share of $1.62 on revenues of $939 million for the fourth quarter of fiscal year 2017. For the fiscal year ended June 30, 2017, the company reported GAAP net income of $926 million and GAAP earnings per diluted share of $5.88 on revenues of $3.5 billion.
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"We're very pleased to report that June marked another exceptional quarter for KLA-Tencor. New orders exceeded the $1 billion mark and shipments were a record $971 million," commented Rick Wallace, president and chief executive officer of KLA-Tencor. "These results were driven by KLA-Tencor's ongoing execution of our strategic objectives and are reflective of the strength of demand in today's industry environment."
GAAP Results Q4 FY 2017 Q3 FY 2017 Q4 FY 2016 Revenues $939 million $914 million $919 million ------------ ------------ Net Income $256 million $254 million $272 million Earnings per Diluted Share $1.62 $1.61 $1.73 -------------------- ----- ----- ----- Non-GAAP Results Q4 FY 2017 Q3 FY 2017 Q4 FY 2016 Net Income $259 million $256 million $277 million Earnings per Diluted Share $1.64 $1.62 $1.77 -------------------- ----- ----- -----
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 fourth quarter and full year, along with its outlook, on a conference call today beginning at 3:00 p.m. Pacific 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 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 more than 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) June 30, 2017 June 30, 2016 ------------- ------------- ------------- ASSETS Cash, cash equivalents and marketable securities $3,016,740 $2,491,294 Accounts receivable, net 571,117 613,233 Inventories 732,988 698,635 Other current assets 71,221 64,870 Land, property and equipment, net 283,975 278,014 Goodwill 349,526 335,177 Deferred income taxes, non-current 291,967 302,219 Purchased intangibles, net 18,963 4,331 Other non- current assets 195,676 174,659 ------- ------- Total assets $5,532,173 $4,962,432 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $147,380 $106,517 Deferred system profit 180,861 174,551 Unearned revenue 65,507 59,147 Current portion of long-term debt 249,983 - Other current liabilities 649,431 662,208 ------- ------- Total current liabilities 1,293,162 1,002,423 Non-current liabilities: Long-term debt 2,680,474 3,057,936 Unearned revenue 59,713 56,336 Other non- current liabilities 172,407 156,623 ------- ------- Total liabilities 4,205,756 4,273,318 Stockholders' equity: Common stock and capital in excess of par value 529,283 452,974 Retained earnings 848,457 284,825 Accumulated other comprehensive income (loss) (51,323) (48,685) ------- ------- Total stockholders' equity 1,326,417 689,114 --------- ------- Total liabilities and stockholders' equity $5,532,173 $4,962,432 ========== ==========
KLA-Tencor Corporation Condensed Consolidated Unaudited Statements of Operations Three months ended Twelve months ended (In thousands, except per share amounts) June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 --------------------- ------------- ------------- ------------- ------------- Revenues: Product $737,432 $731,118 $2,703,934 $2,250,260 Service 201,215 188,053 776,080 734,233 ------- ------- ------- ------- Total revenues 938,647 919,171 3,480,014 2,984,493 Costs and expenses: Costs of revenues 347,930 337,568 1,287,547 1,163,391 Research and development 136,555 127,454 526,870 481,258 Selling, general and administrative 105,164 103,797 389,336 379,399 Interest expense and other, net 23,966 21,865 103,015 102,253 ------ ------ ------- ------- Income before income taxes 325,032 328,487 1,173,246 858,192 Provision for income taxes 68,870 56,946 247,170 153,770 Net income $256,162 $271,541 $926,076 $704,422 ======== ======== ======== ======== Net income per share: Basic $1.64 $1.74 $5.92 $4.52 ----- ----- ----- ----- Diluted $1.62 $1.73 $5.88 $4.49 ----- ----- ----- ----- Cash dividends declared per share $0.54 $0.52 $2.14 $2.08 ----- ----- ----- ----- Weighted-average number of shares: Basic 156,668 155,712 156,468 155,869 Diluted 157,931 156,618 157,481 156,779
KLA-Tencor Corporation Condensed Consolidated Unaudited Statements of Cash Flows Three months ended June 30, (In thousands) 2017 2016 ------------- ---- ---- Cash flows from operating activities: Net income $256,162 $271,541 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,324 14,888 Non-cash stock-based compensation expense 14,485 12,292 Excess tax benefit from equity awards - 240 Net gain on sales of marketable securities and other investments (375) (1,782) Changes in assets and liabilities, net of business acquisition: Decrease in accounts receivable, net 167,034 21,400 Decrease (increase) in inventories (32,464) 26,397 Decrease in other assets 5,000 29,758 Increase (decrease) in accounts payable 6,844 (19,847) Decrease in deferred system profit (8,655) (18,668) Increase in other liabilities 40,282 17,874 ------ ------ Net cash provided by operating activities 462,637 354,093 Cash flows from investing activities: Acquisition of non-marketable securities (1,060) - Business acquisition, net of cash acquired (28,560) - Capital expenditures, net (10,668) (7,508) Proceeds from sale of assets 365 3,050 Purchases of available-for- sale securities (414,383) (301,733) Proceeds from sale of available- for-sale securities 70,443 105,610 Proceeds from maturity of available-for-sale securities 227,569 130,009 Purchases of trading securities (9,694) (20,130) Proceeds from sale of trading securities 11,629 21,449 ------ ------ Net cash used in investing activities (154,359) (69,253) Cash flows from financing activities: Repayment of debt (25,000) (40,000) Issuance of common stock 21,665 16,388 Tax withholding payments related to vested and released restricted stock units - (219) Common stock repurchases (25,002) - Payment of dividends to stockholders (84,637) (81,120) Excess tax benefit from equity awards - (240) Net cash used in financing activities (112,974) (105,191) Effect of exchange rate changes on cash and cash equivalents 1,940 2,865 Net increase in cash and cash equivalents 197,244 182,514 Cash and cash equivalents at beginning of period 955,807 925,974 Cash and cash equivalents at end of period $1,153,051 $1,108,488 ========== ========== Supplemental cash flow disclosures: Income taxes paid, net $43,888 $23,408 Interest paid $56,865 $57,091 Non-cash activities: Purchase of land, property and equipment -investing activities $3,299 $2,035 Business acquisition holdback amounts- investing activities $5,318 $ - Dividends payable -financing activities $13,772 $19,556
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 Twelve months ended June 30, March 31, June 30, June 30, June 30, 2017 2017 2016 2017 2016 ---- ---- ---- ---- ---- GAAP net income $256,162 $253,562 $271,541 $926,076 $704,422 Adjustments to reconcile GAAP net income to non-GAAP net income ----------------------------- Acquisition-related charges a 1,029 513 1,294 3,322 7,493 Restructuring, severance and other related charges b - - - - 8,945 Merger-related charges c 3,072 3,221 5,795 13,967 18,197 Income tax effect of non-GAAP adjustments d (1,295) (1,272) (1,795) (5,406) (8,999) Discrete tax items e - - - (3,064) - --- Non-GAAP net income $258,968 $256,024 $276,835 $934,895 $730,058 ======== ======== ======== ======== ======== GAAP net income per diluted share $1.62 $1.61 $1.73 $5.88 $4.49 ===== ===== ===== ===== ===== Non-GAAP net income per diluted share $1.64 $1.62 $1.77 $5.94 $4.66 ===== ===== ===== ===== ===== Shares used in diluted shares calculation 157,931 157,746 156,618 157,481 156,779 ======= ======= ======= ======= =======
Pre-tax impact of items included in Condensed Consolidated Unaudited Statements of Operations --------------------------------------------------------------------------------------------- Acquisition- Merger-related Total pre-tax related charges charges GAAP to non- GAAP adjustment ---------- Three months ended June 30, 2017 ------------------ Costs of revenues $708 $9 $717 Research and development - 995 995 Selling, general and administrative 321 2,068 2,389 Total in three months ended June 30, 2017 $1,029 $3,072 $4,101 ====== ====== ====== Three months ended March 31, 2017 ------------------ Costs of revenues $500 $362 $862 Research and development - 997 997 Selling, general and administrative 13 1,862 1,875 Total in three months ended March 31, 2017 $513 $3,221 $3,734 ==== ====== ====== 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 ====== ====== ======
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 include amortization of intangible assets and transaction costs associated with acquisitions. Management believes that the expense associated with the amortization of acquisition related intangible assets and acquisition related costs are 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 performances 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 include 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.
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SOURCE KLA-Tencor Corporation