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
