KLA Corporation Reports Fiscal 2021 First Quarter Results
MILPITAS, Calif., Oct. 28, 2020 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced operating results for its first quarter of fiscal year 2021, which ended on Sept. 30, 2020, and reported GAAP net income attributable to KLA of $421 million and GAAP earnings per diluted share attributable to KLA of $2.69 on revenue of $1.54 billion.
Link: https://mma.prnewswire.com/media/806571/KLA_Corporation_Logo.jpg
"Our results demonstrate the resourcefulness of our global workforce, resiliency of our business model, and our continuing commitment to returning value to our shareholders," commented Rick Wallace, president and chief executive officer of KLA Corporation. "In the September quarter we saw broad, diversified strength across each of our segments. Semiconductor Process Control was solidly above plan, and our Service business is on track to deliver double-digit growth in 2020. We also ended the quarter with a strong backlog, reflecting the enabling role KLA plays in our customers' drive to innovate and invest in next-generation technology."
GAAP Results
---
Q1 FY 2021 Q4 FY 2020 Q1 FY 2020
---
Total
revenue
$1,539 million
$1,460 million
$1,413 million
Net
Income
Attributable
to
KLA
$421 million
$411 million
$347 million
--- ---
Earnings
per
Diluted
Share
Attributable
to
KLA $2.69 $2.63 $2.16
---
Non-GAAP Results
---
Q1 FY 2021 Q4 FY 2020 Q1 FY 2020
---
Adjusted
Net
Income
Attributable
to
KLA
$475 million
$426 million
$398 million
--- ---
Earnings
per
Diluted
Share
Attributable
to
KLA $3.03 $2.73 $2.48
---
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 recurring stock-based compensation, but exclude the impact of acquisitions or pending acquisitions, goodwill impairment, restructuring, severance and other charges, loss on extinguishment of debt, and certain discrete tax items. KLA will discuss the results for its fiscal year 2021 first quarter, along with its outlook, on a conference call today beginning at 2 p.m. PT. A webcast of the call will be available at: www.kla.com.
Second Quarter Fiscal 2021 Guidance
The following details our guidance for the second quarter of fiscal 2021 ending in December:
-- Total revenue between $1,510 million to $1,660 million
-- GAAP diluted EPS attributable to KLA is expected to be in a range of
$2.59 to $3.23
-- Non-GAAP diluted EPS attributable to KLA in a range of $2.82 to $3.46
For additional guidance metrics please see the company's published letter to shareholders and earnings slides on the KLA investor relations website.
About KLA:
KLA Corporation ("KLA") develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging, printed circuit boards and flat panel displays. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Additional information may be found at: www.kla.com (KLAC-F).
Note Regarding Forward-Looking Statements:
This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements, including statements regarding our total revenue, GAAP and non-GAAP EPS attributable to KLA for the quarter ending Dec. 31, 2020, and growth of our Services business in 2020, are subject to risks and uncertainties. Factors that may cause actual results to differ materially from those projected and anticipated in the forward-looking statements in this release include risks related to customer cancellations or push outs, our ability to deliver services during the COVID-19 pandemic, the introduction of new laws, regulations or orders that limit our ability to sell products to customers or to service products previously sold to customers and other risk factors included in KLA's annual report on Form 10-K for the year ended June 30, 2020 and other filings with the Securities and Exchange Commission (including, without limitation, the risk factors described therein). Except as otherwise specifically indicated, the information included in this release is as of the date it is delivered. KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements.
KLA Corporation
Condensed Consolidated Unaudited Balance Sheets
(In thousands) Sept. 30, 2020 June 30, 2020
--- ---
ASSETS
Cash, cash equivalents and marketable securities $
2,043,453 $
1,980,472
Accounts receivable, net 1,028,883 1,107,413
Inventories 1,394,225 1,310,985
Other current assets 288,138 324,675
Land, property and equipment, net 561,852 519,824
Goodwill 2,045,432 2,045,402
Deferred income taxes, non-current 245,614 236,797
Purchased intangible assets, net 1,340,913 1,391,413
Other non-current assets 371,586 362,979
Total assets $
9,320,096 $
9,279,960
LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
254,458 $
264,280
Deferred system revenue 253,604 336,237
Deferred service revenue 241,219 233,493
Other current liabilities 999,547 865,776
Total current liabilities 1,748,828 1,699,786
Non-current liabilities:
Long-term debt 3,420,403 3,469,670
Deferred tax liabilities 656,876 660,885
Deferred service revenue 84,953 96,325
Other non-current liabilities 646,691 672,284
Total liabilities 6,557,751 6,598,950
Stockholders' equity:
Common stock and capital in excess of par value 2,072,715 2,090,268
Retained earnings 753,915 654,930
Accumulated other comprehensive income (loss) (79,446) (79,774)
Total KLA stockholders' equity 2,747,184 2,665,424
Non-controlling interest in consolidated subsidiary 15,161 15,586
Total stockholders' equity 2,762,345 2,681,010
Total liabilities and stockholders' equity $
9,320,096 $
9,279,960
KLA Corporation
Condensed Consolidated Unaudited Statements of Operations
Three Months Ended Sept. 30,
(In thousands, except per share amounts) 2020 2019
---
Revenues:
Product $
1,145,495 $
1,057,975
Service 393,125 355,439
Total revenues 1,538,620 1,413,414
Costs and expenses:
Costs of revenues 620,562 604,241
Research and development 219,038 210,580
Selling, general and administrative 172,631 188,345
Interest expense 39,386 40,350
Other expense (income), net 3,197 (1,618)
Income before income taxes 483,806 371,516
Provision for income taxes 63,664 25,120
Net income 420,142 346,396
Less: Net loss attributable to non-controlling interest (425) (129)
Net income attributable to KLA $
420,567 $
346,525
Net income per share attributable to KLA:
Basic $
2.71 $
2.18
Diluted $
2.69 $
2.16
Weighted-average number of shares:
Basic 155,281 158,697
Diluted 156,442 160,131
KLA Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
Three Months Ended
Sept. 30,
---
(In thousands) 2020 2019
--- ---
Cash flows from operating activities:
Net income $
420,142 $
346,396
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 80,066 98,588
(Gain) loss on unrealized foreign
exchange and other (12,907) 10,313
Asset impairment charges 865 2,481
Stock-based compensation expense 26,992 26,944
Changes in assets and liabilities, net of assets
acquired and liabilities assumed in business
acquisitions:
Accounts receivable 73,000 (75,214)
Inventories (85,991) (5,091)
Other assets 5,103 (8,930)
Accounts payable (9,822) 18,885
Deferred system revenue (82,633) (4,833)
Deferred service revenue (3,646) (4,337)
Other liabilities 101,002 91,043
Net cash provided by operating
activities 512,171 496,245
Cash flows from investing activities:
Proceeds from sale of assets 1,114
Business acquisitions, net of cash
acquired - (78,530)
Capital expenditures (55,925) (32,566)
Purchases of available-for-sale
securities (231,821) (263,767)
Proceeds from sale of available-
for-sale securities 53,249 25,449
Proceeds from maturity of
available-for-sale securities 95,835 198,751
Purchases of trading securities (18,630) (9,021)
Proceeds from sale of trading
securities 21,244 11,905
Proceeds from other investments 614 1,086
Net cash used in investing
activities (134,320) (146,693)
Cash flows from financing activities:
Repayment of debt (50,000)
Common stock repurchases (187,897) (228,496)
Payment of dividends to
stockholders (141,164) (121,636)
Issuance of common stock - 114
Tax withholding payments related
to equity awards (25,145) (23,538)
Payment of contingent
consideration payable - (57)
Net cash used in financing
activities (404,206) (373,613)
Effect of exchange rate changes on
cash and cash equivalents 7,766 (3,585)
Net decrease in cash and cash
equivalents (18,589) (27,646)
Cash and cash equivalents at
beginning of period 1,234,409 1,015,994
Cash and cash equivalents at end
of period $
1,215,820 $
988,348
Supplemental cash flow disclosures:
Income taxes paid $
54,185 $
19,862
Interest paid $
40,071 $
26,347
Non-cash activities:
Accrued purchase of land, property
and equipment -investing
activities $
23,388 $
16,074
Contingent consideration payable -
financing activities $
(2,987) $
9,366
Dividends payable -financing
activities $
391 $
1,552
Unsettled common stock repurchase
-financing activities $
6,000 $
8,000
KLA Corporation
Segment Information (Unaudited)
The following is a summary of results for each of our four reportable segments and reconciliation to total revenues for the indicated periods:
Three Months Ended Sept. 30,
(In thousands) 2020 2019
--- ---
Revenues:
Semiconductor Process Control $
1,267,954 $
1,163,632
Specialty Semiconductor Process 88,954 69,139
PCB, Display and Component Inspection 181,177 178,552
Other 140 2,231
Total revenues for reportable segments 1,538,225 1,413,554
Corporate allocation and effects of foreign exchange rates 395 (140)
Total revenues $
1,538,620 $
1,413,414
KLA Corporation
Condensed Consolidated Unaudited Supplemental Information
Reconciliation of GAAP Net Income and GAAP earnings per diluted share to Non-GAAP Net Income and Non-GAAP earnings per diluted share
---
Three Months Ended
(In thousands, except per share amounts) Sept. 30, June 30, Sept. 30,
2020 2020 2019
GAAP net income attributable to KLA $
420,567 $
411,253 $
346,525
Adjustments to reconcile GAAP net income to non-GAAP net income:
---
Acquisition-related charges a 50,475 55,937 73,363
Restructuring, severance and other charges b 3,253 4,240
Income tax effect of non-GAAP adjustments c (17,013) (16,027) (22,266)
Discrete tax items d 17,487 (29,364)
Non-GAAP net income attributable to KLA $
474,769 $
426,039 $
397,622
GAAP net income per diluted share attributable to KLA $
2.69 $
2.63 $
2.16
Non-GAAP net income per diluted share attributable to KLA $
3.03 $
2.73 $
2.48
Shares used in diluted shares calculation 156,442 156,183 160,131
Pre-tax impact of GAAP to non-GAAP adjustments included in Condensed Consolidated Unaudited Statements of Operations
---
In thousands Acquisition - Restructuring, Total pre-tax
Related Charges Severance and GAAP to non-
Other Charges GAAP
Adjustments
--- ---
Three months ended Sept. 30, 2020
---
Costs of revenues $
37,040 $
636 $
37,676
Research and development - 923 923
Selling, general and administrative 13,435 1,933 15,368
Other expense (income), net - (239) (239)
Total in three months ended Sept. 30, 2020 $
50,475 $
3,253 $
53,728
Three months ended June 30, 2020
---
Costs of revenues $
41,446 $
534 $
41,980
Research and development - 585 585
Selling, general and administrative 14,491 1,179 15,670
Other expense (income), net - 1,942 1,942
Total in three months ended June 30, 2020 $
55,937 $
4,240 $
60,177
Three months ended Sept. 30, 2019
---
Costs of revenues $
49,999
$ $
49,999
Selling, general and administrative 23,364 23,364
Total in three months ended Sept. 30, 2019 $
73,363
$ $
73,363
Free Cash Flow Reconciliation
---
Three Months Ended Sept. 30,
(In thousands) 2020 2019
Net cash provided by operating
activities $
512,171 $
496,245
Capital expenditures (55,925) (32,566)
Free Cash Flow $
456,246 $
463,679
Second Quarter Fiscal 2021 Guidance
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
---
Three Months Ending
Dec. 31, 2020
(In thousands, except per share
amounts) Low High
---
GAAP net income per diluted share
attributable to KLA $2.59 $3.23
Acquisition-related charges a 0.32 0.32
Restructuring, severance and
other charges b 0.02 0.02
Income tax effect of non-GAAP
adjustments c (0.11) (0.11)
Non-GAAP net income per diluted share
attributable to KLA $2.82 $3.46
Shares used in net income per diluted
share calculation 155.4 155.4
The Non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA's financial results presented in accordance with United States GAAP.
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
primarily include amortization of
intangible assets and other
acquisition-related adjustments
including adjustments for the fair
valuation of inventory and backlog,
and transaction costs associated
with our acquisitions, primarily
Orbotech. 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
and exclusion of these expenses
allows comparisons of operating
results that are consistent over
time for both KLA's newly acquired
and long-held businesses.
Management believes that the other
acquisition-related expenses are
appropriate to be excluded because
such costs would not have otherwise
been incurred in the periods
presented. 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
charges primarily include costs
associated with employee severance,
acceleration of certain stock-
based compensation arrangements,
and other exit costs. Management
believes excluding these items
helps investors compare our
operating performance with our
results in prior periods.
c. 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.
d. Discrete tax items in the three
months ended Sept. 30, 2020 include
a tax expense of $14.0 million due
to an increase in deferred tax
liability on purchased intangibles
relating to an increase in the
United Kingdom statutory income tax
rate as well as tax expense from a
restructuring. Discrete tax items
in the three months ended June 30,
2020 include a tax benefit of $29.4
million from an internal
restructuring. 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.
View original content:http://www.prnewswire.com/news-releases/kla-corporation-reports-fiscal-2021-first-quarter-results-301162162.html
SOURCE KLA Corporation
