MILPITAS, Calif., Feb. 4, 2020 /PRNewswire/ -- KLA Corporation
(NASDAQ: KLAC) today announced operating results for its second
quarter of fiscal year 2020, which ended on Dec. 31, 2019, and
reported GAAP net income attributable to KLA of $381 million and GAAP earnings per diluted share
attributable to KLA of $2.40 on
revenues of $1.51 billion.
Logo: https://mma.prnewswire.com/media/806571/KLA_Corporation_Logo.jpg
"KLA once again demonstrated solid execution in the December
quarter, delivering results in the upper end of the range of
guidance, and capping multiple records across revenue, GAAP EPS and
non-GAAP EPS for the quarter," commented Rick Wallace, president and CEO of KLA. "As we
begin the new calendar year, we are excited with the growth
opportunities that lie ahead for KLA, with the industry outlook
calling for growth led by technology transitions in advanced Logic,
expanding investment in EUV, and with the expectation that Memory
investment will improve in the calendar year. As the leading
supplier of process control and specialty semiconductor process
equipment for semiconductor and related electronics industries, and
supported by a large and growing services business, KLA is uniquely
positioned to benefit from this growth while continuing to deliver
high levels of profitability."
GAAP
Results
|
|
Q2 FY
2020
|
Q1 FY
2020
|
Q2 FY
2019
|
Revenues
|
$1,509
million
|
$1,413
million
|
$1,120
million
|
Net Income
Attributable to KLA
|
$381 million
|
$347 million
|
$369 million
|
Earnings per Diluted
Share Attributable to KLA
|
$2.40
|
$2.16
|
$2.42
|
|
|
|
|
Non-GAAP
Results
|
|
Q2 FY
2020
|
Q1 FY
2020
|
Q2 FY
2019
|
Net Income
Attributable to KLA
|
$422 million
|
$398 million
|
$372 million
|
Earnings per Diluted
Share Attributable to KLA
|
$2.66
|
$2.48
|
$2.44
|
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, restructuring, severance,
merger and other related charges and certain discrete tax items.
KLA will discuss the results for its fiscal
year 2020 second quarter, along with its outlook, on
a conference call today beginning at 2:00
p.m. Pacific Time. A webcast of the call will be available
at: www.kla.com.
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.
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's
financial results presented in accordance with United States
GAAP.
To supplement KLA'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's operating performance and its prospects in
the future. Specifically, KLA believes that the non-GAAP
information provides useful measures to both management and
investors regarding financial and business trends relating to KLA'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.
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 the
industry outlook on growth, are subject to risks and uncertainties.
For the factors that may cause actual results to differ materially
from those projected and anticipated in the forward-looking
statements in this release, please refer to KLA's annual report on
Form 10-K for the year ended June 30,
2019, subsequently filed quarterly reports on Form 10-Q 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)
|
Dec 31,
2019
|
|
Jun 30,
2019
|
ASSETS
|
|
|
|
Cash, cash
equivalents and marketable securities
|
$
|
1,677,522
|
|
|
$
|
1,739,385
|
|
Accounts receivable,
net
|
1,191,035
|
|
|
990,113
|
|
Inventories
|
1,251,400
|
|
|
1,262,500
|
|
Other current
assets
|
257,486
|
|
|
323,077
|
|
Land, property and
equipment, net
|
489,980
|
|
|
448,799
|
|
Goodwill
|
2,299,781
|
|
|
2,211,858
|
|
Deferred income
taxes, non-current
|
213,255
|
|
|
206,141
|
|
Purchased intangible
assets, net
|
1,492,450
|
|
|
1,560,670
|
|
Other non-current
assets
|
377,811
|
|
|
265,973
|
|
Total
assets
|
$
|
9,250,720
|
|
|
$
|
9,008,516
|
|
LIABILITIES,
NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
256,646
|
|
|
$
|
202,416
|
|
Deferred system
revenue
|
247,103
|
|
|
282,348
|
|
Deferred service
revenue
|
204,284
|
|
|
206,669
|
|
Current portion of
long-term debt
|
—
|
|
|
249,999
|
|
Other current
liabilities
|
1,010,210
|
|
|
827,054
|
|
Total current
liabilities
|
1,718,243
|
|
|
1,768,486
|
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
3,399,877
|
|
|
3,173,383
|
|
Deferred tax
liabilities
|
680,929
|
|
|
702,285
|
|
Deferred service
revenue
|
99,969
|
|
|
98,772
|
|
Other non-current
liabilities
|
663,732
|
|
|
587,897
|
|
Total
liabilities
|
6,562,750
|
|
|
6,330,823
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
capital in excess of par value
|
2,017,521
|
|
|
2,017,312
|
|
Retained
earnings
|
719,001
|
|
|
714,825
|
|
Accumulated other
comprehensive income (loss)
|
(66,758)
|
|
|
(73,029)
|
|
Total KLA
stockholders' equity
|
2,669,764
|
|
|
2,659,108
|
|
Non-controlling
interest in consolidated subsidiary
|
18,206
|
|
|
18,585
|
|
Total stockholders'
equity
|
2,687,970
|
|
|
2,677,693
|
|
Total liabilities and
stockholders' equity
|
$
|
9,250,720
|
|
|
$
|
9,008,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KLA
Corporation
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Dec 31,
|
|
Six Months Ended
Dec 31,
|
(In thousands,
except per share amounts)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Product
|
$
|
1,144,550
|
|
|
$
|
852,201
|
|
|
$
|
2,202,525
|
|
|
$
|
1,681,428
|
|
Service
|
364,903
|
|
|
267,697
|
|
|
720,342
|
|
|
531,730
|
|
Total
revenues
|
1,509,453
|
|
|
1,119,898
|
|
|
2,922,867
|
|
|
2,213,158
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Costs of
revenues
|
633,618
|
|
|
408,260
|
|
|
1,237,859
|
|
|
789,647
|
|
Research and
development
|
220,751
|
|
|
165,903
|
|
|
431,331
|
|
|
319,433
|
|
Selling, general and
administrative
|
192,253
|
|
|
112,462
|
|
|
380,598
|
|
|
226,900
|
|
Interest expense and
other, net
|
37,904
|
|
|
17,310
|
|
|
76,636
|
|
|
33,647
|
|
Income before income
taxes
|
424,927
|
|
|
415,963
|
|
|
796,443
|
|
|
843,531
|
|
Provision for income
taxes
|
44,622
|
|
|
46,863
|
|
|
69,742
|
|
|
78,487
|
|
Net income
|
380,305
|
|
|
369,100
|
|
|
726,701
|
|
|
765,044
|
|
Less: Net loss
attributable to non-controlling interest
|
(250)
|
|
|
—
|
|
|
(379)
|
|
|
—
|
|
Net income
attributable to KLA
|
$
|
380,555
|
|
|
$
|
369,100
|
|
|
$
|
727,080
|
|
|
$
|
765,044
|
|
Net income per share
attributable to KLA:
|
|
|
|
|
|
|
|
Basic
|
$
|
2.42
|
|
|
$
|
2.43
|
|
|
$
|
4.60
|
|
|
$
|
4.98
|
|
Diluted
|
$
|
2.40
|
|
|
$
|
2.42
|
|
|
$
|
4.56
|
|
|
$
|
4.96
|
|
Weighted-average
number of shares:
|
|
|
|
|
|
|
|
Basic
|
157,290
|
|
|
152,148
|
|
|
157,994
|
|
|
153,684
|
|
Diluted
|
158,620
|
|
|
152,648
|
|
|
159,314
|
|
|
154,389
|
|
|
|
|
KLA
Corporation
|
Condensed
Consolidated Unaudited Statements of Cash Flow
|
|
|
Three Months
Ended
|
Dec
31,
|
(In
thousands)
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
380,305
|
|
|
$
|
369,100
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
88,534
|
|
|
15,806
|
|
Loss (gain) on
unrealized foreign exchange and other
|
(5,450)
|
|
|
895
|
|
Stock-based
compensation expense
|
26,789
|
|
|
15,695
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
|
|
|
|
Accounts
receivable
|
(126,682)
|
|
|
(55,869)
|
|
Inventories
|
(1,477)
|
|
|
(15,109)
|
|
Other
assets
|
3,558
|
|
|
34,978
|
|
Accounts
payable
|
35,258
|
|
|
(2,440)
|
|
Deferred system
revenue
|
(30,412)
|
|
|
(19,723)
|
|
Deferred service
revenue
|
1,220
|
|
|
12,211
|
|
Other
liabilities
|
16,088
|
|
|
(73,372)
|
|
Net cash provided by
operating activities
|
387,731
|
|
|
282,172
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(34,874)
|
|
|
(26,366)
|
|
Purchases of
available-for-sale securities
|
(144,715)
|
|
|
(2,686)
|
|
Proceeds from sale of
available-for-sale securities
|
10,287
|
|
|
107,370
|
|
Proceeds from
maturity of available-for-sale securities
|
158,699
|
|
|
128,052
|
|
Purchases of trading
securities
|
(12,852)
|
|
|
(27,481)
|
|
Proceeds from sale of
trading securities
|
15,307
|
|
|
29,722
|
|
Net cash (used in)
provided by investing activities
|
(8,148)
|
|
|
208,611
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
revolving credit facility
|
250,000
|
|
|
—
|
|
Repayment of
debt
|
(275,000)
|
|
|
—
|
|
Common stock
repurchases
|
(284,593)
|
|
|
(250,213)
|
|
Payment of dividends
to stockholders
|
(134,696)
|
|
|
(114,562)
|
|
Issuance of common
stock
|
24,499
|
|
|
20,556
|
|
Tax withholding
payments related to equity awards
|
(12,237)
|
|
|
(3,233)
|
|
Payment of contingent
consideration payable
|
(3)
|
|
|
—
|
|
Net cash used in
financing activities
|
(432,030)
|
|
|
(347,452)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
3,963
|
|
|
1,137
|
|
Net (decrease)
increase in cash and cash equivalents
|
(48,484)
|
|
|
144,468
|
|
Cash and cash
equivalents at beginning of period
|
988,348
|
|
|
1,649,514
|
|
Cash and cash
equivalents at end of period
|
$
|
939,864
|
|
|
$
|
1,793,982
|
|
Supplemental cash
flow disclosures:
|
|
|
|
Income taxes
paid
|
$
|
50,884
|
|
|
$
|
87,854
|
|
Interest
paid
|
$
|
53,140
|
|
|
$
|
51,136
|
|
Non-cash
activities:
|
|
|
|
Business acquisition
holdback amounts - investing activities
|
$
|
—
|
|
|
$
|
440
|
|
Contingent
consideration payable - financing activities
|
$
|
(3,540)
|
|
|
$
|
2,529
|
|
Dividends payable -
financing activities
|
$
|
1,638
|
|
|
$
|
5,404
|
|
Unsettled common
stock repurchase - financing activities
|
$
|
4,000
|
|
|
$
|
—
|
|
Accrued purchase of
land, property and equipment - investing activities
|
$
|
13,755
|
|
|
$
|
7,705
|
|
|
|
|
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
Dec 31,
|
|
Six Months Ended
Dec 31,
|
(In
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Semiconductor Process
Control
|
$
|
1,247,430
|
|
|
$
|
1,094,013
|
|
|
$
|
2,411,062
|
|
|
$
|
2,163,972
|
|
Specialty
Semiconductor Process
|
75,106
|
|
|
—
|
|
|
144,245
|
|
|
—
|
|
PCB, Display and
Component Inspection(1)
|
186,279
|
|
|
26,110
|
|
|
364,831
|
|
|
49,725
|
|
Other
|
517
|
|
|
—
|
|
|
2,748
|
|
|
—
|
|
Total revenues for
reportable segments
|
1,509,332
|
|
|
1,120,123
|
|
|
2,922,886
|
|
|
2,213,697
|
|
Corporate allocation
and effects of foreign exchange rates
|
121
|
|
|
(225)
|
|
|
(19)
|
|
|
(539)
|
|
Total
revenues
|
$
|
1,509,453
|
|
|
$
|
1,119,898
|
|
|
$
|
2,922,867
|
|
|
$
|
2,213,158
|
|
_________
|
(1)
|
Revenues in the three
and six months ended Dec. 31, 2019 include a contribution from the
Orbotech business. Revenues in the three and six months ended Dec.
31, 2018 include the Component Inspection business only.
|
|
|
|
KLA
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
|
|
|
|
Dec 31, 2019
|
|
Sept 30, 2019
|
|
Dec 31, 2018
|
|
Dec 31, 2019
|
|
Dec 31, 2018
|
GAAP net income
attributable to KLA
|
|
$
|
380,555
|
|
|
$
|
346,525
|
|
|
$
|
369,100
|
|
|
$
|
727,080
|
|
|
$
|
765,044
|
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
60,393
|
|
|
73,363
|
|
|
4,281
|
|
|
133,756
|
|
|
9,832
|
|
|
Restructuring,
severance and other related charges
|
b
|
2,786
|
|
|
—
|
|
|
—
|
|
|
2,786
|
|
|
—
|
|
|
Income tax effect of
non-GAAP adjustments
|
c
|
(21,505)
|
|
|
(22,266)
|
|
|
(276)
|
|
|
(43,771)
|
|
|
(586)
|
|
|
Discrete tax
items
|
d
|
—
|
|
|
—
|
|
|
(765)
|
|
|
—
|
|
|
(17,871)
|
|
Non-GAAP net income
attributable to KLA
|
|
$
|
422,229
|
|
|
$
|
397,622
|
|
|
$
|
372,340
|
|
|
$
|
819,851
|
|
|
$
|
756,419
|
|
GAAP net income
(loss) per diluted share attributable to KLA
|
|
$
|
2.40
|
|
|
$
|
2.16
|
|
|
$
|
2.42
|
|
|
$
|
4.56
|
|
|
$
|
4.96
|
|
Non-GAAP net income
per diluted share attributable to KLA
|
|
$
|
2.66
|
|
|
$
|
2.48
|
|
|
$
|
2.44
|
|
|
$
|
5.15
|
|
|
$
|
4.90
|
|
Shares used in
diluted shares calculation
|
|
158,620
|
|
|
160,131
|
|
|
152,648
|
|
|
159,314
|
|
|
154,389
|
|
|
|
|
Pre-tax impact of
GAAP to non-GAAP adjustments included in Condensed Consolidated
Unaudited Statements of Operations
|
|
|
Acquisition -
Related
Charges
|
|
Restructuring,
Severance and Other
Related Charges
|
|
Total pre-tax
GAAP
to non-GAAP
Adjustments
|
Three months ended
Dec 31, 2019
|
|
|
|
|
|
Costs of
revenues
|
$
|
40,590
|
|
|
$
|
831
|
|
|
$
|
41,421
|
|
Research and
development
|
—
|
|
|
802
|
|
|
802
|
|
Selling, general and
administrative
|
19,803
|
|
|
1,153
|
|
|
20,956
|
|
Total in three months
ended Dec 31, 2019
|
$
|
60,393
|
|
|
$
|
2,786
|
|
|
$
|
63,179
|
|
Three months ended
Sep 30, 2019
|
|
|
|
|
|
Costs of
revenues
|
$
|
49,999
|
|
|
$
|
—
|
|
|
$
|
49,999
|
|
Selling, general and
administrative
|
23,364
|
|
|
—
|
|
|
23,364
|
|
Total in three months
ended Sep 30, 2019
|
$
|
73,363
|
|
|
$
|
—
|
|
|
$
|
73,363
|
|
Three months ended
Dec 31, 2018
|
|
|
|
|
|
Costs of
revenues
|
$
|
967
|
|
|
$
|
—
|
|
|
$
|
967
|
|
Selling, general and
administrative
|
3,314
|
|
|
—
|
|
|
3,314
|
|
Total in three months
ended Dec 31, 2018
|
$
|
4,281
|
|
|
$
|
—
|
|
|
$
|
4,281
|
|
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 related charges include costs associated with
employee severance 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
include charges associated with the acquisition of Orbotech as well
as the income tax effects of an income tax expense from the
enacted tax reform legislation through the Tax Cuts and Jobs-Act
(the "Act"), which was signed into law on Dec. 22, 2017, of which
the impact is primarily related to the provisional tax amounts
recorded for the transition tax on accumulated foreign earnings and
the re-measurement of certain deferred tax assets and liabilities
as a result of the enactment of the Act. 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-2020-second-quarter-results-300998961.html
SOURCE KLA Corporation