Lam Research Corporation Reports Financial Results for the Quarter Ended September 26, 2021

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FREMONT, Calif., Oct. 20, 2021 (GLOBE NEWSWIRE) -- Lam Research Corporation (the "Company," "Lam," "Lam Research") today announced financial results for the quarter ended September 26, 2021 (the “September 2021 quarter”).

Highlights for the September 2021 quarter were as follows:

  • Revenue of $4.30 billion.

  • U.S. GAAP gross margin of 45.9%, U.S. GAAP operating income as a percentage of revenue of 31.9%, and U.S. GAAP diluted EPS of $8.27.

  • Non-GAAP gross margin of 46.0%, non-GAAP operating income as a percentage of revenue of 32.4%, and non-GAAP diluted EPS of $8.36.

Key Financial Data for the Quarters Ended
September 26, 2021 and June 27, 2021
(in thousands, except per-share data, percentages, and basis points)

U.S. GAAP

September 2021

June 2021

Change Q/Q

Revenue

$

4,304,465

$

4,145,179

+ 4

%

Gross margin as percentage of revenue

45.9

%

46.2

%

- 30 bps

Operating income as percentage of revenue

31.9

%

31.7

%

+ 20 bps

Diluted EPS

$

8.27

$

7.98

+ 4

%

Non-GAAP

September 2021

June 2021

Change Q/Q

Revenue

$

4,304,465

$

4,145,179

+ 4

%

Gross margin as percentage of revenue

46.0

%

46.5

%

- 50 bps

Operating income as percentage of revenue

32.4

%

32.6

%

- 20 bps

Diluted EPS

$

8.36

$

8.09

+ 3

%

U.S. GAAP Financial Results

For the September 2021 quarter, revenue was $4,304 million, gross margin was $1,977 million, or 45.9% of revenue, operating expenses were $605 million, operating income was 31.9% of revenue, and net income was $1,180 million, or $8.27 per diluted share on a U.S. GAAP basis. This compares to revenue of $4,145 million, gross margin of $1,915 million, or 46.2% of revenue, operating expenses of $599 million, operating income of 31.7% of revenue, and net income of $1,145 million, or $7.98 per diluted share, for the quarter ended June 27, 2021 (the “June 2021 quarter”).

Non-GAAP Financial Results

For the September 2021 quarter, non-GAAP gross margin was $1,980 million, or 46.0% of revenue, non-GAAP operating expenses were $586 million, non-GAAP operating income was 32.4% of revenue, and non-GAAP net income was $1,192 million, or $8.36 per diluted share. This compares to non-GAAP gross margin of $1,926 million, or 46.5% of revenue, non-GAAP operating expenses of $574 million, non-GAAP operating income of 32.6% of revenue, and non-GAAP net income of $1,161 million, or $8.09 per diluted share, for the June 2021 quarter.

“Driven by strong demand and solid execution, Lam delivered its sixth consecutive quarter of record revenue and earnings per share,” said Tim Archer, Lam Research’s President and Chief Executive Officer. “In a robust wafer fabrication equipment environment, Lam is delivering the innovation needed for the success of our customers' semiconductor manufacturing roadmaps.”

Balance Sheet and Cash Flow Results

Cash and cash equivalents, short-term investments, and restricted cash and investments balances decreased to $4.9 billion at the end of the September 2021 quarter compared to $6.0 billion at the end of the June 2021 quarter. This decrease was primarily the result of $1.2 billion of share repurchases, including net share settlement of employee stock-based compensation; $185.4 million of dividends paid to stockholders; and $136.4 million of capital expenditures, partially offset by $457.5 million of cash generated from operating activities.

Revenue

The geographic distribution of revenue during the September 2021 quarter is shown in the following table:

Region

Revenue

China

37%

Korea

21%

Taiwan

15%

Japan

11%

Southeast Asia

8%

United States

6%

Europe

2%

The following table presents revenue disaggregated between system and customer support-related revenue:

Three Months Ended

September 26,
2021

June 27,
2021

September 27,
2020

(In thousands)

System revenue

$

2,924,883

$

2,763,877

$

2,148,241

Customer support-related revenue and other

1,379,582

1,381,302

1,028,839

$

4,304,465

$

4,145,179

$

3,177,080

System revenue includes sales of new leading-edge equipment in deposition, etch and clean markets.

Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from our Reliant® product line.

Outlook

For the quarter ended December 26, 2021, Lam is providing the following guidance:

U.S. GAAP

Reconciling Items

Non-GAAP

Revenue

$4.4 Billion

+/-

$250 Million

$4.4 Billion

+/-

$250 Million

Gross margin as a percentage of revenue

46.0%

+/-

1%

$

1

Million

46.0%

+/-

1%

Operating income as a percentage of revenue

31.7%

+/-

1%

$

13

Million

32.0%

+/-

1%

Net income per diluted share

$8.37

+/-

$0.50

$

12

Million

$8.45

+/-

$0.50

Diluted share count

142 Million

142 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, restructuring, balance sheet valuation adjustments, financing arrangements, gains or losses on equity investments, other investments, or other significant arrangements that may be completed or recognized 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 as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $1 million.

  • Operating income as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $13 million.

  • Net income per diluted share - amortization related to intangible assets acquired though business combinations, $13 million; amortization of note discounts, $1 million; and associated tax benefit for non-GAAP items ($2 million); totaling $12 million.

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 September 2021 and June 2021 quarters exclude amortization related to intangible assets acquired through business combinations, the effects of elective deferred compensation-related assets and liabilities, amortization of note discounts, and the income tax benefit of non-GAAP items. Additionally, the June 2021 quarter non-GAAP results exclude product rationalization charges.

Management uses non-GAAP gross margin, operating expense, operating income, operating income as a percentage of revenue, 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: our outlook and guidance for future financial results, including revenue, gross margins, operating income and net income; demand for wafer fabrication equipment; our operational execution; and our ability to deliver innovative products and services to our customers. Some factors that may affect these forward-looking statements include: supply chain disruptions or manufacturing capacity constraints may limit our ability to manufacture and sell our products; trade regulations, export controls, trade disputes, and other geopolitical tensions may inhibit our ability to sell our products; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; the actions of our customers and competitors may be inconsistent with our expectations; the severity, magnitude and duration of the COVID–19 pandemic (and the related governmental, public health, business and community responses to it), and their impacts on our business, results of operations and financial condition, are evolving and are highly uncertain and unpredictable; and widespread outbreaks of illness may impact our operations and revenue in affected areas; 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 27, 2021. 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.

Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam's equipment and services allow customers to build smaller and better performing devices. In fact, today, nearly every advanced chip is built with Lam technology. We combine superior systems engineering, technology leadership, and a strong values-based culture, with an unwavering commitment to our customers. 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

September 26,
2021

June 27,
2021

September 27,
2020

Revenue

$

4,304,465

$

4,145,179

$

3,177,080

Cost of goods sold

2,327,711

2,229,978

1,670,901

Gross margin

1,976,754

1,915,201

1,506,179

Gross margin as a percent of revenue

45.9

%

46.2

%

47.4

%

Research and development

382,327

381,749

355,367

Selling, general and administrative

222,194

217,525

189,748

Total operating expenses

604,521

599,274

545,115

Operating income

1,372,233

1,315,927

961,064

Operating income as a percent of revenue

31.9

%

31.7

%

30.2

%

Other expense, net

(28,857

)

(7,166

)

(38,792

)

Income before income taxes

1,343,376

1,308,761

922,272

Income tax expense

(163,632

)

(164,104

)

(98,821

)

Net income

$

1,179,744

$

1,144,657

$

823,451

Net income per share:

Basic

$

8.32

$

8.02

$

5.67

Diluted

$

8.27

$

7.98

$

5.59

Number of shares used in per share calculations:

Basic

141,743

142,662

145,267

Diluted

142,612

143,514

147,248

Cash dividend declared per common share

$

1.50

$

1.30

$

1.30

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

September 26,
2021

June 27,
2021

September 27,
2020

(unaudited)

(1)

(unaudited)

ASSETS

Cash and cash equivalents

$

4,042,151

$

4,418,263

$

4,129,067

Investments

569,472

1,310,872

2,528,841

Accounts receivable, net

3,397,180

3,026,430

2,317,922

Inventories

2,872,141

2,689,294

2,138,050

Prepaid expenses and other current assets

263,738

207,528

161,003

Total current assets

11,144,682

11,652,387

11,274,883

Property and equipment, net

1,372,533

1,303,479

1,133,529

Restricted cash and investments

251,448

252,487

253,458

Goodwill and intangible assets

1,614,959

1,622,499

1,646,343

Other assets

1,181,930

1,061,300

748,795

Total assets

$

15,565,552

$

15,892,152

$

15,057,008

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current portion of long-term debt and finance lease obligations

$

6,368

$

11,349

$

834,138

Other current liabilities

3,402,852

3,516,518

2,572,730

Total current liabilities

3,409,220

3,527,867

3,406,868

Long-term debt and finance lease obligations

4,988,964

4,990,333

4,993,495

Income taxes payable

881,325

948,037

879,870

Other long-term liabilities

466,000

398,727

351,283

Total liabilities

9,745,509

9,864,964

9,631,516

Temporary equity, convertible notes

6,307

Stockholders’ equity (2)

5,820,043

6,027,188

5,419,185

Total liabilities and stockholders’ equity

$

15,565,552

$

15,892,152

$

15,057,008


(1)

Derived from audited financial statements.

(2)

Common shares issued and outstanding were 140,811 as of September 26, 2021, 142,501 as of June 27, 2021, and 144,593 as of September 27, 2020.

LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)

Three Months Ended

September 26,
2021

June 27,
2021

September 27,
2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

1,179,744

$

1,144,657

$

823,451

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

79,874

78,397

72,912

Deferred income taxes

(13,023

)

(146,029

)

(1,850

)

Equity-based compensation expense

58,099

56,321

55,988

Other, net

(8,690

)

(27,786

)

4,339

Changes in operating assets and liabilities

(838,480

)

330,375

(312,329

)

Net cash provided by operating activities

457,524

1,435,935

642,511

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures and intangible assets

(136,427

)

(104,622

)

(62,806

)

Net sale (purchase) of available-for-sale securities

738,043

799,965

(737,074

)

Other, net

(4,923

)

(6,282

)

(1,786

)

Net cash provided by (used for) investing activities

596,693

689,061

(801,666

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on debt

(6,338

)

(822,046

)

(19,173

)

Treasury stock purchases

(1,236,753

)

(431,255

)

(448,581

)

Dividends paid

(185,431

)

(185,385

)

(167,129

)

Reissuance of treasury stock related to employee stock purchase plan

56,330

Proceeds from issuance of common stock

742

851

5,538

Other, net

188

(269

)

(2,140

)

Net cash used for financing activities

(1,427,592

)

(1,381,774

)

(631,485

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(3,776

)

702

4,082

Net (decrease) increase in cash, cash equivalents, and restricted cash

(377,151

)

743,924

(786,558

)

Cash, cash equivalents, and restricted cash at beginning of period

4,670,750

3,926,826

5,169,083

Cash, cash equivalents, and restricted cash at end of period

$

4,293,599

$

4,670,750

$

4,382,525

Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)

Three Months Ended

September 26,
2021

June 27,
2021

Revenue

$

4,304,465

$

4,145,179

Gross margin

$

1,979,742

$

1,926,323

Gross margin as percentage of revenue

46.0

%

46.5

%

Operating expenses

$

586,477

$

573,707

Operating income

$

1,393,265

$

1,352,616

Operating income as a percentage of revenue

32.4

%

32.6

%

Net income

$

1,191,561

$

1,161,211

Net income per diluted share

$

8.36

$

8.09

Shares used in per share calculation - diluted

142,612

143,514

Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income
(in thousands, except per share data)
(unaudited)

Three Months Ended

September 26,
2021

June 27,
2021

U.S. GAAP net income

$

1,179,744

$

1,144,657

Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through certain business combinations - cost of goods sold

1,092

1,092

Elective deferred compensation ("EDC") related liability valuation increase - cost of goods sold

1,896

4,256

Product rationalization - cost of goods sold

5,774

EDC related liability valuation increase - research and development

3,412

7,661

Product rationalization - research and development

426

Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative

12,357

12,357

EDC related liability valuation increase - selling, general and administrative

2,275

5,123

Amortization of note discounts - other expense, net

683

923

Gain on EDC related asset - other expense, net

(7,437

)

(17,184

)

Net income tax benefit on non-GAAP items

(2,461

)

(3,874

)

Non-GAAP net income

$

1,191,561

$

1,161,211

Non-GAAP net income per diluted share

$

8.36

$

8.09

U.S. GAAP net income per diluted share

$

8.27

$

7.98

U.S. GAAP and non-GAAP number of shares used for per diluted share calculation

142,612

143,514

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

September 26,
2021

June 27,
2021

U.S. GAAP gross margin

$

1,976,754

$

1,915,201

Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through certain business combinations

1,092

1,092

EDC related liability valuation increase

1,896

4,256

Product rationalization

5,774

Non-GAAP gross margin

$

1,979,742

$

1,926,323

U.S. GAAP gross margin as a percentage of revenue

45.9

%

46.2

%

Non-GAAP gross margin as a percentage of revenue

46.0

%

46.5

%

U.S. GAAP operating expenses

$

604,521

$

599,274

Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through certain business combinations

(12,357

)

(12,357

)

EDC related liability valuation increase

(5,687

)

(12,784

)

Product rationalization

(426

)

Non-GAAP operating expenses

$

586,477

$

573,707

U.S. GAAP operating income

$

1,372,233

$

1,315,927

Non-GAAP operating income

$

1,393,265

$

1,352,616

U.S. GAAP operating income as percent of revenue

31.9

%

31.7

%

Non-GAAP operating income as a percent of revenue

32.4

%

32.6

%

Lam Research Corporation Contacts:

Tina Correia, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com


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