10-QPeriod: Q3 FY2010

KLA CORP Quarterly Report for Q3 Ended Mar 31, 2010

Filed April 30, 2010For Securities:KLAC

Summary

KLA Corp (KLAC) reported significant revenue growth in the third quarter of fiscal year 2010 compared to the prior year, driven by increased capital spending from its semiconductor customers. Total revenues reached $478.3 million, a 54% increase year-over-year, with product revenue up 69% and service revenue up 26%. This rebound indicates a recovery in the semiconductor industry following a challenging prior year. The company's financial performance shows a strong return to profitability, with net income of $57.0 million for the quarter, a substantial improvement from a net loss of $82.8 million in the same period last year. This profitability is supported by improved gross margins, which expanded to 56% from 32% a year ago, reflecting higher capacity utilization and reduced inventory costs. The company also maintained its quarterly dividend of $0.15 per share, demonstrating a commitment to returning value to shareholders.

Financial Highlights

31 data points
Beta

Revenue

$478.30M

56.4% Gross Margin

Net Income

$57.02M

11.9% Net Margin

EPS (Diluted)

$0.03

Cash & Equivalents

$543.50M

Free Cash Flow

$117.63M

Financial Statements
Beta
Revenue$478.30M
Cost of Revenue$208.56M
Gross Profit$269.73M
R&D Expenses$84.74M
SG&A Expenses$93.71M
Operating Expenses$387.02M
Operating Income$91.28M
Interest Expense$14.09M
Net Income$57.02M
EPS (Basic)$0.03
EPS (Diluted)$0.03
Shares Outstanding (Basic)1.72B
Shares Outstanding (Diluted)1.73B

Key Highlights

  • 1Total revenues increased by 54% year-over-year to $478.3 million for the three months ended March 31, 2010.
  • 2Product revenue saw a significant surge of 69% year-over-year, indicating robust demand for KLA Corp's equipment.
  • 3Net income improved dramatically from a loss of $82.8 million in the prior year's quarter to a profit of $57.0 million.
  • 4Gross margin expanded significantly to 56% from 32% year-over-year, driven by higher sales volumes and improved operational efficiency.
  • 5The company reported strong operating cash flow of $364.5 million for the nine months ended March 31, 2010.
  • 6Cash and cash equivalents and marketable securities totaled $1.6 billion, providing a strong liquidity position.
  • 7The quarterly dividend of $0.15 per share was maintained, signaling confidence in future financial performance.

Frequently Asked Questions

The primary driver for KLA Corp's revenue growth is the increased capital spending by its semiconductor customers. This spending is being fueled by improved factory utilization, higher demand for their end products, and the need for advanced technology development equipment.

KLA Corp has shown a significant turnaround in profitability. For the three months ended March 31, 2010, the company reported a net income of $57.0 million, a substantial improvement from a net loss of $82.8 million in the same period of the prior year. This is largely due to increased revenues and improved gross margins.

KLA Corp maintains a strong liquidity position with $1.6 billion in cash, cash equivalents, and marketable securities as of March 31, 2010. The company generated $364.5 million in cash from operations for the nine months ended March 31, 2010 and continues to pay a quarterly dividend, indicating sound cash management and financial health.

The company is involved in several legal proceedings, notably shareholder derivative and class action lawsuits related to historical stock option practices. While a settlement for the federal derivative action was preliminarily approved, the ultimate outcome and financial impact are still subject to final court approval. Investors should monitor these developments, as significant judgments or settlements could impact financial results.