01—Abstract
Summary
Summary of the 10-Q filed October 29, 2010. Cited figures are marked; the original filing is the authoritative source.
KLA-Tencor Corporation (KLAC) reported a significant increase in financial performance for the quarter ended September 30, 2010, compared to the same period in the prior year.
Total revenues more than doubled, driven by a substantial surge in product revenue, indicating a strong recovery and increased capital spending by customers in the semiconductor industry. This top-line growth translated directly into a dramatic improvement in profitability, with net income increasing from $20.4 million to $154.2 milliona, and diluted earnings per share rising from $0.12 to $0.91. The company maintained a healthy gross margin of 61% and demonstrated effective cost management, leading to a significant increase in operating income.
KLA-Tencor also reported robust cash flow from operations, underscoring its financial strength and ability to generate cash. The company continues to invest in research and development to maintain its competitive edge in the rapidly evolving semiconductor technology landscape.
02—Key points
Key Highlights
- Total revenues surged to $682.3 million for the three months ended September 30, 2010, up from $342.7 million in the prior year's comparable period, representing a 99% increase.
- Net income dramatically increased to $154.2 million, a significant jump from $20.4 million in the same quarter last year.
- Diluted earnings per share (EPS) rose to $0.91, up from $0.12 in the prior year quarter.
- Gross margin improved significantly to 61% from 50% in the prior year quarter, reflecting improved pricing, product mix, and manufacturing efficiencies.
- Operating cash flow remained strong at $95.5 million for the quarter, indicating healthy cash generation from business activities.
- The company repurchased $62.2 million of its common stock during the quarter, indicating a commitment to returning capital to shareholders.
- Inventories increased by approximately $62.5 million sequentially, suggesting anticipation of continued demand.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2011, KLA Corp kept $0.23.
- Revenue$682.3M100.0%
- Cost of revenue−$264.0M38.7%
- Gross profit$418.4M61.3%
- Operating costs−$182.8M26.8%
- Operating income$235.6M34.5%
- Interest, other & tax−$81.4M11.9%
- Net income$154.2M22.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2011filed October 29, 2010Financial Statements
Q1 FY2011 against Q1 FY2010
| Line item | Q1 FY2011Q1 FY2010 | Change |
|---|---|---|
| Revenue | $682.34M$342.69M | +99.1% |
| Cost of Revenue | $263.97M$171.89M | +53.6% |
| Gross Profit | $418.37M$170.79M | +145.0% |
| R&D Expenses | $94.72M$78.21M | +21.1% |
| SG&A Expenses | $88.04M$77.64M | +13.4% |
| Operating Expenses | $446.73M$327.74M | +36.3% |
| Operating Income | $235.62M$14.95M | +1476.0% |
| Interest Expense | $13.53M$13.46M | +0.5% |
| Net Income | $154.20M$20.41M | +655.7% |
| EPS (Basic) | $0.09$0.01 | +666.7% |
| EPS (Diluted) | $0.09$0.01 | +658.3% |
| Shares Outstanding (Basic) | 1.67B1.71B | −2.1% |
| Shares Outstanding (Diluted) | 1.70B1.73B | −1.7% |
05—Questions
Frequently Asked Questions
What is the primary driver behind the significant revenue increase in this quarter?
The primary driver behind the substantial revenue increase is the significant rise in product revenue, which more than doubled year-over-year. This is attributed to increased capital spending by customers in the semiconductor industry for both technology and capacity-related investments, responding to anticipated end-market demand.
How has KLA-Tencor's profitability changed compared to the previous year?
Profitability has improved dramatically. Net income increased from $20.4 million to $154.2 million, and diluted earnings per share rose from $0.12 to $0.91. This is a result of the significant revenue growth combined with improved gross margins and effective cost management.
What is KLA-Tencor's cash flow situation and how is it managing its capital?
The company generated strong cash flow from operations ($95.5 million for the quarter). They also utilized cash for financing activities, including $62.2 million in stock repurchases and $41.8 million in dividend payments, indicating a commitment to returning capital to shareholders while maintaining operational liquidity.
Are there any notable changes in the company's asset or liability structure?
Total assets increased to $4.0 billion from $3.9 billion sequentially. Key changes include an increase in accounts receivable and inventories, suggesting higher sales activity and potential anticipation of future demand. Long-term debt remained stable. Stockholders' equity increased due to retained earnings.
06—Continue