10-QPeriod: Q1 FY2014

KLA CORP Quarterly Report for Q1 Ended Sep 30, 2013

Filed October 25, 2013For Securities:KLAC

Summary

KLA Corporation (KLAC) reported total revenues of $658.3 million for the three months ended September 30, 2013, a decrease of 9% compared to the same period in the prior year. This decline was primarily driven by lower product revenues, which fell 13% year-over-year, attributed to reduced shipment backlogs. However, service revenues saw a positive trend, increasing by 7% year-over-year, suggesting a growing contribution from its service segment. The company maintained a healthy gross margin of 57.8% for the quarter, an improvement from the prior year's 56.0%, driven by a favorable product mix and decreased service costs. Despite the revenue dip, R&D expenses increased by 10% year-over-year, reflecting continued investment in innovation and advanced technology development, crucial for its long-term competitive positioning in the cyclical semiconductor industry. KLA Corporation ended the quarter with a strong liquidity position, holding approximately $3.0 billion in cash, cash equivalents, and marketable securities.

Financial Highlights

48 data points
Beta

Revenue

$658.34M

57.8% Gross Margin

Net Income

$111.20M

16.9% Net Margin

EPS (Diluted)

$0.07

Total Assets

$5.28B

Cash & Equivalents

$904.95M

Free Cash Flow

$155.50M

Financial Statements
Beta
Revenue$658.34M
Cost of Revenue$277.66M
Gross Profit$380.68M
R&D Expenses$132.27M
SG&A Expenses$98.50M
Operating Expenses$508.43M
Operating Income$149.91M
Interest Expense$13.66M
Net Income$111.20M
EPS (Basic)$0.07
EPS (Diluted)$0.07
Shares Outstanding (Basic)1.66B
Shares Outstanding (Diluted)1.69B

Key Highlights

  • 1Total revenues for the quarter decreased by 9% year-over-year to $658.3 million.
  • 2Product revenues declined by 13% year-over-year to $501.7 million, primarily due to lower shipment backlogs.
  • 3Service revenues increased by 7% year-over-year to $156.6 million, indicating growth in the services segment.
  • 4Gross margin improved to 57.8% from 56.0% in the prior year's quarter, supported by a favorable product mix and reduced service costs.
  • 5R&D expenses increased by 10% year-over-year to $132.3 million, highlighting continued investment in innovation.
  • 6The company maintained a strong liquidity position with $3.0 billion in cash, cash equivalents, and marketable securities as of September 30, 2013.
  • 7Diluted EPS for the quarter was $0.66, down from $0.80 in the same period last year.

Frequently Asked Questions

The primary reason for the year-over-year decrease in revenue is the lower product revenues, which declined by 13%. This was mainly due to a reduction in shipment backlogs at the beginning of the period compared to the prior year's quarter.

Despite the revenue decline, KLA Corporation increased its R&D expenses by 10% year-over-year. This reflects the company's commitment to investing in advanced product and technology development, which is considered essential for maintaining a competitive advantage and long-term growth in the dynamic semiconductor industry.

As of September 30, 2013, KLA Corporation had a strong liquidity position, with approximately $3.0 billion in cash, cash equivalents, and marketable securities. Of this amount, $1.1 billion was held by foreign subsidiaries.

Yes, on July 9, 2013, the Board of Directors authorized an increase in the quarterly dividend from $0.40 to $0.45 per share. This increase is reflected in the total dividend payments for the quarter.