01—Abstract
Summary
Summary of the 10-Q filed October 25, 2013. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation (KLAC) reported total revenues of $658.3 milliona 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%b 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 billionc in cash, cash equivalents, and marketable securities.
02—Key points
Key Highlights
- Total revenues for the quarter decreased by 9% year-over-year to $658.3 million.
- Product revenues declined by 13% year-over-year to $501.7 million, primarily due to lower shipment backlogs.
- Service revenues increased by 7% year-over-year to $156.6 million, indicating growth in the services segment.
- Gross margin improved to 57.8% from 56.0% in the prior year's quarter, supported by a favorable product mix and reduced service costs.
- R&D expenses increased by 10% year-over-year to $132.3 million, highlighting continued investment in innovation.
- The company maintained a strong liquidity position with $3.0 billion in cash, cash equivalents, and marketable securities as of September 30, 2013.
- Diluted EPS for the quarter was $0.66, down from $0.80 in the same period last year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2014, KLA Corp kept $0.17.
- Revenue$658.3M100.0%
- Cost of revenue−$277.7M42.2%
- Gross profit$380.7M57.8%
- Operating costs−$230.8M35.1%
- Operating income$149.9M22.8%
- Interest, other & tax−$38.7M5.9%
- Net income$111.2M16.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2014filed October 25, 2013Financial Statements
Q1 FY2014 against Q1 FY2013
| Line item | Q1 FY2014Q1 FY2013 | Change |
|---|---|---|
| Revenue | $658.34M$720.71M | −8.7% |
| Cost of Revenue | $277.66M$317.23M | −12.5% |
| Gross Profit | $380.68M$403.48M | −5.7% |
| R&D Expenses | $132.27M$119.74M | +10.5% |
| SG&A Expenses | $98.50M$97.19M | +1.3% |
| Operating Expenses | $508.43M$534.15M | −4.8% |
| Operating Income | $149.91M$186.56M | −19.6% |
| Interest Expense | $13.66M$13.50M | +1.2% |
| Net Income | $111.20M$135.37M | −17.9% |
| EPS (Basic) | $0.07$0.08 | −17.3% |
| EPS (Diluted) | $0.07$0.08 | −17.5% |
| Shares Outstanding (Basic) | 1.66B1.67B | −0.4% |
| Shares Outstanding (Diluted) | 1.69B1.70B | −0.6% |
05—Questions
Frequently Asked Questions
What is the primary reason for the year-over-year decrease in KLA Corporation's revenue?
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.
How is KLA Corporation managing its R&D investments given the revenue decline?
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.
What is the company's liquidity position at the end of the quarter?
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.
Did the company announce any changes to its dividend policy in this period?
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.
06—Continue