10-QPeriod: Q2 FY2014

KLA CORP Quarterly Report for Q2 Ended Dec 31, 2013

Filed January 24, 2014For Securities:KLAC

Summary

KLA Corp. (KLAC) reported its financial results for the quarter ending December 30, 2013. Total revenues for the quarter were $705.1 million, a 5% increase year-over-year, driven by growth in both product and service revenues. Net income for the quarter was $139.2 million, or $0.83 per diluted share, representing a significant improvement from the prior year's quarter. The company maintains a strong balance sheet with total assets of $5.44 billion and substantial liquidity, including $793.4 million in cash and cash equivalents and $2.16 billion in marketable securities. The company highlighted robust new order activity for its process control and yield management equipment across memory, foundry, and logic markets, indicating positive future demand. R&D expenses increased year-over-year, reflecting continued investment in advanced product and technology development, which is crucial for KLAC's competitive position. Management expressed confidence in the long-term growth drivers of the industry and the company's ability to navigate market cyclicality.

Financial Highlights

49 data points
Beta

Revenue

$705.13M

59.5% Gross Margin

Net Income

$139.25M

19.7% Net Margin

EPS (Diluted)

$0.08

Total Assets

$5.44B

Cash & Equivalents

$793.38M

Free Cash Flow

$100.81M

Financial Statements
Beta
Revenue$705.13M
Cost of Revenue$285.81M
Gross Profit$419.31M
R&D Expenses$134.59M
SG&A Expenses$96.75M
Operating Expenses$517.15M
Operating Income$187.98M
Interest Expense$13.31M
Net Income$139.25M
EPS (Basic)$0.08
EPS (Diluted)$0.08
Shares Outstanding (Basic)1.66B
Shares Outstanding (Diluted)1.68B

Key Highlights

  • 1Total revenues increased 5% year-over-year to $705.1 million for the quarter.
  • 2Net income grew to $139.2 million, or $0.83 per diluted share, compared to $106.6 million in the prior year's quarter.
  • 3The company ended the quarter with a strong liquidity position, holding $793.4 million in cash and cash equivalents and $2.16 billion in marketable securities.
  • 4Product revenues saw a year-over-year increase, driven by higher shipment backlog due to demand for advanced technologies.
  • 5Service revenues also increased, reflecting a larger installed base of post-warranty systems.
  • 6Research and Development (R&D) expenses rose 11% year-over-year, demonstrating continued investment in innovation and new product development.
  • 7The company's gross margin improved to 59.5% from 54.8% in the prior year's quarter, indicating improved operational efficiency and favorable product mix.

Frequently Asked Questions

KLA Corp. reported total revenues of $705.1 million for the quarter ended December 31, 2013, representing a 5% increase compared to $673.0 million in the same quarter of the previous year. This growth was driven by increases in both product and service revenues.

Profitability significantly improved. Net income for the quarter was $139.2 million, or $0.83 per diluted share, compared to $106.6 million, or $0.63 per diluted share, in the prior year's quarter. This represents a substantial year-over-year increase in both net income and earnings per share.

KLA Corp. maintains a strong financial position. As of December 31, 2013, the company had total assets of $5.44 billion, with significant liquidity. This included $793.4 million in cash and cash equivalents and $2.16 billion in marketable securities, totaling over $3 billion in readily available funds.

Revenue growth was primarily driven by an increase in product revenues, attributed to higher shipment backlog resulting from customer adoption of new device architectures and leading-edge process technologies. Service revenues also increased, reflecting a growing number of post-warranty systems installed at customer sites.