KLA CORP Quarterly Report for Q1 Ended Sep 30, 2015

Summary

KLA Corporation (KLAC) reported its financial results for the quarter ending September 29, 2015. Total revenues remained stable year-over-year at $642.6 million, with a slight increase in service revenue partially offsetting a decrease in product revenue. Net income saw a significant improvement, rising to $104.9 million from $72.2 million in the same period last year, driven by lower operating expenses, including reduced R&D and SG&A costs, partly due to workforce reductions. The company also benefited from a lower effective tax rate. Despite a decrease in cash and marketable securities from the previous quarter, the company maintained a strong liquidity position with approximately $2.3 billion in cash, cash equivalents, and marketable securities.

Key Highlights

• 1Total revenues for the quarter were $642.6 million, virtually flat compared to $642.9 million in the prior year's quarter.
• 2Net income increased substantially to $104.9 million ($0.66 per diluted share) from $72.2 million ($0.43 per diluted share) in the same quarter of the prior year.
• 3Operating expenses decreased significantly, with R&D expenses down 16% and SG&A expenses down 10% year-over-year, reflecting cost-saving measures including workforce reductions.
• 4The effective tax rate decreased to 21.9% from 27.0% in the prior year's quarter, contributing to the net income growth.
• 5The company's cash, cash equivalents, and marketable securities totaled $2.3 billion, a slight decrease from the prior quarter but indicative of solid liquidity.
• 6Debt increased significantly in the prior year due to a leveraged recapitalization, with total debt at $3.15 billion as of September 30, 2015.
• 7Subsequent to the quarter, KLA announced a definitive agreement to merge with Lam Research Corporation, expected to close mid-2016.

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