01—Abstract
Summary
Summary of the 10-Q filed May 6, 2020. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation reported solid performance for the nine months ended March 31, 2020, with total revenues increasing by 31% year-over-year to $4.35 billiona.
This growth was primarily driven by strong demand in the Semiconductor Process Control segment, which saw a 17% revenue increase, and the inclusion of Orbotech's results following its acquisition in February 2019. Despite an increase in R&D expenses (up 28%) and a significant goodwill impairment charge of $256.6 millionb impacting the Specialty Semiconductor Process and PCB and Display reporting units, the company demonstrated resilience. Financially, KLA maintained a strong liquidity position with $1.63 billion in cash, cash equivalents, and marketable securities as of March 31, 2020.
The company also continued its commitment to returning capital to shareholders through dividends and share repurchases, although the latter saw a decrease in the nine-month period compared to the prior year. The company's debt management also appears sound, with a BBB+ credit rating from S&P and compliance with all debt covenants.
02—Key points
Key Highlights
- Total revenues increased by 31% to $4.35 billion for the nine months ended March 31, 2020.
- Semiconductor Process Control segment revenue grew by 17% year-over-year.
- A goodwill impairment charge of $256.6 million was recognized, impacting the Specialty Semiconductor Process and PCB and Display reporting units.
- R&D expenses increased by 28% to $646.8 million for the nine months ended March 31, 2020.
- Cash, cash equivalents, and marketable securities totaled $1.63 billion as of March 31, 2020.
- The company paid $389.7 million in dividends and dividend equivalents during the nine months ended March 31, 2020.
- S&P upgraded KLA's credit rating to BBB+ with a stable outlook.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2020filed May 6, 2020Financial Statements
Q3 FY2020 against Q3 FY2019
| Line item | Q3 FY2020Q3 FY2019 | Change |
|---|---|---|
| Revenue | $1.42B$1.10B | +29.8% |
| Cost of Revenue | $590.16M$486.94M | +21.2% |
| Gross Profit | $833.81M$610.37M | +36.6% |
| R&D Expenses | $215.43M$184.89M | +16.5% |
| SG&A Expenses | $185.76M$182.18M | +2.0% |
| Interest Expense | $39.23M$31.19M | +25.8% |
| Net Income | $78.45M$192.73M | −59.3% |
| EPS (Basic) | $0.05$0.12 | −59.3% |
| EPS (Diluted) | $0.05$0.12 | −59.3% |
| Shares Outstanding (Basic) | 1.56B1.56B | −0.2% |
| Shares Outstanding (Diluted) | 1.57B1.57B | 0.0% |
05—Questions
Frequently Asked Questions
What was KLA's revenue performance in the reported period?
For the nine months ended March 31, 2020, KLA reported total revenues of $4.35 billion, a 31% increase compared to the same period last year. This growth was driven by strong demand in the Semiconductor Process Control segment and the inclusion of Orbotech's results post-acquisition.
Did KLA incur any significant charges during this period?
Yes, KLA recorded a goodwill impairment charge of $256.6 million, which affected the Specialty Semiconductor Process and PCB and Display reporting units. This was primarily due to a downward revision of financial outlook and the impact of the COVID-19 pandemic.
How is KLA's financial health, particularly its liquidity and debt?
KLA maintains a strong financial position with $1.63 billion in cash, cash equivalents, and marketable securities as of March 31, 2020. The company also has a BBB+ credit rating from S&P and was in compliance with all debt covenants during the period, indicating sound financial management.
How did the Orbotech acquisition impact KLA's financial results?
The acquisition of Orbotech, completed in February 2019, contributed to revenue growth, particularly in product and service revenues for the acquired business. However, it also led to increased R&D expenses and had an impact on segment gross margins.
06—Continue