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KLA CORP 8-K Report, Regulation FD Disclosure (Mar 18, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed March 18, 2024
Period End
March 18, 2024
Security
KLAC
In the record · 2016–202610-K1110-Q328-K131

KLAC filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 131 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Nov ’17Nov ’17
  2. Material agreement8-K · Mar ’20Mar ’20
  3. Leadership change8-K · Aug ’25Aug ’25

01—Abstract

Summary

Summary of the 8-K filed March 18, 2024. Cited figures are marked; the original filing is the authoritative source.

KLA Corporation (KLAC) announced its strategic decision to exit the flat panel display (FPD) business, with manufacturing of FPD products expected to cease by December 31, 2024.

This decision stems from the cancellation of a significant new technology project by a major customer and follows the company's prior exploration of alternatives for this segment. The FPD business represented a small portion of KLA's overall revenue, accounting for only 1.4% in calendar year 2023. While this exit is not expected to impact revenue guidance for the March 2024 quarter, the company anticipates incurring between $60a-$70 million in non-cash inventory write-offs and $50-$70 million for impairment of goodwill and purchased intangible assets.

Consequently, KLA has revised its financial guidance for the March quarter, expecting lower GAAP and non-GAAP gross margins and diluted EPS. The company anticipates an immaterially favorable long-term impact on profitability margins from this strategic shift.

02—Key points

Key Highlights

  1. KLA Corp is exiting its Flat Panel Display (FPD) business, with manufacturing to cease by December 31, 2024.
  2. The FPD business accounted for a minimal 1.4% of KLA's total revenue in calendar year 2023.
  3. The exit is primarily driven by the cancellation of a significant new technology project by a major customer.
  4. KLA reaffirms its revenue guidance for the March 2024 quarter at $2.3 billion +/- $125 million.
  5. The company expects to incur $60-$70 million in non-cash inventory write-offs and $50-$70 million in goodwill/intangible asset impairment charges in Q1 2024.
  6. Revised financial guidance for Q1 2024 reflects lower expected GAAP and non-GAAP gross margins and diluted EPS.
  7. KLA anticipates an immaterially favorable long-term impact on profitability margins from exiting the FPD systems market.

03—Questions

Frequently Asked Questions

  1. What is the financial impact of exiting the FPD business in the March 2024 quarter?

    For the quarter ending March 31, 2024, KLA expects to incur approximately $60-$70 million in non-cash expenses for inventory write-offs and $50-$70 million for the impairment of goodwill and purchased intangible assets. These charges will lead to revised guidance for lower GAAP and non-GAAP gross margins and diluted EPS.

  2. Will this exit affect KLA's overall revenue guidance?

    No, the company stated that this decision has no effect on revenue expectations for the March 2024 quarter, and it reaffirms its revenue guidance range of $2.3 billion, plus or minus $125 million.

  3. What is the long-term financial outlook for KLA after exiting the FPD business?

    KLA expects the exit from the FPD systems market to have an immaterially favorable impact on its long-term profitability margins.

  4. Why is KLA exiting the FPD business?

    The decision is based on multiple factors, including the cancellation of a significant new technology project by a major customer. This follows the company's prior disclosure of exploring alternatives for this business segment.

04—Continue

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