01—Abstract
Summary
Summary of the 10-K filed August 19, 2011. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation's (LRCX) 2011 10-K filing reveals a company experiencing a significant rebound in revenue and profitability, a substantial increase from the challenging fiscal year 2009.
The company's core business in designing, manufacturing, and servicing semiconductor processing equipment, particularly in etch and single-wafer clean technologies, saw a robust 51.7% revenue increase to $3.24 billiona in fiscal year 2011 compared to fiscal year 2010. This growth was driven by an improving global economy and the semiconductor industry's adoption of next-generation technologies. The company's gross margin also improved to 46.2% in FY11, up from 45.5% in FY10 and a significantly lower 34.8% in FY09, indicating improved operational efficiency and absorption.
Financially, Lam Research bolstered its liquidity, ending fiscal year 2011 with $2.3 billionb in cash, cash equivalents, and short-term investments. This was partly due to a successful $900 million convertible note offering. The company also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders.
However, investors should note the cyclical nature of the semiconductor equipment industry, with potential for significant quarterly fluctuations. The company's substantial international revenue, particularly from Asia, also exposes it to foreign currency exchange rate risks.
02—Key points
Key Highlights
- Revenue increased significantly by 51.7% to $3.24 billion in FY11, compared to $2.13 billion in FY10, reflecting strong industry recovery.
- Gross margin improved to 46.2% in FY11, up from 45.5% in FY10 and 34.8% in FY09, indicating better operational leverage.
- Net income surged to $723.7 million in FY11, a 108.8% increase from $346.7 million in FY10, with diluted EPS growing to $5.79.
- The company ended FY11 with a strong liquidity position, holding $2.3 billion in cash, cash equivalents, and short-term investments.
- Lam Research conducted a $900 million convertible note offering in May 2011, strengthening its financial flexibility.
- International sales accounted for a substantial portion of revenue (approximately 88% in FY11), with Asia being a key region, highlighting global operational exposure.
- R&D expenses increased by 16.3% to $373.3 million in FY11, demonstrating continued investment in product development, which represented 11.5% of revenue.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Lam Research Corp kept $0.22.
- Revenue$3.24B100.0%
- Cost of revenue−$1.74B53.8%
- Gross profit$1.50B46.2%
- Operating costs−$692.9M21.4%
- Operating income$804.3M24.8%
- Interest, other & tax−$80.5M2.5%
- Net income$723.7M22.4%
Where FY2011 revenue went
$3.24B- Cost of revenue: $1.74B, 54% of revenue
- Net income: $723.7M, 22% of revenue
- R&D: $373.3M, 12% of revenue
- SG&A: $308.1M, 9.5% of revenue
- Interest, other & tax: $80.5M, 2.5% of revenue
Kept 22% as net incomeInterest, other & tax $80.5M · 2.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed August 19, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $3.24B$2.13B | +51.7% |
| Cost of Revenue | $1.74B$1.16B | +49.5% |
| Gross Profit | $1.50B$969.93M | +54.4% |
| R&D Expenses | $373.29M$320.86M | +16.3% |
| SG&A Expenses | $308.07M$240.94M | +27.9% |
| Operating Expenses | $692.95M$544.52M | +27.3% |
| Operating Income | $804.28M$425.41M | +89.1% |
| Interest Expense | $5.38M$994K | +441.2% |
| Net Income | $723.75M$346.67M | +108.8% |
| EPS (Basic) | $0.59$0.27 | +114.7% |
| EPS (Diluted) | $0.58$0.27 | +113.7% |
| Shares Outstanding (Basic) | 1.24B1.27B | −2.7% |
| Shares Outstanding (Diluted) | 1.25B1.28B | −2.4% |
05—Questions
Frequently Asked Questions
What was Lam Research's revenue performance in fiscal year 2011?
Lam Research reported a substantial revenue increase of 51.7% to $3.24 billion for fiscal year 2011, compared to $2.13 billion in fiscal year 2010. This growth was driven by improvements in the global economy and the semiconductor industry, leading to increased customer demand and system shipments.
How did Lam Research's profitability change in fiscal year 2011?
Profitability saw significant improvement. Gross margin increased to 46.2% in FY11, and net income more than doubled, reaching $723.7 million compared to $346.7 million in FY10. Diluted earnings per share rose to $5.79 from $2.71.
What is the company's financial position and liquidity at the end of FY11?
Lam Research ended fiscal year 2011 with a robust liquidity position, holding $2.3 billion in cash, cash equivalents, and short-term investments. This was supported by strong operating cash flows and proceeds from a convertible note financing.
What are the primary risks and uncertainties highlighted in the filing?
The filing emphasizes the cyclical nature of the semiconductor equipment industry, which can lead to significant fluctuations in demand and results. Other risks include dependence on a few key customers, intense competition, rapid technological change, and exposure to foreign currency exchange rate fluctuations due to a large proportion of international sales.
06—Continue