10-QPeriod: Q1 FY2010

LAM RESEARCH CORP Quarterly Report for Q1 Ended Sep 27, 2009

Filed November 6, 2009For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported its financial results for the quarter ended September 26, 2009. The company demonstrated a recovery in its operational performance compared to the preceding quarter, with revenue increasing by 46% sequentially to $318.5 million. This rebound was driven by improved foundry utilization and an increased demand for next-generation memory products, indicating a positive trend within the semiconductor industry despite revenue being down 28% year-over-year. Despite the sequential improvement, the company's financial position remains cautious due to the ongoing macroeconomic uncertainties. Lam Research's gross margin saw a significant improvement, rising to 42.9% from 31.1% in the prior quarter, largely attributed to better factory utilization and a more favorable product mix. The company maintained its R&D investments, focusing on plasma etch and single wafer clean technologies, while also managing operating expenses, partly aided by the resolution of certain 409A liabilities. The company ended the quarter with a robust cash position of $761.2 million, highlighting its focus on liquidity management.

Financial Highlights

27 data points
Beta

Revenue

$318.55M

42.2% Gross Margin

Net Income

$16.80M

5.3% Net Margin

EPS (Diluted)

$0.01

Cash & Equivalents

$361.16M

Free Cash Flow

$2.70M

Financial Statements
Beta
Revenue$318.55M
Cost of Revenue$184.11M
Gross Profit$134.44M
R&D Expenses$71.20M
SG&A Expenses$52.12M
Operating Expenses$105.18M
Operating Income$29.25M
Net Income$16.80M
EPS (Basic)$0.01
EPS (Diluted)$0.01
Shares Outstanding (Basic)1.27B
Shares Outstanding (Diluted)1.28B

Key Highlights

  • 1Revenue increased 46% sequentially to $318.5 million, indicating a recovery in demand within the semiconductor industry.
  • 2Gross margin improved significantly to 42.9% from 31.1% in the prior quarter, driven by higher factory utilization and a favorable product mix.
  • 3Net income turned positive at $16.8 million ($0.13 EPS) compared to a net loss of $88.5 million in the previous quarter.
  • 4The company maintained its investment in R&D, focusing on core technologies like plasma etch and single wafer clean.
  • 5Cash and investments remained strong at $761.2 million, underscoring a focus on liquidity and financial flexibility.
  • 6Restructuring charges of $2.1 million were incurred, primarily related to severance and facility costs, reflecting ongoing cost management efforts.
  • 7The company saw a $70.7 million increase in accounts receivable, indicating improved sales activity but also a higher working capital requirement.

Frequently Asked Questions

The sequential revenue increase of 46% to $318.5 million was primarily driven by improved foundry utilization and increased demand for next-generation DRAM and NAND wafer starts from leading memory companies. This suggests a cyclical upturn in the semiconductor equipment industry during the quarter.

Lam Research has focused on managing its operating expenses, which decreased sequentially. A portion of this decrease was due to a partial settlement of 409A liabilities. The company also incurred restructuring charges of $2.1 million, primarily for severance and facility costs, indicating ongoing efforts to align costs with business opportunities. R&D investments were maintained to support future growth.

The company maintains a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $761.2 million as of September 27, 2009. Net cash provided by operating activities was $2.7 million for the quarter, a significant improvement from the previous quarter's net cash used. This healthy cash balance is expected to be sufficient to support operations, investments, and debt service for at least the next 12 months.

The company faces significant risks related to the cyclical nature of the semiconductor industry and the broader economic downturn, which can lead to unpredictable revenues and operating results. Other risks include dependence on a few key customers and suppliers, rapid technological changes, product concentration, and challenges in managing global operations and international sales. The company also notes potential impacts from Section 409A issues and ongoing tax audits.