10-QPeriod: Q3 FY2012

LAM RESEARCH CORP Quarterly Report for Q3 Ended Mar 25, 2012

Filed May 3, 2012For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported its Q3 2012 results with revenue of $659.0 million, a 13% increase from the prior quarter, driven by increased foundry customer investments. Despite revenue growth, year-over-year revenue for the three and nine months ended March 25, 2012, declined by 19% and 23% respectively, attributed to reduced macroeconomic activity impacting customer investments. Gross margin percentage saw a sequential improvement to 40.5% from 40.2% in the prior quarter, but a year-over-year decrease from 46.2%, mainly due to lower factory utilization and unfavorable customer mix. Operating expenses increased sequentially and year-over-year, impacted by investments in R&D, Novellus acquisition costs, and higher variable compensation. The company ended the quarter with a strong liquidity position, holding $2.6 billion in cash, cash equivalents, and short-term investments. During the nine months, net cash provided by operating activities was $402.3 million. The company is progressing with its planned acquisition of Novellus Systems, Inc., a significant all-stock deal valued at approximately $3.3 billion at announcement. This acquisition, along with a substantial share repurchase program of up to $1.6 billion, highlights the company's strategic focus and capital allocation plans.

Financial Statements
Beta

Key Highlights

  • 1Revenue for the third quarter of fiscal year 2012 was $659.0 million, a 13% increase sequentially from the previous quarter.
  • 2Gross margin as a percentage of revenue was 40.5%, showing a slight sequential increase from 40.2% in the prior quarter.
  • 3Net income for the quarter was $45.6 million, resulting in diluted earnings per share of $0.38.
  • 4The company held a robust liquidity position with $2.6 billion in cash, cash equivalents, and short-term investments as of March 25, 2012.
  • 5Net cash provided by operating activities for the nine months ended March 25, 2012, was $402.3 million.
  • 6Lam Research announced its plan to acquire Novellus Systems, Inc. in an all-stock deal valued at approximately $3.3 billion.
  • 7The company has a significant share repurchase program in place, with a $1.6 billion authorization announced in December 2011.

Frequently Asked Questions

Revenue for the quarter ended March 25, 2012, was $659.0 million, an increase of 13% from the December 25, 2011 quarter. However, revenue for the three months and nine months ended March 25, 2012, decreased by 19% and 23% respectively, compared to the same periods in the prior year, reflecting reduced macroeconomic activity impacting customer investments.

Gross margin percentage improved slightly to 40.5% from 40.2% in the prior quarter, but decreased year-over-year from 46.2% due to lower factory utilization and customer mix. Net income for the quarter was $45.6 million, leading to diluted EPS of $0.38. Operating expenses increased sequentially and year-over-year due to R&D investments, Novellus acquisition costs, and higher variable compensation.

Lam Research maintains a strong liquidity position, with $2.6 billion in cash, cash equivalents, and short-term investments as of March 25, 2012. Operating activities generated $402.3 million in cash over the nine-month period. The company expects its current liquidity to be sufficient for at least the next 12 months.

The company is actively pursuing the acquisition of Novellus Systems, Inc., an all-stock transaction valued at approximately $3.3 billion. Additionally, Lam Research has a substantial share repurchase program authorized, with up to $1.6 billion available, indicating a focus on capital allocation and shareholder returns.