10-QPeriod: Q1 FY2015

LAM RESEARCH CORP Quarterly Report for Q1 Ended Sep 28, 2014

Filed November 3, 2014For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported its financial results for the quarter ending September 28, 2014. The company demonstrated strong revenue growth compared to the prior year, with a 14% increase year-over-year, driven by increased customer capital spending and market share gains in technology inflection areas like FinFET transistors and 3D NAND. Diluted earnings per share also saw significant improvement, rising to $0.80 from $0.50 in the same period last year. Despite a sequential decrease in revenue and gross margin percentage compared to the June 2014 quarter, primarily due to a less favorable product mix and lower factory utilization, the company maintained a healthy financial position. Operating expenses were well-managed, decreasing slightly quarter-over-quarter. Lam Research continued to return capital to shareholders through share repurchases and dividends, indicating confidence in its future cash flow generation and financial stability.

Financial Highlights

55 data points
Beta

Revenue

$1.15B

43.9% Gross Margin

Net Income

$141.08M

12.2% Net Margin

EPS (Diluted)

$0.08

Total Assets

$7.89B

Cash & Equivalents

$1.29B

Free Cash Flow

$141.16M

Financial Statements
Beta
Revenue$1.15B
Cost of Revenue$646.83M
Gross Profit$505.54M
R&D Expenses$188.93M
SG&A Expenses$148.31M
Operating Expenses$337.24M
Operating Income$168.30M
Interest Expense$15.70M
Net Income$141.08M
EPS (Basic)$0.09
EPS (Diluted)$0.08
Shares Outstanding (Basic)1.62B
Shares Outstanding (Diluted)1.77B

Key Highlights

  • 1Revenue increased by 14% to $1.15 billion for the three months ended September 28, 2014, compared to $1.01 billion for the same period in 2013.
  • 2Diluted EPS rose to $0.80 for the quarter, a significant increase from $0.50 in the prior year's comparable quarter.
  • 3Gross margin percentage improved to 43.9% from 42.5% in the prior year's comparable quarter, despite a sequential decrease from the previous quarter.
  • 4Operating expenses were managed effectively, showing a slight decrease quarter-over-quarter and remaining relatively consistent year-over-year as a percentage of revenue.
  • 5The company actively returned capital to shareholders, with $308 million used for treasury stock purchases and $29.2 million paid in dividends during the quarter.
  • 6Lam Research maintained a strong liquidity position with approximately $3.0 billion in total cash and investments as of September 28, 2014.

Frequently Asked Questions

The primary driver for the year-over-year revenue growth was increased capital spending by semiconductor device manufacturers, fueled by technology inflections such as FinFET transistors, 3D NAND, and multiple patterning. Lam Research's strong market share in these areas contributed significantly to the revenue increase.

The gross margin percentage decreased sequentially from the June 2014 quarter due to a less favorable product mix and lower factory and field utilization. These factors temporarily impacted the company's efficiency and profitability on a per-unit basis.

Lam Research maintained a strong liquidity position with approximately $3.0 billion in total cash, cash equivalents, and short-term investments as of September 28, 2014. The company generated $141 million in net cash from operating activities during the quarter and continues to believe its current liquidity reserves are sufficient to support its anticipated operations, investments, and capital expenditures for at least the next 12 months.

Lam Research actively returns capital to shareholders through share repurchases and dividends. During the reported quarter, the company repurchased $308 million of its stock and paid $29.2 million in dividends, demonstrating its commitment to shareholder value and confidence in its ongoing cash generation capabilities.