10-QPeriod: Q3 FY2015

LAM RESEARCH CORP Quarterly Report for Q3 Ended Mar 29, 2015

Filed April 30, 2015For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported strong financial results for the quarter ended March 29, 2015. Revenue increased by 13% sequentially to $1.39 billion, driven by robust demand from memory customers. Net income also saw a significant rise to $206 million, resulting in diluted EPS of $1.16. The company demonstrated a healthy liquidity position with $4.1 billion in total cash and investments. During the quarter, LRCX successfully issued $1 billion in senior notes, bolstering its financial flexibility. Management expressed confidence in continued growth within the wafer fabrication equipment market for calendar year 2015, citing key technology inflections and increased customer capital expenditures. The balance sheet shows substantial growth in cash and investments, alongside an increase in inventories and accounts receivable, consistent with revenue growth. The company's debt profile saw changes with the new senior note issuance, while strategic investments in Research and Development continued, underscoring a commitment to innovation and future market positioning.

Financial Highlights

55 data points
Beta

Revenue

$1.39B

43.1% Gross Margin

Net Income

$206.28M

14.8% Net Margin

EPS (Diluted)

$0.12

Total Assets

$9.24B

Cash & Equivalents

$1.64B

Free Cash Flow

$191.04M

Financial Statements
Beta
Revenue$1.39B
Cost of Revenue$792.73M
Gross Profit$600.60M
R&D Expenses$217.87M
SG&A Expenses$142.77M
Operating Expenses$360.64M
Operating Income$239.97M
Interest Expense$17.63M
Net Income$206.28M
EPS (Basic)$0.13
EPS (Diluted)$0.12
Shares Outstanding (Basic)1.59B
Shares Outstanding (Diluted)1.78B

Key Highlights

  • 1Revenue increased 13% sequentially to $1.39 billion.
  • 2Net income rose to $206.3 million, with diluted EPS of $1.16.
  • 3Total cash and investments reached $4.1 billion, up from $3.0 billion at the end of the prior quarter.
  • 4The company successfully issued $1 billion in Senior Notes (500 million due 2020 and 500 million due 2025) in March 2015.
  • 5Inventories increased by approximately 24% sequentially to $919.7 million.
  • 6Research and Development expenses increased by 11% sequentially to $217.9 million, reflecting continued investment in technology.
  • 7The company repurchased $125 million of its stock during the quarter.

Frequently Asked Questions

Revenue for the quarter ended March 29, 2015, was $1.39 billion, a 13% increase compared to the previous quarter. Net income was $206.3 million, leading to diluted earnings per share of $1.16.

Lam Research maintained a strong liquidity position, with total cash and investments (cash, cash equivalents, short-term investments, and restricted cash and investments) totaling $4.1 billion as of March 29, 2015, an increase from $3.0 billion at the end of the prior quarter. This increase was primarily due to the issuance of $1 billion in senior notes.

During the quarter, Lam Research completed a public offering of $1 billion in Senior Notes, comprising $500 million due in March 2020 and $500 million due in March 2025. The company also repurchased $125 million of its common stock.

Inventories increased by approximately 24% sequentially to $919.7 million. This increase is consistent with the reported revenue growth and suggests the company is preparing for continued demand or fulfilling backlogged orders.

Management expects growth in the wafer fabrication equipment market for calendar year 2015, driven by leading-edge investments from customers and continued growth in mobile and enterprise spending. Technology inflections like FinFET transistors, 3D NAND, and multiple patterning are noted as key drivers increasing market size.