10-QPeriod: Q1 FY2016

LAM RESEARCH CORP Quarterly Report for Q1 Ended Sep 27, 2015

Filed November 3, 2015For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported strong financial results for the three months ended September 27, 2015. Revenue surged by 39% year-over-year to $1.6 billion, driven by robust demand from memory chip manufacturers, a key growth area fueled by technological advancements like FinFET transistors and 3D NAND. This top-line growth translated into significant profitability improvements, with net income more than doubling to $288.7 million, leading to a diluted EPS of $1.66, up from $0.80 in the prior year. Operationally, the company demonstrated improved efficiency, with gross margins expanding to 45.1% from 43.9% in the same period last year. While research and development expenses increased to support ongoing innovation, overall operating expenses remained manageable relative to revenue growth. The company also announced a significant strategic development: an agreement to acquire KLA-Tencor Corporation for approximately $5.0 billion in cash and stock, signaling a major move to expand its market position. Lam Research ended the quarter with a strong liquidity position, holding $4.5 billion in cash and investments.

Financial Highlights

53 data points
Beta

Revenue

$1.60B

45.1% Gross Margin

Net Income

$288.68M

18.0% Net Margin

EPS (Diluted)

$0.17

Total Assets

$9.59B

Cash & Equivalents

$1.74B

Free Cash Flow

$449.00M

Financial Statements
Beta
Revenue$1.60B
Cost of Revenue$877.68M
Gross Profit$722.36M
R&D Expenses$234.21M
SG&A Expenses$152.73M
Operating Expenses$386.94M
Operating Income$335.43M
Interest Expense$24.66M
Net Income$288.68M
EPS (Basic)$0.18
EPS (Diluted)$0.17
Shares Outstanding (Basic)1.58B
Shares Outstanding (Diluted)1.74B

Key Highlights

  • 1Revenue increased significantly by 39% year-over-year to $1.6 billion.
  • 2Net income more than doubled, reaching $288.7 million, up from $141.1 million in the prior year.
  • 3Diluted Earnings Per Share (EPS) rose to $1.66, a substantial increase from $0.80 in the same period last year.
  • 4Gross margin improved to 45.1% compared to 43.9% in the prior year's quarter.
  • 5The company generated strong operating cash flow of $449 million.
  • 6Announced a significant agreement to acquire KLA-Tencor Corporation for approximately $5.0 billion.
  • 7Cash and cash equivalents, along with investments, totaled $4.5 billion, indicating a healthy liquidity position.

Frequently Asked Questions

The primary driver of Lam Research's revenue growth was strong demand from memory chip manufacturers. This demand was fueled by significant technology inflections in the industry, such as FinFET transistors and 3D NAND, leading customers to increase their capital expenditures.

The announced acquisition of KLA-Tencor Corporation for approximately $5.0 billion in cash and stock is a major strategic move for Lam Research. It is expected to expand the company's market position and capabilities within the semiconductor equipment industry, though the transaction is subject to closing conditions and regulatory approvals.

Profitability saw a substantial improvement. Net income more than doubled to $288.7 million from $141.1 million in the same quarter last year. This was driven by higher revenues, improved gross margins, and effective management of operating expenses, leading to a significant increase in diluted EPS from $0.80 to $1.66.

Lam Research demonstrated a strong financial position and liquidity. The company generated $449 million in cash flow from operations and maintained a substantial cash and investments balance of approximately $4.5 billion as of September 27, 2015. This robust liquidity is expected to be sufficient to support its anticipated operations, investments, and debt service requirements.