KLAC
$257.39
K L A-Tencor
$1.07
.42%
Earnings Details
1st Quarter September 2020
Wednesday, October 28, 2020 4:05:00 PM
Tweet Share Watch
Summary

K L A-Tencor Beats

K L A-Tencor (KLAC) reported 1st Quarter September 2020 earnings of $3.03 per share on revenue of $1.5 billion. The consensus earnings estimate was $2.75 per share on revenue of $1.5 billion. The Earnings Whisper number was $2.90 per share. Revenue grew 8.9% on a year-over-year basis.

The company said it expects second quarter earnings of $2.82 to $3.46 per share on revenue of $1.51 billion to $1.66 billion. The current consensus earnings estimate is $2.81 per share on revenue of $1.51 billion for the quarter ending December 31, 2020.

KLA-Tencor Corp is a supplier of process control and yield management solutions for the semiconductor and related nanoelectronics industries.

Results
Reported Earnings
$3.03
Earnings Whisper
$2.90
Consensus Estimate
$2.75
Reported Revenue
$1.54 Bil
Revenue Estimate
$1.48 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

KLA Corporation Reports Fiscal 2021 First Quarter Results

MILPITAS, Calif., Oct. 28, 2020 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced operating results for its first quarter of fiscal year 2021, which ended on Sept. 30, 2020, and reported GAAP net income attributable to KLA of $421 million and GAAP earnings per diluted share attributable to KLA of $2.69 on revenue of $1.54 billion.

Link: https://mma.prnewswire.com/media/806571/KLA_Corporation_Logo.jpg

"Our results demonstrate the resourcefulness of our global workforce, resiliency of our business model, and our continuing commitment to returning value to our shareholders," commented Rick Wallace, president and chief executive officer of KLA Corporation. "In the September quarter we saw broad, diversified strength across each of our segments. Semiconductor Process Control was solidly above plan, and our Service business is on track to deliver double-digit growth in 2020. We also ended the quarter with a strong backlog, reflecting the enabling role KLA plays in our customers' drive to innovate and invest in next-generation technology."

GAAP Results


Q1 FY 2021

Q4 FY 2020

Q1 FY 2020

Total revenue

$1,539 million

$1,460 million

$1,413 million

Net Income Attributable to KLA

$421 million

$411 million

$347 million

Earnings per Diluted Share Attributable to KLA

$2.69

$2.63

$2.16





Non-GAAP Results


Q1 FY 2021

Q4 FY 2020

Q1 FY 2020

Adjusted Net Income Attributable to KLA

$475 million

$426 million

$398 million

Earnings per Diluted Share Attributable to KLA

$3.03

$2.73

$2.48

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. Non-GAAP results include the impact of recurring stock-based compensation, but exclude the impact of acquisitions or pending acquisitions, goodwill impairment, restructuring, severance and other charges, loss on extinguishment of debt, and certain discrete tax items. KLA will discuss the results for its fiscal year 2021 first quarter, along with its outlook, on a conference call today beginning at 2 p.m. PT. A webcast of the call will be available at: www.kla.com.

Second Quarter Fiscal 2021 Guidance

The following details our guidance for the second quarter of fiscal 2021 ending in December:

  • Total revenue between $1,510 million to $1,660 million
  • GAAP diluted EPS attributable to KLA is expected to be in a range of $2.59 to $3.23
  • Non-GAAP diluted EPS attributable to KLA in a range of $2.82 to $3.46

For additional guidance metrics please see the company's published letter to shareholders and earnings slides on the KLA investor relations website.

About KLA:

KLA Corporation ("KLA") develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging, printed circuit boards and flat panel displays. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Additional information may be found at: www.kla.com (KLAC-F).

Note Regarding Forward-Looking Statements:

This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements, including statements regarding our total revenue, GAAP and non-GAAP EPS attributable to KLA for the quarter ending Dec. 31, 2020, and growth of our Services business in 2020, are subject to risks and uncertainties. Factors that may cause actual results to differ materially from those projected and anticipated in the forward-looking statements in this release include risks related to customer cancellations or push outs, our ability to deliver services during the COVID-19 pandemic, the introduction of new laws, regulations or orders that limit our ability to sell products to customers or to service products previously sold to customers and other risk factors included in KLA's annual report on Form 10-K for the year ended June 30, 2020 and other filings with the Securities and Exchange Commission (including, without limitation, the risk factors described therein). Except as otherwise specifically indicated, the information included in this release is as of the date it is delivered. KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements.

KLA Corporation




Condensed Consolidated Unaudited Balance Sheets








(In thousands)

Sept. 30, 2020


June 30, 2020

ASSETS




Cash, cash equivalents and marketable securities

$

2,043,453



$

1,980,472


Accounts receivable, net

1,028,883



1,107,413


Inventories

1,394,225



1,310,985


Other current assets

288,138



324,675


Land, property and equipment, net

561,852



519,824


Goodwill

2,045,432



2,045,402


Deferred income taxes, non-current

245,614



236,797


Purchased intangible assets, net

1,340,913



1,391,413


Other non-current assets

371,586



362,979


Total assets

$

9,320,096



$

9,279,960





LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY



Current liabilities:




Accounts payable

$

254,458



$

264,280


Deferred system revenue

253,604



336,237


Deferred service revenue

241,219



233,493


Other current liabilities

999,547



865,776


Total current liabilities

1,748,828



1,699,786


Non-current liabilities:




Long-term debt

3,420,403



3,469,670


Deferred tax liabilities

656,876



660,885


Deferred service revenue

84,953



96,325


Other non-current liabilities

646,691



672,284


Total liabilities

6,557,751



6,598,950


Stockholders' equity:




Common stock and capital in excess of par value

2,072,715



2,090,268


Retained earnings

753,915



654,930


Accumulated other comprehensive income (loss)

(79,446)



(79,774)


Total KLA stockholders' equity

2,747,184



2,665,424


Non-controlling interest in consolidated subsidiary

15,161



15,586


Total stockholders' equity

2,762,345



2,681,010


Total liabilities and stockholders' equity

$

9,320,096



$

9,279,960


 

KLA Corporation




Condensed Consolidated Unaudited Statements of Operations









Three Months Ended Sept. 30,

(In thousands, except per share amounts)

2020


2019

Revenues:




Product

$

1,145,495



$

1,057,975


Service

393,125



355,439


Total revenues

1,538,620



1,413,414


Costs and expenses:




Costs of revenues

620,562



604,241


Research and development

219,038



210,580


Selling, general and administrative

172,631



188,345


Interest expense

39,386



40,350


Other expense (income), net

3,197



(1,618)


Income before income taxes

483,806



371,516


Provision for income taxes

63,664



25,120


Net income

420,142



346,396


Less: Net loss attributable to non-controlling interest

(425)



(129)


Net income attributable to KLA

$

420,567



$

346,525


Net income per share attributable to KLA:




Basic

$

2.71



$

2.18


Diluted

$

2.69



$

2.16


Weighted-average number of shares:




Basic

155,281



158,697


Diluted

156,442



160,131


 

KLA Corporation

Condensed Consolidated Unaudited Statements of Cash Flows



Three Months Ended

Sept. 30,

(In thousands)

2020


2019

Cash flows from operating activities:




Net income

$

420,142



$

346,396


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

80,066



98,588


(Gain) loss on unrealized foreign exchange and other

(12,907)



10,313


Asset impairment charges

865



2,481


Stock-based compensation expense

26,992



26,944


Changes in assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions:




Accounts receivable

73,000



(75,214)


Inventories

(85,991)



(5,091)


Other assets

5,103



(8,930)


Accounts payable

(9,822)



18,885


Deferred system revenue

(82,633)



(4,833)


Deferred service revenue

(3,646)



(4,337)


Other liabilities

101,002



91,043


Net cash provided by operating activities

512,171



496,245


Cash flows from investing activities:




Proceeds from sale of assets

1,114




Business acquisitions, net of cash acquired



(78,530)


Capital expenditures

(55,925)



(32,566)


Purchases of available-for-sale securities

(231,821)



(263,767)


Proceeds from sale of available-for-sale securities

53,249



25,449


Proceeds from maturity of available-for-sale securities

95,835



198,751


Purchases of trading securities

(18,630)



(9,021)


Proceeds from sale of trading securities

21,244



11,905


Proceeds from other investments

614



1,086


Net cash used in investing activities

(134,320)



(146,693)


Cash flows from financing activities:




Repayment of debt

(50,000)




Common stock repurchases

(187,897)



(228,496)


Payment of dividends to stockholders

(141,164)



(121,636)


Issuance of common stock



114


Tax withholding payments related to equity awards

(25,145)



(23,538)


Payment of contingent consideration payable



(57)


Net cash used in financing activities

(404,206)



(373,613)


Effect of exchange rate changes on cash and cash equivalents

7,766



(3,585)


Net decrease in cash and cash equivalents

(18,589)



(27,646)


Cash and cash equivalents at beginning of period

1,234,409



1,015,994


Cash and cash equivalents at end of period

$

1,215,820



$

988,348


Supplemental cash flow disclosures:




Income taxes paid

$

54,185



$

19,862


Interest paid

$

40,071



$

26,347


Non-cash activities:




Accrued purchase of land, property and equipment - investing activities

$

23,388



$

16,074


Contingent consideration payable - financing activities

$

(2,987)



$

9,366


Dividends payable - financing activities

$

391



$

1,552


Unsettled common stock repurchase - financing activities

$

6,000



$

8,000


 

KLA Corporation

Segment Information (Unaudited)

The following is a summary of results for each of our four reportable segments and reconciliation to total revenues for the indicated periods:



Three Months Ended Sept. 30,

(In thousands)

2020


2019

Revenues:




Semiconductor Process Control

$

1,267,954



$

1,163,632


Specialty Semiconductor Process

88,954



69,139


PCB, Display and Component Inspection

181,177



178,552


Other

140



2,231


Total revenues for reportable segments

1,538,225



1,413,554


Corporate allocation and effects of foreign exchange rates

395



(140)


Total revenues

$

1,538,620



$

1,413,414


 

KLA Corporation

Condensed Consolidated Unaudited Supplemental Information


Reconciliation of GAAP Net Income and GAAP earnings per diluted share to Non-GAAP Net Income and Non-GAAP earnings per diluted share





Three Months Ended


(In thousands, except per share amounts)


Sept. 30,
2020


June 30,
2020


Sept. 30,
2019

GAAP net income attributable to KLA


$

420,567



$

411,253



$

346,525


Adjustments to reconcile GAAP net income to non-GAAP net income:








Acquisition-related charges

a

50,475



55,937



73,363



Restructuring, severance and other charges

b

3,253



4,240





Income tax effect of non-GAAP adjustments

c

(17,013)



(16,027)



(22,266)



Discrete tax items

d

17,487



(29,364)




Non-GAAP net income attributable to KLA


$

474,769



$

426,039



$

397,622


GAAP net income per diluted share attributable to KLA


$

2.69



$

2.63



$

2.16


Non-GAAP net income per diluted share attributable to KLA


$

3.03



$

2.73



$

2.48


Shares used in diluted shares calculation


156,442



156,183



160,131


 

Pre-tax impact of GAAP to non-GAAP adjustments included in Condensed Consolidated Unaudited Statements of Operations


In thousands

Acquisition - Related Charges


Restructuring, Severance and Other Charges


Total pre-tax GAAP to non-GAAP Adjustments

Three months ended Sept. 30, 2020






Costs of revenues

$

37,040



$

636



$

37,676


Research and development



923



923


Selling, general and administrative

13,435



1,933



15,368


Other expense (income), net



(239)



(239)


Total in three months ended Sept. 30, 2020

$

50,475



$

3,253



$

53,728


Three months ended June 30, 2020






Costs of revenues

$

41,446



$

534



$

41,980


Research and development



585



585


Selling, general and administrative

14,491



1,179



15,670


Other expense (income), net



1,942



1,942


Total in three months ended June 30, 2020

$

55,937



$

4,240



$

60,177


Three months ended Sept. 30, 2019






Costs of revenues

$

49,999



$



$

49,999


Selling, general and administrative

23,364





23,364


Total in three months ended Sept. 30, 2019

$

73,363



$



$

73,363


 

Free Cash Flow Reconciliation




Three Months Ended Sept. 30,

(In thousands)


2020


2019

Net cash provided by operating activities


$

512,171



$

496,245


Capital expenditures


(55,925)



(32,566)


Free Cash Flow


$

456,246



$

463,679


 

Second Quarter Fiscal 2021 Guidance


Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS




Three Months Ending Dec. 31, 2020

(In thousands, except per share amounts)


Low


High

GAAP net income per diluted share attributable to KLA


$2.59


$3.23

Acquisition-related charges

a

0.32


0.32

Restructuring, severance and other charges

b

0.02


0.02

Income tax effect of non-GAAP adjustments

c

(0.11)


(0.11)

Non-GAAP net income per diluted share attributable to KLA


$2.82


$3.46

Shares used in net income per diluted share calculation


155.4


155.4

The Non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA's financial results presented in accordance with United States GAAP.

To supplement our Condensed Consolidated Financial Statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics (for example, determining which costs and expenses to exclude when calculating such a metric) are inherently subject to significant discretion. As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP.

a. 

Acquisition-related charges primarily include amortization of intangible assets and other acquisition-related adjustments including adjustments for the fair valuation of inventory and backlog, and transaction costs associated with our acquisitions, primarily Orbotech. Management believes that the expense associated with the amortization of acquisition-related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets and exclusion of these expenses allows comparisons of operating results that are consistent over time for both KLA's newly acquired and long-held businesses. Management believes that the other acquisition-related expenses are appropriate to be excluded because such costs would not have otherwise been incurred in the periods presented. Management believes excluding these items helps investors compare our operating performances with our results in prior periods as well as with the performance of other companies.



b. 

Restructuring, severance and other charges primarily include costs associated with employee severance, acceleration of certain stock-based compensation arrangements, and other exit costs. Management believes excluding these items helps investors compare our operating performance with our results in prior periods.



c. 

Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above. Management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income.



d. 

Discrete tax items in the three months ended Sept. 30, 2020 include a tax expense of $14.0 million due to an increase in deferred tax liability on purchased intangibles relating to an increase in the United Kingdom statutory income tax rate as well as tax expense from a restructuring. Discrete tax items in the three months ended June 30, 2020 include a tax benefit of $29.4 million from an internal restructuring. Management believes excluding these items helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.  

 

Cision View original content:http://www.prnewswire.com/news-releases/kla-corporation-reports-fiscal-2021-first-quarter-results-301162162.html

SOURCE KLA Corporation