KLAC
$311.23
K L A-Tencor
$6.44
2.11%
Earnings Details
2nd Quarter December 2020
Wednesday, February 3, 2021 4:05:00 PM
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Summary

K L A-Tencor Beats

K L A-Tencor (KLAC) reported 2nd Quarter December 2020 earnings of $3.24 per share on revenue of $1.7 billion. The consensus earnings estimate was $3.18 per share on revenue of $1.6 billion. The Earnings Whisper number was $3.21 per share. Revenue grew 9.4% on a year-over-year basis.

The company said it expects third quarter earnings of $3.23 to $3.91 per share on revenue of $1.665 billion to $1.815 billion. The current consensus earnings estimate is $3.29 per share on revenue of $1.60 billion for the quarter ending March 31, 2021.

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

Results
Reported Earnings
$3.24
Earnings Whisper
$3.21
Consensus Estimate
$3.18
Reported Revenue
$1.65 Bil
Revenue Estimate
$1.59 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

KLA Corporation Reports Fiscal 2021 Second Quarter Results

MILPITAS, Calif., Feb. 3, 2021 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced operating results for its second quarter of fiscal year 2021, which ended on Dec. 31, 2020, and reported GAAP net income attributable to KLA of $457 million and GAAP earnings per diluted share attributable to KLA of $2.94 on revenue of $1.65 billion.

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

"Our results for the December quarter and calendar 2020 demonstrate continued strong demand from customers, exceptional execution by our global teams, and the enduring strength and resiliency of our KLA operating model in guiding our strategic objectives," commented Rick Wallace, president and chief executive officer of KLA Corporation. "In the December quarter we also generated record free cash flow while continuing our commitment to capital returns to our shareholders."

GAAP Results


Q2 FY 2021

Q1 FY 2021

Q2 FY 2020

Total revenue

$1,651 million

$1,539 million

$1,509 million

Net Income Attributable to KLA

$457 million

$421 million

$381 million

Earnings per Diluted Share Attributable to KLA

$2.94

$2.69

$2.40





Non-GAAP Results


Q2 FY 2021

Q1 FY 2021

Q2 FY 2020

Adjusted Net Income Attributable to KLA

$504 million

$475 million

$422 million

Earnings per Diluted Share Attributable to KLA

$3.24

$3.03

$2.66

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. KLA will discuss the results for its fiscal year 2021 second 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.

Third Quarter Fiscal 2021 Guidance

The following details our guidance for the third quarter of fiscal 2021 ending in March:

  • Total revenue between $1,665 million to $1,815 million
  • GAAP diluted EPS attributable to KLA is expected to be in a range of $2.98 to $3.66
  • Non-GAAP diluted EPS attributable to KLA in a range of $3.23 to $3.91

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. Investors and others should note that KLA announces material financial information including SEC filings, press releases, public earnings calls and conference webcasts using an investor relations website (ir.kla.com). 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)

Dec. 31, 2020


June 30, 2020

ASSETS




Cash, cash equivalents and marketable securities

$

2,296,530



$

1,980,472


Accounts receivable, net

1,219,189



1,107,413


Inventories

1,420,618



1,310,985


Other current assets

286,617



324,675


Land, property and equipment, net

594,185



519,824


Goodwill

2,045,445



2,045,402


Deferred income taxes, non-current

258,734



236,797


Purchased intangible assets, net

1,289,843



1,391,413


Other non-current assets

403,483



362,979


Total assets

$

9,814,644



$

9,279,960


LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY



Current liabilities:




Accounts payable

$

262,496



$

264,280


Deferred system revenue

274,642



336,237


Deferred service revenue

239,618



233,493


Short-term debt

20,000




Other current liabilities

1,223,356



865,776


Total current liabilities

2,020,112



1,699,786


Non-current liabilities:




Long-term debt

3,441,465



3,469,670


Deferred tax liabilities

646,028



660,885


Deferred service revenue

88,769



96,325


Other non-current liabilities

667,964



672,284


Total liabilities

6,864,338



6,598,950


Stockholders' equity:




Common stock and capital in excess of par value

2,104,190



2,090,268


Retained earnings

903,696



654,930


Accumulated other comprehensive income (loss)

(72,704)



(79,774)


Total KLA stockholders' equity

2,935,182



2,665,424


Non-controlling interest in consolidated subsidiary

15,124



15,586


Total stockholders' equity

2,950,306



2,681,010


Total liabilities and stockholders' equity

$

9,814,644



$

9,279,960


 

 

KLA Corporation








Condensed Consolidated Unaudited Statements of Operations
















Three Months Ended Dec. 31,


Six Months Ended Dec. 31,

(In thousands, except per share amounts)

2020


2019


2020


2019

Revenues:








Product

$

1,238,023



$

1,144,550



$

2,383,518



$

2,202,525


Service

412,847



364,903



805,972



720,342


Total revenues

1,650,870



1,509,453



3,189,490



2,922,867


Costs and expenses:








Costs of revenues

669,733



633,618



1,290,295



1,237,859


Research and development

229,064



220,751



448,102



431,331


Selling, general and administrative

181,909



192,253



354,540



380,598


Interest expense

38,880



40,472



78,266



80,822


Other expense (income), net

3,882



(2,568)



7,079



(4,186)


Income before income taxes

527,402



424,927



1,011,208



796,443


Provision for income taxes

70,419



44,622



134,083



69,742


Net income

456,983



380,305



877,125



726,701


Less: Net loss attributable to non-controlling interest

(268)



(250)



(693)



(379)


Net income attributable to KLA

$

457,251



$

380,555



$

877,818



$

727,080


Net income per share attributable to KLA:








Basic

$

2.96



$

2.42



$

5.67



$

4.60


Diluted

$

2.94



$

2.40



$

5.62



$

4.56


Weighted-average number of shares:








Basic

154,273



157,290



154,777



157,994


Diluted

155,560



158,620



156,057



159,314


 

 

KLA Corporation
Condensed Consolidated Unaudited Statements of Cash Flows



Three Months Ended

Dec. 31,

(In thousands)

2020


2019

Cash flows from operating activities:




Net income

$

456,983



$

380,305


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




Depreciation and amortization

84,257



88,534


(Gain) loss on unrealized foreign exchange and other

(5,663)



(5,550)


Asset impairment charges



100


Stock-based compensation expense

26,827



26,789


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




Accounts receivable

(190,189)



(126,682)


Inventories

(26,215)



(1,477)


Other assets

(56,390)



3,558


Accounts payable

8,039



35,258


Deferred system revenue

21,038



(30,412)


Deferred service revenue

2,215



1,220


Other liabilities

240,179



16,088


Net cash provided by operating activities

561,081



387,731


Cash flows from investing activities:




Proceeds from sale of assets

741




Capital expenditures

(59,144)



(34,874)


Purchases of available-for-sale securities

(260,227)



(144,715)


Proceeds from sale of available-for-sale securities

57,563



10,287


Proceeds from maturity of available-for-sale securities

163,492



158,699


Purchases of trading securities

(16,741)



(12,852)


Proceeds from sale of trading securities

18,424



15,307


Net cash used in investing activities

(95,892)



(8,148)


Cash flows from financing activities:




Proceeds from issuance of debt, net of issuance costs

40,343




Proceeds from revolving credit facility



250,000


Repayment of debt



(275,000)


Common stock repurchases

(177,492)



(284,593)


Payment of dividends to stockholders

(139,584)



(134,696)


Issuance of common stock

26,356



24,499


Tax withholding payments related to equity awards

(11,000)



(12,237)


Payment of contingent consideration payable



(3)


Net cash used in financing activities

(261,377)



(432,030)


Effect of exchange rate changes on cash and cash equivalents

11,834



3,963


Net increase (decrease) in cash and cash equivalents

215,646



(48,484)


Cash and cash equivalents at beginning of period

1,215,820



988,348


Cash and cash equivalents at end of period

$

1,431,466



$

939,864


Supplemental cash flow disclosures:




Income taxes paid

$

59,764



$

50,884


Interest paid

$

36,925



$

53,140


Non-cash activities:




Accrued purchase of land, property and equipment - investing activities

$

25,987



$

13,755


Contingent consideration payable - financing activities

$

(5,761)



$

(3,540)


Dividends payable - financing activities

$

812



$

1,638


Unsettled common stock repurchase - financing activities

$

6,000



$

4,000


 

 

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 Dec. 31,


Six Months Ended Dec. 31,

(In thousands)

2020


2019


2020


2019

Revenues:








Semiconductor Process Control

$

1,380,184



$

1,247,430



$

2,648,138



$

2,411,062


Specialty Semiconductor Process

90,587



75,106



179,540



144,245


PCB, Display and Component Inspection

179,267



186,279



360,444



364,831


Other

449



517



590



2,748


Total revenues for reportable segments

1,650,487



1,509,332



3,188,712



2,922,886


Corporate allocation and effects of foreign exchange rates

383



121



778



(19)


Total revenues

$

1,650,870



$

1,509,453



$

3,189,490



$

2,922,867


 

 

 

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


Six Months Ended


(In thousands, except per share amounts)


Dec. 31,
2020


Sept. 30,
2020


Dec. 31,
2019


Dec. 31,
2020


Dec. 31,
2019

GAAP net income attributable to KLA


$

457,251



$

420,567



$

380,555



$

877,818



$

727,080


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












Acquisition-related charges

a

53,099



50,475



60,393



103,574



133,756



Restructuring, severance and other charges

b

3,960



3,253



2,786



7,213



2,786



Income tax effect of non-GAAP adjustments

c

(17,552)



(17,013)



(21,505)



(34,565)



(43,771)



Discrete tax items

d

7,381



17,487





24,868




Non-GAAP net income attributable to KLA


$

504,139



$

474,769



$

422,229



$

978,908



$

819,851


GAAP net income per diluted share attributable to KLA


$

2.94



$

2.69



$

2.40



$

5.62



$

4.56


Non-GAAP net income per diluted share attributable to KLA


$

3.24



$

3.03



$

2.66



$

6.27



$

5.15


Shares used in diluted shares calculation


155,560



156,442



158,620



156,057



159,314


 

 

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 Dec. 31, 2020






Costs of revenues

$

38,738



$

765



$

39,503


Research and development



1,432



1,432


Selling, general and administrative

14,361



2,450



16,811


Other expense (income), net



(687)



(687)


Total in three months ended Dec. 31, 2020

$

53,099



$

3,960



$

57,059


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 Dec. 31, 2019






Costs of revenues

$

40,590



$

831



$

41,421


Research and development



802



802


Selling, general and administrative

19,803



1,153



20,956


Total in three months ended Dec. 31, 2019

$

60,393



$

2,786



$

63,179


 

 

Free Cash Flow Reconciliation




Three Months Ended Dec. 31,

(In thousands)


2020


2019

Net cash provided by operating activities


$

561,081



$

387,731


Capital expenditures


(59,144)



(34,874)


Free Cash Flow


$

501,937



$

352,857


 

 


Third Quarter Fiscal 2021 Guidance


Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS




Three Months Ending March 31, 2021

(In millions, except per share amounts)


Low


High

GAAP net income per diluted share attributable to KLA


$2.98


$3.66

Acquisition-related charges

a

0.34


0.34

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


$3.23


$3.91

Shares used in net income per diluted share calculation


155.2


155.2

 

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, including non-GAAP net income attributable to KLA, non-GAAP net income per diluted share attributable to KLA and Free Cash Flow, 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 to help investors compare our operating performances with our results in prior periods as well as with the performance of other companies. 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 are inherently subject to significant discretion (for example, determining which costs and expenses to exclude when calculating such a metric). 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. The following are descriptions of the adjustments made to reconcile GAAP net income attributable to KLA to non-GAAP net income attributable to KLA:

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.



b. 

Restructuring, severance and other charges primarily include costs associated with employee severance, acceleration of certain stock-based compensation arrangements, and other exit costs.



c. 

Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above.



d. 

Discrete tax items in the three months ended Dec. 31, 2020 consist primarily of a tax expense of $4.0 million from an internal restructuring. 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 six months ended Dec. 31, 2020 are the aggregate of the aforementioned discrete tax items.

 

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SOURCE KLA Corporation