Lam Research Corporation Financial Highlights for the Quarter Ended September 25, 2011 (in thousands, except per share data and percentages) U.S. GAAP Non-GAAP --------- --------- Revenue: $ 680,436 $ 680,436 Operating Margin: 14.6% 14.9% Net Income: $ 71,838 $ 78,265 Diluted EPS: $ 0.58 $ 0.63
Lam Research Corporation today announced financial results for the quarter ended September 25, 2011. Revenue for the period was $680.4 million, gross margin was $283.9 million (41.7%), and net income was $71.8 million, or $0.58 per diluted share, compared to revenue of $752.0 million, gross margin of $338.5 million (45.0%), and net income of $125.9 million, or $1.01 per diluted share, for the June 2011 quarter. Shipments for the September 2011 quarter were $580 million compared to $793 million during the June 2011 quarter.
In addition to U.S. Generally Accepted Accounting Principles (GAAP) results, this commentary contains non-GAAP financial measures. The Company's non-GAAP results for both the September 2011 and June 2011 quarters exclude certain costs for restructuring and impairments and the amortization of convertible note discount. Additionally, the Company's non-GAAP results for the June 2011 quarter exclude tax expense associated with legal entity restructuring. Management uses non-GAAP operating income, operating expenses, operating margin, net income, and net income per diluted share to evaluate the Company's operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing the investors' ability to view the Company's results from management's perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company's web site at http://investor.lamresearch.com.
Non-GAAP net income was $78.3 million, or $0.63 per diluted share, in the September 2011 quarter compared to non-GAAP net income of $142.3 million, or $1.14 per diluted share, for the June 2011 quarter. Gross margin for the September 2011 quarter was $283.9 million, or 41.7%, compared to gross margin of $338.5 million, or 45.0%, for the June 2011 quarter. The sequential decrease in gross margin was primarily due to less favorable product mix and reflects the impact of lower factory utilization as a result of the decline in business volumes. Non-GAAP operating expenses for the September 2011 quarter were $182.8 million compared with the June 2011 quarter of $179.5 million resulting from our continued increase in research and development activities.
The geographic distribution of shipments and revenue during the September 2011 quarter is shown in the following table:
Region Shipments Revenue ----------------- ------------ ------------ North America 22% 19% Europe 10% 11% Japan 16% 18% Korea 27% 25% Taiwan 10% 13% Asia Pacific 15% 14%
Cash and cash equivalents, short-term investments and restricted cash and investments balances were $2.2 billion at the end of the September 2011 quarter, compared to $2.3 billion at the end of the June 2011 quarter. The decrease in cash and cash equivalents, short-term investments and restricted cash and investments balances during the quarter was due to activity related to our stock repurchase program partially offset by cash flows from operating activities. Cash flows from operating activities were approximately $86.9 million or 13% of revenue during the September 2011 quarter. Deferred revenue and deferred profit balances at the end of the September 2011 quarter were $179.5 million and $112.5 million, respectively. Lam's deferred revenue balance does not include shipments to Japanese customers, to whom title does not transfer until customer acceptance. Shipments to Japanese customers are classified as inventory at cost until the time of acceptance. The anticipated future revenue from shipments to Japanese customers was approximately $43.4 million as of September 25, 2011.
"As expected, our September quarter results reflect the impact of ongoing macroeconomic uncertainty on wafer fab equipment spending," said Steve Newberry, Lam's chief executive officer and vice chairman. "While customers are currently delaying near-term expansion plans, they continue to make investments in leading edge technologies that enhance their competitiveness. We expect that when advanced technology device demand increases, capacity expansion will resume. Lam traditionally excels in this environment, and we remain focused on making the critical strategic investments that extend our technical leadership, strengthen customer trust and drive our long-term growth," Newberry concluded.