Lam Research Corporation
LAM RESEARCH CORP (Form: 8-K, Received: 01/24/2018 16:09:04)



FORM 8-K

  Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 24, 2018
   
LAM RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
0-12933
 
94-2634797
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification Number)
4650 Cushing Parkway
Fremont, California 94538
(Address of principal executive offices including zip code)
(510) 572-0200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨

 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
¨

 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
¨

 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
¨

 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company      ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ¨








Table of Contents
 
 
 
 
 
 
Item 2.02.
  
Results of Operations and Financial Condition
 
Item 5.02.
 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
Item 9.01.
  
Financial Statements and Exhibits
 
SIGNATURES
 
EX-99.1
 
 
EX-99.2
 
 
 
 







 Item 2.02.
Results of Operations and Financial Condition
On January 24, 2018 , Lam Research Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended December 24, 2017 , the text of which is attached hereto as Exhibit 99.1.
The information in this item of this Current Report on Form 8-K, including Exhibit 99.1, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section. Furthermore, the information in this item of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
 Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c) Appointment of New Officer
On January 24, 2018, Lam Research Corporation (the “Company”) issued a press release regarding the promotion of Timothy M. Archer, the Company’s Executive Vice President and Chief Operating Officer, to the position of President and Chief Operating Officer of the Company effective January 24, 2018. Martin B. Anstice, the Company’s Chief Executive Officer and President, will continue to serve as the Company’s Chief Executive Officer. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated by reference herein.
The employment agreement of Mr. Archer with the Company (the material terms of which are set forth in the Company’s Current Report dated January 2, 2018) will be amended to reflect his revised title.  In conjunction with the Company’s annual compensation review process, the Company shall take into account Mr. Archer’s promotion in determining any appropriate adjustments.
There are no arrangements or understandings between Mr. Archer and any other persons pursuant to which Mr. Archer was named as President of the Company. Mr. Archer does not have any family relationship with any of the Company’s directors or executive officers or any persons nominated or chosen by the Company to be a director or executive officer. Mr. Archer has no direct or indirect material interest in any transaction or proposed transaction required to be reported under Section 404(a) of Regulation S-K or Item 5.02(c) of Form 8-K.
 Item 9.01.
Financial Statements and Exhibits
(d) Exhibits







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date:
January 24, 2018
 
LAM RESEARCH CORPORATION
 
 
 
(Registrant)
 
 
 
/s/ Douglas R. Bettinger
 
 
 
Douglas R. Bettinger
 
 
 
Executive Vice President, Chief Financial Officer
 
 
 
(Principal Financial Officer and Principal Accounting Officer)
 





Exhibit 99.1
FOR IMMEDIATE RELEASE        
Lam Research Corporation Contacts:
Satya Kumar, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com
Lam Research Corporation Reports Financial Results for the Quarter Ended December 24, 2017
FREMONT, Calif., January 24, 2018 - Lam Research Corp. (Nasdaq: LRCX) today announced financial results for the quarter ended December 24, 2017 (the “ December 2017 quarter”).
Highlights for the December 2017 quarter were as follows:
Shipments of $2.63 billion and revenue of $2.58 billion .
U.S. GAAP gross margin of 46.7% , U.S. GAAP operating margin of 28.6% , and U.S. GAAP diluted EPS of $(0.06) .
Non-GAAP gross margin of 47.6% , non-GAAP operating margin of 30.2% , and non-GAAP diluted EPS of $4.34 .
Key Financial Data for the Quarters Ended
December 24, 2017 and September 24, 2017
(in thousands, except per-share data, percentages, and basis points)  
U.S. GAAP
 
  
December 2017
 
September 2017
 
Change Q/Q
Shipments
  
$
2,631,723

 
$
2,381,565

 
11%
Revenue
  
$
2,580,815

 
$
2,478,140

 
+ 4%
Gross margin as percentage of revenue
  
46.7
%
 
46.4
%
 
+ 30 bps
Operating margin as percentage of revenue
  
28.6
%
 
28.0
%
 
+ 60 bps
Diluted EPS
  
$
(0.06
)
 
$
3.21

 
- 102%
 
Non-GAAP
 
  
December 2017
 
September 2017
 
Change Q/Q
Shipments
  
$
2,631,723

 
$
2,381,565

 
11%
Revenue
  
$
2,580,815

 
$
2,478,140

 
+ 4%
Gross margin as percentage of revenue
  
47.6
%
 
47.2
%
 
+ 40 bps
Operating margin as percentage of revenue
  
30.2
%
 
29.6
%
 
+ 60 bps
Diluted EPS
  
$
4.34

 
$
3.46

 
+ 25%
U.S. GAAP Financial Results
For the December 2017 quarter, revenue was $2,581 million , gross margin was $1,206 million , or 46.7% of revenue, operating expenses were $468 million , operating margin was 28.6% of revenue, and net loss was $(10) million , or $(0.06) per diluted share on a U.S. GAAP basis. This compares to revenue of $2,478 million , gross margin of $1,149 million , or 46.4% of revenue, operating expenses of $456 million , operating margin of 28.0% of revenue, and net income of $591 million , or $3.21 per diluted share, for the quarter ended September 24, 2017 (the “ September 2017 quarter”). The December 2017 results were negatively impacted by a one-time provisional charge of $757 million associated with the recently enacted U.S. tax reform, which the Company will continue to evaluate during the measurement period.
Non-GAAP Financial Results
For the December 2017 quarter, non-GAAP gross margin was $1,228 million or 47.6% of revenue, non-GAAP operating expenses were $449 million , non-GAAP operating margin was 30.2% of revenue, and non-GAAP net income was $788 million , or $4.34 per diluted share. This compares to non-GAAP gross margin of $1,171 million or 47.2% of revenue, non-GAAP operating expenses of $438 million , non-GAAP operating margin of 29.6% of revenue, and non-GAAP net income of $628 million , or $3.46 per diluted share for the September 2017 quarter.
“Lam delivered another record quarter to conclude an extraordinary calendar year where we reached new milestones including nearly ten billion dollars in shipments and over thirteen dollars in non-GAAP earnings per share,” said Martin Anstice, Lam Research’s Chief Executive Officer. “Semiconductor innovation is contributing increased value in a data-driven economy and we believe that trend is quite fundamental, exciting and sustainable: in 2018 we expect record levels of customer equipment spending and another year of outperformance opportunity for the company.”






Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances decreased to $6.0 billion at the end of the December 2017 quarter compared to $6.4 billion at the end of the September 2017 quarter. Cash flow from operating activities during the December 2017 quarter total $29 million . Uses of cash during the quarter included: approximately $1,111 million of share repurchases, including net share settlement on employee stock-based compensation; approximately $206 million of purchases of available-for-sale securities, approximately $85 million of capital expenditures, and approximately $73 million of dividends paid to stockholders; partially offset by approximately $799 million of net proceeds on short-term borrowings.

Deferred revenue at the end of the December 2017 quarter increased to $1.1 billion as compared to $938 million at the end of the September 2017 quarter. Deferred profit at the end of the December 2017 quarter increased to $749 million as compared to $598 million at the end of the September 2017 quarter. 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 estimated future revenue from shipments to Japanese customers was approximately $289 million as of December 24, 2017 and $344 million as of September 24, 2017 .
Geographic Distribution
The geographic distribution of shipments and revenue during the December 2017 quarter is shown in the following table:
Region
Shipments
 
Revenue
Korea
32
%
 
30
%
Taiwan
15
%
 
15
%
Japan
14
%
 
16
%
China
14
%
 
11
%
United States
10
%
 
11
%
Southeast Asia
10
%
 
11
%
Europe
5
%
 
6
%
Outlook
For the March 2018 quarter, Lam is providing the following guidance:
 
U.S. GAAP
 
Reconciling Items
 
Non-GAAP
Shipments
$3.175 Billion
+/-
 $125 Million
 
 
$3.175 Billion
+/-
 $125 Million
Revenue
$2.850 Billion
+/-
 $125 Million
 
 
$2.850 Billion
+/-
 $125 Million
Gross margin
45.2%
+/-
1%
 
$
22

Million
 
46.0%
+/-
1%
Operating margin
27.6%
+/-
1%
 
$
39

Million
 
29.0%
+/-
1%
Net income per diluted share
$4.10
+/-
$0.15
 
$
37

Million
 
$4.35
+/-
$0.15
Diluted share count
183 Million
 
2

Million
 
181 Million
The information provided above is only an estimate of what the Company believes is realizable as of the date of this release, and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, balance sheet valuation adjustments, financing arrangements, other investments, measurement period adjustments associated with U.S. tax reform, or other significant transactions that may be completed after the date of this release. U.S. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:
Gross margin - amortization related to intangible assets acquired through business combinations, $22 million.
Operating margin - amortization related to intangible assets acquired through business combinations, $39 million.
Earnings per share - amortization related to intangible assets acquired though business combinations, $39 million; amortization of note discounts, $3 million; and associated tax benefit for non-GAAP items ($5 million); totaling $37 million.
Diluted share count - impact of a note hedge issued contemporaneously with the convertible notes due 2018, 2 million shares.







Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company’s non-GAAP results for both the December 2017 and September 2017 quarters exclude amortization related to intangible assets acquired through business combinations, costs associated with business process reengineering, acquisition and integration costs associated with a business combination, the amortization of note discounts, and tax benefit of non-GAAP items. Additionally, the December 2017 quarter results exclude estimated income tax expense associated with U.S. tax reform and the September 2017 quarter non-GAAP results exclude income tax benefit on the conclusion of tax matters related to a prior business combination.
Management uses non-GAAP gross margin, operating expense, operating income, 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 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 website at http://investor.lamresearch.com .
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to; the estimated future revenue from shipments to Japanese customers; our revenue, industry, performance and general outlooks, and their drivers; our future strategic relevance to customers; our vision of the Company's future; technology demand trends; the legal and business factors that may affect our future tax rate; and our guidance for shipments, revenue, gross margin, operating margin, net income or earnings per diluted share, provisional tax estimate, and diluted share count. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; and the actions of our customers and competitors may be inconsistent with our expectations, as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10-K for the fiscal year ended June 25, 2017 and our quarterly report on Form 10-Q for the fiscal quarter ended September 24, 2017. These uncertainties and changes could materially affect the forward looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.
About Lam Research
Lam Research Corp. is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. As a trusted, collaborative partner to the world’s leading semiconductor companies, we combine superior systems engineering capability, technology leadership, and unwavering commitment to customer success to accelerate innovation through enhanced device performance. In fact, today, nearly every advanced chip is built with Lam technology. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)

Consolidated Financial Tables Follow.
  ###







 
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data and percentages)
(unaudited)  
 
Three Months Ended
 
Six Months Ended
 
December 24,
2017
 
September 24,
2017
 
December 25,
2016
 
December 24,
2017
 
December 25,
2016
Revenue
$
2,580,815

 
$
2,478,140

 
$
1,882,299

 
$
5,058,955

 
$
3,514,718

Cost of goods sold
1,375,248

 
1,328,797

 
1,035,502

 
2,704,045

 
1,951,724

Gross margin
1,205,567

 
1,149,343

 
846,797

 
2,354,910

 
1,562,994

Gross margin as a percent of revenue
46.7
%
 
46.4
%
 
45.0
%
 
46.5
%
 
44.5
%
Research and development
281,311

 
275,078

 
246,804

 
556,389

 
482,044

Selling, general and administrative
186,885

 
181,043

 
160,165

 
367,928

 
325,175

Total operating expenses
468,196

 
456,121

 
406,969

 
924,317

 
807,219

Operating income
737,371

 
693,222

 
439,828

 
1,430,593

 
755,775

Operating income as a percent of revenue
28.6
%
 
28.0
%
 
23.4
%
 
28.3
%
 
21.5
%
Other expense, net
(3,152
)
 
(5,502
)
 
(55,023
)
 
(8,654
)
 
(78,177
)
Income before income taxes
734,219

 
687,720

 
384,805

 
1,421,939

 
677,598

Income tax expense
(744,174
)
 
(97,030
)
 
(52,014
)
 
(841,204
)
 
(80,972
)
Net (loss) income
$
(9,955
)
 
$
590,690

 
$
332,791

 
$
580,735

 
$
596,626

Net (loss) income per share:
 
 
 
 
 
 
 
 
 
Basic
$
(0.06
)
 
$
3.64

 
$
2.05

 
$
3.59

 
$
3.69

Diluted
$
(0.06
)
 
$
3.21

 
$
1.81

 
$
3.16

 
$
3.28

Number of shares used in per share calculations:
 
 
 
 
 
 
 
 
 
Basic
161,135

 
162,141

 
162,659

 
161,638

 
161,633

Diluted
161,135

 
183,880

 
183,543

 
183,958

 
181,780

Cash dividend declared per common share
$
0.50

 
$
0.45

 
$
0.45

 
$
0.95

 
$
0.75


 












 





LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
December 24,
2017
 
September 24,
2017
 
June 25,
2017
 
(unaudited)
 
(unaudited)
 
(1)
ASSETS
 
 
 
 
 
Cash and cash equivalents
$
1,745,173

 
$
2,406,462

 
$
2,377,534

Investments
3,954,526

 
3,775,925

 
3,663,628

Accounts receivable, net
2,279,044

 
1,530,762

 
1,673,398

Inventories
1,507,435

 
1,328,297

 
1,232,916

Other current assets
179,944

 
187,334

 
195,022

Total current assets
9,666,122

 
9,228,780

 
9,142,498

Property and equipment, net
807,340

 
745,600

 
685,595

Restricted cash and investments
255,984

 
256,045

 
256,205

Goodwill and intangible assets
1,866,159

 
1,904,389

 
1,796,668

Other assets
316,660

 
263,812

 
241,799

Total assets
$
12,912,265

 
$
12,398,626

 
$
12,122,765

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
Current portion of debt and capital leases
$
1,401,660

 
$
639,907

 
$
908,439

Other current liabilities
2,510,035

 
2,148,724

 
2,041,676

Total current liabilities
3,911,695

 
2,788,631

 
2,950,115

Long-term debt and capital leases
1,789,958

 
1,793,477

 
1,784,974

Income taxes payable
818,880

 
129,611

 
120,178

Other long-term liabilities
118,177

 
278,733

 
280,186

Total liabilities
6,638,710

 
4,990,452

 
5,135,453

Temporary equity, convertible notes
130,424

 
136,996

 
169,861

Stockholders’ equity (2)
6,143,131

 
7,271,178

 
6,817,451

Total liabilities and stockholders’ equity
$
12,912,265

 
$
12,398,626

 
$
12,122,765

 
(1)
Derived from audited financial statements.
(2)
Common shares issued and outstanding were 159,451 as of December 24, 2017, 162,144 as of September 24, 2017, and 161,723 as of June 25, 2017.
 







 
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 
Three Months Ended
 
Six Months Ended
 
December 24,
2017
 
September 24,
2017
 
December 25,
2016
 
December 24,
2017
 
December 25,
2016
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Net (loss) income
$
(9,955
)
 
$
590,690

 
$
332,791

 
$
580,735

 
$
596,626

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
Depreciation and amortization
79,898

 
79,142

 
77,065

 
159,040

 
151,627

Deferred income taxes
(271,478
)
 
43,204

 
34,615

 
(228,274
)
 
42,248

Equity-based compensation expense
42,124

 
41,783

 
32,255

 
83,907

 
70,850

Loss on extinguishment of debt

 

 
36,325

 

 
36,325

Amortization of note discounts and issuance costs
4,539

 
4,588

 
6,202

 
9,127

 
13,032

Other, net
(1,108
)
 
6,569

 
(1,292
)
 
5,461

 
15,515

Changes in operating assets and liabilities
184,684

 
92,330

 
(113,863
)
 
277,014

 
(48,901
)
Net cash provided by operating activities
28,704

 
858,306

 
404,098

 
887,010

 
877,322

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Capital expenditures and intangible assets
(84,693
)
 
(60,064
)
 
(36,513
)
 
(144,757
)
 
(78,492
)
Business acquisitions, net of cash acquired
(84
)
 
(115,613
)
 

 
(115,697
)
 

Net purchase of available-for-sale securities
(205,701
)
 
(117,774
)
 
(1,990,928
)
 
(323,475
)
 
(1,559,178
)
Transfers of restricted cash and investments
61

 
160

 
465

 
221

 
(4,754
)
Other, net
(4,396
)
 
(10,600
)
 
(241
)
 
(14,996
)
 
(8,041
)
Net cash used for investing activities
(294,813
)
 
(303,891
)
 
(2,027,217
)
 
(598,704
)
 
(1,650,465
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
Principal payments on long-term debt and capital lease obligations and payments for debt issuance costs
(47,522
)
 
(301,727
)
 
(1,616,270
)
 
(349,249
)
 
(1,616,641
)
Net proceeds from commercial paper
798,947

 

 

 
798,947

 

Proceeds from borrowings on revolving credit facility
750,000

 

 

 
750,000

 

Repayments of borrowings on revolving credit facility
(750,000
)
 

 

 
(750,000
)
 

Treasury stock purchases
(1,111,450
)
 
(155,385
)
 
(67,668
)
 
(1,266,835
)
 
(69,522
)
Dividends paid
(73,127
)
 
(72,738
)
 
(48,397
)
 
(145,865
)
 
(96,449
)
Reissuance of treasury stock related to employee stock purchase plan
34,057

 

 

 
34,057

 
19,320

Proceeds from issuance of common stock
3,073

 
1,042

 
3,121

 
4,115

 
4,580

Other, net

 
4

 
(44
)
 
4

 
(54
)
Net cash used for financing activities
(396,022
)
 
(528,804
)
 
(1,729,258
)
 
(924,826
)
 
(1,758,766
)
Effect of exchange rate changes on cash and cash equivalents
842

 
3,317

 
(5,364
)
 
4,159

 
(3,453
)
Net (decrease) increase in cash and cash equivalents
(661,289
)
 
28,928

 
(3,357,741
)
 
(632,361
)
 
(2,535,362
)
Cash and cash equivalents at beginning of period
2,406,462

 
2,377,534

 
5,861,701

 
2,377,534

 
5,039,322

Cash and cash equivalents at end of period
$
1,745,173

 
$
2,406,462

 
$
2,503,960

 
$
1,745,173

 
$
2,503,960








 
Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)
 
Three Months Ended
 
December 24,
2017
 
September 24,
2017
Revenue
$
2,580,815

 
$
2,478,140

Gross margin
$
1,227,961

 
$
1,170,905

Gross margin as percentage of revenue
47.6
%
 
47.2
%
Operating expenses
$
448,667

 
$
438,056

Operating income
$
779,294

 
$
732,849

Operating margin as a percentage of revenue
30.2
%
 
29.6
%
Net income
$
787,863

 
$
627,754

Net income per diluted share
$
4.34

 
$
3.46

Shares used in per share calculation - diluted
181,655

 
181,412

Reconciliation of U.S. GAAP Net (Loss) Income to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non-GAAP number of dilutive shares
(in thousands, except per share data)
(unaudited)  
 
Three Months Ended
 
Twelve Months Ended
 
December 24,
2017
 
September 24,
2017
 
June 25,
2017
 
March 26,
2017
 
December 24,
2017
U.S. GAAP net (loss) income
$
(9,955
)
 
$
590,690

 
$
526,424

 
$
574,713

 
$
1,681,872

Pre-tax non-GAAP items:
 
 
 
 
 
 
 
 
 
Amortization related to intangible assets acquired through certain business combinations - cost of goods sold
22,394

 
21,562

 
21,250

 
21,250

 
86,456

Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative
17,074

 
16,413

 
16,083

 
16,083

 
65,653

Costs associated with business process reengineering - selling, general and administrative
1,362

 
716

 
4,813

 
2,674

 
9,565

Business combination acquisition and integration related costs - selling, general and administrative
1,093

 
936

 

 

 
2,029

Amortization of note discounts - other expense, net
3,410

 
4,104

 
5,631

 
5,654

 
18,799

Net income tax benefit on non-GAAP items
(4,404
)
 
(6,114
)
 
(5,697
)
 
(6,418
)
 
(22,633
)
Income tax expense associated with U.S. tax reform
756,889

 

 

 

 
756,889

Income tax benefit on conclusion of certain tax matters

 
(553
)
 
(2,986
)
 
(106,205
)
 
(109,744
)
Non-GAAP net income
$
787,863

 
$
627,754

 
$
565,518

 
$
507,751

 
$
2,488,886

Non-GAAP net income per diluted share
$
4.34

 
$
3.46

 
$
3.11

 
$
2.80

 
$
13.70

GAAP net (loss) income per diluted share
$
(0.06
)
 
$
3.21

 
$
2.82

 
$
3.10

 
$
9.10

U.S. GAAP number of shares used for per diluted share calculation
161,135

 
183,880

 
186,427

 
185,094

 
184,859

Effect of potentially dilutive securities:
 
 
 
 
 
 
 
 
 
Employee stock plans
2,757

 

 

 

 

Convertible notes
15,423

 

 

 

 

Warrants
4,721

 

 

 

 

Effect of convertible note hedge
(2,381
)
 
(2,468
)
 
(4,334
)
 
(3,555
)
 
(3,184
)
Non-GAAP number of shares used for per diluted share calculation
181,655

 
181,412

 
182,093

 
181,539

 
181,675







 
Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income
(in thousands, except percentages)
(unaudited)  
 
Three Months Ended
 
December 24,
2017
 
September 24,
2017
U.S. GAAP gross margin
$
1,205,567

 
$
1,149,343

Pre-tax non-GAAP items:
 
 
 
Amortization related to intangible assets acquired through certain business combinations
22,394

 
21,562

Non-GAAP gross margin
$
1,227,961

 
$
1,170,905

U.S. GAAP gross margin as a percentage of revenue
46.7
%
 
46.4
%
Non-GAAP gross margin as a percentage of revenue
47.6
%
 
47.2
%
U.S. GAAP operating expenses
$
468,196

 
$
456,121

Pre-tax non-GAAP items:
 
 
 
Amortization related to intangible assets acquired through certain business combinations
(17,074
)
 
(16,413
)
Costs associated with business process reengineering
(1,362
)
 
(716
)
Business combination acquisition and integration related costs
(1,093
)
 
(936
)
Non-GAAP operating expenses
$
448,667

 
$
438,056

Non-GAAP operating income
$
779,294

 
$
732,849

U.S. GAAP operating margin as percent of revenue
28.6
%
 
28.0
%
Non-GAAP operating margin as a percent of revenue
30.2
%
 
29.6
%
 



Exhibit 99.2

Lam Research Promotes Tim Archer to President
Martin Anstice to Remain Chief Executive Officer

FREMONT, CA -- (Marketwired) - 1/24/2018 - Lam Research Corp. (NASDAQ: LRCX), a global supplier of advanced semiconductor manufacturing equipment, today announced the promotion of Tim Archer to the position of president, effective immediately. Mr. Archer will continue to serve as chief operating officer of the company, a position he has held since June 2012. Martin Anstice, Lam’s chief executive officer and current president, will continue as CEO.
"Tim has played a key role in leading the company through a period of transformational growth,” said Mr. Anstice. “The promotion to president is a natural evolution which recognizes Tim’s significant leadership to the success of Lam Research and the high-quality and complementary partnership that we share. It is wonderful to recognize his contributions and potential in the Office of the CEO with me; we have the privilege of working alongside an outstanding global leadership community at Lam.”
Mr. Archer was appointed chief operating officer of Lam Research in June 2012 when the company completed its acquisition of Novellus Systems, Inc. Mr. Archer was previously the chief operating officer of Novellus. He joined Novellus in 1994 and held a number of positions at that company, including executive vice president of Sales, Marketing, and Customer Satisfaction; executive vice president of the PECVD and Electrofill Business Units; and senior director of technology for Novellus Systems Japan.
As president and COO, Mr. Archer will focus on driving the operational priorities of the organization and be accountable for delivery of results across the entire company. His key focus will include ensuring that Lam continues to deliver enabling products and services to our customers in a differentiated manner. As CEO, Mr. Anstice will continue to focus on the strategic agenda and have comprehensive engagement with the full community of stakeholders, including customers, employees, suppliers, partners, and investors.
Caution Regarding Forward-Looking Statements
Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to Lam’s business, product and service strategies, and the future roles and responsibilities of Mr. Archer and Mr. Anstice. Some factors that may affect these forward-looking statements include: business conditions in the consumer electronics industry, the semiconductor industry and the overall economy; and the actions of our customers and competitors, as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10-K for the fiscal year ended June 25, 2017 and our quarterly report on Form 10-Q for the fiscal quarter ended September 24, 2017. These uncertainties and changes could materially affect the forward looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.
About Lam Research
Lam Research Corp. is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. As a trusted, collaborative partner to the world's leading semiconductor companies, we combine superior systems engineering capability, technology leadership, and unwavering commitment to customer success to accelerate innovation through enhanced device performance. In fact, today, nearly every advanced chip is built with Lam technology. Lam Research (Nasdaq:LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)


Company Contacts:
Satya Kumar
Investor Relations
510-572-3232
email: satya.kumar@lamresearch.com

Kerry Farrell
Corporate Communications