- Total revenues were $2.40
billion, at the upper end of the guidance range of
$2.35 billion +/- $125 million;
- GAAP and non-GAAP diluted EPS attributable to KLA was
$5.41 and $5.74, respectively, each finishing at the upper
end of the guidance ranges;
- Cash flow from operating activities for the quarter and last
twelve months were $883.7 million and
$3.54 billion, respectively, and free
cash flow was $815.7 million and
$3.22 billion,
respectively;
- Capital returns for the quarter and last twelve months were
$636.9 million and $2.40 billion, respectively; and
- On Sept. 5, KLA announced an increase in the quarterly
dividend level to $1.45 per share
from $1.30, the 14th consecutive
annual dividend increase since inception in 2006, in addition to an
increase of $2 billion to the current
share repurchase authorization.
MILPITAS, Calif., Oct. 25,
2023 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC)
today announced financial and operating results for its first
quarter of fiscal year 2024, which ended on Sept. 30, 2023, and reported GAAP net income of
$741.4 million and GAAP earnings per
diluted share of $5.41 on revenue of
$2.40 billion.
https://mma.prnewswire.com/media/806571/KLA_Corporation_Logo.jpg
"KLA's September quarter results were at the high-end or above
the midpoint of the guidance ranges for revenue and earnings per
share, demonstrating the strength of KLA's market leadership and
operational execution, while also delivering solid free cash flow
generation," said Rick Wallace,
president and CEO, KLA Corporation.
"Despite the challenging market conditions, our continued strong
performance highlights the relative value of KLA products and
services to our customers, the resiliency of the KLA Operating
Model and our commitment to delivering long-term value to all
stakeholders."
|
GAAP
Results
|
|
Q1 FY
2024
|
Q4 FY
2023
|
Q1 FY
2023
|
|
Total
Revenue
|
$2,397
million
|
$2,355
million
|
$2,724
million
|
|
Net Income Attributable
to KLA
|
$741 million
|
$685 million
|
$1,026
million
|
|
Net Income per Diluted
Share Attributable to KLA
|
$5.41
|
$4.97
|
$7.20
|
|
|
|
|
|
Non-GAAP
Results
|
|
Q1 FY
2024
|
Q4 FY
2023
|
Q1 FY
2023
|
|
Net Income Attributable
to KLA
|
$786 million
|
$743 million
|
$1,007
million
|
|
Net Income per Diluted
Share Attributable to KLA
|
$5.74
|
$5.40
|
$7.06
|
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 2024 first quarter, along with its
outlook, on a conference call today beginning at 2 p.m. Pacific Time. A webcast of the call will
be available at: www.kla.com.
Second Quarter Fiscal 2024 Guidance
The following details our guidance for the second quarter of
fiscal 2024 ending in Dec.:
- Total revenues is expected to be in a range of $2.45 billion +/- $125
million
- GAAP gross margin is expected to be in a range of 59.6% +/-
1.0%
- Non-GAAP gross margin is expected to be in a range of 61.5% +/-
1.0%
- GAAP diluted EPS is expected to be in a range of $5.54 +/- $0.60
- Non-GAAP diluted EPS is expected to be in a range of
$5.86 +/- $0.60
For additional details and assumptions underlying our guidance
metrics, please see the company's published Letter to Shareholders,
Earnings Slide Presentation and Earnings Infographic on the KLA
investor relations website. Such Letter to Shareholders, Earnings
Slide Presentation and Earnings Infographic are not incorporated by
reference into this earnings release.
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.
Note Regarding Forward-Looking Statements:
Statements
in this press release other than historical facts, such as
statements pertaining to total revenues, GAAP and non-GAAP gross
margin and GAAP and non-GAAP diluted EPS for the quarter ending
Dec. 31, 2023, are forward-looking
statements and are subject to the Safe Harbor provisions created by
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current information and
expectations and involve a number of risks and uncertainties.
Actual results may differ materially from those projected in such
statements due to various factors, including but not limited to:
our vulnerability to a weakening in the condition of the financial
markets and the global economy; risks related to our international
operations; evolving Bureau of Industry and Security of the U.S.
Department of Commerce rules and regulations and their impact on
our ability to sell products to and provide services to certain
customers in China; costly
intellectual property disputes that could result in our inability
to sell or use the challenged technology; risks related to the
legal, regulatory and tax environments in which we conduct our
business; increasing attention to ESG matters and the resulting
costs, risks and impact on our business; unexpected delays,
difficulties and expenses in executing against our environmental,
climate, diversity and inclusion or other ESG target, goals and
commitments; our ability to attract, retain and motivate key
personnel; our vulnerability to disruptions and delays at our third
party service providers; cybersecurity threats, cyber incidents
affecting our and our business partners' systems and networks; our
inability to access critical information in a timely manner due to
system failures; our ability to identify suitable acquisition
targets and successfully integrate and manage acquired businesses;
climate change, earthquake, flood or other natural catastrophic
events, public health crises such as the COVID-19 pandemic or
terrorism and the adverse impact on our business operations; the
war between Israel and Hamas, and
the significant military activity in that region; lack of insurance
for losses and interruptions caused by terrorists and acts of war,
and our self-insurance of certain risks including earthquake risk;
risks related to fluctuations in foreign currency exchange rates;
risks related to fluctuations in interest rates and the market
values of our portfolio investments; risks related to tax and
regulatory compliance audits; any change in taxation rules or
practices and our effective tax rate; compliance costs with federal
securities laws, rules, regulations, NASDAQ requirements, and
evolving accounting standards and practices; ongoing changes in the
technology industry, and the semiconductor industry in particular,
including future growth rates, pricing trends in end-markets, or
changes in customer capital spending patterns; our vulnerability to
a highly concentrated customer base; the cyclicality of the
industries in which we operate; our ability to timely develop new
technologies and products that successfully address changes in the
industry; our ability to maintain our technology advantage and
protect proprietary rights; our ability to compete in the industry;
availability and cost of the materials and parts used in the
production of our products; our ability to operate our business in
accordance with our business plan; risks related to our debt and
leveraged capital structure; we may not be able to declare cash
dividends at all or in any particular amount; liability to our
customers under indemnification provisions if our products fail to
operate properly or contain defects or our customers are sued by
third parties due to our products; our government funding for
R&D is subject to audit, and potential termination or
penalties; we may incur significant restructuring charges or other
asset impairment charges or inventory write offs; and risks related
to receivables factoring arrangements and compliance risk of
certain settlement agreements with the government. For other
factors that may cause actual results to differ materially from
those projected and anticipated in forward-looking statements in
this press release, please refer to KLA's Annual Report on Form
10-K for the year ended June 30, 2023, and other subsequent
filings with the Securities and Exchange Commission (including, but
not limited to, the risk factors described therein). 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,
2023
|
|
June 30,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,711,570
|
|
$ 1,927,865
|
|
Marketable
securities
|
1,637,751
|
|
1,315,294
|
|
Accounts receivable,
net
|
1,630,746
|
|
1,753,361
|
|
Inventories
|
3,007,705
|
|
2,876,784
|
|
Other current
assets
|
443,019
|
|
498,728
|
|
Total current
assets
|
8,430,791
|
|
8,372,032
|
|
Land, property and
equipment, net
|
1,059,925
|
|
1,031,841
|
|
Goodwill
|
2,278,805
|
|
2,278,820
|
|
Deferred income
taxes
|
870,472
|
|
816,899
|
|
Purchased intangible
assets, net
|
871,999
|
|
935,303
|
|
Other non-current
assets
|
624,849
|
|
637,462
|
|
Total
assets
|
$
14,136,841
|
|
$
14,072,357
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
363,662
|
|
$
371,026
|
|
Deferred system
revenue
|
665,777
|
|
651,720
|
|
Deferred service
revenue
|
406,940
|
|
416,606
|
|
Other current
liabilities
|
2,381,364
|
|
2,303,490
|
|
Total current
liabilities
|
3,817,743
|
|
3,742,842
|
|
Long-term
debt
|
5,891,731
|
|
5,890,736
|
|
Deferred tax
liabilities
|
505,812
|
|
529,287
|
|
Deferred service
revenue
|
192,236
|
|
176,681
|
|
Other non-current
liabilities
|
739,102
|
|
813,058
|
|
Total
liabilities
|
11,146,624
|
|
11,152,604
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
capital in excess of par value
|
2,073,476
|
|
2,107,663
|
|
Retained
earnings
|
966,179
|
|
848,431
|
|
Accumulated other
comprehensive loss
|
(49,438)
|
|
(36,341)
|
|
Total stockholders'
equity
|
2,990,217
|
|
2,919,753
|
|
Total liabilities and
stockholders' equity
|
$
14,136,841
|
|
$
14,072,357
|
|
KLA
Corporation
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
Three Months Ended
Sept. 30,
|
|
(In thousands,
except per share amounts)
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
Product
|
$ 1,836,664
|
|
$ 2,195,609
|
|
Service
|
560,292
|
|
528,815
|
|
Total
revenues
|
2,396,956
|
|
2,724,424
|
|
Costs and
expenses:
|
|
|
|
|
Costs of
revenues
|
946,891
|
|
1,041,226
|
|
Research and
development
|
311,214
|
|
318,515
|
|
Selling, general and
administrative
|
239,645
|
|
253,980
|
|
Interest
expense
|
74,234
|
|
74,395
|
|
Loss on extinguishment
of debt
|
—
|
|
13,286
|
|
Other expense
(income), net
|
(26,739)
|
|
(47,006)
|
|
Income before income
taxes
|
851,711
|
|
1,070,028
|
|
Provision for income
taxes
|
110,336
|
|
43,963
|
|
Net income
|
741,375
|
|
1,026,065
|
|
Less: Net income
attributable to non-controlling interest
|
—
|
|
74
|
|
Net income attributable
to KLA
|
$
741,375
|
|
$
1,025,991
|
|
Net income per share
attributable to KLA
|
|
|
|
|
Basic
|
$
5.43
|
|
$
7.23
|
|
Diluted
|
$
5.41
|
|
$
7.20
|
|
Weighted-average number
of shares:
|
|
|
|
|
Basic
|
136,412
|
|
141,829
|
|
Diluted
|
137,104
|
|
142,563
|
|
KLA
Corporation
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Cash Flows
|
|
|
|
|
Three Months Ended
Sept. 30,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
741,375
|
|
$
1,026,065
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
102,403
|
|
101,938
|
|
Unrealized foreign
exchange loss and other
|
9,970
|
|
1,783
|
|
Asset impairment
charges
|
—
|
|
9,156
|
|
Disposal of
non-controlling interest
|
—
|
|
8,270
|
|
Stock-based
compensation expense
|
48,772
|
|
34,982
|
|
Deferred income
taxes
|
(71,322)
|
|
(156,226)
|
|
Gain on sale of
business
|
—
|
|
(29,687)
|
|
Loss on extinguishment
of debt
|
—
|
|
13,286
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
|
|
|
|
|
Accounts
receivable
|
107,018
|
|
(55,073)
|
|
Inventories
|
(138,419)
|
|
(265,530)
|
|
Other
assets
|
(7,520)
|
|
45,637
|
|
Accounts
payable
|
8,345
|
|
36,472
|
|
Deferred system
revenue
|
14,057
|
|
(60,492)
|
|
Deferred service
revenue
|
5,901
|
|
(12,411)
|
|
Other
liabilities
|
63,160
|
|
313,375
|
|
Net cash provided by
operating activities
|
883,740
|
|
1,011,545
|
|
Cash flows from
investing activities:
|
|
|
|
|
Net proceeds from sale
of business
|
—
|
|
75,358
|
|
Business acquisitions,
net of cash acquired
|
—
|
|
(27,144)
|
|
Capital
expenditures
|
(68,045)
|
|
(84,352)
|
|
Purchases of
available-for-sale securities
|
(530,842)
|
|
(256,793)
|
|
Proceeds from sale of
available-for-sale securities
|
7,983
|
|
26,608
|
|
Proceeds from maturity
of available-for-sale securities
|
201,149
|
|
211,465
|
|
Purchases of trading
securities
|
(49,958)
|
|
(19,512)
|
|
Proceeds from sale of
trading securities
|
48,042
|
|
19,875
|
|
Proceeds from other
investments
|
—
|
|
1,020
|
|
Net cash used in
investing activities
|
(391,671)
|
|
(53,475)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Payment of debt
issuance costs
|
—
|
|
(6,515)
|
|
Proceeds from
revolving credit facility
|
—
|
|
300,000
|
|
Repayment of
debt
|
—
|
|
(662,250)
|
|
Common stock
repurchases
|
(455,412)
|
|
(89,846)
|
|
Payment of dividends
to stockholders
|
(181,507)
|
|
(187,984)
|
|
Issuance of common
stock
|
—
|
|
115
|
|
Tax withholding
payments related to vested and released restricted stock
units
|
(68,237)
|
|
(54,952)
|
|
Purchase of
non-controlling interest
|
—
|
|
(4,295)
|
|
Net cash used in
financing activities
|
(705,156)
|
|
(705,727)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(3,208)
|
|
(17,971)
|
|
Net increase (decrease)
in cash and cash equivalents
|
(216,295)
|
|
234,372
|
|
Cash and cash
equivalents at beginning of period
|
1,927,865
|
|
1,584,908
|
|
Cash and cash
equivalents at end of period
|
$
1,711,570
|
|
$
1,819,280
|
|
Supplemental cash flow
disclosures:
|
|
|
|
|
Income taxes paid,
net
|
$
99,388
|
|
$
101,061
|
|
Interest
paid
|
$
113,236
|
|
$
44,216
|
|
Non-cash
activities:
|
|
|
|
|
Contingent
consideration payable - financing activities
|
$
(920)
|
|
$
145
|
|
Dividends payable -
financing activities
|
$
1,853
|
|
$
1,942
|
|
Unsettled common stock
repurchase - financing activities
|
$
11,000
|
|
$
—
|
|
Accrued purchase of
land, property and equipment - investing activities
|
$
22,729
|
|
$
34,027
|
|
KLA
Corporation
Segment Information
(Unaudited)
|
|
|
The following is a
summary of results for each of our three reportable segments and
reconciliations to total revenues for the
indicated periods:
|
|
|
Three Months Ended
Sept. 30,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
Semiconductor Process
Control
|
$ 2,135,478
|
|
$ 2,397,759
|
|
Specialty
Semiconductor Process
|
126,719
|
|
127,867
|
|
PCB, Display and
Component Inspection
|
136,043
|
|
200,745
|
|
Total revenues for
reportable segments
|
2,398,240
|
|
2,726,371
|
|
Corporate allocations
and effects of changes in foreign currency exchange
rates
|
(1,284)
|
|
(1,947)
|
|
Total
revenues
|
$ 2,396,956
|
|
$ 2,724,424
|
|
KLA
Corporation
Condensed Consolidated Unaudited Supplemental
Information
|
|
|
Reconciliation of
GAAP Net Income to Non-GAAP Net Income
|
|
|
|
|
Three Months
Ended
|
|
(In thousands,
except per share amounts)
|
|
Sept. 30,
2023
|
|
June 30,
2023
|
|
Sept. 30,
2022
|
|
GAAP net income
attributable to KLA
|
|
$
741,375
|
|
$ 684,654
|
|
$
1,025,991
|
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
63,244
|
|
64,564
|
|
75,260
|
|
Restructuring,
severance and other charges
|
b
|
—
|
|
8,135
|
|
(5,189)
|
|
Loss on extinguishment
of debt
|
c
|
—
|
|
—
|
|
13,286
|
|
Income tax effect of
non-GAAP adjustments
|
d
|
(20,399)
|
|
(20,892)
|
|
(27,282)
|
|
Discrete tax
items
|
e
|
2,255
|
|
6,203
|
|
(75,476)
|
|
Non-GAAP net income
attributable to KLA
|
|
$
786,475
|
|
$ 742,664
|
|
$
1,006,590
|
|
GAAP net income per
diluted share attributable to KLA
|
|
$
5.41
|
|
$
4.97
|
|
$
7.20
|
|
Non-GAAP net income per
diluted share attributable to KLA
|
|
$
5.74
|
|
$
5.40
|
|
$
7.06
|
|
Shares used in diluted
net income per share calculation
|
|
137,104
|
|
137,654
|
|
142,563
|
|
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
|
|
Debt
Extinguishment
Loss
|
|
Discrete Tax
Item
|
|
Total Pre-tax
GAAP
to Non-GAAP
Adjustments
|
|
Three Months Ended
Sept. 30, 2023
|
|
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
46,078
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
46,078
|
|
Selling, general and
administrative
|
17,166
|
|
—
|
|
—
|
|
—
|
|
17,166
|
|
Total in three months
ended Sept. 30, 2023
|
$
63,244
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
63,244
|
|
Three Months Ended
June 30, 2023
|
|
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
45,437
|
|
$
2,570
|
|
$
—
|
|
$
—
|
|
$
48,007
|
|
Research and
development
|
—
|
|
2,727
|
|
—
|
|
—
|
|
2,727
|
|
Selling, general and
administrative
|
19,127
|
|
2,838
|
|
—
|
|
—
|
|
21,965
|
|
Total in three months
ended June 30, 2023
|
$
64,564
|
|
$
8,135
|
|
$
—
|
|
$
—
|
|
$
72,699
|
|
Three Months Ended
Sept. 30, 2022
|
|
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
45,056
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
45,056
|
|
Research and
development
|
9,156
|
|
—
|
|
—
|
|
—
|
|
9,156
|
|
Selling, general and
administrative
|
21,048
|
|
16,228
|
|
—
|
|
—
|
|
37,276
|
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
13,286
|
|
|
|
13,286
|
|
Other expense (income),
net
|
—
|
|
(21,417)
|
|
—
|
|
(3,711)
|
|
(25,128)
|
|
Total in three months
ended Sept. 30, 2022
|
$
75,260
|
|
$
(5,189)
|
|
$
13,286
|
|
$
(3,711)
|
|
$
79,646
|
|
Free Cash Flow
Reconciliation
|
|
|
Three Months Ended
Sept. 30,
|
|
Twelve Months Ended
Sept. 30,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net cash provided by
operating activities
|
$
883,740
|
|
$ 1,011,545
|
|
$ 3,542,000
|
|
$ 3,460,450
|
|
Capital
expenditures
|
(68,045)
|
|
(84,352)
|
|
(325,284)
|
|
(322,717)
|
|
Free cash
flow
|
$
815,695
|
|
$
927,193
|
|
$ 3,216,716
|
|
$ 3,137,733
|
|
Capital Returns
Calculation
|
|
|
Three Months Ended
Sept. 30,
|
|
Twelve Months Ended
Sept. 30,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Payments of dividends
to stockholders
|
$
181,507
|
|
$
187,984
|
|
$
726,079
|
|
$
663,691
|
|
Common stock
repurchases
|
455,412
|
|
89,846
|
|
1,677,430
|
|
3,657,975
|
|
Forward contract for
accelerated share repurchases
|
—
|
|
—
|
|
—
|
|
900,000
|
|
Capital
returns
|
$
636,919
|
|
$
277,830
|
|
$ 2,403,509
|
|
$
5,221,666
|
|
Second Quarter Fiscal 2024
Guidance
|
|
|
Reconciliation of
GAAP Diluted EPS to Non-GAAP Diluted EPS
|
|
|
|
Three Months Ending
Dec. 31, 2023
|
|
(In millions,
except per share amounts)
|
|
Low
|
|
High
|
|
GAAP net income per
diluted share
|
|
$4.94
|
|
$6.14
|
|
Acquisition-related
charges
|
a
|
0.44
|
|
0.44
|
|
Restructuring,
severance and other charges
|
b
|
0.03
|
|
0.03
|
|
Income tax effect of
non-GAAP adjustments
|
d
|
(0.15)
|
|
(0.15)
|
|
Non-GAAP net income per
diluted share
|
|
$5.26
|
|
$6.46
|
|
Shares used in net
income per diluted share calculation
|
|
136.1
|
|
136.1
|
|
Reconciliation of
GAAP Gross Margin to Non-GAAP Gross Margin
|
|
|
|
Three Months Ending
Dec. 31, 2023
|
|
|
Low
|
|
High
|
|
GAAP gross
margin
|
|
58.6 %
|
|
60.6 %
|
|
Acquisition-related
charges
|
a
|
1.8 %
|
|
1.8 %
|
|
Restructuring,
severance and other charges
|
b
|
0.1 %
|
|
0.1 %
|
|
Non-GAAP gross
margin
|
|
60.5 %
|
|
62.5 %
|
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 gains, 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, non-GAAP gross margin 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,
transaction costs associated with our acquisitions and
dispositions, as well as intangible asset impairment charges.
Although we exclude the effect of amortization of all acquired
intangible assets from these non-GAAP financial measures,
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
purchase price accounting arising from acquisitions, and such
amortization of intangible assets related to past acquisitions will
recur in future periods until such intangible assets have been
fully amortized. Investors should note that the use of these
intangible assets contributed to our revenues earned during the
periods presented and are expected to contribute to our future
period revenues as well.
|
|
b.
|
Restructuring,
severance and other charges primarily include costs associated with
employee severance, gains and losses from exiting non-core
businesses and adjustments related to non-controlling interest.
Restructuring, severance and other charges in the three months
ended Sept. 30, 2022 include a gain on the sale of Orbograph, Ltd.
("Orbograph"), partially offset by certain transaction bonuses
triggered by the sale of Orbograph.
|
|
c.
|
Loss on extinguishment
of debt includes a pre-tax loss on early extinguishment of the $500
million 4.650% Senior Notes due in Nov. 2024.
|
|
d.
|
Income tax effect of
non-GAAP adjustments includes the income tax effects of the
excluded items noted above.
|
|
e.
|
Discrete tax items in
all periods presented include a tax impact relating to the
amortization of certain intellectual property as a result of an
internal restructuring of ownership rights to align with how our
business operates. Discrete items in the three months ended Sept.
30, 2022 also include an adjustment of the net benefit of the
Orbotech Ltd. 2012 to 2018 Israel tax audit settlement, for which
the net benefit includes the liability on the audit settlement less
reductions in unrecognized tax positions and deferred tax assets
and liabilities. Discrete items in the three months ended Sept. 30,
2022 also include a tax impact from the sale of
Orbograph.
|
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content:https://www.prnewswire.com/news-releases/kla-corporation-reports-fiscal-2024-first-quarter-results-301967629.html
SOURCE KLA Corporation