- Total revenues were $2.49
billion, above the midpoint of the guidance range of
$2.45 billion +/- $125 million;
- GAAP diluted EPS attributable to KLA was $4.28. Non-GAAP diluted EPS attributable to KLA
was $6.16, near the upper end of the
guidance range. GAAP EPS was impacted by a $219.0 million impairment charge for goodwill and
purchased intangible assets, or $1.59
per diluted share.
- Cash flow from operating activities for the quarter and last
twelve months were $622.2 million and
$3.48 billion, respectively, and free
cash flow was $545.4 million and
$3.17 billion, respectively; and
- Capital returns for the quarter and last twelve months were
$634.7 million and $2.50 billion, respectively.
MILPITAS, Calif., Jan. 25,
2024 /PRNewswire/ -- KLA Corporation (NASDAQ:
KLAC) today announced financial and operating results for its
second quarter of fiscal year 2024, which ended on Dec. 31,
2023, and reported GAAP net income of $582.5
million and GAAP earnings per diluted share of $4.28 on revenue of $2.49
billion.
https://mma.prnewswire.com/media/806571/KLA_Corporation_Logo.jpg
"KLA's December quarter results were ahead of our expectations
and capped a solid year that included strong relative margins and
free cash flow growth despite a persistently soft market," said
Rick Wallace, president and CEO,
KLA Corporation. "While market
conditions remain challenging in the near-term, with limited
visibility regarding the timing of a resumption in sustainable
demand, we believe our business has stabilized around current
revenue levels. As we look forward, we are encouraged by the
improvement in our customers' businesses across multiple markets
and continue to prioritize supporting our customers, executing on
our product roadmaps and preparing for growth at the leading
edge."
|
GAAP
Results
|
|
Q2 FY
2024
|
Q1 FY
2024
|
Q2 FY
2023
|
|
Total
Revenue
|
$2,487
million
|
$2,397
million
|
$2,984
million
|
|
Net Income Attributable
to KLA
|
$583 million
|
$741 million
|
$979 million
|
|
Net Income per Diluted
Share Attributable to KLA
|
$4.28
|
$5.41
|
$6.89
|
|
|
|
|
|
Non-GAAP
Results
|
|
Q2 FY
2024
|
Q1 FY
2024
|
Q2 FY
2023
|
|
Net Income Attributable
to KLA
|
$839 million
|
$786 million
|
$1,048
million
|
|
Net Income per Diluted
Share Attributable to KLA
|
$6.16
|
$5.74
|
$7.38
|
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 second quarter, along with its
outlook, on a conference call today beginning at 3 p.m. PT. A webcast of the call will be
available at: www.kla.com.
Third Quarter Fiscal 2024 Guidance
The following details our guidance for the third quarter of
fiscal 2024 ending in March:
- Total revenues is expected to be in a range of $2.30 billion +/- $125
million
- GAAP gross margin is expected to be in a range of 59.4% +/-
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 $4.93 +/- $0.60
- Non-GAAP diluted EPS is expected to be in a range of
$5.26 +/- $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 March 31, 2024,
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 Ukraine and Russia, and 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)
|
Dec. 31,
2023
|
|
June 30,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,665,054
|
|
$
1,927,865
|
|
Marketable
securities
|
1,677,940
|
|
1,315,294
|
|
Accounts receivable,
net
|
1,843,878
|
|
1,753,361
|
|
Inventories
|
3,038,628
|
|
2,876,784
|
|
Other current
assets
|
523,221
|
|
498,728
|
|
Total current
assets
|
8,748,721
|
|
8,372,032
|
|
Land, property and
equipment, net
|
1,088,824
|
|
1,031,841
|
|
Goodwill,
net
|
2,086,204
|
|
2,278,820
|
|
Deferred income
taxes
|
902,163
|
|
816,899
|
|
Purchased intangible
assets, net
|
786,233
|
|
935,303
|
|
Other non-current
assets
|
668,356
|
|
637,462
|
|
Total
assets
|
$
14,280,501
|
|
$
14,072,357
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
376,671
|
|
$
371,026
|
|
Deferred system
revenue
|
884,027
|
|
651,720
|
|
Deferred service
revenue
|
446,243
|
|
416,606
|
|
Current portion of
long-term debt
|
749,842
|
|
—
|
|
Other current
liabilities
|
2,114,214
|
|
2,303,490
|
|
Total current
liabilities
|
4,570,997
|
|
3,742,842
|
|
Long-term
debt
|
5,142,884
|
|
5,890,736
|
|
Deferred tax
liabilities
|
493,968
|
|
529,287
|
|
Deferred service
revenue
|
221,768
|
|
176,681
|
|
Other non-current
liabilities
|
807,173
|
|
813,058
|
|
Total
liabilities
|
11,236,790
|
|
11,152,604
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
capital in excess of par value
|
2,154,509
|
|
2,107,663
|
|
Retained
earnings
|
921,466
|
|
848,431
|
|
Accumulated other
comprehensive loss
|
(32,264)
|
|
(36,341)
|
|
Total stockholders'
equity
|
3,043,711
|
|
2,919,753
|
|
Total liabilities and
stockholders' equity
|
$
14,280,501
|
|
$
14,072,357
|
|
KLA
Corporation
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
|
|
|
|
Three Months Ended
Dec. 31,
|
|
Six Months Ended
Dec. 31,
|
|
(In thousands,
except per share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product
|
$ 1,921,809
|
|
$ 2,463,408
|
|
$ 3,758,473
|
|
$ 4,659,017
|
|
Service
|
564,917
|
|
520,479
|
|
1,125,209
|
|
1,049,294
|
|
Total
revenues
|
2,486,726
|
|
2,983,887
|
|
4,883,682
|
|
5,708,311
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
976,746
|
|
1,208,786
|
|
1,923,637
|
|
2,250,012
|
|
Research and
development
|
320,418
|
|
332,826
|
|
631,632
|
|
651,341
|
|
Selling, general and
administrative
|
237,244
|
|
243,096
|
|
476,889
|
|
497,076
|
|
Impairment of goodwill
and purchased intangible assets
|
219,000
|
|
—
|
|
219,000
|
|
—
|
|
Interest
expense
|
74,202
|
|
74,280
|
|
148,436
|
|
148,675
|
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
13,286
|
|
Other expense
(income), net
|
(32,154)
|
|
(18,074)
|
|
(58,893)
|
|
(65,080)
|
|
Income before income
taxes
|
691,270
|
|
1,142,973
|
|
1,542,981
|
|
2,213,001
|
|
Provision for income
taxes
|
108,736
|
|
164,178
|
|
219,072
|
|
208,141
|
|
Net income
|
582,534
|
|
978,795
|
|
1,323,909
|
|
2,004,860
|
|
Less: Net income
attributable to non-controlling interest
|
—
|
|
—
|
|
—
|
|
74
|
|
Net income attributable
to KLA
|
$
582,534
|
|
$
978,795
|
|
$ 1,323,909
|
|
$
2,004,786
|
|
Net income per share
attributable to KLA
|
|
|
|
|
|
|
|
|
Basic
|
$
4.30
|
|
$
6.93
|
|
$
9.74
|
|
$
14.16
|
|
Diluted
|
$
4.28
|
|
$
6.89
|
|
$
9.69
|
|
$
14.09
|
|
Weighted-average number
of shares:
|
|
|
|
|
|
|
|
|
Basic
|
135,539
|
|
141,299
|
|
135,976
|
|
141,564
|
|
Diluted
|
136,254
|
|
141,966
|
|
136,684
|
|
142,268
|
|
KLA
Corporation
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Cash Flows
|
|
|
|
|
Three Months Ended
Dec. 31,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
582,534
|
|
$
978,795
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Impairment of goodwill
and purchased intangible assets
|
219,000
|
|
—
|
|
Depreciation and
amortization
|
99,063
|
|
103,508
|
|
Unrealized foreign
exchange (gain) loss and other
|
(34,346)
|
|
(20,679)
|
|
Asset impairment
charges
|
—
|
|
749
|
|
Stock-based
compensation expense
|
48,620
|
|
38,405
|
|
Deferred income
taxes
|
(65,158)
|
|
(98,890)
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
|
|
|
|
|
Accounts
receivable
|
(160,265)
|
|
(440,647)
|
|
Inventories
|
(21,189)
|
|
(127,647)
|
|
Other
assets
|
(104,872)
|
|
(15,091)
|
|
Accounts
payable
|
2,692
|
|
44,317
|
|
Deferred system
revenue
|
218,250
|
|
95,079
|
|
Deferred service
revenue
|
68,821
|
|
42,630
|
|
Other
liabilities
|
(230,908)
|
|
87,761
|
|
Net cash provided by
operating activities
|
622,242
|
|
688,290
|
|
Cash flows from
investing activities:
|
|
|
|
|
Proceeds from sale of
assets
|
5,079
|
|
—
|
|
Capital
expenditures
|
(76,801)
|
|
(93,642)
|
|
Purchases of
available-for-sale securities
|
(451,800)
|
|
(301,372)
|
|
Proceeds from sale of
available-for-sale securities
|
7,252
|
|
10,147
|
|
Proceeds from maturity
of available-for-sale securities
|
427,128
|
|
141,926
|
|
Purchases of trading
securities
|
(16,049)
|
|
(18,071)
|
|
Proceeds from sale of
trading securities
|
16,715
|
|
19,607
|
|
Net cash used in
investing activities
|
(88,476)
|
|
(241,405)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repayment of
debt
|
—
|
|
(200,000)
|
|
Common stock
repurchases
|
(437,817)
|
|
(355,007)
|
|
Payment of dividends
to stockholders
|
(196,859)
|
|
(184,208)
|
|
Issuance of common
stock
|
48,433
|
|
33,793
|
|
Tax withholding
payments related to vested and released restricted stock
units
|
(3,005)
|
|
(2,598)
|
|
Contingent
consideration payable and other, net
|
(1,676)
|
|
(2,500)
|
|
Net cash used in
financing activities
|
(590,924)
|
|
(710,520)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
10,642
|
|
15,832
|
|
Net decrease in cash
and cash equivalents
|
(46,516)
|
|
(247,803)
|
|
Cash and cash
equivalents at beginning of period
|
1,711,570
|
|
1,819,280
|
|
Cash and cash
equivalents at end of period
|
$
1,665,054
|
|
$
1,571,477
|
|
Supplemental cash flow
disclosures:
|
|
|
|
|
Income taxes paid,
net
|
$
506,046
|
|
$
293,403
|
|
Interest
paid
|
$
24,818
|
|
$
29,635
|
|
Non-cash
activities:
|
|
|
|
|
Contingent
consideration payable - financing activities
|
$
155
|
|
$
(1,919)
|
|
Dividends payable -
financing activities
|
$
2,132
|
|
$
1,999
|
|
Unsettled common stock
repurchase - financing activities
|
$
10,999
|
|
$
15,975
|
|
Accrued purchase of
land, property and equipment - investing activities
|
$
18,312
|
|
$
30,590
|
|
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
Dec. 31,
|
|
Six Months Ended
Dec. 31,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Semiconductor Process
Control
|
$ 2,194,079
|
|
$ 2,657,395
|
|
$ 4,329,557
|
|
$ 5,055,154
|
|
Specialty
Semiconductor Process
|
150,065
|
|
158,085
|
|
276,784
|
|
285,952
|
|
PCB, Display and
Component Inspection
|
143,032
|
|
169,959
|
|
279,075
|
|
370,704
|
|
Total revenues for
reportable segments
|
2,487,176
|
|
2,985,439
|
|
4,885,416
|
|
5,711,810
|
|
Corporate allocations
and effects of changes in
foreign currency exchange rates
|
(450)
|
|
(1,552)
|
|
(1,734)
|
|
(3,499)
|
|
Total
revenues
|
$ 2,486,726
|
|
$ 2,983,887
|
|
$ 4,883,682
|
|
$ 5,708,311
|
|
KLA
Corporation
Condensed
Consolidated Unaudited Supplemental Information
Reconciliation of
GAAP Net Income to Non-GAAP Net Income
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(In thousands,
except per share amounts)
|
|
Dec. 31,
2023
|
|
Sept. 30,
2023
|
|
Dec. 31,
2022
|
|
Dec. 31,
2023
|
|
Dec. 31,
2022
|
|
GAAP net income
attributable to KLA
|
|
$ 582,534
|
|
$ 741,375
|
|
$ 978,795
|
|
$
1,323,909
|
|
$
2,004,786
|
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
59,307
|
|
63,244
|
|
66,689
|
|
122,551
|
|
141,949
|
|
Restructuring,
severance and other charges
|
b
|
1,270
|
|
—
|
|
—
|
|
1,270
|
|
(5,189)
|
|
Impairment of goodwill
and purchased intangible assets
|
c
|
219,000
|
|
—
|
|
—
|
|
219,000
|
|
—
|
|
Loss on extinguishment
of debt
|
d
|
—
|
|
—
|
|
—
|
|
—
|
|
13,286
|
|
Income tax effect of
non-GAAP adjustments
|
e
|
(22,806)
|
|
(20,399)
|
|
(19,293)
|
|
(43,205)
|
|
(46,575)
|
|
Discrete tax
items
|
f
|
(103)
|
|
2,255
|
|
21,511
|
|
2,152
|
|
(53,965)
|
|
Non-GAAP net income
attributable to KLA
|
|
$ 839,202
|
|
$ 786,475
|
|
$
1,047,702
|
|
$
1,625,677
|
|
$
2,054,292
|
|
GAAP net income per
diluted share attributable to KLA
|
|
$
4.28
|
|
$
5.41
|
|
$
6.89
|
|
$
9.69
|
|
$
14.09
|
|
Non-GAAP net income per
diluted share attributable to KLA
|
|
$
6.16
|
|
$
5.74
|
|
$
7.38
|
|
$
11.89
|
|
$
14.44
|
|
Shares used in diluted
net income per share calculation
|
|
136,254
|
|
137,104
|
|
141,966
|
|
136,684
|
|
142,268
|
|
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
|
|
Goodwill and
Purchased
Intangible Asset
Impairment
|
|
Total Pre-tax
GAAP
to Non-GAAP
Adjustments
|
|
Three Months Ended
Dec. 31, 2023
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
46,078
|
|
$
467
|
|
$
—
|
|
$
46,545
|
|
Research and
development
|
—
|
|
417
|
|
—
|
|
417
|
|
Selling, general and
administrative
|
13,229
|
|
386
|
|
—
|
|
13,615
|
|
Impairment of goodwill
and purchased intangible assets
|
—
|
|
—
|
|
219,000
|
|
219,000
|
|
Total in three months
ended Dec. 31, 2023
|
$
59,307
|
|
$
1,270
|
|
$ 219,000
|
|
$
279,577
|
|
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
Dec. 31, 2022
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
45,437
|
|
$
—
|
|
$
—
|
|
$
45,437
|
|
Research and
development
|
748
|
|
—
|
|
—
|
|
748
|
|
Selling, general and
administrative
|
20,504
|
|
—
|
|
—
|
|
20,504
|
|
Total in three months
ended Dec. 31, 2022
|
$
66,689
|
|
$
—
|
|
$
—
|
|
$
66,689
|
|
Free Cash Flow
Reconciliation
|
|
|
Three Months Ended
Dec. 31,
|
|
Twelve Months Ended
Dec. 31,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net cash provided by
operating activities
|
$
622,242
|
|
$
688,290
|
|
$ 3,475,952
|
|
$ 3,337,942
|
|
Capital
expenditures
|
(76,801)
|
|
(93,642)
|
|
(308,443)
|
|
(351,458)
|
|
Free cash
flow
|
$
545,441
|
|
$
594,648
|
|
$ 3,167,509
|
|
$ 2,986,484
|
|
Capital Returns
Calculation
|
|
|
Three Months Ended
Dec. 31,
|
|
Twelve Months Ended
Dec. 31,
|
|
(In
thousands)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Payments of dividends
to stockholders
|
$
196,859
|
|
$
184,208
|
|
$
738,730
|
|
$
688,770
|
|
Common stock
repurchases
|
437,817
|
|
355,007
|
|
1,760,240
|
|
3,583,108
|
|
Forward contract for
accelerated share repurchases
|
—
|
|
—
|
|
—
|
|
900,000
|
|
Capital
returns
|
$
634,676
|
|
$
539,215
|
|
$ 2,498,970
|
|
$
5,171,878
|
|
Third Quarter
Fiscal 2024 Guidance
Reconciliation of
GAAP Diluted EPS to Non-GAAP Diluted EPS
|
|
|
|
Three Months Ending
March 31, 2024
|
|
(In millions,
except per share amounts)
|
|
Low
|
|
High
|
|
GAAP net income per
diluted share
|
|
$4.33
|
|
$5.53
|
|
Acquisition-related
charges
|
a
|
0.42
|
|
0.42
|
|
Restructuring,
severance and other charges
|
b
|
0.06
|
|
0.06
|
|
Income tax effect of
non-GAAP adjustments
|
e
|
(0.15)
|
|
(0.15)
|
|
Non-GAAP net income per
diluted share
|
|
$4.66
|
|
$5.86
|
|
Shares used in net
income per diluted share calculation
|
|
135.6
|
|
135.6
|
|
Reconciliation of
GAAP Gross Margin to Non-GAAP Gross Margin
|
|
|
|
Three Months Ending
March 31, 2024
|
|
|
Low
|
|
High
|
|
GAAP gross
margin
|
|
58.4 %
|
|
60.4 %
|
|
Acquisition-related
charges
|
a
|
1.9 %
|
|
1.9 %
|
|
Restructuring,
severance and other charges
|
b
|
0.2 %
|
|
0.2 %
|
|
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 six months ended
Dec. 31, 2022 included a gain on the sale of Orbograph, Ltd.
("Orbograph"), which was sold in the first quarter of fiscal 2023,
partially offset by certain transaction bonuses triggered by the
sale of Orbograph.
|
|
c.
|
Impairment of goodwill
and purchased intangible assets included non-cash expense
recognized as a result of the company's testing for goodwill
impairment and long-lived asset impairment performed in the three
months ended Dec. 31, 2023. The impairment charge resulted from the
downward revision of financial outlook for the PCB and Display
reporting units. Management believes that it is appropriate to
exclude these impairment charges as they are not indicative of
ongoing operating results and therefore limit comparability.
Management also believes excluding this item helps investors
compare our operating performance with our results in prior periods
as well as with the performance of other companies.
|
|
d.
|
Loss on extinguishment
of debt included a pre-tax loss on early extinguishment of the $500
million 4.650% Senior Notes due in Nov. 2024.
|
|
e.
|
Income tax effect of
non-GAAP adjustments includes the income tax effects of the
excluded items noted above.
|
|
f.
|
Discrete tax items in
the three and six months ended Dec. 31, 2023 included a one-time
tax benefit resulting from changes made to our international
structure to better align ownership of certain intellectual
property rights with how our business operates. Discrete tax items
in all periods presented included a tax impact relating to the
amortization of the aforementioned tax benefit or similar tax
benefits recorded in other periods. Discrete tax items in the three
months ended Dec. 31, 2022 included a tax expense of $19.8 million
from an internal restructuring. Discrete tax items in the three
months ended Sept. 30, 2022 also included 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, as well as a tax impact from
the sale of Orbograph.
|
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content:https://www.prnewswire.com/news-releases/kla-corporation-reports-fiscal-2024-second-quarter-results-302045108.html
SOURCE KLA Corporation