- For the quarter, total revenues were $2.355 billion, above the mid-point of guidance
range of $2.125 to $2.375 billion;
- For the quarter, GAAP diluted EPS attributable to KLA was
$4.97 and non-GAAP diluted EPS
attributable to KLA was $5.40, each
finishing above the mid-point of guidance ranges;
- Cash flow from operating activities for the quarter and fiscal
year was $959.1 million and
$3.67 billion, respectively, and free
cash flow was $880.4 million and
$3.33 billion, respectively; and
- Capital returns for the quarter and fiscal year were
$568.3 million and $2.04 billion, respectively.
MILPITAS, Calif., July 27,
2023 /PRNewswire/ -- KLA Corporation (NASDAQ:
KLAC) today announced financial and operating results for its
fourth quarter and fiscal year ended June 30, 2023. KLA
reported GAAP net income attributable to KLA of $684.7 million and GAAP diluted earnings per
share ("EPS") attributable to KLA of $4.97 on total revenues of $2.36 billion for the fourth quarter of fiscal
year 2023. For the fiscal year ended June 30, 2023, KLA
reported GAAP net income attributable to KLA of $3.39 billion and GAAP diluted EPS attributable
to KLA of $24.15 on total revenues of
$10.50 billion.
https://mma.prnewswire.com/media/806571/KLA_Corporation_Logo.jpg
"KLA's June quarter results exceeded expectations, demonstrating
the combination of the broad strength of our portfolio, focused
operational execution and high-performing teams coming together to
deliver against our financial objectives in what remains a
challenging demand environment," said Rick
Wallace, president and CEO, KLA
Corporation. "KLA continues to be focused on supporting our
customer requirements while maintaining critical R&D
investments to enable our technology roadmap. Our results are the
latest example of successfully meeting or exceeding our commitments
and creating value for our customers, partners and
shareholders."
GAAP
Results
|
|
Q4 FY
2023
|
Q3 FY
2023
|
Q4 FY
2022
|
Total
Revenues
|
$2,355
million
|
$2,433
million
|
$2,487
million
|
Net Income Attributable
to KLA
|
$685 million
|
$698 million
|
$805 million
|
Net Income per Diluted
Share Attributable to KLA
|
$4.97
|
$5.03
|
$5.40
|
|
|
|
|
Non-GAAP
Results
|
|
Q4 FY
2023
|
Q3 FY
2023
|
Q4 FY
2022
|
Net Income Attributable
to KLA
|
$743 million
|
$761 million
|
$867 million
|
Net Income per Diluted
Share Attributable to KLA
|
$5.40
|
$5.49
|
$5.81
|
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 2023 fourth quarter and full year, along with its
outlook, on a conference call today beginning at 3 p.m. Pacific Time. A webcast of the call will
be available at: www.kla.com.
First Quarter Fiscal 2024 Guidance
The following details our guidance for the first quarter of
fiscal 2024 ending in September:
- Total revenues is expected to be in a range of $2.35 billion +/- $125
million
- GAAP gross margin is expected to be in a range of 59.0% +/-
1.0%
- Non-GAAP gross margin is expected to be in a range of 61.0% +/-
1.0%
- GAAP diluted EPS is expected to be in a range of $5.02 +/- $0.60
- Non-GAAP diluted EPS is expected to be in a range of
$5.35 +/- $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 (KLAC-F).
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 Sept. 30, 2023, are
forward-looking statements and 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: economic, political and social conditions in the
countries in which we, our customers and our suppliers operate,
including rising inflation and interest rates, Russia's invasion of Ukraine and global trade policies; disruption
to our manufacturing facilities or other operations, or the
operations of our customers, due to natural catastrophic events,
health epidemics or terrorism; 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 ability to timely develop
new technologies and products that successfully anticipate or
address changes in the semiconductor industry; our ability to
maintain our technology advantage and protect our proprietary
rights; our ability to compete with new products introduced by our
competitors; our ability to attract, onboard and retain key
personnel; cybersecurity threats, cyber incidents affecting our and
our customers, suppliers and other service providers' systems and
networks and our and their ability to access critical information
systems for daily business operations; 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; exposure to a highly concentrated
customer base; availability and cost of the wide range of materials
used in the production of our products; our ability to operate our
business in accordance with our business plan; legal, regulatory
and tax environments in which we perform our operations and conduct
our business and our ability to comply with relevant laws and
regulations; increasing attention to environmental, social and
governance matters and the resulting costs, risks and impact on our
business; our ability to pay interest and repay the principal of
our current indebtedness is dependent upon our ability to manage
our business operations, our credit rating and the ongoing interest
rate environment, among other factors; our ability or the ability
of our customers to obtain licenses for the sale of certain
products or provision of certain services to customers in
China, pursuant to regulations
recently issued by the Bureau of Industry and Security of the U.S.
Department of Commerce, which could impact our business, financial
condition and results of operations; instability in the global
credit and financial markets; our exposure to currency exchange
rate fluctuations or declining economic conditions in those
countries where we conduct our business; changes in our effective
tax rate resulting from changes in the tax rates imposed by
jurisdictions where our profits are determined to be earned and
taxed, expiration of tax holidays in certain jurisdictions,
resolution of issues arising from tax audits with various
authorities or changes in tax laws or the interpretation of such
tax laws; our ability to identify suitable acquisition targets and
successfully integrate and manage acquired businesses; and
unexpected delays, difficulties and expenses in executing against
our environmental, climate, inclusion and diversity or other
Environmental, Social and Governance targets, goals and
commitments. 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, 2022, 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)
|
June 30,
2023
|
|
|
June 30,
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,927,865
|
|
|
$
1,584,908
|
Marketable
securities
|
1,315,294
|
|
|
1,123,100
|
Accounts receivable,
net
|
1,753,361
|
|
|
1,811,877
|
Inventories
|
2,876,784
|
|
|
2,146,889
|
Other current
assets
|
498,728
|
|
|
502,137
|
Total current
assets
|
8,372,032
|
|
|
7,168,911
|
Land, property and
equipment, net
|
1,031,841
|
|
|
849,929
|
Goodwill
|
2,278,820
|
|
|
2,320,049
|
Deferred income
taxes
|
816,899
|
|
|
579,173
|
Purchased intangibles,
net
|
935,303
|
|
|
1,194,414
|
Other non-current
assets
|
637,462
|
|
|
484,612
|
Total
assets
|
$
14,072,357
|
|
|
$
12,597,088
|
|
|
|
|
|
LIABILITIES,
NON-CONTROLLING INTEREST AND STOCKHOLDERS'
EQUITY
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
371,026
|
|
|
$
443,338
|
Deferred system
revenue
|
651,720
|
|
|
500,969
|
Deferred service
revenue
|
416,606
|
|
|
381,737
|
Other current
liabilities
|
2,303,490
|
|
|
1,545,039
|
Total current
liabilities
|
3,742,842
|
|
|
2,871,083
|
Long-term
debt
|
5,890,736
|
|
|
6,660,718
|
Deferred tax
liabilities
|
529,287
|
|
|
658,937
|
Deferred service
revenue
|
176,681
|
|
|
124,618
|
Other non-current
liabilities
|
813,058
|
|
|
882,642
|
Total
liabilities
|
11,152,604
|
|
|
11,197,998
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
capital in excess of par value
|
2,107,663
|
|
|
1,061,940
|
Retained
earnings
|
848,431
|
|
|
366,882
|
Accumulated other
comprehensive loss
|
(36,341)
|
|
|
(27,471)
|
Total KLA
stockholders' equity
|
2,919,753
|
|
|
1,401,351
|
Non-controlling
interest in consolidated subsidiaries
|
—
|
|
|
(2,261)
|
Total stockholders'
equity
|
2,919,753
|
|
|
1,399,090
|
Total liabilities and
stockholders' equity
|
$
14,072,357
|
|
|
$
12,597,088
|
KLA
Corporation
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Twelve Months Ended
June 30,
|
(In thousands,
except per share amounts)
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Product
|
$
1,816,524
|
|
|
$
1,975,112
|
|
|
$
8,379,025
|
|
|
$
7,301,428
|
Service
|
538,613
|
|
|
511,627
|
|
|
2,117,031
|
|
|
1,910,455
|
Total
revenues
|
2,355,137
|
|
|
2,486,739
|
|
|
10,496,056
|
|
|
9,211,883
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
962,949
|
|
|
978,564
|
|
|
4,218,307
|
|
|
3,592,441
|
Research and
development
|
317,110
|
|
|
296,881
|
|
|
1,296,727
|
|
|
1,105,254
|
Selling, general and
administrative
|
250,857
|
|
|
236,778
|
|
|
986,326
|
|
|
860,007
|
Interest
expense
|
73,491
|
|
|
44,197
|
|
|
296,940
|
|
|
160,339
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
13,286
|
|
|
—
|
Other expense
(income), net
|
(24,776)
|
|
|
(19,380)
|
|
|
(104,720)
|
|
|
4,605
|
Income before income
taxes
|
775,506
|
|
|
949,699
|
|
|
3,789,190
|
|
|
3,489,237
|
Provision for income
taxes
|
90,852
|
|
|
144,301
|
|
|
401,839
|
|
|
167,177
|
Net income
|
684,654
|
|
|
805,398
|
|
|
3,387,351
|
|
|
3,322,060
|
Less: Net income
attributable to non-controlling interest
|
—
|
|
|
24
|
|
|
74
|
|
|
253
|
Net income attributable
to KLA
|
$
684,654
|
|
|
$
805,374
|
|
|
$
3,387,277
|
|
|
$
3,321,807
|
Net income per share
attributable to KLA:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
5.00
|
|
|
$
5.43
|
|
|
$
24.28
|
|
|
$
22.07
|
Diluted
|
$
4.97
|
|
|
$
5.40
|
|
|
$
24.15
|
|
|
$
21.92
|
Weighted-average number
of shares:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
136,873
|
|
|
148,219
|
|
|
139,483
|
|
|
150,494
|
Diluted
|
137,654
|
|
|
149,117
|
|
|
140,235
|
|
|
151,555
|
KLA
Corporation
Condensed
Consolidated Unaudited Statements of Cash Flows
|
|
|
Three Months Ended
June 30,
|
(In
thousands)
|
2023
|
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
684,654
|
|
|
$
805,398
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
104,813
|
|
|
100,848
|
Unrealized foreign
exchange loss and other
|
17,602
|
|
|
31,862
|
Stock-based
compensation expense
|
49,907
|
|
|
36,849
|
Deferred income
taxes
|
23,567
|
|
|
53,474
|
Settlement of treasury
lock agreement
|
—
|
|
|
82,799
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
|
Accounts
receivable
|
105,096
|
|
|
(192,055)
|
Inventories
|
(144,654)
|
|
|
(170,600)
|
Other
assets
|
(90,591)
|
|
|
(193,341)
|
Accounts
payable
|
(105,844)
|
|
|
19,256
|
Deferred system
revenue
|
117,928
|
|
|
72,246
|
Deferred service
revenue
|
52,672
|
|
|
48,502
|
Other
liabilities
|
143,965
|
|
|
123,991
|
Net cash provided by
operating activities
|
959,115
|
|
|
819,229
|
Cash flows from
investing activities:
|
|
|
|
|
Business acquisitions,
net of cash acquired
|
—
|
|
|
(8,226)
|
Capital
expenditures
|
(78,683)
|
|
|
(73,160)
|
Proceeds from sale of
assets
|
—
|
|
|
27,658
|
Purchases of
available-for-sale securities
|
(481,096)
|
|
|
(254,274)
|
Proceeds from sale of
available-for-sale securities
|
50,079
|
|
|
46,033
|
Proceeds from maturity
of available-for-sale securities
|
434,819
|
|
|
235,871
|
Purchases of trading
securities
|
(18,852)
|
|
|
(19,912)
|
Proceeds from sale of
trading securities
|
19,249
|
|
|
20,616
|
Net cash used in
investing activities
|
(74,484)
|
|
|
(25,394)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance
of debt, net of issuance costs
|
—
|
|
|
2,967,409
|
Proceeds from
revolving credit facility, net of costs
|
—
|
|
|
275,000
|
Repayment of
debt
|
—
|
|
|
(275,000)
|
Issuance of common
stock
|
90,939
|
|
|
76,102
|
Common stock
repurchases
|
(388,825)
|
|
|
(2,573,589)
|
Forward contract for
accelerated share repurchases
|
—
|
|
|
(900,000)
|
Payment of dividends
to stockholders
|
(179,510)
|
|
|
(157,602)
|
Payment of dividends
to subsidiary's non-controlling interest holders
|
—
|
|
|
(602)
|
Tax withholding
payments related to vested and released restricted stock
units
|
(21,102)
|
|
|
(15,423)
|
Payment of contingent
consideration payable
|
(12,823)
|
|
|
(21)
|
Net cash used in
financing activities
|
(511,321)
|
|
|
(603,726)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(13,958)
|
|
|
(20,373)
|
Net increase in cash
and cash equivalents
|
359,352
|
|
|
169,736
|
Cash and cash
equivalents at beginning of period
|
1,568,513
|
|
|
1,415,172
|
Cash and cash
equivalents at end of period
|
$
1,927,865
|
|
|
$
1,584,908
|
Supplemental cash flow
disclosures:
|
|
|
|
|
Income taxes paid,
net
|
$
43,858
|
|
|
$
109,350
|
Interest
paid
|
$
25,049
|
|
|
$
37,882
|
Non-cash
activities:
|
|
|
|
|
Contingent
consideration payable - financing activities
|
$
(29)
|
|
|
$
1,195
|
Dividends payable -
financing activities
|
$
2,047
|
|
|
$
1,653
|
Unsettled common stock
repurchase - financing activities
|
$
11,000
|
|
|
$
—
|
Accrued purchase of
land, property and equipment - investing activities
|
$
18,445
|
|
|
$
19,595
|
KLA
Corporation Segment Information
(Unaudited)
The following is a
summary of results for each of our three reportable segments and
reconciliation to total revenues for the indicated
periods:
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Twelve Months Ended
June 30,
|
(In
thousands)
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Semiconductor Process
Control
|
$ 2,097,479
|
|
|
$ 2,114,242
|
|
|
$ 9,324,190
|
|
|
$ 7,924,822
|
Specialty
Semiconductor Process
|
129,008
|
|
|
124,559
|
|
|
543,398
|
|
|
456,579
|
PCB, Display and
Component Inspection
|
128,977
|
|
|
248,858
|
|
|
631,604
|
|
|
832,176
|
Total revenues for
reportable segments
|
2,355,464
|
|
|
2,487,659
|
|
|
10,499,192
|
|
|
9,213,577
|
Corporate allocations
and effects of changes in foreign exchange rates
|
(327)
|
|
|
(920)
|
|
|
(3,136)
|
|
|
(1,694)
|
Total
revenues
|
$ 2,355,137
|
|
|
$ 2,486,739
|
|
|
$
10,496,056
|
|
|
$ 9,211,883
|
KLA
Corporation
Condensed
Consolidated Unaudited Supplemental Information
Reconciliation of
GAAP Net Income to Non-GAAP Net Income
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
(In thousands,
except per share amounts)
|
|
June 30,
2023
|
|
|
March 31,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
GAAP net income
attributable to KLA
|
|
$
684,654
|
|
|
$
697,837
|
|
|
$
805,374
|
|
|
$
3,387,277
|
|
|
$
3,321,807
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
64,564
|
|
|
65,050
|
|
|
64,450
|
|
|
271,563
|
|
|
238,855
|
Restructuring,
severance and other charges
|
b
|
8,135
|
|
|
19,089
|
|
|
2,837
|
|
|
22,035
|
|
|
5,475
|
Loss on extinguishment
of debt
|
c
|
—
|
|
|
—
|
|
|
—
|
|
|
13,286
|
|
|
—
|
Income tax effect of
non-GAAP adjustments
|
d
|
(20,892)
|
|
|
(22,942)
|
|
|
(19,465)
|
|
|
(90,409)
|
|
|
(74,710)
|
Discrete tax
items
|
e
|
6,203
|
|
|
1,688
|
|
|
13,496
|
|
|
(46,074)
|
|
|
(286,031)
|
Non-GAAP net income
attributable to KLA
|
|
$
742,664
|
|
|
$
760,722
|
|
|
$
866,692
|
|
|
$
3,557,678
|
|
|
$
3,205,396
|
GAAP net income per
diluted share attributable to KLA
|
|
$
4.97
|
|
|
$
5.03
|
|
|
$
5.40
|
|
|
$
24.15
|
|
|
$
21.92
|
Non-GAAP net income per
diluted share attributable to KLA
|
|
$
5.40
|
|
|
$
5.49
|
|
|
$
5.81
|
|
|
$
25.37
|
|
|
$
21.15
|
Shares used in diluted
net income per share calculation
|
|
137,654
|
|
|
138,645
|
|
|
149,117
|
|
|
140,235
|
|
|
151,555
|
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
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
March 31, 2023
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
45,437
|
|
|
$
6,039
|
|
|
$
51,476
|
Research and
development
|
—
|
|
|
6,664
|
|
|
6,664
|
Selling, general and
administrative
|
19,613
|
|
|
6,386
|
|
|
25,999
|
Total in three months
ended March 31, 2023
|
$
65,050
|
|
|
$
19,089
|
|
|
$
84,139
|
Three Months Ended
June 30, 2022
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
44,331
|
|
|
$
—
|
|
|
$
44,331
|
Selling, general and
administrative
|
20,119
|
|
|
—
|
|
|
20,119
|
Other expense (income),
net
|
—
|
|
|
2,837
|
|
|
2,837
|
Total in three months
ended June 30, 2022
|
$
64,450
|
|
|
$
2,837
|
|
|
$
67,287
|
Free Cash Flow
Reconciliation
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Twelve Months Ended
June 30,
|
(In
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
Net cash provided by
operating activities
|
|
$
959,115
|
|
|
$
819,229
|
|
|
$
3,669,805
|
|
|
$
3,312,702
|
Capital
expenditures
|
|
(78,683)
|
|
|
(73,160)
|
|
|
(341,591)
|
|
|
(307,320)
|
Free cash
flow
|
|
$
880,432
|
|
|
$
746,069
|
|
|
$
3,328,214
|
|
|
$
3,005,382
|
Capital Returns
Calculation
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Twelve Months Ended
June 30,
|
(In
thousands)
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
Payments of dividends
to stockholders
|
$
179,510
|
|
|
$
157,602
|
|
|
$
732,556
|
|
|
$
638,528
|
Common stock
repurchases
|
388,825
|
|
|
2,573,589
|
|
|
1,311,864
|
|
|
3,967,806
|
Forward contract for
accelerated share repurchases
|
—
|
|
|
900,000
|
|
|
—
|
|
|
900,000
|
Capital
returns
|
$
568,335
|
|
|
$ 3,631,191
|
|
|
$ 2,044,420
|
|
|
$
5,506,334
|
First Quarter Fiscal
2024 Guidance
Reconciliation of
GAAP Diluted EPS to Non-GAAP Diluted EPS
|
|
|
|
|
|
Three Months Ending
Sept. 30, 2023
|
(In millions,
except per share amounts)
|
|
Low
|
|
|
High
|
GAAP net income per
diluted share
|
|
$4.42
|
|
|
$5.62
|
Acquisition-related
charges
|
a
|
0.45
|
|
|
0.45
|
Restructuring,
severance and other charges
|
b
|
0.01
|
|
|
0.01
|
Income tax effect of
non-GAAP adjustments
|
d
|
(0.13)
|
|
|
(0.13)
|
Non-GAAP net income per
diluted share
|
|
$4.75
|
|
|
$5.95
|
Shares used in net
income per diluted share calculation
|
|
137.3
|
|
|
137.3
|
Reconciliation of
GAAP Gross Margin to Non-GAAP Gross Margin
|
|
|
|
|
|
Three Months Ending
Sept. 30, 2023
|
|
|
Low
|
|
|
High
|
GAAP gross
margin
|
|
58.0 %
|
|
|
60.0 %
|
Acquisition-related
charges
|
a
|
2.0 %
|
|
|
2.0 %
|
Non-GAAP gross
margin
|
|
60.0 %
|
|
|
62.0 %
|
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.
|
b.
|
Restructuring,
severance and other charges primarily include costs associated with
employee severance including associated acceleration of recognition
of certain stock-based and other compensation expenses, gains and
losses from exiting non-core businesses, interest expense on
unrecognized tax benefits, charges related to liquidation of legal
entities and adjustments related to non-controlling interest.
Restructuring, severance and other charges in the twelve months
ended June 30, 2023 include 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.
|
Loss on extinguishment
of debt includes a pre-tax loss on early extinguishment of the $500
million 4.650% Senior Notes due in November 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 tax items in the three months ended
June 30, 2022 include an increase in unrecognized tax benefits
related to the transition tax on accumulated foreign earnings from
the Tax Cuts and Jobs Act. Discrete items in the twelve months
ended June 30, 2023 include a tax expense of $19.8 million from an
internal restructuring and 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 tax items in the twelve months ended June
30, 2023 also include a tax impact from the sale of Orbograph.
Discrete tax items in the twelve months ended June 30, 2022
primarily include the aggregate of the aforementioned discrete tax
items as well as a one-time tax benefit of $394.5 million resulting
from changes made to our international structure to better align
ownership of certain intellectual property rights with how our
business operates and a net benefit of $69.2 million from an
internal restructuring, partially offset by a tax expense of $163.7
million from an increase in deferred tax liabilities on unremitted
foreign earnings due to a change in tax law.
|
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SOURCE KLA Corporation