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KLA-Tencor Post $51 Million in Net Income for Its First Fiscal Quarter 2003
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SAN JOSE, Calif., October 22, 2002 - KLA-Tencor Corp. (Nasdaq: KLAC) today announced its operating results for its first quarter of fiscal 2003, ended September 30, 2002. The company posted net income of $51 million and earnings per share of $0.26 on revenues of $376 million. Revenue, net income and earnings per share were all up slightly from the prior fiscal quarter's results of $374 million, $47 million and $0.23 per share respectively-due in part to a one-time net pre-tax gain of $9 million related to the sale of technology offset by charges related to facilities consolidations. Reflecting the current business environment, net income and revenue were down on a year-over-year basis from the levels of the first fiscal quarter of 2002 when the company posted net income of $86 million on revenues of $503 million.

"KLA-Tencor's continuing profitability, strong backlog position and healthy balance sheet, despite the challenging industry environment, reflect the continued demand for our leading-edge process control solutions, which chipmakers need to speed time to market and profit on their next-generation chips," commented Ken Schroeder, Chief Executive Officer. "To further enhance our technology edge in the process control sector we lead, we are sustaining our strong commitment to research and development. At the same time, we are keeping a tight rein on expenses and have taken additional spending reductions during the quarter."

"Looking forward, KLA-Tencor is well positioned to weather the industry downturn and capitalize on the inevitable upturn when it arrives," Schroeder continued. "The company's process control solutions are critical to the production of next-generation technologies. As a result, KLA-Tencor stands to benefit substantially when the technology buys of today become the large-scale production purchases of the future. In the meantime, we remain focused on increasing customer value and delivering strong financial results for our shareholders."

KLA-Tencor continues to maintain its historical backlog position and industry-leading gross margins. The company retained approximately six months of shipment backlog, based on current shipment levels. Deferred revenue backlog currently represents approximately 3 months of revenue. KLA-Tencor also continues to realize gross margins of approximately 50 percent. The gross margin for the quarter was 50.4 percent versus 50.1 percent in the fourth quarter of 2002. Gross margins improved slightly despite a higher percentage of service revenue, as products introduced over the last 18 months benefited from lower warranty and install costs.

Geographically, orders from Japan were above their historical share while the United States, Korea and Taiwan were at historical share. Europe and the rest of Asia were below historical share.

The company generated $62 million of cash from operating activities in the quarter with total cash, cash equivalents and marketable securities of $1.35 billion at quarter end. The company continues to have no long-term debt on the balance sheet. Inventory decreased $4 million to $319 million and accounts receivable decreased $21 million to $256 million. During the quarter, the company repurchased $47 million in stock, which was partially offset by $4 million in stock issuance.

Click here to view Condensed Consolidated Unaudited Balance Sheets and Unaudited Statements Of Operations

Forward Looking Statements: Statements in this press release regarding the likelihood of any future upturn, current order backlog and future cost-saving measures 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: delays or cancellations of orders by customers; shipments or acceptances; inability by the company to meet its production and/or product development schedules; the demand for semiconductors; and new and enhanced product offerings by competitors. For other factors that may cause actual results to differ from those projected, please refer to the company's Form 10-K, Forms 10-Q and other filings with the Securities and Exchange Commission. Actual results could differ materially from those anticipated in forward-looking statements in this release as a result of certain factors, including those set forth in the risk factors described in the company's SEC filings.

About KLA-Tencor: KLA-Tencor is the world leader in yield management and process control solutions for semiconductor manufacturing and related industries. Headquartered in San Jose, Calif., the company has sales and service offices around the world. An S&P 500 company, KLA-Tencor is traded on the Nasdaq National Market under the symbol KLAC.

Contact:
Meggan Powers
Director Corporate Communications

 

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