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Lam Research Corp. Reports Operating Results (10-Q)

February 03, 2011 | About:
10qk

10qk

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Lam Research Corp. (LRCX) filed Quarterly Report for the period ended 2010-12-26.

Lam Research has a market cap of $6.35 billion; its shares were traded at around $51.6475 with a P/E ratio of 9.7 and P/S ratio of 3. Hedge Fund Gurus that owns LRCX: David Tepper of APPALOOSA MANAGEMENT LP, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Jim Simons of Renaissance Technologies LLC, Richard Pzena of Pzena Investment Management LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns LRCX: John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of Royce& Associates, RS Investment Management, Pioneer Investments.

Highlight of Business Operations:

Our cash and cash equivalents, short-term investments, and restricted cash and investments balances totaled approximately $1.2 billion as of December 26, 2010 compared to $1.1 billion as of September 26, 2010. Cash generated by operations was approximately $186 million during the December 2010 quarter. We used cash to prepay $50 million under a structured stock purchase agreement (see Note 15 to the Consolidated Financial Statements) and to purchase $38 million of property, plant, and equipment. Employee headcount increased to approximately 3,400 as of December 26, 2010, from approximately 3,300 as of September 26, 2010.

The increase in R&D expenses during the three months ended December 26, 2010 as compared to the same period in the prior year was due to approximately $5 million of increased salary, benefit, and travel costs related to higher headcount and $1 million of higher variable compensation associated with higher revenue and profit levels. The increase in R&D expenses during the six months ended December 26, 2010 as compared to the same period in the prior year was due to approximately $10 million of increased salary, benefit, and travel costs related to higher headcount, $8 million of higher variable compensation associated with higher revenue and profit levels, and $3 million of increased costs for supplies and outside services.

The increase in SG&A expenses for the December 2010 quarter compared to the same period in the prior year was primarily due to $9 million of higher variable compensation associated with higher revenue and profit levels, $5 million of increased costs for supplies and outside services, and $4 million of increased salary, benefit, and travel costs related to higher headcount. The increase in SG&A expenses for the six months ended December 26, 2010 compared to the same period in the prior year was primarily due to $21 million of higher variable compensation associated with higher revenue and profit levels, $9 million of increased salary, benefit, and travel costs related to higher headcount, and $6 million of increased costs for supplies and outside services.

Following the voluntary independent review of our historical employee stock option grant process in 2007, we considered whether Section 409A (Section 409A) of the Internal Revenue Code of 1986, as amended (IRC) and similar provisions of state law would apply to certain stock option grants that were found to have intrinsic value at the time of their respective measurement dates. If a stock option is not considered as issued with an exercise price of at least the fair market value of the underlying stock on the date of grant, it may be subject to penalty taxes under Section 409A and similar provisions of state law. Under those circumstances, taxes may be assessed not only on the intrinsic value increase, but on the entire stock option gain as measured at various times. On March 30, 2008, our Board of Directors authorized us to assume potential tax liabilities of certain employees, including our Chief Executive Officer and certain other executive officers, relating to options that might be subject to Section 409A and similar provisions of state law. Those liabilities totaled $51 million; $45 million was recorded in operating expenses and $6 million in cost of goods sold in our Consolidated Statements of Operations for fiscal year 2008. We incurred $3 million of expense during fiscal year 2009 consisting of interest and legal fees.

Read the The complete Report

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