updated 2/24/2011 7:16:47 AM ET 2011-02-24T12:16:47

MILPITAS, Calif., Feb. 24, 2011 (GLOBE NEWSWIRE) -- LTX-Credence Corporation (Nasdaq:LTXC), a global provider of focused, cost-optimized ATE solutions, today announced financial results for its fiscal quarter ended January 31, 2011.

Sales for the quarter were $52,549,000, compared to the prior quarter sales of $75,647,000. Net income for the quarter was $4,705,000, or $0.09 per diluted share on a GAAP basis. Excluding the impact of expenses related to the proposed merger with Verigy, Ltd. (Nasdaq:VRGY) totaling approximately $2,800,000, and amortization of purchased intangible assets of $1,490,000, net income for the quarter was $8,995,000, or $0.18 per diluted share on a non-GAAP basis.   

Dave Tacelli, chief executive officer and president, commented, "As predicted, revenues declined sequentially, and were slightly below guidance, while our earnings exceeded the high end of guidance of $0.11 to $0.16 per share by $0.02 as the business model continues to deliver strong results during this mid-cycle correction.

"During the quarter, we introduced two new products. PAx, an X-Series based tester, is focused on the RF power amplifier and front end module market. We expect PAx to strengthen our position as the leading supplier of commercial test equipment for RF power amplifier and front end module devices and already have multiple customers using it for volume production testing. We also introduced the ASLx, the first product to combine technology from LTX and Credence into a new test solution that provides more functionality and enhanced multi-site test capability for the analog/power semiconductor market. The ASLx also preserves our customers' investments by maintaining compatibility with the approximately 3,500 ASL test systems currently being used around the world for production testing of analog/power devices.

"Our guidance for the third fiscal quarter confirms what many have been predicting, that our industry would experience a mid-cycle correction through the first calendar quarter of 2011, but would return to growth following that correction."

Third Quarter Fiscal 2011 Outlook

For the fiscal quarter ending April 30, 2011, revenue is expected to be in the range of $57 million to $61 million.  Non-GAAP net income is expected to be in the range of $0.17 to $0.21 per share, assuming 50 million fully diluted shares outstanding. The non-GAAP net income guidance excludes amortization of purchased intangible assets of approximately $1.5 million, and any expenses related to the proposed merger with Verigy, Ltd.

The Company will conduct a conference call today, February 24, 2011, at 10:00 AM EST to discuss this release. The conference call may be accessed via telephone by dialing 877.853.5334. The conference call will also be simulcast via the LTX-Credence web site ( www.ltxc.com ).  Audio replays of the call can be heard through March 23, 2011 via telephone by dialing 800.642.1687, Conference ID number 39934113 or by visiting our web site at www.ltxc.com.

Information About Non-GAAP Measures

LTX-Credence supplements its GAAP financial results by providing non-GAAP measures to evaluate the operating performance of the Company. Non-GAAP net income for the quarter ended January 31, 2011 excludes the amortization of purchased intangible assets and expenses related to the proposed merger with Verigy, Ltd. Management finds these non-GAAP measures to be useful for internal comparison to historical operating results as well as to the operating results of its competitors, and believes that this information is useful to investors for the same purposes. A reconciliation between the Company's GAAP and non-GAAP results is provided in the attached tables. Readers are reminded that non-GAAP information is merely a supplement to, and not a replacement for, GAAP financial measures. 

Safe Harbor for Forward-Looking Statements

Statements in this release regarding guidance for LTX-Credence's third fiscal quarter, including the financial guidance on revenue and earnings or loss per share, financial operating results including net income or loss and earnings or loss per share, management's expectations as to the future condition of LTX-Credence's industry and the overall economic environment, and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward‑looking statements within the meaning of the United States securities laws, including the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "targets", "anticipates," "plans," "expects," "may," "will," "would," "intends," "estimates" and similar expressions) should also be considered to be forward‑looking statements. These statements are subject to known and unknown risks and uncertainties that could cause actual results or events to differ materially from those stated or implied, including but not limited to: uncertain global economic and industry conditions, fluctuations in business and consumer spending; fluctuations in our sales and operating results; risks related to the timely development of new products, options and software applications, as well as the other risks described in our filings with the U.S. Securities and Exchange Commission, including those included under the heading "Business Risks" in our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2010. LTX-Credence disclaims any intention or obligation to update any forward‑looking statements as a result of developments occurring after the date of this press release.

About LTX-Credence Corporation

LTX-Credence is a global provider of ATE solutions designed to deliver value through innovation enabling customers to implement best-in-class test strategies to maximize their profitability. LTX-Credence addresses the broad, divergent test requirements of the wireless, computing, automotive and entertainment market segments, offering a comprehensive portfolio of technologies, the largest installed base in the Asia-Pacific region, and a global network of strategically deployed applications and support resources. Additional information can be found at www.ltxc.com .

LTX-Credence and LTXC are trademarks of LTX-Credence Corporation. 
All other trademarks are the property of their respective owners.

LTX-Credence Corporation 
Consolidated Balance Sheets
 (in thousands) 
 (unaudited) 
     
 ASSETS  January 31, 2011 July 31, 2010
 Current assets     
 Cash and cash equivalents   $ 90,820  $ 74,978
 Marketable securities  34,827 18,458
 Accounts receivable - trade, net  36,544 45,622
 Accounts receivable - other, net  441 1,174
 Inventories, net  19,447 21,039
 Prepaid expenses and other current assets  5,570 4,585
 Total current assets  187,649 165,856
     
 Property and equipment, net  23,172 26,277
 Intangible assets, net  9,297 12,277
 Goodwill  43,030 43,030
 Other assets  696 771
 Total assets   $ 263,844  $ 248,211
     
 LIABILITIES AND STOCKHOLDERS' EQUITY     
 Current liabilities     
 Current portion of long-term debt   $ 857  $ 826
 Accounts payable  14,337 16,639
 Other accrued expenses  24,757 29,090
 Deferred revenues and customer advances  5,071 8,317
 Total current liabilities  45,022 54,872
     
 Other long-term liabilities  16,061 16,587
 Stockholder's equity  202,761 176,752
 Total liabilities and stockholders' equity   $ 263,844  $ 248,211
         
LTX-Credence Corporation
Consolidated Statements of Operations
(in thousands, except earnings per share data)
(unaudited)
  Three Months Ended Six Months Ended
  January 31,  January 31,
  2011 2010 2011 2010
         
Net sales  $ 52,549  $ 48,000  $ 128,196  $ 89,850
Cost of sales 21,126 22,038 49,527 43,682
Gross profit  31,423 25,962 78,669 46,168
         
Engineering and product development expenses 12,895 12,000 25,874 23,841
Selling, general, and administrative expenses 12,691 9,240 25,856 17,880
Amortization of purchased intangible assets  1,490  2,664  2,980  5,328
Restructuring   --   816 116  1,239
Income (loss) from operations 4,347 1,242 23,843 (2,120)
         
Other income (expense), net 211 (205) 402 11
Income (loss) before provision (benefit) for income taxes 4,558 1,037 24,245 (2,109)
(Benefit) Provision for income taxes (147) 224 (135) 271
Net income (loss)  $ 4,705  $ 813  $ 24,380  $ (2,380)
         
Net income (loss) per share:        
         
Basic  $ 0.10  $ 0.02  $ 0.49  $ (0.06)
Diluted  $ 0.09  $ 0.02  $ 0.49  $ (0.06)
         
Weighted average shares outstanding:        
         
Basic 49,384 42,845 49,279 42,683
Diluted 50,042 43,378 50,094 42,683
             
LTX-Credence Corporation 
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands, except per share amounts)
(unaudited)
             
  Three Months  Basic  Diluted  Three Months  Basic  Diluted 
  Ended  Earnings  Earnings  Ended  Earnings  Earnings 
  January 31, 2011 Per Share  Per Share  January 31, 2010 Per Share  Per Share 
             
GAAP net income  $ 4,705  $ 0.10  $ 0.09  $ 813  $ 0.02  $ 0.02
Amortization of purchased intangible assets  1,490 0.03 0.03  2,664 0.06 0.06
Restructuring   --  0.00 0.00  816 0.02 0.02
Merger-related expenses  2,800 0.06 0.06  --  0.00 0.00
Recovery of previously written off accounts receivable  --  0.00 0.00  (600) (0.01) (0.01)
             
Non-GAAP net income   $ 8,995  $ 0.18  $ 0.18  $ 3,693  $ 0.09  $ 0.09
             
             
             
Weighted average shares outstanding:    49,384  50,042    42,845  43,378
             
             
  Six Months Basic  Diluted  Six Months Basic  Diluted 
  Ended  Earnings  Earnings  Ended  Earnings  Earnings 
  January 31, 2011 Per Share  Per Share  January 31, 2010 Per Share  Per Share 
             
GAAP net income (loss)  $ 24,380  $ 0.49  $ 0.49  $ (2,380)  $ (0.06)  $ (0.06)
Amortization of purchased intangible assets  2,980 0.06 0.06  5,328 0.12 0.12
Restructuring   116 0.00 0.00  1,239 0.03 0.03
Merger-related expenses  2,800 0.06 0.06  --  0.00 0.00
Recovery of previously written off accounts receivable  --  0.00 0.00  (600) (0.01) (0.01)
             
Non-GAAP net income   $ 30,276  $ 0.61  $ 0.61  $ 3,587  $ 0.08  $ 0.08
             
             
             
Weighted average shares outstanding:    49,279  50,094    42,683  42,683
CONTACT: Rich Yerganian, LTX-Credence Corporation
         Tel. 781.467.5063
         Email rich_yerganian@ltxc.com

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