Second Quarter Notables:
- Total sales up 11% year-over-year, semiconductor test solutions (STS) up 16%
- RF Power Amplifier market rebounds, low end analog strongest in over three years
- Strong, broad based demand drives growth for fiscal Q3 and beyond
NORWOOD, Mass., Feb. 21, 2017 (GLOBE NEWSWIRE) -- Xcerra Corporation (NASDAQ:XCRA), today announced financial results for its second fiscal quarter ended January 31, 2017.
Net sales for the quarter were $80,124,000, compared to the prior quarter’s net sales of $80,085,000. GAAP net income for the quarter was $2,572,000, or $0.05 per diluted share. Excluding restructuring totaling $299,000 and amortization of purchased intangible assets of $180,000, non-GAAP net income for the quarter was $3,051,000, or $0.06 per diluted share.
Dave Tacelli, president and chief executive officer, commented, “We had a solid Q2, with revenue at the higher end of our guidance but more importantly earnings above our business model. Early in January we started to see positive business trends developing and those have accelerated into our third fiscal quarter. This includes strength in both our Semi Test Solutions (STS), as well as our Electronics Manufacturing Solutions (EMS) business segments. Demand for our STS products is especially high as we plan to ship a record number of Diamondx systems during the quarter. This is partly due to the share gains from the strong adoption by multiple customers of our flat panel display driver test solution. We are also experiencing increasing demand for our tri temp MT2168 XT P&P handler from a variety of new customers. While visibility is typically limited to one quarter, we have a high degree of confidence the positive business trends we are currently seeing will continue beyond our third fiscal quarter.”
Third Quarter Fiscal 2017 Outlook
For the fiscal quarter ending April 30, 2017, net sales are expected to be in the range of $95 million to $99 million. Non-GAAP net income for the quarter is expected to be in the range of $0.10 to $0.14 per share, assuming 54.7 million shares outstanding. The non-GAAP net income guidance excludes amortization of purchased intangible assets of approximately $0.2 million.
The Company will conduct a conference call today, February 21, 2017 at 10:00 AM EST to discuss this release. The conference call may be accessed via telephone by dialing (877) 853-5334. The call will be simulcast via the Xcerra web site http://xcerra.com/investors/events-presentations/. Audio replays of the call can be heard through February 24, 2017, via telephone, by dialing (855) 859-2056; conference ID number 66523985. A replay of the webcast can be accessed by visiting our web site 90 minutes following the conference call at http://xcerra.com/investors/events-presentations/.
Information About Non-GAAP Measures
Xcerra 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, 2017 excludes the amortization of purchased intangible assets and restructuring charges. Management believes these non-GAAP measures are 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
Any statements in this presentation about future expectations, plans and prospects for the Company, including financial guidance on revenue, financial operating results (including net income or loss), and earnings or loss per share, continued customer adoption of recent product introductions, product developments, potential customer expansion and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the Company's use of the words "believes," "anticipates," "plans," "expects," "may," "will," "would," "should," "intends," "estimates," "seeks" or similar expressions, whether negative or affirmative. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements as a result of various important factors, including, but not limited to, the fluctuations in the demand for semiconductor devices, the ability of the Company to win orders from customers for the testing and handling of their new generation semiconductor devices and/or manufacturing processes, the fluctuations in the demand of our customer's devices in the marketplace, the Company's ability to timely develop new products, options and software applications and the level of customer demand for such products, options and software applications, the Company's ability to meet acceptance requirements for newly developed products, the conditions affecting markets in which we compete, and the Company's ability to meet its debt service obligations under its existing credit arrangement with Silicon Valley Bank, as well as the other important factors as are described in the Company's filings with the U.S. Securities and Exchange Commission, including those included under the heading "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2016. The Company disclaims any intention or obligation to update any forward-looking statements after the date of this presentation.
About Xcerra
Xcerra Corporation is comprised of four businesses in the semiconductor and electronics manufacturing test markets: atg-Luther & Maelzer, Everett Charles Technologies, LTX-Credence and Multitest. The combination of these businesses creates a company with a broad spectrum of semiconductor and PCB test expertise that drives innovative new products and services, and the ability to deliver to customers fully integrated semiconductor test cell solutions. The Company addresses the broad, divergent requirements of the mobility, industrial, automotive and consumer end markets, offering a comprehensive portfolio of solutions and technologies, and a global network of strategically deployed applications and support resources. Additional information can be found at www.xcerra.com or at each product group’s website; www.atg-lm.com, www.ectinfo.com, www.ltxc.com and www.multitest.com.
Xcerra is a trademark of Xcerra Corporation.
All other trademarks are the property of their respective owners.
| Xcerra Corporation | ||||||
| Consolidated Balance Sheets | ||||||
| (in thousands) | ||||||
| ASSETS | January 31, 2017 | July 31, 2016 | ||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 82,518 | $ | 83,065 | ||
| Marketable securities | 55,288 | 56,356 | ||||
| Accounts receivable - trade, net | 69,780 | 76,513 | ||||
| Accounts receivable - other, net | 562 | 304 | ||||
| Inventories, net | 74,514 | 69,986 | ||||
| Prepaid expenses and other current assets | 11,239 | 8,546 | ||||
| Assets held for sale | 994 | 2,448 | ||||
| Total current assets | 294,895 | 297,218 | ||||
| Property and equipment, net | 26,601 | 25,483 | ||||
| Intangible assets, net | 9,059 | 9,429 | ||||
| Goodwill | 43,850 | 43,850 | ||||
| Other assets | 2,222 | 2,103 | ||||
| Total assets | $ | 376,627 | $ | 378,083 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities | ||||||
| Current portion of long-term debt | $ | 3,128 | $ | 2,822 | ||
| Accounts payable | 24,515 | 25,924 | ||||
| Other accrued expenses | 30,570 | 31,588 | ||||
| Deferred revenues | 6,331 | 6,196 | ||||
| Total current liabilities | 64,544 | 66,530 | ||||
| Term Loan | 19,528 | 21,197 | ||||
| Other long-term liabilities | 8,701 | 8,518 | ||||
| Stockholders' equity | 283,854 | 281,838 | ||||
| Total liabilities and stockholders' equity | $ | 376,627 | $ | 378,083 | ||
| Xcerra Corporation | ||||||||||||
| Consolidated Statements of Operations | ||||||||||||
| (in thousands, except earnings per share data) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| January 31, | January 31, | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Net sales | $ | 80,124 | $ | 72,334 | $ | 160,209 | $ | 150,735 | ||||
| Cost of sales | 45,338 | 42,629 | 91,063 | 88,898 | ||||||||
| Gross profit | 34,786 | 29,705 | 69,146 | 61,837 | ||||||||
| Engineering and product development expenses | 15,013 | 14,834 | 30,309 | 29,897 | ||||||||
| Selling, general, and administrative expenses | 18,084 | 18,907 | 36,545 | 36,860 | ||||||||
| Amortization of purchased intangible assets | 180 | 296 | 370 | 710 | ||||||||
| Restructuring | 299 | 252 | 406 | 384 | ||||||||
| Income (loss) from continuing operations | 1,210 | (4,584 | ) | 1,516 | (6,014 | ) | ||||||
| Other income, net | 1,123 | 449 | 1,443 | 1,912 | ||||||||
| Income (loss) from continuing operations before provision for income taxes | 2,333 | (4,135 | ) | 2,959 | (4,102 | ) | ||||||
| (Benefit) provision for income taxes | (239 | ) | 1,680 | 369 | 2,591 | |||||||
| Income (loss) from continuing operations | 2,572 | (5,815 | ) | 2,590 | (6,693 | ) | ||||||
| Income from discontinued operations, net of tax | - | 8,363 | - | 7,576 | ||||||||
| Net income | $ | 2,572 | $ | 2,548 | $ | 2,590 | $ | 883 | ||||
| Basic net income (loss) per share: | ||||||||||||
| Net income (loss) from continuing operations | $ | 0.05 | $ | (0.11 | ) | $ | 0.05 | $ | (0.12 | ) | ||
| Net income from discontinued operations, net of tax | 0.00 | 0.16 | 0.00 | 0.14 | ||||||||
| Basic net income per share | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.02 | ||||
| Diluted net income (loss) per share: | ||||||||||||
| Net income (loss) from continuing operations | $ | 0.05 | $ | (0.11 | ) | $ | 0.05 | $ | (0.12 | ) | ||
| Net income from discontinued operations, net of tax | 0.00 | 0.16 | 0.00 | 0.14 | ||||||||
| Diluted net income per share | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.02 | ||||
| Weighted-average common shares used in computing net income (loss) per share: | ||||||||||||
| Basic | 54,120 | 53,608 | 53,993 | 54,049 | ||||||||
| Diluted | 54,562 | 53,608 | 54,472 | 54,141 | ||||||||
| Xcerra Corporation | |||||||||||||||||
| Reconciliation of GAAP Net Income to Non-GAAP Net (Loss) Income | |||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months | Basic | Diluted | Three Months | Basic | Diluted | ||||||||||||
| Ended | Earnings | Earnings | Ended | Earnings | Earnings | ||||||||||||
| January 31, 2017 | Per Share | Per Share | January 31, 2016 | Per Share | Per Share | ||||||||||||
| GAAP net income | $ | 2,572 | $ | 0.05 | $ | 0.05 | $ | 2,548 | $ | 0.05 | $ | 0.05 | |||||
| (Income) from discontinued operations | - | - | - | (8,363 | ) | (0.16 | ) | (0.16 | ) | ||||||||
| Amortization of purchased intangible assets | 180 | 0.00 | 0.00 | 296 | 0.01 | 0.01 | |||||||||||
| Restructuring | 299 | 0.01 | 0.01 | 252 | 0.00 | 0.00 | |||||||||||
| Non-GAAP net (loss) income | $ | 3,051 | $ | 0.06 | $ | 0.06 | $ | (5,267 | ) | $ | (0.10 | ) | $ | (0.10 | ) | ||
| Weighted average shares outstanding: | 54,120 | 54,562 | 53,608 | 53,608 | |||||||||||||
| Six Months | Basic | Diluted | Six Months | Basic | Diluted | ||||||||||||
| Ended | Earnings | Earnings | Ended | Earnings | Earnings | ||||||||||||
| January 31, 2017 | Per Share | Per Share | January 31, 2016 | Per Share | Per Share | ||||||||||||
| GAAP net income | $ | 2,590 | $ | 0.05 | $ | 0.05 | $ | 883 | $ | 0.02 | $ | 0.02 | |||||
| (Income) from discontinued operations | - | - | - | (7,576 | ) | (0.14 | ) | (0.14 | ) | ||||||||
| Amortization of purchased intangible assets | 370 | 0.01 | 0.01 | 710 | 0.01 | 0.01 | |||||||||||
| Restructuring | 406 | 0.01 | 0.01 | 384 | 0.01 | 0.01 | |||||||||||
| Non-GAAP net (loss) income | $ | 3,366 | $ | 0.06 | $ | 0.06 | $ | (5,599 | ) | $ | (0.10 | ) | $ | (0.10 | ) | ||
| Weighted average shares outstanding: | 53,993 | 54,472 | 54,049 | 54,141 | |||||||||||||