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Xcerra Announces Fourth Quarter and Fiscal Year Results

Fourth Fiscal Quarter Notables:

  • Grew sales 11% over the previous quarter
  • Shipped initial Diamondx testers for Flat Panel Display driver devices
  • Successfully completed technical evaluation with second potential customer for InCarrier
  • Shipped first MT2168 handlers to customers for ambient, hot and cold test

NORWOOD, Mass., Sept. 01, 2016 (GLOBE NEWSWIRE) -- Xcerra Corporation (NASDAQ:XCRA), today announced financial results for its fourth fiscal quarter and fiscal year ended July 31, 2016.

Net sales for the quarter were $91,234,000, compared to the prior quarter's sales of $82,237,000. GAAP net income for the quarter was $7,134,000, or $0.13 per diluted share. Excluding the loss from discontinued operations of the Board business of $1,050,000, tax benefit from divestiture of $2,530,000, restructuring charges of $420,000, and amortization of purchased intangible assets of $246,000, non-GAAP net income for the quarter was $6,320,000, or $0.12 per diluted share. 

For the twelve-month period ended July 31, 2016, sales were $324,206,000. GAAP net income was $11,174,000, or $0.20 per diluted share. Excluding the income from discontinued operations of the Board business of $8,715,000, tax benefit from divestiture of $3,323,000, restructuring charges of $924,000, other one-time net expenses totaling $601,000, and amortization of purchased intangible assets of $1,203,000, non-GAAP net income for the year was $1,864,000, or $0.03 per diluted share.

Dave Tacelli, chief executive officer and president, commented, "We experienced a solid quarter with earnings above the high end of guidance. In addition, we made considerable progress in several key product areas. We received the first revenues for Diamondx testers used in high volume production test of flat panel display driver devices, we successfully completed the technical evaluation with a second customer of our InCarrier Wafer Level Chip Scale Package (WLCSP) device handling solution, and we shipped the first units of the MT2168 to multiple customers for Ambient-Hot-Cold testing.

“As our guidance indicates, softening business conditions are affecting the industry. The progress we have made in these key product areas should allow us to perform relatively better than the market as we go through the near term industry weakness and the typically seasonally weak fourth calendar quarter.”

First Quarter Fiscal 2017 Outlook

For the fiscal quarter ending, October 31, 2016, net sales are expected to be in the range of $80 million to $84 million.  Non-GAAP net income for the quarter is expected to be in the range of ($0.03) to $0.01 per share, assuming 54 million fully diluted 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, September 1, 2016, at 10:00 AM EDT 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://www.xcerra.com/events-presentations.html.  Audio replays of the call can be heard through September 3, 2016 via telephone, by dialing 855.859.2056; conference ID number 63885692.  A replay of the webcast can be accessed by visiting our web site 90 minutes following the conference call at http://www.xcerra.com/events-presentations.html.

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 July 31, 2016 excludes the amortization of purchased intangible assets, restructuring charges, discontinued operations, and other one-time adjustments.  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, 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 whether the Company is able to timely develop new products, options and software applications,  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 the markets in which we compete, 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 April 30, 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     July 31, 2016     July 31, 2015 
     (unaudited)     
Current assets         
Cash and cash equivalents   $ 83,065     $ 77,858  
Marketable securities     56,356       60,593  
Accounts receivable - trade, net     76,513       81,313  
Accounts receivable - other, net     304       326  
Inventories, net     69,986       60,593  
Prepaid expenses and other current assets     8,546       8,393  
Assets held for sale     2,448       10,454  
Total current assets     297,218       299,530  
         
Property and equipment, net     25,483       31,450  
Intangible assets, net     9,429       10,640  
Goodwill     43,850       43,850  
Other assets     2,103       2,005  
Total assets   $ 378,083     $ 387,475  
         
 LIABILITIES AND STOCKHOLDERS' EQUITY         
Current liabilities         
Current portion of long-term debt   $ 2,822     $ 2,509  
Accounts payable     25,924       27,492  
Other accrued expenses     31,588       35,579  
Deferred revenues     6,196       7,466  
Liabilities held for sale     -       1,147  
Total current liabilities     66,530       74,193  
         
Term Loan     21,197       23,938  
Other long-term liabilities     8,518       10,876  
Stockholders' equity     281,838       278,468  
Total liabilities and stockholders' equity   $ 378,083     $ 387,475  
         

 

Xcerra Corporation            
Consolidated Statements of Operations            
(in thousands, except earnings per share data)             
(unaudited)             
    Three Months Ended   Twelve Months Ended
    July 31,   July 31, 
    2016
  2015
  2016
  2015
                               
Net sales   $ 91,234   $ 102,072     $ 324,206     $ 397,978  
Cost of sales     49,049     56,588       184,280       218,064  
Gross profit     42,185     45,484       139,926       179,914  
             
Engineering and product development expenses     15,594     16,210       60,929       64,157  
Selling, general, and administrative expenses     20,407     21,376       76,742       82,124  
Amortization of purchased intangible assets     246     424       1,203       1,834  
Restructuring     420     739       924       2,206  
Income from continuing operations     5,518     6,735       128       29,593  
             
Other income, net     178     967       670       4,513  
















Income from continuing operations before provision for income taxes     5,696     7,702       799       34,106  
Benefit from income taxes     (2,488 )   (705 )     (1,660 )     2,588  
Income from continuing operations     8,184     8,407       2,459       31,518  
Income (loss) from discontinued operations, net of tax     (1,050 )   (911 )     8,715       (3,292 )
Net income   $ 7,134   $ 7,496     $ 11,174     $ 28,226  
             
Basic net income (loss) per share:            
Net income from continuing operations   $ 0.15   $ 0.15     $ 0.05     $ 0.59  
Net income (loss) from discontinued operations, net of tax     (0.02 ) $ (0.02 )     0.16       (0.06 )
Basic net income per share   $ 0.13   $ 0.14     $ 0.21     $ 0.53  
             
Diluted net income (loss) per share:            
Net income from continuing operations   $ 0.15   $ 0.15     $ 0.05     $ 0.58  
Net income (loss) from discontinued operations, net of tax     (0.02 )   (0.02 )     0.16     $ (0.06 )
Diluted net income per share   $ 0.13   $ 0.14     $ 0.21     $ 0.52  
             
Weighted-average common shares used in computing net income (loss) per share:            
Basic     53,525     54,591       53,783       53,658  
Diluted     53,741     55,121       53,974       54,531  
             

 

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 
 
  July 31, 2016
    Per Share 
    Per Share 
    July 31, 2015
    Per Share 
    Per Share 
 
                                               
GAAP net income  $   7,134     $   0.13     $   0.13     $   7,496     $   0.14     $   0.14  
Loss from discontinued operations     1,050         0.02         0.02         911         0.02         0.02  
Amortization of purchased intangible assets      246         0.00         0.00         424         0.01         0.01  
Restructuring      420         0.01         0.01         739         0.01         0.01  
Tax benefit from divestiture     (2,530 )       (0.05 )       (0.05 )       -          -          -   
Reversal of indemnification accrual     -          -          -          (1,500 )       (0.03 )       (0.03 )
Acquisition and integration related expenses     -          -          -          649         0.01         0.01  
Non-GAAP net income  $   6,320     $   0.12     $   0.12     $   8,719     $   0.16     $   0.16  
                                               
Weighted average shares outstanding:           53,525       53,741                 54,591         55,121  
                                               
                                               
  Twelve Months
    Basic 
    Diluted
    Twelve Months
    Basic
     Diluted
 
  Ended 
    Earnings 
    Earnings 
    Ended 
    Earnings 
    Earnings 
 
  July 31, 2016
    Per Share 
    Per Share 
    July 31, 2015
    Per Share 
    Per Share 
 
                                               
GAAP net income  $   11,174     $   0.21     $   0.21     $   28,226     $   0.53     $   0.52  
(Income) loss from discontinued operations     (8,715 )       (0.16 )       (0.16 )       3,292         0.06         0.06  
Amortization of purchased intangible assets      1,203         0.02         0.02         1,834         0.03         0.03  
Restructuring      924         0.02         0.02         2,206         0.04         0.04  
Impairment of property held for sale     601         0.01         0.01         -          -          -   
Tax benefit from divestiture     (3,323 )       (0.06 )       (0.06 )       -          -          -   
Reversal of indemnification accrual     -          -          -          (1,500 )       (0.03 )       (0.03 )
Amortization of inventory step up for purchase accounting      -          -          -          1,991         0.04         0.04  
Acquisition and integration related expenses     -          -          -          649         0.01         0.01  
Gain from financing activities (Other income, net)     -          -          -          (2,685 )       (0.05 )       (0.05 )
Non-GAAP net income $   1,864     $   0.03     $   0.03     $   34,013     $   0.63     $   0.62  
                                               
Weighted average shares outstanding:     53,783       53,974         53,658       54,531  
                                               
Investor Contact:

Richard Yerganian, 
Vice President, Investor Relations
Xcerra Corporation
Tel. 781.467.5063
Email rich.yerganian@xcerra.com

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