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EX-10.1 - EX-10.1 - Xcerra Corpd533034dex101.htm
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Exhibit 99.1

 

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Xcerra Announces Second Quarter Results

Second Fiscal Quarter Notables:

 

    Second quarter sales of $110.3 million

 

    GAAP net income of $7.9 million or $0.14 per diluted share

 

    Non-GAAP net income of $10.6 million or $0.19 per diluted share

 

    Record sales and earnings for a second fiscal quarter

Norwood, Mass, February 22, 2018 — Xcerra Corporation (NASDAQ:XCRA) today announced financial results for its second fiscal quarter ended January 31, 2018.

Net sales for the quarter were $110,276,000 compared to the prior quarter’s net sales of $120,286,000. GAAP net income for the quarter was $7,931,000, or $0.14 per diluted share. Excluding restructuring and related provision charges of $1,070,000, acceleration of debt financing costs of $891,000, amortization of purchased intangible assets of $137,000, and deal related expenses of $536,000, non-GAAP net income for the quarter was $10,565,000, or $0.19 per diluted share.    

Dave Tacelli, president and chief executive officer, commented, “We reported record second quarter sales and profit for what is usually our seasonally slow fiscal quarter. Our sales were up nearly 40% and non-GAAP net income up approximately 200% compared to fiscal Q2FY17. Early indications for calendar 2018 are that the favorable business cycle will continue, driven by the automotive, industrial and mobility markets. In addition to the strong business environment, we gained share in all of our major product areas in calendar year 2017, and look to extend those gains in 2018.

During the fiscal year, we made an investment in a Malaysian-based handler company which will expand our addressable market. We expect to launch a new product from this investment in the second half of the calendar year.”

Third Quarter Fiscal 2018 Outlook

For the fiscal quarter ending April 30, 2018, net sales are expected to be in the range of $110 million to $115 million. Non-GAAP net income per share is expected to be in the range of $0.19 to $0.23 per share, assuming 56 million shares outstanding. The non-GAAP net income per share guidance excludes amortization of purchased intangible assets of approximately $0.1 million.


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The Company will conduct a conference call tomorrow, February 23, 2018, at 8:30AM 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://www.xcerra.com/events-presentations.html. Audio replays of the call can be heard through March 2, 2018, via telephone by dialing 855.859.2056; conference ID number 1687266. 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 January 31, 2018 excludes the amortization of purchased intangible assets, restructuring charges, 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, 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, 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, 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


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which we compete, 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, 2017. 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

Investor Contact:

Richard Yerganian,

Vice President, Investor Relations

Xcerra Corporation

Tel. 781.467.5063

Email rich.yerganian@xcerra.com

Xcerra is a trademark of Xcerra Corporation.

All other trademarks are the property of their respective owners.

Source: Xcerra Corporation.


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Xcerra Corporation

Consolidated Balance Sheets

(in thousands)

 

     January 31, 2018      July 31, 2017  
ASSETS      

Current assets

     

Cash and cash equivalents

   $ 118,223      $ 103,637  

Marketable securities

     52,825        57,087  

Accounts receivable, net

     77,138        92,963  

Inventories, net

     87,240        81,509  

Prepaid expenses and other current assets

     10,486        19,087  

Assets held for sale

     850        994  
  

 

 

    

 

 

 

Total current assets

     346,762        355,277  
  

 

 

    

 

 

 

Property and equipment, net

     30,091        28,509  

Intangible assets, net

     8,458        8,752  

Goodwill

     45,873        43,850  

Other assets

     2,191        2,225  
  

 

 

    

 

 

 

Total assets

   $ 433,375      $ 438,613  
  

 

 

    

 

 

 
LIABILITIES AND EQUITY      

Current liabilities

     

Current portion of long-term debt

   $ 362      $ 3,779  

Accounts payable

     24,005        36,249  

Other accrued expenses

     39,843        50,262  

Deferred revenues

     8,123        8,085  
  

 

 

    

 

 

 

Total current liabilities

     72,333        98,375  
  

 

 

    

 

 

 

Term Loan

     2,276        17,547  

Other long-term liabilities

     9,203        9,012  

Stockholders’ equity

     347,828        313,679  

Noncontrolling interest

     1,735        —    
  

 

 

    

 

 

 

Total liabilities and equity

   $ 433,375      $ 438,613  
  

 

 

    

 

 

 


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Xcerra Corporation

Consolidated Statements of Operations

(in thousands, except earnings per share data)

(unaudited)

 

     Three Months Ended     Six Months Ended  
     January 31,     January 31,  
     2018     2017     2018     2017  

Net sales

   $ 110,276     $ 80,124     $ 230,562     $ 160,209  

Cost of sales

     59,726       45,338       120,597       91,063  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     50,550       34,786       109,965       69,146  

Engineering and product development expenses

     16,592       15,013       33,731       30,309  

Selling, general, and administrative expenses

     21,986       18,084       43,271       36,545  

Amortization of purchased intangible assets

     137       180       294       370  

Restructuring

     550       299       685       406  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     11,285       1,210       31,984       1,516  

Other (expense) income, net

     (2,123     1,123       (2,333     1,443  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before provision for (benefit from) income taxes

     9,162       2,333       29,651       2,959  

Provision for (benefit from) income taxes

     1,388       (239     4,176       369  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 7,774     $ 2,572     $ 25,475     $ 2,590  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to noncontrolling interest

   $ (157   $ —       $ 13     $ —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Xcerra

   $ 7,931     $ 2,572     $ 25,462     $ 2,590  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net income per share attributable to Xcerra:

        

Basic net income per share

   $ 0.14     $ 0.05     $ 0.47     $ 0.05  

Diluted net income per share

   $ 0.14     $ 0.05     $ 0.46     $ 0.05  

Weighted-average common shares used in computing net income per share:

        

Basic

     54,836       54,120       54,720       53,993  

Diluted

     55,450       54,562       55,659       54,472  


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Xcerra 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, 2018      Per Share      Per Share      January 31, 2017      Per Share      Per Share  

GAAP net income attributable to Xcerra

   $ 7,931      $ 0.14      $ 0.14      $ 2,572      $ 0.05      $ 0.05  

Legal and transaction fees

     536        0.01        0.01        503        0.01        0.01  

Acceleration of debt financing costs

     891        0.02        0.02        —          —          —    

Amortization of purchased intangible assets

     137        0.00        0.00        180        0.00        0.00  

Restructuring and related provisions

     1,070        0.02        0.02        299        0.01        0.01  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP net income attributable to Xcerra

   $ 10,565      $ 0.19      $ 0.19      $ 3,554      $ 0.07      $ 0.07  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding

        54,836        55,450           54,120        54,562  
     Six Months      Basic      Diluted      Six Months      Basic      Diluted  
     Ended      Earnings      Earnings      Ended      Earnings      Earnings  
     January 31, 2018      Per Share      Per Share      January 31, 2017      Per Share      Per Share  

GAAP net income attributable to Xcerra

   $ 25,462      $ 0.47      $ 0.46      $ 2,590      $ 0.05      $ 0.05  

Legal and transaction fees

     1,171        0.02        0.02        503        0.01        0.01  

Acceleration of debt financing costs

     891        0.02        0.02        —          —          —    

Amortization of purchased intangible assets

     294        0.01        0.01        370        0.01        0.01  

Restructuring and related provisions

     1,205        0.02        0.02        406        0.01        0.01  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP net income attributable to Xcerra

   $ 29,023      $ 0.53      $ 0.52      $ 3,869      $ 0.07      $ 0.07  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding

        54,720        55,659           53,993        54,472