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., Feb. 22, 2018 (GLOBE NEWSWIRE) -- 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.

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 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.

Xcerra Corporation
Consolidated Balance Sheets
(in thousands)
ASSETS January 31, 2018 July 31, 2017
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
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
Liabilities held for sale - -
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

Xcerra Corporation
Consolidated Statements of Operations
(in thousands, except earnings per share data)
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

Xcerra Corporation
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands, except per share amounts)
Three Months Basic Diluted Three Months Basic Diluted
Ended Earnings Earnings Ended Earnings Earnings
January 31, 2018Per Share Per Share January 31, 2017Per 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 MonthsBasic Diluted
Ended Earnings Earnings Ended Earnings Earnings
January 31, 2018Per Share Per Share January 31, 2017Per 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

Source:Xcerra Corporation