Exhibit 99.1
CONTACT:
Mark Gallenberger
LTX Corporation
781.467.5417 (t)
mark_gallenberger@ltx.com
www.ltx.com
LTX Announces Fourth Quarter and Fiscal Year Results
WESTWOOD, Mass. – August 27, 2003 – LTX Corporation (Nasdaq: LTXX), a leading provider of semiconductor test solutions, today announced financial results for its fourth quarter and fiscal year ended July 31, 2003. The operating results for the quarter exceeded the high end of Company guidance and showed continued improvement from the prior quarter.
Sales for the quarter were $33,654,000, up from $28,777,000 in the third quarter, with a net loss of $(81,531,000), or $(1.61) per share on a GAAP basis. Excluding one-time charges of $17.2 million associated with the acquisition of StepTech, and charges associated with an excess inventory reserve of $48.5 million, and applying the statutory 40% tax rate, the non-GAAP net loss for the quarter would have been $(9,507,000), or $(0.19) per share. Net loss for the third fiscal quarter was $(17,976,000), or $(0.36) per share on a GAAP basis. Applying the statutory 40% tax rate, the non-GAAP net loss for the third quarter would have been $(10,786,000), or $(0.22) per share. Sales were $32,630,000 for the fourth quarter of fiscal year 2002 and net loss was $(90,319,000), or $(1.84) per share on a GAAP basis. (Non-GAAP comparative information is provided at the end of this press release.) New orders for the quarter were $40.3 million, up 25% from the prior quarter, there were no customer cancellations. The book-to-bill ratio for the fourth quarter was 1.2 to 1. The Company won two new customers and several fabless companies committed production to the Fusion platform in the quarter.
For the twelve-month period ended July 31, 2003, sales were $119,449,000 compared to $121,273,000 in the preceding fiscal year. Net loss was $(145,068,000), or $(2.92) per share on a GAAP basis. Excluding the charges associated with the acquisition of StepTech, excess inventory and restructuring charge and applying a 40% statutory tax rate, the non-GAAP net loss would have been $(44,273,000) or $(0.89) per share for the year. For the prior fiscal year, net loss was $(149,880,000), or $(3.08) per
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LTX Announces Fourth Quarter and Fiscal Year Results
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share on a GAAP basis. Excluding a one-time, non-cash valuation allowance for net deferred tax assets and an excess inventory charge the non-GAAP net loss would have been $(44,374,000), or $(0.91) per share for the year.
The Company’s ending cash balances declined by $10.4 million during the quarter including an out-flow of $6.8 million of net cash used for the acquisition of StepTech. Excluding the StepTech acquisition, the Company bettered its fourth quarter forecast with cash balances declining by $3.5 million, compared to the expected $6 million.
Roger W. Blethen, chairman and chief executive officer of LTX commented, “We exceeded our financial operating targets for the quarter and achieved a 25% increase in new orders. During the quarter, we won two new customers, one a major U.S.-based diversified manufacturer (IDM) who chose Fusion as their next generation platform for automotive and power management products and the other a Taiwanese subcontract test company using Fusion to test DVD chips. Also, several fabless companies made the decision to use Fusion for the production test of their WLAN and BlueTooth devices.
With the successful introduction of Fusion HFi, a significant new variable was added to our quarterly inventory analysis. The HFi is meeting its complete technical specifications and is in production testing of advanced devices with customers. With the growing acceptance for Fusion HFi, our inventory analysis directed us to take an excess inventory reserve made up primarily of raw material.”
Mr. Blethen continued, “During the fiscal year, we achieved several strategic objectives; we successfully brought the newest Fusion configuration to market, Fusion HFi, we aggressively reduced our break-even level from the start of the fiscal year and we acquired and integrated StepTech, our Fusion CX development partner.
As we enter fiscal year 2004, LTX believes the new growth cycle is beginning to emerge with several indicators pointing to continued recovery in our industry. As business conditions improve, LTX believes that our efforts over the last couple of years of fully implementing a flexible business model should provide good leverage as we move forward into the next cycle.”
First Quarter 2004 Outlook
For the quarter ending October 31, 2003, revenue is expected to be in the range of $37 million to $40 million, with gross margin at approximately 26%. The earnings (loss) per share is projected to be a loss in the range of $(0.24) to $(0.27) assuming 51.7 million shares outstanding. This guidance
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LTX Announces Fourth Quarter and Fiscal Year Results
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does not include any provisions for one-time charges and does not include any tax benefit.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), we use certain non-GAAP financial measures identified above. These non-GAAP measures exclude certain charges and include tax effects. We believe that the use of such non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, and allows comparison of such results to previous periods or forecasts. LTX’s management uses these non-GAAP measures, in addition to GAAP financial measures, as a basis for measuring core operating performance, as well as comparing such performance to prior periods and to the performance of our competitors. These non-GAAP financial measures should not be considered as a substitute for the financial measures prepared in accordance with GAAP.
LTX’s financial guidance, however, is only provided on a non-GAAP basis. It is not feasible to provide guidance per GAAP because non-recurring charges are difficult to predict and estimate, and are primarily dependent on future events.
The Company will conduct a conference call today, August 27, 2003, at 4:30 PM EDT to discuss this release. The conference call will be simulcast via the LTX web site (www.ltx.com). Audio replays of the call can be heard through September 3, 2003 via telephone by dialing 888-286-8010, passcode 46255648 or by visiting our web site atwww.ltx.com.
“Safe Harbor” Statement: This press release contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that relate to prospective events or developments, including, without limitation, statements regarding our revenue, margin and earnings guidance, are deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “projects,” “forecasts,” “will” and similar expressions are intended to identify forward-looking statements. There are a number of important factors and risks that could cause actual results or events to differ materially from those indicated by these forward-looking statements. Such risks and factors include, but are not limited to, the risk of fluctuations in sales and operating results, risk related to the timely development of new products, options and software applications, as well as the
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LTX Announces Fourth Quarter and Fiscal Year Results
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other factors described under “Business Risks” in LTX’s most recently filed annual report on Form 10-K and in our most recently filed quarterly report on Form 10-Q filed with the Securities and Exchange Commission. We disclaim any intention or obligation to update any forward-looking statements.
LTX Corporation (Nasdaq: LTXX) is a leading supplier of test solutions for the global semiconductor industry. Fusion, LTX’s patented, scalable, single-platform test system, uses innovative technology to provide high-performance, cost-effective testing of system-on-a-chip, mixed signal, RF, digital and analog integrated circuits. Fusion addresses semiconductor manufacturers’ economic and performance requirements today, while enabling their technology roadmap of tomorrow. LTX’s web site iswww.ltx.com.
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LTX and Fusion are registered trademarks and enVision++ is a trademark of LTX Corporation.
LTX CORPORATION
CONSOLIDATED BALANCE SHEET
(Audited)
(In thousands)
| | | July 31,
2003
| | July 31,
2002
|
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash equivalents | | $ | 73,167 | | $ | 144,467 |
Short term investments | | | 63,416 | | | 72,691 |
Accounts receivable—trade | | | 12,033 | | | 19,308 |
Accounts receivable—other | | | 5,192 | | | 10,269 |
Inventories | | | 66,852 | | | 95,152 |
Prepaid expense | | | 10,989 | | | 30,694 |
| | |
|
| |
|
|
Total current assets | | | 231,649 | | | 372,581 |
| | |
Property and equipment, net | | | 73,443 | | | 76,171 |
Goodwill and other intangible assets | | | 17,695 | | | — |
Other assets | | | 5,040 | | | 15,237 |
| | |
|
| |
|
|
| | | $ | 327,827 | | $ | 463,989 |
| | |
|
| |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Current liabilities: | | | | | | |
Notes payable | | $ | 19,459 | | $ | 14,870 |
Current portion of long-term debt | | | 1,262 | | | 2,059 |
Accounts payable | | | 13,380 | | | 25,714 |
Deferred revenues and customer advances | | | 4,738 | | | 5,229 |
Deferred gain on leased equipment | | | 10,350 | | | 10,248 |
Other accrued expenses | | | 26,555 | | | 29,043 |
| | |
|
| |
|
|
Total current liabilities | | | 75,744 | | | 87,163 |
| | |
|
| |
|
|
Long-term debt, less current portion | | | 64 | | | 1,293 |
Convertible subordinated debentures | | | 150,000 | | | 150,000 |
Stockholders’ equity | | | 102,019 | | | 225,533 |
| | |
|
| |
|
|
| | | $ | 327,827 | | $ | 463,989 |
| | |
|
| |
|
|
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LTX CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except earnings per share amount)
| | | Three Months Ended
July 31, (Unaudited)
| | | Twelve Months Ended
July 31, (Audited)
| |
| | | 2003
| | | 2002
| | | 2003
| | | 2002
| |
Net sales | | $ | 33,654 | | | $ | 32,630 | | | $ | 119,449 | | | $ | 121,273 | |
Cost of sales | | | 26,821 | | | | 26,176 | | | | 97,368 | | | | 96,006 | |
Inventory related provision | | | 48,483 | | | | — | | | | 48,483 | | | | 42,200 | |
Gross margin | | | (41,650 | ) | | | 6,454 | | | | (26,402 | ) | | | (16,933 | ) |
Engineering and product development expenses | | | 15,675 | | | | 18,275 | | | | 66,088 | | | | 71,102 | |
Selling, general and administrative expenses | | | 6,240 | | | | 7,018 | | | | 27,321 | | | | 28,337 | |
In-process research and development | | | 16,100 | | | | — | | | | 16,100 | | | | — | |
Reorganization costs | | | 1,103 | | | | — | | | | 6,696 | | | | — | |
Loss from operations | | | (80,768 | ) | | | (18,839 | ) | | | (142,607 | ) | | | (116,372 | ) |
Interest income (expense), net | | | (763 | ) | | | (286 | ) | | | (2,461 | ) | | | 215 | |
Loss before income taxes | | | (81,531 | ) | | | (19,125 | ) | | | (145,068 | ) | | | (116,157 | ) |
Income tax provision | | | — | | | | 71,194 | | | | — | | | | 33,723 | |
Net loss | | $ | (81,531 | ) | | $ | (90,319 | ) | | $ | (145,068 | ) | | $ | (149,880 | ) |
Net loss per share, as reported | | | | | | | | | | | | | | | | |
Basic | | $ | (1.61 | ) | | $ | (1.84 | ) | | $ | (2.92 | ) | | $ | (3.08 | ) |
Diluted | | $ | (1.61 | ) | | $ | (1.84 | ) | | $ | (2.92 | ) | | $ | (3.08 | ) |
Weighted average shares: | | | | | | | | | | | | | | | | |
Basic | | | 50,575 | | | | 49,031 | | | | 49,614 | | | | 48,693 | |
Diluted | | | 50,575 | | | | 49,031 | | | | 49,614 | | | | 48,693 | |
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LTX CORPORATION
STATEMENT OF OPERATIONS—NON-GAAP
(Unaudited)
(In thousands, except earnings per share amount)
| | | Twelve Months Ended July 31, 2002
| |
| | | GAAP
| | | Special
Items
| | | Non-GAAP
| |
Net sales | | $ | 121,273 | | | | | | | $ | 121,273 | |
Cost of sales | | | 96,006 | | | | | | | | 96,006 | |
Inventory related provision | | | 42,200 | (a) | | | (42,200 | ) | | | — | |
Gross margin | | | (16,933 | ) | | | 42,200 | | | | 25,267 | |
Engineering and product development expenses | | | 71,102 | | | | | | | | 71,102 | |
Selling, general and administrative expenses | | | 28,337 | | | | | | | | 28,337 | |
In-process research and development | | | — | | | | — | | | | — | |
Reorganization costs | | | — | | | | — | | | | — | |
Loss from operations | | | (116,372 | ) | | | 42,200 | | | | (74,172 | ) |
Interest income (expense), net | | | 215 | | | | | | | | 215 | |
Loss before income taxes | | | (116,157 | ) | | | 42,200 | | | | (73,957 | ) |
Income tax benefit/provision | | | 33,723 | (b) | | | (63,306 | ) | | | (29,583 | ) |
Net loss | | $ | (149,680 | ) | | | 105,506 | | | $ | (44,374 | ) |
Net loss before income tax per share, proforma | | | | | | | | | | | | |
Basic | | $ | (2.39 | ) | | $ | 0.87 | | | $ | (1.52 | ) |
Diluted | | $ | (2.39 | ) | | $ | 0.87 | | | $ | (1.52 | ) |
Net loss per share, proforma | | | | | | | | | | | | |
Basic | | $ | (3.08 | ) | | $ | 2.17 | | | $ | (0.91 | ) |
Diluted | | $ | (3.08 | ) | | $ | 2.17 | | | $ | (0.91 | ) |
Weighted average shares: | | | | | | | | | | | | |
Basic | | | 48,693 | | | | 48,693 | | | | 48,693 | |
Diluted | | | 48,693 | | | | 48,693 | | | | 48,693 | |
Notes
| a) | | $42,200 inventory charge relating to excess inventory. |
| b) | | The Company uses a 40% tax rate as a Non-GAAP measure to help investors to gain a better understanding of our core operating results on a comparative basis. |
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LTX CORPORATION
STATEMENT OF OPERATIONS—NON-GAAP
(Unaudited)
(In thousands, except earnings per share amount)
| | | Three Months Ended July 31, 2002
| |
| | | GAAP
| | | Special
Items
| | | Non-GAAP
| |
Net sales | | $ | 32,630 | | | | — | | | $ | 32,630 | |
Cost of sales | | | 26,176 | | | | — | | | | 26,176 | |
Inventory related provision | | | — | | | | — | | | | — | |
Gross margin | | | 6,454 | | | | — | | | | 6,454 | |
Engineering and product development expenses | | | 18,275 | | | | — | | | | 18,275 | |
Selling, general and administrative expenses | | | 7,018 | | | | — | | | | 7,018 | |
In-process research and development | | | — | | | | — | | | | — | |
Reorganization costs | | | — | | | | — | | | | — | |
Loss from operations | | | (18,839 | ) | | | — | | | | (18,839 | ) |
Interest income (expense), net | | | (286 | ) | | | | | | | (286 | ) |
Loss before income taxes | | | (19,125 | ) | | | — | | | | (19,125 | ) |
Income tax benefit/provision | | | 71,194 | (a) | | | (78,844 | )(b) | | | (7,650 | ) |
Net loss | | $ | (90,319 | ) | | | (78,844 | ) | | $ | (11,475 | ) |
Net loss before income tax per share, proforma | | | | | | | | | | | | |
Basic | | $ | (0.39 | ) | | $ | — | | | $ | (0.39 | ) |
Diluted | | $ | (0.39 | ) | | $ | — | | | $ | (0.39 | ) |
Net loss per share, proforma | | | | | | | | | | | | |
Basic | | $ | (1.84 | ) | | $ | (1.61 | ) | | $ | (0.23 | ) |
Diluted | | $ | (1.84 | ) | | $ | (1.61 | ) | | $ | (0.23 | ) |
Weighted average shares: | | | | | | | | | | | | |
Basic | | | 49,031 | | | | 49,031 | | | | 49,031 | |
Diluted | | | 49,031 | | | | 49,031 | | | | 49,031 | |
Notes
| a) | | $78,844 income tax benefit special charge was result of establishing a valuation allowance against the Company's deferred tax asset. |
| b) | | The Company uses a 40% tax rate as a Non-GAAP measure to help investors to gain a better understanding of our core operating results on a comparative basis. |
8
LTX CORPORATION
STATEMENT OF OPERATIONS—NON-GAAP
(Unaudited)
(In thousands, except earnings per share amount)
| | | Twelve Months Ended July 31, 2003
| |
| | | GAAP
| | | Special
Items
| | | Non-GAAP
| |
Net sales | | $ | 119,449 | | | | — | | | $ | 119,449 | |
Cost of sales | | | 97,368 | | | | — | | | | 97,368 | |
Inventory related provision | | | 48,483 | (a) | | | (48,483 | ) | | | — | |
Gross margin | | | (26,402 | ) | | | 48,483 | | | | 22,081 | |
Engineering and product development expenses | | | 66,088 | | | | — | | | | 66,088 | |
Selling, general and administrative expenses | | | 27,321 | | | | — | | | | 27,321 | |
In-process research and development | | | 16,100 | (b) | | | (16,100 | ) | | | — | |
Reorganization costs | | | 6,696 | (c) | | | (6,696 | ) | | | — | |
Loss from operations | | | (142,607 | ) | | | 71,279 | | | | (71,328 | ) |
Interest income (expense), net | | | (2,461 | ) | | | — | | | | (2,461 | ) |
Loss before income taxes | | | (145,068 | ) | | | 71,279 | | | | (73,789 | ) |
Income tax benefit | | | — | (d) | | | (29,516 | ) | | | (29,516 | ) |
Net loss | | $ | (145,068 | ) | | | 100,795 | | | $ | (44,273 | ) |
Net loss before income tax per share, proforma | | | | | | | | | | | | |
Basic | | $ | (2.92 | ) | | $ | 1.44 | | | $ | (1.49 | ) |
Diluted | | $ | (2.92 | ) | | $ | 1.44 | | | $ | (1.49 | ) |
Net loss per share, proforma | | | | | | | | | | | | |
Basic | | $ | (2.92 | ) | | $ | 2.03 | | | $ | (0.89 | ) |
Diluted | | $ | (2.92 | ) | | $ | 2.03 | | | $ | (0.89 | ) |
Weighted average shares: | | | | | | | | | | | | |
Basic | | | 49,614 | | | | 49,614 | | | | 49,614 | |
Diluted | | | 49,614 | | | | 49,614 | | | | 49,614 | |
Notes
| a) | | $48,483 Inventory charge relating to excess inventory. |
| b) | | $16,100 In-process research and development charge associated with the acquistion of StepTech, Inc. |
| c) | | $6,696 reorganization cost represents $339, $3603, $1990 workforce reduction charges taken in Q4, Q2, and Q1, respectively and a $764 asset impairment charge in Q4. |
| d) | | The Company uses a 40% tax rate as a Non-GAAP measure to help investors to gain a better understanding of our core operating results on a comparative basis. |
9
LTX CORPORATION
STATEMENT OF OPERATIONS—NON-GAAP
(Unaudited)
(In thousands, except earnings per share amount)
| | | Three Months Ended July 31, 2003
| |
| | | GAAP
| | | Special
Items
| | | Non-GAAP
| |
Net sales | | $ | 33,654 | | | | | | | $ | 33,654 | |
Cost of sales | | | 26,821 | | | | | | | | 26,821 | |
Inventory related provision | | | 48,483 | (a) | | | (48,483 | ) | | | — | |
Gross margin | | | (41,650 | ) | | | 48,483 | | | | 6,833 | |
Engineering and product development expenses | | | 15,675 | | | | | | | | 15,675 | |
Selling, general and administrative expenses | | | 6,240 | | | | | | | | 6,240 | |
In-process research and development | | | 16,100 | (b) | | | (16,100 | ) | | | — | |
Reorganization costs | | | 1,103 | (c) | | | (1,103 | ) | | | — | |
Loss from operations | | | (80,768 | ) | | | 65,686 | | | | (15,082 | ) |
Interest income (expense), net | | | (763 | ) | | | | | | | (763 | ) |
Loss before income taxes | | | (81,531 | ) | | | 65,686 | | | | (15,845 | ) |
Income tax benefit | | | — | (d) | | | (6,338 | ) | | | (6,338 | ) |
Net loss | | $ | (81,531 | ) | | | 72,024 | | | $ | (9,507 | ) |
Net loss before income tax per share, proforma | | | | | | | | | | | | |
Basic | | $ | (1.61 | ) | | $ | 1.30 | | | $ | (0.31 | ) |
Diluted | | $ | (1.61 | ) | | $ | 1.30 | | | $ | (0.31 | ) |
Net loss per share, proforma | | | | | | | | | | | | |
Basic | | $ | (1.61 | ) | | $ | 1.42 | | | $ | (0.19 | ) |
Diluted | | $ | (1.61 | ) | | $ | 1.42 | | | $ | (0.19 | ) |
Weighted average shares: | | | | | | | | | | | | |
Basic | | | 50,575 | | | | 50,575 | | | | 50,575 | |
Diluted | | | 50,575 | | | | 50,575 | | | | 50,575 | |
Notes
| a) | | $48,483 Inventory charge relating to excess inventory. |
| b) | | $16,100 In-process research and development charge associated with the acquistion of StepTech, Inc. |
| c) | | The $1,103 reorganization cost represents $339 for workforce reductions and $764 for assets deemed to be impaired. |
| d) | | The Company uses a 40% tax rate as a Non-GAAP measure to help investors to gain a better understanding of our core operating results on a comparative basis. |
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