Exhibit 99.1
NPTest Reports Results for Fourth Quarter And Fiscal Year 2003
SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 27, 2004--NPTest Holding
Corporation ("NPTest" or the "Company", Nasdaq:NPTT), a leading
provider of test and diagnostic products and services for the
semiconductor industry, reported its financial results for the fourth
quarter and fiscal period ended December 31, 2003. NPTest Holding
Corporation was incorporated on June 20, 2003 for the purpose of
acquiring NPTest, Inc. from Schlumberger Limited and did not have any
operations prior to July 29, 2003. All financial data for periods
prior to July 29, 2003 are derived from the combined financial
statements of NPTest Inc., as included in the Company's Form S-1
registration statement filed with the SEC.
Revenues for the quarter were $55.0 million, up 11% from $49.5
million in the fourth quarter 2002. Net loss attributable to common
shareholders was $68.9 million, or $5.94 per share on a GAAP basis,
versus a net profit of $5.7 million in the fourth quarter 2002. The
net loss this quarter included special charges of $74.4 million
associated with the acquisition of NPTest, Inc. by NPTest Holding
Corporation from Schlumberger in July, and the subsequent initial
public offering (IPO) in December. On a non GAAP basis the operating
loss was $3.2 million and net loss was $1.4 million for the quarter.
For calendar year 2003, revenues were $231.1 million compared to
$243.5 million in fiscal year 2002. Net loss attributable to common
shareholders was $81.5 million. The net loss in 2003 included special
charges of $96.0 million associated with the Acquisition and IPO. On a
non GAAP basis the operating income was approximately $600,000
and net income was $2.1 million for the year.
The Company finished the year with $93.7 million in cash and no
debt. NPTest Inc. had a cash balance of $4.3 million at June 30, 2003.
This increase in cash balance at the end of the year included $61.9
million from the proceeds of the IPO with the balance primarily from
cash generated by the Company.
"We successfully completed our IPO in December, resulting in an
improved capital structure for the company," commented Ashok Belani,
NPTest president and chief executive officer. "We achieved significant
results against our strategic objectives in 2003, including the launch
of our new test platform--Sapphire NP, the diversification of our
customer base, and maintaining an operating profit and generating cash
during the industry down cycle. Sapphire NP has already created
opportunities with both existing and new customers, with several
systems already shipped and more in backlog." Belani concluded, "We
are very optimistic about the outlook for NPTest in 2004."
Conference Call/Webcast Details
NPTest will hold its conference call to discuss these results
today, Tuesday January 27, 2004, at 4.30pm ET. The call will be
simulcast via the NPTest web site at www.nptest.com under the
"Investor Relations - Events" section. A replay of the call will be
available via phone and web site through February 10, 2004. The replay
number is (800) 642-1687 - or (706) 645-9291 for outside the U.S. and
Canada - passcode is 5034323. A replay will also be available on the
NPTest web site www.nptest.com under the Investor Relations Events
section.
About NPTest
NPTest designs, develops and manufactures advanced semiconductor
test and diagnostic systems and provides related services for the
semiconductor industry. NPTest customers include integrated device
manufacturers, foundries, fabless companies and assembly and test
subcontractors worldwide. NPTest products and services enable
companies to bring their increasingly complex integrated circuits, or
ICs, to market faster at lower cost and without compromising IC
quality. The NPTest business traces its history back to 1965 when
Fairchild Semiconductor established an automated test equipment
division. NPTest is headquartered in San Jose, California, USA.
Additional information is available at www.nptest.com.
GAAP vs non GAAP Results
In addition to disclosing results that are determined in
accordance with GAAP, NPTest also discloses non GAAP results of
operations that exclude certain charges and credits. NPTest reports
non GAAP results in order to better assess and reflect operating
performance. These results are provided as a complement to results
provided in accordance with GAAP. Management believes the non GAAP
measure helps indicate underlying trends in the NPTest business, and
management uses non GAAP measures to plan and forecast future periods,
and to establish operational goals. Earnings guidance is being
provided on a GAAP basis. Non GAAP information is not determined using
GAAP and should not be considered superior to or as a substitute for
GAAP measures or data prepared in accordance with GAAP. Furthermore
non GAAP information may not be comparable across companies, as other
companies may use different non GAAP adjustments.
Safe Harbor Statement
Statements in this press release other than statements of
historical fact are "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. The Company's
future results could differ materially from the expectations discussed
herein. Factors that could cause or contribute to such differences
include general economic and political uncertainty, conditions in the
semiconductor industry, changes in the conditions affecting our target
markets, manufacturing utilization, fluctuations in customer demand,
raw material costs and availability, timing and success of new
products, competitive conditions in the semiconductor industry, and
risks associated with international operations including fluctuations
in foreign currencies. For a more comprehensive discussion of risks
and uncertainties relating to our business, please read the
discussions of these risks in the Company's Form S-1 registration
statement filed with the SEC. The Company undertakes no obligation to
revise or update any forward-looking statements to reflect events or
circumstances after the date of this press release.
In the following tables and text, all numbers are denoted in
thousands unless otherwise indicated.
Table 1. Condensed Consolidated Statement of Operations (GAAP)
- -------------------------------------------------------------
Period from
June 20 (date
Three Months of inception)
Ending to December 31,
Dollars in Thousands, except December 31,
for per share amounts 2003 2002 2003
NPTest NPTest,
Holding Inc.
Net revenue 55,011 49,543 101,193
Cost of net revenue 43,206 30,640 75,134
Gross Margin 11,805 18,903 26,059
Operating expenses
Research and development 10,316 10,323 18,590
In-process research and
development 0 0 5,000
Selling, general and
administrative 18,020 10,503 26,313
Gain on curtailment of
pension and employee
benefits 0 (8,667) 0
Total operating
expenses 28,336 12,159 49,903
Operating income (loss) (16,531) 6,744 (23,844)
Interest income (expense),
net (8,031) 0 (9,369)
Exchange gain (loss), net (245) (97) (486)
Total Other Inc./(Exp) (8,276) (97) (9,855)
Income (Loss) Before Taxes (24,807) 6,647 (33,699)
Income tax benefit (expense) 8,982 (990) 10,473
Income (Loss) After Taxes (15,825) 5,657 (23,226)
Dividend on Cumulative
Redeemable Preferred Stock (53,072) 0 (54,528)
Net income (loss)
attributable to Common
Shares (68,897) 5,657 (77,754)
Basic and diluted net loss
per common share ($5.94) - ($10.51)
Weighted average shares in
net loss per share
calculation 11,600,926 - 7,395,308
The following is a reconciliation of GAAP net loss to
non GAAP net income (loss):
GAAP Loss before income tax (24,807) 6,647
Dividend on Cumulative
Redeemable Preferred Stock (53,072) 0
GAAP Loss before income tax
with impact of charge
related to Cumulative
Redeemable Preferred Stock (77,879) 6,647
(1) Interest and charges on
Cumulative Mandatory 53,072 0
Redeemable Preferred Stock
(2) Interest Expense and
financing cost on $75M term
loan. 5,720 0
(3) Advisory Fees 5,419 0
(4) Amortization of
Identified Intangibles 5,266 0
(5) Amortization of tangible
assets written up to market 1,761 0
(6) IPO Charges not
capitalized against IPO
proceeds 727 0
(7) Interest and charges on
Mandatory Redeemable
Preferred Shares. 2,318 0
(8) Divestiture & Retention
Bonuses Paid 125 0
(9) Gain on curtailment 0 (8,667)
(10) Write-off of In-Process
Technology 0 0
Subtotal Changes 74,408 (8,667)
non GAAP Income (Loss)
before income tax (3,471) (2,020)
non GAAP income tax Expense
(Benefit) 2,024 927
non GAAP Net Income (Loss) (1,447) (1,093)
Table 2. Condensed Consolidated Statement of Operations (GAAP)
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A(GAAP) B(GAAP) Combined NPTest,Inc.
NPTest, NPTest (A+B) 12
Inc. Holding months
Dollars in Thousands, except for Jan 1 June 20 Jan 1 ended
per share amounts to to to Dec 31,
July 29 Dec 31, Dec 31
2003 2003 2003 2002
Net revenue 129,870 101,193 231,063 243,491
Cost of net revenue 80,629 75,134 155,763 148,193
Gross Margin 49,241 26,059 75,300 95,298
Operating expenses
Research and development 29,017 18,590 47,607 36,573
Inprocess research and
development 0 5,000 5,000 0
Selling, general and
administrative 27,877 26,313 54,190 49,652
Gain on curtailment of pension
and employee benefits 0 0 0 (8,667)
Total operating expenses 56,894 49,903 106,797 77,558
Operating income (loss) (7,653) (23,844) (31,497) 17,740
Interest income (expense), net 0 (9,369) (9,369) 0
Exchange gain (loss), net (473) (486) (959) (1,147)
Total Other Inc./(Exp) (473) (9,855) (10,328) (1,147)
Income (Loss) Before Taxes (8,126) (33,699) (41,825) 16,593
Income tax benefit (expense) 4,355 10,473 14,828 (2,117)
Income(Loss) After Taxes (3,771) (23,226) (26,997) 14,476
Dividend on Cumulative Redeemable
Preferred Stock 0 (54,528) (54,528) 0
Net income (loss) attributable to
Common Shares (3,771) (77,754) (81,525) 14,476
The following is a reconciliation of GAAP net loss to non
GAAP net income (loss):
GAAP Loss before income tax (41,825) 16,593
Dividend on Cumulative Redeemable
Preferred Stock (54,528) 0
GAAP Loss before income tax with impact of charge (96,353) 16,593
related to Cumulative Redeemable Preferred Stock
(1) Interest and charges on Cumulative
Mandatory Redeemable Preferred Stock 54,528 0
(2) Interest Expense and financing cost on $75M
term loan. 6,353 0
(3) Advisory Fees 5,764 0
(4) Amortization of Identified
Intangibles 8,058 0
(5) Amortization of tangible assets
written up to market 4,686 0
(6) IPO Charges not capitalized against
IPO proceeds 727 0
(7) Interest and charges on Mandatory Redeemable
Preferred Shares. 3,031 0
(8) Divestiture & Retention
Bonuses Paid 7,884 0
(9) Gain on curtailment 0 (8,667)
(10) Write-off of In-Process
Technology 5,000 0
Subtotal Changes 96,031 (8,667)
non GAAP Income (Loss) before income tax (322) 7,926
non GAAP income tax Expense (Benefit) 2,457 (357)
non GAAP Net Income (Loss) 2,135 7,569
Table 3. Condensed Consolidated Statement of Operations (non GAAP)
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Twelve
Three Months Ref: Table2, months
Ending col.3 ended
Dollars in Thousands, except December 31, Jan 1 to December
for per share amounts Dec 31 31,
2003 2002 2003 2002
non GAAP financials as NPTest NPTest, NPTest,
adjusted for special charges: Holding Inc. Inc.
Net revenue 55,011 49,543 231,063 243,491
Cost of net revenue 36,242 30,640 141,363 148,193
Gross Margin 18,769 18,903 89,700 95,298
Operating expenses
Research and development 10,316 10,323 45,377 36,573
Selling, general and
administrative 11,686 10,503 43,701 49,652
Total operating expenses 22,002 20,826 89,078 86,225
Operating income (loss) (3,233) (1,923) 622 9,073
Interest income (expense), net 7 0 15 0
Exchange gain (loss), net (245) (97) (959) (1,147)
Total Other Inc./(Exp) (238) (97) (944) (1,147)
Income (Loss) Before Taxes (3,471) (2,020) (322) 7,926
Income tax benefit (expense) 2,024 927 2,457 (357)
Income(Loss) After Taxes (1,447) (1,093) 2,135 7,569
Basic and Diluted net income
(Loss) per common shares (0.12)
Weighted average shares in net
loss per share calculation 11,600,926
4th Quarter Activity
(1) The charge for accelerated amortization of issuance costs and
the Beneficial Conversion Feature associated with exchanging the
convertible mandatory redeemable preferred stock of NPTest Holding
Corporation for our common stock of approximately $53,072 includes:
-- $51,761 in accretion of financing costs and BCF; and
-- $1,311 in dividends through December 16, 2003.
In the GAAP Statement of Operations, the $53,072 charge is
reported in its own line under Dividend on Convertible Mandatory
Redeemable Preferred Stock.
(2) The charge for the accelerated amortization of deferred
financing costs plus any accrued Interest from October 1, 2003 through
December 16, 2003 the repayment of our $75.0 million term loan of
$5,720 includes:
-- $5,280 in accelerated amortization of deferred financing costs;
and
-- $440 in accrued interest from October 1, 2003.
In the GAAP Statement of Operations, the $5,720 charge is
classified as Interest Expense.
(3) The charge for advisory fees of approximately $5,419 includes:
-- $5,000 in a one time payment due under the amended Advisory
Agreement; and
-- $419 as the amount due in the period under the pre-existing
Advisory Agreement.
In the GAAP Statement of Operations, the $5,419 charge is included
in the line Selling, General & Administrative expenses.
(4) The charge for the amortization of identifiable intangible
assets of $5,266 includes:
-- $4,709 in amortization of Backlog;
-- $503 in amortization of core technology; and
-- $54 in amortization of Customer Relationships.
In the GAAP Statement of Operations, the $5,266 charge is included
in the cost of net revenue.
(5) The increase in the charge for depreciation of property plant
and equipment as a result of our acquisition of NPTest, Inc. and the
increase in cost of net product revenue resulting from the write-up to
fair value of our inventory, totaling $1,761 included:
-- $940 in increased inventory charges related to the write-up of
work in process inventories;
-- $568 in increased inventory charges related to the write-up of
Finished Goods Inventories;
-- $103 in increased inventory charges related to the write-up of
Spare Parts Inventories; and
-- $150 in depreciation of the write-up of plant property &
equipment as a result of the acquisition.
In the GAAP Statement of Operations, $1,698 of this charge is
included in the cost of net revenue and $63 is included in Selling,
General & Administrative expenses.
(6) The charge for accounting, legal and other expenses related to
the IPO (not capitalized against the proceeds of the IPO) of $727
include:
-- $494 in accounting services;
-- $180 in tax consulting services;
-- $36 in Legal Services; and
-- $17 in Other Services.
In the GAAP Statement of Operations the $727 charge was included
in Selling, General & Administrative expenses.
(7) The charge for dividends and accretion on the mandatory
redeemable preferred stock of NPTest Capital Corporation of $2,318 was
charged to interest expense included:
-- $1,336 in accelerated amortization of deferred financing
costs; and
-- $982 in accrued interest from October 1, 2003 to December 16,
2003.
In the GAAP Statement of Operations, the $2,318 was included in
interest income (expense) net.
(8) The charge for the amortization of a retention bonus of $125
was included in Selling, General & Administrative expenses (see note
8. below for the year activity).
(9) The gain on the curtailment of pension and employee benefits
recognized in the fourth quarter of 2002 resulted when Schlumberger
terminated the participation of NPTest, Inc. employees in both the
Schlumberger Pension Plan and the US Group Health Care Plan and Trust
effective December 31, 2002. Upon termination of NPTest, Inc.'s
participation, Schlumberger also assumed the liabilities as of
December 31, 2002 relating to these plans and any future obligations
relating to these liabilities. NPTest Inc. therefore recorded a
curtailment gain of $8.667 as of December 31, 2002.
In the GAAP Statement of Operations, the $8,667 gain was reported
in its own line titled Gain on Curtailment of Pension and Employee
Benefits.
Year Activity
(1) The charge for accelerated amortization of issuance costs and
the Beneficial Conversion Feature associated with exchanging the
convertible mandatory redeemable preferred stock of NPTest Holding
Corporation for our common stock of approximately $54,528 includes:
-- $52,161 in accretion of financing costs and Beneficial
Conversion Feature; and
-- $2,367 in dividends through December 16, 2003.
In the GAAP Statement of Operations, the $54,528 charge is
reported in its own line under Dividend on Convertible Mandatory
Redeemable Preferred Stock.
(2) The charge for the accelerated amortization of deferred
financing costs plus any accrued interest from October 1, 2003 through
the repayment of our $75.0 million term loan of $6,353 includes:
-- $5,575 in accelerated amortization of deferred financing
costs; and
-- $778 in accrued interest from October 1, 2003.
In the GAAP Statement of Operations, the $6,353 charge is
classified as Interest Expense.
(3) The charge for advisory fees of approximately $5,764 in
advisory fees includes:
-- $5,000 in a one time payment due under the amended Advisory
Agreement; and
-- $764 as the amount due in the period under the pre-existing
Advisory Agreement.
In the GAAP Statement of Operations, the $5,764 charge is included
in the line Selling, general and administrative expenses.
(4) The charge for the amortization of identifiable intangible
assets of $8,058 includes:
-- $7,117 in amortization of Backlog;
-- $850 in amortization of Core Technology; and
-- $91 in amortization of Customer Relationships.
In the GAAP Statement of Operations, the $8,058 charge is included
in cost of net revenue.
(5) The increase in the charge for depreciation of property plant
and equipment as a result of our acquisition of NPTest, Inc. and the
increase in cost of net product revenue resulting from the write-up to
fair value of our inventory, totaling $4,686 included:
-- $3,084 in increased inventory charges related to the write-up
of Work in Process Inventories;
-- $1,013 in increased inventory charges related to the write-up
of Finished Goods Inventories;
-- $388 in increased inventory charges related to the write-up
of Spare Parts Inventories; and
-- $201 in depreciation of plant property & equipment related to
the write-up of Plant Property & Equipment.
In the GAAP Statement of Operations, $4,580 is included in cost of
net revenue and $106 is included in Selling General and Administrative
expenses.
(6) The charge for accounting, legal and other expenses related to
the IPO (not capitalized against the proceeds of the IPO) of $727
include:
-- $494 in accounting services;
-- $180 in tax consulting services;
-- $36 in Legal Services; and
-- $17 in Other Services.
In the GAAP Statement of Operations, $727 was included in Selling,
General & Administrative expenses.
(7) The charge for dividends and accretion on the mandatory
redeemable preferred stock of NPTest Capital Corporation of $3,031 was
charged to interest expense and included:
-- $1,545 in accelerated amortization of deferred financing
costs; and
-- $1,486 in accrued interest from October 1, 2003
In the GAAP Statement of Operations, the $3,031 was included in
interest income (expense) net.
(8) The charge for the payment of divestiture bonuses and the
amortization of a retention bonus totaling $7,884 included:
-- $7,673 in Divestiture Bonuses; and
-- $211 in the amortization of a retention bonus.
In the GAAP Statement of Operations, $1,762 was charged to cost of
net revenue, $2,230 was charged to Research and Development and $3,892
was charged to Selling, General & Administrative expenses.
(9) The gain on the curtailment of pension and employee benefits
recognized in the fourth quarter of 2002 resulted when Schlumberger
terminated the participation of NPTest, Inc. employees in both the
Schlumberger Pension Plan and the US Group Health Care Plan and Trust
effective December 31, 2002. Upon termination of NPTest, Inc.'s
participation, Schlumberger also assumed the liabilities as of
December 31, 2002 relating to these plans and any future obligations
relating to these liabilities. NPTest Inc. therefore recorded a
curtailment gain of $8,667 as of December 31, 2002.
In the GAAP Statement of Operations, the $8,667 gain was reported
in its own line titled Gain on curtailment of pension and employee
benefits.
(10) The one-time charge related to the write-off of in-process
research and development in total year 2003 of $5.0 million was
included in research and development.
Table 4. Condensed Consolidated Balance Sheet
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(in $ thousands) December 31,
--------------
2003
Assets
Current Assets:
Cash and cash equivalents 93,723
Accounts receivable, net of allowance for
doubtful accounts 53,185
Inventory 90,143
Deferred income taxes 36,652
Prepaid expenses and other current assets 11,620
--------------
Total Current Assets 285,323
Property, plant and equipment, net 24,378
Goodwill 8,649
Intangible assets 17,243
Deferred Financing costs -
Other assets 459
--------------
Total Assets $336,052
--------------
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable 17,638
Accrued liabilities 33,710
Income taxes payable 2,505
--------------
Total Current Liabilities 53,853
Deferred income taxes 6,689
--------------
Total Liabilities 60,542
--------------
Common stock, par value $.001 per share 40
Other comprehensive income (loss) (60)
Additional paid-in capital 353,284
Retained earnings/(accumulated deficit) (77,754)
--------------
Total Stockholders' equity 275,510
--------------
Total liabilities and stockholders' equity $336,052
NPTest and Sapphire NP are trademarks of NPTest registered or by
application with the Patent and Trademark Office, in the U.S. and in
other countries.
CONTACT: NPTest, Inc.
Colin Ritchie, 408-586-6740 (Investor Relations)
critchie@nptest.com