Third Quarter Notables:
Xcerra Corporation (NASDAQ:XCRA), today announced financial results
for its third fiscal quarter ended April 30, 2017.
Net sales for the quarter were $103,635,000 compared to the
prior quarter’s net sales of $80,124,000. GAAP net income for
the quarter was $7,548,000 or $0.14 per diluted share.
Excluding amortization of purchased intangible assets of $148,000,
restructuring of $187,000 and deal related expenses of $1,341,000,
non-GAAP net income for the quarter was $9,224,000, or $0.17 per
diluted share.
On April 10, 2017, the Company announced that it had entered
into a definitive agreement to be acquired by Unic Capital
Management Co., Ltd, an affiliate of Sino IC Capital. The process
of obtaining approval from the Committee on Foreign Investment in
the United States (CFIUS) is underway. We respect the CFIUS review
process and are committed to providing the Committee with the
information it needs to conduct its review.
As a result of the acquisition announcement, the Company will
not hold a quarterly conference call and webcast, and will not
provide an outlook for its future financial results.
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 April 30,
2017 excludes the amortization of purchased intangible assets,
restructuring charges, and deal related expenses. 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
Certain statements contained in this press release may be
considered forward-looking statements within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995, including
statements regarding the proposed transaction involving Xcerra
Corporation ("Xcerra") and Unic Capital Management Co., Ltd.
("Parent") and the ability to consummate the transaction.
Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or
conditions, and include words such as "may," "will," "should,"
"would," "expect," "anticipate," "plan," "likely," "believe,"
"estimate," "project," "intend," and other similar expressions
among others. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on
current beliefs and assumptions that are subject to risks and
uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: the risk that the conditions to the
closing of the transaction are not satisfied, including the failure
to timely or at all obtain stockholder approval for the transaction
or the failure to timely or at all obtain any required regulatory
clearances, including under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (HSR) or from the Committee on Foreign
Investment in the United States (CFIUS); uncertainties as to the
timing of the consummation of the transaction and the ability of
each of Xcerra and Parent to consummate the transaction, including
as a result of the failure of Parent to obtain or provide on a
timely basis or at all the necessary financing; risks that the
transaction disrupts the current plans and operations of Xcerra;
the ability of Xcerra to retain and hire key personnel; competitive
responses to the transaction; unexpected costs, charges or expenses
resulting from the transaction; potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the transaction; and legislative, regulatory,
political and economic developments. The foregoing review of
important factors that could cause actual events to differ from
expectations should not be construed as exhaustive and should be
read in conjunction with statements that are included herein and
elsewhere, including the risk factors included in Xcerra's most
recent Annual Report on Form 10-K, and Xcerra's more recent
Quarterly Report on Form 10-Q and Current Reports on Form 8-K filed
with the U.S. Securities and Exchange Commission (the "SEC").
Xcerra can give no assurance that the conditions to the transaction
will be satisfied. Except as required by applicable law, Xcerra
undertakes no obligation to revise or update any forward-looking
statement, or to make any other forward-looking statements, whether
as a result of new information, future events or otherwise.
Participants in the Solicitation
Xcerra and its directors and executive officers and certain of
its other members of management and employees may be deemed to be
participants in the solicitation of proxies in connection with the
proposed transaction. Information about Xcerra's directors and
executive officers is included in Xcerra's Annual Report on Form
10-K for the year ended July 31, 2016, filed with the SEC on
September 16, 2016, and the proxy statement for Xcerra's 2016
annual meeting of stockholders, filed with the SEC on October 28,
2016. Additional information regarding these persons and
their interests in the transaction will be included in the proxy
statement relating to the transaction when it is filed with the
SEC. These documents can be obtained free of charge from the
sources indicated below.
Additional Information and Where to Find It
This press release is being made in respect of the proposed
transaction involving Xcerra and Parent. Xcerra intends to
file with the SEC a proxy statement in connection with the proposed
transaction as well as other documents regarding the proposed
transaction. The definitive proxy statement will be sent or given
to the stockholders of Xcerra and will contain important
information about the proposed transaction and related matters.
XCERRA'S SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT
REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. The proxy statement and other relevant materials (when
they become available), and any other documents filed by Xcerra
with the SEC, may be obtained free of charge at the SEC's website,
at www.sec.gov. In addition, security holders of Xcerra will be
able to obtain free copies of the proxy statement from Xcerra by
contacting Investor Relations by mail at Attn: Investor Relations,
825 University Avenue, Norwood, Massachusetts 02062.
Details regarding the record date, and the date, time and place
of the special meeting of Xcerra shareholders to vote on the
transaction will be announced at a later date.
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 |
April 30, 2017 |
|
July 31, 2016 |
|
|
|
|
Current assets |
|
|
|
Cash and cash
equivalents |
$ |
92,310 |
|
$ |
83,065 |
Marketable
securities |
|
56,027 |
|
|
56,356 |
Accounts receivable -
trade, net |
|
76,549 |
|
|
76,513 |
Accounts receivable -
other, net |
|
426 |
|
|
304 |
Inventories, net |
|
78,966 |
|
|
69,986 |
Prepaid expenses and
other current assets |
|
11,476 |
|
|
8,546 |
Assets held for
sale |
|
994 |
|
|
2,448 |
Total
current assets |
|
316,748 |
|
|
297,218 |
|
|
|
|
Property and equipment,
net |
|
26,965 |
|
|
25,483 |
Intangible assets,
net |
|
8,911 |
|
|
9,429 |
Goodwill |
|
43,850 |
|
|
43,850 |
Other assets |
|
2,293 |
|
|
2,103 |
Total
assets |
$ |
398,767 |
|
$ |
378,083 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities |
|
|
|
Current portion of
long-term debt |
$ |
3,444 |
|
$ |
2,822 |
Accounts payable |
|
32,453 |
|
|
25,924 |
Other accrued
expenses |
|
35,076 |
|
|
31,588 |
Deferred revenues |
|
6,771 |
|
|
6,196 |
Total
current liabilities |
|
77,744 |
|
|
66,530 |
|
|
|
|
Term Loan |
|
18,540 |
|
|
21,197 |
Other long-term
liabilities |
|
8,908 |
|
|
8,518 |
Stockholders'
equity |
|
293,575 |
|
|
281,838 |
Total
liabilities and stockholders' equity |
$ |
398,767 |
|
$ |
378,083 |
|
|
|
|
Xcerra Corporation |
Consolidated Statements of Operations |
(in thousands, except earnings per share
data) |
(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
April 30, |
|
April 30, |
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Net sales |
$ |
103,635 |
|
$ |
82,237 |
|
|
$ |
263,845 |
$ |
232,972 |
|
Cost of sales |
|
57,310 |
|
|
46,333 |
|
|
|
148,373 |
|
135,231 |
|
Gross profit |
|
46,325 |
|
|
35,904 |
|
|
|
115,472 |
|
97,741 |
|
|
|
|
|
|
|
Engineering and product
development expenses |
|
15,581 |
|
|
15,438 |
|
|
|
45,891 |
|
45,335 |
|
Selling, general, and
administrative expenses |
|
21,523 |
|
|
19,475 |
|
|
|
58,069 |
|
56,335 |
|
Amortization of
purchased intangible assets |
|
148 |
|
|
247 |
|
|
|
518 |
|
957 |
|
Restructuring |
|
187 |
|
|
120 |
|
|
|
592 |
|
504 |
|
Income (loss) from
continuing operations |
|
8,886 |
|
|
624 |
|
|
|
10,402 |
|
(5,390 |
) |
|
|
|
|
|
|
Other (loss) income,
net |
|
(57 |
) |
|
(1,419 |
) |
|
|
1,386 |
|
493 |
|
Income (loss) from
continuing operations before provision for income taxes |
|
8,829 |
|
|
(795 |
) |
|
|
11,788 |
|
(4,897 |
) |
Provision for (benefit
from) income taxes |
|
1,281 |
|
|
(1,763 |
) |
|
|
1,650 |
|
828 |
|
Income (loss) from
continuing operations |
|
7,548 |
|
|
968 |
|
|
|
10,138 |
|
(5,725 |
) |
Income from
discontinued operations, net of tax |
|
- |
|
|
2,189 |
|
|
|
- |
|
9,765 |
|
Net income |
$ |
7,548 |
|
$ |
3,157 |
|
|
$ |
10,138 |
$ |
4,040 |
|
|
|
|
|
|
|
Basic net income per
share: |
|
|
|
|
|
Net income (loss) from
continuing operations |
$ |
0.14 |
|
$ |
0.02 |
|
|
$ |
0.19 |
$ |
(0.11 |
) |
Net income from
discontinued operations, net of tax |
|
- |
|
|
0.04 |
|
|
|
- |
$ |
0.18 |
|
Basic net income per
share |
$ |
0.14 |
|
$ |
0.06 |
|
|
$ |
0.19 |
$ |
0.08 |
|
|
|
|
|
|
|
Diluted net income per
share: |
|
|
|
|
|
Net income (loss) from
continuing operations |
$ |
0.14 |
|
$ |
0.02 |
|
|
$ |
0.19 |
$ |
(0.11 |
) |
Net income from
discontinued operations, net of tax |
|
- |
|
|
0.04 |
|
|
|
- |
|
0.18 |
|
Diluted net income per
share |
$ |
0.14 |
|
$ |
0.06 |
|
|
$ |
0.19 |
$ |
0.07 |
|
|
|
|
|
|
|
Weighted-average common
shares used in computing net income per share: |
|
|
|
|
|
Basic |
|
54,259 |
|
|
53,506 |
|
|
|
54,080 |
|
53,837 |
|
Diluted |
|
55,043 |
|
|
53,506 |
|
|
|
54,661 |
|
53,897 |
|
|
|
|
|
|
|
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 |
|
April 30, 2017 |
Per Share |
Per Share |
|
April 30, 2016 |
Per Share |
Per Share |
|
|
|
|
|
|
|
|
GAAP net income |
$ |
7,548 |
$ |
0.14 |
$ |
0.14 |
|
$ |
3,157 |
|
$ |
0.06 |
|
$ |
0.06 |
|
Legal and transaction
fees |
|
1,341 |
|
0.02 |
|
0.02 |
|
|
- |
|
|
- |
|
|
- |
|
Income from
discontinued operations, net of tax |
|
- |
|
- |
|
- |
|
|
(2,189 |
) |
|
(0.04 |
) |
|
(0.04 |
) |
Amortization of
purchased intangible assets |
|
148 |
|
0.00 |
|
0.00 |
|
|
247 |
|
|
0.00 |
|
|
0.00 |
|
Restructuring |
|
187 |
|
0.00 |
|
0.00 |
|
|
120 |
|
|
0.00 |
|
|
0.00 |
|
Impairment of property
held for sale |
|
- |
|
- |
|
- |
|
|
601 |
|
|
0.01 |
|
|
0.01 |
|
Tax benefit from
divestiture |
|
- |
|
- |
|
- |
|
|
(1,929 |
) |
|
(0.04 |
) |
|
(0.04 |
) |
Non-GAAP net income
(loss) |
$ |
9,224 |
$ |
0.17 |
$ |
0.17 |
|
$ |
7 |
|
$ |
0.00 |
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
54,259 |
|
55,043 |
|
|
|
53,506 |
|
|
53,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months |
Basic |
Diluted |
|
Nine Months |
Basic |
Diluted |
|
Ended |
Earnings |
Earnings |
|
Ended |
Earnings |
Earnings |
|
April 30, 2017 |
Per Share |
Per Share |
|
April 30, 2016 |
Per Share |
Per Share |
|
|
|
|
|
|
|
|
GAAP net income |
$ |
10,138 |
$ |
0.19 |
$ |
0.19 |
|
$ |
4,040 |
|
$ |
0.08 |
|
$ |
0.07 |
|
Legal and transaction
fees |
|
1,844 |
|
0.03 |
|
0.03 |
|
|
- |
|
|
- |
|
|
- |
|
Income from
discontinued operations, net of tax |
|
- |
|
- |
|
- |
|
|
(9,765 |
) |
|
(0.18 |
) |
|
(0.18 |
) |
Amortization of
purchased intangible assets |
|
518 |
|
0.01 |
|
0.01 |
|
|
957 |
|
|
0.02 |
|
|
0.02 |
|
Restructuring |
|
592 |
|
0.01 |
|
0.01 |
|
|
504 |
|
|
0.01 |
|
|
0.01 |
|
Impairment of property
held for sale |
|
- |
|
- |
|
- |
|
|
601 |
|
|
0.01 |
|
|
0.01 |
|
Tax benefit from
divestiture |
|
- |
|
- |
|
- |
|
|
(792 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
Non-GAAP net income
(loss) |
$ |
13,092 |
$ |
0.24 |
$ |
0.24 |
|
$ |
(4,455 |
) |
$ |
(0.08 |
) |
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
54,080 |
|
54,661 |
|
|
|
53,837 |
|
|
53,897 |
|
|
|
|
|
|
|
|
|
Investor Contact:
Richard Yerganian,
Vice President, Investor Relations
Xcerra Corporation
Tel. 781.467.5063
Email rich.yerganian@xcerra.com
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