Xcerra Announces Second Quarter Results
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Xcerra Announces Second Quarter Results

Second Fiscal Quarter Notables:

NORWOOD, Mass., Feb. 25, 2016 (GLOBE NEWSWIRE) -- Xcerra Corporation (NASDAQ:XCRA), today announced financial results for its second fiscal quarter ended January 31, 2016. 

Net sales for the quarter were $72,334,000 compared to the prior quarter’s net sales of $78,401,000.  GAAP net income for the quarter was $4,436,000 or $0.08 per diluted share.  Excluding the net impact from discontinued operations of ($8,363,000), restructuring totaling $252,000, and amortization of purchased intangible assets of $296,000, non-GAAP net loss for the quarter was ($3,379,000), or ($0.06) per diluted share.  

Dave Tacelli, president and chief executive officer, commented, “The Company continues to deliver financial results ahead of our business model and has generated positive EBITDA for the 8th consecutive quarter.

"One of the key technical milestones in the quarter was the completion of the proof of concept phase of our solution for handling wafer level chip scale packaged devices (WLCSP). Using our InCarrier solution a customer has successfully tested multiple wafers. We have additional customers going through the validation process with their own products over the next few months. We expect first revenues from this solution in FY17.

"We see recovery of our Semiconductor Test Solutions (STS) business in the April quarter while in the near term the Electronics Manufacturing Solutions (EMS) business environment remains soft. To support the demand for Diamondx, we are investing capital in the current quarter to assist key strategic customers to expand their installed base of equipment. This investment represents a value of approximately $8M in revenue, and we expect these investments to convert to revenue in calendar 2017.”

Third Quarter Fiscal 2016 Outlook

For the fiscal quarter ending April 30, 2016, net sales are expected to be in the range of $80 million to $83 million.  Non-GAAP net income (loss) for the quarter is expected to be in the range of ($0.02) to $0.01 per share, assuming 53.5 million shares outstanding.  The non-GAAP guidance excludes amortization of purchased intangible assets and the tax effect related to the gain on the sale of the Harbor Electronics business.

The Company will conduct a conference call today, February 25, 2016 at 10:00 AM 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://xcerra.com/investors/events-presentations/.  Audio replays of the call can be heard through February 26, 2016, via telephone, by dialing (855) 859-2056; conference ID number 40989453.  A replay of the webcast can be accessed by visiting our web site 90 minutes following the conference call at http://xcerra.com/investors/events-presentations/

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 loss for the quarter ended January 31, 2016 excludes the amortization of purchased intangible assets, restructuring charges, and net gain from discontinued operations.  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, including 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, the Company’s ability to meet its debt service obligations under its existing credit arrangement with Silicon Valley Bank, 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, 2015. 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

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  January 31, 2016   July 31, 2015  
Current assets     
Cash and cash equivalents$75,194  $77,858  
Marketable securities 59,162   60,593  
Accounts receivable - trade, net 71,458   81,313  
Accounts receivable - other, net 662   326  
Inventories, net 65,174   60,593  
Prepaid expenses and other current assets 11,155   8,393  
Assets held for sale -   10,454  
Total current assets 282,805   299,530  
Property and equipment, net 29,793   31,450  
Intangible assets, net 9,922   10,640  
Goodwill 43,850   43,850  
Other assets 2,498   2,005  
Total assets$368,868  $387,475  
Current liabilities     
Current portion of long-term debt$3,442  $2,509  
Accounts payable 23,219   27,492  
Other accrued expenses 32,619   35,579  
Deferred revenues 7,636   7,466  
Liabilities held for sale -   1,147  
Total current liabilities 66,916   74,193  
Term Loan 22,539   23,938  
Other long-term liabilities 10,834   10,876  
Stockholders' equity 268,579   278,468  
Total liabilities and stockholders' equity$368,868  $387,475  

Xcerra Corporation      
Consolidated Statements of Operations      
(in thousands, except earnings per share data)       
 Three Months Ended Six Months Ended 
 January 31, January 31, 
  2016  2015   2016  2015  
Net sales$72,334 $83,453  $150,735 $199,674  
Cost of sales 41,729  46,790   87,998  109,812  
Gross profit 30,605  36,663   62,737  89,862  
Engineering and product development expenses 14,834  15,625   29,897  31,695  
Selling, general, and administrative expenses 18,907  18,262   36,860  40,413  
Amortization of purchased intangible assets 296  449   710  984  
Restructuring 252  230   384  938  
Income (loss) from continuing operations (3,684) 2,097   (5,114) 15,832  
Other income, net 449  4,058   1,912  3,579  
Income (loss) from continuing operations before provision for income taxes (3,235) 6,155   (3,202) 19,411  
Provision for income taxes 692  1,563   1,603  2,326  
Income (loss) from continuing operations (3,927) 4,592   (4,805) 17,085  
Income (loss) from discontinued operations, net of tax 8,363  (663)  7,576  (1,094) 
Net income$4,436 $3,929  $2,771 $15,991  
Basic net income (loss) per share:      
Net income (loss) from continuing operations$(0.07)$0.08  $(0.09)$0.32  
Net income (loss) from discontinued operations, net of tax 0.16  (0.01)  0.14  (0.02) 
Basic net income (loss) per share$0.08 $0.07  $0.05 $0.30  
Diluted net income (loss) per share:      
Net income (loss) from continuing operations$(0.07)$0.08  $(0.09)$0.32  
Net income (loss) from discontinued operations, net of tax 0.16  (0.01)  0.14  (0.02) 
Diluted net income (loss) per share$0.08 $0.07  $0.05 $0.30  
Weighted-average common shares used in computing net income (loss) per share:      
Basic 53,608  54,362   54,049  52,745  
Diluted 53,608  54,667   54,141  53,510  

Xcerra Corporation        
Reconciliation of GAAP Net Income to Non-GAAP Net (Loss) Income        
(In thousands, except per share amounts)         
 Three Months Basic Diluted  Three Months Basic Diluted 
 Ended Earnings Earnings  Ended Earnings Earnings 
 January 31, 2016 Per Share Per Share  January 31, 2015 Per Share Per Share 
GAAP net income$4,436 $0.08 $0.08  $3,929 $0.07 $0.07  
(Income) loss from discontinued operations (8,363) (0.16) (0.16)  663  0.01  0.01  
Amortization of purchased intangible assets 296  0.01  0.01   449  0.01  0.01  
Restructuring 252  -  -   230  -  -  
Amortization of inventory step up for purchase accounting -  -  -   498  0.01  0.01  
Gain from financing activities (Other income, net) -  -  -   (2,685) (0.05) (0.05) 
Non-GAAP net (loss) income$(3,379)$(0.06)$(0.06) $3,084 $0.05 $0.05  
Weighted average shares outstanding:  53,608  53,608    54,362  54,667  
 Six Months Basic Diluted  Six Months Basic Diluted 
 Ended Earnings Earnings  Ended Earnings Earnings 
 January 31, 2016 Per Share Per Share  January 31, 2015 Per Share Per Share 
GAAP net income$2,771 $0.05 $0.05  $15,991 $0.30 $0.30  
(Gain) loss from discontinued operations (7,576) (0.14) (0.14)  1,094  0.02  0.02  
Amortization of purchased intangible assets 710  0.01  0.01   984  0.02  0.02  
Restructuring 384  0.01  0.01   938  0.02  0.02  
Amortization of inventory step up for purchase accounting -  -  -   1,991  0.04  0.04  
Gain from financing activities (Other income, net) -  -  -   (2,685) (0.05) (0.05) 
Non-GAAP net (loss) income$(3,711)$(0.07)$(0.07) $18,313 $0.35 $0.34  
Weighted average shares outstanding:  54,049  54,141    52,745  53,510  

Investor Contact:

Richard Yerganian, 
Vice President, Investor Relations
Xcerra Corporation
Tel. 781.467.5063
Email rich.yerganian@xcerra.com

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