-- Revenue is expected to be in the range of $115 million to $120 million.
-- The company is not providing GAAP EPS guidance at this time since it is
unable to assess the amount of merger-related expenses and potential
restructuring costs it will incur. These amounts could be significant.
-- After excluding charges expected to be incurred due to merger-related
transaction activities and potential restructuring, earnings per share
on a non-GAAP basis are expected to be in the range of ($0.03) to
$0.02.
-- Share-based compensation expense is expected to be approximately $3.6
million to $3.8 million.
-- Weighted average shares outstanding is expected to be approximately 61
million.
Conference Call and Webcast
Verigy's management will present more details on its first quarter fiscal
year 2011 financial results on a conference call with investors today
beginning at 1:30 p.m. (Pacific). This event will be webcast live in
listen-only mode. Listeners may log on at http://investor.verigy.com and
select "Q1 FY'11 Verigy Earnings Conference Call" in the "Events & Webcast"
section under "IR News & Events." The webcast will remain available on the
company's web site for 14 days.
A telephone replay of the conference call will be available from 4:30 p.m.
(Pacific) today through March 10, 2011. The replay number is
+1 888-286-8010 toll-free, or international callers may dial
+1 617-801-6888; enter passcode 15114156.
About Verigy
Verigy provides advanced semiconductor test systems and solutions used by
leading companies worldwide in design validation, characterization, and
high-volume manufacturing test. Verigy offers scalable platforms for a wide
range of system-on-chip (SOC) test solutions, and memory test solutions for
Flash, DRAM including high-speed memories, as well as multi-chip packages
(MCP). Verigy also provides advanced analysis tools that accelerate design
debug and yield ramp processes. Additional information about Verigy can be
found at www.verigy.com.
Forward-Looking Statements
This earnings release contains forward-looking statements, including
statements about our estimated second quarter revenue, non-GAAP earnings
per share and share-based compensation expense. Forward-looking statements
are subject to a number of risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements.
The risks and uncertainties include, but are not limited to, the results of
discussions with Advantest; actions of LTX-Credence in response to
discussions with Advantest; the impact of actions of other parties with
respect to any discussions and the potential consummation of a transaction
with Advantest or LTX-Credence; the commencement of litigation relating to
the Advantest discussions or to the proposed transaction with LTX-Credence;
the ability to retain key employees; delays in or cancellations of orders
by customers awaiting resolution of the Advantest discussions and the
pending merger with LTX-Credence; conditions of the semiconductor and
semiconductor test industries; the strength of our customers' businesses;
unanticipated delays in meeting product demand and delivery requirements;
and other economic, business, competitive, and/or regulatory factors
affecting the businesses of Verigy generally, including those set forth in
Verigy's filings with the Securities and Exchange Commission, especially in
the "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" sections of its annual report on Form
10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and
other SEC filings. The forward-looking statements in this press release are
only valid as of this date, and Verigy undertakes no duty to update any
forward-looking statements.
Information About Non-GAAP Measures
Verigy is supplementing its financial measures presented on a GAAP basis by
providing non-GAAP measures to provide additional meaningful comparisons
between current results and results in prior operating periods to evaluate
the operating performance of the company. Management believes that these
non-GAAP financial measures can provide additional meaningful information
of underlying trends of the business because they provide a comparison of
historical information that excludes certain items that impact the overall
comparability. Non-GAAP net income for the quarter ended January 31, 2011
excludes the effects of charges related to the company's merger transaction
costs, restructuring actions, and gains on the sale of investments.
Management uses this information to make operational decisions and for
comparisons to historical operating results and the operating results of
its competitors. Management finds the non-GAAP information to be useful and
believes that its investors may also benefit from seeing the company's
results "through the eyes" of management in addition to seeing its GAAP
results. A reconciliation between the company's GAAP and non-GAAP measures
is provided in the attached tables. Non-GAAP numbers are merely a
supplement to, and not a replacement for, GAAP financial measures. They
should be read and evaluated in conjunction with the GAAP financial
measures.
VERIGY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)
(Unaudited)
Three Months Ended
January 31,
--------------------
2011 2010
--------- ---------
Net revenue:
Products $ 83 $ 76
Services 37 30
--------- ---------
Total net revenue 120 106
Cost of sales:
Cost of products (*) 42 40
Cost of services (*) 22 19
--------- ---------
Total cost of sales 64 59
Operating expenses:
Research and development (*) 23 22
Selling, general and administrative (*) 38 29
Restructuring charges - 1
--------- ---------
Total operating expenses 61 52
Loss from operations (5) (5)
Other (expense) income, net - (1)
--------- ---------
Loss before income taxes (5) (6)
Provision for income taxes - -
--------- ---------
Net loss $ (5) $ (6)
========= =========
Loss per share- basic: $ (0.08) $ (0.10)
Loss per share- diluted: $ (0.08) $ (0.10)
Weighted average shares (presented in thousands) used
in computing net loss per share:
Basic 60,455 59,148
Diluted 60,455 59,148
*Share-based compensation expense by function:
Cost of products $ 0.3 $ 0.5
Cost of services $ 0.5 $ 0.3
Research and development $ 0.5 $ 0.4
Selling, general and administrative $ 6.0 $ 3.4
VERIGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
January 31, October 31,
2011 2010
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 272 $ 296
Short-term marketable securities 138 135
Trade accounts receivable, net 81 94
Inventory 91 85
Other current assets 46 47
---------- ----------
Total current assets 628 657
Property, plant and equipment, net 43 45
Long-term marketable securities 31 38
Goodwill and other intangibles, net 14 14
Other long-term assets 64 63
---------- ----------
Total assets $ 780 $ 817
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 54 $ 69
Employee compensation and benefits 19 35
Deferred revenue, current 41 44
Income taxes and other taxes payable 2 6
Other current liabilities 14 18
---------- ----------
Total current liabilities 130 172
Long-term liabilities:
Convertible senior notes 138 138
Income taxes payable 18 18
Other long-term liabilities 59 60
---------- ----------
Total liabilities 345 388
Shareholders' equity
Ordinary shares, no par value, 60,632,795 and
60,015,188 issued and outstanding at January
31, 2011 and October 31, 2010, respectively
Additional paid in capital 459 449
Accumulated deficit (12) (7)
Accumulated other comprehensive loss (12) (13)
---------- ----------
Total shareholders' equity 435 429
---------- ----------
Total liabilities and shareholders' equity $ 780 $ 817
========== ==========
VERIGY LTD.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In millions, except per share amounts)
(Unaudited)
Three Months Ended
--------------------------------------------
January 31, 2011
Net
income Gross Gross Operating
(loss) EPS (*) profit margin expenses
------- ------- -------- ------- --------
GAAP (5) $ (0.08) $ 56 47% $ 61
Non-GAAP adjustments:
Restructuring charges in
operating expenses 0.4 0.01 - - (0.4)
Gain on sale of
investments (1.6) (0.03) - - -
Merger related deal
costs in operating
expenses, net of tax 8.9 0.15 - - (8.9)
Acquisition related
charges in cost of
sales 0.1 - 0.1 0.1% -
Acquisition related
charges in operating
expenses 0.1 - - - (0.1)
------- ------- -------- ------- --------
Non-GAAP 3 0.05 $ 56 47% $ 52
======= ======= ======== ======= ========
Three Months Ended
--------------------------------------------
January 31, 2010
Gross Gross Operating
Net loss EPS (*) profit margin expenses
------- ------- -------- ------- --------
GAAP (6) $ (0.10) $ 47 44% $ 52
Non-GAAP adjustments:
Restructuring charges in
cost of sales 0.3 - 0.3 0.3% -
Restructuring charges in
operating expenses 1.0 0.02 - - (1.0)
Gain on sale of
investments (0.5) (0.01) - - -
Acquisition related
charges in cost of
sales 0.1 - 0.1 0.1% -
Acquisition related
charges in operating
expenses 0.1 - - - (0.1)
Transition related
charges in cost of
sales 3.4 0.06 3.4 3.2% -
Transition related
charges in operating
expenses 0.1 - - - (0.1)
------- ------- -------- ------- --------
Non-GAAP (2) (0.03) $ 51 48% $ 51
======= ======= ======== ======= ========
* The convertible senior notes are antidilutive for the three months ended
January 31, 2011 and 2010 on both non-GAAP and GAAP basis.
Weighted average shares (presented in thousands) used in computing net
income per share for the three months ended January 31, 2011:
Diluted 60,975
Contact Information: INVESTOR CONTACT: Judy Davies VP, Investor Relations and Marketing Communications +1 408-864-7549