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LTXCredence Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: March 9, 2012 04:39PM

LTXCredence Corp. (LTXC) filed Quarterly Report for the period ended 2012-01-31. Ltx-credence Cp has a market cap of $327.2 million; its shares were traded at around $6.58 with a P/E ratio of 29.1 and P/S ratio of 1.3.



Highlight of Business Operations:

Net service sales, included in net sales, accounted for $9.1 million, or 37.6% of net sales, and $10.9 million, or 20.7% of net sales, for the three months ended January 31, 2012 and 2011, respectively, and $18.8 million or 32.6% of net sales, and $21.3 million or 16.6% of net sales for the six months ended January 31, 2012 and 2011, respectively. The decrease in service revenue was primarily the result of increased reliability of our products and a lower cost product which reduces the demand for service because customers are more apt to replace legacy product than contract for service.

Gross profit. Gross profit was $10.9 million or 45.2% of net sales in the three months ended January 31, 2012, as compared to $31.4 million or 59.8% of net sales in the same quarter of the prior year. For the six months ended January 31, 2012, the gross profit was $28.9 million or 50.0% of net sales as compared to $78.7 million or 61.4% of net sales for the six months ended January 31, 2011. The decrease in gross profit for the three and six months ended January 31, 2012 as compared to January 31, 2011 was in line with our target gross margin model at this revenue level, and was primarily driven by the approximately 54% reduction in revenue for all periods presented, partially offset by lower variable costs.

Selling, general and administrative expenses. Selling, general and administrative expenses were $8.3 million, or 34.6% of net sales, in the three months ended January 31, 2012, as compared to $12.7 million, or 24.2% of net sales, in the same quarter of the prior year. For the six months ended January 31, 2012, selling, general and administrative expenses were $17.7 million or 30.6% of net sales as compared to $25.9 million or 20.2% of net sales for the six months ended January 31, 2011. The decrease in selling, general, and administrative expenses, on a dollar basis, for the three and six months ended January 31, 2012 as compared to the same periods ending January 31, 2011, was primarily driven by a decrease in variable expenses that are tied to revenue and net income such as commissions and profit share expense as a result of aforementioned decrease in revenue in profits. Also, the three and six month periods ending January 31, 2011 included merger-related fees that did not recur in the three and six months ending January 31, 2012.

Net income (loss). Net loss was $9.7 million, or $(0.20) per basic and diluted share, in the three months ended January 31, 2012, as compared to net income of $4.7 million, or $0.10 per basic share and $0.09 per diluted share, in the same quarter of the prior year. For the six months ended January 31, 2012, our net loss was $14.6 million, or $(0.30) per basic and diluted share, as compared to net income of $24.4 million or $0.49 per basic and diluted share for the six months ended January 31, 2011 as a result of the aforementioned decrease in revenue and profits.

We had $66.5 million in net cash used in investing activities for the six months ended January 31, 2012 as compared to net cash used in investing activities of $19.6 million for the six months ended January 31, 2011. The net cash used in investing activities for the six months ended January 31, 2012 was primarily related to $81.0 million of purchases of available-for-sale securities and $7.9 million in purchases of held-to-maturity securities, $1.8 million of purchases of property and equipment, offset by $18.4 million of proceeds from sales and maturities of available-for-sale securities and $5.8 million of proceeds from sales and maturities of held-to-maturity securities. Approximately $53.0 million of the $88.9 million of security purchases related to a transfer of money market funds into longer duration marketable securities to take advantage of more favorable investments yields. The net cash used in investing activities for the six months ended January 31, 2011 was primarily related to $13.7 million of purchases of available-for-sale securities and $11.1 million in purchases of held-to-maturity securities, $3.0 million of purchases of property and equipment, offset by $5.0 million of proceeds from sales and maturities of available-for-sale securities and $3.2 million of proceeds from held-to-maturity securities.

Read the The complete Report



Stocks Discussed: LTXC,
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