LTXCredence Corp. Reports Operating Results (10-Q)

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Dec 09, 2011
LTXCredence Corp. (LTXC, Financial) filed Quarterly Report for the period ended 2011-10-31.

Ltxcredence Corp. has a market cap of $298.9 million; its shares were traded at around $6.04 with a P/E ratio of 9.9 and P/S ratio of 1.2.

Highlight of Business Operations:

Service revenue, included in net sales, accounted for $9.8 million, or 28.9% of net sales, and $10.4 million, or 13.8% of net sales, for the three months ended October 31, 2011 and 2010, respectively. The decrease in service revenue is primarily a result of an increased reliability of our products and a lower cost product sale which reduces the demand for service because customers are more apt to replace than contract for service.

Gross profit. Gross profit was $18.0 million or 53.4% of net sales in the three months ended October 31, 2011, as compared to $47.2 million or 62.5% of net sales in the same quarter of the prior year. The decrease in gross profit for the three months ended October 31, 2011 as compared to October 31, 2010 was primarily driven by the decrease in total revenue of approximately 55%, and partially offset by lower warranty costs due to product mix.

Selling, general and administrative expenses. Selling, general and administrative expenses were $9.3 million, or 27.6% of net sales, in the three months ended October 31, 2011, as compared to $13.2 million, or 17.4% of net sales, in the same quarter of the prior year. The decrease in selling, general and administrative expenses, on a dollar basis, for the three months ended October 31, 2011 as compared to October 31, 2010 was primarily driven by a decrease in variable expenses that are tied to revenue or profits such as profit sharing and commissions.

Accounts receivable from trade customers, net of allowances, was $24.4 million at October 31, 2011, as compared to $42.6 million at July 31, 2011. Accounts receivable decreased during the quarter due to a sequential revenue decrease of $28.9 million or 46.1%.The allowance for doubtful accounts was less than $0.1 million, or 0.2 % of gross accounts receivable, at October 31, 2011and July 31, 2011.

We had $55.4 million in net cash used in investing activities for the three months ended October 31, 2011 as compared to net cash used in investing activities of $14.3 million for the three months ended October 31, 2010. The net cash used in investing activities for the three months ended October 31, 2011 was primarily related to $56.9 million of purchases of available-for-sale securities and $5.5 million in purchases of held-to-maturity securities, $0.5 million of purchases of property and equipment, offset by $4.5 million of proceeds from sales and maturities of available-for-sale securities and $3.0 million in proceeds from sales of held-to-maturity securities. The net cash used in investing activities for the three months ended October 31, 2010 was primarily related to $7.3 million of purchases of available-for-sale securities, $7.2 million of purchases of held-to-maturity securities, and $1.2 million in purchases of property and equipment offset by $1.5 million of proceeds from sales and maturities of available-for-sale securities.

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