LTXCredence Corp. (LTXC, Financial) filed Quarterly Report for the period ended 2011-01-31.
Ltxcredence Corp. has a market cap of $445.1 million; its shares were traded at around $9.02 with a P/E ratio of 8.3 and P/S ratio of 2.
Amortization of purchased intangible assets. Amortization associated with intangible assets acquired from Credence was $1.5 million or 2.8% of net sales for the three months ended January 31, 2011 as compared to $2.7 million or 5.6% of net sales for the same quarter of the prior year. For the six months ended January 31, 2011, amortization associated with these assets was $3.0 million or 2.3% of net sales as compared to $5.3 million or 5.9% of net sales for the six months ended January 31, 2010. The underlying intangible assets relate to acquired technology, and customer and distributor relationships. These intangible assets acquired in the Credence merger are being amortized over their estimated useful lives of between one and nine years based on their expected pattern of use.
Interest expense. Interest expense was less than $0.1 million for the three months ended January 31, 2011 as compared to $1.1 million for the three months ended January 31, 2010. For the six months ended January 31, 2011, interest expense was $0.1 million compared to $2.3 million for the same period in 2010. The decrease on a year to date basis is primarily the result of the reduction in the convertible notes balance due to repurchases in the quarter ended April 30, 2010 and repayment of $1.5 million notes in May 2010, resulting in lower outstanding principal for the comparative periods. Also, the period ended January 31, 2010 included interest due on the Companys borrowings under the credit revolver, which was not borrowed against in the three and six months ended January 31, 2011.
Gain on extinguishment of debt, net. We did not repurchase any debt in the three or six months ending January 31, 2011. At the time of the completion of the merger, Credence had outstanding $122.5 million aggregate principal amount of 3.5% Convertible Senior Subordinated Notes due 2010. In the first quarter of fiscal 2010, we repurchased approximately $0.6 million of principal amount of the outstanding notes at a discount to their par. The discount to the par value resulted in a net gain on extinguishment of debt of approximately $0.3 million in the six months ended January 31, 2010. We also recognized approximately $0.3 million and $0.6 million in the three and six months ended January 31, 2010, respectively, of previously deferred gains from debt modifications under ASC 470 (EITF 96-19) recorded in prior periods.
Provision for (benefit from) from income taxes. We recorded an income tax benefit of $0.1 million for both the three and six months ended January 31, 2011 as compared to an income tax provision of $0.2 million and $0.3 million, respectively, for the three and six months ended January 31, 2010. The provisions were primarily due to foreign tax on earnings generated in foreign jurisdictions. As of January 31, 2011 and July 31, 2010, the total liability for unrecognized income tax benefits was $8.5 million and $8.6 million, respectively, (of which $4.8 million, if recognized, would impact our income tax rate). We recognize interest and penalties related to uncertain tax positions as a component of income tax expense.
Net income (loss). Net income was $4.7 million, or $0.10 per basic share and $0.09 per diluted share, in the three months ended January 31, 2011, as compared to net income of $0.8 million, or $0.02 per basic and diluted share, in the same quarter of the prior year. For the six months ended January 31, 2011, our net income was $24.4 million, or $0.49 per basic and diluted share, as compared to a net loss of $2.4 million or $(0.06) per basic and diluted share for the six months ended January 31, 2010.
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Ltxcredence Corp. has a market cap of $445.1 million; its shares were traded at around $9.02 with a P/E ratio of 8.3 and P/S ratio of 2.
Highlight of Business Operations:
Selling, general and administrative expenses. Selling, general and administrative expenses were $12.7 million, or 24.2% of net sales, in the three months ended January 31, 2011, as compared to $9.2 million, or 19.3% of net sales, in the same quarter of the prior year. For the six months ended January 31, 2011, selling, general and administrative expenses were $25.9 million or 20.2% of net sales as compared to $17.9 million or 19.9% of net sales for the six months ended January 31, 2010. The increase in selling, general, and administrative expenses for the three and six months ended January 31, 2011 compared to the same periods in the prior year is primarily related to merger $2.8 million of expenses related to the Verigy transaction incurred during the three months ended January 31, 2011 that did not occur in the quarter ended January 31, 2010. The three and six months ended January 31, 2011 also includes higher salary expense due to the reinstatement of 8.0% salary reductions during the quarter ended July 31, 2010, and therefore is not reflected in the three and six months ended January 31, 2010. The three and six months ended January 31, 2011 also includes increased profit sharing expense and sales commissions based on increased revenues and profitability for these periods.Amortization of purchased intangible assets. Amortization associated with intangible assets acquired from Credence was $1.5 million or 2.8% of net sales for the three months ended January 31, 2011 as compared to $2.7 million or 5.6% of net sales for the same quarter of the prior year. For the six months ended January 31, 2011, amortization associated with these assets was $3.0 million or 2.3% of net sales as compared to $5.3 million or 5.9% of net sales for the six months ended January 31, 2010. The underlying intangible assets relate to acquired technology, and customer and distributor relationships. These intangible assets acquired in the Credence merger are being amortized over their estimated useful lives of between one and nine years based on their expected pattern of use.
Interest expense. Interest expense was less than $0.1 million for the three months ended January 31, 2011 as compared to $1.1 million for the three months ended January 31, 2010. For the six months ended January 31, 2011, interest expense was $0.1 million compared to $2.3 million for the same period in 2010. The decrease on a year to date basis is primarily the result of the reduction in the convertible notes balance due to repurchases in the quarter ended April 30, 2010 and repayment of $1.5 million notes in May 2010, resulting in lower outstanding principal for the comparative periods. Also, the period ended January 31, 2010 included interest due on the Companys borrowings under the credit revolver, which was not borrowed against in the three and six months ended January 31, 2011.
Gain on extinguishment of debt, net. We did not repurchase any debt in the three or six months ending January 31, 2011. At the time of the completion of the merger, Credence had outstanding $122.5 million aggregate principal amount of 3.5% Convertible Senior Subordinated Notes due 2010. In the first quarter of fiscal 2010, we repurchased approximately $0.6 million of principal amount of the outstanding notes at a discount to their par. The discount to the par value resulted in a net gain on extinguishment of debt of approximately $0.3 million in the six months ended January 31, 2010. We also recognized approximately $0.3 million and $0.6 million in the three and six months ended January 31, 2010, respectively, of previously deferred gains from debt modifications under ASC 470 (EITF 96-19) recorded in prior periods.
Provision for (benefit from) from income taxes. We recorded an income tax benefit of $0.1 million for both the three and six months ended January 31, 2011 as compared to an income tax provision of $0.2 million and $0.3 million, respectively, for the three and six months ended January 31, 2010. The provisions were primarily due to foreign tax on earnings generated in foreign jurisdictions. As of January 31, 2011 and July 31, 2010, the total liability for unrecognized income tax benefits was $8.5 million and $8.6 million, respectively, (of which $4.8 million, if recognized, would impact our income tax rate). We recognize interest and penalties related to uncertain tax positions as a component of income tax expense.
Net income (loss). Net income was $4.7 million, or $0.10 per basic share and $0.09 per diluted share, in the three months ended January 31, 2011, as compared to net income of $0.8 million, or $0.02 per basic and diluted share, in the same quarter of the prior year. For the six months ended January 31, 2011, our net income was $24.4 million, or $0.49 per basic and diluted share, as compared to a net loss of $2.4 million or $(0.06) per basic and diluted share for the six months ended January 31, 2010.
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