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Xcerra Corporation$13.49($.08)(.59%)

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 Xcerra Announces Fourth Quarter and Fiscal Year Results
   Wednesday, August 30, 2017 7:00:36 AM ET

Fourth Fiscal Quarter Notables:

-- Fourth quarter sales of $126.9 million the highest in the company’s history

-- GAAP net income of $12.4 million or $0.23 per diluted share

-- Non-GAAP net income of $14.0 million or $0.25 per diluted share

-- The company continues the process to obtain regulatory approval for the acquisition by Sino IC Capital

Xcerra Corporation (XCRA ), today announced financial results for its fourth fiscal quarter and fiscal year ended July 31, 2017.

Net sales for the quarter were $126,926,000, compared to the prior quarter’s sales of $103,635,000. GAAP net income for the quarter was $12,417,000, or $0.23 per diluted share. Excluding restructuring of $198,000, amortization of purchased intangible assets of $159,000, and deal related expenses of $1,242,000, non-GAAP net income for the quarter was $14,016,000, or $0.25 per diluted share.

For the twelve-month period ended July 31, 2017, sales were $390,771,000. GAAP net income was $22,555,000, or $0.41 per diluted share. Excluding restructuring, and other one-time net expenses totaling $3,877,000, and amortization of purchased intangible assets of $676,000, non-GAAP net income for the year was $27,108,000, or $0.49 per diluted share.

As a result of the acquisition announcement with Sino IC Capital, the Company will not hold a quarterly conference call and webcast, and will not provide an outlook for its future financial results.

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 income for the quarter ended July 31, 2017 excludes the amortization of purchased intangible assets, restructuring charges, and other one-time adjustments. 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

Certain statements contained in this press release may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the proposed transaction involving Xcerra Corporation ("Xcerra") and Unic Capital Management Co., Ltd. ("Parent") and the ability to consummate the transaction. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as "may," "will," "should," "would," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend," and other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: the risk that the conditions to the closing of the transaction are not satisfied, including the failure to timely or at all obtain stockholder approval for the transaction or the failure to timely or at all obtain any required regulatory clearances, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) or from the Committee on Foreign Investment in the United States (CFIUS); uncertainties as to the timing of the consummation of the transaction and the ability of each of Xcerra and Parent to consummate the transaction, including as a result of the failure of Parent to obtain or provide on a timely basis or at all the necessary financing; risks that the transaction disrupts the current plans and operations of Xcerra; the ability of Xcerra to retain and hire key personnel; competitive responses to the transaction; unexpected costs, charges or expenses resulting from the transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; and legislative, regulatory, political and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the risk factors included in Xcerra’s most recent Annual Report on Form 10-K, and Xcerra’s more recent Quarterly Report on Form 10-Q and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission (the "SEC"). Xcerra can give no assurance that the conditions to the transaction will be satisfied. Except as required by applicable law, Xcerra undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Participants in the Solicitation

Xcerra and its directors and executive officers and certain of its other members of management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about Xcerra’s directors and executive officers is included in Xcerra’s Annual Report on Form 10-K for the year ended July 31, 2016, filed with the SEC on September 16, 2016, and the proxy statement for Xcerra’s 2016 annual meeting of stockholders, filed with the SEC on October 28, 2016. Additional information regarding these persons and their interests in the transaction will be included in the proxy statement relating to the transaction when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated below.

Additional Information and Where to Find It

This press release is being made in respect of the proposed transaction involving Xcerra and Parent. Xcerra intends to file with the SEC a proxy statement in connection with the proposed transaction as well as other documents regarding the proposed transaction. The definitive proxy statement will be sent or given to the stockholders of Xcerra and will contain important information about the proposed transaction and related matters. XCERRA’S SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials (when they become available), and any other documents filed by Xcerra with the SEC, may be obtained free of charge at the SEC’s website, at www.sec.gov. In addition, security holders of Xcerra will be able to obtain free copies of the proxy statement from Xcerra by contacting Investor Relations by mail at Attn: Investor Relations, 825 University Avenue, Norwood, Massachusetts 02062.

Details regarding the record date, and the date, time and place of the special meeting of Xcerra shareholders to vote on the transaction will be announced at a later date.

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                                     July 31, 2017   July 31, 2016
Current assets
Cash and cash equivalents                  $      103,637  $      83,065
Marketable securities                             57,087          56,356
Accounts receivable - trade, net                  92,689          76,513
Accounts receivable - other, net                  274             304
Inventories, net                                  81,509          69,986
Prepaid expenses and other current assets         19,087          8,546
Assets held for sale                              994             2,448
Total current assets                              355,277         297,218
Property and equipment, net                       28,509          25,483
Intangible assets, net                            8,752           9,429
Goodwill                                          43,850          43,850
Other assets                                      2,225           2,103
Total assets                               $      438,613  $      378,083
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt          $      3,779    $      2,822
Accounts payable                                  36,249          25,924
Other accrued expenses                            50,262          31,588
Deferred revenues                                 8,085           6,196
Total current liabilities                         98,375          66,530
Term Loan                                         17,547          21,197
Other long-term liabilities                       9,012           8,518
Stockholders’ equity                              313,679         281,838
Total liabilities and stockholders’ equity $      438,613  $      378,083
Xcerra Corporation
Consolidated Statements of Operations
(in thousands, except earnings per share data)
(unaudited)
                                                                       Three Months Ended              Twelve Months Ended
                                                                       July 31,                        July 31,
                                                                           2017            2016            2017        2016
Net sales                                                              $   126,926     $   91,234      $   390,771 $   324,206
Cost of sales                                                              69,289          49,049          217,662     184,280
Gross profit                                                               57,637          42,185          173,109     139,926
Engineering and product development expenses                               15,799          15,594          61,689      60,929
Selling, general, and administrative expenses                              24,072          20,407          82,141      76,742
Amortization of purchased intangible assets                                159             246             676         1,203
Restructuring                                                              198             420             791         924
Income from continuing operations                                          17,409          5,518           27,812      128
Other (loss) income, net                                                   (698    )       178             687         671
Income from continuing operations before provision for income taxes        16,711          5,696           28,499      799
Provision for (benefit from) income taxes                                  4,294           (2,488 )        5,944       (1,660  )
Income from continuing operations                                          12,417          8,184           22,555      2,459
(Loss) income from discontinued operations, net of tax                     -               (1,050 )        -           8,715
Net income                                                             $   12,417      $   7,134       $   22,555  $   11,174
Basic net income per share:
Net income from continuing operations                                  $   0.23        $   0.15        $   0.42    $   0.05
Net (loss) income from discontinued operations, net of tax                 -               (0.02  )        -           0.16
Basic net income per share                                             $   0.23        $   0.13        $   0.42    $   0.21
Diluted net income per share:
Net income from continuing operations                                  $   0.23        $   0.15        $   0.41    $   0.05
Net (loss) income from discontinued operations, net of tax                 -               (0.02  )        -           0.16
Diluted net income per share                                           $   0.23        $   0.13        $   0.41    $   0.21
Weighted-average common shares used in computing net income per share:
Basic                                                                      54,260          53,525          54,127      53,783
Diluted                                                                    55,175          53,741          54,872      53,974
Xcerra Corporation
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands, except per share amounts)
(unaudited)
                                                         Three Months  Basic       Diluted      Three Months     Basic          Diluted
                                                         Ended         Earnings    Earnings     Ended            Earnings       Earnings
                                                         July 31, 2017 Per Share   Per Share    July 31, 2016    Per Share      Per Share
GAAP net income                                          $      12,417 $    0.23   $    0.23    $    7,134       $   0.13       $   0.13
Legal and transaction fees                                      1,242       0.02        0.02         -               -              -
(Income) loss from discontinued operations, net of tax          -           -           -            1,050           0.02           0.02
Amortization of purchased intangible assets                     159         0.00        0.00         246             0.00           0.00
Restructuring                                                   198         0.00        0.00         420             0.01           0.01
Tax benefit from divestiture                                    -           -           -            (2,530 )        (0.05  )       (0.05  )
Non-GAAP net income                                      $      14,016 $    0.26   $    0.25    $    6,320       $   0.12       $   0.12
Weighted average shares outstanding:                                        54,260      55,175                       53,525         53,741
                                                         Twelve Months Basic       Diluted      Twelve Months    Basic          Diluted
                                                         Ended         Earnings    Earnings     Ended            Earnings       Earnings
                                                         July 31, 2017 Per Share   Per Share    July 31, 2016    Per Share      Per Share
GAAP net income                                          $      22,555 $    0.42   $    0.41    $    11,174      $   0.21       $   0.21
Legal and transaction fees                                      3,086       0.06        0.06         -               -              -
(Income) loss from discontinued operations, net of tax          -           -           -            (8,715 )        (0.16  )       (0.16  )
Amortization of purchased intangible assets                     676         0.01        0.01         1,203           0.02           0.02
Restructuring                                                   791         0.01        0.01         924             0.02           0.02
Impairment of property held for sale                            -           -           -            601             0.01           0.01
Tax benefit from divestiture                                    -           -           -            (3,323 )        (0.06  )       (0.06  )
Non-GAAP net income                                      $      27,108 $    0.50   $    0.49    $    1,864       $   0.03       $   0.03
Weighted average shares outstanding:                                        54,127      54,872                       53,783         53,974
Investor Contact:

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

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