Merger Charges Add To LTX-Credence Loss

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LTX-Credence ( LTXC) reported on March 4, 2009 that its Q2 FY09 net loss widened, hurt by one-time charges related to its merger with Credence Systems Corporation. Net loss for the latest second quarter was $54.55 million or $0.43 per share, compared to a net loss of $3.18 million or $0.05 per share in Q2 FY08. Excluding one-time charges of $779,000 or $0.01 per share, $4.45 million or $0.03 per share, and $14.67 million or $0.12 per share, the net loss was $29.03 million or $0.23 per share. The most recent consensus estimate was a loss of $0.22 per share.

Revenue fell 2.0% to $30.40 million from $31.02 million in Q2 FY08. Gross margin deteriorated to 3.35% from 47.80% due to a 46.7% increase in the cost of sales and inclusion of a $5.63 million or $0.04 per share inventory-related provision. Engineering and product development expenses rose 91.3% to $21.71 million from $11.35 million and selling, general, and administrative expenses more than doubled to $15.00 million from $6.92 million. Operating margin deteriorated to negative 182.82% from negative 11.09% in the prior year's quarter.

LTX-Credence and Spirox recently announced the integration of their local field operations organizations. LTX-Credence secured a two year $40.00 million revolving line of credit from Silicon Valley Bank, a subsidiary of SVB Financial Group.

LTXC expects a Q3 FY09 net loss of $0.22 per share to $0.19 per share on projected revenue of $28.00 million, plus or minus 10.0%. The net loss guidance does not include amortization of purchased intangibles of $4.40 million.

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