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A replay of this call will be made available through March 23, by dialing 800-642-1687, and the passcode is 39934113 or you can visit our website at www.ltxc.com. As a reminder, the only authorized spokespeople for the company are Dave Tacelli, Rich Yerganian and myself.Now, for our Safe Harbor statement. During the course of this conference call, we may make projections or other forward-looking statements regarding LTX-Credence’s business outlook or the future financial performance of the company. We wish to caution you that these statements such as projected revenues, net income, earnings per share, operating expenses, gross margin, cash flow, non-GAAP measures, and breakeven targets are only predictions, and that actual events or results may differ materially. The guidance provided during this call represents the company’s estimates as of this day and the company assumes no obligation to update this guidance. Please refer to our Safe Harbor statement in our earnings release for more information on important factors that could cause actual results to differ. Now on to the call. Dave? David G. Tacelli Thank you, Mark. Good morning, everyone. On today's call, I'll be focusing my comments on the performance of our business model, our position in specific market segments of the SOC test space, recent product introductions that enhance our position in those markets, and finally, a few comments on the business cycle. There are three key components to our corporate strategy: focus on high growth market segments with an SOC test to strive for market leadership in each one; fund a strong pipeline of differentiated cost optimized products designed using innovative technology with the ultimate goal of lowering our customers’ test costs; and continuously improve on a business model design for our cyclical business. First, a brief review of our quarterly financial results. At $52.5 million, revenues were slightly below the lower-end of our guidance, while EPS exceeded the high-end of our guidance range provided on the last call. The business model continues to deliver excellent results with another quarter of industry-leading gross margin and strong EBITDA performance. We remain confident that our business model can continue to generate positive EBITDA throughout an entire business cycle.
The general guideline we’ve been communicating to our investors is that for every incremental revenue dollar above breakeven, about $0.60 should go to the gross margin line and above $0.50 to the bottom line. Because of the variable cost structure we’ve put in place, we believe this formula is valid for periods of both growth or decline.I’d like to now spend a few minutes describing how we view the semiconductor test market, which sub-segments we focus on, why we see them as attractive and our market position in each. SOC test devices can range from pure analog to pure digital and everything in between including RF. Within the SOC test market, the specific segments we focus on are heavily biased towards analog and mixed signal technologies, which represent about 70% of the overall SOC market. These market segments include microcontrollers, power management devices, standalone RF devices including RF power amplifiers, front-end modules and transceivers, data converters and application specific products or devices designed for a specific purpose such as baseband, integrated RF, cellular, Bluetooth or other devices used in automotive applications. We focus on these particular market segments for several reasons. First, they contain a mixture of analog, digital and RF technologies providing significant opportunity to develop differentiating test solutions. Second, we have a deep pool of application engineering talent that have on average, 15 years experience developing test programs and innovative test techniques in our target markets. Third, these markets represent high growth segments with a compound annual growth rate of unit volumes forecast to be over 12% between 2011 and 2015. Four, there is a broad diversity of end customers, both diversified manufacturers and fabulous companies. And finally, testing analog, mixed signal devices are inherently more complex than testing digital only devices, which enables us to develop differentiated test solutions that lead to more stable pricing. Read the rest of this transcript for free on seekingalpha.com