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A replay of this call will be made available through March 22 by dialing 855-859-2056 and the passcode is 49265055 or you can visit our website at 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 or loss, earnings or loss 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, onto the call. Dave. David Tacelli Thank you Mark and good morning everyone. During today’s call, I’ll briefly review our second quarter performance and then spend the majority of my prepared remarks on three things fueling our optimism for the company’s short and long-term outlook. Those things are first, our return to growth. As our mid-point for Q3 revenue guidance represents a 25% increase over Q2 results; second, the addition of Pascal Ronde to our executive team and third, the expansion of our addressable market through new product introductions. We expect that our second quarter results will represent the bottom of the cycle. While loss per share was within guidance, revenues were below the low end of the range as business conditions during the quarter remained challenging. While the total revenue dipped below the low point of the previous cycle, the make up of the revenue is quite different with product revenues 30% higher than in 2009.
We attribute the higher product revenue to a broadening of our customer base, which was primarily driven by companies recognizing our ability to reduce their cost of test. We acknowledge that at these low revenue levels it’s difficult to see the progress we’ve made expanding our customer portfolio. But as our customers see success in the market with their new products and the overall economic environment improves, we are confident it will show in our top line.While we are unable to predict how the overall shape of the next business cycle will unfold, we are encouraged that business levels are expected to modestly rebound in the current quarter. At the midpoint our guidance indicates top line growth of 25% sequentially. There are several factors contributing to this growth, including new customers releasing applications to volume production and pockets of capacity expansion in addition, in specific areas like RF power amplifiers. While it seems like the worst of the recent downturn is behind us, the rate of recovery will ultimately be driven by the macro economic environment. Visibility remains limited and the current business improvements are tied to specific customers and selected markets, most notably mobile communications. Once the recovery begins in earnest, we are confident that our top line growth potential is higher than the last cycle. The confidence is based on the additional customers we’ve added over the last several quarters and our ability to continue to win new business. As a result, we expect peak quarterly revenues, cycle-over-cycle, to be 20% higher. This will translate to a revenue of approximately $90 million. With a strong business model in place, the focus of the company is on growing the top line. We’ve developed a track record of winning new customers within our target market segments and we expect to enhance this momentum with the addition of Pascal Ronde to our executive team. Pascal will be heading up our Global Sales Service and Support Operations. His objective is quite simple; accelerate our top line growth opportunities.
Pascal brings to LTX-Credence, 27 years of experience, most of that time in a sales management role, directing global field operations. Most recently he ran the Global Sales and Customer Support Operations at Verigy. I met Pascal several years ago and got to know him quite well during the merger discussions between LTX-Credence and Verigy. His knowledge of the industry, professionalism and extensive network of customer contacts is impressive. To succeed in this industry you have to have the right products and cost profile, but you also need access to customers. This is a big part of what Pascal brings to LTXC.Read the rest of this transcript for free on seekingalpha.com