Verigy Ltd. (NASDAQ: VRGY), a premier semiconductor test company, today
reported financial results for its third quarter, ended July 31, 2008.
Third quarter revenue was $179 million, a 10 percent increase from $162
million in the prior quarter, and a decrease of 12 percent from the
prior year period. Orders for the third quarter were $165 million, a 7
percent decrease from the prior quarter, and a decrease of 21 percent
from the prior year period.
Net income for the third quarter was $18 million or $0.29 per fully
diluted share, compared with net income of $14 million or $0.23 per
fully diluted share in the prior quarter, and $30 million or $0.50 per
fully diluted share in the prior year period.
“While the memory market has been in a
downturn, we have used this time as an opportunity to drive three
strategic initiatives – expanding our customer
base, investing in new products and placing an emphasis on our SOC
business,” said Keith Barnes, Verigy chairman,
chief executive officer and president. “As a
result, we have won several customer evaluations, received repeat orders
and further expanded our footprint in the RF and high speed memory
markets. We believe our ability to quickly respond to our customers’
changing test requirements has contributed to our ongoing success.”
“Verigy again delivered solid financial
results in a very challenging environment due to strong demand for our
consumer mixed-signal and Port Scale RF products,”
added Bob Nikl, Verigy chief financial officer. “We
shipped significant quantities of our 93K systems from China, achieved
our revenue and earnings expectations, and initiated our recently
authorized share repurchase program.”
Outlook for Q4 2008
For the fourth quarter ending Oct. 31, 2008, the company is providing
the following guidance:
Revenue is expected to be in the range of $155 to $165 million.
Net income is expected to be in the range of $7 to $10 million, or
$0.12 to $0.17 per fully diluted share, and will include between $4.4
to $4.6 million of share-based compensation expense.
Conference Call and Webcast
Verigy’s management will present more details
on its third quarter fiscal year 2008 financial results on a conference
call with investors today beginning at 1:30 p.m. (Pacific). This event
will be webcast live in listen-only mode. Listeners may log on at http://investor.verigy.com
and select “Q3 Verigy Earnings Conference Call”
in the “Webcasts & Presentations”
section. The webcast will remain available on the company’s
Web site for fourteen days.
A telephone replay of the conference call will be available from 4:30
p.m. (Pacific) today through Sept. 4, 2008. The replay number is +1
888-286-8010 toll-free, or international callers may dial +1
617-801-6888; enter pass code 66890180.
About Verigy
Verigy designs, develops, manufactures, sells and services advanced
semiconductor test systems and solutions for the flash memory,
high-speed memory and system-on-chip (SoC) markets. Verigy’s
scalable platforms are used by leading companies worldwide in design
validation, characterization, and high-volume manufacturing test.
Advanced analysis tools accelerate design debug and yield ramp processes
for Verigy’s customers. Information about
Verigy can be found at www.verigy.com.
Forward-Looking Statements
This earnings release contains forward-looking statements, including
statements regarding Verigy’s guidance for
the fourth quarter. These forward-looking statements are based on
current information and estimates, and are not guarantees of future
performance or events. These statements are subject to a number of risks
and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. The risks and
uncertainties include, but are not limited to, unforeseen changes in
demand for semiconductors and thus for semiconductor test solutions, the
strength of our customers’ businesses and
unforeseen changes in the demand for current and new products and
technologies. Additional factors that may cause results to differ
materially from those in the forward-looking statements are discussed in
our most recent Form 10-Q and 10-K filings. In those filings you will
find descriptions of risk factors that could impact our future results.
These forward-looking statements, including our guidance, are only valid
as of this date, and Verigy undertakes no duty to update any
forward-looking statements.
VERIGY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
July 31,
July 31,
2008
2007
2008
2007
Orders:
$
165
$
208
$
521
$
543
Net revenue:
Products
$
138
$
168
$
423
$
443
Services
41
36
118
109
Total net revenue
179
204
541
552
Cost of sales:
Cost of products (a)
67
85
202
233
Cost of services (a)
29
26
86
76
Total cost of sales
96
111
288
309
Operating expenses:
Research and development (a)
27
23
78
68
Selling, general and administrative (a)
40
38
116
107
Restructuring charges
1
-
1
-
Separation costs
-
1
-
4
Total operating expenses
68
62
195
179
Income from operations
15
31
58
64
Other income, net
6
3
15
10
Income before taxes
21
34
73
74
Provision for income taxes
3
4
9
9
Net income
$
18
$
30
$
64
$
65
Net income per share- basic:
$
0.30
$
0.50
$
1.06
$
1.10
Net income per share- diluted:
$
0.29
$
0.50
$
1.05
$
1.09
Weighted average shares (presented in thousands) used in computing
net income per share:
Basic
60,003
59,428
59,962
59,068
Diluted
60,853
60,418
60,760
59,708
(a) Share-based compensation expense by function:
Cost of products
$
0.6
$
0.4
$
1.6
$
1.2
Cost of services
$
0.2
$
0.2
$
0.7
$
0.6
Research and development
$
0.5
$
0.4
$
1.5
$
1.3
Selling, general and administrative
$
3.0
$
2.4
$
8.6
$
7.2
VERIGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
July 31,
October 31,
2008
2007
ASSETS
Current assets:
Cash and cash equivalents
$
218
$
146
Short-term marketable securities
167
229
Trade accounts receivable, net
87
107
Inventory
86
68
Other current assets
49
54
Total current assets
607
604
Property, plant and equipment, net
42
42
Long-term marketable securities
82
48
Goodwill and other intangibles, net
18
18
Other long-term assets
82
59
Total assets
$
831
$
771
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
76
$
76
Payables to Agilent
-
1
Employee compensation and benefits
46
53
Deferred revenue, current
63
65
Income and other taxes payable
5
12
Other current liabilities
22
19
Total current liabilities
212
226
Long-term liabilities:
Income taxes payable
10
-
Other long-term liabilities
48
47
Total liabilities
270
273
Shareholders' equity
Ordinary shares, no par value, 59,814,433 and 59,704,629 issued and
outstanding at July 31, 2008 and October 31, 2007, respectively
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