TELEDYNE LECROY INC 
By CHESTNUT RIDGE, N.Y., Oct. 26, 2011 /PRNewswire/ -- LeCroy Corporation (NASDAQ: LCRY), a leading supplier of oscilloscopes and serial data test solutions, today announced financial results for its fiscal first quarter ended October 1, 2011.
The highlights of the Company's year-over-year ("YOY") financial performance for the first quarter of fiscal 2012 are as follows:
(In
millions,
except
per
share
data,
percentages
and bps) Q1 FY12 Q1 FY11 Q1 FY12 Q1 FY11 YOY Change
GAAP GAAP non-GAAP* non-GAAP* non-GAAP*
Revenue $49.0 $39.1 $49.0 $39.1 25.4%
Gross
Margin 61.0% 59.8% 60.6% 60.1% 50 bps
Operating
Income
(Loss) $11.8 $(0.6) $6.9 $4.3 59.6%
Operating
Margin 24.0% (1.4)% 14.0% 11.0% 300 bps
Net
Income
(Loss) $7.3 $(1.3) $4.3 $2.3 87.2%
------- ---- ----- ---- ---- ----
Net
Income
(Loss)
Per
Diluted
Share $0.43 $(0.10) $0.26 $0.18 44.4%
-------- ----- ------ ----- ----- ----
* A presentation of, and a reconciliation of, non-GAAP
financial measures with the most directly comparable GAAP
measures, if different, can be found in the financial
tables below.
Comments on the Quarter
"LeCroy's first quarter of fiscal 2012 marked the Company's tenth consecutive quarter of sequential revenue growth," said President and Chief Executive Officer Tom Reslewic. "Sales increased 25% to $49 million - a record for the Company - driven by continued strength at the mid- and high-end range of our oscilloscope product lines. All geographies performed well, particularly Asia-Pacific and EMEA. We generated $6.8 million in cash from operations as we continued to effectively manage our working capital."
As previously disclosed last week, in the second quarter of fiscal 2012, LeCroy retired all of its outstanding 4% convertible notes totaling approximately $29.7 million, which matured on October 15, 2026. The retired convertible notes were rolled into the Company's existing $75 million revolving line of credit, which expires on August 8, 2016, and is currently carrying an interest rate of 2.3%.
GAAP operating income for the first quarter of fiscal 2012 includes $5.1 million of non-cash share-based compensation benefit of which $5.6 million is attributable to the remeasurement of outstanding stock appreciation rights ("SARs"), offset by $0.5 million in share-based compensation expense attributable to options and restricted stock. Accounting for SARs requires the recognition of an expense or benefit to the consolidated statements of operations depending on whether the Company's stock price increased or decreased, respectively.
Outlook and Guidance
"Going forward, we continue to see opportunities to further penetrate the oscilloscope market," said Reslewic. "Demand is strong for LabMaster, the world's highest bandwidth and channel count oscilloscope system. Our new WaveRunner 6 Zi series oscilloscopes also are selling at a brisk pace, setting an all-time record for WaveRunner sales in the current quarter."
"LeCroy entered the second quarter with robust demand for our products and strong backlog. For fiscal year 2012, we are increasing our guidance, anticipating sales of between $200 to $205 million. We expect non-GAAP operating margin of between 15.0% and 15.5% and non-GAAP net income in the range of $1.16 to $1.21 per diluted share. For the second quarter of fiscal 2012, we currently expect to report revenues of approximately $50 to $52 million, non-GAAP operating margin of approximately 15%, and non-GAAP net income in the range of $0.29 to $0.31 per diluted share," concluded Reslewic.
Conference Call Information
LeCroy will broadcast its quarterly conference call for investors live over the Internet today, Wednesday, October 26, 2011 at 10:00 a.m. ET. To access the webcast, visit the "Events Calendar" in the "Investors" section of LeCroy's website at www.lecroy.com. The call also may be accessed by dialing (877) 709-8155 or (201) 689-8881. For interested individuals unable to join the live conference call, a webcast replay will be available on the Company's website for approximately one year.
About LeCroy Corporation
LeCroy Corporation is a worldwide leader in serial data test solutions, creating advanced instruments that drive product innovation by quickly measuring, analyzing and verifying complex electronic signals. The Company offers high-performance oscilloscopes, serial data analyzers and global communications protocol test solutions used by design engineers in the computer, semiconductor and consumer electronics, data storage, automotive and industrial, and military and aerospace markets. LeCroy's 47-year heritage of technical innovation is the foundation for its recognized leadership in "WaveShape Analysis" - capturing, viewing and measuring the high-speed signals that drive today's information and communications technologies. LeCroy is headquartered in Chestnut Ridge, New York. Company information is available at http://www.lecroy.com.
Safe Harbor
This release contains forward-looking statements, including those pertaining, but not limited to, expectations regarding: continuing to see opportunities to further penetrate the oscilloscope market; expectation to continue to see strong demand for LabMaster, the world's highest bandwidth and channel count oscilloscope system; expectation to continue to see robust demand for LeCroy's products and strong backlog; and LeCroy's expectations for second-quarter and full-year fiscal 2012 revenues, non-GAAP operating margin and non-GAAP earnings per share.
Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties including, without limitation, adverse changes in general economic or political conditions in any of the major countries in which LeCroy does business; volume and timing of orders received; changes in the mix of products sold; competitive pricing pressure; the availability and timing of funding for the Company's current products; delays in development or shipment of LeCroy's new products or existing products; introduction of new products by existing and new competitors; failure to successfully manage transitions to new markets; failure to anticipate and develop new products and services in response to changes in demand; failure to obtain and maintain cost reductions; difficulty in predicting revenue from new products; disputes and litigation; inability to protect LeCroy's intellectual property from third-party infringers; failure to manage LeCroy's sales and distribution channels effectively; disruption of LeCroy's business due to catastrophic events; risks associated with international operations; fluctuations in foreign currency exchange rates and interest rates applicable to our variable rate bank debt; changes in, or interpretations of, accounting principles; inventory write-down; impairment of long-lived assets; valuation of deferred tax assets; unanticipated changes in, or interpretations of, tax rules and regulations; LeCroy's inability to attract and retain key personnel; and interruptions or terminations in LeCroy's relationships with turnkey assemblers.
For further discussion of these and other risks and uncertainties, individuals should refer to LeCroy's SEC filings, which are available at the Company's website www.lecroy.com. The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in LeCroy's Quarterly Report on Form 10-Q for the fiscal quarter ended October 1, 2011, which the Company expects to file in November 2011.
LeCroy undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise. Further information on potential factors that could affect LeCroy Corporation's business are described in the Company's reports on file with the SEC.
Use of Non-GAAP Financial Measures
Certain disclosures in this press release include "non-GAAP financial measures." A non-GAAP financial measure is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in the Consolidated Balance Sheets, Consolidated Statements of Operations or Cash Flows of the Company.
The non-GAAP results are a supplement to the financial statements based on generally accepted accounting principles ("GAAP"). The Company believes this presentation provides investors and LeCroy management with additional insight into its underlying results because of the materiality of certain non-cash charges. The Company excludes these expenses when evaluating core operating activities and for strategic decision making, forecasting future results and evaluating current performance.
We define non-GAAP gross profit as gross profit as reported under GAAP plus or minus primarily non-cash charges for share-based compensation (benefit) costs and business realignment charges included in cost of revenues. Non-GAAP gross margin is computed as non-GAAP gross profit as a percentage of total revenues. Non-GAAP gross profit and non-GAAP gross margin are not substitutes for comparable GAAP measures.
We define non-GAAP operating income as operating income (loss) reported under GAAP plus or minus primarily non-cash charges for share-based compensation (benefit) costs, business realignment charges, acquisition costs and amortization of intangible assets acquired through the Bogatin Enterprises, L.L.C. transaction. A significant portion of our stock-based compensation benefit was the result of the decrease in the fair value of our SARs, driven primarily by the decline in our stock price. Non-GAAP operating income is not a substitute for GAAP operating income (loss).
We define non-GAAP net income as net income (loss) reported under GAAP plus or minus primarily non-cash charges for share-based compensation (benefit) costs, business realignment charges, acquisition costs and amortization of intangible assets acquired through the Bogatin Enterprises, L.L.C. transaction, write-off of debt issue costs and non-cash amortization of debt discount on convertible notes, each net of applicable income taxes, such that the effective tax rate, for non-GAAP net income is approximately 29% and 31% on a year-to-date basis, adjusted for tax return filing true-ups and reserve adjustments, for the 2011 and 2012 periods, respectively. Non-GAAP net income is not a substitute for GAAP net income (loss).
We define non-GAAP net income per diluted common share as non-GAAP net income divided by the weighted average number of shares outstanding plus the dilutive effect of stock options, restricted stock and the convertible notes, calculated consistent with GAAP, as applicable. Non-GAAP net income per diluted common share is not a substitute for GAAP net income (loss) per diluted common share.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted common share, as we defined them, may differ from similarly named measures used by other entities and, consequently, could be misleading unless all entities calculate and define such non-GAAP measures in the same manner. A presentation of, and a reconciliation of, our non-GAAP financial measures with the most directly comparable GAAP measures are included in the accompanying financial data. By definition, non-GAAP measures do not give a full understanding of LeCroy; therefore, to be truly valuable, they must be used in conjunction with the GAAP measures. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
LeCROY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended
Oct 1, Oct 2,
2011 2010
In thousands, except per share data
-----------------------------------
Revenues:
Test and measurement products $45,905 $36,473
Service and other 3,121 2,637
----- -----
Total revenues 49,026 39,110
Cost of revenues:
Share-based compensation (232) 135
Other costs of revenues 19,376 15,587
19,144 15,722
Gross profit 29,882 23,388
Operating expenses:
Selling, general and administrative:
Share-based compensation (4,369) 4,037
Other selling, general and administrative
expenses 13,545 11,312
9,176 15,349
Research and development:
Share-based compensation (471) 697
Other research and development expenses 9,423 7,905
8,952 8,602
Total operating expenses 18,128 23,951
Operating income (loss) 11,754 (563)
Other income (expense):
Write-off of debt issue costs (153) -
Interest income 24 11
Interest expense (465) (790)
Amortization of debt discount on
convertible notes (470) (561)
Other, net (171) (277)
---- ----
Other expense, net (1,235) (1,617)
Income (loss) before income taxes 10,519 (2,180)
Provision (benefit) for income taxes 3,230 (916)
----- ----
Net income (loss) $7,289 $(1,264)
====== =======
Net income (loss) per common share
Basic $0.44 $(0.10)
Diluted $0.43 $(0.10)
Weighted average number of common shares:
Basic 16,460 12,667
Diluted 16,965 12,667
LeCROY CORPORATION
------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(UNAUDITED)
-----------
Oct 1, July 2,
In thousands 2011 2011
------------ ---- ----
ASSETS
Current assets:
Cash and cash equivalents $9,363 $5,488
Accounts receivable, net 30,997 31,562
Inventories, net 46,674 48,248
Other current assets 11,332 13,329
------ ------
Total current assets 98,366 98,627
Property and equipment, net 26,609 26,334
Intangible assets, net 1,787 499
Other non-current assets 4,274 4,733
----- -----
TOTAL ASSETS $131,036 $130,193
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $17,029 $17,896
Accrued expenses and other current
liabilities 18,885 24,728
Convertible notes, net of unamortized
discount of $82 and $553, respectively 29,568 29,097
Total current liabilities 65,482 71,721
Deferred revenue and other non-current
liabilities 4,357 3,968
Total liabilities 69,839 75,689
Stockholders' equity 61,197 54,504
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $131,036 $130,193
======== ========
LeCROY CORPORATION
RECONCILIATION OF REPORTED GAAP RESULTS
TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Quarter Ended
Oct 1, Oct 2,
2011 2010
In thousands
------------
GAAP gross profit, as reported $29,882 $23,388
Non GAAP adjustments:
Share-based compensation (232) 135
Business realignment - severance charge 68 -
Non GAAP gross profit $29,718 $23,523
======= =======
Quarter Ended
Oct 1, Oct 2,
2011 2010
In thousands
------------
GAAP operating income (loss), as
reported $11,754 $(563)
Non GAAP adjustments:
Share-based compensation (5,072) 4,869
Business realignment - severance charge 81 -
Acquisition costs 38 -
Amortization of intangible assets
acquired 72 -
Non GAAP operating income $6,873 $4,306
====== ======
Quarter Ended
Oct 1, Oct 2,
2011 2010
In thousands
------------
GAAP net income (loss), as reported $7,289 $(1,264)
After-tax effect of Non GAAP adjustments:
Share-based compensation (3,517) 3,220
Business realignment - severance charge 57 -
Acquisition costs 27 -
Amortization of intangible assets
acquired 50 -
Write-off of debt issue costs 106 -
Non-cash amortization of debt discount
on convertible notes 328 362
Non GAAP net income $4,340 $2,318
====== ======
Quarter Ended
Oct 1, Oct 2,
2011 2010
In thousands, except per share data
-----------------------------------
Net income (loss) per common share
Diluted, as reported $0.43 $(0.10)
Diluted, non GAAP $0.26 $0.18
Weighted average number of common shares:
Diluted, as reported 16,965 12,667
Diluted, non GAAP 16,965 13,013
Contact:
Sean B. O'Connor
Vice President, Finance and Chief Financial Officer
LeCroy Corporation
Tel: 845-425-2000
SOURCE LeCroy Corporation
