LeCroy Reports 20 Percent Rise in Sequential Operating Income as
Operating Margins Reach 15-Quarter High
Strong Demand for WaveRunner 6000 Fuels Third Consecutive Quarter of Greater
than 20% Year on Year Order Growth; Company's Gross Margins Increase to 58%
CHESTNUT RIDGE, N.Y., April 14 /PRNewswire-FirstCall/ -- LeCroy Corporation ,
a major supplier of high-performance digital oscilloscopes, today announced
financial results for its third fiscal quarter ended March 31, 2004.
* Product orders increased 25.0 percent to $30.5 million compared with $24.3
million in the third quarter of fiscal 2003.
* Revenues rose 23.8 percent to $32.8 million from $26.5 million in the third
quarter last year.
* Gross margin increased to 58.0 percent, compared with 56.7 percent in the
third quarter last year.
* Operating income was $3.6 million, compared with operating income of $839,000
in the third quarter of fiscal 2003 and increased 20.0 percent sequentially
from the $3.0 million reported in the second quarter of fiscal 2004.
* Net income was $2.4 million compared with net income of $522,000 one year
ago.
* Income per diluted share applicable to common stockholders was $0.21 compared
with $0.00 per diluted share one year ago.
Comments on the Third Quarter "Steady growth in demand, a well-targeted product strategy and recent
improvements in operating efficiency combined to offset historical seasonality
and produce a tremendous third quarter for LeCroy," said President and Chief
Executive Officer Tom Reslewic. "We posted our third consecutive quarter of
better than 20 plus percent year-over-year order growth, gross margin rose to
58%, and operating margin was the highest it's been in nearly four years.
"A year ago we reported seeing signs that the demand environment was beginning
to improve," said Reslewic. "Demand for LeCroy's products has increased
steadily since then, and order growth and linearity remained excellent in the
third quarter. It was a particularly strong quarter for our business in the
Asia Pacific region, where orders were 34% higher than last year driven
primarily by demand in China and Japan. Orders from US customers were up 23%
from the third quarter last year, and European orders rose 17%.
"The WaveRunner 6000 series of oscilloscopes that we launched late in calendar
2003 has proven to be a resounding success," said Reslewic. "Deploying our
high-end silicon germanium and MAUI technologies into this new low-end line was
a move that has clearly resonated in our target market. It also has been
successful from a profit perspective, as we were able to increase our gross
margin during a quarter in which WaveRunner shipments comprised a greater
percentage of total shipments than they have historically.
"We have been capitalizing on the improving demand environment by consistently
launching great new products from the high end to the low end of the market,"
said Reslewic. "Customer response to the WaveRunner 6000 demonstrates once
again that this strategy is working. In the third quarter, 86 percent of our
orders were for products launched in the past 24 months. We recently announced
the introduction of our WaveSurfer series of 200MHz to 500MHz oscilloscopes.
WaveSurfer delivers class-leading features in a trend- setting form factor, and
at the lowest price point LeCroy has ever offered. We plan to continue
launching new products during the next several quarters.
"Our product strategy reflects the fact that global demand for personal digital
capacity -- whether for entertainment, information or communication -- means
stronger sales of devices that share, download and store huge amounts of data,"
said Reslewic. "Signal complexity has reached extraordinary levels as a
result, and LeCroy's competency in WaveShape Analysis has positioned us to
benefit from this trend.
"In the Computer/Semiconductor sector, for example, evolving serial data
communications standards applications are producing greater demand for our
Serial Data Analyzers," said Reslewic. "In the Data Storage market, orders for
LeCroy products are being driven by the proliferation of hard disk drives in
consumer devices like portable music players and set-top boxes. We are seeing
similar growth in the Automotive sector, where digital processing and
communication plays a more important role in each new generation of product." Nine-Month Results For the nine months ended March 31, 2004, LeCroy reported revenues of $90.0
million and operating income of $8.6 million. For the nine months ended March
31, 2003, the Company reported revenues of $78.2 million and an operating loss
of $(3.9) million, which included charges of $2.7 million for severance and
$2.3 million for impaired intangible assets.
Net income for the nine months ended March 31, 2004, was $5.3 million,
resulting in a $(0.22) loss per share applicable to common stockholders after
the $7.7 million premium paid to repurchase all outstanding shares of the
Series A Redeemable Convertible Preferred Stock in the first quarter of 2004. For the nine months ended March 31, 2003, the Company reported a net loss of
$(2.5) million, resulting in a $(0.39) loss per share applicable to common
stockholders after $1.6 million in charges for the Preferred Stock dividend and
the accretion for the value of fully exercisable warrants.
Business Outlook and Financial Guidance "With positive trends in our markets and a thoroughly refreshed product line,
LeCroy approaches fiscal 2005 with solid momentum," said Reslewic. "We have
already begun to capitalize on these dynamics. As we announced last week,
LeCroy was able to complete a follow-on offering of 1.5 million shares of
common stock in a difficult market, of which 1.0 million shares were sold by
major shareholder ValueAct Capital providing liquidity for them, and 0.5
million shares were sold by LeCroy, adding $8 million, net in cash to our
balance sheet. We intend to use $4 million of these net proceeds to retire the
remaining bank debt." "Operationally, we begin the fourth fiscal quarter with solid backlog, and we
are looking forward to continued strength in orders," said Reslewic. "Given the
operational streamlining that has reduced costs and improved our organizational
performance, we expect to continue leveraging this excellent top-line scenario
to produce solid margins and profitability. We expect LeCroy's fourth-quarter
revenues to rise to approximately $34.5 million. In addition, we anticipate
operating income of approximately $3.6 million, due to the seasonally higher
level of operating expenses we historically experience in the fourth quarter." Conference Call Information LeCroy Corporation will conduct a conference call to discuss the information
contained in this news release today, Wednesday, April 14, 2004 at 10:00 a.m. (ET). Investors who want to hear a webcast of the call should log onto
http://www.lecroy.com/ and select "Investor Relations" at least 15 minutes
prior to the broadcast. Investors should then follow the instructions provided
to assure that the necessary audio applications are downloaded and installed. The call will be archived on the Investor Relations section of
http://www.lecroy.com/ through April 30, 2004.
About LeCroy Corporation LeCroy Corporation makes advanced instruments for measuring and analyzing
complex electronic signals. The Company's core products are high-performance
oscilloscopes used by design engineers in the computer and semiconductor, data
storage devices, automotive and industrial, and military and aerospace markets. LeCroy's 40-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. Targeting a growing billion-dollar global market,
LeCroy meets a broad spectrum of customer needs with four families of
oscilloscopes, and distributes these products through a worldwide direct sales
organization. LeCroy is headquartered in Chestnut Ridge, New York, and Company
information is available at http://www.lecroy.com/.
Safe Harbor This release contains forward-looking statements pertaining to the Company's
business outlook and financial guidance for the fourth quarter of fiscal 2004,
the Company's intent and ability to retire the remaining bank debt, the
Company's ability to launch new products successfully, including the WaveSurfer
product line, the Company's ability to increase market share and increase its
addressable market, and increase its expenditures for research and development
and sales and marketing, as well as other estimates relating to future
operations. All such forward-looking statements are only estimates of future
results, and there can be no assurance that actual results will not materially
differ from expectations. 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, volume and timing of orders received, changes in the mix of
products sold, competitive pricing pressure, the Company's ability to
anticipate changes in the market, the availability and timing of funding for
the Company's current products, the development of future products and the
Company's ability to use intellectual property and protect its patent
portfolio. 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 is described in the Company's reports on file with the SEC.
Condensed Financial Information Follows ... LeCROY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
March 31, March 31,
In thousands, except 2004 2003 2004 2003
per share data (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues:
Digital oscilloscopes
and related products $29,968 $21,009 $81,592 $67,864
Service and other 2,862 5,527 8,428 10,300
Total revenues 32,830 26,536 90,020 78,164 Cost of sales 13,794 11,478 38,448 38,875
Gross profit 19,036 15,058 51,572 39,289 Operating expenses:
Selling, general and
administrative 11,319 9,552 31,411 29,605
Research and development 4,120 4,667 11,585 13,537
Total operating
expenses 15,439 14,219 42,996 43,142 Operating income (loss) 3,597 839 8,576 (3,853) Other income (expense), net 147 (10) (95) (161)
Income (loss) before
income taxes 3,744 829 8,481 (4,014)
Provision for (benefit from)
income taxes 1,385 307 3,138 (1,485)
Net income (loss) 2,359 522 5,343 (2,529) Charges related to convertible
preferred stock -- 518 -- 1,550
Redemption of convertible
preferred stock -- -- 7,665 --
Net income (loss) applicable to
common stockholders $2,359 $4 $(2,322) $(4,079) Income (loss) per common share
applicable to common
stockholders:
Basic $0.22 $-- $(0.22) $(0.39)
Diluted $0.21 $-- $(0.22) $(0.39) Weighted average number of
common shares:
Basic 10,721 10,384 10,545 10,337
Diluted 11,271 10,404 10,545 10,337 LeCROY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS March 31, June 30,
In thousands 2004 2003
(Unaudited) ASSETS
Current assets:
Cash and cash equivalents $24,951 $30,851
Accounts receivable, net 24,313 20,523
Inventories, net 22,132 24,720
Other current assets 11,749 10,012
Total current
assets 83,145 86,106 Property and equipment, net 19,624 20,021
Other assets 13,462 16,025 TOTAL ASSETS $116,231 $122,152 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and current
portion of long-term debt $4,101 $94
Accounts payable 11,477 10,937
Accrued expenses and other
liabilities 13,081 12,244
Total current
liabilities 28,659 23,275 Deferred revenue and other non-
current liabilities 2,008 3,028
Total liabilities 30,667 26,303 Redeemable convertible preferred
stock -- 15,335 Stockholders' equity 85,564 80,514 TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $116,231 $122,152
DATASOURCE: LeCroy Corporation CONTACT: Scott D. Kantor, Vice President, Finance, LeCroy Corporation, +1-845-425-2000 Web site: http://www.lecroy.com/ Company News On-Call: http://www.prnewswire.com/comp/112071.html
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