<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT of 1934
For the quarterly period ended April 30, 1997
-----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT of 1934
For the transition period from ____________________ to ____________________
Commission File Number 0-10761
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LTX CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
MASSACHUSETTS 04-2594045
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
LTX Park at University Avenue, Westwood, Massachusetts 02090
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Are Code (617) 461-1000
-----------------------------
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check X whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 23, 1997
- --------------------------------------- ---------------------------
Common Stock, par value $0.05 per share 35,475,365
<PAGE> 2
LTX CORPORATION
INDEX
Page Number
Part I. FINANCIAL INFORMATION
Consolidated Balance Sheet 1
April 30, 1997 and July 31, 1996
Consolidated Statement of Operations
Three months and nine months ended
April 30, 1997 and April 30, 1996 2
Consolidated Statement of Cash Flows
Nine months ended April 30, 1997
and April 30, 1996 3
Notes to Consolidated Financial Statements 4 - 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6 - 10
Part II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 11
SIGNATURES 12
<PAGE> 3
LTX CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
(Unaudited)
(In thousands, except share data)
<CAPTION>
April 30, July 31,
1997 1996
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 61,891 $ 66,069
Short-term investments -- 9,941
Accounts receivable, less allowances of $1,024 and $900 36,812 46,201
Inventories 56,542 66,496
Other current assets 4,998 5,239
-------- --------
Total current assets 160,243 193,946
Property and equipment, net 40,789 37,880
Other assets 3,445 3,493
-------- --------
$204,477 $235,319
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of
long-term liabilities $ 10,849 $ 12,395
Accounts payable 20,864 28,451
Accrued expenses and restructuring charges 11,055 9,052
Unearned service revenues and customer advances 4,057 6,429
-------- --------
Total current liabilities 46,825 56,327
Long-term liabilities, less current portion 15,345 16,645
Convertible subordinated debentures 7,308 7,308
Stockholders' equity:
Common stock, $0.05 par value 1,819 1,800
Additional paid-in capital 192,456 191,455
Accumulated deficit (54,915) (37,211)
Less - Treasury stock at cost (947,500 and 200,000 shares) (4,361) (1,005)
-------- --------
Total stockholders' equity 134,999 155,039
-------- --------
$204,477 $235,319
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE> 4
LTX CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
(Unaudited)
(In thousands, except per share amounts)
<CAPTION>
Three Months Nine Months
Ended Ended
April 30, April 30,
------------------- ----------------------
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales $49,497 $71,979 $140,946 $199,191
Cost of sales 33,307 42,852 96,903 120,587
Inventory provision for product line restructuring -- -- 9,250 --
------- ------- -------- --------
Gross profit 16,190 29,127 34,793 78,604
Engineering and product development expenses 5,761 5,950 17,200 16,941
Selling, general and administrative expenses 9,586 12,219 28,582 34,707
Product line restructuring costs -- -- 6,750 --
------- ------- -------- --------
Income (loss) from operations 843 10,958 (17,739) 26,956
Interest (income) expense, net 7 (150) (154) (37)
------- ------- -------- --------
Income (loss) before income taxes 836 11,108 (17,585) 26,993
Provision for income taxes 119 517 119 1,111
------- ------- -------- --------
Net income (loss) $ 717 $10,591 $(17,704) $ 25,882
======= ======= ======== ========
Fully diluted net income (loss) per share $ 0.02 $ 0.28 $ (0.50) $ 0.70
Weighted average shares 36,945 37,702 35,432 36,614
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE> 5
LTX CORPORATION
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
Nine Months
Ended
April 30,
----------------------
1997 1996
-------- --------
<S> <C> <C>
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss) $(17,704) $ 25,882
Add (deduct) non-cash items:
Depreciation and amortization 7,963 7,923
Exchange (gain) loss (154) (456)
(Increase) decrease in:
Accounts receivable 8,470 (12,452)
Inventories 9,954 (12,696)
Other current assets 209 (763)
Other assets 48 (22)
Increase (decrease) in:
Accounts payable (7,438) 4,173
Accrued expenses and restructuring charges 2,173 (1,635)
Unearned service revenues and customer advances (2,372) 1,435
-------- --------
Net cash provided by operating activities 1,149 11,389
-------- --------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of held-to-maturity securities -- (22,863)
Sale of held-to-maturity securities 9,941 --
Expenditures for property and equipment, net (10,872) (16,190)
-------- --------
Net cash used in investing activities (931) (39,053)
-------- --------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Proceeds from sale of common stock -- 55,797
Proceeds from stock purchase and option plans 1,020 1,212
Increase (decrease) in bank debt (1,306) 1,850
Payments of long-term debt (2,667) (306)
Proceeds from lease financing 2,435 --
Purchase of treasury stock (3,356) --
-------- --------
Net cash provided by (used in) financing activities (3,874) 58,553
-------- --------
Effect of exchange rate changes on cash (522) (581)
-------- --------
Net increase (decrease) in cash and equivalents (4,178) 30,308
Cash and equivalents at beginning of period 66,069 29,183
-------- --------
Cash and equivalents at end of period $ 61,891 $ 59,491
======== ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid during the period for:
Interest $ 1,742 $ 1,809
Income taxes 1,951 608
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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<PAGE> 6
LTX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The Company
-----------
LTX Corporation (the "Company") designs, manufactures, and markets
automatic test equipment for the semiconductor industry that is used to
test mixed signal, digital, linear and discrete semiconductor components.
Headquartered in Westwood, Massachusetts, the Company has development and
manufacturing facilities in Westwood, Massachusetts and San Jose,
California and worldwide sales and service facilities to support its
customer base.
2. Summary of Significant Accounting Policies
------------------------------------------
Basis of Presentation
The accompanying financial statements have been prepared by the Company,
without audit, and reflect all adjustments which, in the opinion of
management, are necessary for a fair statement of the results of the
interim periods presented. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosures of contingent assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the reporting periods. Certain
information and footnote disclosures normally included in the annual
financial statements which are prepared in accordance with generally
accepted accounting principles have been condensed or omitted. Accordingly,
although the Company believes that the disclosures are adequate to make the
information presented not misleading, the financial statements should be
read in conjunction with the footnotes contained in the Company's Annual
Report on Form 10-K.
Revenue Recognition
Revenues from product sales and related warranty costs are recognized at
the time of shipment. Service revenues are recognized over the applicable
contractual periods or as services are performed. Revenues from engineering
contracts are recognized over the contract period on a percentage of
completion basis.
Net Income (Loss) Per Share
Fully diluted net income per share is based on the weighted average number
of shares of common stock and common stock equivalents outstanding. Common
stock equivalents include shares issuable under stock option plans and
warrants to purchase shares. None of the Company's Convertible Subordinated
Debentures are common stock equivalents. Fully diluted net loss per share
is based on the weighted average number of shares of common stock
outstanding only, as the inclusion of common stock equivalents would be
anti-dilutive.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market
and include material, labor and manufacturing overhead. Inventories
consisted of the following at:
<TABLE>
<CAPTION>
April 30, July 31,
1997 1996
------- -------
(In thousands)
<S> <C> <C>
Raw materials $14,438 $17,752
Work-in-process 27,233 34,261
Finished goods 14,871 14,483
------- -------
$56,542 $66,496
======= =======
</TABLE>
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<PAGE> 7
LTX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
3. Recent Accounting Pronouncements
--------------------------------
The Company adopted Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to Be Disposed Of" (FAS 121) effective August 1, 1996. The
application of this new statement did not have a material effect on the
results of operations or financial condition of the Company.
In December 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (FAS 123) which is effective for the Company's fiscal year
ended July 31, 1997. FAS 123 requires employee stock-based compensation to
be either recorded or disclosed at its fair value. The Company will
continue to account for employee stock-based compensation under Accounting
Principles Board Opinion No. 25 and will not adopt the new accounting
standard for employee stock-based compensation under FAS 123, but will
include the additional required disclosures in the fiscal year ended July
31, 1997 consolidated financial statements.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 "Earnings Per Share" (FAS 128)
which is effective for periods ending after December 15, 1997. FAS 128
requires the presentation of basic earnings per share (EPS) and diluted
EPS. Basic EPS replaces the primary EPS calculation required under APB
Opinion No. 15. Basic EPS excludes dilution and is calculated using the
weighted average of common shares outstanding for the period. Diluted EPS
is computed similarly to fully diluted EPS pursuant to APB Opinion No. 15.
The pro-forma effect of this accounting change on the April 30, 1997 and
April 30, 1996 previously reported EPS data is as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
April 30, April 30,
--------------- ----------------
Per share amounts 1997 1996 1997 1996
----- ----- ------ -----
<S> <C> <C> <C> <C>
Primary EPS as reported $0.02 $0.28 $(0.50) $0.70
Effect of FAS 128 - $0.02 - $0.07
----- ----- ------ -----
Basic EPS $0.02 $0.30 $(0.50) $0.77
Fully Dibuted EPS as reported $0.02 $0.28 $(0.50) $0.70
Effect of FAS 128 - - - $0.01
----- ----- ------ -----
Diluted EPS $0.02 $0.28 $(0.50) $0.71
</TABLE>
4. Interest Expense and Income
---------------------------
Interest expense and income were as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
April 30, April 30,
-------------- ---------------
1997 1996 1997 1996
---- ----- ----- ----
(In thousands)
<S> <C> <C> <C> <C>
Expense $642 $ 651 $2,012 $1,916
Income (635) (801) (2,166) (1,953)
---- ----- ------ ------
Interest (income) expense, net $ 7 $(150) ($154) ($37)
==== ===== ====== ======
</TABLE>
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<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the principal
items included in the Consolidated Statement of Operations as percentages of net
sales.
<TABLE>
<CAPTION>
Percentage of Net Sales Percentage
------------------------------------- Increase/(Decrease)
Three Months Nine Months -------------------------
Ended Ended Three Months Nine Months
April 30, April 30, 1997 1997
--------------- ---------------- Over Over
1997 1996 1997 1996 1996 1996
----- ----- ----- ----- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0% (31.2)% (29.2)%
Cost of sales 67.3 59.5 68.7 60.5 (22.3) (19.6)
Inventory provision for product line -- -- 6.6 -- N/A N/M
restructuring
----- ----- ----- -----
Gross profit 32.7 40.5 24.7 39.5 (44.4) (55.7)
Engineering and product
development expenses 11.6 8.3 12.2 8.5 (3.2) 1.5
Selling, general and
administrative expenses 19.4 17.0 20.3 17.5 (21.5) (17.6)
Product line restructuring costs -- -- 4.8 -- N/A N/M
----- ----- ----- -----
Income (loss) from operations 1.7 15.2 (12.6) 13.5 (92.3) N/M
Interest (income) expense, net -- (0.2) (0.1) (0.1) N/M N/M
----- ----- ----- -----
Income (loss) before income taxes 1.7 15.4 (12.5) 13.6 (92.5) N/M
Provision for income taxes 0.3 0.7 0.1 0.6 (77.0) N/M
----- ----- ----- -----
Net income (loss) 1.4% 14.7% (12.6)% 13.0% (93.2)% N/M
===== ===== ===== =====
N/A - Not Applicable
N/M - Not Meaningful
</TABLE>
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<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the three months ended April 30, 1997 were $49.5 million as
compared to $72.0 million in the same quarter of the prior year. For the nine
months ended April 30, 1997, net sales were $140.9 million as compared to $199.2
million in the same period of the prior year. On a comparative basis, sales have
declined about 30%, for both the three month and nine month periods. The
reduction in sales largely reflects the weak demand for semiconductor test
equipment which the Company has experienced for the past twelve months. However,
orders improved sequentially in the three months ended April 30, 1997, which
enabled the Company to increase sales 6% over the preceding three month period.
Gross margin was 32.7% of net sales for the three months ended April 30, 1997
as compared to 40.5% in the same quarter of the prior year. For the nine months
ended April 30, 1997, gross margin was 31.3% of sales, excluding an inventory
provision for product line restructuring, as compared to 39.5% of sales in the
same period of the prior year. In the current fiscal year, gross margin has been
adversely affected by the lower level of sales relative to fixed manufacturing
costs and relative to the cost of the Company's applications assistance and
warranty support organizations. As a result of a combination of increased
shipments and reductions in manufacturing costs, initiated in the first half of
fiscal 1997, the Company's gross margin improved sequentially from 31.1% of
sales for the three months ended January 31, 1997 to 32.7% for the three months
ended April 30, 1997.
For the nine months ended April 30, 1997, the Company's gross margin was
reduced by a $9.3 million inventory provision related to non-strategic Digital
products. In addition to the inventory provision, the Company also took a charge
of $6.7 million for the cancellation of non-strategic Digital development
projects, future costs associated with the Company's redirection of its Digital
product strategy and severance costs related to a workforce reduction. These
provisions were included in the Company's results of operations for the three
months ended October 31, 1996.
Engineering and product development expenses were $5.8 million, or 11.6% of
net sales, as compared to $6.0 million, or 8.3% of net sales, in the same
quarter of the prior year. For the nine months ended April 30, 1997, engineering
and product development expenses were $17.2 million, or 12.2% of net sales, as
compared to $16.9 million, or 8.5% of net sales, in the same period of the prior
year. Engineering expenditures have remained at essentially the same level
year-to-year, reflecting the Company's commitment to maintaining its investment
in strategic product development programs for its system-on-a-chip test system.
Selling, general and administrative expenses were $9.6 million, or 19.4% of
net sales, in the three months ended April 30, 1997, as compared to $12.2
million, or 17.0% of net sales, in the same quarter of the prior year. For the
nine months ended April 30, 1997, selling, general and administrative expenses
were $28.6 million, or 20.3% of net sales, as compared to $34.7 million, or
17.5% of net sales, in the same period of the prior year. The reduction in
selling, general and administrative expenses is largely a result of a
combination of lower variable selling costs and variable compensation, reduced
discretionary spending, as well as a workforce reduction and holiday vacation
shutdown in the first half of the fiscal year.
For the three months ended April 30, 1997, interest expense and interest
income were approximately equal. For the three months ended April 30, 1996, net
interest income was $0.2 million. For the nine months ended April 30, 1997, net
interest income was $0.2 million as compared to less than $0.1 million in the
same period of the prior year. The lower level of net interest income in the
three months ended April 30, 1997 is a result of lower average cash balances
during the period as compared to the same quarter of the prior year.
- 7 -
<PAGE> 10
The tax provision of $0.1 million in the three months ended April 30, 1997
reflects certain state and foreign tax provisions. For most of the Company's tax
jurisdictions, the Company has net operating loss carryforwards to offset
current taxable income.
As a result of the 6% increase in shipments and the improvement in gross
margin, the Company increased its net profit sequentially from $0.4 million, or
$0.01 per share, in the three months ended January 31, 1997, to $0.7 million, or
$0.02 per share, in the three months ended April 30, 1997. For the three months
ended April 30, 1996, net income was $10.6 million, or $0.28 per share. For the
nine months ended April 30, 1997, the net loss, before the inventory provision
and product line restructuring charge, was $1.7 million, or $0.05 per share, as
compared to net income of $25.9 million, or $0.70 per share, in the same period
of the prior year. The total net loss for the nine months ended April 30, 1997
was $17.7 million, or $0.50 per share.
Until semiconductor equipment industry conditions improve considerably, the
Company's ability to maintain profitable operations in the near-term will
continue to depend on obtaining the required level of shippable orders to meet
its quarterly sales objectives. The Company's results of operations would be
adversely affected if it were to experience lower than anticipated order levels
or extended customer delivery requirements.
LIQUIDITY AND CAPITAL RESOURCES
Cash and equivalents were $61.9 million at April 30, 1997 as compared to $76.0
million of cash and short-term investments at July 31, 1996. The reduction in
cash and short-term investments of $14.1 million in the nine months ended April
30, 1997 was the net result of $1.1 million of net cash provided by operations,
$10.9 million of net cash used for property and equipment expenditures, $3.9
million of net cash used in financing activities as well as the $0.5 million
effect on cash for changes in exchange rates.
The decrease of $8.5 million in accounts receivable was largely a result of
the lower level of sales in the three months ended April 30, 1997 as compared to
the level of sales in the three months ended July 31, 1996. The decrease of
$10.0 million in inventories in the nine months ended April 30, 1997 was
primarily a result of the inventory provision for product line restructuring of
$9.3 million in the first three months of the fiscal year. The decrease in
accounts payable of $7.4 million in the nine months ended April 30, 1997 was
largely a result of the lower level of inventory purchases during this period
relative to the level of inventory purchases in the three month period ending
July 31, 1996.
Property and equipment additions were $10.9 million in the nine months ended
April 30, 1997 and exceeded depreciation charges of $8.0 million. Additions
during this period included a new management information system, which is being
funded through lease financing, as well as test systems and spare modules needed
for the Company's product development programs and customer support
requirements.
The Company's Japanese subsidiary's bank borrowings were $5.9 million at April
30, 1997 as compared to $8.3 million at July 31, 1996. Payment of long-term debt
of $2.7 million in the nine months ended April 30, 1997 included the first $2.0
million semi-annual sinking fund payment on a $20.0 million long-term note at
8%. During the first six months of the current fiscal year, the Company
repurchased 747,500 shares of its common stock at a cost of $3.4 million.
Management believes that the Company has sufficient cash resources to meet its
future cash requirements. These resources include cash balances of $61.9
million, together with future cash flows from operations.
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<PAGE> 11
FORWARD-LOOKING STATEMENTS
The Company in this report makes, and may from time to time elsewhere make,
disclosures which contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such disclosures in this
report include, without limitation, the Company's belief, under "Liquidity and
Capital Resources," as to the adequacy of its cash resources. Such
forward-looking statements involve risks and uncertainties including, but not
limited to, the following important factors that could cause actual results to
differ materially from those in the forward-looking statement:
Fluctuations in Sales and Operating Results
- -------------------------------------------
Given the relatively large selling prices of the Company's test systems, sales
of a limited number of test systems account for a substantial portion of sales
in any particular fiscal quarter and a small number of transactions could
therefore have a significant impact on sales and gross margins for that fiscal
quarter. The Company's sales and operating results have fluctuated and could in
the future fluctuate significantly from period to period, including from one
quarterly period to another, due to a combination of factors, including the
cyclical demand of the semiconductor industry, order cancellations or
reschedulings by customers, the large selling prices of the Company's test
systems (which typically result in a long selling process), competitive pricing
pressures and the mix between and configuration of digital and linear/mixed
signal and discrete component test systems sold in a particular period. The
impact of these and other factors on the Company's sales and operating results
in any future period cannot be forecast with accuracy. In addition, the need for
continued investment in research and development, for capital equipment
requirements and for extensive worldwide customer support capability results in
significant fixed costs which would be difficult to reduce in the event that the
Company does not meet its sales objectives.
Cyclicality of Semiconductor Industry
- -------------------------------------
The Company's business is largely dependent upon the capital expenditures of
semiconductor manufacturers. The semiconductor industry is highly cyclical and
has historically experienced, and is currently experiencing, recurring periods
of oversupply, which often have had a severely detrimental effect on such
industry's demand for test equipment and could cause cancellations,
reschedulings or reductions of customer orders. No assurance can be given that
the Company's business and results of operations will not be materially
adversely affected if the current weak market conditions continue for a
prolonged period or if weak market conditions or changes in any particular
market segments of the semiconductor industry occur in the future, especially if
all of the market segments in which the Company participates experience
downturns at the same time.
Importance of New Product Introductions
- ---------------------------------------
The semiconductor test equipment ("STE") market is subject to rapid
technological change and new product introductions, as well as advancing
industry standards. The development of increasingly complex semiconductors and
the utilization of semiconductors in a broader spectrum of products has driven
the need for more advanced test systems to test such devices at an acceptable
cost. The Company's ability to remain competitive in the digital, linear and
mixed signal integrated circuit ("IC") and discrete component markets will
depend upon its ability to successfully enhance existing test systems and
develop new generations of test systems and to introduce these new products on a
timely and cost-effective basis. The Company also has to manufacture its
products in volume at a competitive price and on a timely basis to enable
customers to integrate them into their operations as they begin to produce their
next generation of semiconductors. The Company's failure to have a competitive
test system available when required by a semiconductor manufacturer would make
it substantially more difficult for the Company to sell test systems to that
manufacturer for a number of years.
- 9 -
<PAGE> 12
The Company has in the past experienced delays in introducing certain of its
products and enhancements, and there can be no assurance that it will not
encounter technical or other difficulties that could in the future delay the
introduction of new products or enhancements. If new products have reliability
or functionality problems, then reduced, canceled or rescheduled orders, higher
manufacturing costs, delays in collecting accounts receivable and additional
warranty expense may result, which could reduce gross margins on new product
sales and otherwise materially affect the Company's business and results of
operations. Furthermore, announcements by the Company or its competitors of new
products could cause customers to defer or forego purchases of the Company's
existing products, which would also adversely affect the Company's business and
results of operations. There can be no assurance that the Company will be
successful in the introduction and volume manufacture of its new products, that
such introduction will coincide with the development by semiconductor
manufacturers of their next generation semiconductors or that such products will
satisfy customer needs or achieve market acceptance. The failure to do so could
materially adversely affect the Company's business and results of operations.
Acquisitions
- ------------
The Company from time to time may acquire technologies, product lines or
businesses that are complementary to those of the Company. There can be no
assurance that the Company will be able to successfully negotiate financing or
integrate such acquired technologies, product lines or businesses. Furthermore,
the integration of an acquired company or business may cause a diversion of
management time and resources. There can be no assurance that a given
acquisition, if consummated, would not materially adversely affect the Company.
Proprietary Rights
- ------------------
The Company's future success depends in part upon its proprietary technology.
Although the Company attempts to protect its proprietary technology through a
combination of contract provisions, trade secrets, copyrights and patents, it
believes that its future success depends more upon its engineering,
manufacturing, marketing and service skills. There can be no assurance that the
steps taken by the Company to protect its proprietary rights will be adequate to
prevent misappropriation of its technology or the independent development by
others of similar technology. Although there are no pending actions against the
Company regarding any patents, no assurance can be given that infringement
claims by third parties will not have a material adverse effect on the Company's
business and results of operations.
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<PAGE> 13
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) (i) Exhibit 13 - Selected Financial Data
(ii) Exhibit 27 - Financial Data Schedule
(b) There were no reports on Form 8-K filed during the three months
ended April 30, 1997.
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<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LTX Corporation
Date: June 2, 1997 By: /s/ Roger W. Blethen
------------ ---------------------------------------
Roger W. Blethen
Chief Executive Officer and President
Date: June 2, 1997 By: /s/ John J. Arcari
------------ ---------------------------------------
John J. Arcari
Treasurer
Chief Financial Officer
(Principal Financial Officer)
Date: June 2, 1997 By: /s/ Glenn W. Meloni
------------ ---------------------------------------
Glenn W. Meloni
Controller
(Principal Accounting Officer)
- 12 -
<PAGE> 1
<TABLE>
Exhibit 13
------------------------------
SELECTED FINANCIAL INFORMATION
------------------------------
FIVE YEAR SUMMARY
<CAPTION>
(In millions, except per Year Ended July 31
share data and statistics) --------------------------------------------
1996 1995 1994 1993 1992
--------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATINGS RESULTS
Customer Orders $233.6 236.9 197.9 182.1 127.4
Order Backlog $ 65.5 98.4 71.8 42.2 33.0
Sales $266.5 210.3 168.3 172.9 149.1
Gross Margin $101.1 73.6 47.9 59.4 43.0
Engineering and Product
Development Expenses $ 22.9 19.8 19.6 19.7 22.0
Selling, General and
Administrative Expenses $ 46.8 39.0 42.3 42.6 41.5
Restructuring Charges $ -- -- 14.4 -- 2.8
Income (Loss) from Operations $ 31.4 14.8 (28.4) (2.9) (23.3)
Net Income (Loss) $ 30.3 10.7 (31.3) (4.3) (24.3)
PER SHARE DATA
Fully Diluted Earnings
(Loss) per Share $ 0.82 0.36 (1.23) (0.20) (1.22)
Weighted Average Shares 36.8 29.8 25.5 21.1 19.9
Book Value Per Share $ 4.33 2.23 1.55 2.69 2.64
FINANCIAL POSTION
Working Capital $137.6 62.2 48.9 55.6 49.0
Property and Equipment $ 37.9 28.4 28.9 28.3 29.6
Total Assets $235.3 145.9 130.6 138.3 118.3
Debt $ 36.3 37.1 48.7 31.0 35.5
Stockholders' Equity $155.0 65.4 40.6 66.5 53.1
Current Ratio 3.4 2.2 2.0 2.1 2.3
Asset Turnover 1.4 1.5 1.2 1.4 1.1
Debt as a % of Total Capitalization % 19.0 36.2 54.5 31.8 40.1
OTHER INFORMATION
Additions to Property and Equipment (Net) $ 20.0 10.2 12.7 7.8 7.6
Depreciation and Amortization $ 10.5 9.7 9.2 9.2 9.4
Employees 1,032 944 880 930 946
Sales Per Employee (000) $ 270 230 179 186 139
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> APR-30-1997
<CASH> 61,891
<SECURITIES> 0
<RECEIVABLES> 37,836
<ALLOWANCES> 1,024
<INVENTORY> 56,542
<CURRENT-ASSETS> 160,243
<PP&E> 106,491
<DEPRECIATION> 65,702
<TOTAL-ASSETS> 204,477
<CURRENT-LIABILITIES> 46,825
<BONDS> 22,653
0
0
<COMMON> 1,819
<OTHER-SE> 133,180
<TOTAL-LIABILITY-AND-EQUITY> 204,477
<SALES> 121,399
<TOTAL-REVENUES> 140,946
<CGS> 86,724
<TOTAL-COSTS> 96,903
<OTHER-EXPENSES> 16,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,012
<INCOME-PRETAX> (17,585)
<INCOME-TAX> 119
<INCOME-CONTINUING> (17,704)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,704)
<EPS-PRIMARY> (0.50)
<EPS-DILUTED> (0.50)
</TABLE>
