LTX-Credence Investor Presentation

Transcription

1 LTX-Credence Investor Presentation November, 2009

2 Safe Harbor for Forward-Looking Statements Statements in this presentation regarding the business and financial prospects of LTX-Credence, and the merger between LTX and Credence completed on August 29, 2008, including the belief that the product and marketing strategy will retain existing customers and provide growth opportunities, forecasts of market size and market share, product roadmap plans, and the anticipation of saving in excess of $110 million at the end of the integration period, the financial guidance on revenue, non- GAAP net loss, net loss and loss per share, gross margin, the target break-even business model, financial and business plans for fiscal 2010, and any other statements about management s future expectations, beliefs, goals, plans or prospects constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of Any statements that are not statements of historical fact (including statements containing believes, anticipates, plans, expects, may, will, would, intends, estimates and similar expressions) should also be considered to be forward looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including: high cash consumption rates due to low revenues; the ability to successfully integrate LTX s and Credence s operations and employees; current weak worldwide economic conditions; the ability to realize anticipated synergies and cost savings; the risk of fluctuations in sales and operating results; risks related to the timely development of new products, options and software applications and the other factors described in LTX s Annual Report on Form 10-K for the fiscal year ended July 31, 2008 and Credence s Annual Report on Form 10 K for the fiscal year ended November 3, 2007 and their most recent Quarterly Reports on Form 10-Q each filed with the SEC. LTX-Credence disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this presentation.

3 LTX-Credence Overview Vision To be the leading provider of focused, cost-optimized ATE solutions to the SOC market Fast Facts Founded Recent M&A Corporate Offices Employees FY09 Revenue Core Businesses $137.4M Design & development of automated test equipment (ATE) for the semiconductor industry Market focus on SOC device testing RF wireless Power management Complex analog Consumer digital Applications engineering services Worldwide field service and support 1976 Acquired Credence in August 2008 Norwood, Massachusetts and Milpitas, California 620

4 Why did LTX acquire Credence? Created a strong player in mid-range and analog segments Enabled immediate access into consumer digital markets Extended customer diversification beyond TI and AMD Increased our size and scale Created a strong presence in Asia via Spirox partnership Established us as key supplier with Asian subcontractors Realized annual synergy savings of greater than $112M

5 Current Environment

6 Current Market Conditions Conditions improving but its not broad based China/Taiwan seeing strength in: RF wireless Analog and consumer digital US & Europe economy still cautious Expect markets we serve to grow faster than the overall industry No slow down in electronic content Pieces of technology continue to be combined into single chip or single package applications Analog content keeps increasing Limited visibility persists Will take conservative approach to running the business.

7 SOC ATE Market Poised for Recovery Semi equipment is highly cyclical and 2009 is expected to be the lowest point in over 15 years. 3,000 2,750 Global SOC ATE Sales ($M) 2,500 2,250 2,000 1,750 1,500 1,250 1, E 2010E 2011E 2012E Calendar Year Data Source: Gartner 12/2008.

8 LTX-Credence SOC Test Market Share Demonstrated share growth post merger 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10E Source: SEC filings and LTXC estimates Data includes SOC revenue for TER, VRGY, ATE and LTXC

9 SOC Market and Customer Overview

10 Product Strategy Aligned with Market Dynamics PC Domain Consumer Domain LTXC s Growth Strategy and Market Focus Graphics/ Peripheral CPU DSP / ASIC Power/Analog Mixed Signal Auto Mobility RF 2008 IC Sales $36.1B $34.3B $36.7B $14.3B $15.76B $6.35B $8.71B 2008 IC Unit Volume 7.8B 0.375B 5.65B 48.1B 21.8B 5.62B 6.59B CAGR (units) % 5% 14% 13% 18% 9% 6% Customer Diversity Very Low Medium High High Low High Market Dynamics Heavy use of BIST/DFT Move to Reduced Pin Count Test Commoditized ATE pricing environment High Unit volume growth continues to drive ATE CAPEX Wide range of Analog technologies low level of BIST/DFT Multi-Function integration especially RF, Power Mgt and DSP Represents 90% of IC unit volume Average ATE growth rate >5% Source: IC Insights & LTX

11 Segment Focused, Scalable Platforms LTXC s Growth Strategy and Market Focus CPU Chipset Graphics MCU DSP ASIC Wireless RF Power M/S, Analog Unit Volume Bn 7.9Bn 9.9Bn 5.7Bn 6.6Bn 69.9Bn Digital Sapphire Optimized performance for CPU, graphics and high end digital testing Diamond High density packaging for lowest cost testing of microcontrollers, cost sensitive digital consumer X-Series Configurations for optimal testing of DSP, power, automotive, mixed signal & RF applications Analog ASL Market leader for testing linear, low end mixed signal and power management devices

12 Integrated Multi-system Architecture, IMA IMA CPU CPU CPU CPU Tester Module Tester Module Tester Module What is IMA? Ability to create tester arrays of low cost systems to enable massive multi-site testing As production needs shift tester arrays can be reconfigured back into individual test cells providing the ultimate in capital flexibility Industry Leading Multi-site efficiency

13 Diamond Platform CPU High density packaging for lowest cost testing of microcontrollers, cost sensitive digital consumer Chipset Graphics MCU Wireless RF DSP ASIC Segment Focused Devices Microcontrollers: gaming, video, digital camera, Internet communication, multimedia PC peripherals: SATA, Cardbus Printer drivers and motor controllers Portable media players: MP3 controllers, decoders Optical storage: CD/DVD encoder, decoder, controllers ASICs: digital, MS Power M/S, Analog Sapphire Diamond X-Series ASL

14 X-Series Platform Sapphire Chipset Graphics CPU Configurations for optimal testing of DSP, power, automotive, mixed signal & RF applications Segment Focused Devices Power and power management Automotive switches and sensors Printer drivers & motor controllers Automotive microcontrollers DSP: digital, MS, analog X-Series Transceivers, PAs, RFSOC, FEM for all mobile wireless technologies Converters: precision, high speed, embedded, audio ASL Power M/S, Analog Wireless RF DSP ASIC MCU Diamond Audio: CODECS, amplifiers

15 ASL Platform Sapphire Segment Focused Devices Discrete small signal, high power/voltage (PMOS, NMOS, IGBT, BJT, MOSFET) Diamond MCU Chipset Graphics CPU Market leader for testing linear, low pin count mixed signal and power management devices Analog MEMS Standard linear Voltage regulators (LDO, switching, and power) X-Series Audio/video (ADCs, DACs, buffers/filters) Analog ICs ASL Power M/S, Analog Wireless RF DSP ASIC Power management and monitoring

16 Strong Position with Leading IDMs, Fabless and OSAT Customers Computing Entertainment Wireless Automotive

17 LTXC is a Global Supplier of Semiconductor Test Equipment Every RF device in the technologically acclaimed iphone is tested on LTXC systems

18 Financials

19 Quarterly Break-even Business Model LTX & Credence standalone $M Q1FY09 Q2FY09 Q3FY09 Q4FY09 FY10E GAAP net income B-E $118 $91 $69 $57 $50 Pro forma net income B-E* $108 $83 $62 $50 $46 EBITDA B-E** $88 $73 $51 $39 $37 * Excludes amortization of intangibles ** Excludes equity compensation expense Reduced expenses by approximately $112M annually Reduced facilities footprint by 65% Lowering our quarterly EBITDA B-E by over 58% to $37M

20 Q3 & Q4 09 Review and Q1FY10 Guidance Business model better than expected Q3FY09 Actual Q4FY09 Actual Q1FY09 Street Guidance Revenue $24.7M $35.2M $40-42M Gross Margin* 28.4% 43% N/A Net Income* ($22.3M) ($9.0M) ($6.4M) to ($3.8M) EPS ($0.18) ($0.07) ($0.05) ($0.03) EBITDA ($15.3M) ($2.7M) N/A The Company is Expected to Return to a Positive EBITDA in Q1 Anticipated Growth in Revenues of 15-20% * Excludes one time charges and amortization of purchased intangibles

21 Revenue Rebound $M Q1 Q2 Q3 Q4 Q1E FY2009 FY2010 Service Product Note: Q1E assumes the mid-point of guidance provided Sept. 3

22 Debt Summary Total Cash Total Debt Net Cash to Total Debt Q4 FY09 $96M $86M $10M Pro Forma (1) Q4 FY09 $84M $74M $10M CONVERTIBLE NOTES: $1.5M due May 2010 (3.5% fixed coupon, $13.63 conversion price) $34M now due May 2011 (3.5% fixed coupon, $13.63 conversion price, par plus a 7.5% premium paid on maturity date) SVB OBLIGATIONS: $40M revolver ($39.4M drawn). Expires February Note: (1) Pro Forma reflects August 5 th, 2009 pay down of $12.2M term loan with SVB.

23 Created a New Test Company Products Focused, cost-optimized solutions Broader, more comprehensive portfolio of proven technologies Supported by long history of industry-leading innovation Roadmap Focused on cost effective testing regardless of test strategy Market focus: Wireless, Computing, Automotive, Consumer Leverages proven R&D experience and technologies Support Broader, strategically deployed global network Enhanced local applications and support resources Significantly expanded presence in Asia Strength Experienced, customer-focused leadership team Size and scope necessary to provide comprehensive solutions Structured for consistently strong financial performance