Credence Systems Corporation. MCF 3 rd Annual Investor Summit 2006 September 18, 2006

Transcription

1 Credence Systems Corporation MCF 3 rd Annual Investor Summit 2006 September 8, 2006

2 Forward-Looking Statements This presentation contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, statements regarding industry leadership, profitability, accretion, expected synergies, and execution of integration plans are all forward-looking statements. Please see the risks that are described from time to time in Credence's Securities and Exchange Commission reports (including, but not limited to Credence's annual report on Form 0-K for the year ended October 3, 2005 and Credence s most recent report on Form 0-Q). If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Credence's results could differ materially from Credence's expectations in these statements. Credence assumes no obligation and does not intend to update these forward-looking statements.

3 What do Investors Want to Know? Our future growth engine Our model for sustained profitability

4 Credence Overview Our mission is to be the leading provider of highly integrated engineering and production solutions for the consumer age Focus on large and growing markets Increase market share Leverage diversified customer base that includes major IDMs, fabless and subcontractors Deliver technology leadership and innovation for cost efficiency

5 Focus On Large and Growing Segments Computing Mobile Consumer Home Entertainment Automotive & Industrial Target the right customer and the right market with the right product to maximize Credence profitability Establish deeper engagements with larger, high growth customers Develop differentiated solutions to reduce cost and time to profit

6 And Growth In Non-memory ATE Market 7% CAGR across the segment Opportunity to capture market share in 2007

7 Diversified Customer Base Strength in leading IDMs, Fabless and OSATs Stable and growing base for growth Participating in both technology and capacity buys Fabless IDMs OSATs

8 The Consumer Age Is Driving IC Consumption Computing is still the largest segment New consumer products are the important growth drivers

9 Challenges in the Consumer Age Consumer electronics account for >50% of IC demand Cost Power Performance Time to Market $60 50 Cost Driven Devices Performance Driven Devices Dollars in billions Lower ASPs Higher ASPs 0 Low Complexity High

10 The Tester Optimized For Profitability In The Consumer Age The Sapphire D High Performance Tester Performance Optimized Consumer Tester Low Cost Tester Profitability Suffers Cost of Test

11 Capitalize On Growth Markets with Sapphire D Focus S On High-End, ASL & D On Consumer Sapphire S Sapphire D-40 Performance ASL 000 Sapphire D-0 ATE Revenue Forecast ($M) Cost of Test

12 D Series : Advantages over peers Source platform D-0 D-0 D-0 test time advantage Application Source Platform No Of Sites Test Time (S) Single Site (S) Dual Site (S) Quad Site (S) % faster - single site LCD Controller SC % BaseBand SC % Baseband Catalyst.7.0 in progress 4% Pen Driver J in progress 23% USB. SC in progress 48% Mobile ASIC U-FLEX in progress 4% WLAN Controller SC % LCD Controller Adv % BaseBand Nextest in progress 58% Embedded MCU J % Smart card reader / controller SC % DECT basband with CODEC C % Embedded MCU Nextest % Security Camera SC % DTV Quartet % DVD FLEX %

13 Why The Sapphire D Will Win Market Share The lowest cost solution for consumer IC s MCU, display controllers, baseband ICs Compelling wafer sort & final test solutions Parallel RF Test - MVNA Enabled The next generation consumer test platform Low capital cost / small footprint / scalable Over 50 Sapphire D s installed in first 7 months 0 new customers in H 06 Priced for tomorrow s test economics Scalable mixed-signal performance Extremely low operating costs Small Footprint Test & Measurement

14 What do Investors Want to Know? Our future growth engine Our model for sustained profitability

15 Implemented A Realigned Business Model Narrowed the focus Prioritized profitable, high growth opportunities, cut others Focus direct channel on fewer customers, move others to variable Resized for profitability Announced 4% headcount reduction in early Q4 Flattened the organization Reducing facilities footprint Driving cost reduction Funding IT to implement one global system (SAP) to improve efficiency Planning for Mfg outsourcing to Asia is underway Expected Results Reduce OpEx by ~ $0M/quarter Drop break-even to ~ $00M GAAP

16 Q3 Preliminary Results & Q4 06 Outlook 3Q06A 4Q06F Revenue $09.6M $05M - $0M Operating Income * ( $.5M) $.0 - $4.0M Net Income * ($4.M) ($3.0) - $0.0 Cash $29.3M $25M - $30M * Non-GAAP measures exclude inventory write-offs, amortization of purchased intangible assets, restructuring, impairment charges, and stock compensation expense.

17 Q3 FY06 Balance Sheet Summary Q'06 Q2'06 Q3 06 Wrote memory inventory off in Q2 Cash ($M) () AR - DSO (2) Net Inventory ($M) Debt ($M) Wrote legacy and excess and obsolete service inventory off in Q3 $80M convertible note matures in May 2008 () Cash, cash equivalents, investments (2) Adjusted for deferred revenue Goodwill impairment analysis not yet complete but will likely lead to write-off of goodwill in Q3

18 Summary A realigned business model focused on profitability Balance sheet cleaned up write offs behind us Targeting the right customer and the right market with the right product to maximize Credence profitability Poised to take market share in the Consumer Age

19 Our mission is to be the leading provider of highly integrated engineering and production solutions for the consumer age