SAN JOSE, Calif., June 26, 2008 (PRIME NEWSWIRE) -- Electroglas, Inc. (Nasdaq:EGLS), a leading supplier of wafer probing and software solutions for the semiconductor industry, today reported its operating results for the fourth fiscal quarter ended May 31, 2008.
Revenue for the fourth quarter of fiscal 2008 was $12.0 million, a 4% increase over the third quarter of fiscal 2008 and a 38% increase over the fourth quarter of fiscal 2007. Bookings for the quarter were $11.5 million, a 17% decrease over the third quarter of fiscal 2008, and a 3% increase over the same period last year. The book to bill ratio for the quarter was .96 despite a difficult market environment for semiconductor capital equipment. Net loss on a GAAP (Generally Accepted Accounting Principles) basis was $5.2 million, or $0.20 per share and $0.15 per share on a non-GAAP basis. A reconciliation of non-GAAP operating results to GAAP results is included below.
"We are pleased that we were able to grow revenue for the fourth consecutive quarter, despite a very challenging market for semiconductor capital equipment," stated Tom Rohrs, Chairman and CEO. "Due to increased acceptance of our 300mm platform, our business increased 27% from the second half of fiscal 2007 to the second half of fiscal 2008. As we have now completed transferring our manufacturing operation to Flextronics, we expect to see sequential increases in gross margin and net profit during fiscal year 2009."
First Fiscal Quarter 2009 Business Outlook
Electroglas expects revenue for the first fiscal quarter of 2009 to decrease to the $10.5-$11.5 million range and to improve through the year as the Company's products are adopted by new and existing customers.
Investor Conference Call Details
Electroglas' management plans to hold a teleconference today beginning at 2:00 p.m. PT, 5:00 p.m. ET. Interested parties who wish to attend the teleconference may call (866) 551-1530 (United States) or (212) 401-6760; Participant PIN Code is 7786014#, and is asked to do so approximately 10 minutes before the teleconference is scheduled to begin. No reservations are required. The teleconference will be available via webcast from the Company's website at www.electroglas.com.
About Electroglas
Electroglas is a leading supplier of innovative wafer probers and software solutions for the semiconductor industry. For more than 40 years, Electroglas has helped integrated device manufacturers (IDMs), wafer foundries and outsourced assembly and test (OSAT) suppliers improve the overall effectiveness of semiconductor manufacturers' wafer testing. Headquartered in San Jose, California, the company has shipped more than 16,500 systems worldwide. Electroglas' stock trades on the NASDAQ Capital Market under the symbol "EGLS." More information about the company and its products is available at www.electroglas.com.
Safe Harbor Statement
This news release contains forward-looking statements including statements relating to Electroglas' business outlook; including our efforts to penetrate markets outside of the wafer prober market and our expectations regarding increases in gross margins and net profit during fiscal year 2009. These forward-looking statements involve risks and uncertainties including, but not limited to, the risk of adverse changes in global and domestic economic conditions, a prolonged downturn in the semiconductor and electronics industries, a downturn or decrease in customer utilization rates, unforeseen technical difficulties related to the development and manufacture of Electroglas' products, and a failure of its new products to achieve broad market acceptance as a result of competing technologies and an inability to successfully market our precision motion control technology to users outside the wafer probing market. In addition, bookings are not necessarily indicative of sales or revenue in any future period. Electroglas assumes no obligation to update this information. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Electroglas' business in general, see the risk disclosures in Electroglas' SEC filings, including its most recent annual report on Form 10-K for the year ended May 31, 2007, its quarterly reports on Form 10-Q and periodic reports on Form 8-K filed from time to time with the SEC.
ELECTROGLAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share amounts)
(unaudited)
Three months ended Twelve months ended
------------------ -------------------
May 31, May 31, May 31, May 31,
2008 2007 2008 2007
-------- -------- -------- --------
Net sales $ 11,996 $ 8,701 $ 45,421 $ 44,624
Cost of sales 8,869 8,172 32,682 35,141
-------- -------- -------- --------
Gross profit 3,127 529 12,739 9,483
Operating expenses:
Engineering, research and
development 2,288 2,581 9,102 11,073
Sales, general and
administrative 3,764 3,797 14,475 16,593
Restructuring and impairment
charges 1,331 154 1,939 129
Indemnification release -- -- -- (459)
-------- -------- -------- --------
Total operating expenses 7,383 6,532 25,516 27,336
-------- -------- -------- --------
Operating loss (4,256) (6,003) (12,777) (17,853)
Interest expense, net (517) (306) (1,410) (487)
Other expense, net (353) (306) (770) (434)
-------- -------- -------- --------
Loss before income taxes (5,126) (6,615) (14,957) (18,774)
Provision for income taxes 103 (6) 651 9
-------- -------- -------- --------
Net loss $ (5,229) $ (6,609) $(15,608) $(18,783)
======== ======== ======== ========
Net loss per share, basic and
diluted $ (0.20) $ (0.25) $ (0.59) $ (0.71)
======== ======== ======== ========
Shares used in basic and
diluted calculations 26,525 26,311 26,395 26,285
======== ======== ======== ========
Reconciliation of GAAP to Non-GAAP Financial Measures Financial Information
In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles (GAAP), Electroglas also discloses non-GAAP results of operations that exclude certain unusual charges, gains, or benefits. Electroglas reports non-GAAP results to better assess and reflect operating performance. These results are provided as a complement to results provided in accordance with GAAP. Management believes the non-GAAP measure helps indicate underlying trends in Electroglas' business, and management uses non-GAAP measures to establish operational goals. Non-GAAP information should not be considered superior to or as a substitute for GAAP measures or data prepared in accordance with GAAP.
The following is a reconciliation of GAAP net loss to non-GAAP net loss
(in thousands):
(unaudited) (unaudited)
Three months ended Twelve months ended
------------------ -------------------
May 31, May 31, May 31, May 31,
2008 2007 2008 2007
-------- -------- -------- --------
GAAP loss before income taxes $ (5,126) $ (6,615) $(14,957) $(18,774)
Non-GAAP adjustments:
Inventory Provision(1) -- 1,050 -- 3,844
Duplicate Factory Costs(2) -- -- 1,572 --
Restructuring and impairment
charges(3) 1,331 154 1,939 129
Indemnification Release -- -- -- (459)
-------- -------- -------- --------
Non-GAAP loss before income
taxes (3,795) (5,411) (11,446) (15,260)
Income tax provision 103 (6) 651 9
-------- -------- -------- --------
Non-GAAP net loss $ (3,898) $ (5,405) $(12,097) $(15,269)
======== ======== ======== ========
Non-GAAP net loss per share,
basic and diluted $ (0.15) $ (0.21) $ (0.46) $ (0.58)
======== ======== ======== ========
The following is a reconciliation of GAAP gross profit to non-GAAP gross
profit (in thousands):
(unaudited) (unaudited)
Three months ended Twelve months ended
------------------ -------------------
May 31, May 31, May 31, May 31,
2008 2007 2008 2007
-------- -------- -------- --------
GAAP gross profit $ 3,127 $ 529 $ 12,739 $ 9,483
Non-GAAP adjustments:
Inventory Provision(1) -- 1,050 -- 3,844
Duplicate Factory Costs(2) -- -- 1,572 --
-------- -------- -------- --------
Non-GAAP gross profit 3,127 1,579 14,311 13,327
-------- -------- -------- --------
Net sales $ 11,996 $ 8,701 $ 45,421 $ 44,624
======== ======== ======== ========
Non-GAAP gross margin 26% 18% 32% 30%
======== ======== ======== ========
(1) During Q1 2007, the Company reduced its forecast outlook for its
Sidewinder product line. In connection with this decision, the
Company recorded a $3.4 million provision for excess inventory.
During Q2 2007, the Company sold fully reserved inventory of
$0.6 million.
(2) Freight, travel and overhead costs associated with the Company's
move from internal manufacturing in Singapore to contract
manufacturing with Flextronics in China.
(3) During Q1, Q2, Q3 and Q4 2008, the Company accrued restructuring
costs related to the retention of employees in its Singapore
factory of $0.1 million, $0.2 million, $0.1 million, and $0.2
million respectively. The Company also recorded a liability for
a reduction in force in Europe of $0.2 million during Q1 2008.
During Q4, the Company also incurred restructuring and
impairment costs related to the shut down of its Singapore
factory of $1.0 million, comprised mainly of labor,
transportation, and occupancy. The Company also impaired
furniture and fixtures in dormant facilities of $0.1 million.
ELECTROGLAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
May 31, May 31,
2008 2007
---------- ----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 16,541 $ 30,788
Accounts receivable, net 9,419 9,855
Inventories 5,688 11,883
Restricted cash -- 500
Prepaid expenses and other current assets 4,396 2,355
---------- ----------
Total current assets 36,044 55,381
Property, plant and equipment, net 2,724 4,779
Goodwill 1,942 1,942
Other assets 2,806 3,732
---------- ----------
Total assets $ 43,516 $ 65,834
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,848 $ 5,953
Accrued liabilities 6,095 6,347
Deferred revenue 826 1,036
Convertible subordinated notes -- 8,486
---------- ----------
Total current liabilities 13,769 21,822
Convertible subordinated notes 23,610 22,851
Financial instrument related to convertible
debt -- 3,192
Other non-current liabilities 1,894 2,466
Stockholders' equity 4,243 15,503
---------- ----------
Total liabilities and stockholders' equity $ 43,516 $ 65,834
========== ==========