Keithley Instruments Reports Results for Fiscal 2009 First Quarter.
CLEVELAND -- Keithley Instruments Keithley Instruments (NYSE: KEI) is a measurement and instrument company headquartered in Solon, Ohio. Keithley develops, manufactures, markets and sells highly accurate instruments and data acquisition products, as well as complete system solutions for high-volume production , Inc. (NYSE NYSE
See: New York Stock Exchange :KEI), a world leader in advanced electrical test instruments and systems, today announced results for its fiscal 2009 first quarter ended December 31, 2008.
First Quarter Fiscal 2009 Results
Net sales Net Sales
The amount a seller receives from the buyer after costs associated with the sale are deducted.
This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $31.1 million for the first quarter of fiscal 2009 decreased $7.4 million, or 19 percent, from net sales of $38.4 million in last year's first quarter. Sales outside of the Americas represented approximately 75 percent of total sales for the first quarter of fiscal 2009. Two percentage points of the sales decrease as compared to the prior year was the result of a stronger U.S. dollar. Sales decreased six percent compared to the fourth quarter of fiscal 2008, approximately half of which was the result of a stronger U.S. dollar.
For the first quarter of fiscal 2009, the Company reported a net loss of $2.4 million, or $0.15 per share, excluding a non-cash special charge. This compared to net income of $0.9 million, or $0.05 per share, for the first quarter of fiscal 2008. Including the special charge, the reported net loss for the first quarter of fiscal 2009 was $32.4 million, or $2.07 per share. The special charge is for a non-cash discrete tax adjustment of $30.0 million, or $1.92 per share, to reserve for the Company's U.S. deferred tax assets. The loss before taxes was $2.1 million for the first quarter of fiscal 2009 versus income before taxes of $1.0 million in the prior year's first quarter. The decrease in earnings before taxes was primarily the result of lower sales volume and lower gross margins. Selling, general and administrative costs administrative costs,
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. in the first quarter of fiscal 2009 decreased $2.0 million from the first quarter of last year, primarily the result of the cost reductions that were previously announced as well as the impact of variable compensation awards.
The Company recorded tax expense of $30.2 million during the first quarter of fiscal 2009, which included the previously mentioned discrete tax adjustment of $30.0 million. Additionally, the Company was unable to record a tax benefit on the current quarter's U.S. loss, and recorded income in certain foreign operations which resulted in tax expense for the quarter. This compares to tax expense of $0.1 million during the first quarter of fiscal 2008.
Orders of $27.7 million for the first quarter of fiscal 2009 decreased 32 percent from last year's first quarter orders of $40.6 million. Geographically, orders decreased 28 percent in the Americas, 41 percent in Asia, and 24 percent in Europe when compared to the prior year. Orders from the Company's semiconductor customers decreased approximately 35 percent, orders from wireless communications wireless communications
System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. customers decreased approximately 80 percent, and orders from both precision electronic component/subassembly manufacturers and from research and education customers each decreased approximately 15 percent compared to the prior year's first quarter. For the first quarter, semiconductor customer orders comprised approximately 25 percent of the total, wireless communications customer orders were approximately five percent, precision electronic component/subassembly manufacturers orders were approximately 25 percent, and research and education customer orders made up about 35 percent. Orders decreased 21 percent compared to the fourth quarter of fiscal 2008. Order backlog decreased $3.4 million during the quarter to $15.0 million at December 31, 2008.
"Global economic and industry conditions continued to deteriorate during the latter part of calendar 2008. We saw our order levels continue to decline this past quarter and, accordingly, we announced several costs reduction actions to improve our financial performance," stated Joseph P. Keithley, the Company's Chairman, President and Chief Executive Officer. "Our focus is on managing our liquidity."
Recent Developments and New Product Update
During November, the Company announced ACS (Asynchronous Communications Server) See network access server. Basic Edition, characterization and curve tracer software for component test applications. This software product is the latest addition to Keithley's powerful Automated Characterization Suite (ACS) family, which provides an integrated solution for test management and analysis with Keithley's SourceMeter[R] Instrument family that performs comprehensive device parameter analysis as well as basic curve tracing (Math.) the process of determining the shape, location, singular points, and other peculiarities of a curve from its equation.
See also: Curve at a low cost of ownership. While initial ACS systems were designed for larger semiconductor lab applications, ACS Basic Edition systems provide an economical bench-top solution for component test applications.
The Company's KTEI KTEI Kenjgewin Teg Educational Institute (Canada) (Keithley Test Environment Interactive) V7.1 software for the Model 4200-SCS (Semiconductor Characterization System) was recently named one of EDN magazine's Hot 100 Electronic Products of 2008. KTEI V7.1 software broadens the capabilities of the Model 4200, enabling characterization of high-power semiconductor devices.
Balance Sheet and Cash Flow
The Company used $3.6 million in cash from operations during the quarter. Cash and investments in Auction Rate Securities decreased by $5.4 million to $29.2 million at December 31, 2008. Total debt was $0.6 million at December 31, 2008. Inventory of $18.0 million decreased $1.8 million from September 30, 2008. Turns were 2.7 at December 31, 2008, versus 4.2 a year ago and 2.7 at September 30, 2008. Trade receivables were $14.4 million, down $1.9 million from September 30, 2008. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). were 47 at December 31, 2008, versus 49 a year ago, and 47 at September 30, 2008.
Legal Proceeding Update
On January 20, 2009, the United States District Court for the Northern District of Ohio The U.S. District Court for the Northern District of Ohio is the federal trial court for the northern half of Ohio. The court has courthouses in Cleveland (where the chief judge and most of the Northern District's judges have chambers), Toledo, Akron, and Youngstown. issued an order granting the Company's and the other defendants' motion to dismiss in its entirety the Second Amended Complaint amended complaint n. what results when the party suing (plaintiff or petitioner) changes the complaint he/she has filed. It must be in writing, and can be done before the complaint is served on any defendant, by agreement between the parties (usually their lawyers), in the previously disclosed shareholder derivative litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. . The plaintiffs have thirty days from the date of the order to appeal the dismissal.
Stock Buyback Stock buyback
A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share.
See buyback. Program
During the first quarter of fiscal 2009, the Company repurchased 155,000 shares for $0.7 million at an average cost of $4.80 per share under the terms of the Company's previously announced stock repurchase Stock repurchase
A firm's repurchase of outstanding shares of its common stock. program (the "Program"). From the Program's inception through December 31, 2008, the Company has repurchased 942,600 shares for $8.5 million at an average cost of $8.97 per share, of the 2,000,000 Common Shares that may be purchased through February 2009.
"Our customers' spending has dramatically decreased as a result of current macroeconomic mac·ro·ec·o·nom·ics
n. (used with a sing. verb)
The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. conditions, and we are particularly uncertain about their future capital spending capital spending
Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. . We remain focused on executing against our business plan and on aligning our cost structure with the current economic reality," stated Keithley.
Based upon current expectations, the Company is estimating sales for the second quarter of fiscal 2009, which will end March 31, 2009, to range between $22 and $29 million. The Company expects a loss for the second quarter. For the remainder of fiscal year 2009, the Company expects to record tax expense as a result of taxes generated in foreign jurisdictions.
During the second quarter of fiscal 2009, the Company expects to incur approximately $1.3 million for the costs associated with the previously announced reduction in its worldwide workforce that was implemented during January, 2009, slightly less than previously announced. The actions taken were the result of the order decline realized during the latter part of fiscal 2008 and into fiscal 2009. The cost reduction actions that the Company has taken, including pay and benefit reductions, workforce reductions, and discretionary cost reductions, are expected to result in a cost savings during fiscal 2009 of approximately 20 percent of the Company's operating costs operating costs npl → gastos mpl operacionales incurred during fiscal 2008.
Statements in the "Operations Outlook" section of this release that are not historical facts, including those relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc orders, sales, earnings, spending, and tax rates are "forward-looking statements," as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, that involve a number of risks and uncertainties. Actual results may differ materially from the results stated or implied in the forward-looking statements as a result of a number of factors that include, but are not limited to: worldwide economic conditions; uncertainties in the credit and capital markets including the ability of the Company's customers to access credit and the Company's risk to cash and short-term investments that are not backed by a government agency; business conditions in the semiconductor, wireless, precision electronics and other segments of the worldwide electronics industry; the timing of large orders from customers or canceling of orders in backlog; timing of recognizing shipments as revenue; changes in product and sales mix sales mix
See product mix. , and the related effects on gross margins; the Company's ability to develop new products in a timely fashion and gain market acceptance of those products to remain competitive and gain market share; the Company's ability to work with third parties; competitive factors, including pricing pressures, loss of key employees, technological developments and new products offered by competitors; the impact of the Company's fixed costs fixed costs,
n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). in a period of declining sales; the Company's ability to fine-tune its lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. system to lower costs without incurring significant disruptions in production; the Company's ability to effectively manage outsourcing arrangements without disruption to demand schedules or quality standards; the Company's ability to implement and effectively manage IT system enhancements without interruption to its business processes; the Company's ability to maintain planned cost savings initiatives without adversely affecting the Company's strategic initiatives; the potential volatility on earnings as a result of the accounting for performance share awards; changes in effective tax rates due to tax law changes, changes in tax planning Tax planning
Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. strategies, changes in deferred tax assets, or changes in levels of pretax earnings; foreign currency fluctuations which could affect worldwide operations; costs and other effects of domestic and foreign legal, regulatory and administrative proceedings; government actions to protect worldwide trade; compliance with the listing standards of the New York Stock Exchange New York Stock Exchange (NYSE)
World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. ; the availability of parts and supplies from third-party suppliers on a timely basis and at reasonable prices; changes in the fair value of the Company's investments; and matters arising out of or related to the Company's stock option grants and procedures and related matters, including the outcome of the inquiry commenced by the U.S. Securities and Exchange Commission (SEC), the possibility that the SEC may disagree with Verb 1. disagree with - not be very easily digestible; "Spicy food disagrees with some people"
hurt - give trouble or pain to; "This exercise will hurt your back" the Special Committee's findings and may require a restatement of the Company's financial statements or additional or different remediation, any other proceedings which may be brought against the Company by the SEC or other governmental agencies, the outcome of the shareholder derivative actions filed against certain of the Company's officers and directors, and the possibility of other private litigation relating to such stock option grants and related matters. Further information on factors that could cause actual results to differ from those anticipated is included in the Company's annual report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. and quarterly reports on Form 10-Q Form 10-Q
See 10-Q. which are filed with the Securities and Exchange Commission. In light of these uncertainties, the inclusion of forward-looking information should not be regarded as a representation by the Company that its plans or objectives will be achieved. Further, the Company is not obligating itself to revise forward-looking statements contained herein to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
Conference Call on the Web
On Wednesday, February 4, 2009, at 10 a.m. Eastern Time, interested parties may listen to the Keithley Instruments quarterly conference call live on the Web by registering on the investor relations Investor relations
The process by which the corporation communicates with its investors. portion of the Company's website at www.keithley.com. Interested parties may also listen to a replay of the quarterly conference call by visiting the website. The replay will be available for approximately 60 days.
About Keithley Instruments, Inc.
With more than 60 years of measurement expertise, Keithley Instruments has become a world leader in advanced electrical test instruments and systems from DC to RF (radio frequency). Our customers are scientists and engineers in the worldwide electronics industry involved with advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, research, semiconductor device development and fabrication fabrication (fab´rikā´shn),
n the construction or making of a restoration. , and the production of end products such as portable wireless devices. The value we provide them is a combination of products for their critical measurement needs and a rich understanding of their applications to improve the quality of their products and reduce their cost of test.
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