Posted By: Technology Staff Editor In: Information Technology written by Mark LaPedus, courtesy of EE Times
SAN JOSE, Calif. -- Troubled ATE supplier Credence Systems Corp. plans to divest several product lines and reduce its headcount by 400 people, or approximately 30 percent of its workforce, by end of fiscal 2008.
The company intends to divest or otherwise reduce its commitment to businesses and products that are unrelated to its consumer semiconductor market focus, including its Diagnostics and Characterization business and Sapphire DPI solution.
The Sapphire DPI is an engineering de-bug tester. The Diagnostics and Characterization unit includes an IC circuit debug system, an IC electrical failure analysis platform, a front-side and back-side IC editing system and a focused ion beam product.
Credence intends to prioritize its research and development activities in the Diamond and ASL line of ATE platforms. The company intends to focus its Sapphire ATE platform for the high-end of the consumer semiconductor markets.
Credence also intends to scale down its service infrastructure. While its plans to cut jobs, Credence will seek to double its sales and support headcount in Asia by the end of 2008. It will add some 100 employees in Asia.
In recent times, the company also exited the flash-memory ATE business. In 2004, Credence acquired NPTest, an ATE firm that developed the Sapphire platform, for about $660 million. NPTest was formerly known as Schlumberger ATE. Many ATE products acquired via NPTest are being dropped.
The moves at Credence follow a slowdown -- and a shakeup -- in the ATE segment. Two ATE firms have been acquired in recent times and some wonder if Credence is next.
For now, Credence is in a cost-cutting mode. "The essence of our new strategy is simplicity and focus," said Lavi Lev, Credence's president and CEO, in a statement. "This means doing fewer things better in a focused market. Executing on the new strategy regrettably requires extremely difficult decisions that affect valued employees and colleagues.''
Credence also posted its results for the quarter. Net sales for the fourth quarter were $97.7 million, down 21 percent from third quarter net sales of $123.5 million, and down 23 percent from the fourth quarter of fiscal year 2006 net sales of $127.1 million.
Net income for the quarter was $5.6 million or $0.05 per share, versus a net income of $10.3 million or $0.10 cents per share in the third quarter and a net loss of $1.9 million or $0.02 per share in the fourth quarter of fiscal 2006.
For fiscal 2007, net sales were $461.1 million, down 6.5 percent from net sales of $493.4 million in the fiscal year ended Oct. 31, 2006. The company achieved a net profit for fiscal 2007 of $12.5 million, or $0.12 per share.
This represents the company's first profitable year in six years. This compares to a net loss of $481.6 million, or $4.82 per share in fiscal 2006.
Net sales in the first quarter of fiscal 2008 are expected to be $58 million to $62 million, with a per share loss of approximately $0.37 to $0.39.
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