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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Credence Systems (MM) | NASDAQ:CMOS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.13 | 0 | 01:00:00 |
to create
a leading provider of focused, cost-optimized solutions,
enabling
customers to implement best in class test strategies
to maximize their
profitability.
LTX Investor Relations Presentation
June 22, 2008
Filed
by
LTX
Corporation
pursuant
to
Rule
425
under
the
Securities
Act
of
1933
and
deemed
filed
pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Credence Systems Corporation
Commission File No.: 000-22366
The
following
materials
were
first
made
available
by
LTX
Corporation
to
investors
on
June
24,
2008.
|
LTX
Confidential -
2
Safe Harbor for Forward-Looking Statements
Statements in this presentation regarding the proposed transaction between LTX and
Credence, including the terms of
the agreement and the tax-free,
all-stock nature of the transaction, the belief that the combined strengths of the two
companies will create a leading provider of focused, cost-optimized solutions
designed to enable customers to
implement best-in-class test
strategies to maximize their profitability, the new companys ability to address broad
market segments, the increased presence in the Asia-Pacific region, the
establishment of a global network of
applications and resources, the
continuation of current employees and directors with the new company, the belief that
the
combined
strengths
of
the
companies
expertise
and
product
portfolio
will
benefit
customers,
the
creation
of
a
test
company with the financial strength, growth opportunities, critical mass, and
operational efficiency to lead the industry,
the expectation that the
combination will drive efficiencies associated with operating a larger business, and the
anticipation of saving approximately $25 million at the end of the integration period,
the expectation that the merger will
be accretive within 12 months,
the expected timetable for completing the transaction and any other statements
about
LTX or Credence managements
future expectations, beliefs, goals, plans or prospects constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. 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: the ability to consummate the transaction, the ability to
successfully
integrate
LTXs
and
Credences
operations
and
employees;
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 LTXs Annual Report on Form 10-K for
the fiscal year ended July 31, 2007 and Credences 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 and Credence disclaim any
intention or obligation to update any forward-looking statements as a result of
developments occurring after the date of
this presentation.
|
LTX
Confidential -
3
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
LTX plans to file with the SEC a Registration Statement on Form S-4 in connection
with the transaction and LTX and Credence plan to file
with the SEC and mail
to their respective stockholders a Joint Proxy Statement/Prospectus in connection with the transaction. The
Registration Statement and the Joint Proxy Statement/Prospectus will contain important
information about LTX, Credence, the transaction
and related matters.
Investors and security holders are urged to read the Registratio
n Statement and the Joint Proxy
Statement/Prospectus carefully when they are available.
Investors and security holders will be able to obtain free copies of the Registration
Statement and the Joint Proxy Statement/Prospectus and
other documents filed
with the SEC by LTX and Credence through the website maintained by the SEC at www.sec.gov.
In addition, investors and security holders will be able to obtain free copies of the
Registration Statement and the Joint Proxy
Statement/Prospectus when they are
available from LTX by contacting Mark Gallenberger at mark_gallenberger@ltx.com, or 781-467-5417
or
from
Credence
by
contacting
Brenda
Ropoulos
at
brenda_ropoulos@credence.com,
or
408-635-4309.
LTX
and
Credence,
and
their
respective
directors
and
executive
officers,
may
be
deemed
to
be
participants
in
the
solicitation
of
proxies
in
respect of the transactions contemplated by the merger agreement. Information
regarding LTXs directors and executive officers is
contained in
LTXs Annual Report on Form 10-K for the fiscal year ended July 31, 2007 and its proxy statement dated November 6, 2007,
which are filed with the SEC. As of June 16, 2008, LTXs directors and
executive officers beneficially owned approximately 4,201,725
shares, or
6.7%, of LTXs common stock. Information regarding Credences directors and executive officers is contained in Credences
Annual Report on Form 10-K for the fiscal year ended November 3, 2007, its proxy
statement dated March 7, 2008, its Current Reports on
Form 8-K filed on
April 18, 2008, May 1, 2008, June 10, 2008, and June 17, 2008, and its Form 4 filed on April 29, 2008, which are filed with
the SEC. As of June 16, 2008, Credences directors and executive officers
beneficially owned approximately 1,348,090 shares, or 1.3%, of
Credences
common
stock.
In
connection
with
the
transaction,
Mr.
Tacelli
has
agreed
that
the
transaction
will
not
constitute
a
change
of
control for purposes of his Change-of-Control Employment Agreement dated March
2, 1998 and Mr. Gallenberger has agreed that the
transaction
will
not
constitute
a
change
of
control
for
purposes
of
his
Change-of-Control
Employment
Agreement
dated
October
2,
2000.
In
connection with the transaction, each of Mr. Lev and Mr. Eichler
has entered into a Transition Services Agreement with Credence pursuant
to
which
they
have
agreed
to
accept
new
positions
with
Credence,
and
perform
certain
transition
services
for
Credence,
for
a
period
of
six
months following the closing of the transaction in exchange for certain salary, bonus,
acceleration of equity-based awards and other
compensation.
A more complete description will be available in the Registration Statement and the
Joint Proxy Statement/Prospectus.
|
LTX
Confidential -
4
Strategic Rationale Overview
Creates strong player in mid-range and analog segments
Provides immediate access into consumer digital markets
Extends customer diversification beyond TI and AMD
Increases our scale
Creates strong presence in Asia via Spirox
Establishes us as key supplier with subcontractors
Annual cost savings opportunity is high
approximately
$25M
|
LTX
Confidential -
5
Our Vision
To create a leading provider of focused, cost-optimized solutions,
enabling customers to implement best in class test strategies to
maximize their profitability.
Our Leadership
Dave Tacelli (LTX)
President and CEO
Mark Gallenberger (LTX)
CFO
Lavi Lev (Credence)
Executive Chairman
Board
LTX (5), Credence (4)
Our Markets
Wireless, Computing, Automotive, Entertainment
Our Technologies
RF wireless & digital signal processing techniques,
power management, high performance analog,
low cost, high-density digital
Creating a new test company
|
LTX
Confidential -
6
Products
Focused, cost-optimized solutions
Broader, more comprehensive portfolio of proven technologies
Extensive deployment of systems in Asia
Roadmap
Driven by customers
operational test requirements
Focused on cost effective testing regardless of test strategy
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
Providing direct customer advantages
|
LTX
Confidential -
7
Complementary customer base
LTX
Credence
AMD goes from 27% to 21%
TI goes from 38% to 9%
More customer
diversity:
|
LTX
Confidential -
8
Market Position
Creates three significant SOC test providers
(Trailing 12 months)
Annual Revenue
$0
$250
$500
$750
$1,000
Source: SEC filings and Company estimates
|
LTX
Confidential -
9
Market Segmentation
Significant position in major market segments
Power/Mixed Signal
0
10
20
30
40
50
60
CPU
0
10
20
30
40
50
60
Chipset-Graphics
0
10
20
30
40
50
60
DSP/ASIC
0
10
20
30
40
50
#2
#2
#2
#4
Source: SEMI, SEC filings, and Company estimates
|
LTX
Confidential -
10
Market Segmentation
Significant position in major market segments
Auto
0
10
20
30
40
50
60
Mobility RF
0
10
20
30
40
50
Plasma LCD
0
10
20
30
40
50
60
MCU
0
10
20
30
40
50
60
#2
#2
#2
#4
Source: SEMI, SEC filings, and Company estimates
|
LTX
Confidential -
11
Cost Savings
Assumptions Overview
R&D
Consolidate to four key locations
»
Milpitas, CA (Headquarters)
»
Norwood, MA
»
Hillsboro, OR
»
Armenia
Sales / Support
Establish major account teams
Other accounts managed by
geographical teams
Distributors for China, Taiwan, Korea
Eliminate redundant sales and support
resources
Cross train support personnel
Manufacturing
Complete outsourcing for both
companies to Asia
Finance / IT/ HR
Eliminate redundancy
Consolidate systems
Standardize all people processes and
plans
Facilities
Eliminate redundancy
Majority of reductions will occur in first quarter after
the close and be completed within 12 months
15 office locations that
overlap
Facilities consolidation from
42 offices worldwide to 27
|
LTX
Confidential -
12
LTM Financial performance
73%
27%
73%
27%
85%
15%
Revenue
Gross profit
EBITDA
Total: $482
Total: $233
Total: $50
LTX
$130mm
LTX
$64mm
LTX
$7mm
Credence
$352mm
Credence
$169mm
Credence
$43mm
Source: LTX Corp and Credence Systems Corp SEC filings
Note: EBITDA (excl. stock-based compensation expense). Gross profit and EBITDA
have been adjusted for one-time and restructuring items.
|
LTX
Confidential -
13
Balance Sheet Strength
Combined cash position is strong
$ 41M
$121M
$162M
Credence
$ 93M
$140M
$232M
Combined
$ 52M
Net Cash
$ 19M
Debt
$ 71M
Gross Cash
LTX
Source: SEC filings as of last fiscal quarter. Credence figures adjusted for pay down
of convertible debt in May of 2008.
|
LTX
Confidential -
14
Summary of Major Deal Points
Approximately 50 / 50 equity ownership split
All stock transaction
Nine member Board of Directors (5 LTX, 4 CMOS)
LTX has CEO and CFO positions
CMOS appoints the Executive Chairman
Headquarters in Milpitas, CA, where each company already
has significant presence
|
LTX
Confidential -
15
Accelerate customer diversity ( installed base )
Expand LTX technology in Asia ( Spirox
)
Leverage ASL1000 installed base with LTX analog
instrumentation
Capitalize on digital technology
Realize significant annual cost savings
approx. $25M
Creates strong, cross-cycle cash flow
The result
a test company with the financial strength,
growth opportunities, critical mass and operational
efficiency to lead the industry
|
to create
a leading provider of focused, cost-optimized solutions,
enabling
customers to implement best in class test strategies
to maximize their
profitability.
|
1 Year Credence Systems (MM) Chart |
1 Month Credence Systems (MM) Chart |
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