LTX Announces Second Quarter Financial Results

    Business Editors/High-Tech Writers

    WESTWOOD, Mass.--(BUSINESS WIRE)--Feb. 16, 2005--LTX Corporation (Nasdaq: LTXX), a leading provider of semiconductor test solutions, today announced financial results for its fiscal second quarter ended January 31, 2005. The results were in-line with the Company's updated guidance provided on February 2, 2005.
    Sales for the quarter were $27,036,000, down 37% from prior quarter sales of $43,033,000. Net loss for the quarter was $(19,183,000), or $(0.31) per share on a GAAP basis compared to a net loss for the 2005 first fiscal quarter of $(61,673,000), or $(1.01) per share on a GAAP basis, which included excess and obsolete inventory and restructuring charges totaling $50,572,000, or $(0.83) per share. Sales were $58,415,000 for the second quarter of fiscal year 2004 and net loss was $(1,435,000), or $(0.03) per share on a GAAP basis. Incoming orders for the second quarter of fiscal 2005 were $31 million yielding a book-to-bill ratio of 1.13 to 1.
    Roger W. Blethen, chairman and chief executive officer, commented, "Industry conditions remain weak for the semiconductor test equipment industry and while we don't anticipate that conditions will weaken further, we also are not yet seeing signs of a return to growth. Fusion continues to gain market momentum, winning another half dozen new customers during the second quarter."
    "Two technologies are the primary drivers behind this accelerating pace of new customer wins - these are Fusion's parallel RF measurement capabilities for wireless communications testing, and Fusion's high-performance capabilities for testing of SERDES interfaces using our fully integrated, high speed serial VX-GTO instruments. The broader customer base, along with an associated strong volume of new device applications, will be key drivers of our business as industry conditions improve."

    Third Quarter Fiscal 2005 Outlook

    Revenue is expected to be in the range of $26 million to $28 million, with gross margin of approximately 29%. The earnings per share is projected to be a loss in the range of $(0.34) to $(0.35) assuming 61.2 million shares outstanding. This guidance includes approximately $4 million in severance charges, or $0.07 per share, but does not include any other provisions for restructuring and other special charges.
    The Company will conduct a conference call today, February 16, 2005, at 4:30 PM EST to discuss this release. The conference call will be simulcast via the LTX web site (www.ltx.com). Audio replays of the call can be heard through February 28, 2005 via telephone by dialing 888.286.8010; passcode 98495870 or by visiting our web site at www.ltx.com.

    "Safe Harbor" Statement: This press release contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that relate to prospective events or developments, including, without limitation, statements regarding our revenue, margin and earnings guidance, are deemed to be forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "projects," "forecasts," "will" and similar expressions are intended to identify forward-looking statements. There are a number of important factors and risks that could cause actual results or events to differ materially from those indicated by these forward-looking statements. Such risks and factors include, but are not limited to, the risk of fluctuations in sales and operating results, risk related to the timely development of new products, options and software applications, as well as the other factors described under "Business Risks" in LTX's most recently filed annual report on Form 10-K and in our most recently filed quarterly report on Form 10-Q filed with the Securities and Exchange Commission. We disclaim any intention or obligation to update any forward-looking statements.

    LTX Corporation (Nasdaq: LTXX) is a leading supplier of test solutions for the global semiconductor industry. Fusion, LTX's patented, scalable, single-platform test system, uses innovative technology to provide high performance, cost-effective testing of system-on-a-chip, mixed signal, RF, digital and analog integrated circuits. Fusion addresses semiconductor manufacturers' economic and performance requirements today, while enabling their technology roadmap of tomorrow. LTX's web site is www.ltx.com.

    LTX and Fusion are registered trademarks of LTX Corporation.

LTX CORPORATION

CONSOLIDATED BALANCE SHEET (Unaudited) (In thousands)

January 31, July 31, 2005 2004 ---------- ---------- ASSETS Current assets: Cash and Cash equivalents $ 48,472 $ 95,112 Marketable Securities 147,874 149,601 Accounts receivable - trade 18,498 32,961 Accounts receivable - other 3,171 11,494 Inventories 41,363 69,220 Prepaid Expense 6,678 9,828

---------- ---------- Total current assets 266,056 368,216

Property and equipment, net 69,858 71,329 Goodwill and other intangible assets 15,413 15,763 Other assets 3,779 4,256 ---------- ----------

$ 355,106 $ 459,564 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 109 $ 321 Accounts payable 17,048 37,438 Deferred revenues and customer advances 3,127 3,520 Deferred gain on leased equipment 5,745 6,852 Other accrued expenses 25,434 27,179

---------- ---------- Total current liabilities 51,463 75,310 ---------- ----------

Long-term debt, less current portion 150,000 150,000 Stockholders' equity 153,643 234,254 ---------- ---------- $ 355,106 $ 459,564 ========== ==========

LTX CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In thousands, except earnings per share data)

Three Months Six Months Ended Ended January 31, January 31, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- ---------

Net sales $ 27,036 $ 58,415 $ 70,069 $ 105,034

Cost of sales 19,883 35,327 48,117 67,850

Inventory related provision - - 47,457 - --------- --------- --------- --------- Gross margin 7,153 23,088 (25,505) 37,184

Engineering and product development expenses 17,894 16,487 35,534 33,066

Selling, general and administrative expenses 8,052 6,841 15,931 13,223

Reorganization costs - - 3,115 - --------- --------- --------- ---------

Loss from operations (18,793) (240) (80,085) (9,105)

Interest income (expense), net (390) (1,195) (771) (2,136) -------- --------- --------- ---------

Net loss $(19,183) $ (1,435) $(80,856) $ (11,241) ======== ========= ========= ========= Net loss per share Basic $ (0.31) $ (0.03) $ (1.32) $ (0.22) Diluted $ (0.31) $ (0.03) $ (1.32) $ (0.22)

Weighted average shares: Basic 61,040 52,069 61,029 51,936 Diluted 61,040 52,069 61,029 51,936

--30--SP/bo*

CONTACT: LTX Corporation Mark Gallenberger, 781-467-5417 mark_gallenberger@ltx.com www.ltx.com

KEYWORD: MASSACHUSETTS INDUSTRY KEYWORD: HARDWARE MANUFACTURING EARNINGS CONFERENCE CALLS SOURCE: LTX Corporation

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