Keithley Instruments Reports Results for Fiscal 2009 Second Quarter

Second Quarter Fiscal 2009 Results
Net sales of $24.0 million for the second quarter of fiscal 2009 decreased $15.9 million, or 40 percent, from net sales of $39.9 million in last year’s second quarter. Sales outside of the Americas represented approximately 70 percent of total sales for the second quarter of fiscal 2009. Two percentage points of the decrease was the result of a stronger U.S. dollar. Net sales decreased 23 percent compared to the first quarter of fiscal 2009.

During the second quarter of fiscal 2009, the Company reported a pre-tax operating loss of $3.3 million, excluding $6.7 million of charges for special items related to the previously announced discontinuance of a product line and an 11 percent reduction in the Company’s worldwide workforce. This compared to operating income of $1.6 million during the second quarter of fiscal 2008. The decrease in earnings from operations, excluding the special items, as compared to the prior year’s second quarter, was primarily the result of a $15.9 million decrease in net sales resulting in lower gross margins. This decrease was partially offset by a 25 percent reduction in operating expenses, excluding restructuring charges. The special items incurred during the second quarter of fiscal 2009 included $5.5 million for costs associated with the discontinuance of a product line and $1.2 million for the reduction in the worldwide workforce implemented in January 2009, totaling $6.7 million. Of the $6.7 million of special items, $2.5 million were non-cash inventory write-offs and accelerated depreciation that were recorded as cost of goods sold in accordance with GAAP and $4.2 million were restructuring charges (non-cash charges of $2.0 million and severance and related charges of $2.2 million). The Company recorded a GAAP operating loss of $10.1 million during the second quarter of fiscal 2009.

The Company generated $0.7 million in cash from operations during the second quarter of fiscal 2009. Cash and short-term investments were $28.6 million at March 31, 2009, a decrease of $0.5 million from the prior quarter.

The Company reported a net loss of $10.3 million, or $0.66 per share, for the second quarter of fiscal 2009 compared to net income of $1.2 million, or $0.07 per share, during last year’s second quarter. The Company was unable to record a tax benefit on the current quarter’s U.S. loss, and recorded tax expense on certain foreign operations’ results. This resulted in tax expense of $0.2 million during the second quarter of fiscal 2009, the same as the prior year’s second quarter.

Orders of $21.7 million for the second quarter decreased 44 percent compared to last year’s second quarter orders of $39.0 million. Geographically, orders decreased 31 percent in the Americas, 57 percent in Asia, and 38 percent in Europe when compared to the same period in the prior year. Orders from the Company’s semiconductor customers decreased approximately 70 percent, orders from wireless communications customers decreased approximately 75 percent, orders from precision electronic component and subassembly manufacturers decreased approximately 30 percent, and research and education customer orders decreased approximately 20 percent compared to the prior year’s second quarter.