Japan is home to the world's largest producers of microcontrollers. Worldwide production of these devices is forecast to grow at a CAGR of 10 percent to reach approximately 15 billion units by 2012, according to industry analysts.

"It's no surprise that the largest market opportunity for microcontroller testers is in Japan," said Kenji Sato, Vice President of Verigy Ltd. and General Manager of Verigy Japan K.K. in Hachioji-shi, Japan. "We're receiving very positive customer response to the V101 system's high functionality and ability to deliver the industry's lowest cost of test for this market segment."

Capable of testing embedded analog-to-digital converters (ADCs) at clock rates up to 100 MHz, the V101 tester is optimized for wafer sort with direct probing capability. It provides both high throughput and low cost of ownership, including zero footprint and low-power operation.

Along with the V101 tester, Verigy will showcase the company's test solutions for system-on-a-chip (SOC), high-speed memory, DRAM and Flash devices as well as yield analysis software. For a closer look, visit Verigy in booth #8C-701 in Hall 8.

About Verigy

Verigy provides advanced semiconductor test systems and solutions used by leading companies worldwide in design validation, characterization, and high-volume manufacturing test. Verigy offers scalable platforms for a wide range of system-on-chip (SOC) test solutions, and memory test solutions for Flash, DRAM including high-speed memories, as well as multi-chip packages (MCP). Verigy also provides advanced analysis tools that accelerate design debug and yield ramp processes. Additional information about Verigy can be found at www.verigy.com.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6104044&lang=en

SOURCE: Verigy

Verigy 
Investors: 
Judy Davies, +1 408-864-7549 
VP, Investor Relations and Marketing Communications 
judy.davies@verigy.com 
or 
Local Media Contact during SEMICON Japan: 
Eve Yin, +886 917-259-809 
Field Marketing Programs Manager, Asia and Japan Regions 
eve.yin@verigy.com

Expected next investor conference call information:
Conference Call Date: 11/19/2009
Conference Call Time (ET): 4:30 PM
Conference Call URL: http://investor.verigy.com/events.cfm

SmarTrend is bearish on shares of VRGY and our subscribers received a Downtrend alert on October 05, 2009 at $10.54, which has returned 14.6% to date.

Write to Chip Brian at cbrian@tradethetrend.com

---------------------------------------------------------------------------------------------

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Net loss for the fourth quarter was $12 million, or ($0.20) per share, compared to a net loss of $21 million, or ($0.36) per share, in the prior quarter, and a net loss of $36 million, or ($0.60) per share, in last year's comparable quarter.

The results for the fourth quarter included approximately $3 million of charges related to the company's restructuring and manufacturing transition actions and $1.6 million of impairment charges on its investments. After excluding the impact of these charges, Verigy reported a non-GAAP net loss of $7 million, or ($0.12) per share, for its fourth quarter of fiscal 2009.

For fiscal year 2009, net loss was $127 million, or ($2.17) per share, compared to last year's net income of $28 million, or $0.47 per share. On a non-GAAP basis, the company reported full year net loss of $87 million, or ($1.49) per share, compared to last year's non-GAAP net income of $71 million, or $1.18 per share. A reconciliation of the company's GAAP to non-GAAP results is included in the tables accompanying this press release.

Orders for the fourth quarter were $109 million, a sequential increase of approximately 17 percent and represented a book-to-bill ratio of 1.12. For fiscal year 2009, orders totaled $323 million, a decrease of approximately 48 percent from last year, and represented a book-to-bill ratio of 1.00 for the year.

"We ended the fiscal year with a clearly improving business environment," said Keith Barnes, Verigy's chairman, chief executive officer and president. "We are feeling increasingly optimistic about both the SOC and memory markets and we expect to see significant revenue growth in 2010. After a very challenging 2009 we believe that our investments in new and innovative products will enable continued share gain."

"While we are coming off a low base, we are encouraged by the improved demand that we are seeing from customers with revenue increasing for the third consecutive quarter," said Bob Nikl, Verigy's chief financial officer. "As we enter the new fiscal year, we can expect improvements in our operating leverage as a result of the significant benefits from our restructuring programs."

Outlook for Q1 2010

For the first quarter ending Jan. 31, 2010, the company is providing the following guidance:

-- Revenue is expected to be in the range of $105 million to $115 million.

-- Loss per share on a GAAP basis is expected to be in the range of ($0.13) to ($0.06).

-- After excluding restructuring and manufacturing transition-related charges, loss per share on a non-GAAP basis is expected to be in the range of ($0.09) to ($0.02).

-- Share based compensation expense is expected to be between $5 million to $5.2 million.

-- Weighted average shares outstanding is expected to be approximately 59.4 million.

Conference Call and Webcast

Verigy's management will present details of its fourth quarter and fiscal year 2009 financial results on a conference call with investors today beginning at 1:30 p.m. (Pacific). This event will be webcast live in listen-only mode. Listeners may log on at http://investor.verigy.com and select "Q4 and Fiscal Year 2009 Verigy Earnings Conference Call" in the "Webcasts & Presentations" section. The webcast will remain available on the company's web site for fourteen days.

A telephone replay of the conference call will be available from 4:30 p.m. (Pacific) today through December 3, 2009. The replay number is +1 888-286-8010 toll-free, or international callers may dial +1 617-801-6888; enter pass code 26622810.

About Verigy

Verigy provides advanced semiconductor test systems and solutions used by leading companies worldwide in design validation, characterization, and high-volume manufacturing test. Verigy offers scalable platforms for a wide range of system-on-chip (SOC) test solutions, and memory test solutions for Flash, DRAM including high-speed memories, as well as multi-chip packages (MCP). Verigy also provides advanced analysis tools that accelerate design debug and yield ramp processes. Additional information about Verigy can be found at www.verigy.com.

Forward-Looking Statements

This earnings release contains forward-looking statements, including statements about expenses and our expected revenue and loss per share. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The risks and uncertainties include, but are not limited to, uncertainty surrounding the timing and strength of the global economic recovery and the impact on our industry, the strength of our customers' businesses and unforeseen changes in the demand for current and new products and technologies. Additional factors that may cause results to differ materially from those in the forward-looking statements are discussed in our most recent periodic reports filed with the SEC. In those filings you will find descriptions of risk factors that could affect our future results. These forward-looking statements are only valid as of this date, and Verigy undertakes no duty to update any forward-looking statements.

Information About Non-GAAP Measures

Verigy is supplementing its financial results presented on a GAAP basis by providing non-GAAP measures to evaluate the operating performance of the company. Non-GAAP net loss for the quarter ended October 31, 2009, excludes the effects of charges for the company's previously announced restructuring actions and manufacturing transition, and impairment charges on its investments. Non-GAAP net loss for the year ended October 31, 2009, also excludes additional items, as set forth in the attached tables. Since management finds the non-GAAP information to be useful, the company believes that its investors may also benefit from seeing the company's results "through the eyes" of management in addition to seeing its GAAP results. This information also facilitates management's internal comparisons to historical operating results as well as to the operating results of its competitors. A reconciliation between the company's GAAP and non-GAAP results is provided in the attached tables. Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures.

VERIGY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)
(Unaudited)
                                            Three Months Ended                     Twelve Months Ended
                                            October 31,                            October 31,
                                            2009                   2008            2009            2008
   Net revenue:
   Products                                 $         68           $   108         $   201         $   531
   Services                                           29               42              122             160
   Total net revenue                                  97               150             323             691
   Cost of sales:
   Cost of products (*)                               35               68              133             270
   Cost of services (*)                               20               28              82              114
   Total cost of sales                                55               96              215             384
   Operating expenses:
   Research and development (*)                       22               25              92              103
   Selling, general and administrative (*)            29               38              117             154
   Restructuring charges                              1                1               8               2
   Total operating expenses                           52               64              217             259
   (Loss) income from operations                      (10       )      (10    )        (109   )        48
   Interest income and other                          -                6               4               23
   Impairment of Investments                          (2        )      (29    )        (18    )        (31    )
   (Loss) income before income taxes                  (12       )      (33    )        (123   )        40
   Provision for income taxes                         -                3               4               12
   Net (loss) income                        $         (12       )  $   (36    )    $   (127   )    $   28
   Net (loss) income per share- basic:      $         (0.20     )  $   (0.60  )    $   (2.17  )    $   0.48
   Net (loss) income per share- diluted:    $         (0.20     )  $   (0.60  )    $   (2.17  )    $   0.47
   Weighted average shares (presented in thousands) used in computing
   net (loss) income per share:
   Basic                                              58,823           58,416          58,437          59,574
   Diluted                                            58,823           58,416          58,437          60,360
   * Share-based compensation expense by function:
   Cost of products                         $         0.6          $   0.6         $   2.2         $   2.2
   Cost of services                         $         0.3          $   0.2         $   1.2         $   0.9
   Research and development                 $         0.5          $   0.5         $   2.1         $   2.0
   Selling, general and administrative      $         3.5          $   3.1         $   13.5        $   11.7

VERIGY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
                                                                                              October 31,  July 31,   October 31,
                                                                                              2009         2009       2008
ASSETS
Current assets:
          Cash and cash equivalents                                                           $   197      $  281     $   144
          Short-term marketable securities                                                        167         104         196
          Trade accounts receivable, net                                                          54          35          74
          Inventory                                                                               55          64          78
          Other current assets                                                                    40          43          46
                              Total current assets                                                513         527         538
Property, plant and equipment, net                                                                41          40          42
Long-term marketable securities                                                                   75          57          71
Goodwill and other intangibles, net                                                               20          20          18
Other long-term assets                                                                            62          61          65
                                                  Total assets                                $   711      $  705     $   734
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
          Accounts payable                                                                    $   40       $  36      $   65
          Employee compensation and benefits                                                      32          28          41
          Deferred revenue, current                                                               26          26          53
          Income taxes and other taxes payable                                                    3           3           3
          Other current liabilities                                                               22          17          34
                              Total current liabilities                                           123         110         196
Long-term liabilities:
          Convertible senior notes                                                                138         138         -
          Income taxes payable                                                                    15          14          13
          Other long-term liabilities                                                             33          41          36
                              Total liabilities                                                   309         303         245
Shareholders' equity
          Ordinary shares, no par value, 58,841,248, 58,727,123 and
          57,822,242 issued
          and outstanding at October 31, 2009, July
          31, 2009 and October 31, 2008, respectively
          Additional paid in capital                                                              429         424         406
          (Accumulated deficit) retained earnings                                                 (23 )       (11 )       105
          Accumulated other comprehensive loss                                                    (4  )       (11 )       (22 )
                              Total shareholders' equity                                          402         402         489
                                                  Total liabilities and shareholders' equity  $   711      $  705     $   734

VERIGY LTD.
RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP NET (LOSS)
INCOME
(In millions, except per share amounts)
(Unaudited)
                                                                                        Three Months Ended               Twelve Months Ended
                                                                                        October 31, 2009  EPS            October 31, 2009  EPS
GAAP net loss                                                                           $     (12   )     $   (0.20 )    $     (127  )     $   (2.17 )
        Non-GAAP adjustments:
                   Restructuring charges in cost of sales                                     0.9             0.01             5.5             0.09
                   Restructuring charges in operating expenses                                0.8             0.01             8.2             0.14
                   Impairment of auction rate securities                                      1.6             0.03             10.8            0.19
                   Impairment of cost method investment                                       -               0                6.2             0.11
                   Non-Recurring operating expenses                                           (0.3  )         0                2.4             0.04
                   Acquisition related charges in cost of sales                               0.1             0                0.3             0.01
                   Acquisition related charges in operating expenses                          0.0             0                4.1             0.07
                   Transition related charges in cost of sales                                1.7             0.03             2.3             0.04
                   Transition related charges in operating expenses                           0.1             0                0.2             -
                   Tax impact for transfer of intellectual property                           -               0                1.2             0.02
                   Tax impact related to acquisition                                          -               0                (1.5  )         (0.03 )
Non-GAAP net loss                                                                       $     (7    )     $   (0.12 )    $     (87   )     $   (1.49 )
                                                                                        Three Months Ended               Twelve Months Ended
                                                                                        October 31, 2008  EPS            October 31, 2008  EPS
GAAP net (loss) income                                                                  $     (36   )     $   (0.60 )    $     28          $   0.47
        Non-GAAP adjustments:
                   Incremental excess and obsolescence inventory charges in cost of           14.7            0.25             14.7            0.25
                   sales *
                   Impairment of auction rate securities and money market investments         18.1            0.31             18.1            0.30
                   Impairment of cost method investments in other (expense) income, net       11.1            0.19             11.1            0.18
                   Related tax impacted                                                       (0.6  )         (0.01 )          (0.6  )         (0.01 )
                   Restructuring charges in cost of sales                                     -               -                0.2             -
                   Restructuring charges in operating expenses                                -                                1.1             0.02
                   Separation related costs in cost of sales                                  -               -                0.1             -
                   Acquisition related charges in cost of sales                               -               -                0.6             0.01
                   Acquisition related charges in operating expenses                          -               -                -               -
                   FX gain relating to remeasurement of taxes                                 -               -                (2.4  )         (0.04 )
                   Non-recurring operating expenses                                           -               -                (0.1  )         -
Non-GAAP net income                                                                     $     8           $   0.14       $     71          $   1.18
*       Total excess and obsolete inventory write-downs included in cost of
        sales for the three and twelve months ended October 31, 2008 were
        $19 million and $27 million, respectively, of which $4 million and
        $12 million were considered to be consistent with our historical run
        rate and thus have not been included in the non-GAAP adjustment. The
        balance of $14.7 million represents incremental inventory
        write-downs recorded in the fourth quarter that resulted from the
        extraordinary drop in memory tester demand in general as well as the
        impact of the introduction of our new V6000 series product on our
        inventory of earlier generation products.

SOURCE: Verigy Ltd.

Verigy Ltd. 
Judy Davies, +1-408-864-7549 
VP, Investor Relations and Marketing Communications 
judy.davies@verigy.com