Overview

We are a leading provider of test solutions for testing, burning-in, and stabilizing semiconductor devices. Decarbonization, generative AI, and digitalization are driving increased quality, reliability, safety, and security needs of semiconductors used across multiple applications, creating additional test requirements and new opportunities for our test products and solutions.

We have developed several innovative products, including the FOX-P family of test and burn-in systems, FOX WaferPak Aligner, FOX WaferPak Contactor, FOX DiePak Carrier, and FOX DiePak Loader. These systems can test, burn-in, and stabilize a wide range of devices such as power semiconductors, sensors, memory, processors, and photonics devices.

Through the acquisition of Incal Technology, our product portfolio expanded to include packaged parts burn-in solutions, including the Sonoma series for ultra-high-power burn-in testing, the Tahoe series for medium-power reliability burn-in, and the Echo series for low-power and high parallelism testing.

Critical Accounting Estimates

Our critical accounting estimates include those related to business combinations and the impairment of goodwill and long-lived assets. Accounting for business combinations requires significant estimates and assumptions to determine the fair values of acquired assets and liabilities. We also assess goodwill for impairment annually or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable.

Results of Operations

Revenues

Revenue increased 142% in the three-month period due to higher shipments of systems and contactors, as well as the addition of package parts burn-in products from the Incal acquisition. Revenue decreased 10% in the nine-month period due to lower power semiconductor demand, partially offset by growth in the United States.

Gross Margin

Gross profit increased 128% in the three-month period due to higher revenue, but gross margin decreased 2.5 percentage points due to amortization of acquired intangible assets and a one-time inventory charge. Gross profit and margin decreased in the nine-month period due to lower system shipments, product mix changes, and acquisition-related charges.

Research and Development

R&D expenses increased due to severance costs, higher employee costs, and increased license fees, partially offset by lower non-recurring engineering charges.

Selling, General and Administrative

SG&A expenses increased due to higher legal fees, expenses from the Incal acquisition, and increased employee-related costs.

Liquidity and Capital Resources

Cash, cash equivalents, and restricted cash were $31.4 million as of February 28, 2025, compared to $47.7 million as of February 29, 2024. Cash used in operations was $5.1 million, primarily due to a net loss and changes in working capital. Cash used in investing was $13.2 million, mainly for the Incal acquisition and capital expenditures. Cash provided by financing was $0.4 million.

Outlook

We believe our existing cash resources and anticipated funds from operations will satisfy our cash requirements for the next twelve months. The semiconductor industry’s increasing quality, reliability, safety, and security needs continue to drive demand for our test and burn-in solutions, providing opportunities for future growth. However, macroeconomic factors and industry-specific challenges may impact our financial performance going forward.