LeCroy expecting to generate strong cash flow in 2009, to continue repurchasing bonds

By Jennifer Lanning Drey

Portland, Ore., March 19 - LeCroy Corp. expects to generate cash flow on par with the record $21 million it generated in 2008 and will continue to capitalize on opportunities in the bond market if they present themselves, Tom Reslewic, chief executive officer of LeCroy, said Thursday during a presentation at the B. Riley Las Vegas Investor Conference.

The company recently used cash to retire $14 million of convertibles at a discount of 62%. LeCroy now has about $50 million of convertible bonds remaining, and their first put date is in the fall of 2011, Reslewic said.

Looking forward in 2009, LeCroy believes it could remove approximately $10 million from working capital in the next two to three quarters, as its inventory is presently higher than usual as a function of initial production plans in the current quarter and new product introductions, he said.

In addition, the company recently announced a series of planned operating expense reductions, and additional cost reductions of about $3 million per quarter could be implemented if necessary, Reslewic said.

LeCroy is a Chestnut Ridge, N.Y.-based communications test equipment company.

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