Cascade Microtech Reports Third Quarter 2009 Results

Revenue of $14.0 Million, up 11% Sequentially With Improving Margins


PORTLAND, OR--(Marketwire - October 27, 2009) - Cascade Microtech (NASDAQ: CSCD), today reported financial results for the third quarter ended September 30, 2009.

Third quarter results include:

--  Revenue of $14.0 million, up 11% from Q209
--  Engineering systems revenue increased 17% from Q209
--  Probes and sockets revenue increased 5% from Q209
--  Net loss of $1.4 million or $0.11 per share for Q309, compared to a
    net loss of $1.6 million or $0.12 per share in Q209
--  Cash and investment balances increased by $1.4 million from Q209 to
    $35.1 million
    

"During the third quarter, we continued to see a recovery in the market place with increased revenue and improving gross and operating margins. Our focus is on achieving revenue growth while controlling operating costs in order to leverage our earnings model," said Geoff Wild, CEO of Cascade Microtech.

Financial Outlook

Based on the current backlog and anticipated bookings, Cascade anticipates that fourth quarter 2009 revenues will be in the range of $14 million to $16 million.

The company will host a conference call beginning at 5 p.m. EDT (2 p.m. PDT) on October 27, 2009 to discuss its results for the third quarter of 2009.

A simultaneous audio cast of the conference call may be accessed online from the investor relations page of www.cascademicrotech.com. A replay will be available after 8 p.m. EDT at this same internet address. (For a telephone replay, dial (888) 286-8010 passcode: 60250700; International: 617-801-6888.)

Forward-Looking Statements

The statements in this release, particularly the comments above made by Mr. Wild and the paragraph above captioned "Financial Outlook," are "forward-looking" statements within the meaning of the Securities Litigation Reform act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including changes in demand for the Company's products, product mix, the timing of shipments and customer orders, constraints on supplies of components, excess or shortage of production capacity and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports, including the Company's Annual Report on Form 10-K. In addition such statements could be affected by general industry and market conditions and growth rates and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

About Cascade Microtech

Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in the precise electrical measurement and test of integrated circuits (ICs) and other small structures. For technology businesses and scientific institutions that need to evaluate small structures, Cascade Microtech delivers access to electrical data from wafers, integrated circuits (ICs), IC packages, circuit boards and modules, MEMs, biological structures, electro-optic devices and more. Cascade Microtech's leading-edge semiconductor production test consumables include unique probe cards and test sockets that reduce manufacturing costs of high-speed and high-density semiconductor chips. Information about Cascade Microtech can be found on the Web at www.cascademicrotech.com.

                         CASCADE MICROTECH, INC.
                            AND SUBSIDIARIES

              Condensed Consolidated Statements of Operations
                  (in thousands, except per share data)
                                (unaudited)

                              Three Months Ended
                        ------------------------------  Year to Date Ended
                        September            September     September 30,
                           30,     June 30,     30,     ------------------
                          2009       2009      2008       2009      2008
                        ---------  --------  ---------  --------  --------

Sales                   $  13,971  $ 12,616  $  21,128  $ 38,056  $ 61,174
Cost of sales               8,478     7,835     12,068    23,927    33,933
                        ---------  --------  ---------  --------  --------

       Gross profit         5,493     4,781      9,060    14,129    27,241
                        ---------  --------  ---------  --------  --------

Operating expenses:
  Research and
   development              2,095     1,818      2,308     5,906     8,040
  Selling, general
   and administrative       4,971     5,186      7,739    15,552    21,953
  Amortization of
   purchased intangibles      144       145        582       435     1,879
                        ---------  --------  ---------  --------  --------

       Total operating
        expenses            7,210     7,149     10,629    21,893    31,872
                        ---------  --------  ---------  --------  --------

       Loss from
        operations         (1,717)   (2,368)    (1,569)   (7,764)   (4,631)
                        ---------  --------  ---------  --------  --------

Other income (expense):
  Interest income, net         68       103        221       269       711
  Other, net                  226       440       (369)      111      (113)
                        ---------  --------  ---------  --------  --------

       Total other
        income (expense)      294       543       (148)      380       598
                        ---------  --------  ---------  --------  --------

       Loss before
        income taxes       (1,423)   (1,825)    (1,717)   (7,384)   (4,033)

Income tax benefit             (4)     (249)      (426)     (224)     (868)
                        ---------  --------  ---------  --------  --------

       Net loss         $  (1,419) $ (1,576) $  (1,291) $ (7,160) $ (3,165)
                        =========  ========  =========  ========  ========

       Basic and diluted
        net loss per
        share           $   (0.11) $  (0.12) $   (0.10) $  (0.54) $  (0.24)

       Shares used in
        basic and diluted
        per share
        calculations       13,325    13,306     13,108    13,291    13,047






                          CASCADE MICROTECH, INC.
                             AND SUBSIDIARIES

                  Condensed Consolidated Balance Sheets
                              (in thousands)
                                (unaudited)

                                                September 30,  December 31,
                       Assets                       2009          2008
                                                ------------  ------------

Current assets:
     Cash and cash equivalents                  $     21,030  $      3,750
     Marketable securities                             8,813        28,795
     Accounts receivable, net                          9,970        12,801
     Inventories                                      17,588        19,079
     Prepaid expenses and other                          810         1,367
     Income taxes receivable                               -         1,003
     Deferred income taxes                               100            99
     Assets held for sale                                  -           400
                                                ------------  ------------
         Total current assets                         58,311        67,294

Long-term investments                                  5,267         2,465
Fixed assets, net                                     12,799        13,580
Purchased intangible assets, net                       1,990         2,425
Deferred income taxes                                    276           237
Other assets                                           2,441         2,455
                                                ------------  ------------

                                                $     81,084  $     88,456
                                                ============  ============


      Liabilities and Stockholders' Equity

Current liabilities:
     Current portion of long-term debt and
      capital leases                            $         11  $         19
     Accounts payable                                  3,697         4,110
     Deferred revenue                                    913         1,120
     Accrued liabilities                               2,769         3,776
                                                ------------  ------------
         Total current liabilities                     7,390         9,025

Capital leases, net of current portion                    33            62
Deferred revenue                                          87           313
Other long-term liabilities                            2,277         2,356
                                                ------------  ------------

         Total liabilities                             9,787        11,756
                                                ------------  ------------

Stockholders' equity:
     Common stock                                     85,136        83,345
     Unrealized holding gain on investments               35            69
     Accumulated deficit                             (13,874)       (6,714)
                                                ------------  ------------

         Total stockholders' equity                   71,297        76,700
                                                ------------  ------------

                                                $     81,084  $     88,456
                                                ============  ============