SOURCE: Cascade Microtech

Cascade Microtech

October 29, 2015 16:05 ET

Cascade Microtech Reports Third Quarter 2015 Results

Revenue of $35.8 Million; Record Gross Margin of 56.7%; Record Income From Operations of $4.5 Million; GAAP EPS of $0.19 / Share; Non-GAAP EPS of $0.20 / Share

BEAVERTON, OR--(Marketwired - Oct 29, 2015) - Cascade Microtech, Inc. (NASDAQ: CSCD) today reported financial results for the third quarter ended September 30, 2015.

Financial Summary

Results for the quarter ended September 30, 2015 were as follows:

  • Total revenue of $35.8 million, compared to $36.0 million for Q2 2015 and $32.7 million for Q3 2014.
    • Systems revenue of $19.1 million, a decrease of $0.4 million, or 2.0%, from Q2 2015, and an increase of $0.5 million, or 2.5%, over Q3 2014.
    • Record Probes revenue of $16.6 million, an increase of $0.1 million, or 0.8%, over Q2 2015, and an increase of $2.6 million, or 18.3%, over Q3 2014.
  • Record gross margin of 56.7%, up from 55.6% in Q2 2015 and 53.5% in Q3 2014.
    • Record Systems gross margin of 50.3%, up from 46.9% in Q2 2015 and 43.7% in Q3 2014.
    • Probes gross margin of 63.9%, down from 65.8% in Q2 2015 and 66.5% in Q3 2014.
  • Record income from operations of $4.5 million, an increase of $0.5 million, or 11.7%, from Q2 2015, and an increase of $0.9 million, or 24.8%, over Q3 2014.
  • GAAP net income of $3.2 million, or $0.19 per diluted share, compared to $2.8 million, or $0.16 per diluted share, for Q2 2015, and $2.2 million, or $0.13 per diluted share, for Q3 2014.
  • Non-GAAP net income of $0.20 per diluted share, compared to $0.19 per diluted share for Q2 2015, and $0.15 per diluted share for Q3 2014.
  • Depreciation, amortization and stock-based compensation expenses totaled $2.2 million, compared to $2.0 million for Q2 2015, and $2.2 million for Q3 2014.
  • Adjusted EBITDAS of $6.7 million, compared to $6.2 million for Q2 2015, and $5.5 million for Q3 2014.
  • Total cash and investments totaled $41.1 million, a decrease of $4.8 million from Q2 2015.
    • During Q3 2015, we purchased 336,429 shares of our common stock for $4.7 million.

"We are encouraged by our improved financial results, despite our increased investments in research and development. We expect that thru these investments we will expand our served available markets, while maintaining our leadership position in the markets we serve," said Michael Burger, President and CEO. Mr. Burger continued, "Our third quarter performance continues to demonstrate the strength of our financial model and included records in Probes revenue, Systems gross margins, and operating income. Turning to the future, our backlog at the end of the third quarter was 18% higher than the same time last year. As a result, we are positioned for a strong fourth quarter which is traditionally our best quarter of the year."

Financial Outlook

For the fourth quarter of 2015 we are projecting revenue in the range of $37 million to $40 million, with diluted GAAP earnings per share in the range of $0.19 to $0.25, and non-GAAP earnings per share in the range of $0.22 to $0.28. Our guidance assumes a tax rate of 33%, consistent foreign currency exchange rates and no significant one-time charges.

We will host a conference call beginning at 5:00 p.m. EDT (2:00 p.m. PDT) on Thursday, October 29, 2015, to discuss our results for the quarter ended September 30, 2015.

A simultaneous audio cast of the conference call may be accessed online from the investor relations page of www.cascademicrotech.com/investors. If you are interested in participating in the call, the live dial-in number is 855-871-8541, or international 720-634-2920, conference ID: 66787737. A replay will be available after 9:00 p.m. EDT at the same internet address. (For a telephone replay available after 9:00 p.m. EDT, dial: 855-859-2056, international: 404-537-3406, conference ID: 66787737).

Forward-Looking Statements

The statements in this release regarding financial results, positioning for a strong fourth quarter, investments in research and development, positioning in our markets, expanding our markets, and statements under "Financial Outlook" regarding projected revenue, GAAP earnings per share, and non-GAAP earnings per share and assumptions supporting those projections, and other statements identified by terminology such as "will," "should," "expects," "estimates," "predicts," and "continue" or other derivations of these or other comparable terms 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; changes in product mix; potential delays and other factors affecting the timing of new product introductions; the timing of shipments and customer orders; constraints on supplies of components; excess or shortage of production capacity; potential failure of expected market opportunities to materialize; changes in foreign exchange or tax rates; our ability to integrate acquired businesses and any delays in such integration; 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 for the year ended December 31, 2014. 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.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains Non-GAAP financial measures, which are defined below and reconciled to GAAP financial measures in a table later in this release:

  • Non-GAAP net income is defined as GAAP net income before certain items (adjustments) such as: restructuring, facility move and project costs, acquisition-related expenses, the amortization of intangibles and discrete tax items that we believe are either not representative of our ongoing operating performance or affect the comparability of results over time. Non-GAAP net income should not be construed as a substitute for net income as defined by GAAP. However, we regard non-GAAP net income as a complement to GAAP net income in assessing our financial performance over time and in the future.

  • Adjusted EBITDAS is defined as income from continuing operations before depreciation and amortization and stock-based compensation and certain other items (adjustments) such as: restructuring, facility move and project costs, and acquisition-related expenses that we believe are not representative of our ongoing operating performance. Adjusted EBITDAS should not be construed as a substitute for net income from continuing operations or net cash provided by (used in) operating activities (all as determined in accordance with GAAP) for the purpose of analyzing our operating performance, financial position and cash flows, as adjusted EBITDAS is not defined by GAAP. However, we regard adjusted EBITDAS as a complement to net income from continuing operations and other GAAP financial performance measures, by including an indirect measure of operating cash flow.

About Cascade Microtech, Inc.

Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in precision contact, electrical measurement and test of integrated circuits (ICs), optical devices 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, ICs, IC packages, circuit boards and modules, MEMS, 3D TSV, LED devices and more. Cascade Microtech's leading-edge stations, probes, probe cards, advanced thermal subsystems and integrated systems deliver precision accuracy and superior performance both in the lab and during production manufacturing of high-speed and high-density semiconductor chips. For more information, visit www.cascademicrotech.com.

   
CASCADE MICROTECH, INC.  
AND SUBSIDIARIES  
               
Condensed Consolidated Statements of Operations  
(in thousands, except per share data)  
(unaudited)  
                               
                               
    Three Months Ended              
    September 30,     June 30,     September 30,     Nine Months Ended September 30,  
    2015     2015     2014     2015     2014  
                                         
Revenue   $ 35,781     $ 36,044     $ 32,749     $ 103,567     $ 99,429  
Cost of sales     15,511       16,021       15,229       46,252       48,650  
Gross profit     20,270       20,023       17,520       57,315       50,779  
      56.7 %     55.6 %     53.5 %     55.3 %     51.1 %
Operating expenses:                                        
  Research and development     4,344       4,188       3,554       12,208       10,223  
  Selling, general and administrative     11,414       11,795       10,352       33,756       31,412  
      15,758       15,983       13,906       45,964       41,635  
                                         
Income from operations     4,512       4,040       3,614       11,351       9,144  
                                         
Other income (expense):                                        
  Interest income, net     14       8       16       8       25  
  Other, net     (19 )     65       (235 )     277       (360 )
      (5 )     73       (219 )     285       (335 )
                                         
Income before income taxes     4,507       4,113       3,395       11,636       8,809  
                                         
Income tax expense     1,288       1,316       1,188       3,447       3,182  
                                         
Net income   $ 3,219     $ 2,797     $ 2,207     $ 8,189     $ 5,627  
                                         
Net income per share:                                        
  Basic   $ 0.19     $ 0.17     $ 0.13     $ 0.49     $ 0.35  
  Diluted   $ 0.19     $ 0.16     $ 0.13     $ 0.48     $ 0.34  
                                         
Shares used in computing net income per share:                                        
  Basic     16,529       16,612       16,357       16,549       16,286  
  Diluted     17,112       17,202       16,851       17,135       16,775  
                                           
                                           
                                           
CASCADE MICROTECH, INC.  
AND SUBSIDIARIES  
             
Condensed Consolidated Balance Sheets  
(in thousands)  
(unaudited)  
             
             
    September 30,     December 31,  
Assets   2015     2014  
                 
Current assets:                
  Cash and cash equivalents   $ 30,131     $ 38,107  
  Marketable securities     10,988       1,626  
  Restricted cash     4       61  
  Accounts receivable, net     25,560       20,763  
  Inventories     25,123       24,642  
  Deferred income taxes     3,018       3,027  
  Prepaid expenses and other     4,289       4,454  
    Total current assets     99,113       92,680  
                 
Fixed assets, net     10,065       8,100  
Goodwill     11,898       12,823  
Purchased intangible assets, net     9,960       12,572  
Deferred income taxes     1,467       1,262  
Other assets     724       944  
                 
    $ 133,227     $ 128,381  
                 
                 
Liabilities and Shareholders' Equity                
                 
Current liabilities:                
  Accounts payable   $ 8,659     $ 7,505  
  Deferred revenue     2,025       2,070  
  Accrued liabilities     8,480       9,505  
    Total current liabilities     19,164       19,080  
                 
Deferred revenue     393       329  
Other long-term liabilities     1,583       1,511  
                 
    Total liabilities     21,140       20,920  
                 
Shareholders' equity:                
  Common stock     109,632       111,645  
  Accumulated other comprehensive income (loss)     (4,677 )     (3,127 )
  Retained earnings (accumulated deficit)     7,132       (1,057 )
                   
    Total shareholders' equity     112,087       107,461  
                 
    $ 133,227     $ 128,381  
                 
                 
                 
CASCADE MICROTECH, INC.  
AND SUBSIDIARIES  
   
Reconciliation of GAAP to Non-GAAP Financial Measures  
(in thousands, except per share amounts)  
(unaudited)  
                               
                               
    Three Months Ended              
    September 30,     June 30,     September 30,     Nine Months Ended September 30,  
Non-GAAP Net Income   2015     2015     2014     2015     2014  
GAAP net income   $ 3,219     $ 2,797     $ 2,207     $ 8,189     $ 5,627  
                                         
Adjustments to net income:                                        
  Restructuring     -       144       (191 )     262       58  
  Acquisition and acquisition related     -       -       (100 )     -       (557 )
  Amortization of intangibles     593       636       752       1,876       2,317  
  Income tax effect of non-GAAP adjustments     (196 )     (250 )     (161 )     (699 )     (661 )
  Discrete tax items     (204 )     -       -       (358 )     -  
Non-GAAP net income   $ 3,412     $ 3,327     $ 2,507     $ 9,270     $ 6,784  
                                         
GAAP net income per diluted share   $ 0.19     $ 0.16     $ 0.13     $ 0.48     $ 0.34  
Non-GAAP net income per diluted share   $ 0.20     $ 0.19     $ 0.15     $ 0.54     $ 0.40  
                                         
Shares used in diluted share calculations     17,112       17,202       16,851       17,135       16,775  
                                         
                                         
    Three Months Ended              
    September 30,     June 30,     September 30,     Nine Months Ended September 30,  
EBITDAS and Adjusted EBITDAS   2015     2015     2014     2015     2014  
GAAP Income from operations   $ 4,512     $ 4,040     $ 3,614     $ 11,351     $ 9,144  
                                         
Adjustments:                                        
  Depreciation     785       722       824       2,257       2,452  
  Amortization of intangibles     593       636       752       1,876       2,317  
  Stock-based compensation     805       617       648       2,009       1,918  
EBITDAS     6,695       6,015       5,838       17,493       15,831  
                                         
Adjustments:                                        
  Restructuring     -       144       (191 )     262       58  
  Acquisition and acquisition related     -       -       (100 )     -       (557 )
Adjusted EBITDAS   $ 6,695     $ 6,159     $ 5,547     $ 17,755     $ 15,332  
                                         
                                         
    Three Months Ending December 31, 2015                  
    Low Range Guidance           High Range Guidance                  
Forward-looking non-GAAP net income                                        
GAAP net income   $ 3,250             $ 4,250                  
Adjustments:                                        
  Amortization of intangibles     593               593                  
  Income tax effect of non-GAAP adjustments     (196 )             (196 )                
Non-GAAP net income   $ 3,647             $ 4,647                  
                                         
GAAP net income per diluted share   $ 0.19             $ 0.25                  
Non-GAAP net income per diluted share   $ 0.22             $ 0.28                  
                                         
Shares used in diluted share calculations     16,700               16,700                  
                                         

Contact Information

  • FOR MORE INFORMATION, CONTACT:

    Jeff A. Killian
    Cascade Microtech, Inc.
    (503) 601-1280