SOURCE: Rudolph Technologies, Inc.

May 03, 2006 16:05 ET

Rudolph Reports First Quarter Revenue at High End of Guidance Range and Pro Forma EPS Exceeding Guidance; Q2 Revenue Forecast Between $52 and $55 Million

FLANDERS, NJ -- (MARKET WIRE) -- May 3, 2006 --Rudolph Technologies, Inc. (NASDAQ: RTEC), a leading provider of process control equipment for thin film measurement and macro defect inspection during integrated circuit manufacturing, today announced financial results for the first quarter ended March 31, 2006 which included the Company's merger with August Technology on February 15, 2006.

The Company's first quarter revenue totaled $31.8 million, which included sales of $11.2 million from the former August Technology for the six-week period from the date of the merger, compared to $18.3 million in the fourth quarter of 2005 and $23.1 million for the first quarter a year ago. During the first quarter, international sales represented approximately 65% of revenue while domestic sales accounted for 35%. This compares to international sales of 67% and domestic sales of 33% in the year-ago quarter. Approximately half of the Company's 2006 first quarter revenue was from 300-millimeter tools.

Primarily reflecting the impact of the merger, the Company in the first quarter reported a loss of $11.7 million or $0.54 per diluted share, which included $13.8 million after tax or $0.63 per share, in certain purchase accounting charges and other items. Nearly all of the charges were related to the merger with August, including an in-process R&D charge of $9.9 million, purchase accounting inventory step-up of $2.5 million, duplicative inventory write downs of $2.4 million, $452 thousand for the amortization of acquired intangible assets and $87 thousand for stock option expense related to the adoption of SFAS 123(R) "Stock Based Compensation" for acquired stock options. Additionally, other non-merger related inventory charges totaled $913 thousand. Excluding these items, earnings were $0.09 per diluted share.

Discussing the first quarter results and the status of the merger integration activities, Paul F. McLaughlin, Chairman and CEO, commented, "We are very pleased with the fast start of our integration after closing our merger with August Technology. This fast start has led to our forecasting a "breakout quarter" for Rudolph Technologies as we are guiding second quarter revenues to be in the range of $52 to $55 million. As has been the case in our history as a public company, Rudolph was again able to show solid net income in the first quarter as earnings exceeded guidance when adjustments are excluded. These adjustments, totaling $13.8 million, were almost entirely related to the August merger. We are seeing strength, particularly in the three product lines of our business where we have #1 market share positions: metal film metrology, front-end macro defect inspection, and back-end macro defect inspection."

Balance Sheet Strength

The Company's cash and marketable securities position remained very strong and totaled $78.4 million at the end of the first quarter of 2006. Working capital increased from $125.3 million at December 31, 2005 to $156.5 million.

Outlook

The Company is currently anticipating revenue for the second quarter ending June 30, 2006 to be between $52 and $55 million with earnings per share ranging from $0.17 to $0.21 per diluted share, without giving effect to the sale of inventory stepped up in the purchase accounting for the August merger.

Conference Call

Rudolph Technologies will be hosting a conference call today at 4:45 PM ET. A live webcast will also be available to investors on the Company's website at www.rudolphtech.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download and install any necessary audio software.

About Rudolph Technologies

Rudolph Technologies is a worldwide leader in the design, development, manufacture and support of high-performance process control metrology, defect inspection and data analysis systems used by semiconductor device manufacturers. Rudolph provides a full-fab solution through its families of proprietary products that provide critical yield-enhancing information, enabling microelectronic device manufacturers to drive down costs and time to market. The company has enhanced the competitiveness of its products in the marketplace by anticipating and addressing many emerging trends driving the semiconductor industry's growth. Rudolph's strategy for continued technological and market leadership includes aggressive research and development of complementary metrology and inspection solutions. Headquartered in Flanders, New Jersey, Rudolph supports its customers with a worldwide sales and service organization. Additional information can be found on the Company's website at www.rudolphtech.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, statements related to our expectations regarding our revenue and earnings expectations for the second quarter, increases in customer orders and bookings, future growth of our business, and the overall improvement in the market. In some cases, you can identify those so-called "forward-looking statements" by words such as "may," "will," "would," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of those words and other comparable words. Rudolph wishes to take advantage of the "safe harbor" provided for by the Private Securities Litigation Reform Act of 1995 and you are cautioned that actual events or results may differ materially from the expectations expressed in such forward-looking statements as a result of various factors, including risks and uncertainties, many of which are beyond the control of Rudolph. Factors that could cause actual results to differ materially from the expectations expressed in such forward-looking statements include, but are not limited to: (1) cyclicality of the semiconductor industry; (2) customer concentration; (3) introduction of new products by Rudolph's competitors; (4) sole or limited sources of supply; (5) the businesses of Rudolph and August may not be integrated successfully, which may result in the combined company not operating as effectively and efficiently as expected or such integration may be more difficult, time-consuming or costly than expected; (6) expected combination benefits from the merger may not be fully realized or realized within the expected time frame; (7) revenues may be lower than expected; (8) costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected, or the effects of purchase accounting, when finalized, may be different from the company's expectations; (9) the industry may be subject to future regulatory or legislative actions that could adversely affect the companies; (10) the impact of a slowdown in the overall economy; (11) uncertainty of the current global political environment; (12) the potential for terrorist attacks; (13) changes in customer demands for our existing and new products, the timing, cancellation or delay of customer orders and shipments; (14) the timing of revenue recognition of shipments and services provided; (15) changes in or an inability to execute our business strategy; (16) unanticipated manufacturing or supply problems and (17) changes in tax rules. Rudolph cannot guarantee future results, levels of activity, performance, or achievements. Additional factors that may affect the future results of Rudolph are set forth in its Form 10-K reports for the year ended December 31, 2005 and other filings with the Securities and Exchange Commission ("SEC"), which are available at http://www.sec.gov, the SEC's website, and at the Company's website which is http://www.rudolphtech.com. These factors are updated from time to time through the filing of reports and registration statements with the SEC. Rudolph Technologies does not assume any obligation to update the forward-looking information contained in this press release.


                        RUDOLPH TECHNOLOGIES, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                           ($000) - (Unaudited)


                                                         March    December
                                                           31,       31,
                                                          2006      2005
                                                        --------- ---------
ASSETS
Current assets
Cash and marketable securities                          $  78,427 $  80,807
Accounts receivable, net                                   49,185    26,046
Inventories                                                53,922    30,073
Prepaid and other assets                                    6,670     3,093
                                                        --------- ---------
     Total current assets                                 188,204   140,019
Property, plant and equipment, net                         16,282     8,599
Intangibles                                               187,021    21,873
Other assets                                                2,957     9,510
                                                        --------- ---------
Total assets                                            $ 394,464 $ 180,001
                                                        ========= =========

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities                $  21,187 $   9,952
Other current liabilities                                  10,506     4,773
                                                        --------- ---------
     Total current liabilities                             31,693    14,725
Non-current liabilities                                     4,249       742
                                                        --------- ---------
     Total liabilities                                     35,942    15,467
Stockholders’ equity                                      358,522   164,534
                                                        --------- ---------
Total liabilities and stockholders’ equity              $ 394,464 $ 180,001
                                                        ========= =========




                         RUDOLPH TECHNOLOGIES, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                           ($000) - (Unaudited)

                                                      Three Months Ended
                                                    ----------------------
                                                    March 31,   March 31,
                                                       2006        2005
                                                    ----------  -----------

Revenues                                            $   31,848  $    23,057
Cost of revenues                                        22,599       12,295
                                                    ----------  -----------
       Gross profit                                      9,249       10,762
Operating expenses:
  Research and development                               5,310        3,371
  In-process research and development                    9,900            -
  Selling, general and administrative                    6,986        5,322
  Amortization                                             672          219
                                                    ----------  -----------
Total operating expenses                                22,868        8,912
                                                    ----------  -----------
           Operating income (loss)                     (13,619)       1,850
Interest income and other, net                             712          424
Provision (benefit) for income taxes                    (1,161)         525
                                                    ----------  -----------
Net income (loss)                                   $(  11,746) $     1,749
                                                    ==========  ===========

Net income (loss) per share:
     Basic                                          $(    0.54) $      0.10
     Diluted                                        $(    0.54) $      0.10


Weighted average shares outstanding:
     Basic                                          21,661,185   16,841,197
     Diluted                                        21,661,185   16,922,968

The following pro forma financial information excludes certain charges and other items and as such represents non-GAAP financial measures. Management believes the presentation of non-GAAP financial measures, which exclude certain purchase accounting charges associated with the merger with August Technology and other items, is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.

                        RUDOLPH TECHNOLOGIES, INC.
                    CALCULATION OF PRO FORMA NET INCOME
                FOR THE THREE MONTHS ENDED MARCH 31, 2006
                           ($000) - (Unaudited)


                                    U.S. GAAP  ADJUSTMENTS       PRO FORMA
                                    ----------  ----------      -----------

Revenues                            $   31,848  $        -      $    31,848
Cost of revenues                        22,599       5,735  (A)      16,864
                                    ----------  ----------      -----------
       Gross profit                      9,249      (5,735)          14,984
Operating expenses:
  Research and development               5,310           -            5,310
  In-process research and
   development                           9,900       9,900  (B)           -
  Selling, general and
   administrative                        6,986          87  (C)       6,899
  Amortization                             672         452  (D)         220
                                    ----------  ----------      -----------
Total operating expenses                22,868      10,439           12,429
                                    ----------  ----------      -----------
           Operating income (loss)     (13,619)    (16,174)           2,555
Interest income and other, net             712           -              712
Provision (benefit) for income
 taxes                                  (1,161)     (2,422)           1,261
                                    ----------  ----------      -----------
Net income (loss)                   $(  11,746) $(  13,752)     $     2,006
                                    ==========  ==========      ===========

Net income (loss) per share:
     Basic                          $(    0.54) $(    0.63)     $      0.09
     Diluted                        $(    0.54) $(    0.63)     $      0.09

Weighted average shares
 outstanding:
     Basic                          21,661,185                   21,661,185
     Diluted                        21,661,185                   21,887,228

Adjustments:

(A)  Inventory purchase accounting step up          $2,468
     Write-off of duplicative and excess inventory  $3,267
(B)  Write-off of purchased in-process R&D          $9,900
(C)  Stock-based compensation of acquired options      $87
(D)  Amortization of acquired intangible assets       $452

Contact Information

  • For more information, please contact:

    Investors:
    Steven R. Roth
    973.448.4302
    Email Contact

    Trade Press:
    Virginia Becker
    952.259.1647
    Email Contact