SOURCE: Rudolph Technologies, Inc.

August 01, 2005 16:05 ET

Rudolph Technologies Announces Second Quarter Results

Revenue and Earnings Increase Over 2004 Levels and Meet Guidance

FLANDERS, NJ -- (MARKET WIRE) -- August 1, 2005 -- Rudolph Technologies, Inc. (NASDAQ: RTEC), a leading provider of process control equipment for thin film measurements and macro-defect inspection during Integrated Circuit (IC) manufacturing, today announced financial results for the second quarter ended June 30, 2005.

Highlights for the second quarter include:

--  Revenue of $21.4 million increases 5% year-over-year
    
--  EPS increase to $0.11 from $0.09 in prior-year period
    
--  Operating profit increases 11% year-over-year to $2.1 million
    
--  New WaferView® 320 macro-defect inspection tools gain market
    acceptance
    
--  A definitive agreement is signed to merge with August Technology
    
Discussing the second quarter results, Paul F. McLaughlin, Chairman and CEO, commented:

"We had an extremely productive second quarter. First, we continued our track record of profitability by effectively managing the Company at various revenue levels reflective of the current sideways movement in semiconductor capital equipment markets. Second, we introduced two major new products in the quarter and highlighted these at Semicon West in San Francisco this month. Third, our macro-defect inspection tools continued to gain acceptance in the marketplace and we received customer acceptance of our first WaferView 320 tools that were shipped to a major logic supplier in the first quarter. Our macro-defect products, including both our WaferView 310 tools and our new tools, accounted for slightly over 20% of our second quarter revenues. Fourth, in June we announced shipment of our 200th MetaPULSE® tool. While achieving these accomplishments, the Company signed a strategic merger agreement with August Technology, taking a major step toward our goal to become the 4th largest overall supplier of process control solutions and the number two 'pure play' process control company in the industry."

The Company's second quarter revenue totaled $21.4 million, a 5% increase compared to $20.4 million for the second quarter of 2004. Revenue for the 2005 second quarter decreased by 7% compared to the 2005 first quarter revenue of $23.1 million. During the second quarter, international sales represented approximately 80% of revenue while domestic sales accounted for 20%. This compares to international sales of 60% and domestic sales of 40% in the year-ago quarter.

The Company continued its strong heritage of profitability as second quarter net income totaled $1.9 million, or $0.11 per diluted share, compared to $1.5 million, or $0.09 per diluted share for the 2004 second quarter. The Company reported net income of $1.7 million, or $0.10 per diluted share for the 2005 first quarter.

Second quarter gross margin was 47% compared to 48% in the 2004 second quarter. The gross margin in the 2005 first quarter was 47%.

Research and development (R&D) expenses for the second quarter totaled $3.0 million, compared to $3.4 million in the first quarter of 2005, and $4.1 million in the year-ago period. As a percentage of revenue, R&D was 14%, compared to 15% last quarter, and 20% in the same quarter last year. The sequential decrease in R&D is primarily the result of the timing of project cost spending and cost containment initiatives implemented in the second quarter. The Company anticipates that third quarter spending on R&D will be approximately 14% of revenue.

Selling, general and administrative (S,G&A) expenses for the second quarter totaled $4.8 million, compared to $5.3 million in the first quarter of 2005, and $3.7 million in the prior-year period. As a percentage of revenue, S,G&A was 23% in the 2005 first and second quarters. The sequential decrease in S,G&A was due to cost containment initiatives. Also contributing to the decrease was $362,000 recorded in first quarter of 2005 for the Company's merger and acquisition activities. The Company expects that S,G&A will be approximately 22% of revenue in the third quarter of 2005.

Balance Sheet Strength

At June 30, 2005, the Company's cash and marketable securities totaled $78.3 million and working capital increased to $124.5 million. For the quarter, receivables increased $7.1 million primarily due to the timing of shipments in the quarter and longer collection times in Japan resulting from our move last year to direct operations. Inventory continued to decline to $31.2 million.

Outlook

Reflecting the current sideways movement in our market and our belief that order troughs in the current cycle have recently been reached, the Company is currently anticipating revenue for the third quarter ending September 30, 2005 to be sequentially flat to down 10%, compared to that of the 2005 second quarter revenue of $21.4 million. The Company is expecting diluted earnings per share to be approximately $0.06 to $0.10 for the 2005 third quarter. We are reaffirming our belief that orders will show improvement as the second half of 2005 continues leading to stronger revenue and earnings levels in 2006.

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 website 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 systems used by semiconductor device manufacturers. The Company provides a full-fab solution through its families of proprietary systems for metrology applications used throughout the device manufacturing process. Rudolph's product development has successfully anticipated and addressed many emerging trends that are driving the semiconductor industry's growth. The Company's success in creating complementary metrology applications through aggressive research and development is key to Rudolph's strategy for continued technological and market leadership.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 merger agreement and the transactions contemplated thereby may not be approved by the companies' shareholders; (6) Rudolph and August may be unable to obtain certain foreign regulatory approvals required for the transaction, or obtain these approvals may delay the transaction or result in the imposition of conditions that could have a material adverse effect on the combined company; (7) conditions to the closing of the transaction may not be satisfied; (8) 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; (9) expected combination benefits from the merger may not be fully realized or realized within the expected time frame; (10) revenues following the merger may be lower than expected; (11) costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the consummation of the merger, or the effects of purchase accounting may be different from the companies' expectations; (12) the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; (13) the businesses of the companies may suffer as a result of uncertainty surrounding the transaction; (14) the industry may be subject to future regulatory or legislative actions that could adversely affect the companies; (15) the impact of the slowdown in the overall economy; (16) uncertainty of the current global political environment; (17) the potential for terrorist attacks; (18) changes in customer demands for our existing and new products, the timing, cancellation or delay of customer orders and shipments; (19) the timing of revenue recognition of shipments; (20) changes in or an inability to execute our business strategy; (21) unanticipated manufacturing or supply problems and (22) 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 and August are set forth in their respective Form 10-K reports for the year ended December 31, 2004 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 companies' websites, which are http://www.rudolphtech.com and http://www.augusttech.com, respectively. These factors are updated from time to time through the filing of reports and registration statements with the SEC.


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

                                                  June 30,     December 31,
                                                    2005           2004
                                                -----------    -----------
ASSETS
Current assets
Cash and marketable securities                  $    78,270    $    76,747
Accounts receivable, net                             27,512         20,827
Inventories                                          31,210         33,996
Prepaid and other assets                              2,974          3,050
                                                -----------    -----------
     Total current assets                           139,966        134,620
Net property, plant and equipment                     7,378          8,330
Intangibles                                          22,311         22,749
Other assets                                          7,822          5,581
                                                -----------    -----------
Total assets                                    $   177,477    $   171,280
                                                ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities        $     8,130    $     9,313
Other current liabilities                             7,288          5,192
                                                -----------    -----------
     Total current liabilities                       15,418         14,505
Stockholders' equity                                162,059        156,775
                                                -----------    -----------
Total liabilities and stockholders' equity      $   177,477    $   171,280
                                                ===========    ===========

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

                              Three Months Ended        Six Months Ended
                             June 30,    June 30,     June 30,    June 30,
                               2005        2004         2005        2004
                            ---------   ---------    ---------   ---------

Revenues                    $  21,385   $  20,433    $  44,442   $  39,325
Cost of revenues               11,266      10,533       23,561      20,821
                            ---------   ---------    ---------   ---------
       Gross profit            10,119       9,900       20,881      18,504
Operating expenses:
  Research and development      3,005       4,145        6,376       8,316
  Selling, general
   and administrative           4,836       3,678       10,158       6,971
  Amortization                    219         219          438         438
                            ---------   ---------    ---------   ---------
Total operating expenses        8,060       8,042       16,972      15,725
                            ---------   ---------    ---------   ---------
           Operating income     2,059       1,858        3,909       2,779
Interest income and
 other, net                       417         251          841         600
Provision for income taxes        615         617        1,140         909
                            ---------   ---------    ---------   ---------
Net income                  $   1,861   $   1,492    $   3,610   $   2,470
                            =========   =========    =========   =========

Net income per share:
     Basic                  $    0.11   $    0.09    $    0.21   $    0.15
     Diluted                $    0.11   $    0.09    $    0.21   $    0.15

Weighted average shares
 outstanding:
     Basic                 16,896,480  16,740,759   16,868,991  16,717,084
     Diluted               16,928,358  16,892,059   16,925,316  16,968,741

Contact Information

  • Contact:
    Steven Roth
    CFO
    973-448-4302