Cascade Microtech Reports Second Quarter 2015 Results
Revenue of $36.0 Million; Record Gross Margin of 55.6%; Income From Operations of $4.0 Million; GAAP EPS of $0.16 / Share; Non-GAAP EPS of $0.19 / Share
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BEAVERTON, OR -- (Marketwired) -- 07/28/15 -- Cascade Microtech, Inc. (NASDAQ: CSCD) today reported financial results for the second quarter ended June 30, 2015.
Financial Summary
Results for the quarter ended June 30, 2015 were as follows:
- Total revenue of $36.0 million, compared to $31.7 million for Q1 2015 and $33.0 million for Q2 2014.
- Systems revenue of $19.5 million, an increase of $2.1 million, or 11.9%, over Q1 2015, and a decrease of $1.8 million, or 8.5%, from Q2 2014.
- Record Probes revenue of $16.5 million, an increase of $2.2 million, or 15.6%, over Q1 2015, and an increase of $4.9 million, or 41.9%, over Q2 2014.
- Record gross margin of 55.6%, up from 53.6% in Q1 2015 and 51.5% in Q2 2014.
- Systems gross margin of 46.9%, down from 48.6% in Q1 2015 and 47.5% in Q2 2014.
- Probes gross margin of 65.8%, up from 59.8% in Q1 2015 and 58.9% in Q2 2014.
- Income from operations of $4.0 million, an increase of $1.2 million, or 44.3%, from Q1 2015, and an increase of $1.1 million, or 38.0%, over Q2 2014.
- Q2 2015 operating income includes restructuring expenses of $0.1 million, compared to $0.1 million in Q1 2015, and $0.2 million in Q2 2014.
- GAAP net income of $2.8 million, or $0.16 per diluted share, compared to $2.2 million, or $0.13 per diluted share, for Q1 2015, and $1.8 million, or $0.11 per diluted share, for Q2 2014.
- Non-GAAP net income of $0.19 per diluted share, compared to $0.15 per diluted share for Q1 2015, and $0.13 per diluted share for Q2 2014.
- Depreciation, amortization and stock-based compensation expenses totaled $2.0 million, compared to $2.0 million for Q1 2015, and $2.4 million for Q2 2014.
- Adjusted EBITDAS of $6.2 million, compared to $4.9 million for Q1 2015, and $5.1 million for Q2 2014.
- Total cash and investments of $45.9 million, an increase of $4.9 million over Q1 2015.
"Cascade Microtech's quarterly revenue grew by 13.6% for Q2 compared with Q1 of 2015,driven by both our Systems and Probes segments, with our Probes segment setting a new all-time revenue record," said Michael Burger, President and CEO. Mr. Burger continued, "Company-wide gross margins also set a new record of 55.6%, which exceeds our recently adopted Success Model for this metric, and reflects the leverage capability in the business. Our expanding gross profit exceeded our increased investment in new product development, which generated an EPS that came in near the upper end of our guidance range. We posted a book-to-bill ratio of 1.21 as each of our segments were greater than 1 for the quarter, which drove an all-time record backlog for the company." Mr. Burger concluded by stating, "We are very pleased with the results of Q2 and remain optimistic about the balance of 2015 as our Probe products continue to gain market share and we are seeing continued acceleration in our Systems business."
Financial Outlook
For the third quarter of 2015 we are projecting revenue in the range of $35.0 million to $39.0 million, with diluted GAAP earnings per share in the range of $0.14 to $0.20, and non-GAAP diluted earnings per share in the range of $0.17 to $0.23. Our guidance assumes a tax rate of 32%, 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 Tuesday, July 28, 2015, to discuss our results for the quarter ended June 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: 89802623. 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: 89802623).
Forward-Looking Statements
The statements in this release regarding financial results and positioning in our markets in 2015, continuing growth in the Systems business and the market share of Probes, 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; 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. Non-GAAP EPS is based on Non-GAAP net income.
- 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 and is not uniformly defined among companies. 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 Six Months Ended
------------------------------ June 30,
June 30, March 31, June 30, --------------------
2015 2015 2014 2015 2014
--------- --------- --------- --------- ---------
Revenue $ 36,044 $ 31,742 $ 32,995 $ 67,786 $ 66,680
Cost of sales 16,021 14,720 16,009 30,741 33,421
--------- --------- --------- --------- ---------
Gross profit 20,023 17,022 16,986 37,045 33,259
Operating expenses:
Research and
development 4,188 3,676 3,428 7,864 6,669
Selling, general and
administrative 11,795 10,547 10,630 22,342 21,060
--------- --------- --------- --------- ---------
15,983 14,223 14,058 30,206 27,729
--------- --------- --------- --------- ---------
Income from operations 4,040 2,799 2,928 6,839 5,530
Other income
(expense):
Interest income, net 8 (14) 7 (6) 9
Other, net 65 231 (56) 296 (125)
--------- --------- --------- --------- ---------
73 217 (49) 290 (116)
--------- --------- --------- --------- ---------
Income before income
taxes 4,113 3,016 2,879 7,129 5,414
Income tax expense 1,316 843 1,051 2,159 1,994
--------- --------- --------- --------- ---------
Net income $ 2,797 $ 2,173 $ 1,828 $ 4,970 $ 3,420
========= ========= ========= ========= =========
Net income per share:
Basic $ 0.17 $ 0.13 $ 0.11 $ 0.30 $ 0.21
Diluted $ 0.16 $ 0.13 $ 0.11 $ 0.29 $ 0.20
Shares used in
computing net income
per share:
Basic 16,612 16,523 16,255 16,569 16,249
Diluted 17,202 17,037 16,751 17,145 16,725
CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, December 31,
Assets 2015 2014
-------------- --------------
Current assets:
Cash and cash equivalents $ 34,705 $ 38,107
Marketable securities 11,230 1,626
Restricted cash - 61
Accounts receivable, net 23,942 20,763
Inventories 24,209 24,642
Deferred income taxes 3,017 3,027
Prepaid expenses and other 3,772 4,454
-------------- --------------
Total current assets 100,875 92,680
Fixed assets, net 9,848 8,100
Goodwill 11,877 12,823
Purchased intangible assets, net 10,540 12,572
Deferred income taxes 1,467 1,262
Other assets 791 944
-------------- --------------
$ 135,398 $ 128,381
============== ==============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 8,195 $ 7,505
Deferred revenue 2,303 2,070
Accrued liabilities 10,220 9,505
-------------- --------------
Total current liabilities 20,718 19,080
Deferred revenue 367 329
Other long-term liabilities 1,594 1,511
-------------- --------------
Total liabilities 22,679 20,920
Shareholders' equity:
Common stock 113,516 111,645
Accumulated other comprehensive loss (4,710) (3,127)
Retained earnings (accumulated deficit) 3,913 (1,057)
-------------- --------------
Total shareholders' equity 112,719 107,461
-------------- --------------
$ 135,398 $ 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 Six Months Ended
---------------------------------- June 30,
Non-GAAP Net June 30, March 31, June 30, ----------------------
Income 2015 2015 2014 2015 2014
---------- ---------- ---------- ---------- ----------
GAAP net income $ 2,797 $ 2,173 $ 1,828 $ 4,970 $ 3,420
Adjustments to
net income:
Restructuring 144 118 249 262 249
Acquisition
and
acquisition
related - - (457) - (457)
Amortization
of
intangibles 636 647 780 1,283 1,565
Income tax
effect of
non-GAAP
adjustments (250) (253) (209) (503) (500)
Discrete tax
items - (154) - (154) -
---------- ---------- ---------- ---------- ----------
Non-GAAP net
income $ 3,327 $ 2,531 $ 2,191 $ 5,858 $ 4,277
========== ========== ========== ========== ==========
GAAP net income
per diluted
share $ 0.16 $ 0.13 $ 0.11 $ 0.29 $ 0.20
========== ========== ========== ========== ==========
Non-GAAP net
income per
diluted share $ 0.19 $ 0.15 $ 0.13 $ 0.34 $ 0.26
========== ========== ========== ========== ==========
Shares used in
diluted share
calculations 17,202 17,037 16,751 17,145 16,725
Three Months Ended Six Months Ended
EBITDAS and ---------------------------------- June 30,
Adjusted June 30, March 31, June 30, ----------------------
EBITDAS 2015 2015 2014 2015 2014
---------- ---------- ---------- ---------- ----------
GAAP Income from
operations $ 4,040 $ 2,799 $ 2,928 $ 6,839 $ 5,530
Adjustments:
Depreciation 722 750 799 1,472 1,628
Amortization
of
intangibles 636 647 780 1,283 1,565
Stock-based
compensation 617 587 821 1,204 1,270
---------- ---------- ---------- ---------- ----------
EBITDAS 6,015 4,783 5,328 10,798 9,993
Adjustments:
Restructuring 144 118 249 262 249
Acquisition
and
acquisition
related - - (457) - (457)
---------- ---------- ---------- ---------- ----------
Adjusted EBITDAS $ 6,159 $ 4,901 $ 5,120 $ 11,060 $ 9,785
========== ========== ========== ========== ==========
Three Months Ending
September 30, 2015
----------------------------------
Low Range High Range
Guidance Guidance
---------- ----------
Forward-looking
non-GAAP net
income
GAAP net income $ 2,500 $ 3,500
Adjustments:
Amortization
of
intangibles 600 600
Income tax
effect of
non-GAAP
adjustments (192) (192)
---------- ----------
Non-GAAP net
income $ 2,908 $ 3,908
========== ==========
GAAP net income
per diluted
share $ 0.14 $ 0.20
========== ==========
Non-GAAP net
income per
diluted share $ 0.17 $ 0.23
========== ==========
Shares used in
diluted share
calculations 17,300 17,300
FOR MORE INFORMATION, CONTACT: Jeff A. Killian Cascade Microtech, Inc. (503) 601-1280
Source: Cascade Microtech
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