Cascade Microtech Reports First Quarter 2015 Results

BEAVERTON, OR -- (Marketwired) -- Apr 29, 2015 -- Cascade Microtech, Inc. (NASDAQ: CSCD) today reported financial results for the first quarter ended March 31, 2015.

Financial Summary

Results for the quarter ended March 31, 2015 were as follows:

  • Total revenue of $31.7 million, compared to $36.6 million for Q4 2014 and $33.7 million for Q1 2014.
    • Systems revenue of $17.5 million, a decrease of $3.9 million, or 18.2%, from Q4 2014, and a decrease of $4.0 million, or 18.5%, from Q1 2014.
    • Probes revenue of $14.3 million, a decrease of $1.0 million, or 6.3%, from Q4 2014, and an increase of $2.0 million, or 16.5%, over Q1 2014.
  • Gross margin of 53.6%, up from 53.4% in Q4 2014 and up from 48.3% in Q1 2014.
    • Systems gross margin of 48.6%, up from 48.1% in Q4 2014 and 42.9% in Q1 2014.
    • Probes gross margin of 59.8%, down from 60.8% in Q4 2014 and up from 57.8% in Q1 2014.
  • Income from operations of $2.8 million, a decrease of $1.3 million, or 32.4%, from Q4 2014, and an increase of $0.2 million, or 7.6%, over Q1 2014.
    • Q1 2015 operating income includes restructuring expenses of $0.1 million, compared to $1.2 million in Q4 2014 and no restructuring expenses in Q1 2014.
  • GAAP net income of $2.2 million, or $0.13 per diluted share, compared to $4.3 million, or $0.25 per diluted share, for Q4 2014, and $1.6 million, or $0.10 per diluted share, for Q1 2014.
    • Q1 2015 includes income tax expense of $0.8 million, compared to a benefit of $0.4 million for Q4 2014, and an income tax expense of $0.9 million for Q1 2014.
  • Non-GAAP net income of $0.15 per diluted share, compared to $0.26 per diluted share for Q4 2014, and $0.13 per diluted share for Q1 2014.
  • Depreciation, amortization and stock-based compensation expenses totaled $2.0 million, compared to $2.1 million for Q4 2014, and $2.1 million for Q1 2014.
  • Adjusted EBITDAS of $4.9 million, compared to $7.5 million for Q4 2014, and $4.7 million for Q1 2014.
  • Total cash and investments of $41.0 million, an increase of $1.2 million over Q4 2014.

"Revenue for the first quarter of 2015 was, as predicted, seasonally down and was impacted by the change in foreign exchange rates. Our profitability exceeded expectations due to strong product mix and record gross margins," said Michael Burger, President and CEO. "We remain very optimistic about the balance of 2015 as our Probes products continue to gain market share and we are seeing acceleration in our Systems business. As stated previously, for 2015 we expect to financially outperform our 2014 results and grow faster than the markets we serve."

Financial Outlook

For the second quarter of 2015 we are projecting revenue in the range of $34.0 million to $38.0 million, with diluted GAAP earnings per share in the range of $0.12 to $0.17, and non-GAAP earnings per share in the range of $0.14 to $0.20. 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 Wednesday, April 29, 2015, to discuss our results for the quarter ended March 31, 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: 32505266. 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: 32505266).

Forward-Looking Statements

The statements in this release regarding financial results and positioning in our markets in 2015, continuing growth in market share of Probes, a return to historic levels of revenue for Systems 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 or delay in integrating acquired businesses; 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                    
                                                                              ------------------------------------  
                                                                                March  31,    December  31,      March  31,  
                                                                                    2015                  2014                  2014        
                                                                              ----------    ------------    ----------  
                                                                                                                                                        
Revenue                                                                $      31,742    $          36,593    $      33,685  
Cost  of  sales                                                            14,720                17,058            17,412  
                                                                              ----------    ------------    ----------  
Gross  profit                                                              17,022                19,535            16,273  
                                                                                                                                                        
Operating  expenses:                                                                                                                  
    Research  and  development                                    3,676                  3,598              3,241  
    Selling,  general  and  administrative            10,547                11,797            10,430  
                                                                              ----------    ------------    ----------  
                                                                                      14,223                15,395            13,671  
                                                                              ----------    ------------    ----------  
                                                                                                                                                        
Income  from  operations                                            2,799                  4,140              2,602  
                                                                                                                                                        
Other  income  (expense):                                                                                                          
    Interest  income  (expense),  net                            (14)                        4                      2  
    Other,  net                                                                    231                    (289)                (69)
                                                                              ----------    ------------    ----------  
                                                                                            217                    (285)                (67)
                                                                              ----------    ------------    ----------  
                                                                                                                                                        
Income  before  income  taxes                                    3,016                  3,855              2,535  
                                                                                                                                                        
Income  tax  expense  (benefit)                                    843                    (448)                943  
                                                                              ----------    ------------    ----------  
                                                                                                                                                        
Net  income                                                          $        2,173    $            4,303    $        1,592  
                                                                              ==========    ============    ==========  
                                                                                                                                                        
Net  income  per  share:                                                                                                              
    Basic                                                                $          0.13    $              0.26    $          0.10  
    Diluted                                                            $          0.13    $              0.25    $          0.10  
                                                                                                                                                        
Shares  used  in  computing  net  income  per                                                                          
  share:                                                                                                                                          
    Basic                                                                        16,523                16,435            16,242  
    Diluted                                                                    17,037                16,955            16,679  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                    CASCADE  MICROTECH,  INC.                                                      
                                                            AND  SUBSIDIARIES                                                            
                                                                                                                                                        
                                      Condensed  Consolidated  Balance  Sheets                                        
                                                              (in  thousands)                                                              
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                                                  March  31,          December  31,  
                                        Assets                                                    2015                      2014          
                                                                                              -------------    -------------  
                                                                                                                                                        
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents                                        $            34,079    $            38,107  
    Marketable  securities                                                                6,854                    1,626  
    Restricted  cash                                                                                  54                          61  
    Accounts  receivable,  net                                                        21,197                  20,763  
    Inventories                                                                                  24,723                  24,642  
    Deferred  income  taxes                                                                3,013                    3,027  
    Prepaid  expenses  and  other                                                      4,584                    4,454  
                                                                                              -------------    -------------  
        Total  current  assets                                                            94,504                  92,680  
                                                                                                                                                        
Fixed  assets,  net                                                                            9,196                    8,100  
Goodwill                                                                                            11,419                  12,823  
Purchased  intangible  assets,  net                                            10,748                  12,572  
Deferred  income  taxes                                                                    1,573                    1,262  
Other  assets                                                                                          838                        944  
                                                                                              -------------    -------------  
                                                                                                                                                        
                                                                                              $          128,278    $          128,381  
                                                                                              =============    =============  
                                                                                                                                                        
                                                                                                                                                        
          Liabilities  and  Shareholders'  Equity                                                                      
                                                                                                                                                        
Current  liabilities:                                                                                                                
    Accounts  payable                                                          $              9,297    $              7,505  
    Deferred  revenue                                                                          1,750                    2,070  
    Accrued  liabilities                                                                    7,391                    9,505  
                                                                                              -------------    -------------  
        Total  current  liabilities                                                  18,438                  19,080  
                                                                                                                                                        
Deferred  revenue                                                                                  296                        329  
Other  long-term  liabilities                                                        1,624                    1,511  
                                                                                              -------------    -------------  
                                                                                                                                                        
        Total  liabilities                                                                  20,358                  20,920  
                                                                                                                                                        
Shareholders'  equity:                                                                                                              
    Common  stock                                                                              112,292                111,645  
    Accumulated  other  comprehensive  loss                                (5,488)                (3,127)
    Retained  earnings  (accumulated  deficit)                            1,116                  (1,057)
                                                                                              -------------    -------------  
                                                                                                                                                        
        Total  shareholders'  equity                                              107,920                107,461  
                                                                                              -------------    -------------  
                                                                                                                                                        
                                                                                              $          128,278    $          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                    
                                                                            -------------------------------------  
                                                                              March  31,      December  31,      March  31,  
Non-GAAP  Net  Income                                              2015                  2014                    2014      
                                                                            ----------    -------------    ----------  
GAAP  net  income                                              $        2,173    $              4,303    $        1,592  
                                                                                                                                                        
Adjustments  to  net  income:                                                                                                    
    Restructuring                                                            118                    1,178                      -  
    Amortization  of  intangibles                                647                        694                  785  
    Income  tax  effect  of  non-GAAP                                                                                          
      adjustments                                                            (253)                    (509)              (291)
    Discrete  tax  items                                                (154)                (1,246)                    -  
                                                                            ----------    -------------    ----------  
Non-GAAP  net  income                                      $        2,531    $              4,420    $        2,086  
                                                                            ==========    =============    ==========  
                                                                                                                                                        
GAAP  net  income  per  diluted  share          $          0.13    $                0.25    $          0.10  
                                                                            ==========    =============    ==========  
Non-GAAP  net  income  per  diluted  share  $          0.15    $                0.26    $          0.13  
                                                                            ==========    =============    ==========  
                                                                                                                                                        
Shares  used  in  diluted  share                                                                                                
  calculations                                                          17,037                  16,955            16,679  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                Three  Months  Ended                    
                                                                            -------------------------------------  
                                                                              March  31,      December  31,      March  31,  
EBITDAS  and  Adjusted  EBITDAS                          2015                    2014                  2014        
                                                                            ----------    -------------    ----------  
GAAP  Income  from  operations                      $        2,799    $              4,140    $        2,602  
                                                                                                                                                        
Adjustments:                                                                                                                                
    Depreciation                                                              750                        883                  829  
    Amortization  of  intangibles                                647                        694                  785  
    Stock-based  compensation                                      587                        564                  449  
                                                                            ----------    -------------    ----------  
EBITDAS                                                                        4,783                    6,281              4,665  
                                                                                                                                                        
Adjustments:                                                                                                                                
    Restructuring                                                            118                    1,178                      -  
Adjusted  EBITDAS                                            $        4,901    $              7,459    $        4,665  
                                                                            ==========    =============    ==========  
                                                                                                                                                        
                                                                                                                                                        
                                                                                Three  Months  Ending  June  30,  2015      
                                                                            -------------------------------------  
                                                                              Low  Range                                  High  Range  
                                                                              Guidance                                      Guidance    
                                                                            ----------                                  ----------  
Forward-looking  non-GAAP  net  income                                                                                  
GAAP  net  income                                              $        2,000                                  $        3,000  
Adjustments:                                                                                                                                
    Amortization  of  intangibles                                650                                                650  
    Income  tax  effect  of  non-GAAP                                                                                          
      adjustments                                                            (215)                                            (215)
                                                                            ----------                                  ----------  
Non-GAAP  net  income                                      $        2,435                                  $        3,435  
                                                                            ==========                                  ==========  
                                                                                                                                                        
GAAP  net  income  per  diluted  share          $          0.12                                  $          0.17  
                                                                            ==========                                  ==========  
Non-GAAP  net  income  per  diluted  share  $          0.14                                  $          0.20  
                                                                            ==========                                  ==========  
                                                                                                                                                        
Shares  used  in  diluted  share                                                                                                
  calculations                                                          17,150                                          17,150  
 

FOR MORE INFORMATION, CONTACT:

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





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