Fourth quarter revenue totaled $51.1 million, a 13 percent decrease as compared with $58.6 million for the 2015 third quarter. During the fourth quarter, international sales represented approximately 85 percent of revenue, while domestic sales accounted for 15 percent. In the 2015 third quarter, international sales represented approximately 84 percent of revenue and domestic sales accounted for 16 percent. In the fourth quarter, revenue from front-end semiconductor customers accounted for approximately 53 percent of revenue and back-end customers accounted for 47 percent.
Fourth quarter gross margin was 52 percent of revenues, compared to 54 percent in the 2015 third quarter. The decrease in gross margin was primarily due to a change in product sales mix; specifically, lower margin lithography sales were partially offset by continued strong software sales in the quarter.
Operating expenses for the fourth quarter of 2015 totaled $20.8 million, compared with $19.9 million in the 2015 third quarter. R&D expenses for the fourth quarter totaled $10.3 million, compared with $10.0 million in the 2015 third quarter. SG&A expenses for the fourth quarter totaled $9.9 million, compared with $9.4 million in the third quarter of 2015. The increase in both R&D and SG&A operating expenses was mainly due to an increase in compensation expense and higher professional fees in the quarter.
GAAP net income for the fourth quarter of 2015 was $2.9 million, or $0.09 per diluted share, compared with GAAP net income of $7.2 million, or $0.22 per diluted share, for the third quarter of 2015.
Fourth Quarter Non-GAAP Financial Results
Fourth quarter Non-GAAP net income was $5.1 million, or $0.16 per diluted share. Non-GAAP results excluded $2.2 million in expenses, after tax, that were included in the GAAP results related to share-based compensation, litigation and amortization of intangibles. In the 2015 third quarter, Non-GAAP net income was $8.4 million or $0.26 per diluted share. The third quarter Non-GAAP results excluded $1.2 million in expenses, after tax, that were included in the GAAP results related to share-based compensation, litigation and amortization of intangibles.
Balance Sheet Strength
At December 31, 2015, cash and marketable securities totaled $161.5 million, compared with $155.3 million at the end of the 2015 third quarter. Accounts receivable decreased $5.8 million to $55.5 million and inventory decreased to $71.5 million as of December 31, 2015. Working capital was $197.0 million at December 31, 2015.
During the fourth quarter, the Company purchased approximately 273 thousand shares of Rudolph stock under its authorized repurchase program, bringing the total shares repurchased under the plan to approximately 3 million shares. The cost of fourth quarter repurchased shares totaled $3.5 million.
Rudolph Technologies will discuss its 2015 fourth quarter and year-end results and other matters on a conference call it is hosting today at 4:30 PM EST. To participate in the call, please dial (855) 877-0343 (Domestic) or (678) 509-8772 (International), and reference Conference ID # 19918997 at least five (5) minutes prior to the scheduled start time. A live webcast will also be available on the Companys website at www.rudolphtech.com.
To listen to the live webcast, please go to the website at least fifteen (15) minutes early to register, download and install any necessary audio software.
There will be a replay of the conference call available from 8:00 pm EST on February 1 until 11:59 pm EST on February 8, 2016. To access the replay, please dial (855) 859-2056 (Domestic) or (404) 537-3406 (International) at any time during that period and use Conference ID #19918997.
A replay will also be available on the Companys website at www.rudolphtech.com.
2016 Analyst Event (May 9, 2016 / New York Marriott Marquis Hotel)
Rudolph Technologies will host its annual Analyst Event on May 9, 2016 at the New York Marriott Marquis Hotel (New York City). The 2016 Analyst Event will highlight Rudolphs evolution as a front-end and back-end value-added solutions provider by combining product services and software to solve customer problems. We will discuss market trends and industry challenges that Rudolphs customers face, and the differentiated solutions Rudolph affords them to accelerate their process development. Speakers will be the General Managers from each of the business units.
Financial analysts, institutional investors and industry analysts interested in attending the event in person should contact Rudolphs Investor Relations for registration information: Guerrant Associates / Laura Guerrant-Oiye / Principal / 808.882.1467 / firstname.lastname@example.org.
Discussion of Non-GAAP Financial Measures
In this press release, we have presented financial measures, which have not been determined in accordance with generally accepted accounting principles (GAAP) and are therefore non-GAAP financial measures. Non-GAAP financial measures exclude the amortization of intangible assets, the impact of litigation fees, acquisition related costs, restructuring charges and share-based compensation. We believe that this presentation of non-GAAP financial measures allows investors to better assess the Companys operating performance by comparing it to prior periods on a more consistent basis. We have included a reconciliation of various non-GAAP financial measures to those measures reported in accordance with GAAP. To that end, non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. Because our calculation of non-GAAP financial measures may differ from similar measures used by other companies, investors should be careful when comparing our non-GAAP financial measures to those of other companies.