Rudolph Technologies Reports 2013 Third Quarter Results *Strong Profit Performance: Non-GAAP Earnings Per Share of $0.06 *Front-End Logic, Foundry and Memory Orders Increase Business Wire FLANDERS, N.J. -- November 4, 2013 Rudolph Technologies, Inc. (Nasdaq:RTEC), a leading provider of process characterization equipment, lithography equipment and software for wafer fabs and advanced packaging facilities, today announced financial results for the third quarter of 2013. 2013 Third Quarter Highlights: *Third quarter revenue was $44.0 million, compared to $46.1 million in the 2013 second quarter. *Third quarter GAAP net income was $252 thousand, or $0.01 per diluted share; non-GAAP net income was $2.1 million, or $0.06 per diluted share. *Gross margins remained strong at 51 percent. *Revenue recognized for the second JetStep^™ System shipped for advanced packaging lithography. *Added the NSX^®220 System to the macro defect inspection family. The system provides fast, easy defect inspection for traditional back-end processes in the semiconductor, MEMS and LED packaging and test facilities to achieve productivity at a reduced price point. Paul F. McLaughlin, Chairman and Chief Executive Officer, commented, “We delivered solid operating results for the third quarter, which were within guidance despite the downturn from Asian subcontractors of high-end smart phones and tablets. We achieved revenue of $44.0 million, gross margins remained strong at 51 percent and we maintained profitability, with non-GAAP earnings per share of $0.06. We believe this is positive testimony to the balance our unique front-end/back-end business model offers.” Mr. McLaughlin continued, “We are pleased to see the recent strengthening of orders for our front-end metrology solutions for 3D FinFET NAND flash memory technology at 20, 16 and 14 nanometer nodes. We believe this signals a restart of our industry’s front-end growth trajectory and gives us increased confidence for 2014 after the pause experienced in the last couple of quarters. “2013 has been a year of technological advancement and solid positioning for Rudolph’s future. We have made significant customer inroads with our investments in R&D, resulting in a rich and substantially stronger technology portfolio, which has more than doubled since the global crisis in 2008. Our unique business model targets both front-end and back-end growth markets, and provides us with a broad customer base with a balanced product portfolio across all industry cycles. Back-end business predominantly drove our business in the first half of this year. As the third quarter progressed, back-end customers significantly slowed capital spending as supply chains for smart phones and high-end tablets were realigning to reflect the shift to lower-priced, lower-featured solutions for more price sensitive markets. We see that trend ending in the seasonally slow fourth quarter which tempers our near-term back-end business outlook. Nonetheless, resurgence in front-end customer spending is offsetting that softness in the back-end, and we are forecasting modest overall growth in the fourth quarter. “Increasingly, the wafer-level-packaging market is gaining more significance in the semiconductor industry, and shows the greatest potential for substantial future growth – and Rudolph is a company highly leveraged to that Advanced Packaging market. Over the last year, we have introduced four new products and technologies in Advanced Packaging, most significantly our newest market entry, the JetStep™ Panel Lithography System. Our vision for Rudolph is to establish the Company as the vendor of choice for advanced packaging inspection, metrology, software and photolithography solutions.” Mr. McLaughlin concluded, “Looking forward, we expect that 2014 will be a very strong growth year for Rudolph. Our markets will benefit from both cyclical and sector growth, comprised of strong demand for our expanding total package of leading-edge solutions. Most importantly there is considerable earnings leverage in our operating model, and we believe the Company is uniquely positioned to deliver notably more shareholder value in the forthcoming 2014 up-cycle.” Third Quarter 2013 Financial Results Third quarter revenue totaled $44.0 million, a 4 percent decrease compared with $46.1 million for the 2013 second quarter. During the third quarter, international sales represented approximately 69 percent of revenue, while domestic sales accounted for 31 percent. In the 2013 second quarter, international sales represented approximately 78 percent of revenue and domestic sales accounted for 22 percent. In the third quarter, revenue from front-end semiconductor customers accounted for approximately 56 percent of revenue and back-end customers accounted for 44 percent. Gross margin was 51 percent of revenues in both the 2013 third and second quarters and was in line with the Company’s guidance. Both 2013 quarterly gross margins were positively impacted by a favorable product mix which included software revenue above the Company’s target model. Operating expenses for the third quarter of 2013 totaled $21.2 million, a decrease of $0.2 million from $21.4 million in the 2013 second quarter. R&D expenses for the third quarter totaled $10.5 million, compared with $10.2 million in the 2013 second quarter. S,G&A expenses for the third quarter totaled $10.1 million, compared with $10.5 million in the second quarter of 2013. The decrease in operating expenses was primarily due to lower compensation costs in the quarter, partially offset by an increase in patent litigation costs. GAAP net income for the third quarter of 2013 was $252 thousand, or $0.01 per diluted share, compared with net income of $759 thousand, or $0.02 per diluted share, for the second quarter of 2013. On a non-GAAP basis, third quarter 2013 net income was $2.1 million, or $0.06 per diluted share, compared to $2.0 million, or $0.06 per diluted share, in the 2013 second quarter. Balance Sheet Strength At September 30, 2013, cash and marketable securities totaled $158.6 million, an increase of $0.8 million from $157.8 million at the end of the 2013 second quarter. Accounts receivable decreased to $58.7 million and inventory decreased to $65.9 million as of September 30, 2013. Working capital increased $2.9 million in the quarter, ending at $256.4 million. Conference Call Rudolph Technologies will discuss its 2013 third quarter results and other matters on a conference call it is hosting today at 4:30 PM EST. To access the live conference call, please dial (888) 603-6873 and reference Conference ID#76475806. A live audio 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 software. A digital replay of the conference call will be available on Rudolph’s website for one week following the live broadcast. 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 and share-based compensation. We believe that this presentation of non-GAAP financial measures allows investors to better assess the Company’s 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. About Rudolph Technologies Rudolph Technologies, Inc. is a worldwide leader in the design, development, manufacture and support of defect inspection, advanced packaging lithography, process control metrology, and data analysis systems and software used by semiconductor device manufacturers worldwide. 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 the costs and time to market of their products. The Company’s expanding portfolio of equipment and software solutions is used in both the wafer processing and final manufacturing of ICs, and in adjacent markets such as FPD, LED and Solar. 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 (the “Act”) which include Rudolph’s business momentum and future growth; the benefit to customers of Rudolph’s products and customer service; Rudolph’s ability to both deliver products and services consistent with our customers’ demands and expectations and strengthen its market position; Rudolph’s expectations regarding semiconductor market outlook; as well as other matters that are not purely historical data. Rudolph wishes to take advantage of the “safe harbor” provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Rudolph’s control. Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength/weakness of the back-end and/or front-end semiconductor market segments; and fluctuations in customer capital spending. Additional information and considerations regarding the risks faced by Rudolph are available in Rudolph’s Form 10-K report for the year ended December 31, 2012 and other filings with the Securities and Exchange Commission. As the forward-looking statements are based on Rudolph’s current expectations, the Company cannot guarantee any related future results, levels of activity, performance or achievements. Rudolph does not assume any obligation to update the forward-looking information contained in this press release. RUDOLPH TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) - (Unaudited) September 30, 2013 December 31, 2012 (Audited) ASSETS Current assets Cash and marketable securities $ 158,591 $ 169,216 Accounts receivable, net 58,733 57,113 Inventories 65,939 57,948 Prepaid and other assets 7,771 4,301 Total current assets 291,034 288,578 Net property, plant and equipment 13,011 11,909 Intangibles 37,006 29,203 Other assets 34,640 34,894 Total assets $ 375,691 $ 364,584 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued $ 17,575 $ 15,696 liabilities Other current liabilities 17,104 21,352 Total current liabilities 34,679 37,048 Senior convertible notes 51,047 49,010 Other non-current liabilities 13,889 8,037 Total liabilities 99,615 94,095 Stockholders’ equity 276,076 270,489 Total liabilities and $ 375,691 $ 364,584 stockholders’ equity RUDOLPH TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) - (Unaudited) Three Months Ended Nine Months Ended September 30, September September September 2013 30, 2012 30, 2013 30, 2012 Revenues $ 44,044 $ 62,152 $ 131,753 $ 164,187 Cost of 21,574 29,027 63,894 77,075 revenues Gross profit 22,470 33,125 67,859 87,112 Operating expenses: Research and 10,455 10,243 30,372 29,430 development Selling, general and 10,054 10,306 30,825 29,419 administrative Amortization 666 523 1,930 1,355 Total operating 21,175 21,072 63,127 60,204 expenses Operating 1,295 12,053 4,732 26,908 income Interest 1,262 1,125 3,671 3,280 expense, net Other expenses (4 ) 357 (53 ) 253 (income) Income before 37 10,571 1,114 23,375 income taxes Provision (benefit) for (215 ) 3,910 (290 ) 8,506 income taxes Net income $ 252 $ 6,661 $ 1,404 $ 14,869 Net income per share: Basic $ 0.01 $ 0.21 $ 0.04 $ 0.46 Diluted $ 0.01 $ 0.20 $ 0.04 $ 0.45 Weighted average shares outstanding: Basic 32,897 32,317 32,727 32,183 Diluted 33,426 32,862 33,337 32,788 RUDOLPH TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share amounts) - (Unaudited) Three Months Ended Nine Months Ended September September 30, September September 30, 2013 2012 30, 2013 30, 2012 GAAP operating $ 1,295 $ 12,053 $ 4,732 $ 26,908 income Non-GAAP adjustments: Amortization of 666 523 1,930 1,355 intangibles Acquisition — 371 — 371 related (1) Litigation 458 712 977 2,011 costs Share-based 1,081 992 3,035 3,010 compensation Total non-GAAP 2,205 2,598 5,942 6,747 adjustments Non-GAAP operating $ 3,500 $ 14,651 $ 10,674 $ 33,655 income GAAP net $ 252 $ 6,661 $ 1,404 $ 14,869 income Total non-GAAP 2,205 2,598 5,942 6,747 adjustments Income tax effect of non-GAAP (322 ) (905 ) (1,630 ) (2,351 ) adjustments (2) Non-GAAP net $ 2,135 $ 8,354 $ 5,716 $ 19,265 income Net income per share: Basic $ 0.06 $ 0.26 $ 0.17 $ 0.60 Diluted $ 0.06 $ 0.25 $ 0.17 $ 0.59 1) During the three and nine month periods ended September 30, 2012, the Company recorded acquisition related expenses of $0.4 million for inventory written up to fair value in purchase accounting. 2) For the nine month periods ended September 30, 2013 and 2012, the non-GAAP adjustments were taxed at a marginal tax rate of 27.4% and 34.8%, respectively. Contact: Rudolph Technologies, Inc. Investors: Steven R. Roth, 973-448-4302 Senior Vice President & CFO email@example.com or Guerrant Associates Laura Guerrant-Oiye, 808-882-1467 Principal firstname.lastname@example.org or Trade Press: Amy Pauling, 952-259-1794 email@example.com
Rudolph Technologies Reports 2013 Third Quarter Results
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