Cascade Microtech Reports Fourth Quarter and 2013 Results

Cascade Microtech Reports Fourth Quarter and 2013 Results 
Record Annual Revenue of $120.0 Million; Record Quarterly Revenue of
$34.0 Million; Record Quarterly Bookings of $38.9 Million 
BEAVERTON, OR -- (Marketwired) -- 02/05/14 --  Cascade Microtech,
Inc. (NASDAQ: CSCD) today reported financial results for the fourth
quarter and year ended December 31, 2013. 
Financial summary 
Results for the year ended December 31, 2013 were as follows: 


 
--  Total revenue of $120.0 million, compared to $113.0 million for 2012.
    --  Systems revenue of $79.2 million, an increase of $4.8 million, or
        6.5%, over 2012.
    --  Probes revenue of $40.8 million, an increase of $2.2 million, or
        5.7%, over 2012.
    --  2013 set new revenue records for both of our segments and includes
        $5.0 million in annual revenue related to current year
        acquisitions.
--  Gross margin of 45.6%, up from 44.2% in 2012.
    --  2013 cost of sales includes acquisition-related expenses of $0.5
        million, or 0.4% of revenue, with no comparable expenses for 2012.
--  Income from operations of $7.3 million, a decrease of $0.2 million, or
    3.0%, from 2012.
    --  2013 operating expense includes acquisition-related and
        restructuring expenses of $1.1 million with no comparable expenses
        for 2012.
    --  2013 includes depreciation, amortization and stock-based
        compensation expenses of $6.8 million, compared to $6.1 million
        for 2012.
--  Net income of $13.4 million, or $0.89 per diluted share, compared to
    $6.1 million, or $0.42 per diluted share, for 2012.
    --  2013 includes a net tax benefit of $6.3 million, or $0.42 per
        diluted share, related primarily to the release of valuation
        allowance on deferred tax assets, compared to a net tax expense of
        $0.7 million, or $0.05 per diluted share, for 2012.
--  Adjusted EBITDAS of $15.8 million compared to $13.6 million for 2012.
--  Annual book-to-bill ratio of 1.02 to 1.

  
Results for the quarter ended December 31, 2013 were as follows: 


 
--  Total revenue of $34.0 million, compared to $28.2 million for Q3 2013
    and $30.4 million for Q4 2012.
    --  Systems revenue of $24.2 million, an increase of $6.7 million, or
        38.2%, over Q3 2013, and an increase of $3.4 million, or 16.5%,
        over Q4 2012.
    --  Probes revenue of $9.9 million, a decrease of $0.8 million, or
        7.9%, from Q3 2013, and an increase of $0.2 million, or 2.4%, over
        Q4 2012.
    --  Q4 2013 set a new revenue record for our Systems segment and
        includes $4.9 million in quarterly revenue related to current year
        acquisitions.
--  Gross margin of 45.5%, down from 47.6% in Q3 2013, and up from 43.0%
    in Q4 2012.
    --  Q4 2013 cost of sales includes acquisition-related expenses of
        $0.5 million, or 1.4% of revenue, with no comparable expenses for
        either Q3 2013 or Q4 2012.
--  Income from operations of $2.2 million, an increase of $0.6 million,
    or 40.3%, from Q3 2013, and a decrease of $0.1 million, or 3.5%, from
    Q4 2012.
    --  Q4 2013 operating expense includes acquisition-related and
        restructuring expenses of $0.4 million, compared to $0.6 million
        for Q3 2013, and no comparable expenses for Q4 2012.
    --  Q4 2013 includes depreciation, amortization and stock-based
        compensation expenses of $2.1 million compared to $1.5 million for
        both Q3 2013 and Q4 2012.
--  Net income of $8.8 million, or $0.53 per diluted share, compared to
    $1.7 million, or $0.11 per diluted share, for Q3 2013, and $1.7
    million, or $0.12 per diluted share, for Q4 2012.
    --  Q4 2013 includes a net tax benefit of $6.6 million, or $0.40 per
        diluted share, related primarily to the release of valuation
        allowance on deferred tax assets. Net tax expense was near zero in
        Q3 2013 and $0.4 million, or $0.03 per diluted share, for Q4 2012.
    --  Q4 2013 includes intangible amortization expenses of $0.6 million,
        or $0.03 per diluted share, related to our acquisition of Advanced
        Temperature Test Systems GmbH (ATT Systems) on October 1, 2013.
    --  Q4 2013 includes $0.9 million, or $0.05 per diluted share, of
        previously mentioned acquisition-related and restructuring
        charges.
--  Adjusted EBITDAS of $5.2 million, compared to $3.7 million for Q3
    2013, and $3.8 million for Q4 2012.
--  Quarterly book-to-bill ratio of 1.14 to 1.

  
Adjusted EBITDAS is a non-GAAP financial measure. Please see "Non-GAAP
Financial Measures" below and the attached supplemental schedule for
a reconciliation of GAAP to non-GAAP financial measures. 
"We are very excited about 2014 based upon the results for the fourth
quarter and the full year of 2013," said Michael Burger, President
and CEO. "Our historical products prior to recent acquisitions
outperformed the semi-conductor capital equipment market this year,
and we've accelerated our growth with the acquisitions closed in the
second half of 2013. We set annual and quarterly records for revenue
and bookings, while improving our profitability. The markets we serve
have been expanded with the addition of Reliability Test Products and
ATT Systems, together with our new product introductions that
continue to gain traction. Finally, in the fourth quarter, our
adjusted EBITDAS increased to 15.2% of revenue and reflects progress
towards our success model of 20%. Cascade Microtech is well
positioned as we enter 2014." 
Financial outlook 
Based upon industry seasonality, and assuming consistent foreign
currency rates, we are projecting revenue for the first quarter of
2014 to be in the range of $31.0 million to $34.0 million, with an
adjusted EBITDAS in the range of $3.0 million to $5.0 million. 
We will host a conference call beginning at 2:00 p.m. PST (5:00 p.m.
EST) on Wednesday, February 5, 2014, to discuss our results for the
quarter ended December 31, 2013. 
A simultaneous audio cast of the conference call may be accessed
online from the investor relations page of www.cascademicrotech.com.
If you are interested in participating in the call, the live dial-in
number is 877-546-5021 or international 857-244-7553, participant
passcode: 56070753. A replay will be available after 6:00 p.m. PST
(9:00 p.m. EST) at the same internet address. (For a telephone replay
available after 6:00 p.m. PST (9:00 p.m. EST), dial: 888-286-8010,
international: 617-801-6888, passcode: 13911804). 
Forward-Looking Statements 
The statements in this release regarding our financial outlook as to
anticipated revenue and adjusted EBITDAS for the first quarter of
2014, demand for our new and existing products, our growth, 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 our 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
our 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 rates; our ability or delay in integrating acquired
businesses; and other risks discussed from time to time in our
Securities and Exchange Commission filings and reports, including our
Annual Report on Form 10-K for the year ended December 31, 2012. 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 we do 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 the
attached supplemental schedule. Adjusted EBITDAS is defined as
operating 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,
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           Year Ended     
                          -----------------------------     December 31,    
                          December  September  December  ------------------ 
                          31, 2013   30, 2013  31, 2012    2013      2012   
                          --------  ---------  --------  --------  -------- 
                                                                            
Revenue                   $ 34,035  $  28,197  $ 30,368  $120,010  $112,963 
Cost of sales               18,547     14,779    17,313    65,286    63,012 
                          --------  ---------  --------  --------  -------- 
Gross profit                15,488     13,418    13,055    54,724    49,951 
                          --------  ---------  --------  --------  -------- 
                                                                            
Operating expenses:                                                         
  Research and                                                              
   development               3,061      2,750     3,022    10,961    11,017 
  Selling, general and                                                      
   administrative           10,223      9,097     7,749    36,430    31,377 
                          --------  ---------  --------  --------  -------- 
                            13,284     11,847    10,771    47,391    42,394 
                          --------  ---------  --------  --------  -------- 
                                                                            
Income from operations       2,204      1,571     2,284     7,333     7,557 
                          --------  ---------  --------  --------  -------- 
                                                                            
Other income (expense):                                                     
  Interest income, net           4         18        26        44        52 
  Other, net                   (27)        87      (240)     (296)     (801)
                          --------  ---------  --------  --------  -------- 
                               (23)       105      (214)     (252)     (749)
                          --------  ---------  --------  --------  -------- 
                                                                            
Income before income                                                        
 taxes                       2,181      1,676     2,070     7,081     6,808 
                                                                            
Income tax expense                                                          
 (benefit)                  (6,621)        (7)      380    (6,337)      709 
                          --------  ---------  --------  --------  -------- 
                                                                            
Net income                $  8,802  $   1,683  $  1,690  $ 13,418  $  6,099 
                          ========  =========  ========  ========  ======== 
                                                                            
Net income per share:                                                       
  Basic                   $   0.54  $    0.12  $   0.12  $   0.91  $   0.43 
  Diluted                 $   0.53  $    0.11  $   0.12  $   0.89  $   0.42 
                                                                            
Shares used in computing                                                    
 net income per share:                                                      
  Basic                     16,173     14,453    14,223    14,792    14,182 
  Diluted                   16,634     14,797    14,428    15,150    14,390 
                                                                            
                                                                            
                          CASCADE MICROTECH, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                (unaudited)                                 
                                                                            
                                                                            
                                                 December 31,  December 31, 
                     Assets                          2013          2012     
------------------------------------------------ ------------  ------------ 
                                                                            
Current assets:                                                             
  Cash and cash equivalents                      $     17,172  $     17,927 
  Marketable securities                                 4,278         5,322 
  Restricted cash                                       1,082         1,069 
  Accounts receivable, net                             26,518        21,087 
  Inventories                                          23,803        24,277 
  Deferred income taxes                                 2,268           218 
  Prepaid expenses and other                            2,147         2,285 
                                                 ------------  ------------ 
    Total current assets                               77,268        72,185 
                                                                            
Fixed assets, net                                       6,403         8,271 
Purchased intangible assets, net                       16,937         1,610 
Goodwill                                               14,471           990 
Deferred income taxes                                   1,235           396 
Other assets, net                                       1,116         1,828 
                                                 ------------  ------------ 
                                                                            
                                                 $    117,430  $     85,280 
                                                 ============  ============ 
                                                                            
                                                                            
      Liabilities and Shareholders' Equity                                  
------------------------------------------------                            
                                                                            
Current liabilities:                                                        
  Accounts payable                               $      7,229  $      5,900 
  Deferred revenue                                      1,474         3,526 
  Accrued liabilities                                   8,659         6,640 
                                                 ------------  ------------ 
    Total current liabilities                          17,362        16,066 
                                                                            
Deferred revenue                                          548           356 
Other long-term liabilities                             2,119         2,940 
                                                 ------------  ------------ 
                                                                            
    Total liabilities                                  20,029        19,362 
                                                 ------------  ------------ 
                                                                            
Shareholders' equity:                                                       
Common stock                                          108,070        91,039 
Accumulated other comprehensive income (loss)             318          (716)
Accumulated deficit                                   (10,987)      (24,405)
                                                 ------------  ------------ 
                                                                            
    Total shareholders' equity                         97,401        65,918 
                                                 ------------  ------------ 
                                                                            
                                                 $    117,430  $     85,280 
                                                 ============  ============ 
                                                                            
                                                                            
                           CASCADE MICROTECH, INC.                          
                              AND SUBSIDIARIES                              
                                                                            
            Reconcilation of GAAP and Non-GAAP Financial Measures           
                        EBITDAS and Adjusted EBITDAS                        
                               (in thousands)                               
                                 (unaudited)                                
                                                                            
                                                                            
                                   Three Months Ended          Year Ended   
                             -----------------------------    December 31,  
                             December  September  December -----------------
                             31, 2013  30, 2013   31, 2012   2013     2012  
                             --------- --------- --------- -------- --------
                                                                            
Income from operations       $   2,204 $   1,571 $   2,284 $  7,333 $  7,557
                                                                            
Adjustments:                                                                
  Depreciation and                                                          
   amortization                  1,661     1,146     1,222    5,183    4,629
  Stock-based compensation         399       343       323    1,614    1,459
                             --------- --------- --------- -------- --------
                                                                            
EBITDAS                      $   4,264 $   3,060 $   3,829 $ 14,130 $ 13,645
                             --------- --------- --------- -------- --------
                                                                            
Adjustments:                                                                
  Restructuring                    115         -         -      227        -
  Acquisition and                                                           
   acquisition related             779       627         -    1,406        -
                             --------- --------- --------- -------- --------
                                                                            
Adjusted EBITDAS             $   5,158 $   3,687 $   3,829 $ 15,763 $ 13,645
                             ========= ========= ========= ======== ========
                                                                            
                                                                            
    Reconcilation of Forward-Looking GAAP and non-GAAP Financial Measures   
                        EBITDAS and Adjusted EBITDAS                        
                               (in thousands)                               
                             
    (unaudited)                                
                                                                            
                                                                            
                                        Three Months Ended March 31, 2014   
                                     ---------------------------------------
                                     Low Range Guidance  High Range Guidance
                                     ------------------  -------------------
Income from operations               $            1,000  $             3,000
                                                                            
Adjustments:                                                                
  Depreciation and amortization                   1,600                1,600
  Stock-based compensation                          400                  400
                                     ------------------  -------------------
                                                                            
EBITDAS                              $            3,000  $             5,000
                                     ------------------  -------------------
                                                                            
Adjustments:                                                                
  Restructuring                                       -                    -
  Acquisition and acquisition                                               
   related                                            -                    -
                                     ------------------  -------------------
                                                                            
Adjusted EBITDAS                     $            3,000  $             5,000
                                     ==================  ===================

  
FOR MORE INFORMATION, CONTACT: 
Jeff A. Killian
Cascade Microtech, Inc.
(503) 601-1280 
 
 
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