Cascade Microtech Reports Fourth Quarter and Annual 2015 Results

BEAVERTON, OR -- (Marketwired) -- Feb 04, 2016 -- Cascade Microtech, Inc. (NASDAQ: CSCD)

  • Record Annual Revenue of $144.0 million
  • Record Quarterly Revenue of $40.4 million
  • Record Annual Income from Operations of $17.9 million
  • Record Quarterly Income from Operations of $6.5 million
  • Record Quarterly Bookings of $48.7 million

Cascade Microtech, Inc. (NASDAQ: CSCD) today reported financial results for the fourth quarter and year ended December 31, 2015.

Cascade Microtech also announced today that it has entered into a merger agreement with FormFactor, Inc. (NASDAQ: FORM) ("FormFactor") pursuant to which FormFactor has agreed to acquire Cascade Microtech. The Company has provided details of the merger in a separate press release.

Financial Summary

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

  • Total revenue of $40.4 million, compared to $35.8 million for Q3 2015 and $36.6 million for Q4 2014.
    • Systems revenue of $21.7 million, an increase of $2.5 million, or 13.3%, over Q3 2015, and an increase of $0.3 million, or 1.5%, from Q4 2014.
    • Probes revenue of $18.7 million, an increase of $2.1 million, or 12.5%, over Q3 2015, and an increase of $3.5 million, or 22.9%, over Q4 2014.
    • Q4 2015 represents record revenue overall and for our Probes segment.
  • Gross margin of 56.3%, down from 56.7% in Q3 2015 and up from 53.4% in Q4 2014.
    • Systems gross margin of 49.8%, down from 50.3% in Q3 2015 and up from 48.1% in Q4 2014.
    • Probes gross margin of 63.9%, consistent with 63.9% in Q3 2015 and up from 60.8% in Q4 2014.
  • Income from operations of $6.5 million, an increase of $2.0 million, or 44.9%, over Q3 2015, and an increase of $2.4 million, or 58.0%, over Q4 2014.
    • Q4 2015 sets a new record for income from operations.
  • GAAP net income of $4.2 million, or $0.25 per diluted share, compared to $3.2 million, or $0.19 per diluted share, for Q3 2015, and $4.3 million, or $0.25 per diluted share, for Q4 2014.
    • Q4 2015 includes income tax expense of $2.1 million, compared to an expense of $1.3 million for Q3 2015, and a benefit of $0.4 million for Q4 2014.
  • Non-GAAP net income of $4.5 million, or $0.28 per diluted share, compared to $3.4 million, or $0.20 per diluted share, for Q3 2015, and $4.4 million, or $0.26 per diluted share, for Q4 2014.
    • Q4 2015 sets a new record for non-GAAP earnings per share.
  • Depreciation, amortization and stock-based compensation expenses totaled $2.3 million, compared to $2.2 million for Q3 2015, and $2.1 million for Q4 2014.
  • Adjusted EBITDAS of $8.8 million, compared to $6.7 million for Q3 2015, and $7.5 million for Q3 2015.
    • Q4 2015 sets a new record for adjusted EBITDAS.
  • Book-to-bill ratio of 1.21 to 1.

Results for the year ended December 31, 2015 were as follows:

  • Total revenue of $144.0 million, compared to $136.0 million for 2014.
    • Systems revenue of $77.9 million, a decrease of $5.0 million, or 6.0%, from 2014.
    • Probes revenue of $66.1 million, an increase of $13.0 million, or 24.4%, over 2014.
    • 2015 represents record revenue overall and for our Probes segment.
  • Gross margin of 55.6%, up from 51.7% in 2014.
    • 2015 sets a new record for gross margin.
  • Income from operations of $17.9 million, an increase of $4.6 million, or 34.7%, over 2014.
    • 2015 sets a new record for income from operations.
  • GAAP net income of $12.4 million, or $0.73 per diluted share, compared to $9.9 million, or $0.59 per diluted share, for 2014.
    • 2015 includes income tax expense of $5.5 million, compared to an expense of $2.7 million for 2014.
  • Non-GAAP net income of $13.8 million, or $0.81 per diluted share, compared to $11.2 million, or $0.67 per diluted share, for 2014.
  • Depreciation, amortization and stock-based compensation expenses of $8.4 million, compared to $8.8 million for 2014.
  • Adjusted EBITDAS of $26.5 million, compared to $22.8 million for 2014.
  • Annual book-to-bill ratio of 1.04 to 1.

"Cascade Microtech set quarterly records for production probe and analytical probe card revenue, overall revenue, income from operations, adjusted EBITDAS, and bookings. As a percentage of revenue, in the fourth quarter we improved our adjusted EBITDAS to 21.8% which compares favorably to our stated success model target of 22%. This achievement reflects our customers growing demand for Cascade products and services as well as the leverage of our financial model. This financial performance was achieved as we increased our investments in R&D for new product development," said Michael Burger, President and CEO. "On an annual basis, records were set for probes segment revenue, overall revenue, gross margins, income from operations, adjusted EBITDAS and non-GAAP EPS. With a very strong close to 2015 together with record backlog, we expect to financially outperform our 2015 results and grow faster than the markets we serve in 2016."

Financial Outlook

For the first quarter of 2016 we are projecting revenue in the range of $33.0 million to $37.0 million, with diluted GAAP earnings per share in the range of $0.08 to $0.14, and non-GAAP earnings per share in the range of $0.10 to $0.16. Our guidance assumes a tax rate of 32%, consistent foreign currency exchange rates and no significant one-time charges.

The companies will hold a joint conference call today at 8:30 a.m. Eastern (5:30 a.m. Pacific) to discuss this announcement. The conference call can be joined by dialing 877-331-4217, Conference ID 42589273, within the U.S. and 224-633-1404, Conference ID 42589273, for all other locations. To access the webcast, visit the Investors section of Cascade Microtech's web site at www.cascademicrotech.com/investors to view the details. A webcast replay will be available on the Cascade Microtech web site approximately three hours after the conference call concludes.

                                                                            
                          CASCADE MICROTECH, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
              Condensed Consolidated Statements of Operations               
                                (in  thousands,  except  per  share  data)                                        
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                                                                                                        
                                                                Three  Months  Ended                                                    
                                                    -----------------------------                                          
                                                      December  September    December  Year  Ended  December  
                                                          31,              30,              31,                        31,                  
                                                                                                                -------------------  
                                                          2015            2015            2014            2015            2014      
                                                    ---------  ---------  ---------  ---------  ---------  
                                                                                                                                                        
Revenue                                      $    40,411  $    35,781  $    36,593  $  143,978  $  136,022  
Cost  of  sales                                17,640        15,511        17,058        63,892        65,708  
                                                    ---------  ---------  ---------  ---------  ---------  
Gross  profit                                  22,771        20,270        19,535        80,086        70,314  
                                                              56.3%          56.7%          53.4%          55.6%          51.7%
Operating  expenses:                                                                                                                  
  Research  and  development          4,757          4,344          3,598        16,965        13,821  
  Selling,  general  and                                                                                                              
    administrative                          11,474        11,414        11,797        45,230        43,209  
                                                    ---------  ---------  ---------  ---------  ---------  
                                                          16,231        15,758        15,395        62,195        57,030  
                                                    ---------  ---------  ---------  ---------  ---------  
                                                                                                                                                        
Income  from  operations                6,540          4,512          4,140        17,891        13,284  
                                                                                                                                                        
Other  income  (expense):                                                                                                          
  Interest  income,  net                          7                14                  4                15                29  
  Other,  net                                        (293)            (19)          (289)            (16)          (649)
                                                    ---------  ---------  ---------  ---------  ---------  
                                                              (286)              (5)          (285)              (1)          (620)
                                                    ---------  ---------  ---------  ---------  ---------  
                                                                                                                                                        
Income  before  income                                                                                                                
  taxes                                                6,254          4,507          3,855        17,890        12,664  
                                                                                                                                                        
Income  tax  expense                        2,093          1,288            (448)        5,540          2,734  
                                                    ---------  ---------  ---------  ---------  ---------  
                                                                                                                                                        
Net  income                                $      4,161  $      3,219  $      4,303  $    12,350  $      9,930  
                                                    =========  =========  =========  =========  =========  
                                                                                                                                                        
Net  income  per  share:                                                                                                              
  Basic                                        $        0.26  $        0.19  $        0.26  $        0.75  $        0.61  
  Diluted                                    $        0.25  $        0.19  $        0.25  $        0.73  $        0.59  
                                                                                                                                                        
Shares  used  in  computing                                                                                                        
  net  income  per  share:                                                                                                            
  Basic                                              15,933        16,529        16,435        16,396        16,323  
  Diluted                                          16,517        17,112        16,955        16,957        16,828  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                    CASCADE  MICROTECH,  INC.                                                      
                                                            AND  SUBSIDIARIES                                                            
                                                                                                                                                        
                                      Condensed  Consolidated  Balance  Sheets                                        
                                                              (in  thousands)                                                              
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                                                                                                        
                                                                                          December  31,          December  31,    
                                    Assets                                                  2015                          2014            
------------------------------------------  ---------------    ---------------  
                                                                                                                                                        
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents                                $                32,107    $                38,107  
    Marketable  securities                                                            3,658                        1,626  
    Restricted  cash                                                                              10                              61  
    Accounts  receivable,  net                                                    27,716                      20,763  
    Inventories                                                                              23,229                      24,642  
    Prepaid  expenses  and  other                                                  6,597                        4,454  
                                                                                      ---------------    ---------------  
        Total  current  assets                                                        93,317                      89,653  
                                                                                                                                                        
Fixed  assets,  net                                                                      12,256                        8,100  
Goodwill                                                                                        11,592                      12,823  
Purchased  intangible  assets,  net                                          9,143                      12,572  
Deferred  income  taxes                                                                5,326                        6,884  
Other  assets                                                                                      677                            944  
                                                                                      ---------------    ---------------  
                                                                                                                                                        
                                                                                      $              132,311    $              130,976  
                                                                                      ===============    ===============  
                                                                                                                                                        
                                                                                                                                                        
Liabilities  and  Stockholders'  Equity                                                                                
------------------------------------------                                                                    
                                                                                                                                                        
Current  liabilities:                                                                                                                
    Accounts  payable                                                                      8,834                        7,505  
    Deferred  revenue                                                                      1,617                        2,070  
    Accrued  liabilities                                                                8,488                        9,505  
                                                                                      ---------------    ---------------  
        Total  current  liabilities                                              18,939                      19,080  
                                                                                                                                                        
Deferred  revenue                                                                              555                            329  
Deferred  income  taxes                                                                1,840                        2,595  
Other  long-term  liabilities                                                    1,581                        1,511  
                                                                                      ---------------    ---------------  
                                                                                                                                                        
        Total  liabilities                                                              22,915                      23,515  
                                                                                      ---------------    ---------------  
                                                                                                                                                        
Stockholders'  equity:                                                                                                              
    Common  stock                                                                          103,354                    111,645  
    Accumulated  other  comprehensive  loss                            (5,251)                    (3,127)
    Retained  earnings  (accumulated  deficit)                      11,293                      (1,057)
                                                                                      ---------------    ---------------  
                                                                                                                                                        
        Total  stockholders'  equity                                          109,396                    107,461  
                                                                                      ---------------    ---------------  
                                                                                                                                                        
                                                                                      $              132,311    $              130,976  
                                                                                      ===============    ===============  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                    CASCADE  MICROTECH,  INC.                                                      
                                                            AND  SUBSIDIARIES                                                            
                                                                                                                                                        
                      Reconciliation  of  GAAP  to  Non-GAAP  Financial  Measures                        
                                    (in  thousands,  except  per  share  amounts)                                    
                                                                (unaudited)                                                                  
                                                                                                                                                        
                                                                                                                                                        
                                                                Three  Months  Ended                                                    
                                                    -----------------------------                                          
                                                      December  September    December  Year  Ended  December  
                                                          31,              30,              31,                        31,                  
                                                                                                                -------------------  
Non-GAAP  Net  Income                    2015            2015            2014            2015            2014      
-------------------------  ---------  ---------  ---------  ---------  ---------  
GAAP  net  income                      $      4,161  $      3,219  $      4,303  $    12,350  $      9,930  
                                                                                                                                                        
Adjustments  to  net                                                                                                                    
  income:                                                                                                                                        
  Restructuring                                        -                  -          1,178              262          1,236  
  Acquisition  and                                                                                                                        
    acquisition  related                          -                  -                  -                  -            (557)
  Amortization  of                                                                                                                        
    intangibles                                      582              593              694          2,458          3,011  
  Income  tax  effect  of                                                                                                              
    non-GAAP  adjustments                  (195)          (196)          (509)          (894)      (1,170)
  Discrete  tax  items                              -            (204)      (1,246)          (358)      (1,246)
                                                    ---------  ---------  ---------  ---------  ---------  
Non-GAAP  net  income              $      4,548  $      3,412  $      4,420  $    13,818  $    11,204  
                                                    =========  =========  =========  =========  =========  
                                                                                                                                                        
GAAP  net  income  per                                                                                                                  
  diluted  share                        $        0.25  $        0.19  $        0.25  $        0.73  $        0.59  
                                                    =========  =========  =========  =========  =========  
Non-GAAP  net  income  per                                                                                                          
  diluted  share                        $        0.28  $        0.20  $        0.26  $        0.81  $        0.67  
                                                    =========  =========  =========  =========  =========  
                                                                                                                                                        
Shares  used  in  diluted                                                                                                            
  share  calculations                    16,517        17,112        16,955        16,957        16,828  
                                                                                                                                                        
                                                                                                                                                        
                                                                Three  Months  Ended                                                    
                                                    -----------------------------                                          
                                                      December  September    December  Year  Ended  December  
                                                          31,              30,              31,                        31,                  
                                                                                                                -------------------  
EBITDAS  and  Adjusted                                                                                                                
  EBITDAS                                          2015            2015            2014            2015            2014      
-------------------------  ---------  ---------  ---------  ---------  ---------  
GAAP  Income  from                                                                                                                        
  operations                              $      6,540  $      4,512  $      4,140  $    17,891  $    13,284  
                                                                                                                                                        
Adjustments:                                                                                                                                
  Depreciation                                      852              785              883          3,109          3,335  
  Amortization  of                                                                                                                        
    intangibles                                      582              593              694          2,458          3,011  
  Stock-based  compensation              816              805              564          2,825          2,482  
                                                    ---------  ---------  ---------  ---------  ---------  
EBITDAS                                              8,790          6,695          6,281        26,283        22,112  
                                                                                                                                                        
Adjustments:                                                                                                                                
  Restructuring                                        -                  -          1,178              262          1,236  
  Acquisition  and                                                                                                                        
    acquisition  related                          -                  -                  -                  -            (557)
                                                    ---------  ---------  ---------  ---------  ---------  
Adjusted  EBITDAS                    $      8,790  $      6,695  $      7,459  $    26,545  $    22,791  
                                                    =========  =========  =========  =========  =========  
                                                                                                                                                        
                                                                                                                                                        
                                                    Three  Months  Ending  March  31,                                          
                                                                              2016                                                                  
                                                    -----------------------------                                          
                                                                                                  High                                              
                                                    Low  Range                          Range                                              
                                                      Guidance                        Guidance                                          
                                                    ---------                      ---------                                          
Forward-looking  non-GAAP                                                                                                        
  net  income                                                                                                                                  
-------------------------                                                                                                      
GAAP  net  income                      $      1,300                      $      2,300                                          
Adjustments:                                                                                                                                
  Amortization  of                                                                                                                        
    intangibles                                      582                                  582                                          
  Income  tax  effect  of                                                                                                              
    non-GAAP  adjustments                  (186)                              (186)                                        
                                                    ---------                      ---------                                          
Non-GAAP  net  income              $      1,696                      $      2,696                                          
                                                    =========                      =========                                          
                                                                                                                                                        
GAAP  net  income  per                                                                                                                  
  diluted  share                        $        0.08                      $        0.14                                          
                                                    =========                      =========                                          
Non-GAAP  net  income  per                                                                                                          
  diluted  share                        $        0.10                      $        0.16                                          
                                                    =========                      =========                                          
                                                                                                                                                        
Shares  used  in  diluted                                                                                                            
  share  calculations                    16,700                            16,700                                          
                                                                                                                                                        
                                                                                                                                                        
 

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