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. (
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