Published: August 01, 2005
Rudolph Technologies Announces Second Quarter Results
Revenue and Earnings Increase Over 2004 Levels and Meet Guidance
Rudolph Technologies, Inc. (NASDAQ: RTEC), a
leading provider of process control equipment for thin film measurements
and macro-defect inspection during Integrated Circuit (IC) manufacturing,
today announced financial results for the second quarter ended June 30,
2005.
Highlights for the second quarter include:
-- Revenue of $21.4 million increases 5% year-over-year
-- EPS increase to $0.11 from $0.09 in prior-year period
-- Operating profit increases 11% year-over-year to $2.1 million
-- New WaferView® 320 macro-defect inspection tools gain market
acceptance
-- A definitive agreement is signed to merge with August Technology
Discussing the second quarter results, Paul F. McLaughlin, Chairman and
CEO, commented:
"We had an extremely productive second quarter. First, we continued our
track record of profitability by effectively managing the Company at
various revenue levels reflective of the current sideways movement in
semiconductor capital equipment markets. Second, we introduced two major
new products in the quarter and highlighted these at Semicon West in San
Francisco this month. Third, our macro-defect inspection tools continued to
gain acceptance in the marketplace and we received customer acceptance of
our first WaferView 320 tools that were shipped to a major logic supplier
in the first quarter. Our macro-defect products, including both our
WaferView 310 tools and our new tools, accounted for slightly over 20% of
our second quarter revenues. Fourth, in June we announced shipment of our
200th MetaPULSE® tool. While achieving these accomplishments, the
Company signed a strategic merger agreement with August Technology, taking
a major step toward our goal to become the 4th largest overall supplier of
process control solutions and the number two 'pure play' process control
company in the industry."
The Company's second quarter revenue totaled $21.4 million, a 5% increase
compared to $20.4 million for the second quarter of 2004. Revenue for the
2005 second quarter decreased by 7% compared to the 2005 first quarter
revenue of $23.1 million. During the second quarter, international sales
represented approximately 80% of revenue while domestic sales accounted for
20%. This compares to international sales of 60% and domestic sales of 40%
in the year-ago quarter.
The Company continued its strong heritage of profitability as second
quarter net income totaled $1.9 million, or $0.11 per diluted share,
compared to $1.5 million, or $0.09 per diluted share for the 2004 second
quarter. The Company reported net income of $1.7 million, or $0.10 per
diluted share for the 2005 first quarter.
Second quarter gross margin was 47% compared to 48% in the 2004 second
quarter. The gross margin in the 2005 first quarter was 47%.
Research and development (R&D) expenses for the second quarter totaled $3.0
million, compared to $3.4 million in the first quarter of 2005, and $4.1
million in the year-ago period. As a percentage of revenue, R&D was 14%,
compared to 15% last quarter, and 20% in the same quarter last year. The
sequential decrease in R&D is primarily the result of the timing of project
cost spending and cost containment initiatives implemented in the second
quarter. The Company anticipates that third quarter spending on R&D will
be approximately 14% of revenue.
Selling, general and administrative (S,G&A) expenses for the second quarter
totaled $4.8 million, compared to $5.3 million in the first quarter of
2005, and $3.7 million in the prior-year period. As a percentage of
revenue, S,G&A was 23% in the 2005 first and second quarters. The
sequential decrease in S,G&A was due to cost containment initiatives. Also
contributing to the decrease was $362,000 recorded in first quarter of 2005
for the Company's merger and acquisition activities. The Company expects
that S,G&A will be approximately 22% of revenue in the third quarter of
2005.
Balance Sheet Strength
At June 30, 2005, the Company's cash and marketable securities totaled
$78.3 million and working capital increased to $124.5 million. For the
quarter, receivables increased $7.1 million primarily due to the timing of
shipments in the quarter and longer collection times in Japan resulting
from our move last year to direct operations. Inventory continued to
decline to $31.2 million.
Outlook
Reflecting the current sideways movement in our market and our belief that
order troughs in the current cycle have recently been reached, the Company
is currently anticipating revenue for the third quarter ending September
30, 2005 to be sequentially flat to down 10%, compared to that of the 2005
second quarter revenue of $21.4 million. The Company is expecting diluted
earnings per share to be approximately $0.06 to $0.10 for the 2005 third
quarter. We are reaffirming our belief that orders will show improvement
as the second half of 2005 continues leading to stronger revenue and
earnings levels in 2006.
Conference Call
Rudolph Technologies will be hosting a conference call today at 4:45 PM ET.
A live 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 audio software.
About Rudolph Technologies
Rudolph Technologies is a worldwide leader in the design, development,
manufacture and support of high-performance process control metrology
systems used by semiconductor device manufacturers. The Company provides a
full-fab solution through its families of proprietary systems for metrology
applications used throughout the device manufacturing process. Rudolph's
product development has successfully anticipated and addressed many
emerging trends that are driving the semiconductor industry's growth. The
Company's success in creating complementary metrology applications through
aggressive research and development is key to Rudolph's strategy for
continued technological and market leadership.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. In some cases, you
can identify those so-called "forward-looking statements" by words such as
"may," "will," "would," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," or "continue," or the
negative of those words and other comparable words. Rudolph wishes to take
advantage of the "safe harbor" provided for by the Private Securities
Litigation Reform Act of 1995 and you are cautioned that actual events or
results may differ materially from the expectations expressed in such
forward-looking statements as a result of various factors, including risks
and uncertainties, many of which are beyond the control of Rudolph. Factors
that could cause actual results to differ materially from the expectations
expressed in such forward-looking statements include, but are not limited
to: (1) cyclicality of the semiconductor industry; (2) customer
concentration; (3) introduction of new products by Rudolph's competitors;
(4) sole or limited sources of supply; (5) the merger agreement and the
transactions contemplated thereby may not be approved by the companies'
shareholders; (6) Rudolph and August may be unable to obtain certain
foreign regulatory approvals required for the transaction, or obtain these
approvals may delay the transaction or result in the imposition of
conditions that could have a material adverse effect on the combined
company; (7) conditions to the closing of the transaction may not be
satisfied; (8) the businesses of Rudolph and August may not be integrated
successfully, which may result in the combined company not operating as
effectively and efficiently as expected or such integration may be more
difficult, time-consuming or costly than expected; (9) expected combination
benefits from the merger may not be fully realized or realized within the
expected time frame; (10) revenues following the merger may be lower than
expected; (11) costs, customer loss and business disruption, including,
without limitation, difficulties in maintaining relationships with
employees, customers, clients or suppliers, may be greater than expected
following the consummation of the merger, or the effects of purchase
accounting may be different from the companies' expectations; (12) the
credit ratings of the combined company or its subsidiaries may be different
from what the companies expect; (13) the businesses of the companies may
suffer as a result of uncertainty surrounding the transaction; (14) the
industry may be subject to future regulatory or legislative actions that
could adversely affect the companies; (15) the impact of the slowdown in
the overall economy; (16) uncertainty of the current global political
environment; (17) the potential for terrorist attacks; (18) changes in
customer demands for our existing and new products, the timing,
cancellation or delay of customer orders and shipments; (19) the timing of
revenue recognition of shipments; (20) changes in or an inability to
execute our business strategy; (21) unanticipated manufacturing or supply
problems and (22) changes in tax rules. Rudolph cannot guarantee future
results, levels of activity, performance, or achievements. Additional
factors that may affect the future results of Rudolph and August are set
forth in their respective Form 10-K reports for the year ended December 31,
2004 and other filings with the Securities and Exchange Commission ("SEC"),
which are available at http://www.sec.gov, the SEC's website, and at the
companies' websites, which are http://www.rudolphtech.com and
http://www.augusttech.com, respectively. These factors are updated from
time to time through the filing of reports and registration statements with
the SEC.
RUDOLPH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000) - (Unaudited)
June 30, December 31,
2005 2004
----------- -----------
ASSETS
Current assets
Cash and marketable securities $ 78,270 $ 76,747
Accounts receivable, net 27,512 20,827
Inventories 31,210 33,996
Prepaid and other assets 2,974 3,050
----------- -----------
Total current assets 139,966 134,620
Net property, plant and equipment 7,378 8,330
Intangibles 22,311 22,749
Other assets 7,822 5,581
----------- -----------
Total assets $ 177,477 $ 171,280
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 8,130 $ 9,313
Other current liabilities 7,288 5,192
----------- -----------
Total current liabilities 15,418 14,505
Stockholders' equity 162,059 156,775
----------- -----------
Total liabilities and stockholders' equity $ 177,477 $ 171,280
=========== ===========
RUDOLPH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($000) - (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues $ 21,385 $ 20,433 $ 44,442 $ 39,325
Cost of revenues 11,266 10,533 23,561 20,821
--------- --------- --------- ---------
Gross profit 10,119 9,900 20,881 18,504
Operating expenses:
Research and development 3,005 4,145 6,376 8,316
Selling, general
and administrative 4,836 3,678 10,158 6,971
Amortization 219 219 438 438
--------- --------- --------- ---------
Total operating expenses 8,060 8,042 16,972 15,725
--------- --------- --------- ---------
Operating income 2,059 1,858 3,909 2,779
Interest income and
other, net 417 251 841 600
Provision for income taxes 615 617 1,140 909
--------- --------- --------- ---------
Net income $ 1,861 $ 1,492 $ 3,610 $ 2,470
========= ========= ========= =========
Net income per share:
Basic $ 0.11 $ 0.09 $ 0.21 $ 0.15
Diluted $ 0.11 $ 0.09 $ 0.21 $ 0.15
Weighted average shares
outstanding:
Basic 16,896,480 16,740,759 16,868,991 16,717,084
Diluted 16,928,358 16,892,059 16,925,316 16,968,741
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