Rudolph Technologies, Inc. (NYSE: 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 2016 second quarter.
2016 Second Quarter Financial Highlights
- Second quarter revenue of $62.7 million, a quarterly record, increased 15 percent sequentially and was at the high end of the Company’s guidance.
- Record quarter for Lithography Systems Group, driven by both display and advanced packaging stepper shipments.
- Gross margins improved to 55 percent for the quarter, compared with 53 percent for the previous quarter.
- GAAP net income of $7.6 million, or $0.24 per diluted share; Non-GAAP net income of $9.9 million, or $0.31 per diluted share, exceeded Company guidance and marked the third best quarter in the Company’s history.
- Cash and marketable securities increased $14.9 million, ending the quarter at $163.1 million.
- Strong software sales comprised 12 percent of revenue.
| Key Financial Data for the Quarters Ended June 30, 2016, March 31, 2016 | ||||||||||||
| and June 30, 2015 | ||||||||||||
| (in thousands, except per share amounts) | ||||||||||||
| US GAAP | ||||||||||||
June 2016 | March 2016 | June 2015 | ||||||||||
| Revenue | $ | 62,701 | $ | 54,362 | $ | 59,466 | ||||||
| Gross profit margin | 54.5% | 53.4% | 53.6% | |||||||||
| Operating income | $ | 12,231 | $ | 21,137 | $ | 9,829 | ||||||
| Net income | $ | 7,601 | $ | 13,939 | $ | 6,027 | ||||||
| Net income per diluted share | $ | 0.24 | $ | 0.44 | $ | 0.19 | ||||||
| US NON-GAAP | ||||||||||||
June 2016 | March 2016 | June 2015 | ||||||||||
| Revenue | $ | 62,701 | $ | 54,362 | $ | 59,466 | ||||||
| Gross profit margin | 54.6% | 53.5% | 53.7% | |||||||||
| Operating income | $ | 15,307 | $ | 9,570 | $ | 12,170 | ||||||
| Net income | $ | 9,864 | $ | 5,742 | $ | 7,582 | ||||||
| Net income per diluted share | $ | 0.31 | $ | 0.18 | $ | 0.23 | ||||||
Michael Plisinski, chief executive officer, commented, “We delivered strong financial results for the second quarter across a number of key metrics including revenue, gross margin, and operating income; on a sequential basis, revenue increased 15 percent, gross margins expanded 110 basis points, our strong operating leverage resulted in a non-GAAP net income that substantially improved by 72 percent, and earnings per share grew by $0.13. In addition, the shipment of a tool for R&D of next generation AMOLED displays and fan out wafer level packaging contributed to a record quarter for our lithography business.”
Mr. Plisinski added, “Customer demand for Rudolph’s integrated solutions is solid. Looking ahead, we continue to benefit from a number of market drivers, with considerable strength in spending in the RF filters and fan out wafer level packaging markets, as evidenced by orders we have received that are scheduled to ship in the second half of the year. We recently introduced Clearfind™ technology for advanced packaging inspection, which our customers see as a critical technology to improve quality for their customers. This will be incorporated in our upcoming defect inspection systems for advanced packaging and front end applications, which we believe will drive incremental revenue in the second half of the year. By continuing to work in close partnership, we will leverage Rudolph’s broad technology portfolio to efficiently meet the highly technical challenges of our customers.”
Second Quarter 2016 GAAP Financial Results
Second quarter
revenue totaled $62.7 million, a 15 percent increase as compared with
$54.4 million for the 2016 first quarter. Second quarter gross margin
was 55 percent of revenues, compared to 53 percent in the 2016 first
quarter. The increase in gross margin was primarily due to a change in
product sales mix; specifically, continued strong software sales and the
shipment of a flat panel display tool in the quarter.
Operating expenses for the second quarter totaled $22.0 million. Operating expenses for the first quarter of 2016 totaled $7.9 million, which included income from a $14.6 million patent litigation judgment.
GAAP net income for the second quarter of 2016 was $7.6 million, or $0.24 per diluted share, compared with GAAP net income of $13.9 million, or $0.44 per diluted share, for the first quarter of 2016.
Second Quarter Non-GAAP Financial Results
Second quarter
Non-GAAP net income was $9.9 million, or $0.31 per diluted share.
Non-GAAP results excluded items that decreased GAAP income by $2.3
million, after tax, including share-based compensation expense, patent
litigation expense and amortization of intangibles. In the 2016 first
quarter, Non-GAAP net income was $5.7 million or $0.18 per diluted
share. The first quarter Non-GAAP results excluded a net $8.2 million in
income, after tax, which were included in the GAAP results related to a
patent litigation judgment, share-based compensation expense, patent
litigation expense and amortization of intangibles.
Balance Sheet
At June 30, 2016, cash and marketable
securities totaled $163.1 million, an increase of $14.9 million from the
2016 first quarter. Accounts receivable of $64.6 million remained
relatively unchanged with the previous quarter. Inventory decreased to
$70.6 million as of June 30, 2016 and working capital increased to
$214.1 million.
Outlook
The Company is currently anticipating revenue for
the third quarter ending September 30, 2016 to be in the range of $59 to
$63 million. The Company is also expecting diluted GAAP net income per
share to be in the range of $0.21 to $0.25 and non-GAAP net income per
diluted share to be in the range of $0.27 to $0.31.
Conference Call
Rudolph Technologies will discuss its 2016
second quarter results and other matters on a conference call it is
hosting today at 4:30 PM EDT. To participate in the call, please dial
(888) 438-5535 (Domestic) or (719) 325-2420 (International), and
reference Conference ID # 4840514 at least five (5) minutes prior to the
scheduled start time. A live webcast will also be available on the
Company’s website at www.rudolphtech.com.
To listen to the live webcast, please go to the website at least fifteen (15) minutes early to register, download and install any necessary audio software.
There will be a replay of the conference call available from 8:00 pm EDT on June 28 until 11:59 pm EDT on August 4, 2016. To access the replay, please dial (888) 203-1112 (Domestic) or (719) 457-0820 (International) at any time during that period and use Conference ID #4840514.
A replay will also be available on the Company’s website at www.rudolphtech.com.
Discussion of Non-GAAP Financial Measures
The Company has
provided in this release non-GAAP financial information including
non-GAAP gross profit, operating income, net income, and net income per
diluted share, as a supplement to the condensed consolidated financial
statements, which are prepared in accordance with generally accepted
accounting principles (“GAAP”). Management uses these non-GAAP financial
measures internally in analyzing the Company’s financial results to
assess operational performance. The Company believes that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing its performance and when planning,
forecasting and analyzing future periods. Further, the Company believes
these non-GAAP financial measures are useful to investors because they
allow for greater transparency with respect to key financial metrics
that the Company uses in making operating decisions and because the
Company believes that investors and analysts use them to help assess the
health of its business and for comparison to other companies. Non-GAAP
results are presented for supplemental informational purposes only for
understanding the Company’s operating results. The non-GAAP information
should not be considered a substitute for financial information
presented in accordance with GAAP, and may be different from non-GAAP
measures used by other companies.
The financial statements provided with this release include a reconciliation of the non-GAAP financial measures to those measures reported in accordance with GAAP.
The Company’s non-GAAP financial measures, used in this press release, reflect adjustments based on the following items:
Stock-based compensation expense. These expenses primarily relate to employee restricted stock units and employee stock options. The Company excludes stock-based compensation expense from its non-GAAP measures primarily because such expenses are non-cash expenses that the Company does not believe are reflective of ongoing operating results.
Amortization expense. The Company incurs expenses for the amortization of intangible assets acquired in acquisitions. The Company excludes these items because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Company’s prior acquisitions and have no direct correlation to the operation of the Company’s core business.
Patent litigation fees and judgments. The Company, from time to time, may incur charges or benefits that are outside of the ordinary course of the Company’s business related to litigation. The Company believes it is useful to exclude such charges or benefits because it does not consider such amounts to be part of the ongoing operation of the Company’s business and because of the singular nature of the claims underlying the matter.
About Rudolph Technologies
Rudolph Technologies, Inc. is a
leader in the design, development, manufacture and support of defect
inspection, lithography, process control metrology, and process control
software used by semiconductor and advanced packaging device
manufacturers worldwide. Rudolph delivers comprehensive solutions
throughout the fab with its families of proprietary products that
provide critical yield-enhancing information, enabling microelectronic
device manufacturers to drive down costs and time to market of their
devices. Headquartered in Wilmington, Massachusetts, 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 the semiconductor market outlook; Rudolph’s third quarter 2016
financial 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, 2015 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) | ||||||||
| June 30, 2016 | December 31, 2015 | |||||||
| (Audited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and marketable securities | $ | 163,100 | $ | 161,478 | ||||
| Accounts receivable, net | 64,576 | 55,492 | ||||||
| Inventories | 70,561 | 71,490 | ||||||
| Prepaid and other assets | 22,426 | 8,137 | ||||||
| Total current assets | 320,663 | 296,597 | ||||||
| Net property, plant and equipment | 13,513 | 12,346 | ||||||
| Intangibles | 33,898 | 35,088 | ||||||
| Other assets | 35,641 | 35,532 | ||||||
| Total assets | $ | 403,715 | $ | 379,563 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 20,613 | $ | 21,466 | ||||
| Senior convertible notes | 59,885 | 57,846 | ||||||
| Other current liabilities | 26,049 | 20,019 | ||||||
| Total current liabilities | 106,547 | 99,331 | ||||||
| Other non-current liabilities | 10,388 | 9,554 | ||||||
| Total liabilities | 116,935 | 108,885 | ||||||
| Stockholders’ equity | 286,780 | 270,678 | ||||||
| Total liabilities and stockholders’ equity | $ | 403,715 | $ | 379,563 | ||||
| RUDOLPH TECHNOLOGIES, INC. | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||
| (In thousands, except per share amounts) - (Unaudited) | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
| Revenues | $ | 62,701 | $ | 54,362 | $ | 59,466 | $ | 117,063 | $ | 112,036 | |||||||||||||
| Cost of revenues | 28,508 | 25,317 | 27,582 | 53,825 | 51,186 | ||||||||||||||||||
| Gross profit | 34,193 | 29,045 | 31,884 | 63,238 | 60,850 | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 11,879 | 12,446 | 10,507 | 24,325 | 20,867 | ||||||||||||||||||
| Selling, general and administrative | 9,488 | 9,499 | 11,033 | 18,987 | 24,007 | ||||||||||||||||||
| Amortization | 595 | 595 | 515 | 1,190 | 1,030 | ||||||||||||||||||
| Patent litigation judgment | — | (14,632 | ) | — | (14,632 | ) | — | ||||||||||||||||
| Total operating expenses | 21,962 | 7,908 | 22,055 | 29,870 | 45,904 | ||||||||||||||||||
| Operating income | 12,231 | 21,137 | 9,829 | 33,368 | 14,946 | ||||||||||||||||||
| Interest expense, net | 1,446 | 1,469 | 1,385 | 2,915 | 2,767 | ||||||||||||||||||
| Other expense | 192 | 107 | (212 | ) | 299 | 426 | |||||||||||||||||
| Income before income taxes | 10,593 | 19,561 | 8,656 | 30,154 | 11,753 | ||||||||||||||||||
| Provision for income taxes | 2,992 | 5,622 | 2,629 | 8,614 | 3,878 | ||||||||||||||||||
| Net income | $ | 7,601 | $ | 13,939 | $ | 6,027 | $ | 21,540 | $ | 7,875 | |||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | 0.25 | $ | 0.45 | $ | 0.19 | $ | 0.70 | $ | 0.25 | |||||||||||||
| Diluted | $ | 0.24 | $ | 0.44 | $ | 0.19 | $ | 0.68 | $ | 0.24 | |||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 30,779 | 30,957 | 31,663 | 30,869 | 31,724 | ||||||||||||||||||
| Diluted | 31,754 | 31,654 | 32,339 | 31,705 | 32,373 | ||||||||||||||||||
| RUDOLPH TECHNOLOGIES, INC. | |||||||||||||||||||||||||
| NON-GAAP FINANCIAL SUMMARY | |||||||||||||||||||||||||
| (In thousands, except percentage and per share amounts) - (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
| Revenue | $ | 62,701 | $ | 54,362 | $ | 59,466 | $ | 117,063 | $ | 112,036 | |||||||||||||||
| Gross profit | $ | 34,256 | $ | 29,102 | $ | 31,947 | $ | 63,358 | $ | 60,968 | |||||||||||||||
| Gross margin as percentage of revenue | 54.6 | % | 53.5 | % | 53.7 | % | 54.1 | % | 54.4 | % | |||||||||||||||
| Operating expenses | $ | 18,949 | $ | 19,532 | $ | 19,777 | $ | 38,481 | $ | 38,301 | |||||||||||||||
| Operating income | $ | 15,307 | $ | 9,570 | $ | 12,170 | $ | 24,877 | $ | 22,667 | |||||||||||||||
| Operating margin as a percentage of revenue | 24.4 | % | 17.6 | % | 20.5 | % | 21.3 | % | 20.2 | % | |||||||||||||||
| Net income | $ | 9,864 | $ | 5,742 | $ | 7,582 | $ | 15,606 | $ | 12,962 | |||||||||||||||
| Net income per diluted share | $ | 0.31 | $ | 0.18 | $ | 0.23 | $ | 0.49 | $ | 0.40 | |||||||||||||||
RECONCILIATION OF U.S. GAAP GROSS PROFIT, | |||||||||||||||||||||||||
| OPERATING EXPENSES AND OPERATING INCOME TO NON-GAAP | |||||||||||||||||||||||||
| GROSS PROFIT, OPERATING EXPENSES AND OPERATING INCOME | |||||||||||||||||||||||||
| (In thousands, except percentages) - (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
| U.S. GAAP gross profit | $ | 34,193 | $ | 29,045 | $ | 31,884 | $ | 63,238 | $ | 60,850 | |||||||||||||||
| Pre-tax non-GAAP items: | |||||||||||||||||||||||||
| Share-based compensation expense | 63 | 57 | 63 | 120 | 118 | ||||||||||||||||||||
| Non-GAAP gross profit | $ | 34,256 | $ | 29,102 | $ | 31,947 | $ | 63,358 | $ | 60,968 | |||||||||||||||
| U.S. GAAP gross margin as a percentage of revenue | 54.5 | % | 53.4 | % | 53.6 | % | 54.0 | % | 54.3 | % | |||||||||||||||
| Non-GAAP gross margin as a percentage of revenue | 54.6 | % | 53.5 | % | 53.7 | % | 54.1 | % | 54.4 | % | |||||||||||||||
| U.S. GAAP operating expenses | $ | 21,962 | $ | 7,908 | $ | 22,055 | $ | 29,870 | $ | 45,904 | |||||||||||||||
| Pre-tax non-GAAP items: | |||||||||||||||||||||||||
| Amortization of intangibles | 595 | 595 | 515 | 1,190 | 1,030 | ||||||||||||||||||||
| Patent litigation fees | 1,255 | 1,309 | 806 | 2,564 | 1,261 | ||||||||||||||||||||
| Patent litigation judgment | — | (14,632 | ) | — | (14,632 | ) | — | ||||||||||||||||||
| Share-based compensation expense | 1,163 | 1,104 | 957 | 2,267 | 5,312 | ||||||||||||||||||||
| Non-GAAP operating expenses | 18,949 | 19,532 | 19,777 | 38,481 | 38,301 | ||||||||||||||||||||
| Non-GAAP operating income | $ | 15,307 | $ | 9,570 | $ | 12,170 | $ | 24,877 | $ | 22,667 | |||||||||||||||
| GAAP operating margin as a percentage of revenue | 19.5 | % | 38.9 | % | 16.5 | % | 28.5 | % | 13.3 | % | |||||||||||||||
| Non-GAAP operating margin as a percentage of revenue | 24.4 | % | 17.6 | % | 20.5 | % | 21.3 | % | 20.2 | % | |||||||||||||||
| RUDOLPH TECHNOLOGIES, INC. | |||||||||||||||||||||||||
RECONCILIATION OF U.S. GAAP NET INCOME TO | |||||||||||||||||||||||||
| NON-GAAP NET INCOME | |||||||||||||||||||||||||
| (In thousands, except share and per share data) - (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
| U.S. GAAP net income | $ | 7,601 | $ | 13,939 | $ | 6,027 | $ | 21,540 | $ | 7,875 | |||||||||||||||
| Pre-tax non-GAAP items | |||||||||||||||||||||||||
Amortization of intangibles | 595 | 595 | 515 | 1,190 | 1,030 | ||||||||||||||||||||
| Patent litigation fees | 1,255 | 1,309 | 806 | 2,564 | 1,261 | ||||||||||||||||||||
| Patent litigation judgment | — | (14,632 | ) | — | (14,632 | ) | — | ||||||||||||||||||
| Share-based compensation expense | 1,226 | 1,161 | 1,020 | 2,387 | 5,430 | ||||||||||||||||||||
| Net tax provision on non-GAAP items | (813 | ) | 3,370 | (786 | ) | 2,557 | (2,634 | ) | |||||||||||||||||
| Non-GAAP net income | $ | 9,864 | $ | 5,742 | $ | 7,582 | $ | 15,606 | $ | 12,962 | |||||||||||||||
| Non-GAAP net income per diluted share | $ | 0.31 | $ | 0.18 | $ | 0.23 | $ | 0.49 | $ | 0.40 | |||||||||||||||
SUPPLEMENTAL INFORMATION - RECONCILIATION OF THIRD QUARTER 2016 | ||||||||
| GAAP TO NON-GAAP GUIDANCE (net of tax) | ||||||||
| Low | High | |||||||
| Estimated GAAP net income per diluted share | $ | 0.21 | $ | 0.25 | ||||
| Estimated non-GAAP items: | ||||||||
| Amortization of intangibles | 0.01 | 0.01 | ||||||
| Patent litigation fees | 0.02 | 0.02 | ||||||
| Share-based compensation expense | 0.03 | 0.03 | ||||||
| Estimated non-GAAP net income per diluted share | $ | 0.27 | $ | 0.31 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160728006466/en/
Contacts:
Investors:
Steven R.
Roth, 973-448-4302
Senior Vice President & CFO
steven.roth@rudolphtech.com
or
Guerrant
Associates
Laura Guerrant-Oiye, 808-960-2642
Principal
lguerrant@guerrantir.com
or
Trade
Press:
Amy Shay, 952-259-1794
amy.shay@rudolphtech.com
