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 third quarter.
2016 Third Quarter Financial Highlights
- Third quarter revenue of $61.6 million increased five percent over the same period last year and was in line with the Company’s guidance.
- Process Control equipment revenue increased 16 percent sequentially, driven by advanced packaging, memory and logic expansions.
- Metrology-enabled NSX® systems with software led to multiple new customer wins in advanced packaging spanning memory, logic, and automotive applications.
- Strong software sales comprised 12 percent of revenue and are on track for record year.
- First JetStep® S lithography system installed in the semiconductor industry’s first fan-out packaging panel manufacturing line.
- GAAP net income was $9.3 million, or $0.30 per diluted share. Non-GAAP net income was $9.1 million, or $0.29 per diluted share. GAAP and non-GAAP net income increased 29 percent and 9 percent year-over-year, respectively.
- Cash and marketable securities remain strong at $123.3 million after redemption of $60 million senior convertible notes.
| Key Financial Data for the Quarters Ended September 30, 2016, June 30, 2016 | |||||||||
| and September 30, 2015 | |||||||||
| (in thousands, except per share amounts) | |||||||||
| US GAAP | |||||||||
September 2016 | June 2016 | September 2015 | |||||||
| Revenue | $ | 61,641 | $ | 62,701 | $ | 58,597 | |||
| Gross profit margin | 52.6% | 54.5% | 54.5% | ||||||
| Operating income | $ | 12,641 | $ | 12,231 | $ | 11,993 | |||
| Net income | $ | 9,286 | $ | 7,601 | $ | 7,198 | |||
| Net income per diluted share | $ | 0.30 | $ | 0.24 | $ | 0.22 | |||
| US NON-GAAP | |||||||||
September 2016 | June 2016 | September 2015 | |||||||
| Revenue | $ | 61,641 | $ | 62,701 | $ | 58,597 | |||
| Gross profit margin | 52.7% | 54.6% | 54.5% | ||||||
| Operating income | $ | 13,303 | $ | 15,307 | $ | 13,958 | |||
| Net income | $ | 9,141 | $ | 9,864 | $ | 8,371 | |||
| Net income per diluted share | $ | 0.29 | $ | 0.31 | $ | 0.26 | |||
Michael Plisinski, chief executive officer, commented, “Customer demand for Rudolph’s integrated solutions continues to be strong, and we are expanding our applications in a number of our served markets. Our quarterly revenue growth was fueled by stronger memory and logic sales of our metal metrology MetaPULSE® G product line and advanced packaging. Within advanced packaging, fan-out packaging continues to drive our business. Our advanced packaging sales through the first nine months of 2016 have already exceeded our total sales for 2015; and with industry forecasts of ten percent growth in 2017 we believe we are uniquely positioned to capitalize on that growth.
“In addition, we added a new customer from the top five RF filter manufacturers this third quarter with an inspection tool for advanced BAW filter research and development. We continue to expand our applications in the RF market where our suite of technologies combines to provide customers a comprehensive solution for identifying and isolating faults to improve yield.”
Third Quarter 2016 GAAP Financial Results
Third quarter
revenue totaled $61.6 million, a five percent increase as compared with
$58.6 million for the 2015 third quarter and a two percent decrease
compared to the 2016 second quarter. Third quarter gross margin was 53
percent of revenues, compared to 55 percent in the 2016 second quarter.
The decrease in gross margin was primarily due to a change in product
sales mix; specifically, the shipment of lower margin systems in the
quarter and slightly lower software sales.
Operating expenses for the third quarter totaled $19.8 million compared to $22.0 million for the second quarter of 2016. The decrease in operating expense was primarily due to lower litigation expenses in the quarter.
GAAP net income for the third quarter of 2016 was $9.3 million, or $0.30 per diluted share, compared with GAAP net income of $7.2 million, or $0.22 per diluted share, for the 2015 third quarter. In the 2016 second quarter, GAAP net income was $7.6 million, or $0.24 per diluted share.
Third Quarter Non-GAAP Financial Results
Third quarter
Non-GAAP net income was $9.1 million, or $0.29 per diluted share.
Non-GAAP results excluded items that had a net after tax increase in
GAAP net income of $145 thousand. The third quarter 2015 Non-GAAP
results excluded items that decreased GAAP net income by $1.2 million
after tax, and the 2016 second quarter Non-GAAP results excluded items
that decreased GAAP net income by $2.3 million after tax.
Balance Sheet
At September 30, 2016, cash and marketable
securities totaled $123.3 million. During the third quarter, the Company
redeemed $60 million in senior convertible notes, contributing to the
decrease in cash for the quarter. Also in the quarter, the Company
received a $14.6 million payment from a patent lawsuit. Accounts
receivable increased in the quarter to $74.9 million and inventory
decreased in the quarter to $68.6 million. Working capital increased
$12.2 million to $226.3 million.
Outlook
The Company is currently anticipating revenue for
the fourth quarter ending December 31, 2016 to be in the range of $52
million to $56 million. The Company is also expecting diluted GAAP net
income per share to be in the range of $0.11 to $0.15 and non-GAAP net
income per diluted share to be in the range of $0.18 to $0.22.
Conference Call
Rudolph Technologies will discuss its 2016
third quarter results and other matters on a conference call it is
hosting today at 4:30 PM EST. To participate in the call, please dial
(888) 430-8701 (Domestic) or (719) 325-2334 (International), and
reference Conference ID # 2722022 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 EST on November 7 until 11:59 pm EST on November 14, 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 #2722022.
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:
Share-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 of intangibles. 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 settlements. 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.
Gain on sale of building. The Company received this benefit from the sale of one of its assets. The Company believes it is useful to exclude such benefit because it does not consider such amount to be part of the ongoing operation of the Company’s business and because of the singular nature of 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 fourth 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) | ||||||
| September 30, 2016 | December 31, 2015 | |||||
| (Audited) | ||||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and marketable securities | $ | 123,261 | $ | 161,478 | ||
| Accounts receivable, net | 74,884 | 55,492 | ||||
| Inventories | 68,595 | 71,490 | ||||
| Prepaid and other assets | 7,975 | 8,137 | ||||
| Total current assets | 274,715 | 296,597 | ||||
| Net property, plant and equipment | 12,355 | 12,346 | ||||
| Intangibles | 33,303 | 35,088 | ||||
| Other assets | 35,651 | 35,532 | ||||
| Total assets | $ | 356,024 | $ | 379,563 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 21,591 | $ | 21,466 | ||
| Senior convertible notes | — | 57,846 | ||||
| Other current liabilities | 26,837 | 20,019 | ||||
| Total current liabilities | 48,428 | 99,331 | ||||
| Other non-current liabilities | 9,771 | 9,554 | ||||
| Total liabilities | 58,199 | 108,885 | ||||
| Stockholders’ equity | 297,825 | 270,678 | ||||
| Total liabilities and stockholders’ equity | $ | 356,024 | $ | 379,563 | ||
| RUDOLPH TECHNOLOGIES, INC. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (In thousands, except per share amounts) - (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Revenues | $ | 61,641 | $ | 62,701 | $ | 58,597 | $ | 178,704 | $ | 170,633 | ||||||||||
| Cost of revenues | 29,192 | 28,508 | 26,685 | 83,017 | 77,871 | |||||||||||||||
| Gross profit | 32,449 | 34,193 | 31,912 | 95,687 | 92,762 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 9,330 | 11,879 | 10,032 | 33,655 | 30,899 | |||||||||||||||
| Selling, general and administrative | 9,894 | 9,488 | 9,372 | 28,881 | 33,379 | |||||||||||||||
| Amortization | 595 | 595 | 515 | 1,785 | 1,545 | |||||||||||||||
| Patent litigation judgment | (11 | ) | — | — | (14,643 | ) | — | |||||||||||||
| Total operating expenses | 19,808 | 21,962 | 19,919 | 49,678 | 65,823 | |||||||||||||||
| Operating income | 12,641 | 12,231 | 11,993 | 46,009 | 26,939 | |||||||||||||||
| Interest expense, net | 64 | 1,446 | 1,440 | 2,979 | 4,207 | |||||||||||||||
| Other (income) expense | (393 | ) | 192 | (327 | ) | (94 | ) | 99 | ||||||||||||
| Income before income taxes | 12,970 | 10,593 | 10,880 | 43,124 | 22,633 | |||||||||||||||
| Provision for income taxes | 3,684 | 2,992 | 3,682 | 12,298 | 7,560 | |||||||||||||||
| Net income | $ | 9,286 | $ | 7,601 | $ | 7,198 | $ | 30,826 | $ | 15,073 | ||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.30 | $ | 0.25 | $ | 0.23 | $ | 0.99 | $ | 0.48 | ||||||||||
| Diluted | $ | 0.30 | $ | 0.24 | $ | 0.22 | $ | 0.97 | $ | 0.47 | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 30,988 | 30,779 | 31,526 | 31,082 | 31,597 | |||||||||||||||
| Diluted | 31,459 | 31,754 | 32,204 | 31,655 | 32,255 | |||||||||||||||
| RUDOLPH TECHNOLOGIES, INC. | ||||||||||||||||||||
| NON-GAAP FINANCIAL SUMMARY | ||||||||||||||||||||
| (In thousands, except percentage and per share amounts) - (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Revenue | $ | 61,641 | $ | 62,701 | $ | 58,597 | $ | 178,704 | $ | 170,633 | ||||||||||
| Gross profit | $ | 32,513 | $ | 34,256 | $ | 31,939 | $ | 95,871 | $ | 92,907 | ||||||||||
| Gross margin as percentage of revenue | 52.7 | % | 54.6 | % | 54.5 | % | 53.6 | % | 54.4 | % | ||||||||||
| Operating expenses | $ | 19,210 | $ | 18,949 | $ | 17,981 | $ | 57,691 | $ | 56,282 | ||||||||||
| Operating income | $ | 13,303 | $ | 15,307 | $ | 13,958 | $ | 38,180 | $ | 36,625 | ||||||||||
| Operating margin as a percentage of revenue | 21.6 | % | 24.4 | % | 23.8 | % | 21.4 | % | 21.5 | % | ||||||||||
| Net income | $ | 9,141 | $ | 9,864 | $ | 8,371 | $ | 24,747 | $ | 21,333 | ||||||||||
| Net income per diluted share | $ | 0.29 | $ | 0.31 | $ | 0.26 | $ | 0.78 | $ | 0.66 | ||||||||||
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 | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| U.S. GAAP gross profit | $ | 32,449 | $ | 34,193 | $ | 31,912 | $ | 95,687 | $ | 92,762 | ||||||||||
| Pre-tax non-GAAP items: | ||||||||||||||||||||
| Share-based compensation expense | 64 | 63 | 27 | 184 | 145 | |||||||||||||||
| Non-GAAP gross profit | $ | 32,513 | $ | 34,256 | $ | 31,939 | $ | 95,871 | $ | 92,907 | ||||||||||
| U.S. GAAP gross margin as a percentage of revenue | 52.6 | % | 54.5 | % | 54.5 | % | 53.5 | % | 54.4 | % | ||||||||||
| Non-GAAP gross margin as a percentage of revenue | 52.7 | % | 54.6 | % | 54.5 | % | 53.6 | % | 54.4 | % | ||||||||||
| U.S. GAAP operating expenses | $ | 19,808 | $ | 21,962 | $ | 19,919 | $ | 49,678 | $ | 65,823 | ||||||||||
| Pre-tax non-GAAP items: | ||||||||||||||||||||
| Amortization of intangibles | 595 | 595 | 515 | 1,785 | 1,545 | |||||||||||||||
| Litigation fees | (1,181 | ) | 1,255 | 548 | 1,382 | 1,809 | ||||||||||||||
| Patent litigation judgment | (11 | ) | — | — | (14,643 | ) | — | |||||||||||||
| Share-based compensation expense | 1,195 | 1,163 | 875 | 3,463 | 6,187 | |||||||||||||||
| Non-GAAP operating expenses | 19,210 | 18,949 | 17,981 | 57,691 | 56,282 | |||||||||||||||
| Non-GAAP operating income | $ | 13,303 | $ | 15,307 | $ | 13,958 | $ | 38,180 | $ | 36,625 | ||||||||||
| GAAP operating margin as a percentage of revenue | 20.5 | % | 19.5 | % | 20.5 | % | 25.7 | % | 15.8 | % | ||||||||||
| Non-GAAP operating margin as a percentage of revenue | 21.6 | % | 24.4 | % | 23.8 | % | 21.4 | % | 21.5 | % | ||||||||||
| 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 | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| U.S. GAAP net income | $ | 9,286 | $ | 7,601 | $ | 7,198 | $ | 30,826 | $ | 15,073 | ||||||||||
| Pre-tax non-GAAP items | ||||||||||||||||||||
| Amortization of intangibles | 595 | 595 | 515 | 1,785 | 1,545 | |||||||||||||||
| Litigation fees | (1,181 | ) | 1,255 | 548 | 1,382 | 1,809 | ||||||||||||||
| Patent litigation judgment | (11 | ) | — | — | (14,643 | ) | — | |||||||||||||
| Share-based compensation expense | 1,259 | 1,226 | 902 | 3,647 | 6,332 | |||||||||||||||
| Gain on sale of building | (946 | ) | — | — | (946 | ) | — | |||||||||||||
| Net tax provision (benefit) on non-GAAP items | 139 | (813 | ) | (792 | ) | 2,696 | (3,426 | ) | ||||||||||||
| Non-GAAP net income | $ | 9,141 | $ | 9,864 | $ | 8,371 | $ | 24,747 | $ | 21,333 | ||||||||||
| Non-GAAP net income per diluted share | $ | 0.29 | $ | 0.31 | $ | 0.26 | $ | 0.78 | $ | 0.66 | ||||||||||
SUPPLEMENTAL INFORMATION - RECONCILIATION OF FOURTH QUARTER 2016 | ||||||
| GAAP TO NON-GAAP GUIDANCE (net of tax) | ||||||
| Low | High | |||||
| Estimated GAAP net income per diluted share | $ | 0.11 | $ | 0.15 | ||
| Estimated non-GAAP items: | ||||||
| Restructuring charge | 0.01 | 0.01 | ||||
| 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 | $ | 0.18 | $ | 0.22 | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161107006280/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
