Rudolph Technologies (NYSE:RTEC)
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Rudolph Technologies Posts Sequential Growth in Revenue, Gross Margin and EPS
*Anticipates 6% to 10% Sequential Revenue Growth for Fourth Quarter *Increased
Order Activity Expected to Lead to Increased Revenue in the First Half of 2004
FLANDERS, N.J., Oct. 27 /PRNewswire-FirstCall/ -- Rudolph Technologies, Inc. ,
a leading provider of process control equipment for thin film measurement and
macro defect inspection during Integrated Circuit (IC) manufacturing, today
announced financial results for the third quarter ended September 30, 2003.
Highlights for the third quarter include:
-- Revenue increases to $14.2 million; Gross margin increases by 3% over
prior year
-- Profitability increases sequentially with EPS of $0.03
-- Strengthening balance sheet supported by $3.4 million sequential
increase in cash and marketable securities to $81.0 million
Discussing the third quarter results, Paul F. McLaughlin, Chairman and CEO
commented:
"Our performance this quarter clearly validates our business strategy -- that we
continue to invest in the development of leading-edge products while remaining
profitable -- regardless of the business environment. As a result, we believe
we have built the foundation for future growth as the market improves by
developing new product offerings in each of our four main metrology niches --
Metal with MetaPULSE(R), Transparent with the S-ultra(TM) family, Macro Defect
with WaferView(R) and Integrated Metrology with i- MOD(TM). This broad product
offering is enabling the Company to compete on levels not available to us a few
years ago, when we achieved record results during the industry's last peak
cycle. This has created a lot of excitement at Rudolph, knowing we have the
opportunity to surpass our previous levels when the recovery takes hold and our
customers have the confidence to further increase capacity and add new tools."
The Company's third quarter revenue totaled $14.2 million compared to $15.2
million for the third quarter of 2002. Although management had previously
anticipated a flat quarter, revenue for the 2003 third quarter increased a
modest 2% compared to the 2003 second quarter revenue of $13.9 million. During
the third quarter, international sales represented approximately 56% of revenue
while domestic sales accounted for 44%. This compares to international sales of
33% of revenue and domestic sales of 67% in the year-ago quarter. Approximately
46% of the Company's 2003 third quarter revenue was from 300 millimeter tools.
The Company continued its strong heritage of maintaining profitability as third
quarter net income totaled $465,000, or $0.03 per diluted share compared to net
income of $286,000, or $0.02 per diluted share for the 2003 second quarter. The
Company reported a net loss of $3.1 million, or $0.19 per share for the 2002
third quarter. The adjusted net income for third quarter 2002, which excludes
an in-process R&D charge related the Company's acquisition of the Yield
Metrology Group on September 24, 2002 and other acquisition related charges, was
$793,000, or $0.05 per diluted share.
Third quarter gross margin increased to 44% compared to 43% in the 2003 second
quarter. The gross margin in the year-ago period was 41%. The year- over-year
increase in gross margin is primarily due to licensing revenues from the Yield
Metrology Group related to certain inspection technology.
Research & development (R&D) expenses for the third quarter totaled $3.1
million, compared to $3.2 million in the second quarter of 2003, and $3.0
million in the year-ago period. As a percentage of revenue, R&D was 22%,
compared to 23% last quarter, and 20% in the same quarter last year. The
year-over-year increase in R&D is primarily due to the cost associated with the
engineering team acquired as part of the Yield Metrology Group acquisition.
This increase is partially offset by the timing of engineering project costs and
the cost reduction initiatives that were implemented by the Company in the first
quarter of 2003. On a year to date basis, the Company's spending on R&D has
increased by 23% in absolute dollars over the prior year. The Company continues
to maintain tight control on its spending while continuing to invest in R&D for
new products and infrastructure.
Selling, general & administrative (S,G&A) expenses for the third quarter totaled
$2.6 million, compared to $2.5 million in the second quarter of 2003, and $3.5
million in the prior year period. As a percentage of revenue, S,G&A was 18% in
both the 2003 second and third quarter compared to 23% for the prior year
period. The year-over-year decrease is primarily due to the Company's cost
reduction initiatives implemented in 2003 as well as a charge in the third
quarter of 2002 for acquisition related costs that did not reoccur. This
decrease was partially offset by cost associated with the Yield Metrology
Group.
Balance Sheet Strength
At September 30, 2003, the Company's cash and marketable securities totaled
$81.0 million increasing by $3.4 million during the third quarter. Working
capital changed slightly from June 30, 2003 increasing to $108.4 million.
Outlook
The Company is currently anticipating revenue for the fourth quarter ending
December 31, 2003 to be sequentially up 6% to 10% compared to that of the 2003
third quarter revenue of $14.2 million. The Company is anticipating diluted
earnings per share to be approximately $0.03 to $0.04 for the 2003 fourth
quarter.
"Consistent with our previous outlook, we are forecasting a stronger second half
of 2003 with regards to bookings -- as indicated by our recent announcement in
which a major Taiwanese foundry customer ordered seven tools scheduled for
delivery over the next several quarters. There are increased signs of customer
activity, which are often precursors of a capacity-based industry upturn.
Nonetheless, while these developments are encouraging, we maintain a position of
measured optimism until longer-term visibility improves," McLaughlin
concluded.
Use of Non-GAAP Measures
The non-GAAP financial measures used in this news release exclude an in-process
research and development charge incurred in connection with the Company's
acquisition of the Yield Metrology Group and costs related to acquisitions not
pursued in 2002. Management believes that the non-GAAP adjusted net income and
income per diluted share for the third quarter of 2002 provide a useful measure
of financial performance. We include these non-GAAP financial measures in our
earnings announcement because we believe they are useful to investors in
comparing financial performance on a quarterly basis and provide consistency in
our financial reporting. However, these non-GAAP financial measures are not
prepared in accordance with generally accepted accounting principles (GAAP) in
the United States and may be different from the non-GAAP financial measures used
by other companies. Non-GAAP financial measures should be considered
supplemental, and should not be considered as a substitute for, or superior to,
measures of financial performance prepared in accordance with GAAP. Investors
should review the reconciliation of the non- GAAP financial measures used in
this news release to the most directly comparable GAAP financial measures as
provided in tabular format with the financial statements attached to this news
release.
Conference call
Rudolph Technologies will be hosting a conference call today at 4:45 PM EST. A
live webcast will also be available to investors on the Company's web site at
http://www.rudolphtech.com/. To listen to the live call, please go to the web
site 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, including, but not
limited to, statements related to our expectations regarding our revenue and
earnings expectations for the fourth quarter of 2003, increases in customer
orders and bookings, future growth of our business, and the overall improvement
in the market. Actual results may differ materially from those projected due to
a number of risks, including, but not limited to, the impact of the slowdown in
the overall economy, the uncertainty of the current global political
environment, the potential for terrorist attacks, the potential for business
disruptions due to infectious diseases, changes in customer demands for our
existing and new products, the timing, cancellation or delay of customer orders
and shipments, the timing of revenue recognition of shipments, new product
offerings from our competitors, changes in or an inability to execute Rudolph
Technologies' business strategy, unanticipated manufacturing or supply problems,
and changes in tax rules. Rudolph Technologies cannot guarantee future results,
levels of activity, performance or achievements. The matters discussed in this
press release also involve risks and uncertainties summarized under the heading
"Risk Factors" in Rudolph Technologies' Form 10-K filed for the year ended
December 31, 2002. These factors are updated from time to time through the
filing of reports and registration statements with the Securities and Exchange
Commission. Rudolph Technologies does not assume any obligation to update the
forward-looking information contained in this press release.
(Tables to follow)
RUDOLPH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000) - (Unaudited)
September 30, December 31,
2003 2002
ASSETS
Current assets
Cash and marketable securities $81,007 $73,270
Accounts receivable, net 11,811 16,142
Inventories 26,083 30,488
Prepaid and other assets 2,215 4,033
Total current assets 121,116 123,933
Net property, plant and equipment 6,681 7,454
Intangibles 23,808 24,465
Other assets 6,151 6,111
Total assets $157,756 $161,963
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 4,900 $6,502
Other current liabilities 7,823 11,380
Total current liabilities 12,723 17,882
Stockholders' equity 145,033 144,081
Total liabilities and stockholders'
equity $157,756 $161,963
RUDOLPH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($000) - (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
Revenues $14,169 $15,199 $42,605 $40,355
Cost of revenues 7,890 8,966 24,282 23,578
Gross profit 6,279 6,233 18,323 16,777
Operating expenses:
Research and
development 3,149 3,010 9,798 7,968
In-process
research and
development -- 3,500 -- 3,500
Selling, general
and
administrative 2,592 3,475 7,996 8,062
Amortization 219 65 657 193
Total operating
expenses 5,960 10,050 18,451 19,723
Operating
income/(loss) 319 (3,817) (128) (2,946)
Interest income and
other, net 285 746 1,332 1,589
Provision for income
taxes 139 20 278 630
Net income/(loss) $465 $(3,091) $ 926 $(1,987)
Net income/(loss)
per share:
Basic $ 0.03 $(0.19) $0.06 $(0.12)
Diluted $ 0.03 $(0.19) $0.06 $(0.12)
Weighted average
shares outstanding:
Basic 16,376,434 16,226,346 16,354,962 16,179,442
Diluted 16,781,359 16,226,346 16,606,139 16,179,442
RECONCILIATION OF NET
INCOME/(LOSS) TO ADJUSTED
NET INCOME:
Net income/
(loss) $465 $(3,091) $926 $(1,987)
In-process R&D -- 3,500 -- 3,500
Cost related to
acquisitions
not completed,
net of tax -- 384 -- 384
Adjusted net income $465 $793 $926 $ 1,897
Adjusted net
income per share:
Basic $ 0.03 $ 0.05 $0.06 $0.12
Diluted $ 0.03 $ 0.05 $0.06 $0.11
Weighted average
shares outstanding:
Basic 16,376,434 16,226,346 16,354,962 16,179,442
Diluted 16,781,359 16,474,893 16,606,139 16,714,665
DATASOURCE: Rudolph Technologies
CONTACT: Paul F. McLaughlin, Chairman and CEO of Rudolph Technologies,
Inc., +1-973-448-4470; or Michael Polyviou, Kirin Smith, or Scot Hoffman, all
of Financial Dynamics, +1-212-850-5600, for Rudolph Technologies
Web site: http://www.rudolphtechnologies.com/