Exhibit 99.1
Cascade Microtech Reports Second Quarter 2006 Results
Revenues of $19.6 million, up 7% over last year and EPS of 7 cents; Record bookings for the quarter with strong book-to-bill for both Divisions
PORTLAND, Ore.—(BUSINESS WIRE)—July 25, 2006—Cascade Microtech (NASDAQ:CSCD), today reported financial results for the second quarter ended June 30, 2006.
Highlights for the Second Quarter 2006 include:
· Revenues of $19.6 million, up 7% over last year
· Record bookings during the quarter with strong book-to-bill for both divisions
· $3.6 million Production Probes Division revenue, up 56% over last year
· $16.0 million Engineering Products Division revenue, flat with last year
· EPS of $0.07 per diluted share, including stock compensation expense under SFAS123R
· Effective tax rate of 33% for the quarter due to the expiration of the R&E credit.
“We were extremely pleased with our record bookings in the second quarter of 2006. Book-to-bill was well above one in both divisions and we built solid backlog in both probe cards and systems. Our Production Probe division revenue, however, was limited by our production and test capabilities during the quarter. We are continuing to add employees and equipment to build a larger probe card business,” said Eric Strid, CEO of Cascade Microtech.
Revenue for the second quarter was $19.6 million, net income for the quarter was $0.8 million and diluted earnings per share were $0.07, compared to revenue of $19.7 million, net income of $0.7 million and diluted earnings per share of $0.06 for the first quarter of 2006.
Gross margin for the second quarter improved to 44.5% from 43.5% in the first quarter of 2006 primarily due to product mix.
Beginning in January 2006 we were required to expense the costs of stock options through our income statement under SFAS 123R. This resulted in a charge to earnings of approximately $447,000 during the second quarter of 2006.
The effective tax rate for the second quarter was 33% in line with the first quarter of 2006. The tax charge for the first and second quarters does not include any benefit for research and experimentation tax credits since current legislation related to such credits has expired and has not yet been renewed.
Financial Outlook
Based on the current backlog and anticipated bookings, Cascade anticipates that third quarter 2006 revenues will be in the range of $20.0 million to $21.5 million compared to $19.6 million in the second quarter of 2006; and that diluted earnings per share will be in the range of $0.06 to $0.11, including stock compensation expense under SFAS 123R .
About Cascade Microtech
Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in the precise electrical measurement and test of integrated circuits (ICs) and other small structures. For technology businesses and scientific institutions that need to evaluate small structures, Cascade Microtech delivers access to, and extraction of, electrical data from wafers, integrated circuits (ICs), IC packages, circuit boards and modules, MEMs, biological structures, electro-optic devices and more. Cascade Microtech’s highly reliable production wafer test solutions provide the
semiconductor industry with leading-edge probe cards that reduce manufacturing costs of complex semiconductors. Information about Cascade Microtech can be found on the Web at www.cascademicrotech.com.
Forward-Looking Statements
The statements in this release regarding the Company’s financial outlook as to revenue and diluted earnings per share in the third quarter of 2006 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 the Company’s 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 the Company’s products, product mix, the timing of shipments and customer orders, constraints on supplies of components, excess or shortage of production capacity and other risks discussed from time to time in the Company’s Securities and Exchange Commission filings and reports, including the Company’s Annual Report on Form 10-K. 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 the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
The company will host a conference call beginning at 5 p.m. EST (2 p.m. PST) on July 25, 2006 to discuss its results for the second quarter ended June 30, 2006 and its outlook for the third quarter of 2006.
A simultaneous audio cast of the conference call may be accessed online from the investor relations page of www.cascademicrotech.com. A replay will be available after 7 p.m. EST at this same internet address. (For a telephone replay, dial (888) 286-8010 pass code: 15137563; International: 617-801-6888.)
CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| | Three Months Ended | | | |
| | June 30, | | March 31, | | June 30, | | Year to Date Ended June 30, | |
| | 2006 | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | | | | | | | | | |
Sales | | $ | 19,598 | | $ | 19,699 | | $ | 18,311 | | $ | 39,297 | | $ | 36,972 | |
| | | | | | | | | | | |
Cost of sales | | 10,739 | | 11,020 | | 9,651 | | 21,759 | | 19,141 | |
Stock-based compensation | | 113 | | 112 | | 10 | | 225 | | 22 | |
| | | | | | | | | | | |
Gross profit | | 8,746 | | 8,567 | | 8,650 | | 17,313 | | 17,809 | |
| | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | |
Research and development (includes $77, $77, $4, $154 and $8, respectively, of stock-based compensation) | | 2,150 | | 1,998 | | 1,669 | | 4,148 | | 3,312 | |
Selling, general and administrative (includes $258, $264, $11, $522 and $36, respectively, of stock-based compensation) | | 5,808 | | 6,009 | | 5,172 | | 11,817 | | 9,796 | |
| | | | | | | | | | | |
Total operating expenses | | 7,958 | | 8,007 | | 6,841 | | 15,965 | | 13,108 | |
| | | | | | | | | | | |
Income from operations | | 788 | | 560 | | 1,809 | | 1,348 | | 4,701 | |
| | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | |
Interest income | | 405 | | 362 | | 258 | | 767 | | 470 | |
Interest expense | | — | | — | | — | | — | | (16 | ) |
Other, net | | (10 | ) | 57 | | 766 | | 47 | | 790 | |
| | | | | | | | | | | |
Total other income (expense) | | 395 | | 419 | | 1,024 | | 814 | | 1,244 | |
| | | | | | | | | | | |
Income before income taxes | | 1,183 | | 979 | | 2,833 | | 2,162 | | 5,945 | |
| | | | | | | | | | | |
Provision for income taxes | | 387 | | 323 | | 602 | | 710 | | 1,219 | |
| | | | | | | | | | | |
Net income | | $ | 796 | | $ | 656 | | $ | 2,231 | | $ | 1,452 | | $ | 4,726 | |
| | | | | | | | | | | |
Net income per share: | | | | | | | | | | | |
Basic | | $ | 0.07 | | $ | 0.06 | | $ | 0.20 | | $ | 0.13 | | $ | 0.43 | |
Diluted | | $ | 0.07 | | $ | 0.06 | | $ | 0.19 | | $ | 0.12 | | $ | 0.40 | |
| | | | | | | | | | | |
Shares used in computing net income per share: | | | | | | | | | | | |
Basic | | 11,411 | | 11,373 | | 10,916 | | 11,392 | | 10,890 | |
Diluted | | 11,897 | | 11,907 | | 11,728 | | 11,841 | | 11,696 | |
CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2006 and December 31, 2005
| | June 30, | | December 31, | |
| | 2006 | | 2005 | |
| | (unaudited) | | | |
| | | | | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 2,008 | | $ | 2,224 | |
Marketable securities | | 46,644 | | 48,122 | |
Accounts receivable net of allowances of $83,812 and $97,051 | | 17,399 | | 16,182 | |
Inventories | | 12,445 | | 10,889 | |
Prepaid expenses and other | | 2,047 | | 3,000 | |
Deferred income taxes | | 1,745 | | 1,699 | |
| | | | | |
Total current assets | | 82,288 | | 82,116 | |
| | | | | |
Long-term investments | | 4,972 | | 1,549 | |
Fixed assets, net | | 5,712 | | 4,422 | |
Deferred income tax | | 344 | | 336 | |
Other assets | | 1,881 | | 1,697 | |
| | | | | |
| | $ | 95,197 | | $ | 90,120 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
| | | | | |
Current liabilities: | | | | | |
Current portion of long-term debt and capital leases | | $ | 4 | | $ | 8 | |
Accounts payable | | 4,860 | | 3,904 | |
Deferred revenue | | 562 | | 516 | |
Accrued liabilities | | 4,116 | | 3,087 | |
| | | | | |
Total current liabilities | | 9,542 | | 7,515 | |
| | | | | |
Deferred revenue | | 241 | | 255 | |
Other long-term liabilities | | 802 | | 845 | |
| | | | | |
Total liabilities | | 10,585 | | 8,615 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock, $0.01 par value; 11,415,649 and 11,328,109 shares issued and outstanding at June 30, 2006 and December 31, 2005 | | 59,896 | | 58,400 | |
Deferred stock-based compensation | | — | | (142 | ) |
Unrealized holding gain (loss) on investments | | (59 | ) | (76 | ) |
Retained earnings | | 24,775 | | 23,323 | |
| | | | | |
Total stockholders’ equity | | 84,612 | | 81,505 | |
| | | | | |
| | $ | 95,197 | | $ | 90,120 | |
Contact: | Cascade Microtech, Inc. |
| Steven Sipowicz, Chief Financial Officer, 503 601-1000 |
| Gale Napier, Investor relations, 503 601-1000 |
