CSCD

Cascade Microtech (NASDAQ:CSCD), today reported financial results for the first quarter ended March 31, 2006. Highlights for the First Quarter 2006 include: -- Revenues of $19.7 million, up 11% sequentially and 6% over last year -- Strong bookings during the quarter with positive book-to-bill for both divisions -- $3.4 million Production Probes Division revenue, up 77% over last year -- $16.3 million Engineering Products Division revenue, up 13% sequentially -- EPS of $0.06 per diluted share, including $0.03 stock compensation expense under SFAS123R -- Cash and investments at March 31, 2006 were $54.6 million, up $2.7 million from the end of last year. "We were pleased with our strong bookings and revenue performance in the first quarter of 2006. Book-to-bill was above one in both divisions and revenue grew 11% sequentially. We also continued to invest during the quarter by adding employees in our Production Probe Division to improve our lead times and in our Engineering Products Division to expand our direct sales capabilities," said Eric Strid, CEO of Cascade Microtech. Revenue for the first quarter was $19.7 million, net income for the quarter was $0.7 million and diluted earnings per share were $0.06, compared to revenue of $17.7 million, net income of $1.4 million and diluted earnings per share of $0.12 for the fourth quarter of 2005. Gross margin for the first quarter improved to 43.5% from 42.8% in the fourth quarter of 2005 primarily due to the increase in revenue and related gross margin and 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 $453,000 during the first quarter of 2006. The effective tax rate for the first quarter was 33% compared to a tax benefit of 29% in the fourth quarter of 2005. The tax charge for the first quarter did 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. At March 31, 2006, the Company had cash and investments of $54.6 million, up from $51.9 million at December 31, 2005. Financial Outlook Based on the current backlog and anticipated bookings, Cascade anticipates that second quarter 2006 revenues will be in the range of $19.5 million to $21.0 million compared to $19.7 million in the first quarter of 2006; and that diluted earnings per share will be in the range of $0.05 to $0.10, 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 who 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 second 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. EDT (2 p.m. PDT) on April 25, 2006 to discuss its results for the first quarter ended March 31, 2006 and its outlook for the second 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. EDT at this same internet address. (For a telephone replay, dial 888-286-8010 passcode: 58807273; International: 617-801-6888.) -0- *T CASCADE MICROTECH, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (in thousands, except per share data) (unaudited) Three Months Ended ---------------------------------- March 31, December 31, March 31, 2006 2005 2005 --------- ------------ --------- Sales $ 19,699 $ 17,678 $ 18,661 Cost of sales 11,020 10,100 9,490 Stock-based compensation 112 6 12 --------- ------------ --------- Gross profit 8,567 7,572 9,159 --------- ------------ --------- Operating expenses: Research and development (includes $77, $3, and $4, respectively, of stock-based compensation) 1,998 1,898 1,643 Selling, general and administrative (includes $264, $6, and $25, respectively, of stock-based compensation) 6,009 5,043 4,624 --------- ------------ --------- Total operating expenses 8,007 6,941 6,267 --------- ------------ --------- Income from operations 560 631 2,892 --------- ------------ --------- Other income (expense): Interest income 362 315 212 Interest expense - (2) (16) Other, net 57 176 24 --------- ------------ --------- Total other income (expense) 419 489 220 --------- ------------ --------- Income before income taxes 979 1,120 3,112 Provision for income taxes 323 (325) 617 --------- ------------ --------- Net income $ 656 $ 1,445 $ 2,495 ========= ============ ========= Net income per share: Basic $ 0.06 $ 0.13 $ 0.23 Diluted $ 0.06 $ 0.12 $ 0.21 Shares used in computing net income per share: Basic 11,373 11,281 10,864 Diluted 11,907 11,955 11,674 CASCADE MICROTECH, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets March 31, 2006 and December 31, 2005 March 31, December 31, Assets 2006 2005 ------ ---- ---- (unaudited) Current assets: Cash and cash equivalents $ 1,896 $ 2,224 Marketable securities 51,673 48,122 Accounts receivable, net 16,088 16,182 Inventories 11,477 10,889 Prepaid expenses and other 2,014 3,000 Deferred income taxes 1,584 1,699 ----------- ------------ Total current assets 84,732 82,116 Long-term investments 1,045 1,549 Fixed assets, net 5,240 4,422 Deferred income tax 342 336 Other assets 1,734 1,697 ----------- ------------ $ 93,093 $ 90,120 =========== ============ Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Accounts payable 4,692 3,912 Deferred revenue 515 516 Accrued liabilities 3,478 3,087 ----------- ------------ Total current liabilities 8,685 7,515 Deferred revenue 309 255 Other long-term liabilities 822 845 ----------- ------------ Total liabilities 9,817 8,615 ----------- ------------ Stockholders' equity: Common stock 59,371 58,400 Deferred stock-based compensation - (142) Unrealized holding gain (loss) on investments (73) (76) Retained earnings 23,979 23,323 ----------- ------------ Total stockholders' equity 83,277 81,505 ----------- ------------ $ 93,093 $ 90,120 =========== ============ *T