CSCD

Cascade Microtech (NASDAQ:CSCD), today reported financial results for the second quarter ended June 30, 2007. Highlights for the Second Quarter 2007 include: Record revenues of $24.1 million, up 7% sequentially and up 23% over Q2 last year; $19.1 million Engineering Products Division revenue, up 4% sequentially and 19% over Q2 last year; $5.0 million Production Products Division revenue, up 24% sequentially and up 39% over Q2 last year; Q2 results this year include $1.3 million in revenue from the Gryphics acquisition; EPS of $0.02 per diluted share includes amortization of purchased intangibles of $555,000; During the second quarter, we closed the acquisition of Gryphics, Inc. for approximately $26 million. "Our Engineering Products Division continued to show strong performance in the second quarter of 2007, in which we shipped another record number of 300mm probe stations. In our Production Products Division, however, both Pyramid Probe Card revenues and bookings were below plan as we continue to build a more diversified customer base,� said Eric Strid, CEO of Cascade Microtech. �During the quarter, we were pleased to complete the acquisition of Gryphics, Inc. and have begun the integration of this business into our Production Products Division," added Strid. Revenue for the second quarter was $24.1 million, net income for the quarter was $0.2 million and diluted earnings per share were $0.02 compared to revenue of $19.6 million, net income of $0.8 million and diluted earnings per share of $0.07 for the second quarter of 2006. Gross margin for the second quarter was 44.8% compared to 45.7% in the first quarter of 2007 and 44.6% for the second quarter of 2006. For the second quarter, there was a tax benefit of $248,000 which included the impact of the acquisition of Gryphics, Inc., which was acquired in April 2007. Financial Outlook Based on the current backlog and anticipated bookings, Cascade anticipates that third quarter 2007 revenues will be in the range of $23.0 million to $25.0 million and that diluted earnings per share will be in the range of $0.01 to $0.06. This anticipated earnings range includes $555,000 of acquisition-related amortization. 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 leading-edge semiconductor production test consumables include unique probe cards and test sockets that reduce manufacturing costs of high-speed and high-density semiconductor chips. 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 earnings in the third quarter of 2007 and any acquisition-related charges 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 July 24, 2007 to discuss its results for the second quarter ended June 30, 2007 and its outlook for the third quarter of 2007. 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: 35500195; 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, 2007 2007 2006 2007 2006 � Sales $ 24,116 $ 22,471 $ 19,598 $ 46,587 $ 39,297 � Cost of sales 13,186 12,087 10,739 25,273 21,759 Stock-based compensation 127 122 113 249 225 � Gross profit 10,803 10,262 8,746 21,065 17,313 � Operating expenses: Research and development (includes $89, $79, $77, $168, $154 respectively, of stock-based compensation) 3,120 2,639 2,150 5,759 4,148 Selling, general and administrative (includes $408, $361, $258, $769, $522 respectively, of stock-based compensation) 7,439 6,664 5,808 14,103 11,817 Amortization of purchased intangibles 555 106 - 661 - � Total operating expenses 11,114 9,409 7,958 20,523 15,965 � Income (loss) from operations (311) 853 788 542 1,348 � Other income (expense): Interest income 366 455 405 821 767 Interest expense - (1) - (1) - Other, net (65) 110 (10) 45 47 � Total other income (expense) 301 564 395 865 814 � Income (loss) before income taxes (10) 1,417 1,183 1,407 2,162 � Provision (benefit) for income taxes (248) 369 387 121 710 � Net income $ 238 $ 1,048 $ 796 $ 1,286 $ 1,452 � Net income per share: Basic $ 0.02 $ 0.09 $ 0.07 $ 0.10 $ 0.13 Diluted $ 0.02 $ 0.09 $ 0.07 $ 0.10 $ 0.12 � Shares used in computing net income per share: Basic 12,724 11,808 11,411 12,269 11,392 Diluted 13,038 12,207 11,897 12,625 11,841 CASCADE MICROTECH, INC. AND SUBSIDIARIES � Consolidated Balance Sheets � June 30, 2007 and December 31, 2006 � � June 30, December 31, Assets 2007 2006 (unaudited) Current assets: Cash and cash equivalents $ 3,495 $ 5,260 Marketable securities 24,425 38,534 Accounts receivable, net 20,336 17,642 Inventories 15,679 15,094 Prepaid expenses and other 1,842 2,055 Deferred income taxes 2,059 2,042 � Total current assets 67,836 80,627 � Long-term investments 9,442 9,662 Fixed assets, net 12,504 6,818 Deferred income tax 1,158 1,132 Goodwill 15,651 1,295 Other assets 17,445 4,702 � $ 124,036 $ 104,236 � � Liabilities and Stockholders' Equity � Current liabilities: Current portion of long-term debt and capital leases $ 6 $ - Accounts payable 5,432 6,013 Deferred revenue 808 1,184 Accrued liabilities 4,280 5,026 � Total current liabilities 10,526 12,223 � Long-term debt and capital leases 25 - Deferred income tax 5,016 450 Deferred revenue 460 199 Other long-term liabilities 1,922 1,171 � Total liabilities 17,949 14,043 � Stockholders' equity: Common stock 77,894 63,261 Unrealized holding gain (loss) on investments (26) (1) Retained earnings 28,219 26,933 � Total stockholders' equity 106,087 90,193 � $ 124,036 $ 104,236