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/
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