- Quarterly record revenue of $73
million, increased 22 percent sequentially
- Earnings per share exceeded
guidance
Rudolph Technologies, Inc. (NYSE: RTEC), a leading provider of
semiconductor process control systems, lithography equipment, as
well as process control and yield management software for wafer
fabs and advanced packaging facilities, today announced financial
results for the 2018 first quarter.
2018 First Quarter Highlights
- First quarter revenue of $73.1 million,
an increase of 22 percent sequentially and a 20 percent increase
over the 2017 first quarter.
- Gross margin increased to 58
percent.
- Shipped a second Gen 4.5 lithography
tool to one of the two leading OLED display manufacturers in China
for pilot builds of future generation high resolution mobile
displays.
- Software sales increased 48 percent
over the prior quarter.
- Record shipments to China in the first
quarter represented 25 percent of total revenue.
- First Firefly™ inspection system
purchased by new RF customer, expanding the customer base.
Key Financial Data for the Quarters
Ended March 31, 2018,December 31, 2017, and March 31,
2017(in thousands, except per share amounts)
US GAAP March 2018 December
2017 March 2017 Revenue $ 73,096 $ 60,081 $
60,679 Gross profit margin 58.0 % 53.5 % 52.5 % Operating income $
17,465 $ 11,391 $ 9,685 Net income (loss) $ 15,130 $ (804 ) $ 7,151
Net income (loss) per diluted share $ 0.47 $ (0.03 ) $ 0.22
US NON-GAAP March 2018 December 2017
March 2017 Revenue $ 73,096 $ 60,081 $ 60,679 Gross profit
margin 58.1 % 53.6 % 52.6 % Operating income $ 19,352 $ 13,059 $
12,220 Net income $ 16,346 $ 9,437 $ 8,231 Net income per diluted
share $ 0.51 $ 0.29 $ 0.26
Michael Plisinski, chief executive officer, commented,
“Rudolph’s focus on providing high value solutions to diverse high
growth markets continues to result in solid performance. Two years
ago we identified a high value problem related to the control of
hard mask carbon layer for 3D NAND at two large memory customers
and announced our expectation to expand our customer base. The
breadth of our memory customers is now widespread, including four
of the top five memory IDMs and two new IDMs in China.”
Mr. Plisinski concluded, “In addition to the expansion of our
customer base in memory, we are pleased to announce progress on a
number of other initiatives. Orders for our Dragonfly™ and Firefly™
inspection tools to support advanced packaging and specialty
markets in the first quarter could potentially triple the number of
systems planned for shipment in the second quarter. Our second
display customer recently completed a successful source inspection
at our headquarters, resulting in our team being able to ship the
Gen 4.5 display stepper on schedule. The tool is already installed
and process qualifications will begin this quarter. The diversity
of our portfolio and end market demand for our solutions combine
for another strong start to the year.”
First Quarter 2018 GAAP Financial ResultsFirst quarter
revenue totaled $73.1 million, an increase of 22 percent compared
with $60.1 million for the fourth quarter of 2017 and a 20 percent
increase compared with $60.7 million in the first quarter of 2017.
The first quarter gross margin improved to 58 percent of revenues,
compared to 53 percent in the fourth quarter of 2017. A favorable
product mix consisting of a high value lithography system for a
flat panel display customer, an increase in metal metrology tools,
and higher software sales drove the gross margin improvement.
Operating expenses for the first quarter of 2018 totaled $25.0
million, compared to $22.2 million in the 2017 first quarter.
As a percentage of revenue, operating expenses represented 34
percent of revenue in the 2018 first quarter compared to 37 percent
in the same quarter last year. The increase in operating expenses
over the prior year was primarily due to an increase in
compensation related expenses, including the resetting of payroll
taxes, increased medical costs, annual compensation increases and
an increase in headcount. Also contributing to the increase in
expenses were costs related to the Company’s recently announced
AMOLED initiative and an accrual for a loss contingency related to
the misappropriation of payroll taxes by a third party payroll
accountant in the United Kingdom.
GAAP net income for the first quarter of 2018 was $15.1 million,
or $0.47 per diluted share, compared with a net loss of $(0.8)
million, or $(0.03) per diluted share, for the fourth quarter of
2017. The increase in GAAP net income was primarily due to an
increase in sales and gross margin, and a lower effective tax rate
due to the 2017 Tax Cut and Jobs Act “Tax Reform” passed by the
U.S. Congress. Also contributing to the quarter-over-quarter change
were non-cash discrete tax charges of $9.5 million recorded in the
fourth quarter of 2017 related to Tax Reform. In the first quarter
of 2017, GAAP net income was $7.2 million, or $0.22 per diluted
share.
First Quarter Non-GAAP Financial ResultsFirst quarter
2018 non-GAAP net income was $16.3 million, or $0.51 per diluted
share and exceeded the Company’s guidance. Non-GAAP results
excluded certain items, as detailed in the attached table. Fourth
quarter 2017 non-GAAP net income was $9.4 million, or $0.29 per
diluted share. In the first quarter of 2017, non-GAAP net income
was $8.2 million, or $0.26 per diluted share.
Balance SheetAt March 31, 2018, cash and marketable
securities increased $3.0 million over the previous quarter to
$180.3 million and cash provided by operating activities was $4.6
million for the first quarter. Accounts receivable increased in the
quarter to $74.7 million and inventory increased to $79.8 million
primarily due to higher sales volumes and timing of shipments in
the quarter. Working capital increased in the quarter and ended at
$296.9 million.
OutlookThe Company is currently anticipating revenue for
the second quarter ended June 30, 2018 to be in a range of $75
million to $81 million. The Company is also expecting diluted GAAP
net income per share to be in the range of $0.38 to $0.45 and
non-GAAP net income per diluted share to be in the range of $0.44
to $0.51.
Conference CallRudolph Technologies will discuss its 2018
first quarter results on a conference call it is hosting today at
4:30 PM EDT. To participate in the call, please dial (800)-239-9838
(Domestic) or +1 (323)-794-2551 (International), and reference
Conference ID #9746199 at least five (5) minutes prior to the
scheduled start time. A live webcast will also be available on the
Company’s website at www.rudolphtech.com.
To listen to the live webcast, please go to the website at least
fifteen (15) minutes early to register, download and install any
necessary audio software.
There will be a replay of the conference call available from
8:00 pm EDT on May 2, 2018 until 11:59 pm EDT on May 9, 2018. To
access the replay, please dial (888) 203-1112 (Domestic) or +1
(719) 457-0820 (International) at any time during that period and
use Conference ID #9746199.
A replay will also be available on the Company’s website at
www.rudolphtech.com.
Discussion of Non-GAAP Financial MeasuresThe Company has
provided in this release non-GAAP financial information including
non-GAAP gross profit, operating income, net income, and net income
per diluted share, as a supplement to the condensed consolidated
financial statements, which are prepared in accordance with
generally accepted accounting principles (“GAAP”). Management uses
these non-GAAP financial measures internally in analyzing the
Company’s financial results to assess operational performance. The
Company believes that both management and investors benefit from
referring to these non-GAAP financial measures in assessing its
performance and when planning, forecasting and analyzing future
periods. Further, the Company believes these non-GAAP financial
measures are useful to investors because they allow for greater
transparency with respect to key financial metrics that the Company
uses in making operating decisions and because the Company believes
that investors and analysts use them to help assess the health of
its business and for comparison to other companies. Non-GAAP
results are presented for supplemental informational purposes only
for understanding the Company’s operating results. The non-GAAP
information should not be considered a substitute for financial
information presented in accordance with GAAP, and may be different
from non-GAAP measures used by other companies.
The financial statements provided with this release include a
reconciliation of the non-GAAP financial measures to those measures
reported in accordance with GAAP.
The Company’s non-GAAP financial measures, used in this press
release, reflect adjustments based on the following items:
Share-based compensation expense. These expenses relate to
employee restricted stock units and employee stock options. The
Company excludes stock-based compensation expense from its non-GAAP
measures primarily because such expenses are non-cash expenses that
the Company does not believe are reflective of ongoing operating
results.
Amortization of intangibles. The Company incurs expenses for the
amortization of intangible assets acquired in acquisitions. The
Company excludes these items because these expenses are not
reflective of ongoing operating results in the period incurred.
These amounts arise from the Company’s prior acquisitions and have
no direct correlation to the operation of the Company’s core
business.
Patent litigation fees and income. The Company, from time to
time, may incur charges or benefits that are outside of the
ordinary course of the Company’s business related to litigation.
The Company believes it is useful to exclude such charges or
benefits because it does not consider such amounts to be part of
the ongoing operation of the Company’s business and because of the
singular nature of the claims underlying the matter.
Net tax provision (benefit) adjustments. This line item
represents the income tax effects of the non-GAAP items.
Tax reform. The Tax Cuts and Jobs Act impacted the Company’s
2017 results primarily due to (i) a one-time non-cash tax expense
estimated at $8 million, reflecting the revaluation of its net
deferred tax asset using a U.S. federal tax rate of 21%, (ii) a
one-time transition tax estimated at $1.5 million on its unremitted
foreign earnings and profits, which are offset by utilized foreign
tax credits estimated at $1.6 million and (iii) a valuation
allowance associated with any remaining foreign tax credits of $1.5
million, which may not be utilized in future periods. The Company
will continue to evaluate the impact of tax reform during the
measurement period.
About Rudolph TechnologiesRudolph Technologies, Inc. is a
leader in the design, development, manufacture and support of
defect inspection, lithography, process control metrology, and
process control software used by semiconductor and advanced
packaging device manufacturers worldwide. Rudolph delivers
comprehensive solutions throughout the fab with its families of
proprietary products that provide critical yield-enhancing
information, enabling microelectronic device manufacturers to drive
down costs and time to market of their devices. Headquartered in
Wilmington, Massachusetts, Rudolph supports its customers with a
worldwide sales and service organization. Additional information
can be found on the Company’s website at www.rudolphtech.com.
Forward Looking StatementsThis press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the “Act”) which include
Rudolph’s business momentum and future growth; the benefit to
customers of Rudolph’s products and customer service; Rudolph’s
ability to both deliver products and services consistent with our
customers’ demands and expectations and strengthen its market
position; Rudolph’s expectations regarding the semiconductor market
outlook; Rudolph’s second quarter 2018 financial outlook; as well
as other matters that are not purely historical data. Rudolph
wishes to take advantage of the “safe harbor” provided for by the
Act and cautions that actual results may differ materially from
those projected as a result of various factors, including risks and
uncertainties, many of which are beyond Rudolph’s control. Such
factors include, but are not limited to, the Company’s ability to
leverage its resources to improve its position in its core markets;
its ability to weather difficult economic environments; its ability
to open new market opportunities and target high-margin markets;
the strength/weakness of the back-end and/or front-end
semiconductor market segments; and fluctuations in customer capital
spending. Additional information and considerations regarding the
risks faced by Rudolph are available in Rudolph’s Form 10-K report
for the year ended December 31, 2017 and other filings with the
Securities and Exchange Commission. As the forward-looking
statements are based on Rudolph’s current expectations, the Company
cannot guarantee any related future results, levels of activity,
performance or achievements. Rudolph does not assume any obligation
to update the forward-looking information contained in this press
release.
RUDOLPH TECHNOLOGIES,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In
thousands) - (Unaudited)
March 31,2018
December 31,2017
(Audited) ASSETS Current assets Cash and
marketable securities $ 180,321 $ 177,359 Accounts receivable, net
74,672 65,283 Inventories 79,763 67,521 Prepaid and other assets
11,016 11,919 Total current assets 345,772 322,082
Net property, plant and equipment 17,498 17,342 Intangibles 30,847
31,127 Other assets 15,385 15,371
Total assets
$ 409,502 $ 385,922
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities Accounts payable and accrued
liabilities $ 31,966 $ 26,800 Other current liabilities
16,913 15,507 Total current liabilities 48,879 42,307 Other
non-current liabilities 10,894 10,461 Total
liabilities 59,773 52,768 Stockholders’ equity 349,729
333,154
Total liabilities and stockholders’ equity $
409,502 $ 385,922
RUDOLPH TECHNOLOGIES,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share amounts) -
(Unaudited)
Three Months Ended March 31,
December 31, March 31, 2018 2017
2017 Revenue $ 73,096 $ 60,081 $ 60,679 Cost of revenue
30,675 27,955 28,811 Gross profit
42,421 32,126 31,868 Operating expenses: Research and
development 11,783 10,810 12,010 Selling, general and
administrative 12,793 9,501 9,668 Amortization 380
424 505 Total operating expenses 24,956 20,735
22,183 Operating income 17,465 11,391 9,685 Interest income,
net (391 ) (313 ) (191 ) Other expense (income) 182
(76 ) 269 Income before income taxes 17,674 11,780 9,607
Provision for income taxes 2,544 12,584 2,456
Net income (loss) $ 15,130 $ (804 ) $ 7,151 Earnings (loss) per
share: Basic $ 0.48 $ (0.03 ) $ 0.23 Diluted $ 0.47 $ (0.03 ) $
0.22 Weighted average shares outstanding: Basic 31,662 31,597
31,290 Diluted 32,317 31,597 32,058
RUDOLPH TECHNOLOGIES,
INC.NON-GAAP FINANCIAL SUMMARY(In thousands, except
percentage and per share amounts) - (Unaudited)
Three Months Ended
March 31,2018
December 31,2017
March 31,2017
Revenue $ 73,096 $ 60,081 $ 60,679 Gross profit $ 42,482 $ 32,193 $
31,928 Gross margin as percentage of revenue 58.1 % 53.6 % 52.6 %
Operating expenses $ 23,130 $ 19,134 $ 19,708 Operating income $
19,352 $ 13,059 $ 12,220 Operating margin as a percentage of
revenue 26.5 % 21.7 % 20.1 % Net income $ 16,346 $ 9,437 $ 8,231
Net income per diluted share $ 0.51 $ 0.29 $ 0.26
RECONCILIATION OF U.S. GAAP GROSS
PROFIT,OPERATING EXPENSES AND OPERATING INCOME TO
NON-GAAPGROSS PROFIT, OPERATING EXPENSES AND OPERATING
INCOME(In thousands, except percentages) -
(Unaudited)
Three Months Ended March 31,
2018
December 31,
2017
March 31,
2017
U.S. GAAP gross profit $ 42,421 $ 32,126 $ 31,868 Pre-tax non-GAAP
items: Share-based compensation expense 61 67
60 Non-GAAP gross profit $ 42,482 $ 32,193 $ 31,928
U.S. GAAP gross margin as a percentage
of revenue
58.0 % 53.5 % 52.5 %
Non-GAAP gross margin as a percentage
of revenue
58.1 % 53.6 % 52.6 % U.S. GAAP operating expenses $ 24,956 $ 20,735
$ 22,183 Pre-tax non-GAAP items: Amortization of intangibles 380
424 505 Litigation fees — (13 ) 881 Share-based compensation
expense 1,446 1,190 1,089 Non-GAAP operating
expenses 23,130 19,134 19,708 Non-GAAP
operating income $ 19,352 $ 13,059 $ 12,220
GAAP operating margin as a percentage
of revenue
23.9 % 19.0 % 16.0 %
Non-GAAP operating margin as a percentage
of revenue
26.5 % 21.7 % 20.1 %
RUDOLPH TECHNOLOGIES,
INC.RECONCILIATION OF U.S. GAAP NET INCOME (LOSS)
TONON-GAAP NET INCOME(In thousands, except share and
per share data) - (Unaudited)
Three Months Ended March 31,
2018
December 31,
2017
March 31,
2017
U.S. GAAP net income (loss) $ 15,130 $ (804 ) $ 7,151 Pre-tax
non-GAAP items Amortization of intangibles 380 424 505 Litigation
fees — (13 ) 881 Share-based compensation expense 1,507 1,257 1,149
Net tax provision (benefit) adjustments (671 ) (883 ) (1,455 ) Tax
reform — 9,456 — Non-GAAP net income $ 16,346
$ 9,437 $ 8,231 Non-GAAP net income per diluted share $ 0.51 $ 0.29
$ 0.26
SUPPLEMENTAL INFORMATION -
RECONCILIATION OF SECOND QUARTER 2018GAAP TO NON-GAAP
GUIDANCE (net of tax)
Low High Estimated GAAP net income per diluted
share $ 0.38 $ 0.45 Estimated non-GAAP items: Share-based
compensation expense 0.05 0.05 Amortization of intangibles
0.01 0.01 Estimated non-GAAP net income per diluted share $
0.44 $ 0.51
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version on businesswire.com: https://www.businesswire.com/news/home/20180502006482/en/
Rudolph Technologies, Inc.Investors:Michael Sheaffer,
978-253-6273Senior Director, Corp.
CommunicationsMike.Sheaffer@rudolphtech.comorTrade Press:Amy Shay,
952-259-1794Amy.Shay@rudolphtech.com
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