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 2017 second quarter.
2017 Second Quarter Highlights
- Company recorded highest all-time quarterly revenue of $67.4 million, an increase of 11 percent over the 2017 first quarter.
- Operating income increased 31 percent over the previous quarter.
- Revenue driven by 34 percent growth in process control and lithography sales to multiple providers of outsourced advanced packaging services.
- Revenue from advanced memory and foundry rose 23 percent over the prior quarter.
- Delivered a JetStep® S3500 panel stepper to a new customer.
- Added two new RF filter / module customers in the quarter.
Key Financial Data for the Quarters Ended June 30, 2017, March 31, 2017, | |||||||||
and June 30, 2016 | |||||||||
(in thousands, except per share amounts) | |||||||||
US GAAP | |||||||||
June 2017 | March 2017 | June 2016 | |||||||
| Revenue | $ | 67,418 | $ | 60,679 | $ | 62,701 | |||
| Gross profit margin | 52.6% | 52.5% | 54.5% | ||||||
| Operating income | $ | 12,695 | $ | 9,685 | $ | 12,231 | |||
| Net income | $ | 9,193 | $ | 7,151 | $ | 7,601 | |||
| Net income per diluted share | $ | 0.29 | $ | 0.22 | $ | 0.24 | |||
US NON-GAAP | |||||||||
June 2017 | March 2017 | June 2016 | |||||||
| Revenue | $ | 67,418 | $ | 60,679 | $ | 62,701 | |||
| Gross profit margin | 52.7% | 52.6% | 54.6% | ||||||
| Operating income | $ | 15,671 | $ | 12,220 | $ | 15,307 | |||
| Net income | $ | 10,605 | $ | 8,231 | $ | 9,864 | |||
| Net income per diluted share | $ | 0.33 | $ | 0.26 | $ | 0.31 | |||
Michael Plisinski, chief executive officer, commented, “Strong demand for Rudolph solutions continued in the second quarter. Growth from both advanced packaging and memory resulted in Rudolph’s twelfth straight quarter of year-over-year growth and a record quarter. Underscoring the Rudolph team’s focus on operational efficiency our 11 percent revenue growth resulted in a 31 percent improvement in operating income for the quarter.”
Mr. Plisinski continued, “We also made progress to strengthen our long term growth prospects in addition to the strong quarterly performance. Rudolph shipped multiple tools of our new Firefly™ and Dragonfly™ systems to three different customers in the second quarter, which strengthens our technical leadership in the advanced packaging macro inspection market. In addition, our JetStep system was selected by a new customer for panel-level fan out for a multi-chip system in package (SiP) and we expanded our footprint in the RF market and MEMS markets. We believe our Rudolph tools and software are well positioned to help our customers develop and control their increasingly demanding new processes.”
Second Quarter 2017 GAAP Financial Results
Second quarter
revenue totaled $67.4 million, an 11 percent increase compared with
$60.7 million for the first quarter of 2017 and $62.7 million in the
second quarter of 2016. The second quarter gross margin remained at 53
percent of revenues, compared to 53 percent in the first quarter of 2017.
Operating expenses for the second quarter of 2017 totaled $22.8 million, compared to $22.2 million for the first quarter of 2017. The increase in operating expense was primarily due to higher compensation cost in the quarter.
GAAP net income for the second quarter of 2017 was $9.2 million, or $0.29 per diluted share, compared with GAAP net income of $7.2 million, or $0.22 per diluted share, for the first quarter of 2017. In the second quarter of 2016 GAAP net income was $7.6 million, or $0.24 per diluted share.
Second Quarter Non-GAAP Financial Results
Second quarter of
2017 non-GAAP net income was $10.6 million, or $0.33 per diluted share.
Non-GAAP results excluded certain items, as detailed in the attached
table. First quarter 2017 non-GAAP net income was $8.2 million, or $0.26
per diluted share. In the second quarter of 2016, non-GAAP net income
was $9.9 million, or $0.31 per diluted share.
Balance Sheet
At June 30, 2017, cash and marketable
securities increased $11.6 million over the previous quarter to $148.9
million and cash provided by operating activities was $15.8 million for
the quarter. Accounts receivable increased in the quarter to $70.6
million and DSOs increased to 94 days. Inventory increased slightly to
$66.8 million. Working capital increased $8.4 million to $244.9 million.
Outlook
The Company is currently anticipating revenue for
the third quarter ending September 30, 2017 to be in a range of $64
million to $68 million. The Company is also expecting diluted GAAP net
income per share to be in the range of $0.23 to $0.28 and non-GAAP net
income per diluted share to be in the range of $0.28 to $0.33. The
outlook for GAAP net income per diluted share does not include the
recently announced patent infringement settlement with Camtek, Ltd. of
$13 million.
Conference Call
Rudolph Technologies will discuss its 2017
second quarter results and other matters on a conference call it is
hosting today at 4:30 PM EDT. To participate in the call, please dial
(888) 393-2965 (Domestic) or (323) 794-2130 (International), and
reference Conference ID # 3166328 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 August 2, 2017 until 11:59 pm EDT on August 9, 2017. To access the replay, please dial (888) 203-1112 (Domestic) or (719) 457-0820 (International) at any time during that period and use Conference ID #3166328.
A replay will also be available on the Company’s website at www.rudolphtech.com.
Discussion of Non-GAAP Financial Measures
The 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 judgment. 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.
About Rudolph Technologies
Rudolph 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 Statements
This 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 third quarter 2017
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, 2016 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) | |||||||
| June 30, 2017 | December 31, 2016 | ||||||
| (Audited) | |||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and marketable securities | $ | 148,949 | $ | 125,731 | |||
| Accounts receivable, net | 70,564 | 64,912 | |||||
| Inventories | 66,835 | 65,485 | |||||
| Prepaid and other assets | 4,634 | 6,502 | |||||
| Total current assets | 290,982 | 262,630 | |||||
| Net property, plant and equipment | 15,091 | 11,858 | |||||
| Intangibles | 31,758 | 32,768 | |||||
| Other assets | 32,755 | 31,443 | |||||
| Total assets | $ | 370,586 | $ | 338,699 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 25,928 | $ | 21,495 | |||
| Other current liabilities | 20,120 | 14,467 | |||||
| Total current liabilities | 46,048 | 35,962 | |||||
| Other non-current liabilities | 11,247 | 9,002 | |||||
| Total liabilities | 57,295 | 44,964 | |||||
| Stockholders’ equity | 313,291 | 293,735 | |||||
| Total liabilities and stockholders’ equity | $ | 370,586 | $ | 338,699 | |||
| RUDOLPH TECHNOLOGIES, INC. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (In thousands, except per share amounts) - (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Revenues | $ | 67,418 | $ | 60,679 | $ | 62,701 | $ | 128,097 | $ | 117,063 | ||||||||||
| Cost of revenues | 31,962 | 28,811 | 28,508 | 60,773 | 53,825 | |||||||||||||||
| Gross profit | 35,456 | 31,868 | 34,193 | 67,324 | 63,238 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 12,146 | 12,010 | 11,879 | 24,156 | 24,325 | |||||||||||||||
| Selling, general and administrative | 10,110 | 9,668 | 9,488 | 19,778 | 18,987 | |||||||||||||||
| Amortization | 505 | 505 | 595 | 1,010 | 1,190 | |||||||||||||||
| Patent litigation judgment | — | — | — | — | (14,632 | ) | ||||||||||||||
| Total operating expenses | 22,761 | 22,183 | 21,962 | 44,944 | 29,870 | |||||||||||||||
| Operating income | 12,695 | 9,685 | 12,231 | 22,380 | 33,368 | |||||||||||||||
| Interest (income) expense, net | (223 | ) | (191 | ) | 1,446 | (414 | ) | 2,915 | ||||||||||||
| Other expense | 166 | 269 | 192 | 435 | 299 | |||||||||||||||
| Income before income taxes | 12,752 | 9,607 | 10,593 | 22,359 | 30,154 | |||||||||||||||
| Provision for income taxes | 3,559 | 2,456 | 2,992 | 6,015 | 8,614 | |||||||||||||||
| Net income | $ | 9,193 | $ | 7,151 | $ | 7,601 | $ | 16,344 | $ | 21,540 | ||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.29 | $ | 0.23 | $ | 0.25 | $ | 0.52 | $ | 0.70 | ||||||||||
| Diluted | $ | 0.29 | $ | 0.22 | $ | 0.24 | $ | 0.51 | $ | 0.68 | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 31,501 | 31,290 | 30,779 | 31,397 | 30,869 | |||||||||||||||
| Diluted | 32,146 | 32,058 | 31,754 | 32,104 | 31,705 | |||||||||||||||
| RUDOLPH TECHNOLOGIES, INC. | ||||||||||||||||||||
| NON-GAAP FINANCIAL SUMMARY | ||||||||||||||||||||
| (In thousands, except percentage and per share amounts) - (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Revenue | $ | 67,418 | $ | 60,679 | $ | 62,701 | $ | 128,097 | $ | 117,063 | ||||||||||
| Gross profit | $ | 35,553 | $ | 31,928 | $ | 34,256 | $ | 67,481 | $ | 63,358 | ||||||||||
| Gross margin as percentage of revenue | 52.7 | % | 52.6 | % | 54.6 | % | 52.7 | % | 54.1 | % | ||||||||||
| Operating expenses | $ | 19,882 | $ | 19,708 | $ | 18,949 | $ | 39,590 | $ | 38,481 | ||||||||||
| Operating income | $ | 15,671 | $ | 12,220 | $ | 15,307 | $ | 27,891 | $ | 24,877 | ||||||||||
| Operating margin as a percentage of revenue | 23.2 | % | 20.1 | % | 24.4 | % | 21.8 | % | 21.3 | % | ||||||||||
| Net income | $ | 10,605 | $ | 8,231 | $ | 9,864 | $ | 18,836 | $ | 15,606 | ||||||||||
| Net income per diluted share | $ | 0.33 | $ | 0.26 | $ | 0.31 | $ | 0.59 | $ | 0.49 | ||||||||||
| RECONCILIATION OF U.S. GAAP GROSS PROFIT, | ||||||||||||||||||||
| OPERATING EXPENSES AND OPERATING INCOME TO NON-GAAP | ||||||||||||||||||||
| GROSS PROFIT, OPERATING EXPENSES AND OPERATING INCOME | ||||||||||||||||||||
| (In thousands, except percentages) - (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| U.S. GAAP gross profit | $ | 35,456 | $ | 31,868 | $ | 34,193 | $ | 67,324 | $ | 63,238 | ||||||||||
| Pre-tax non-GAAP items: | ||||||||||||||||||||
| Share-based compensation expense | 97 | 60 | 63 | 157 | 120 | |||||||||||||||
| Non-GAAP gross profit | $ | 35,553 | $ | 31,928 | $ | 34,256 | $ | 67,481 | $ | 63,358 | ||||||||||
| U.S. GAAP gross margin as a percentage of revenue | 52.6 | % | 52.5 | % | 54.5 | % | 52.6 | % | 54.0 | % | ||||||||||
| Non-GAAP gross margin as a percentage of revenue | 52.7 | % | 52.6 | % | 54.6 | % | 52.7 | % | 54.1 | % | ||||||||||
| U.S. GAAP operating expenses | $ | 22,761 | $ | 22,183 | $ | 21,962 | $ | 44,944 | $ | 29,870 | ||||||||||
| Pre-tax non-GAAP items: | ||||||||||||||||||||
| Amortization of intangibles | 505 | 505 | 595 | 1,010 | 1,190 | |||||||||||||||
| Litigation fees | 671 | 882 | 1,255 | 1,553 | 2,564 | |||||||||||||||
| Patent litigation judgment | — | — | — | — | (14,632 | ) | ||||||||||||||
| Share-based compensation expense | 1,703 | 1,088 | 1,163 | 2,791 | 2,267 | |||||||||||||||
| Non-GAAP operating expenses | 19,882 | 19,708 | 18,949 | 39,590 | 38,481 | |||||||||||||||
| Non-GAAP operating income | $ | 15,671 | $ | 12,220 | $ | 15,307 | $ | 27,891 | $ | 24,877 | ||||||||||
| GAAP operating margin as a percentage of revenue | 18.8 | % | 16.0 | % | 19.5 | % | 17.5 | % | 28.5 | % | ||||||||||
| Non-GAAP operating margin as a percentage of revenue | 23.2 | % | 20.1 | % | 24.4 | % | 21.8 | % | 21.3 | % | ||||||||||
| RUDOLPH TECHNOLOGIES, INC. | ||||||||||||||||||||
| RECONCILIATION OF U.S. GAAP NET INCOME TO | ||||||||||||||||||||
| NON-GAAP NET INCOME | ||||||||||||||||||||
| (In thousands, except share and per share data) - (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| U.S. GAAP net income | $ | 9,193 | $ | 7,151 | $ | 7,601 | $ | 16,344 | $ | 21,540 | ||||||||||
| Pre-tax non-GAAP items | ||||||||||||||||||||
| Amortization of intangibles | 505 | 505 | 595 | 1,010 | 1,190 | |||||||||||||||
| Litigation fees | 671 | 882 | 1,255 | 1,553 | 2,564 | |||||||||||||||
| Patent litigation judgment | — | — | — | — | (14,632 | ) | ||||||||||||||
| Share-based compensation expense | 1,800 | 1,148 | 1,226 | 2,948 | 2,387 | |||||||||||||||
| Net tax provision (benefit) adjustments | (1,564 | ) | (1,455 | ) | (813 | ) | (3,019 | ) | 2,557 | |||||||||||
| Non-GAAP net income | $ | 10,605 | $ | 8,231 | $ | 9,864 | $ | 18,836 | $ | 15,606 | ||||||||||
| Non-GAAP net income per diluted share | $ | 0.33 | $ | 0.26 | $ | 0.31 | $ | 0.59 | $ | 0.49 | ||||||||||
SUPPLEMENTAL INFORMATION - RECONCILIATION OF THIRD QUARTER 2017 | |||||||
| Low | High | ||||||
| Estimated GAAP net income per diluted share | $ | 0.23 | $ | 0.28 | |||
| Estimated non-GAAP items: | |||||||
| Amortization of intangibles | 0.01 | 0.01 | |||||
| Patent litigation fees | 0.01 | 0.01 | |||||
| Share-based compensation expense | 0.03 | 0.03 | |||||
| Estimated non-GAAP net income per diluted share | $ | 0.28 | $ | 0.33 | |||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006142/en/
Contacts:
Investors:
Michael Sheaffer,
973-448-4302
Senior Director, Corp. Communications
Mike.Sheaffer@rudolphtech.com
or
Trade
Press:
Amy Shay, 952-259-1794
Amy.Shay@rudolphtech.com
