- Quarterly record revenue of $77.5
million
- Software sales drive margins to high
end of 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 second quarter.
2018 Second Quarter Highlights
- Record second quarter revenue of $77.5
million, an increase of 15 percent over the 2017 second
quarter.
- Gross margin of 54 percent at high end
of guidance.
- GAAP earnings of $0.45; non-GAAP
earnings of $0.51 was at the high end of guidance.
- Added new lithography customer in China
for fan-out packaging applications.
- Record shipments to China in the second
quarter, representing 30 percent of total revenue.
- The new Firefly™ and Dragonfly™
inspection systems were delivered to four additional new
customers.
Key Financial Data for the Quarters Ended June 30,
2018, March 31, 2018, and June 30, 2017 (in
thousands, except per share amounts) US GAAP
June 2018
March 2018
June 2017
Revenue $ 77,476 $ 73,096 $ 67,418 Gross profit margin 53.9 %
58.0
% 52.6 % Operating income $ 16,674 $ 17,465 $ 12,695 Net income $
14,697 $ 15,130 $ 9,193 Net income per diluted share $ 0.45 $ 0.47
$ 0.29
US NON-GAAP
June 2018
March 2018
June 2017
Revenue $ 77,476 $ 73,096 $ 67,418 Gross profit margin
54.0
% 58.1 % 52.7 % Operating income $ 19,138 $ 19,352 $ 15,671 Net
income $ 16,552 $ 16,346 $ 10,605 Net income per diluted share $
0.51 $ 0.51 $ 0.33
Michael Plisinski, chief executive officer, commented, “All
product teams contributed nicely to the record-setting second
quarter. Our software business is back to historical peaks and we
expect to set new records in 2019. Our lithography business
continues to add new customers and product innovations, expanding
our total available market. Our process control products saw broad
appeal, particularly from the memory market, and we experienced
growing adoption of our new inspection platforms.”
Mr. Plisinski concluded, “Despite the industry pause in the
third quarter, we see growth returning in the fourth quarter to
levels similar to that in the first half of the year. Longer term,
we see the large secular trends in automotive, high performance
computing, and wireless communication continuing to create growth
opportunities for all of our business units.”
Second Quarter 2018 GAAP Financial ResultsSecond quarter
revenue totaled $77.5 million, an increase of 6 percent compared
with $73.1 million for the first quarter of 2018 and a 15 percent
increase compared with $67.4 million in the second quarter of 2017.
The second quarter gross margin was 54 percent of revenues,
compared to 58 percent in the first quarter of 2018. The decrease
in gross margin was the result of the first quarter of 2018 gross
margin included a high value lithography system for a flat panel
display customer that was comprised of inventory with reduced book
value.
Operating expenses for the second quarter of 2018 totaled $25.1
million, compared to $22.8 million in the 2017 second quarter.
As a percentage of revenue, operating expenses represented 32
percent of revenue in the 2018 second quarter compared to 34
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, project costs related to the
Company’s AMOLED initiative, and an increase in third party sales
commissions, offset by lower legal expenses.
GAAP net income for the second quarter of 2018 was $14.7
million, or $0.45 per diluted share, compared with a net income of
$9.2 million, or $0.29 per diluted share, for the same period in
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. In the first quarter of 2018, GAAP net income was
$15.1 million, or $0.47 per diluted share.
Second Quarter Non-GAAP Financial ResultsSecond quarter
2018 non-GAAP net income was $16.6 million, or $0.51 per diluted
share at the high end of the Company’s guidance. Non-GAAP results
excluded certain items, as detailed in the attached table. Second
quarter 2017 non-GAAP net income was $10.6 million, or $0.33 per
diluted share. In the first quarter of 2018, non-GAAP net income
was $16.3 million, or $0.51 per diluted share.
Balance SheetAt June 30, 2018, cash and marketable
securities increased $3.1 million over the previous quarter to
$183.5 million and cash provided by operating activities was $4.8
million for the second quarter. Accounts receivable increased in
the quarter to $82.6 million and inventory increased to $84.2
million primarily due to higher sales volumes and a slight increase
in days sales outstanding in the quarter. Working capital increased
in the quarter and ended at $313.4 million.
OutlookThe Company is currently anticipating revenue for
the third quarter ended September 30, 2018 to be $65 million plus
or minus 5 percent. The Company is also expecting diluted GAAP net
income per share to be in the range of $0.25 to $0.35 and non-GAAP
net income per diluted share to be in the range of $0.30 to
$0.40.
Conference CallRudolph Technologies will discuss its 2018
second quarter results on a conference call it is hosting today at
4:30 PM EDT. To participate in the call, please dial (888) 204-4368
(Domestic) or (323) 794-2423 (International), reference Conference
ID # 2088303 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 p.m. ET on August 2 until 11:59 p.m. ET on August 9, 2018. 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 2088303.
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.
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 third 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)
June 30, December 31,
2018 2017 (Audited) ASSETS
Current assets Cash and marketable securities $ 183,457 $ 177,359
Accounts receivable, net 82,555 65,283 Inventories 84,222 67,521
Prepaid and other assets 9,868 11,919 Total current
assets 360,102 322,082 Net property, plant and equipment 16,880
17,342 Intangibles 30,565 31,127 Other assets 15,319
15,371
Total assets $ 422,866 $ 385,922
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities
Accounts payable and accrued liabilities $ 32,011 $ 26,800 Other
current liabilities 14,699 15,507 Total current
liabilities 46,710 42,307 Other non-current liabilities
10,166 10,461 Total liabilities 56,876 52,768 Stockholders’
equity 365,990 333,154
Total liabilities and
stockholders’ equity $ 422,866 $ 385,922
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, 2018 2018 2017 2018 2017
Revenue $ 77,476 $ 73,096 $ 67,418 $ 150,572 $ 128,097 Cost of
revenue 35,740 30,675 31,962 66,415
60,773 Gross profit 41,736 42,421
35,456 84,157 67,324 Operating expenses: Research and
development 12,733 11,783 12,146 24,516 24,156 Selling, general and
administrative 11,946 12,793 10,110 24,739 19,778 Amortization
383 380 505 763 1,010 Total
operating expenses 25,062 24,956 22,761
50,018 44,944 Operating income 16,674 17,465 12,695 34,139
22,380 Interest income, net (476 ) (391 ) (223 ) (867 ) (414 )
Other expense (income) (140 ) 182 166
42 435 Income before income taxes 17,290 17,674 12,752
34,964 22,359 Provision for income taxes 2,593 2,544
3,559 5,137 6,015 Net income $ 14,697 $ 15,130
$ 9,193 $ 29,827 $ 16,344 Earnings per share: Basic $ 0.46 $ 0.48 $
0.29 $ 0.94 $ 0.52 Diluted $ 0.45 $ 0.47 $ 0.29 $ 0.92 $ 0.51
Weighted average shares outstanding: Basic 31,859 31,662 31,501
31,760 31,397 Diluted 32,437 32,317 32,146 32,377 32,104
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, 2018 2018
2017 2018 2017 Revenue $ 77,476 $
73,096 $ 67,418 $ 150,572 $ 128,097 Gross profit $ 41,851 $ 42,482
$ 35,553 $ 84,333 $ 67,481 Gross margin as percentage of revenue
54.0 % 58.1 % 52.7 % 56.0 % 52.7 % Operating expenses $ 22,713 $
23,130 $ 19,882 $ 45,843 $ 39,590 Operating income $ 19,138 $
19,352 $ 15,671 $ 38,490 $ 27,891
Operating margin as a percentage of
revenue
24.7 % 26.5 % 23.2 % 25.6 % 21.8 % Net income $ 16,552 $ 16,346 $
10,605 $ 32,898 $ 18,836 Net income per diluted share $ 0.51 $ 0.51
$ 0.33 $ 1.02 $ 0.59
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, 2018 2018 2017 2018 2017
U.S. GAAP gross profit $ 41,736 $ 42,421 $ 35,456 $ 84,157 $ 67,324
Pre-tax non-GAAP items: Share-based compensation expense 115
61 97 176 157 Non-GAAP gross profit $
41,851 $ 42,482 $ 35,553 $ 84,333 $ 67,481
U.S. GAAP gross margin as a percentage of
revenue
53.9 % 58.0 % 52.6 % 55.9 % 52.6 %
Non-GAAP gross margin as a percentage of
revenue
54.0 % 58.1 % 52.7 % 56.0 % 52.7 % U.S. GAAP operating expenses $
25,062 $ 24,956 $ 22,761 $ 50,018 $ 44,944 Pre-tax non-GAAP items:
Amortization of intangibles 383 380 505 763 1,010 Litigation fees —
— 671 — 1,553 Share-based compensation expense 1,966
1,446 1,703 3,412 2,791 Non-GAAP operating
expenses 22,713 23,130 19,882 45,843
39,590 Non-GAAP operating income $ 19,138 $ 19,352 $ 15,671
$ 38,490 $ 27,891
GAAP operating margin as a percentage of
revenue
21.5 % 23.9 % 18.8 % 22.7 % 17.5 %
Non-GAAP operating margin as a percentage
of revenue
24.7 % 26.5 % 23.2 % 25.6 % 21.8 %
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 Six Months Ended
June 30,2018
March 31,2018
June 30,2017
June 30,2018
June 30,2017
U.S. GAAP net income $ 14,697 $ 15,130 $ 9,193 $ 29,827 $ 16,344
Pre-tax non-GAAP items Amortization of intangibles 383 380 505 763
1,010 Litigation fees — — 671 — 1,553 Share-based compensation
expense 2,081 1,507 1,800 3,588 2,948 Net tax benefit adjustments
(609 ) (671 ) (1,564 ) (1,280 )
(3,019 ) Non-GAAP net income $ 16,552 $ 16,346 $ 10,605 $ 32,898 $
18,836 Non-GAAP net income per diluted share $ 0.51 $ 0.51 $ 0.33 $
1.02 $ 0.59
SUPPLEMENTAL INFORMATION -
RECONCILIATION OF THIRD QUARTER 2018GAAP TO NON-GAAP
GUIDANCE (net of tax)
Low High Estimated GAAP net income per diluted
share $ 0.25 $ 0.35 Estimated non-GAAP items: Share-based
compensation expense 0.04 0.04 Amortization of intangibles
0.01 0.01 Estimated non-GAAP net income per diluted share $
0.30 $ 0.40
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version on businesswire.com: https://www.businesswire.com/news/home/20180802005816/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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