10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________

FORM 10-Q

__________________________

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

Commission File No. 000-27965

___________________________

RUDOLPH TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

___________________________

Delaware	22-3531208
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

One Rudolph Road, PO Box 1000, Flanders, New Jersey 07836

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (973) 691-1300

___________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]   No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]   No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act.    

Large accelerated filer [  ]	Accelerated filer [ X ]	Non-accelerated filer [  ]	Smaller reporting company [  ]
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes [_] No [X]

The number of outstanding shares of the Registrant’s Common Stock on October 21, 2014 was 33,185,520.

TABLE OF CONTENTS

Item No.  Page

PART I    FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets at September 30, 2014 and December 31, 2013	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2014 and 2013	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	22

PART II    OTHER INFORMATION

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

RUDOLPH TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2014			December 31, 2013
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	47,628		$	80,790
Marketable securities	114,857			86,582
Accounts receivable, less allowance of $1,366 as of September 30, 2014 and $1,152 as of December 31, 2013	49,969			53,437
Inventories, net	65,829			61,351
Prepaid expenses and other current assets	23,774			14,804
Total current assets	302,057			296,964
Property, plant and equipment, net	12,244			13,058
Goodwill	22,495			22,553
Identifiable intangible assets, net	9,557			11,464
Other assets	28,847			27,323
Total assets	$	375,200		$	371,362
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	17,127		$	12,772
Other current liabilities	18,743			18,918
Total current liabilities	35,870			31,690
Convertible senior notes	53,997			51,751
Other non-current liabilities	9,657			8,918
Total liabilities	99,524			92,359
Commitments and contingencies
Stockholders’ equity:
Common stock	33			33
Additional paid-in capital	418,417			415,739
Accumulated other comprehensive loss	(1,666		)	(1,795		)
Accumulated deficit	(141,108		)	(134,974		)
Total stockholders’ equity	275,676			279,003
Total liabilities and stockholders’ equity	$	375,200		$	371,362

The accompanying notes are an integral part of these financial statements.

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RUDOLPH TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenues	$	46,960		$	44,044		$	131,627		$	131,753
Cost of revenues	22,000			21,574			61,794			63,894
Gross profit	24,960			22,470			69,833			67,859
Operating expenses:
Research and development	9,631			10,455			30,477			30,372
Selling, general and administrative	10,262			10,054			42,328			30,825
Amortization	567			666			1,907			1,930
Total operating expenses	20,460			21,175			74,712			63,127
Operating income (loss)	4,500			1,295			(4,879		)	4,732
Interest expense, net	1,328			1,262			3,950			3,671
Other expense (income)	337			(4		)	372			(53		)
Income (loss) before income taxes	2,835			37			(9,201		)	1,114
Provision (benefit) for income taxes	3,833			(215		)	(3,067		)	(290		)
Net income (loss)	$	(998	)	$	252		$	(6,134	)	$	1,404
Earnings (loss) per share:
Basic	$	(0.03	)	$	0.01		$	(0.18	)	$	0.04
Diluted	$	(0.03	)	$	0.01		$	(0.18	)	$	0.04
Weighted average shares outstanding:
Basic	33,237			32,897			33,205			32,727
Diluted	33,237			33,426			33,205			33,337

The accompanying notes are an integral part of these financial statements. 

2

RUDOLPH TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014			2013
Net income (loss)	$	(998	)	$	252	$	(6,134	)	$	1,404
Other comprehensive loss:
Change in net unrealized gains (losses) on investments, net of tax	161			2		188			(39		)
Change in currency translation adjustments	(286		)	563		(59		)	(385		)
Total comprehensive income (loss)	$	(1,123	)	$	817	$	(6,005	)	$	980

The accompanying notes are an integral part of these financial statements. 

3

RUDOLPH TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities:
Net income (loss)	$	(6,134	)	$	1,404
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Amortization of intangibles and other	1,912			2,113
Amortization of convertible note discount and issuance costs	2,514			2,261
Depreciation	3,042			3,105
Foreign currency exchange loss (gain)	372			(53		)
Contingent consideration adjustments	(111		)	—
Share-based compensation	4,741			3,035
Provision for doubtful accounts and inventory valuation	2,974			2,382
Deferred income taxes	65			—
Changes in operating assets and liabilities, net of acquisitions	(11,361		)	(18,219		)
Net cash and cash equivalents provided by (used in) operating activities	(1,986		)	(3,972		)
Cash flows from investing activities:
Purchases of marketable securities	(172,323		)	(81,731		)
Proceeds from sales of marketable securities	145,015			71,687
Purchases of property, plant and equipment	(1,442		)	(4,002		)
Purchase of business				(3,365		)
Net cash and cash equivalents used in investing activities	(28,750		)	(17,411		)
Cash flows from financing activities:
Purchases of common stock	(2,330		)	—
Payment of contingent consideration for acquired business	(194		)	—
Proceeds from sales of shares through share-based compensation plans	200			903
Tax benefit for sale of shares through share-based compensation plans	67			669
Net cash and cash equivalents provided by (used in) financing activities	(2,257		)	1,572
Effect of exchange rate changes on cash and cash equivalents	(169		)	(662		)
Net decrease in cash and cash equivalents	(33,162		)	(20,473		)
Cash and cash equivalents at beginning of period	80,790			104,253
Cash and cash equivalents at end of period	$	47,628		$	83,780
Supplemental disclosure of cash flow information:
Income taxes paid	$	1,900		$	5,261
Interest paid	$	2,250		$	2,250
Litigation settlement paid - reflected in changes in operating assets and liabilities, net of acquisitions	$	10,613		$	—

The accompanying notes are an integral part of these financial statements. 

4

RUDOLPH TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

(Unaudited)

NOTE 1.    Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared by Rudolph Technologies, Inc. (the “Company” or “Rudolph”) and in the opinion of management reflect all adjustments, consisting of normal recurring accruals, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Preparing financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.  Actual amounts could differ materially from those amounts.  The interim results for the three and nine month periods ended September 30, 2014 are not necessarily indicative of results to be expected for the entire year or any future periods.  This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 10-K”) filed with the Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements included in the 2013 10-K.

Reclassifications

Certain prior period amounts have been reclassified to conform to current financial statement presentation. These amounts include the reclassification of a portion of deferred tax assets from Other assets to Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, “Presentation of Financial Statements-Going Concern ( Subtopic 205-40 ), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about our ability to continue as a going concern, and if so, to provide related footnote disclosures. The standard is effective for annual and interim reporting periods ending after December 15, 2016. The Company is currently evaluating this new standard and expects it to have no impact on our financial position, results of operations, and cash flows.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. ASU 2014-09 will be effective for the Company starting in the first quarter of 2017. ASU 2014-09 allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the 2017 opening retained earnings balance. The Company is in the process of determining the adoption method as well as the effects the adoption of ASU 2014-09 will have on its consolidated financial position, results of operations, and cash flows.

NOTE 2.  Fair Value Measurements

The Company applies a three-level valuation hierarchy for fair value measurements. This hierarchy prioritizes the inputs into three broad levels.  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs based on management’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s fair value measurement classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

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The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at September 30, 2014 and December 31, 2013:

			Fair Value Measurements Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2014
Assets:
Available-for-sale debt securities:
Municipal notes and bonds	$	114,857	$	—	$	114,857	$	—
Auction rate securities	—		—		—		—
Foreign currency forward contracts	138		$	—	138		$	—
Total Assets	$	114,995	$	—	$	114,995	$	—
Liabilities:
Contingent consideration - acquisitions	$	4,903	$	—	$	—	$	4,903
Total Liabilities	$	4,903	$	—	$	—	$	4,903
December 31, 2013
Assets:
Available-for-sale debt securities:
Municipal notes and bonds	$	86,305	$	—	$	86,305	$	—
Auction rate securities	277		—		—		277
Foreign currency forward contracts	6		—		6		—
Total Assets	$	86,588	$	—	$	86,311	$	277
Liabilities:
Contingent consideration - acquisitions	$	5,208	$	—	$	—	$	5,208
Total Liabilities	$	5,208	$	—	$	—	$	5,208

Level 1 investments are based on quoted prices that are available in active markets.

The Company’s investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. The foreign currency forward contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. Available-for-sale debt securities prices are obtained from third party pricing providers, which models prices utilizing the above observable inputs, for each asset class.

Level 3 investments consist of an auction rate security and contingent consideration related to an acquisition for which the Company uses a discounted cash flow model to value these investments. The auction rate security was called and redeemed by the issuer during the three month period ended September 30, 2014. The auction rate security was redeemed for the full amount of $475. The Level 3 assumptions used in the discounted cash flow model for the contingent consideration included projected revenues, estimates of discount rates of 6.7% and timing of cash flows. A significant decrease in the projected revenues or increase in discount rate could result in a significantly lower fair value measurement for the contingent consideration.

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This table presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months endedSeptember 30, 2014:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets:
Balance at December 31, 2013	$	277
Unrealized gain in accumulated other comprehensive loss	198
Purchases	—
Sales, issuances, and settlements	(475		)
Transfers into (out of) Level 3	—
Balance at September 30, 2014	$	—
Liabilities:
Balance at December 31, 2013	$	5,208
Additions	—
Total gain included in earnings	(111		)
Payments	(194		)
Transfers into (out of) Level 3	—
Balance at September 30, 2014	$	4,903

See Note 3 for additional discussion regarding the fair value of the Company’s marketable securities.

Fair Value of Other Financial Instruments

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value because of the short-term maturity of these instruments. The estimated fair value of these obligations is based, primarily, on a market approach, comparing the Company’s interest rates to those rates the Company believes it would reasonably receive upon re-entry into the market. Judgment is required to estimate the fair value, using available market information and appropriate valuation methods.

The Company’s convertible senior notes are not publicly traded. The estimated fair value of the Company’s convertible senior notes was valued using a discounted cash flow model. The Level 3 assumptions, based on data available at the valuation date used in preparing the discounted cash flow model included estimates of interest rates, timing and amount of cash flows and expected holding periods of the convertible senior notes. The fair value of the contingent interest associated with the convertible senior notes is valued quarterly using the present value of expected cash flow model incorporating the probabilities of the contingent events occurring.

The following table reflects information pertaining to the Company’s convertible senior notes:

	September 30, 2014			December 31, 2013
Net carrying value of convertible senior notes	$	53,997		$	51,751
Estimated fair value of convertible senior notes	$	59,832		$	59,340
Estimated interest rate used in discounted cash flow model	4.4		%	4.2		%

There was no contingent interest related to the Company’s convertible senior notes as of September 30, 2014 and December 31, 2013.

NOTE 3.   Marketable Securities

The Company has evaluated its investment policies and determined that all of its investment securities are to be classified as available-for-sale.  Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in Stockholders’ Equity under the caption “Accumulated other comprehensive loss.”  Realized gains and losses on available-for-sale securities are included in “Other expense (income)” in the Condensed Consolidated Statements of Operations.  The Company records other-than-temporary impairment charges for its available-for-sale investments when it intends to sell the securities, it is

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more-likely-than not that it will be required to sell the securities before a recovery, or when it does not expect to recover the entire amortized cost basis of the securities.  The cost of securities sold is based on the specific identification method.

At December 31, 2013, the Company held one auction rate security. The auction rate security was called and redeemed by the issuer during the three month period ended September 30, 2014. The auction rate security was redeemed for the full amount of $475.

The Company has determined that the gross unrealized losses on its marketable securities at September 30, 2014 and December 31, 2013 are temporary in nature. The Company reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, credit quality and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

At September 30, 2014 and December 31, 2013, marketable securities are categorized as follows:

	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
September 30, 2014
Municipal notes and bonds	$	114,820	$	39	$	2	$	114,857
Auction rate securities	—		—		—		—
Total marketable securities	$	114,820	$	39	$	2	$	114,857
December 31, 2013
Municipal notes and bonds	$	86,257	$	50	$	2	$	86,305
Auction rate securities	475		—		198		277
Total marketable securities	$	86,732	$	50	$	200	$	86,582

 The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Condensed Consolidated Balance Sheet classification, is as follows at September 30, 2014 and December 31, 2013:

	September 30, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	102,567	$	102,595	$	81,495	$	81,533
Due after one through five years	12,253		12,262		4,762		4,772
Due after five through ten years	—		—		—		—
Due after ten years	—		—		475		277
Total marketable securities	$	114,820	$	114,857	$	86,732	$	86,582

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The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position at September 30, 2014 and December 31, 2013:  

	In Unrealized Loss Position For Less Than 12 Months				In Unrealized Loss Position For Greater Than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2014
Municipal notes and bonds	$	2,965	$	2	$	—	$	—
Auction rate securities	—		—		—		—
Total	$	2,965	$	2	$	—	$	—
December 31, 2013
Municipal notes and bonds	$	16,448	$	2	$	—	$	—
Auction rate securities	—		—		277		198
Total	$	16,448	$	2	$	277	$	198

See Note 2 for additional discussion regarding the fair value of the Company’s marketable securities.

NOTE 4.    Derivative Instruments and Hedging Activities

The Company, when it considers it to be appropriate, enters into forward contracts to hedge the economic exposures arising from foreign currency denominated transactions. At September 30, 2014 and December 31, 2013, these contracts included the future sale of Japanese Yen to purchase U.S. dollars. Derivative instruments are recognized as either “Prepaid expenses and other current assets” or “Other current liabilities” in the Condensed Consolidated Balance Sheets and are measured at fair value. The foreign currency forward contracts were entered into by the Company’s Japanese subsidiary to economically hedge a portion of certain intercompany obligations. The forward contracts are not designated as hedges for accounting purposes and an increase in the fair value of $132 and a decrease in the fair value of $259 for the nine month period ended September 30, 2014 and 2013, respectively, are recorded within the caption “Other expense (income)” in the Condensed Consolidated Statements of Operations.

The dollar equivalent of the U.S. dollar forward contracts and related fair values as of September 30, 2014 and December 31, 2013 were as follows:

	September 30, 2014		December 31, 2013
Notional amount	$	2,447	$	1,029
Fair value of asset	$	138	$	6

NOTE 5.    Goodwill and Purchased Intangible Assets

Goodwill

The changes in the carrying amount of goodwill are as follows:

Balance at December 31, 2013	$	22,553
Goodwill acquired during period	—
Other	(58		)
Balance at September 30, 2014	$	22,495

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Purchased Intangible Assets

Purchased intangible assets as of  September 30, 2014 and December 31, 2013 are as follows:

	Gross Carrying Amount		Accumulated Amortization		Net
September 30, 2014
Finite-lived intangibles:
Developed technology	$	59,831	$	53,015	$	6,816
Customer and distributor relationships	9,560		7,730		1,830
Trade names	4,361		3,450		911
Total identifiable intangible assets	$	73,752	$	64,195	$	9,557
December 31, 2013
Finite-lived intangibles:
Developed technology	$	59,831	$	51,496	$	8,335
Customer and distributor relationships	9,560		7,449		2,111
Trade names	4,361		3,343		1,018
Total identifiable intangible assets	$	73,752	$	62,288	$	11,464

Intangible asset amortization expense for the three and nine months endedSeptember 30, 2014 was $567 and $1,907, respectively. For the three and nine months endedSeptember 30, 2013, intangible assets amortization expense was $666 and $1,930, respectively. Assuming no change in the gross carrying value of identifiable intangible assets and estimated lives, estimated amortization expense for the remainder of 2014 will be $515, and for each of the next five years estimated amortization expense amounts to $2,050 for 2015, $1,941 for 2016, $1,553 for 2017, $1,117 for 2018, and $1,117 for 2019.

NOTE 6.    Balance Sheet Details

Inventories

Inventories are comprised of the following:

	September 30, 2014		December 31, 2013
Materials	$	29,822	$	31,194
Work-in-process	26,437		19,867
Finished goods	9,570		10,290
Total inventories	$	65,829	$	61,351

The Company has established reserves of $6,878 and $6,101 as of September 30, 2014 and December 31, 2013, respectively, for slow moving and obsolete inventory, which are included in the amounts above.

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Property, Plant and Equipment

Property, plant and equipment, net is comprised of the following:

	September 30, 2014		December 31, 2013
Land and building	$	5,024	$	5,024
Machinery and equipment	21,322		20,827
Furniture and fixtures	3,498		4,043
Computer equipment	6,183		5,568
Leasehold improvements	7,797		7,744
	43,824		43,206
Less: Accumulated depreciation	31,580		30,148
Total property, plant and equipment, net	$	12,244	$	13,058

Other assets

Other assets is comprised of the following:

	September 30, 2014		December 31, 2013
Deferred income taxes	$	27,377	$	25,547
Other	1,470		1,776
Total other assets	$	28,847	$	27,323

Other current liabilities

Other current liabilities is comprised of the following:

	September 30, 2014		December 31, 2013
Litigation accrual	$	3,259	$	4,293
Deferred revenue	8,536		8,383
Contingent consideration - acquisitions	583		868
Other	6,365		5,374
Total other current liabilities	$	18,743	$	18,918

Other non-current liabilities

Other non-current liabilities is comprised of the following:

	September 30, 2014		December 31, 2013
Unrecognized tax benefits (including interest)	$	3,537	$	2,806
Contingent consideration - acquisitions	4,320		4,340
Other	1,800		1,772
Total other non-current liabilities	$	9,657	$	8,918

NOTE 7.   Debt Obligations

On July 25, 2011, the Company issued $60,000 aggregate principal amount of 3.75% Convertible Senior Notes due 2016 (the “Notes”) at par. The Notes were issued pursuant to an indenture, dated as of July 25, 2011, between the Company and Bank of New York Mellon Trust Company, N.A., as Trustee, which includes a form of Note. The Notes provide for the payment of interest semi-annually in arrears on January 15 and July 15 of each year, beginning January 15, 2012, at an annual rate of 3.75%

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and will mature on July 15, 2016, unless earlier converted or repurchased. The Notes may be converted, under certain circumstances, based on an initial conversion rate of 77.241 shares of Company common stock per $1 principal amount of Notes, which represents an initial conversion price of approximately $12.95 per share. Concurrently with the issuance of the Notes, the Company purchased a convertible note hedge and sold a warrant. Each of the convertible note hedge and warrant transactions were entered into with an affiliate of the initial purchaser of the Notes. The convertible note hedge is intended to reduce the potential future dilution to the Company’s common stock associated with the conversion of the Notes. However, the warrant transaction will have a dilutive effect on the Company’s earnings per share to the extent that the price of the Company’s common stock exceeds the strike price of the warrant. The strike price of the warrant is $17.00 per share subject to adjustment in accordance with the terms of the agreement. The net proceeds to the Company from the sale of the Notes, including the convertible note hedge and warrant were $50,249.

The following table reflects the net carrying value of the Notes:

	September 30, 2014		December 31, 2013
Convertible senior notes	$	60,000	$	60,000
Less: Unamortized interest discount	6,003		8,249
Net carrying value of convertible senior notes	$	53,997	$	51,751

The following table presents the amount of interest cost recognized relating to the Notes during the three and nine months endedSeptember 30, 2014 and September 30, 2013.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Contractual interest coupon	$	563	$	562	$	1,688	$	1,686
Amortization of interest discount	772		700		2,246		2,037
Amortization of debt issuance costs	94		79		268		224
Total interest cost recognized	$	1,429	$	1,341	$	4,202	$	3,947

The remaining bond discount of the Notes of $6,003, as of September 30, 2014, will be amortized over the remaining life of the Notes.

NOTE 8.   Commitments and Contingencies

Warranty Reserves

The Company generally provides a warranty on its products for a period of twelve to fifteen months against defects in material and workmanship. The Company estimates the costs that may be incurred during the warranty period and records a liability in the amount of such costs at the time revenue is recognized. The Company’s estimate is based primarily on historical experience. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 15 months prior to the year-end and warranty accruals are related to sales during the year.

Changes in the Company’s warranty reserves are as follows:

	Nine Months Ended September 30,
	2014		2013
Balance, beginning of the period	$	1,551	$	2,024
Accruals	1,471		1,511
Less: Usage	1,527		2,018
Balance, end of the period	$	1,495	$	1,517

Warranty reserves are reported in the Condensed Consolidated Balance Sheets within the caption “Accounts payable and accrued liabilities.”

Legal Matters

From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business. As previously disclosed, in December 2007, the Company completed the acquisition of specific assets and liabilities of the semiconductor division

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of Applied Precision LLC (“Applied”). As a result of the acquisition, the Company assumed certain liabilities of Applied including a lawsuit filed in the United States District Court, District of Arizona, by Integrated Technology Corporation (“ITC”) which alleged Applied’s PrecisionPoint™, PrecisionWoRx^® and ProbeWoRx^® products infringed an ITC patent (Integrated Technology Corporation v. Rudolph Technologies, Inc., No.  CV-06-2182-PHX-ROS).  Prior to trial, the District Court ruled that such products sold prior to August of 2007 (the “pre-August 2007 tools”) infringed the ITC patent. At trial in December of 2011, a trial verdict was rendered in which the jury found that while the Company’s products manufactured after August of 2007 (the “post-August 2007 tools”) did not literally infringe ITC’s patent, the products were found to infringe under a rule known as the doctrine of equivalents, a legal principle which expands the language of patent claims to encompass products or processes which may otherwise be found not to literally infringe the patent. The jury awarded $15,475 to ITC in damages for sales made during the years 2000-2011, of which award approximately one-half related to sales for pre-August 2007 tools. The jury found that for the sales of the post-August 2007 tools, the infringement was willful. On July 23, 2012, the District Court issued an Order which affirmed the jury’s award, applied treble damages to the portion of the jury award related to post-August 2007 tool sales and granted ITC’s motion for attorney’s fees and prejudgment interest on the verdict and attorney’s fees. At that time, the District Court also enjoined the Company from future infringement of the ITC patent and from selling or supplying the applicable products with the applicable features from or into the United States. The Company appealed the injunction, the District Court Order and the damages assessment. In October 2012, the injunction was stayed by the U.S. Federal Court of Appeals and thereafter in June of 2013, the patent expired. On November 4, 2013, the U.S. Federal Court of Appeals issued a ruling which reversed the judgment of infringement against all post-August 2007 tools, reversed the finding of willfulness, vacated the treble damages award, vacated the award of attorney’s fees and costs, remanded the issue back to the District Court for further review, and affirmed the award of damages and interest for the pre-August 2007 tools. As a result of this ruling, the matter was resolved with regard to the alleged infringement of the post-August 2007 tools in the Company’s favor. With regard to the damages assessment against the pre-August 2007 tools, on March 4, 2014, the Company filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to appeal the basis of the Federal Court of Appeals’ decision affirming the damages award for the pre-August 2007 tools. On June 30, 2014, the Supreme Court denied the Company’s Petition. On July 22, 2014, the Company then paid to ITC $10,613 which represented only the damages and interest portion of the judgment. Since the patent expired in June of 2013 and payment of the judgment has been made, this matter is fully resolved with the sole exception of the issue of the remanded attorney’s fees. On August 8, 2014, the District Court issued an order for setting the attorney’s fees award at $3,252 which the Company appealed to the U.S. Federal Court of Appeals on September 5, 2014. The Company believes that it has meritorious defenses regarding this issue and intends to continue to vigorously prosecute the matter. The $3,252 is held in escrow and is recorded in “Prepaid expenses and other current assets” in the Condensed Consolidated Balance Sheets. The corresponding liability is recorded under the caption, “Other current liabilities,” in the Condensed Consolidated Balance Sheets. The Company expects this to be the maximum liability reasonably possible for the attorney’s fees, excluding interest, for this lawsuit with respect to both the pre-August 2007 and post-2007 August tools.

In the Company’s patent infringement suit against Camtek, Ltd., of Migdal Hamek, Israel, concerning the Company’s proprietary continuous scan wafer inspection technology, the U.S. Federal Court of Appeals issued a ruling on August 22, 2011.  In its opinion, the Appellate Court affirmed multiple rulings from trial at the District Court level including (i) finding the Company’s U.S. Patent No. 6,826,298 valid, (ii) the part of the infringement ruling based on the finding that Camtek’s Falcon product strobes “based on velocity,” and (iii) the dismissal of Camtek’s claim against the Company for inequitable conduct against the U.S. Patent and Trademark Office.  The court did, however, revise one claim construction ruling made by the District Court in the original case.  As a result, the Appellate Court set aside the verdict delivered by the jury for damages and the District Court’s decision to enter an injunction against Camtek’s selling Falcon tools in the U.S. and remanded the case back to the trial court for a limited trial on this single infringement issue.  On March 31, 2014, the District Court ruled in the Company’s favor, finding that Camtek’s Falcon tools continue to infringe the Company’s patent even under the revised claim construction of the patent, obviating the need for the limited trial.  The Company intends to petition the court to reinstate a permanent injunction against the sale by Camtek of its infringing semiconductor inspection systems. The Company also anticipates that the damages originally awarded by the jury in 2009 will be reinstated, as well as related interest and all subsequently awarded damages.   This lawsuit was initially brought in 2005 by August Technology prior to its merger with the Company. A subsequent lawsuit has been filed by Rudolph against Camtek alleging infringement of Rudolph’s U.S. Patent No. 7,729,528, also related to the Company’s proprietary continuous scan wafer inspection technology.  This lawsuit is currently stayed pending resolution of a re-examination petition filed by Camtek with the U.S. Patent and Trademark Office.

Letter of Credit

The Company had a $40,000 irrevocable standby letter of credit with Credit Suisse AG available to secure the damages assessment in connection with the ITC litigation discussed in Legal Matters above. On July 22, 2014, the Company paid $10,613 to ITC through a draw down of the letter of credit. Pursuant to the terms of the letter of credit, upon draw down of the funds, the letter of credit was collateralized by securities held in the Company’s investment portfolios which were immediately sold to satisfy the letter of credit payment. The letter of credit was subsequently canceled upon completion of this payment.

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NOTE 9.   Share-Based Compensation

Restricted Stock Unit Activity

A summary of the Company’s nonvested restricted stock unit activity with respect to the nine months ended September 30, 2014 is as follows:

	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013	1,116	$	9.73
Granted	616	$	10.91
Less: Vested	442	$	8.60
Less: Forfeited	43	$	10.52
Nonvested at September 30, 2014	1,247	$	10.68

As of September 30, 2014 and December 31, 2013, there was $7,287 and $5,755 of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.  That cost is expected to be recognized over a weighted average period of 2.6 years and 2.0 years for the respective periods.

NOTE 10.   Other Expense (Income)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014		2013			2014		2013
Foreign currency exchange losses (gains), net	$	337	$	(4	)	$	372	$	(53	)
Total other expense (income)	$	337	$	(4	)	$	372	$	(53	)

NOTE 11.   Income Taxes

The following table provides details of income taxes:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Income (loss) before income taxes	$	2,835		$	37		$	(9,201	)	$	1,114
Provision (benefit) for income taxes	$	3,833		$	(215	)	$	(3,067	)	$	(290	)
Effective tax rate	135.2		%	(581.1		)%	33.3		%	(26.0		)%

The income tax provision for the three and nine months endedSeptember 30, 2014 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year. The effective tax rates for the three month periods ended September 30, 2014 and 2013 were impacted by changes in the Company’s annual earnings forecast which resulted in cumulative catch up adjustments being recorded in the period. The changes in the Company’s effective tax rate for the nine months endedSeptember 30, 2014 compared to the same period for the prior year are primarily due to the generation of federal R&D credits for both 2012 and 2013 recognized in 2013, which are not available in the 2014 period as a result of legislation, and an increase in foreign tax expense in excess of foreign tax credits generated in 2014.

The Company currently has a partial valuation allowance recorded against certain deferred tax assets. Each quarter, the Company assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers available evidence, both positive and negative, including prudent and feasible tax planning strategies in assessing the need for a valuation allowance. As a result of the Company’s analysis, it concluded that it is more likely than not that a portion of its deferred tax assets will not be realized. Therefore, the Company continues to provide a valuation allowance against certain deferred tax assets. The Company continues to closely monitor available evidence and may reverse some or all of the remaining valuation allowance in future periods, if appropriate. The Company has a valuation allowance of $1,646 as of September 30, 2014 and December 31, 2013.

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NOTE 12.   Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share is computed in the same manner and also gives effect to all dilutive common equivalent shares outstanding during the period.  Potential common shares that would have the effect of increasing diluted earnings per share are considered to be antidilutive. In accordance with U.S. GAAP, these shares were not included in calculating diluted earnings per share. For the three and nine months endedSeptember 30, 2014, all outstanding restricted stock units of 1,247 and stock options of 654 were excluded from the computation of diluted loss per share because the effect in the period would be antidilutive. For the three and nine months endedSeptember 30, 2013, the weighted average number of stock options and restricted stock units excluded from the computation of diluted earnings per share totaled 672 and 731, respectively, because their effect was antidilutive. Diluted earnings per share-weighted average shares outstanding do not include any effect resulting from assumed conversion of the Notes and warrants as their impact would be antidilutive.

The Company’s basic and diluted earnings (loss) per share amounts are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
Numerator:
Net income (loss)	$	(998	)	$	252	$	(6,134	)	$	1,404
Denominator:
Basic earnings (loss) per share - weighted average shares outstanding	33,237			32,897		33,205			32,727
Effect of potential dilutive securities:
Employee stock options and restricted stock units - dilutive shares	—			529		—			610
Diluted earnings (loss) per share - weighted average shares outstanding	33,237			33,426		33,205			33,337
Earnings (loss) per share:
Basic	$	(0.03	)	$	0.01	$	(0.18	)	$	0.04
Diluted	$	(0.03	)	$	0.01	$	(0.18	)	$	0.04

NOTE 13.   Accumulated Other Comprehensive Loss

Comprehensive income includes net income (loss), foreign currency translation adjustments, and net unrealized gains and losses on available-for-sale investments. See the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the effect of the components of comprehensive loss to our net income (loss).

The components of accumulated other comprehensive loss, net of tax, are as follows:

	Foreign currency translation adjustments		Net unrealized losses on available-for-sale investments			Accumulated other comprehensive loss
Beginning Balance, December 31, 2013	$	1,645	$	150		$	1,795
Net current period other comprehensive loss	59		(188		)	(129		)
Reclassifications	—		—			—
Ending balance, September 30, 2014	$	1,704	$	(38	)	$	1,666

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NOTE 14.   Segment Reporting and Geographic Information

The Company is engaged in the design, development, manufacture and support of high-performance control metrology, defect inspection, advanced packaging lithography and data analysis systems used by microelectronics device manufacturers. The Company and its subsidiaries currently operate in a single operating segment: the design, development, manufacture and support of high-performance process control defect inspection, metrology, and process control software systems used by microelectronics device manufacturers, and therefore have one reportable segment. The Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the reporting segment level.

The following table lists the different sources of revenue:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2014				2013				2014				2013
Systems and Software:
Inspection	$	23,134	49	%	$	21,734	49	%	$	63,987	49	%	$	73,441	55	%
Metrology	2,692		6	%	5,470		12	%	13,093		10	%	11,627		9	%
Lithography	7,304		16	%	3,618		8	%	10,961		8	%	7,318		6	%
Data Analysis and Review	5,463		12	%	4,724		11	%	18,393		14	%	13,737		10	%
Parts	4,939		10	%	5,235		12	%	15,051		11	%	16,036		13	%
Services	3,428		7	%	3,263		8	%	10,142		8	%	9,594		7	%
Total revenue	$	46,960	100	%	$	44,044	100	%	$	131,627	100	%	$	131,753	100	%

For geographical revenue reporting, revenues are attributed to the geographic location in which the product is shipped.  Revenue by geographic region is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
United States	$	19,683	$	13,484	$	39,320	$	32,962
Taiwan	14,592		11,136		34,774		43,757
Japan	1,236		2,345		7,589		6,052
China	1,807		4,015		8,932		11,284
South Korea	1,434		1,928		9,873		6,995
Other Asia	1,942		5,552		14,528		14,127
Germany	3,166		1,771		8,418		4,242
Other Europe	3,100		3,813		8,193		12,334
Total revenue	$	46,960	$	44,044	$	131,627	$	131,753

The following customers each accounted for more than 10% of total revenues for the indicated periods.

	Nine Months Ended
	September 30,
	2014		2013
Customer A	7.4	%	13.0	%
Customer B	4.2	%	11.2	%

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NOTE 15.   Share Repurchase Program

In 2008, the Board of Directors authorized a share repurchase program of up to 3,000 shares of the Company’s common stock with no established end date.  The program allows for repurchases to be made in the open market or through negotiated transactions from time to time. At September 30, 2014, 2,762 shares remained available for future stock repurchases under this repurchase program. The shares of common stock purchased under the share repurchase program are being retired.

The Company did not repurchase any shares of its common stock during the three and nine month periods ended September 30, 2013. The following table summarizes the Company’s stock repurchases for the three and nine month periods ended September 30, 2014:

	Three Months Ended		Nine Months Ended
	September 30, 2014		September 30, 2014
Shares of common stock repurchased	138		238
Cost of stock repurchased		$1,344		$2,331
Average price paid per share		$9.78		$9.81

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements, including those concerning our business momentum and future growth, acceptance of our products and services, our ability to deliver both products and services consistent with our customers’ demands and expectations and strengthen our market position, our expectations of the semiconductor market outlook, future revenues, gross profits, research and development and engineering expenses, selling, general and administrative expenses, product introductions, technology development, manufacturing practices, cash requirements and anticipated trends and developments in and management plans for, our business and the markets in which we operate, our anticipated revenue as a result of acquisitions, and our ability to be successful in managing our cost structure and cash expenditures and results of litigation, including resolution of the remaining issue in our ITC litigation. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the words such as, but not limited to, “anticipate,” “believe,” “expect,” “intend,” “plan,” “should,” “may,” “could,” “will” and words or phrases of similar meaning, as they relate to our management or us.

The forward-looking statements contained herein reflect our current expectations with respect to future events and are subject to certain risks, uncertainties and assumptions. Actual results may differ materially from those projected in such forward-looking statements for a number of reasons including, but not limited to, the following: variations in the level of orders which can be affected by general economic conditions and growth rates in the semiconductor manufacturing industry and in the markets served by our customers, the global economic and political climates, difficulties or delays in product functionality or performance, the delivery performance of sole source vendors, the timing of future product releases, failure to respond adequately to either changes in technology or customer preferences, changes in pricing by us or our competitors, our ability to manage growth, risk of nonpayment of accounts receivable, changes in budgeted costs, our ability to leverage our resources to improve our position in our core markets, our ability to weather difficult economic environments, our 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, our ability to successfully integrate acquired businesses into our business and fully realize, or realize within the expected time frame, the expected combination benefits from the acquisitions, and the “Risk Factors” set forth in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 10-K”). The forward-looking statements reflect our position as of the date of this report and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Critical Accounting Policies

The preparation of condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make judgments, assumptions and estimates that affect the amounts reported. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our condensed consolidated financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition or results of operations. Specifically, these policies have the following attributes: (1) we are required to make judgments and assumptions about matters that are highly uncertain at the time of the estimate; and (2) different estimates

17

we could reasonably have used, or changes in the estimate that are reasonably likely to occur, could have a material effect on our financial position and results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have been included in the condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Certain of these uncertainties are discussed in our 2013 10-K in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP, and provide a fair presentation of our financial position and results of operations.

For more information, please see our critical accounting policies as previously disclosed in our 2013 10-K.

See Note 1 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q regarding the impact of recent accounting pronouncements on our financial position and results of operations.

Results of Operations for the Three and Nine Month Periods EndedSeptember 30, 2014 and 2013

We are a worldwide leader in the design, development, manufacture and support of defect inspection, advanced packaging lithography, process control metrology, and data analysis systems and software used by microelectronic device manufacturers. We provide process and yield management solutions used in both wafer processing and final manufacturing through a family of standalone systems for macro-defect inspection, lithography, probe card test and analysis, and transparent and opaque thin film measurements. All Rudolph systems feature sophisticated software and production-worthy automation. Rudolph systems are backed by worldwide customer support.

Rudolph’s business is affected by the annual spending patterns of our customers on semiconductor capital equipment. The amount that our customers devote to capital equipment spending depends on a number of factors, including general worldwide economic conditions as well as other economic drivers such as personal computer, tablet, cell phone, other personal electronic devices and automotive sales. Current forecasts by industry analysts for the semiconductor device manufacturing industry project a year-over-year increase in capital spending of approximately 5% to 10% for 2014. We monitor capital equipment spending through announced capital spending plans by our customers and monthly-published industry data such as the book-to-bill ratio. The book-to-bill ratio is a 3-month running statistic that compares bookings or orders placed with capital equipment suppliers to billings or shipments. A book-to-bill above 1.0 shows that semiconductor device equipment manufacturers are ordering equipment at a pace that exceeds the equipment suppliers’ shipments for the period. The 3-month rolling average North American semiconductor equipment book-to-bill ratio was 0.9 at September 30, 2014, a decrease from the book-to-bill ratio of 1.0 at December 31, 2013.

Historically, a significant portion of our revenues in each quarter and year has been derived from sales to relatively few customers, and we expect this trend to continue. For the nine month period ended September 30, 2014 and for the years ended December 31, 2013, 2012 and 2011, sales to customers that individually represented at least five percent of our revenues accounted for 36.0%, 41.6%, 50.9%, and 43.6% of our revenues, respectively.

We do not have purchase contracts with any of our customers that obligate them to continue to purchase our products, and they could cease purchasing products from us at any time. A delay in purchase or cancellation by any of our large customers could cause quarterly revenues to vary significantly. In addition, during a given quarter, a significant portion of our revenues may be derived from the sale of a relatively small number of systems. The following table lists the average selling price for our systems:

System	Average Selling Price Per System
Macro-defect inspection and probe card and test analysis	$250,000 to $1.7 million
Transparent film measurement	$800,000 to $1.2 million
Opaque film measurements	$1.0 million to $1.8 million
Lithography steppers	$3.0 million to $8.0 million

A significant portion of our revenues has been derived from customers outside of the United States.  We expect that revenues generated from customers outside of the United States will continue to account for a significant percentage of our revenues. 

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The following table lists, for the periods indicated, the revenue derived from customers outside of the United States (in percentages of total revenues): 

	Nine Months Ended
	September 30,		Years Ended December 31,
	2014		2013		2012		2011
Asia	57.5	%	62.4	%	67.3	%	51.3	%
Europe	12.6	%	14.4	%	13.4	%	20.4	%
Total international revenue	70.1	%	76.8	%	80.7	%	71.7	%

The sales cycle for our systems typically ranges from six to 15 months, and can be longer when our customers are evaluating new technology. Due to the length of these cycles, we invest significantly in research and development and sales and marketing in advance of generating revenues related to these investments.

Revenues. Our revenues are primarily derived from the sale of our systems, services, spare parts and software licensing.  Our revenue was $47.0 million and $131.6 million for the three and nine month periods ended September 30, 2014, compared to $44.0 million and $131.8 million for the three and nine month periods ended September 30, 2013. In the quarter-over-quarter period revenue increased 6.6% and in the year-over-year period revenue decreased 0.1%. 

The following table lists, for the periods indicated, the different sources of our revenues in dollars (thousands) and as percentages of our total revenues:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2014				2013				2014				2013
Systems and Software:
Inspection	$	23,134	49	%	$	21,734	49	%	$	63,987	49	%	$	73,441	55	%
Metrology	2,692		6	%	5,470		12	%	13,093		10	%	11,627		9	%
Lithography	7,304		16	%	3,618		8	%	10,961		8	%	7,318		6	%
Data Analysis and Review	5,463		12	%	4,724		11	%	18,393		14	%	13,737		10	%
Parts	4,939		10	%	5,235		12	%	15,051		11	%	16,036		13	%
Services	3,428		7	%	3,263		8	%	10,142		8	%	9,594		7	%
Total revenue	$	46,960	100	%	$	44,044	100	%	$	131,627	100	%	$	131,753	100	%

Total systems and software revenue increased slightly for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Year-over-year there was decreased customer demand for our inspection systems which contributed to a lower number of inspection systems sold during the nine months ended September 30, 2014 as compared to the same period in the prior year. As a result, inspection systems revenue decreased $9.5 million for the 2014 period compared to the 2013 period. The number of metrology systems sold during the nine months ended September 30, 2014 was higher compared to the same period in the prior year, resulting in an increase in metrology systems revenue of $1.5 million for the 2014 period. Lithography system revenue increased $3.6 million for the nine months ended September 30, 2014, compared to the same period in the prior year, as we sold a JetStep^®G system which has a higher average selling price than our other lithography systems. The year-over-year increase in data analysis and review software revenue for the nine months ended September 30, 2014 of $4.7 million is primarily due to increased sales in licensing revenue.  As a result, the slight increase in total systems and software revenue for the 2014 period was caused by product mix of units shipped rather than pricing changes as the average selling price of similarly configured systems has been consistent across the year-over-year periods. Systems revenue generated by our latest product releases and major enhancements in each of our product families amounted to 67% and 61% of total revenues for the three and nine month periods ended September 30, 2014, compared to 58% and 64% of total revenues for the three and nine month periods ended September 30, 2013.  The year-over-year decrease in total parts and services revenue for the nine month period ended September 30, 2014 is primarily due to decreased spending by our customers on system upgrades and repairs of existing systems. Parts and services revenues are generated from part sales, maintenance service contracts, system upgrades, as well as time and material billable service calls. 

Deferred revenues of $8.5 million are recorded in the Condensed Consolidated Balance Sheets within the caption “Other current liabilities” at September 30, 2014 and primarily consist of $2.2 million for systems awaiting acceptance and outstanding deliverables and $6.3 million for deferred maintenance agreements.

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Gross Profit. Our gross profit has been and will continue to be affected by a variety of factors, including manufacturing efficiencies, excess and obsolete inventory write-offs, pricing by competitors or suppliers, new product introductions, production volume, customization and reconfiguration of systems, international and domestic sales mix, and parts and service margins. Our gross profit was $25.0 million and $69.8 million for the three and nine month periods ended September 30, 2014, compared to $22.5 million and $67.9 million for the three and nine month periods ended September 30, 2013.  Our gross profit represented 53.2% and 53.1% of our revenues for the three and nine month periods ended September 30, 2014 and 51.0% and 51.5% of our revenues for the same periods in the prior year.  The increase in gross profit as a percentage of revenue for the three and nine month periods ended September 30, 2014 compared to the same period in the prior year is primarily due to product mix.

Operating Expenses. Major components of operating expenses include research and development as well as selling, general and administrative expenses. 

Research and Development.  Our research and development expense was $9.6 million and $30.5 million for the three and nine month periods ended September 30, 2014, compared to $10.5 million and $30.4 million for the same period in the prior year.  Research and development expense represented 20.5% and 23.2% of our revenues for the three and nine month periods ended September 30, 2014, compared to 23.7% and 23.1% of revenues for the prior year period.  The slight year-over-year dollar increase for the nine month period ended September 30, 2014 in research and development expenses primarily reflects an increase in compensation and project costs related to our lithography systems.

Selling, General and Administrative.     Our selling, general and administrative expense was $10.3 million and $42.3 million for the three and nine month periods ended September 30, 2014, compared to $10.1 million and $30.8 million for the same period in the prior year.  Selling, general and administrative expense represented 21.9% and 32.2% of our revenues for the three and nine month periods ended September 30, 2014, compared to 22.8% and 22.4% of our revenues for the same period in the prior year.  The year-over-year dollar increase for the three and nine month periods ended September 30, 2014 in selling, general and administrative expense was primarily due to higher litigation expenses of $9.6 million related to the final judgment awarded to ITC. For further information, see Note 8 in the accompanying unaudited condensed consolidated financial statements.

Income Taxes.  We recorded income tax provision of $3.8 million and income tax benefit of $3.1 million, for the three and nine month periods ended September 30, 2014, respectively. Our effective tax rate of 33.3% differs from the statutory rate of 35% for the nine month period ended September 30, 2014 primarily due to projected foreign tax expense in excess of foreign tax credits generated in 2014.

We currently have a partial valuation allowance recorded against our deferred tax assets. Each quarter we assess the likelihood that we will be able to recover our deferred tax assets primarily relating to state R&D credits. We consider available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. As a result of our analysis, we concluded that it is more likely than not that a portion of our net deferred tax assets will not be realized. Therefore, we continue to provide a valuation allowance against certain net deferred tax assets. We continue to closely monitor available evidence and may reverse some or all of the valuation allowance in future periods, if appropriate.

Litigation. As discussed in Note 8 in the accompanying unaudited condensed consolidated financial statements and in Part II, Item 1 of this Quarterly Report on Form 10-Q (“Legal Proceedings”), we are subject to legal proceedings and claims, which include, among other things, our litigation with ITC in a patent infringement action related to the predictive scrub feature of our PrecisionPoint™, PrecisionWoRx^® and ProbeWoRx^® products in which we were the defendants (the “ITC Litigation”). See Note 8 in the accompanying unaudited condensed consolidated financial statements and Legal Proceedings for a discussion of this action and the District Court’s adverse order affirming the jury award and ordering other relief in this matter, the ruling obtained from the U.S. Federal Court of Appeals, the ruling by the U.S. Supreme Court, the Company’s payment in July 2014 of the assessed $10.6 million judgment, and the sole unresolved issue in the matter regarding the remanded attorney’s fees.

Liquidity and Capital Resources

At September 30, 2014, we had $162.5 million of cash, cash equivalents and marketable securities and $266.2 million in working capital.  At December 31, 2013, we had $167.4 million of cash, cash equivalents and marketable securities and $265.3 million in working capital. 

Operating activities used $2.0 million in net cash and cash equivalents for the nine month period ended September 30, 2014.  The net cash and cash equivalents used in operating activities during the nine month period ended September 30, 2014 was primarily a result of changes in operating assets and liabilities of $11.4 million, partially offset by net loss, adjusted to exclude the effect of non-cash operating charges of $9.4 million. Operating activities used $4.0 million in net cash and cash equivalents for the nine month period ended September 30, 2013. The net cash and cash equivalents used in operating activities during the

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nine month period ended September 30, 2013 was primarily a result of changes in operating assets and liabilities of $18.2 million, partially offset by net income adjusted to exclude the effect of non-cash operating charges of $14.2 million.

Net cash and cash equivalents used in investing activities during the nine month period ended September 30, 2014 of $28.8 million was due to the purchase of marketable securities of $172.3 million, and capital expenditures of $1.4 million, partially offset by the proceeds from sales of marketable securities of $145.0 million.  Net cash and cash equivalents used in investing activities during the nine month period ended September 30, 2013 of $17.4 million was due to the purchase of marketable securities of $81.7 million, purchase of business of $3.4 million and capital expenditures of $4.0 million, partially offset by the proceeds from sales of marketable securities of $71.7 million.

In 2008, our Board of Directors approved a stock repurchase program of up to 3 million shares of Company common stock with no established end date.  The program allows for repurchases to be made in the open market or through negotiated transactions from time to time. At September 30, 2014, 2.8 million shares remained available for future stock repurchases under this repurchase program. The shares of common stock purchased under the share repurchase program are being retired. For further information, see Note 15 in the accompanying unaudited condensed consolidated financial statements.

From time to time, we evaluate whether to acquire new or complementary businesses, products and/or technologies. We may fund all or a portion of the purchase price of these acquisitions in cash, stock, or a combination of cash and stock.

We had a $40 million irrevocable standby letter of credit available with Credit Suisse AG which was required to secure the damages assessment in connection with the ITC Litigation discussed in Legal Proceedings. On July 22, 2014, we paid $10.6 million to ITC through a draw down of the letter of credit. Pursuant to the terms of the letter of credit, upon draw down of the funds, the letter of credit was collateralized by securities held in the Company’s investment portfolios which were immediately sold to satisfy the letter of credit payment. The letter of credit was subsequently canceled upon completion of this payment.

Our future capital requirements will depend on many factors, including the timing and amount of our revenues and our investment decisions, which will affect our ability to generate additional cash. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our anticipated cash requirements for working capital and capital expenditures for the next twelve months. Thereafter, if cash generated from operations and financing activities is insufficient to satisfy our working capital requirements, we may seek additional funding through bank borrowings, sales of securities or other means. There can be no assurance that we will be able to raise any such capital on terms acceptable to us or at all.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Interest Rate and Credit Market Risk

We are exposed to changes in interest rates and market liquidity including our investments in certain available-for-sale securities. Our available-for-sale securities consist of fixed and variable rate income investments (municipal notes, municipal bonds and corporate bonds). We continually monitor our exposure to changes in interest rates, market liquidity and credit ratings of issuers from our available-for-sale securities. It is possible that we are at risk if interest rates, market liquidity or credit ratings of issuers change in an unfavorable direction. The magnitude of any gain or loss will be a function of the difference between the fixed or variable rate of the financial instrument and the market rate and our financial condition and results of operations could be materially affected. Based on a sensitivity analysis performed on our financial investments held as of September 30, 2014, an immediate adverse change of 10% in interest rates (e.g. 3.00% to 3.30%) would result in an immaterial decrease in the fair value of our available-for-sale securities and would not have a material impact on our consolidated financial position, results of operations or cash flows.

Foreign Currency Risk

We have branch operations in Taiwan, Singapore and South Korea and wholly-owned subsidiaries in Europe, China and Japan.  Our international subsidiaries and branches operate primarily using local functional currencies.  The intercompany transactions denominated in U.S. dollars appearing on the financial statements of the subsidiaries and branches are remeasured at each quarter-end resulting in gains and losses which are reflected in net income.  A hypothetical 10% appreciation or depreciation in the U.S. dollar relative to the reporting currencies of our foreign subsidiaries at September 30, 2014 would have affected the foreign-currency-denominated non-operating expenses of our foreign subsidiaries by approximately $2.1 million. We cannot accurately predict future exchange rates or the overall impact of future exchange rate fluctuations on our business, results of operations and financial condition.

A substantial portion of our international sales are denominated in U.S. dollars with the exception of Japan and, as a result, we have relatively little exposure to foreign currency exchange risk with respect to these sales. Substantially all our sales in Japan are denominated in Japanese yen. From time to time, we may enter into forward exchange contracts to economically hedge a portion of, but not all, existing and anticipated foreign currency denominated transactions expected to occur within 12

21

months. The change in fair value of the forward contracts is recognized in “Other expense (income)” in the Condensed Consolidated Statements of Operations for each reporting period. As of September 30, 2014, we had eight forward contracts outstanding with a total notional contract value of $2.4 million. We do not use derivative financial instruments for trading or speculative purposes.

Item 4.  Controls and Procedures

We maintain a set of disclosure controls and procedures, as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act, designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosure. The disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives. 

Scope of the Controls Evaluation

The evaluation of our disclosure controls and procedures included a review of the controls’ objectives and design, our implementation of the controls and the effect of the controls on the information generated for use in this Quarterly Report on Form 10-Q. In the course of the evaluation, we sought to identify data errors, control problems or acts of fraud and confirm that appropriate corrective actions, if any, including process improvements, were being undertaken. This type of evaluation is performed on a quarterly basis so that the conclusions of management, including the CEO and CFO, concerning the effectiveness of the controls can be reported in our Quarterly Reports on Form 10-Q and in our Annual Reports on Form 10-K. Many of the components of our disclosure controls and procedures are also evaluated on an ongoing basis by other personnel in our accounting, finance and legal functions. The overall goals of these various evaluation activities are to monitor our disclosure controls and procedures and to modify them on an ongoing basis as necessary. A control system can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

Conclusions

As of September 30, 2014, an evaluation of our disclosure controls and procedures was carried out under the supervision and with the participation of our management, including the CEO and CFO. Based on this evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II    OTHER INFORMATION

Item 1.   Legal Proceedings

For a description of our previously reported legal proceedings refer to “Part I, Item 3 - Legal Proceedings” in our 2013 10-K, as updated in Note 8 to the accompanying unaudited condensed consolidated financial statements.

In our ITC Litigation, on June 30, 2014, the U.S. Supreme Court denied the Company’s Petition for a Writ of Certiorari to appeal the basis of the Federal Court of Appeals’ decision affirming the damages award for the pre-August 2007 tools. As a result, the Company paid to ITC $10.6 million on July 22, 2014. This matter is now fully resolved with the sole exception of the issue of remanded attorney’s fees. See Note 8 to the accompanying unaudited condensed consolidated financial statements for additional information regarding this action.

We are party to other ordinary and routine litigation incidental to our business. We do not expect the outcome of any pending litigation to have a material adverse effect on our consolidated financial position or results of operations.

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Item 1A.    Risk Factors

There were no material changes to our risk factors as discussed in Part I, Item 1A - Risk Factors in our 2013 10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

In 2008, our Board of Directors authorized a share repurchase program of up to 3 million shares of the Company’s common stock with no established end date. The program allows for repurchases to be made in the open market or through negotiated transactions from time to time. At September 30, 2014, 2,762 shares remained available for future stock repurchases under this repurchase program. The shares of common stock purchased under the share repurchase program are being retired.

The following table provides details of common stock purchased during the three month period ended September 30, 2014 (in thousands, except per share data):

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares that May Yet Be Purchased Under the Program
July 1, 2014 - July 31, 2014	75	$	9.87	75	2,825
August 1, 2014 - August 31, 2014	—	—		—	2,825
September 1, 2014 - September 30, 2014	63	$	9.66	63	2,762
Three months ended September 30, 2014	138	$	9.78	138	2,762

Item 3.    Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

None.

Item 5.    Other Information

None.

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Item 6.   Exhibits

Exhibit No.	Description
10.1	Form of Restricted Stock Agreement pursuant to the Rudolph Technologies, Inc. 2009 Stock Plan.
10.2	Restated and Amended Management Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and Paul F. McLaughlin (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
10.3	Restated and Amended Management Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and Steven R. Roth (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
10.4	Restated and Amended Employment Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and Michael Plisinski (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
10.5	Restated and Amended Employment Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and D. Mayson Brooks (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
31.1	Certification of Paul F. McLaughlin, Chief Executive Officer, pursuant to Securities Exchange Act Rule 13a-14(a).
31.2	Certification of  Steven R. Roth, Chief Financial Officer, pursuant to Securities Exchange Act Rule 13a-14(a).
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Paul F. McLaughlin, Chief Executive Officer of Rudolph Technologies, Inc.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Steven R. Roth, Chief Financial Officer of Rudolph Technologies, Inc.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
* Management contract, compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Rudolph Technologies, Inc.
Date:	November 6, 2014	By:	/s/  Paul F. McLaughlin
		Paul F. McLaughlin
		Chairman and Chief Executive Officer
Date:	November 6, 2014	By:	/s/  Steven R. Roth
		Steven R. Roth
		Senior Vice President, Chief Financial Officer and Principal Accounting Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Form of Restricted Stock Agreement pursuant to the Rudolph Technologies, Inc. 2009 Stock Plan.
10.2	Restated and Amended Management Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and Paul F. McLaughlin (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
10.3	Restated and Amended Management Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and Steven R. Roth (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
10.4	Restated and Amended Employment Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and Michael Plisinski (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
10.5	Restated and Amended Employment Agreement, dated as of July 29, 2014, by and between Rudolph Technologies, Inc. and D. Mayson Brooks (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (SEC File No. 000-27965) filed on August 6, 2014). *
31.1	Certification of Paul F. McLaughlin, Chief Executive Officer, pursuant to Securities Exchange Act Rule 13a-14(a).
31.2	Certification of  Steven R. Roth, Chief Financial Officer, pursuant to Securities Exchange Act Rule 13a-14(a).
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Paul F. McLaughlin, Chief Executive Officer of Rudolph Technologies, Inc.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Steven R. Roth, Chief Financial Officer of Rudolph Technologies, Inc.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
* Management contract, compensatory plan or arrangement.

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EX-10.1

Exhibit 10.1

Rudolph Technologies, Inc.

Employee Restricted Stock Unit Purchase Agreement

THIS AGREEMENT (“Agreement”), dated _________________, 20___ (the “Award Date”), is made between Rudolph Technologies, Inc., a Delaware corporation, hereinafter referred to as the “Company,” and ________________________ (the “Participant”).

1. Definitions. All capitalized terms used in this Agreement without definition shall have the meanings ascribed in Company’s 2009 Stock Plan, as amended from time to time (the “Plan”).

2. Award of Restricted Stock Units.

(a) Award. In consideration of Participant’s agreement to remain in the employ of Company or one of its Subsidiaries, and for other good and valuable consideration, the Company hereby issues to Participant, as of the Award Date, the award for Restricted Stock Units (“RSUs”) covering shares (“Shares”) of common stock of the Company (“Common Stock”) as described in Attachment I - Notice of Award (the “Notice of Award”) attached to this Agreement (the “Award”). The number of RSUs subject to the Award (which shall be subject to adjustment in accordance with Section 15 of the Plan) is set forth in the Notice of Award. Each RSU represents the right to receive one Share, subject to the terms and conditions of this Agreement. Upon granting of the Award, all RSUs shall be credited to Participant’s employee stock plan account established at the stock plan administration service determined by Company (the “Stock Service”). The current Stock Service is set forth in the Notice of Award.

(a)Vested Shares to be Issued in Book Entry Form. Upon vesting of the RSUs and the satisfaction of all other applicable conditions set forth in this Agreement, the Company shall cause uncertificated Shares to be issued to Participant’s account. Shares to be delivered to Participant under the terms of this Award shall be delivered to Participant no later than two and one-half months following the last day of the year that includes the date of vesting and lapse of Restrictions.

(b)Plan. The Award granted hereunder is subject to the terms and provisions of the Plan, including without limitation, Article 15(a) thereof. The Award constitutes Restricted Stock Units pursuant Section 8 of the Plan.

3. Restrictions.

(a)Forfeiture. Except only as may otherwise be expressly set forth in any employment, severance or change in control agreement of the Company or a Subsidiary with Participant, any Award which is not vested as of the date Participant ceases to be an employee of Company or one of its Subsidiaries shall thereupon be forfeited immediately and terminate without any further action by Company.

(b)Vesting and Lapse of Restrictions. Subject to the terms of this Agreement, the RSUs covered by this Award shall vest and all Restrictions thereon shall lapse in accordance with the schedule set forth in the Notice of Award, provided in each case that Participant remains continuously as an employee of Company or a Subsidiary from the Award Date through the particular scheduled vesting date therefor (except only as may otherwise be expressly set forth in any employment, severance or change in control agreement of the Company or a Subsidiary with Participant). For purposes of this Agreement, “Restrictions” shall mean the exposure to forfeiture set forth in this Award.

(c)Acceleration of Vesting. Notwithstanding any other provision of this Award, the Award shall become fully vested and all Restrictions applicable to such Award shall lapse in the event of a Change in Control event and the successor or acquiring corporation or an affiliate thereof does not assume or substitute for this Award in accordance with Section 15(c)(i) of the Plan. Should the successor or acquiring corporation or an affiliate thereof assume or substitute for this Award in accordance with Section 15(c)(i) of the Plan, then no accelerated vesting or lapse of Restrictions of this Award shall apply.

(d)Tax Withholding; Issuance of Uncertificated Shares for Participants Domiciled Outside the U.S. For Participants domiciled outside of the United States, the provisions set forth herein related to U.S. federal and/or state tax withholding do not apply. Shares shall be delivered to such Participant or his or her legal representative at the time the vesting requirements as provided in this Award shall have been satisfied. Participants domiciled outside the U.S. are advised to consult with a local tax advisor regarding the tax ramifications of the Award in their country of residence and assure compliance with such tax obligations.

(e)Tax Withholding for Participants Domiciled in U.S. Withholding Requirements. By accepting this Award, Participant agrees to make appropriate arrangements with the Company for the satisfaction, as of the applicable withholding date, of all applicable federal, state and local tax withholding requirements, including in connection with the vesting and settlement of this Award. No Shares will be issued until satisfaction of such applicable tax withholding has been received by the Company. Prior to the delivery of any Shares pursuant to this Award, the Company will have the power and the right to deduct or withhold an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to the vesting or settlement of this Award.

(f)Withholding Arrangements. The Company pursuant to such procedures as it will specify from time to time, will permit Participant to satisfy such tax withholding obligation, in each case as of the applicable tax withholding date, by (without limitation and in such combinations as the Participant may elect):

(i)    paying cash;

(ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld; or

(iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld.

The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld. Participant may elect to make prior arrangements with the Stock Service to sell Shares as of the vesting date and apply the appropriate amount of the proceeds thereof to the applicable tax withholding amount and remit any balance of the proceeds to Participant, provided that if Participant elects to have any Shares sold by the Stock Service or otherwise, any such proposed sale of Shares shall be in compliance with and satisfy all requirements and conditions under the Rudolph Technologies, Inc. Insider Trading Compliance Program.

4. Company Share Issuance Prerequisites. Company shall not be required to issue or deliver any Shares prior to the fulfillment of all of the following conditions:

(a)the admission of the Shares to listing on all stock exchanges on which such Common Stock is then listed;

(b)the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Company shall, in its sole and absolute discretion, deem necessary and advisable;

(c)the obtaining of any approval or other clearance from any state or federal governmental agency that the Company shall, in its absolute discretion, determine to be necessary or advisable; and

(d)the lapse of any such reasonable period of time following the date the Restrictions lapse as the Company may from time to time establish for reasons of administrative convenience.

5.Restricted Stock Units Not Transferable. No RSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 5 shall not prevent transfers by will or by applicable laws of descent and distribution if permitted under the Plan.

6.Rights as Stockholder. Until Participant has satisfied all requirements for vesting and the satisfaction of all conditions set forth in this Agreement and Shares have been issued to Participant, Participant shall not be deemed to be a shareholder or to have any of the rights of a shareholder with respect to any such Shares.

7.Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other Service Provider of Company or any of its Subsidiaries.

8.Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement and the Award regardless of the law that might be applied under principles of conflicts of laws.

9.Conformity to Securities Laws. Participant acknowledges that the Plan and this Award are intended to conform to the extent necessary with all provisions of the Securities Act of 1933, as amended, and the Exchange Act, and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, including without limitation Rule 16b-3 under the Exchange Act. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Awards are granted, only in such a manner as to conform to such laws, rules and regulations.

10.Amendment, Suspension and Termination. The Awards may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Compensation Committee of the Board of Directors of the Company, which is the Administrator of the Plan (the “Committee”), provided that, except as otherwise provided by the Plan, neither the amendment, suspension nor termination of this Agreement shall, without the consent of Participant, alter or impair any material rights of Participant under this Award.

11.Notices. Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to Participant at his or her address then shown in Company records, and to Company at its principal executive office.

12.Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions will nevertheless be binding and enforceable.

13.Section 409A.

(a)This Award is intended to constitute a “short-term deferral” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and the rules and regulations promulgated thereunder and is intended to comply

with the requirements of Section 409A of the Code so as not to be subject to taxes, interest or penalties under Section 409A of the Code. This Agreement shall be interpreted and administered to give effect to such intention and understanding.

(b)Notwithstanding anything in this Agreement to the contrary, any payment or issuance of Shares to be made to the Participant under this Award in connection with Participant’s separation from service shall not be made until the date six months and one day after the date of the Participant’s separation from service to the extent necessary to comply with Section 409A(a)(B)(i) of the Code and applicable Treasury regulations thereunder, after giving effect to the extent applicable to the short-term deferral exemption under Treasury Regulation §1.409A-1(b)(4) and the severance pay exemption under Treasury Regulation §1.409A-1(b)(9)(iii). Following any such six-month and one day delay, all such delayed payments will be paid in a single lump sum on the date six months and one day after the Participant’s separation from service. For the purposes of this Agreement, “separation of service” means a separation from service as defined in Section 409A of the Code determined using the default provisions set forth in Treasury Regulation §1.409A-1(h) or any successor regulation thereto. Each and every payment or issuance of Shares made pursuant to this Award shall be deemed a separate payment or issuance and not a series of payments or issuances.

(c)If any provision of this Award would, in the reasonable, good faith judgment of the Committee, result or likely result in their position on the Participant, beneficiary or any other person claiming by or through the Participant, of any additional tax, accelerated taxation, interest or penalties under Section 409A of the Code, the Committee may, in its sole discretion, modify the terms of this Award or take any other such action, without the consent of the Participant or any spouse, beneficiary or any other person claiming by or through the Participant, in the manner that the Committee may reasonably and in good faith determine to be necessary or advisable to avoid the imposition of such additional tax, accelerated taxation, interest or penalties or otherwise comply with Sections 409A of the Code. However, nothing in this Agreement is intended to or shall create any obligation or liability on the part of the Company or the Committee or its members to modify the Agreement, the Award or any RSUs or other rights granted hereunder nor guarantee that the Participant will not be subject to additional taxes, accelerated taxation, interest or penalties under Section 409A of the Code.

Participant represents that he or she has read this Agreement and the Plan and is familiar with the terms and provisions of each. Participant acknowledges that the Award is issued pursuant to, and is subject to the terms and conditions of, the Plan, and Participant will be bound by the terms of the Plan as if it were set forth verbatim in this Agreement. Participant agrees to comply with all rules the Committee may establish from time to time with respect to the Plan. Participant agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee with respect to any questions arising under the Plan or this Agreement. Participant further acknowledges and agrees that this Agreement (including the Plan) constitutes the entire agreement between the parties with respect to the Award and that this Agreement (including the Plan) supersedes any and all prior agreements, whether written or oral, between the parties with respect to the Award.

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first set forth above.

RUDOLPH TECHNOLOGIES, INC.PARTICIPANT

By:___________________________    ______________________________

Name:    Name:

Title:

ATTACHMENT I

NOTICE OF AWARD

Participant Information:

Participant Name: ________________________    

Participant Residence Address:

«STREET1»

«STREET2»

«CITY», «STATE» «ZIP»

«COUNTRY»

Participant Section 16 Status:    Participant is is not a Section 16 Insider of Company.

Award Information:

Award Date: ___________________________

Aggregate number of Restricted Stock Units subject to the Award: __________________

Grant Number: ______________________

Vesting Schedule:

The Award shall vest and Restrictions shall lapse with respect to twenty percent (20%) of the Shares subject to the Award (rounded down to the next whole number of shares) on each of the first five (5) anniversaries of the Award Date.

The Award shall vest and Restrictions shall lapse with respect to

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

Additional Vesting Requirements:

____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________

Company Stock Plan Administration Service (the “Stock Service”): _________________________

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Paul F. McLaughlin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Rudolph Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2014

By:	/s/ PAUL F. MCLAUGHLIN
	Paul F. McLaughlin Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven R. Roth, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Rudolph Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2014

By:	/s/ STEVEN R. ROTH
	Steven R. Roth Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul F. McLaughlin, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Rudolph Technologies, Inc. on Form 10-Q for the quarter ended September 30, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Rudolph Technologies, Inc.

Date: November 6, 2014

By:	/s/  PAUL F. MCLAUGHLIN
	Paul F. McLaughlin Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven R. Roth, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Rudolph Technologies, Inc. on Form 10-Q for the quarter ended September 30, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Rudolph Technologies, Inc.

Date: November 6, 2014

By:	/s/  STEVEN R. ROTH
	Steven R. Roth Senior Vice President and Chief Financial Officer

XML

Identifiable Intangible Assets - (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Finite-Lived Intangible Assets and Goodwill [Line Items]
Goodwill	$ 22,495		$ 22,495		$ 22,553
Goodwill, Acquired During Period			0
Business Acquisition Purchase Price Allocation Goodwill Amount 2			(58)
Finite-Lived Intangible Assets, Gross	73,752		73,752		73,752
Finite-Lived Intangible Assets, Accumulated Amortization	64,195		64,195		62,288
Intangible Assets, Net (Excluding Goodwill)	9,557		9,557		11,464
Amortization of Intangible Assets	567	666	1,907	1,930
Future Amortization Expense, Remainder of Fiscal Year	515		515
Future Amortization Expense, Year One	2,050		2,050
Future Amortization Expense, Year Two	1,941		1,941
Future Amortization Expense, Year Three	1,553		1,553
Future Amortization Expense, Year Four	1,117		1,117
Future Amortization Expense, Year Five	1,117		1,117
Developed Technology Rights [Member]
Finite-Lived Intangible Assets and Goodwill [Line Items]
Finite-Lived Intangible Assets, Gross	59,831		59,831		59,831
Finite-Lived Intangible Assets, Accumulated Amortization	53,015		53,015		51,496
Intangible Assets, Net (Excluding Goodwill)	6,816		6,816		8,335
Customer Relationships [Member]
Finite-Lived Intangible Assets and Goodwill [Line Items]
Finite-Lived Intangible Assets, Gross	9,560		9,560		9,560
Finite-Lived Intangible Assets, Accumulated Amortization	7,730		7,730		7,449
Intangible Assets, Net (Excluding Goodwill)	1,830		1,830		2,111
Trade Names [Member]
Finite-Lived Intangible Assets and Goodwill [Line Items]
Finite-Lived Intangible Assets, Gross	4,361		4,361		4,361
Finite-Lived Intangible Assets, Accumulated Amortization	3,450		3,450		3,343
Intangible Assets, Net (Excluding Goodwill)	$ 911		$ 911		$ 1,018

XML

Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Rate	Sep. 30, 2013 Rate
Segment Reporting Information [Line Items]
Revenues	$ 46,960	$ 44,044	$ 131,627	$ 131,753
Concentration Risk, Percentage			7.40%	13.00%
Inspection Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	23,134	21,734	63,987	73,441
Metrology Revenue [Member]
Segment Reporting Information [Line Items]
Revenues	2,692	5,470	13,093	11,627
Lithography Revenue [Domain]
Segment Reporting Information [Line Items]
Revenues	7,304	3,618	10,961	7,318
Data Analysis & Review [Member]
Segment Reporting Information [Line Items]
Revenues	5,463	4,724	18,393	13,737
Sales Revenue, Goods, Net [Member]
Segment Reporting Information [Line Items]
Revenues	4,939	5,235	15,051	16,036
Sales Revenue, Services, Net [Member]
Segment Reporting Information [Line Items]
Revenues	3,428	3,263	10,142	9,594
Sales Revenue, Segment [Member]
Segment Reporting Information [Line Items]
Revenues	$ 46,960	$ 44,044	$ 131,627	$ 131,753
Sales [Member] | Percentage of Inspection Revenues [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	49.00%	49.00%	49.00%	55.00%
Sales [Member] | Percentage of Metrology Revenue [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	6.00%	12.00%	10.00%	9.00%
Sales [Member] | Percentage of Lithography Revenue [Member] [Domain]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	16.00%	8.00%	8.00%	6.00%
Sales [Member] | Percentage of Data Analysis & Review [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	12.00%	11.00%	14.00%	10.00%
Sales [Member] | Percentage of Parts [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	10.00%	12.00%	11.00%	13.00%
Sales [Member] | Percentage of Service [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	7.00%	8.00%	8.00%	7.00%
Sales [Member] | Percentage of Total Revenue [Member]
Segment Reporting Information [Line Items]
Concentration Risk, Percentage	100.00%	100.00%	100.00%	100.00%

XML

Legal Matters (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	9 Months Ended
	Jul. 22, 2014	Sep. 30, 2014	Sep. 30, 2013	Aug. 08, 2014
Commitments and Contingencies [Abstract]
Loss Contingency, Damages Awarded, Value		$ 15,475
Estimated Litigation Liability		3,259		3,252
Payments for Legal Settlements	$ 10,613	$ 10,613	$ 0

XML

Segment Reporting and Geographic Information Geographic Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
Revenues	$ 46,960	$ 44,044	$ 131,627	$ 131,753
UNITED STATES
Segment Reporting Information [Line Items]
Revenues	19,683	13,484	39,320	32,962
TAIWAN, PROVINCE OF CHINA
Segment Reporting Information [Line Items]
Revenues	14,592	11,136	34,774	43,757
JAPAN
Segment Reporting Information [Line Items]
Revenues	1,236	2,345	7,589	6,052
CHINA
Segment Reporting Information [Line Items]
Revenues	1,807	4,015	8,932	11,284
South Korea [Domain]
Segment Reporting Information [Line Items]
Revenues	1,434	1,928	9,873	6,995
Asia [Member]
Segment Reporting Information [Line Items]
Revenues	1,942	5,552	14,528	14,127
GERMANY
Segment Reporting Information [Line Items]
Revenues	3,166	1,771	8,418	4,242
Other Europe [Domain]
Segment Reporting Information [Line Items]
Revenues	3,100	3,813	8,193	12,334
Sales [Member]
Segment Reporting Information [Line Items]
Revenues	$ 46,960	$ 44,044	$ 131,627	$ 131,753

XML

Commitments and Contingencies - (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Commitments and Contingencies [Abstract]
Standard Product Warranty Accrual	$ 1,495	$ 1,517	$ 1,551	$ 2,024
Product Warranty Accrual, Warranties Issued	1,471	1,511
Product Warranty Accrual, Payments	$ 1,527	$ 2,018

XML

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Loss [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The components of accumulated other comprehensive loss, net of tax, are as follows:

	Foreign currency translation adjustments		Net unrealized losses on available-for-sale investments			Accumulated other comprehensive loss
Beginning Balance, December 31, 2013	$	1,645	$	150		$	1,795
Net current period other comprehensive loss	59		(188		)	(129		)
Reclassifications	—		—			—
Ending balance, September 30, 2014	$	1,704	$	(38	)	$	1,666

XML

Share Repurchase Program - (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Jul. 30, 2008
Share Repurchase Program [Abstract]
Restricted stock units excluded from Computation of diluted loss per share	1,247	1,247
Stock Repurchased and Retired During Period, Shares	138	238
Stock Repurchased During Period, Value	$ 1,344	$ 2,331
Share repurchase program, authorized amount of shares			3,000
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	2,762	2,762
StockRepurchasedAndRetired-AveragePricePerShare	$ 9.78	$ 9.81

XML

Identifiable Intangible Assets and Goodwill - (Tables)

9 Months Ended

Sep. 30, 2014

Identifiable Intangible Assets and Goodwill [Abstract]

Schedule of Goodwill [Table Text Block]

The changes in the carrying amount of goodwill are as follows:

Balance at December 31, 2013	$	22,553
Goodwill acquired during period	—
Other	(58		)
Balance at September 30, 2014	$	22,495

Schedule of Finite-Lived Intangible Assets by Major Class [Table Text Block]

Purchased intangible assets as of  September 30, 2014 and December 31, 2013 are as follows:

	Gross Carrying Amount		Accumulated Amortization		Net
September 30, 2014
Finite-lived intangibles:
Developed technology	$	59,831	$	53,015	$	6,816
Customer and distributor relationships	9,560		7,730		1,830
Trade names	4,361		3,450		911
Total identifiable intangible assets	$	73,752	$	64,195	$	9,557
December 31, 2013
Finite-lived intangibles:
Developed technology	$	59,831	$	51,496	$	8,335
Customer and distributor relationships	9,560		7,449		2,111
Trade names	4,361		3,343		1,018
Total identifiable intangible assets	$	73,752	$	62,288	$	11,464

XML

Other Income - (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Other Income (Expense) [Abstract]
Foreign currency exchange losses (gains), net	$ 337	$ (4)	$ 372	$ (53)
Total other expenses (income)	$ 337	$ (4)	$ 372	$ (53)

XML

Balance Sheet Details - Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Assets [Abstract]
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent	$ 27,377	$ 25,547
Other	1,470	1,776
Total Other Assets	$ 28,847	$ 27,323

XML

Marketable Securities - (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Proceeds from Sale of Available-for-sale Securities, Debt	$ 475
Available-for-sale Securities, Failed Auction, Value	0	277
Available-for-sale Securities, Amortized Cost Basis	114,820	86,732
Available-for-sale Securities, Fair Value Disclosure	114,857	86,582
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract]
Available-for-sale Securities, Debt Maturities, within One Year, Amortized Cost Basis	102,567	81,495
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value	102,595	81,533
Available-for-sale Securities, Debt Maturities, Rolling Year Two Through Five, Amortized Cost Basis	12,253	4,762
Available-for-sale Securities, Debt Maturities, Rolling Year Two Through Five, Fair Value	12,262	4,772
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Amortized Cost Basis	0	0
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Fair Value	0	0
Available-for-sale Securities, Debt Maturities, after Ten Years, Amortized Cost Basis	0	475
Held-to-maturity Securities, Debt Maturities, after Ten Years, Fair Value	0	277
US Government and Government Agencies and Authorities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost Basis	114,820	86,257
Available-for-sale Securities, Gross Unrealized Gains	39	50
Available-for-sale Securities, Gross Unrealized Losses	2	2
Available-for-sale Securities, Fair Value Disclosure	114,857	86,305
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	2,965	16,448
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	2	2
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0	0
Auction Rate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost Basis	0	475
Available-for-sale Securities, Gross Unrealized Gains	0	0
Available-for-sale Securities, Gross Unrealized Losses	0	198
Available-for-sale Securities, Fair Value Disclosure	0	277
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	277
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0	198
Available-for-sale Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost Basis	114,820	86,732
Available-for-sale Securities, Gross Unrealized Gains	39	50
Available-for-sale Securities, Gross Unrealized Losses	2	200
Available-for-sale Securities, Fair Value Disclosure	114,857	86,582
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	2,965	16,448
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	2	2
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0	277
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	$ 0	$ 198

XML

Earnings Per Share - (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Restricted stock units excluded from Computation of diluted loss per share	1,247		1,247
Net Income (Loss) Attributable to Parent	$ (998)	$ 252	$ (6,134)	$ 1,404
Weighted Average Number of Shares Outstanding, Basic	33,237	32,897	33,205	32,727
Weighted Average Number Diluted Shares Outstanding Adjustment	0	529	0	610
Weighted Average Number of Shares Outstanding, Diluted	33,237	33,426	33,205	33,337
Earnings (Loss) Per Share, Basic	$ (0.03)	$ 0.01	$ (0.18)	$ 0.04
Earnings (Loss) Per Share, Diluted	$ (0.03)	$ 0.01	$ (0.18)	$ 0.04
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		672		731
Stock Options Excluded from Computation of diluted loss per share	654		654

XML

Commitments and Contingencies Letter of Credit (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Loss Contingencies [Line Items]
MaximumCapacityToGuaranteeUnderExistingLettersOfCredit	$ 40,000

XML

Marketable Securities

9 Months Ended

Sep. 30, 2014

Marketable Securities [Abstract]

Marketable Securities [Text Block]

Marketable Securities

The Company has evaluated its investment policies and determined that all of its investment securities are to be classified as available-for-sale.  Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in Stockholders’ Equity under the caption “Accumulated other comprehensive loss.”  Realized gains and losses on available-for-sale securities are included in “Other expense (income)” in the Condensed Consolidated Statements of Operations.  The Company records other-than-temporary impairment charges for its available-for-sale investments when it intends to sell the securities, it is more-likely-than not that it will be required to sell the securities before a recovery, or when it does not expect to recover the entire amortized cost basis of the securities.  The cost of securities sold is based on the specific identification method.

At December 31, 2013, the Company held one auction rate security. The auction rate security was called and redeemed by the issuer during the three month period ended September 30, 2014. The auction rate security was redeemed for the full amount of $475.

The Company has determined that the gross unrealized losses on its marketable securities at September 30, 2014 and December 31, 2013 are temporary in nature. The Company reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, credit quality and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

At September 30, 2014 and December 31, 2013, marketable securities are categorized as follows:

	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
September 30, 2014
Municipal notes and bonds	$	114,820	$	39	$	2	$	114,857
Auction rate securities	—		—		—		—
Total marketable securities	$	114,820	$	39	$	2	$	114,857
December 31, 2013
Municipal notes and bonds	$	86,257	$	50	$	2	$	86,305
Auction rate securities	475		—		198		277
Total marketable securities	$	86,732	$	50	$	200	$	86,582

 The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Condensed Consolidated Balance Sheet classification, is as follows at September 30, 2014 and December 31, 2013:

	September 30, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	102,567	$	102,595	$	81,495	$	81,533
Due after one through five years	12,253		12,262		4,762		4,772
Due after five through ten years	—		—		—		—
Due after ten years	—		—		475		277
Total marketable securities	$	114,820	$	114,857	$	86,732	$	86,582

The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position at September 30, 2014 and December 31, 2013:  

	In Unrealized Loss Position For Less Than 12 Months				In Unrealized Loss Position For Greater Than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2014
Municipal notes and bonds	$	2,965	$	2	$	—	$	—
Auction rate securities	—		—		—		—
Total	$	2,965	$	2	$	—	$	—
December 31, 2013
Municipal notes and bonds	$	16,448	$	2	$	—	$	—
Auction rate securities	—		—		277		198
Total	$	16,448	$	2	$	277	$	198

See Note 2 for additional discussion regarding the fair value of the Company’s marketable securities.

XML

Balance Sheet Details - Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Current Liabilities [Abstract]
Estimated Litigation Liability, Current		$ 4,293
Deferred Revenue	8,536	8,383
Contingent Consideration Current Liability	583	868
Other Current Liabilities Subtotal	6,365	5,374
Other Liabilities, Current	$ 18,743	$ 18,918

XML

Share-Based Compensation - (Tables)

9 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Summary of restricted stock unit activity [Table Text Block]

A summary of the Company’s nonvested restricted stock unit activity with respect to the nine months ended September 30, 2014 is as follows:

	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013	1,116	$	9.73
Granted	616	$	10.91
Less: Vested	442	$	8.60
Less: Forfeited	43	$	10.52
Nonvested at September 30, 2014	1,247	$	10.68

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Commitments and Contingencies - (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Schedule of changes product warranty liability [Table Text Block]

Changes in the Company’s warranty reserves are as follows:

	Nine Months Ended September 30,
	2014		2013
Balance, beginning of the period	$	1,551	$	2,024
Accruals	1,471		1,511
Less: Usage	1,527		2,018
Balance, end of the period	$	1,495	$	1,517

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Segment Reporting and Geographic Information Customer Reporting (Details)	9 Months Ended
	Sep. 30, 2014 Rate	Sep. 30, 2013 Rate
Segment Reporting Information [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	7.40%	13.00%
Major Customers Two [Domain]
Segment Reporting Information [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	4.20%	11.20%

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Balance Sheet Details - Other Non-Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Non-current Liabilities [Abstract]
Unrecognized Tax Benefits	$ 3,537	$ 2,806
Contingent consideration - Acquisition non-current liability	4,320	4,340
Other Liabilities	1,800	1,772
Other Liabilities, Noncurrent	$ 9,657	$ 8,918

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Other Income - (Tables)

9 Months Ended

Sep. 30, 2014

Other Income (Expense) [Abstract]

Schedule of Other Nonoperating Income (Expense) [Table Text Block]

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014		2013			2014		2013
Foreign currency exchange losses (gains), net	$	337	$	(4	)	$	372	$	(53	)
Total other expense (income)	$	337	$	(4	)	$	372	$	(53	)

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Income Taxes - (Tables)

9 Months Ended

Sep. 30, 2014

Income Taxes [Abstract]

Schedule of effective tax rate [Table Text Block]

The following table provides details of income taxes:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Income (loss) before income taxes	$	2,835		$	37		$	(9,201	)	$	1,114
Provision (benefit) for income taxes	$	3,833		$	(215	)	$	(3,067	)	$	(290	)
Effective tax rate	135.2		%	(581.1		)%	33.3		%	(26.0		)%

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Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Measurements [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

The Company applies a three-level valuation hierarchy for fair value measurements. This hierarchy prioritizes the inputs into three broad levels.  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs based on management’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s fair value measurement classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at September 30, 2014 and December 31, 2013:

			Fair Value Measurements Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2014
Assets:
Available-for-sale debt securities:
Municipal notes and bonds	$	114,857	$	—	$	114,857	$	—
Auction rate securities	—		—		—		—
Foreign currency forward contracts	138		$	—	138		$	—
Total Assets	$	114,995	$	—	$	114,995	$	—
Liabilities:
Contingent consideration - acquisitions	$	4,903	$	—	$	—	$	4,903
Total Liabilities	$	4,903	$	—	$	—	$	4,903
December 31, 2013
Assets:
Available-for-sale debt securities:
Municipal notes and bonds	$	86,305	$	—	$	86,305	$	—
Auction rate securities	277		—		—		277
Foreign currency forward contracts	6		—		6		—
Total Assets	$	86,588	$	—	$	86,311	$	277
Liabilities:
Contingent consideration - acquisitions	$	5,208	$	—	$	—	$	5,208
Total Liabilities	$	5,208	$	—	$	—	$	5,208

Level 1 investments are based on quoted prices that are available in active markets.

The Company’s investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. The foreign currency forward contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers. Available-for-sale debt securities prices are obtained from third party pricing providers, which models prices utilizing the above observable inputs, for each asset class.

Level 3 investments consist of an auction rate security and contingent consideration related to an acquisition for which the Company uses a discounted cash flow model to value these investments. The auction rate security was called and redeemed by the issuer during the three month period ended September 30, 2014. The auction rate security was redeemed for the full amount of $475. The Level 3 assumptions used in the discounted cash flow model for the contingent consideration included projected revenues, estimates of discount rates of 6.7% and timing of cash flows. A significant decrease in the projected revenues or increase in discount rate could result in a significantly lower fair value measurement for the contingent consideration.

This table presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months endedSeptember 30, 2014:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets:
Balance at December 31, 2013	$	277
Unrealized gain in accumulated other comprehensive loss	198
Purchases	—
Sales, issuances, and settlements	(475		)
Transfers into (out of) Level 3	—
Balance at September 30, 2014	$	—
Liabilities:
Balance at December 31, 2013	$	5,208
Additions	—
Total gain included in earnings	(111		)
Payments	(194		)
Transfers into (out of) Level 3	—
Balance at September 30, 2014	$	4,903

See Note 3 for additional discussion regarding the fair value of the Company’s marketable securities.

Fair Value of Other Financial Instruments

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value because of the short-term maturity of these instruments. The estimated fair value of these obligations is based, primarily, on a market approach, comparing the Company’s interest rates to those rates the Company believes it would reasonably receive upon re-entry into the market. Judgment is required to estimate the fair value, using available market information and appropriate valuation methods.

The Company’s convertible senior notes are not publicly traded. The estimated fair value of the Company’s convertible senior notes was valued using a discounted cash flow model. The Level 3 assumptions, based on data available at the valuation date used in preparing the discounted cash flow model included estimates of interest rates, timing and amount of cash flows and expected holding periods of the convertible senior notes. The fair value of the contingent interest associated with the convertible senior notes is valued quarterly using the present value of expected cash flow model incorporating the probabilities of the contingent events occurring.

The following table reflects information pertaining to the Company’s convertible senior notes:

	September 30, 2014			December 31, 2013
Net carrying value of convertible senior notes	$	53,997		$	51,751
Estimated fair value of convertible senior notes	$	59,832		$	59,340
Estimated interest rate used in discounted cash flow model	4.4		%	4.2		%

There was no contingent interest related to the Company’s convertible senior notes as of September 30, 2014 and December 31, 2013.

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Earnings Per Share - (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The Company’s basic and diluted earnings (loss) per share amounts are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
Numerator:
Net income (loss)	$	(998	)	$	252	$	(6,134	)	$	1,404
Denominator:
Basic earnings (loss) per share - weighted average shares outstanding	33,237			32,897		33,205			32,727
Effect of potential dilutive securities:
Employee stock options and restricted stock units - dilutive shares	—			529		—			610
Diluted earnings (loss) per share - weighted average shares outstanding	33,237			33,426		33,205			33,337
Earnings (loss) per share:
Basic	$	(0.03	)	$	0.01	$	(0.18	)	$	0.04
Diluted	$	(0.03	)	$	0.01	$	(0.18	)	$	0.04

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Balance Sheet Details - Inventory (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Inventory Details [Abstract]
Inventory, Raw Materials, Net of Reserves	$ 29,822	$ 31,194
Inventory, Work in Process, Net of Reserves	26,437	19,867
Inventory, Finished Goods, Net of Reserves	9,570	10,290
Inventory, Net	65,829	61,351
Inventory Valuation Reserves	$ 6,878	$ 6,101

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Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Stockholders' Equity Attributable to Parent	$ 275,676	$ 279,003
Accumulated Translation Adjustment [Member]
Stockholders' Equity Attributable to Parent	1,704	1,645
Net current period other comprehensive gain (loss)	59
Reclassification of accumulated other comprehensive income (loss)	0
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Stockholders' Equity Attributable to Parent	(38)	150
Net current period other comprehensive gain (loss)	(188)
Reclassification of accumulated other comprehensive income (loss)	0
Accumulated Other Comprehensive Income (Loss) [Member]
Stockholders' Equity Attributable to Parent	1,666	1,795
Net current period other comprehensive gain (loss)	(129)
Reclassification of accumulated other comprehensive income (loss)	$ 0

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Statements of Financial Position Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Cash and Cash Equivalents, at Carrying Value	$ 47,628	$ 80,790
Marketable Securities, Current	114,857	86,582
Accounts Receivable, Net, Current	49,969	53,437
Inventory, Net	65,829	61,351
Prepaid Expense and Other Assets	23,774	14,804
Assets, Current	302,057	296,964
Property, Plant and Equipment, Net	12,244	13,058
Goodwill	22,495	22,553
Intangible Assets, Net (Excluding Goodwill)	9,557	11,464
Other Assets, Noncurrent	28,847	27,323
Assets	375,200	371,362
Accounts Payable and Accrued Liabilities	17,127	12,772
Other Liabilities, Current	18,743	18,918
Liabilities, Current	35,870	31,690
Convertible senior notes	53,997	51,751
Other Liabilities, Noncurrent	9,657	8,918
Liabilities	99,524	92,359
Commitments and Contingencies
Common Stock, Value, Issued	33	33
Additional Paid in Capital, Common Stock	418,417	415,739
Accumulated Other Comprehensive Income (Loss), Net of Tax	(1,666)	(1,795)
Retained Earnings (Accumulated Deficit)	(141,108)	(134,974)
Stockholders' Equity Attributable to Parent	275,676	279,003
Liabilities and Equity	$ 375,200	$ 371,362

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Debt Obligations - (Details) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Jul. 25, 2011
Debt Obligations [Abstract]
Convertible Debt		$ 60,000		$ 60,000		$ 60,000	$ 60,000
Debt Instrument, Interest Rate, Stated Percentage							3.75%
Convertible Preferred Stock, Shares Issued upon Conversion							77.241
Note increment for which conversion amount of Common Stock based							1
Debt Instrument, Convertible, Conversion Price							$ 12.95
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 17.00
Proceeds from Convertible Debt	50,249
Debt Instrument, Unamortized Discount		6,003		6,003		8,249
Convertible senior notes		53,997		53,997		51,751
Contractual Interest Coupon		563	562	1,688	1,686
Amortization of Debt Discount (Premium)		772	700	2,246	2,037
Amortization of Financing Costs		94	79	268	224
Interest Expense, Debt		$ 1,429	$ 1,341	$ 4,202	$ 3,947

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Statements of Cash Flows Statement (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Net Income (Loss) Attributable to Parent	$ (6,134)	$ 1,404
Amortization	1,912	2,113
Amortization of Financing Costs and Discounts	2,514	2,261
Depreciation	3,042	3,105
Foreign Currency Transaction Gain (Loss), before Tax	372	(53)
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Asset	(111)	0
Share-based Compensation	4,741	3,035
Provision for doubtful accounts and inventory valuation	2,974	2,382
Increase (Decrease) in Deferred Income Taxes	65	0
Increase (Decrease) in Other Operating Assets and Liabilities, Net	(11,361)	(18,219)
Net Cash Provided by (Used in) Operating Activities	(1,986)	(3,972)
Payments to Acquire Marketable Securities	(172,323)	(81,731)
Proceeds from Sale and Maturity of Marketable Securities	145,015	71,687
Payments to Acquire Property, Plant, and Equipment	(1,442)	(4,002)
Payments to Acquire Businesses, Net of Cash Acquired		(3,365)
Net Cash Provided by (Used in) Investing Activities	(28,750)	(17,411)
Payments for Repurchase of Common Stock	(2,330)	0
Proceeds from (Payments for) Other Financing Activities	(194)	0
Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options	200	903
Excess Tax Benefit (Tax Deficiency) from Share-based Compensation, Financing Activities	67	669
Net Cash Provided by (Used in) Financing Activities	(2,257)	1,572
Effect of Exchange Rate on Cash and Cash Equivalents	(169)	(662)
Cash and Cash Equivalents, Period Increase (Decrease)	(33,162)	(20,473)
Cash and Cash Equivalents, at Carrying Value	47,628	83,780
Income Taxes Paid	1,900	5,261
Interest Paid	2,250	2,250
Payments for Legal Settlements	$ 10,613	$ 0

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Share Repurchase Program - (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of common stock repurchased [Abstract]

share repurchase program [Table Text Block]

The Company did not repurchase any shares of its common stock during the three and nine month periods ended September 30, 2013. The following table summarizes the Company’s stock repurchases for the three and nine month periods ended September 30, 2014:

	Three Months Ended		Nine Months Ended
	September 30, 2014		September 30, 2014
Shares of common stock repurchased	138		238
Cost of stock repurchased		$1,344		$2,331
Average price paid per share		$9.78		$9.81

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Fair Value Measurements - (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Measurements [Abstract]

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at September 30, 2014 and December 31, 2013:

			Fair Value Measurements Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2014
Assets:
Available-for-sale debt securities:
Municipal notes and bonds	$	114,857	$	—	$	114,857	$	—
Auction rate securities	—		—		—		—
Foreign currency forward contracts	138		$	—	138		$	—
Total Assets	$	114,995	$	—	$	114,995	$	—
Liabilities:
Contingent consideration - acquisitions	$	4,903	$	—	$	—	$	4,903
Total Liabilities	$	4,903	$	—	$	—	$	4,903
December 31, 2013
Assets:
Available-for-sale debt securities:
Municipal notes and bonds	$	86,305	$	—	$	86,305	$	—
Auction rate securities	277		—		—		277
Foreign currency forward contracts	6		—		6		—
Total Assets	$	86,588	$	—	$	86,311	$	277
Liabilities:
Contingent consideration - acquisitions	$	5,208	$	—	$	—	$	5,208
Total Liabilities	$	5,208	$	—	$	—	$	5,208

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

This table presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months endedSeptember 30, 2014:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets:
Balance at December 31, 2013	$	277
Unrealized gain in accumulated other comprehensive loss	198
Purchases	—
Sales, issuances, and settlements	(475		)
Transfers into (out of) Level 3	—
Balance at September 30, 2014	$	—
Liabilities:
Balance at December 31, 2013	$	5,208
Additions	—
Total gain included in earnings	(111		)
Payments	(194		)
Transfers into (out of) Level 3	—
Balance at September 30, 2014	$	4,903

Fair value convertible senior notes [Table Text Block]

The following table reflects information pertaining to the Company’s convertible senior notes:

	September 30, 2014			December 31, 2013
Net carrying value of convertible senior notes	$	53,997		$	51,751
Estimated fair value of convertible senior notes	$	59,832		$	59,340
Estimated interest rate used in discounted cash flow model	4.4		%	4.2		%

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Fair Value Measurements - (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2014 Rate	Sep. 30, 2013	Dec. 31, 2013 Rate	Jun. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Proceeds from Sale of Available-for-sale Securities, Debt	$ 475
Financial Instruments, Owned, State and Municipal Government Obligations, at Fair Value	114,857		86,305
Available-for-sale Securities, Failed Auction, Value	0		277
Foreign Currency Contract, Asset, Fair Value Disclosure	138		6
Assets, Fair Value Disclosure	114,995		86,588
Business Combination, Contingent Consideration, Liability	(4,903)		5,208
Liabilities, Fair Value Disclosure	4,903		5,208
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value			277	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)		198
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issues, Settlements		0
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Sales, Issues, Settlements		(475)
Fair Value, Level 3 Transfers out, Description	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	4,903		5,208
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Other Comprehensive Income (Loss)	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases	(111)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	(194)
Convertible Debt	53,997		51,751
Long-term Debt, Fair Value	59,832		59,340
Fair Value Inputs Discount Rate 2	4.40%		4.20%
Fair Value Inputs Discount Rate 3	6.70%
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments, Owned, State and Municipal Government Obligations, at Fair Value	0		0
Available-for-sale Securities, Failed Auction, Value	0		0
Foreign Currency Contract, Asset, Fair Value Disclosure	0		0
Assets, Fair Value Disclosure	0		0
Business Combination, Contingent Consideration, Liability	0		0
Liabilities, Fair Value Disclosure	0		0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments, Owned, State and Municipal Government Obligations, at Fair Value	114,857		86,305
Available-for-sale Securities, Failed Auction, Value	0		0
Foreign Currency Contract, Asset, Fair Value Disclosure	138		6
Assets, Fair Value Disclosure	114,995		86,311
Business Combination, Contingent Consideration, Liability	0		0
Liabilities, Fair Value Disclosure	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments, Owned, State and Municipal Government Obligations, at Fair Value	0		0
Available-for-sale Securities, Failed Auction, Value	0		277
Foreign Currency Contract, Asset, Fair Value Disclosure	0		0
Assets, Fair Value Disclosure	0		277
Business Combination, Contingent Consideration, Liability	(4,903)		5,208
Liabilities, Fair Value Disclosure	$ 4,903		$ 5,208

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Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities - (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The dollar equivalent of the U.S. dollar forward contracts and related fair values as of September 30, 2014 and December 31, 2013 were as follows:

	September 30, 2014		December 31, 2013
Notional amount	$	2,447	$	1,029
Fair value of asset	$	138	$	6

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Basis of Presentation (Notes)

9 Months Ended

Sep. 30, 2014

Organization and Nature of Operations: [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared by Rudolph Technologies, Inc. (the “Company” or “Rudolph”) and in the opinion of management reflect all adjustments, consisting of normal recurring accruals, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Preparing financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.  Actual amounts could differ materially from those amounts.  The interim results for the three and nine month periods ended September 30, 2014 are not necessarily indicative of results to be expected for the entire year or any future periods.  This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 10-K”) filed with the Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements included in the 2013 10-K.

Reclassifications

Certain prior period amounts have been reclassified to conform to current financial statement presentation. These amounts include the reclassification of a portion of deferred tax assets from Other assets to Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, “Presentation of Financial Statements-Going Concern ( Subtopic 205-40 ), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This standard sets forth management’s responsibility to evaluate, each reporting period, whether there is substantial doubt about our ability to continue as a going concern, and if so, to provide related footnote disclosures. The standard is effective for annual and interim reporting periods ending after December 15, 2016. The Company is currently evaluating this new standard and expects it to have no impact on our financial position, results of operations, and cash flows.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. ASU 2014-09 will be effective for the Company starting in the first quarter of 2017. ASU 2014-09 allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the 2017 opening retained earnings balance. The Company is in the process of determining the adoption method as well as the effects the adoption of ASU 2014-09 will have on its consolidated financial position, results of operations, and cash flows.

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Statements of Financial Position B/S Parenthetical (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Allowance for Doubtful Accounts Receivable, Current	$ 1,366	$ 1,152

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

The following table provides details of income taxes:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Income (loss) before income taxes	$	2,835		$	37		$	(9,201	)	$	1,114
Provision (benefit) for income taxes	$	3,833		$	(215	)	$	(3,067	)	$	(290	)
Effective tax rate	135.2		%	(581.1		)%	33.3		%	(26.0		)%

The income tax provision for the three and nine months endedSeptember 30, 2014 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year. The effective tax rates for the three month periods ended September 30, 2014 and 2013 were impacted by changes in the Company’s annual earnings forecast which resulted in cumulative catch up adjustments being recorded in the period. The changes in the Company’s effective tax rate for the nine months endedSeptember 30, 2014 compared to the same period for the prior year are primarily due to the generation of federal R&D credits for both 2012 and 2013 recognized in 2013, which are not available in the 2014 period as a result of legislation, and an increase in foreign tax expense in excess of foreign tax credits generated in 2014.

The Company currently has a partial valuation allowance recorded against certain deferred tax assets. Each quarter, the Company assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers available evidence, both positive and negative, including prudent and feasible tax planning strategies in assessing the need for a valuation allowance. As a result of the Company’s analysis, it concluded that it is more likely than not that a portion of its deferred tax assets will not be realized. Therefore, the Company continues to provide a valuation allowance against certain deferred tax assets. The Company continues to closely monitor available evidence and may reverse some or all of the remaining valuation allowance in future periods, if appropriate. The Company has a valuation allowance of $1,646 as of September 30, 2014 and December 31, 2013.

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Document and Entity Information Document	9 Months Ended
	Sep. 30, 2014	Oct. 21, 2014
Entity Information [Line Items]
Entity Registrant Name	RUDOLPH TECHNOLOGIES INC
Entity Central Index Key	0001094392
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		33,185,520

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings (Loss) Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share is computed in the same manner and also gives effect to all dilutive common equivalent shares outstanding during the period.  Potential common shares that would have the effect of increasing diluted earnings per share are considered to be antidilutive. In accordance with U.S. GAAP, these shares were not included in calculating diluted earnings per share. For the three and nine months endedSeptember 30, 2014, all outstanding restricted stock units of 1,247 and stock options of 654 were excluded from the computation of diluted loss per share because the effect in the period would be antidilutive. For the three and nine months endedSeptember 30, 2013, the weighted average number of stock options and restricted stock units excluded from the computation of diluted earnings per share totaled 672 and 731, respectively, because their effect was antidilutive. Diluted earnings per share-weighted average shares outstanding do not include any effect resulting from assumed conversion of the Notes and warrants as their impact would be antidilutive.

The Company’s basic and diluted earnings (loss) per share amounts are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2014			2013		2014			2013
Numerator:
Net income (loss)	$	(998	)	$	252	$	(6,134	)	$	1,404
Denominator:
Basic earnings (loss) per share - weighted average shares outstanding	33,237			32,897		33,205			32,727
Effect of potential dilutive securities:
Employee stock options and restricted stock units - dilutive shares	—			529		—			610
Diluted earnings (loss) per share - weighted average shares outstanding	33,237			33,426		33,205			33,337
Earnings (loss) per share:
Basic	$	(0.03	)	$	0.01	$	(0.18	)	$	0.04
Diluted	$	(0.03	)	$	0.01	$	(0.18	)	$	0.04

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Statements of Income Statement (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues	$ 46,960	$ 44,044	$ 131,627	$ 131,753
Cost of Revenue	22,000	21,574	61,794	63,894
Gross Profit	24,960	22,470	69,833	67,859
Research and Development Expense	9,631	10,455	30,477	30,372
Selling, General and Administrative Expense	10,262	10,054	42,328	30,825
Amortization of Intangible Assets	567	666	1,907	1,930
Operating Expenses	20,460	21,175	74,712	63,127
Operating Income (Loss)	4,500	1,295	(4,879)	4,732
Interest Expense, net	1,328	1,262	3,950	3,671
Total other expenses (income)	337	(4)	372	(53)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	2,835	37	(9,201)	1,114
Income Tax Expense (Benefit)	3,833	(215)	(3,067)	(290)
Net Income (Loss) Attributable to Parent	$ (998)	$ 252	$ (6,134)	$ 1,404
Earnings (Loss) Per Share, Basic	$ (0.03)	$ 0.01	$ (0.18)	$ 0.04
Earnings (Loss) Per Share, Diluted	$ (0.03)	$ 0.01	$ (0.18)	$ 0.04
Weighted Average Number of Shares Outstanding, Basic	33,237	32,897	33,205	32,727
Weighted Average Number of Shares Outstanding, Diluted	33,237	33,426	33,205	33,337

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Balance Sheet Details

9 Months Ended

Sep. 30, 2014

Balance Sheet Detail [Abstract]

Balance Sheet Details [Text Block]

Balance Sheet Details

Inventories

Inventories are comprised of the following:

	September 30, 2014		December 31, 2013
Materials	$	29,822	$	31,194
Work-in-process	26,437		19,867
Finished goods	9,570		10,290
Total inventories	$	65,829	$	61,351

The Company has established reserves of $6,878 and $6,101 as of September 30, 2014 and December 31, 2013, respectively, for slow moving and obsolete inventory, which are included in the amounts above.

Property, Plant and Equipment

Property, plant and equipment, net is comprised of the following:

	September 30, 2014		December 31, 2013
Land and building	$	5,024	$	5,024
Machinery and equipment	21,322		20,827
Furniture and fixtures	3,498		4,043
Computer equipment	6,183		5,568
Leasehold improvements	7,797		7,744
	43,824		43,206
Less: Accumulated depreciation	31,580		30,148
Total property, plant and equipment, net	$	12,244	$	13,058

Other assets

Other assets is comprised of the following:

	September 30, 2014		December 31, 2013
Deferred income taxes	$	27,377	$	25,547
Other	1,470		1,776
Total other assets	$	28,847	$	27,323

Other current liabilities

Other current liabilities is comprised of the following:

	September 30, 2014		December 31, 2013
Litigation accrual	$	3,259	$	4,293
Deferred revenue	8,536		8,383
Contingent consideration - acquisitions	583		868
Other	6,365		5,374
Total other current liabilities	$	18,743	$	18,918

Other non-current liabilities

Other non-current liabilities is comprised of the following:

	September 30, 2014		December 31, 2013
Unrecognized tax benefits (including interest)	$	3,537	$	2,806
Contingent consideration - acquisitions	4,320		4,340
Other	1,800		1,772
Total other non-current liabilities	$	9,657	$	8,918

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Identifiable Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2014

Finite-Lived Intangible Assets [Line Items]

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Purchased Intangible Assets

Goodwill

The changes in the carrying amount of goodwill are as follows:

Balance at December 31, 2013	$	22,553
Goodwill acquired during period	—
Other	(58		)
Balance at September 30, 2014	$	22,495

Purchased Intangible Assets

Purchased intangible assets as of  September 30, 2014 and December 31, 2013 are as follows:

	Gross Carrying Amount		Accumulated Amortization		Net
September 30, 2014
Finite-lived intangibles:
Developed technology	$	59,831	$	53,015	$	6,816
Customer and distributor relationships	9,560		7,730		1,830
Trade names	4,361		3,450		911
Total identifiable intangible assets	$	73,752	$	64,195	$	9,557
December 31, 2013
Finite-lived intangibles:
Developed technology	$	59,831	$	51,496	$	8,335
Customer and distributor relationships	9,560		7,449		2,111
Trade names	4,361		3,343		1,018
Total identifiable intangible assets	$	73,752	$	62,288	$	11,464

Intangible asset amortization expense for the three and nine months endedSeptember 30, 2014 was $567 and $1,907, respectively. For the three and nine months endedSeptember 30, 2013, intangible assets amortization expense was $666 and $1,930, respectively. Assuming no change in the gross carrying value of identifiable intangible assets and estimated lives, estimated amortization expense for the remainder of 2014 will be $515, and for each of the next five years estimated amortization expense amounts to $2,050 for 2015, $1,941 for 2016, $1,553 for 2017, $1,117 for 2018, and $1,117 for 2019.

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Marketable Securities - (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Available-for-sale Securities [Line Items]

Schedule of marketable securities by category [Table Text Block]

At September 30, 2014 and December 31, 2013, marketable securities are categorized as follows:

	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
September 30, 2014
Municipal notes and bonds	$	114,820	$	39	$	2	$	114,857
Auction rate securities	—		—		—		—
Total marketable securities	$	114,820	$	39	$	2	$	114,857
December 31, 2013
Municipal notes and bonds	$	86,257	$	50	$	2	$	86,305
Auction rate securities	475		—		198		277
Total marketable securities	$	86,732	$	50	$	200	$	86,582

Schedule of marketable securities classified by contractual maturity date [Table Text Block]

The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Condensed Consolidated Balance Sheet classification, is as follows at September 30, 2014 and December 31, 2013:

	September 30, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	102,567	$	102,595	$	81,495	$	81,533
Due after one through five years	12,253		12,262		4,762		4,772
Due after five through ten years	—		—		—		—
Due after ten years	—		—		475		277
Total marketable securities	$	114,820	$	114,857	$	86,732	$	86,582

Schedule of marketable securities in unrealized loss positions [Table Text Block]

The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position at September 30, 2014 and December 31, 2013:  

	In Unrealized Loss Position For Less Than 12 Months				In Unrealized Loss Position For Greater Than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2014
Municipal notes and bonds	$	2,965	$	2	$	—	$	—
Auction rate securities	—		—		—		—
Total	$	2,965	$	2	$	—	$	—
December 31, 2013
Municipal notes and bonds	$	16,448	$	2	$	—	$	—
Auction rate securities	—		—		277		198
Total	$	16,448	$	2	$	277	$	198

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Accumulated Other Comprehensive Loss (Notes)

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Loss [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Accumulated Other Comprehensive Loss

Comprehensive income includes net income (loss), foreign currency translation adjustments, and net unrealized gains and losses on available-for-sale investments. See the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the effect of the components of comprehensive loss to our net income (loss).

The components of accumulated other comprehensive loss, net of tax, are as follows:

	Foreign currency translation adjustments		Net unrealized losses on available-for-sale investments			Accumulated other comprehensive loss
Beginning Balance, December 31, 2013	$	1,645	$	150		$	1,795
Net current period other comprehensive loss	59		(188		)	(129		)
Reclassifications	—		—			—
Ending balance, September 30, 2014	$	1,704	$	(38	)	$	1,666

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Share-Based Compensation

9 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Share-Based Compensation

Restricted Stock Unit Activity

A summary of the Company’s nonvested restricted stock unit activity with respect to the nine months ended September 30, 2014 is as follows:

	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013	1,116	$	9.73
Granted	616	$	10.91
Less: Vested	442	$	8.60
Less: Forfeited	43	$	10.52
Nonvested at September 30, 2014	1,247	$	10.68

As of September 30, 2014 and December 31, 2013, there was $7,287 and $5,755 of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.  That cost is expected to be recognized over a weighted average period of 2.6 years and 2.0 years for the respective periods.

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Debt Obligations

9 Months Ended

Sep. 30, 2014

Debt Obligations [Abstract]

Debt Disclosure [Text Block]

Debt Obligations

On July 25, 2011, the Company issued $60,000 aggregate principal amount of 3.75% Convertible Senior Notes due 2016 (the “Notes”) at par. The Notes were issued pursuant to an indenture, dated as of July 25, 2011, between the Company and Bank of New York Mellon Trust Company, N.A., as Trustee, which includes a form of Note. The Notes provide for the payment of interest semi-annually in arrears on January 15 and July 15 of each year, beginning January 15, 2012, at an annual rate of 3.75% and will mature on July 15, 2016, unless earlier converted or repurchased. The Notes may be converted, under certain circumstances, based on an initial conversion rate of 77.241 shares of Company common stock per $1 principal amount of Notes, which represents an initial conversion price of approximately $12.95 per share. Concurrently with the issuance of the Notes, the Company purchased a convertible note hedge and sold a warrant. Each of the convertible note hedge and warrant transactions were entered into with an affiliate of the initial purchaser of the Notes. The convertible note hedge is intended to reduce the potential future dilution to the Company’s common stock associated with the conversion of the Notes. However, the warrant transaction will have a dilutive effect on the Company’s earnings per share to the extent that the price of the Company’s common stock exceeds the strike price of the warrant. The strike price of the warrant is $17.00 per share subject to adjustment in accordance with the terms of the agreement. The net proceeds to the Company from the sale of the Notes, including the convertible note hedge and warrant were $50,249.

The following table reflects the net carrying value of the Notes:

	September 30, 2014		December 31, 2013
Convertible senior notes	$	60,000	$	60,000
Less: Unamortized interest discount	6,003		8,249
Net carrying value of convertible senior notes	$	53,997	$	51,751

The following table presents the amount of interest cost recognized relating to the Notes during the three and nine months endedSeptember 30, 2014 and September 30, 2013.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Contractual interest coupon	$	563	$	562	$	1,688	$	1,686
Amortization of interest discount	772		700		2,246		2,037
Amortization of debt issuance costs	94		79		268		224
Total interest cost recognized	$	1,429	$	1,341	$	4,202	$	3,947

The remaining bond discount of the Notes of $6,003, as of September 30, 2014, will be amortized over the remaining life of the Notes.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Warranty Reserves

The Company generally provides a warranty on its products for a period of twelve to fifteen months against defects in material and workmanship. The Company estimates the costs that may be incurred during the warranty period and records a liability in the amount of such costs at the time revenue is recognized. The Company’s estimate is based primarily on historical experience. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 15 months prior to the year-end and warranty accruals are related to sales during the year.

Changes in the Company’s warranty reserves are as follows:

	Nine Months Ended September 30,
	2014		2013
Balance, beginning of the period	$	1,551	$	2,024
Accruals	1,471		1,511
Less: Usage	1,527		2,018
Balance, end of the period	$	1,495	$	1,517

Warranty reserves are reported in the Condensed Consolidated Balance Sheets within the caption “Accounts payable and accrued liabilities.”

Legal Matters

From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business. As previously disclosed, in December 2007, the Company completed the acquisition of specific assets and liabilities of the semiconductor division of Applied Precision LLC (“Applied”). As a result of the acquisition, the Company assumed certain liabilities of Applied including a lawsuit filed in the United States District Court, District of Arizona, by Integrated Technology Corporation (“ITC”) which alleged Applied’s PrecisionPoint™, PrecisionWoRx^® and ProbeWoRx^® products infringed an ITC patent (Integrated Technology Corporation v. Rudolph Technologies, Inc., No.  CV-06-2182-PHX-ROS).  Prior to trial, the District Court ruled that such products sold prior to August of 2007 (the “pre-August 2007 tools”) infringed the ITC patent. At trial in December of 2011, a trial verdict was rendered in which the jury found that while the Company’s products manufactured after August of 2007 (the “post-August 2007 tools”) did not literally infringe ITC’s patent, the products were found to infringe under a rule known as the doctrine of equivalents, a legal principle which expands the language of patent claims to encompass products or processes which may otherwise be found not to literally infringe the patent. The jury awarded $15,475 to ITC in damages for sales made during the years 2000-2011, of which award approximately one-half related to sales for pre-August 2007 tools. The jury found that for the sales of the post-August 2007 tools, the infringement was willful. On July 23, 2012, the District Court issued an Order which affirmed the jury’s award, applied treble damages to the portion of the jury award related to post-August 2007 tool sales and granted ITC’s motion for attorney’s fees and prejudgment interest on the verdict and attorney’s fees. At that time, the District Court also enjoined the Company from future infringement of the ITC patent and from selling or supplying the applicable products with the applicable features from or into the United States. The Company appealed the injunction, the District Court Order and the damages assessment. In October 2012, the injunction was stayed by the U.S. Federal Court of Appeals and thereafter in June of 2013, the patent expired. On November 4, 2013, the U.S. Federal Court of Appeals issued a ruling which reversed the judgment of infringement against all post-August 2007 tools, reversed the finding of willfulness, vacated the treble damages award, vacated the award of attorney’s fees and costs, remanded the issue back to the District Court for further review, and affirmed the award of damages and interest for the pre-August 2007 tools. As a result of this ruling, the matter was resolved with regard to the alleged infringement of the post-August 2007 tools in the Company’s favor. With regard to the damages assessment against the pre-August 2007 tools, on March 4, 2014, the Company filed a Petition for a Writ of Certiorari with the U.S. Supreme Court to appeal the basis of the Federal Court of Appeals’ decision affirming the damages award for the pre-August 2007 tools. On June 30, 2014, the Supreme Court denied the Company’s Petition. On July 22, 2014, the Company then paid to ITC $10,613 which represented only the damages and interest portion of the judgment. Since the patent expired in June of 2013 and payment of the judgment has been made, this matter is fully resolved with the sole exception of the issue of the remanded attorney’s fees. On August 8, 2014, the District Court issued an order for setting the attorney’s fees award at $3,252 which the Company appealed to the U.S. Federal Court of Appeals on September 5, 2014. The Company believes that it has meritorious defenses regarding this issue and intends to continue to vigorously prosecute the matter. The $3,252 is held in escrow and is recorded in “Prepaid expenses and other current assets” in the Condensed Consolidated Balance Sheets. The corresponding liability is recorded under the caption, “Other current liabilities,” in the Condensed Consolidated Balance Sheets. The Company expects this to be the maximum liability reasonably possible for the attorney’s fees, excluding interest, for this lawsuit with respect to both the pre-August 2007 and post-2007 August tools.

In the Company’s patent infringement suit against Camtek, Ltd., of Migdal Hamek, Israel, concerning the Company’s proprietary continuous scan wafer inspection technology, the U.S. Federal Court of Appeals issued a ruling on August 22, 2011.  In its opinion, the Appellate Court affirmed multiple rulings from trial at the District Court level including (i) finding the Company’s U.S. Patent No. 6,826,298 valid, (ii) the part of the infringement ruling based on the finding that Camtek’s Falcon product strobes “based on velocity,” and (iii) the dismissal of Camtek’s claim against the Company for inequitable conduct against the U.S. Patent and Trademark Office.  The court did, however, revise one claim construction ruling made by the District Court in the original case.  As a result, the Appellate Court set aside the verdict delivered by the jury for damages and the District Court’s decision to enter an injunction against Camtek’s selling Falcon tools in the U.S. and remanded the case back to the trial court for a limited trial on this single infringement issue.  On March 31, 2014, the District Court ruled in the Company’s favor, finding that Camtek’s Falcon tools continue to infringe the Company’s patent even under the revised claim construction of the patent, obviating the need for the limited trial.  The Company intends to petition the court to reinstate a permanent injunction against the sale by Camtek of its infringing semiconductor inspection systems. The Company also anticipates that the damages originally awarded by the jury in 2009 will be reinstated, as well as related interest and all subsequently awarded damages.   This lawsuit was initially brought in 2005 by August Technology prior to its merger with the Company. A subsequent lawsuit has been filed by Rudolph against Camtek alleging infringement of Rudolph’s U.S. Patent No. 7,729,528, also related to the Company’s proprietary continuous scan wafer inspection technology.  This lawsuit is currently stayed pending resolution of a re-examination petition filed by Camtek with the U.S. Patent and Trademark Office.

Letter of Credit

The Company had a $40,000 irrevocable standby letter of credit with Credit Suisse AG available to secure the damages assessment in connection with the ITC litigation discussed in Legal Matters above. On July 22, 2014, the Company paid $10,613 to ITC through a draw down of the letter of credit. Pursuant to the terms of the letter of credit, upon draw down of the funds, the letter of credit was collateralized by securities held in the Company’s investment portfolios which were immediately sold to satisfy the letter of credit payment. The letter of credit was subsequently canceled upon completion of this payment.

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Other Expense (Income)

9 Months Ended

Sep. 30, 2014

Other Income (Expense) [Abstract]

Other Income and Other Expense Disclosure [Text Block]

Other Expense (Income)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014		2013			2014		2013
Foreign currency exchange losses (gains), net	$	337	$	(4	)	$	372	$	(53	)
Total other expense (income)	$	337	$	(4	)	$	372	$	(53	)

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Segment Reporting and Geographic Information - (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting and Geographic Information [Abstract]

Schedule of revenue from external customers by Products and Services [Table Text Block]

The following table lists the different sources of revenue:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2014				2013				2014				2013
Systems and Software:
Inspection	$	23,134	49	%	$	21,734	49	%	$	63,987	49	%	$	73,441	55	%
Metrology	2,692		6	%	5,470		12	%	13,093		10	%	11,627		9	%
Lithography	7,304		16	%	3,618		8	%	10,961		8	%	7,318		6	%
Data Analysis and Review	5,463		12	%	4,724		11	%	18,393		14	%	13,737		10	%
Parts	4,939		10	%	5,235		12	%	15,051		11	%	16,036		13	%
Services	3,428		7	%	3,263		8	%	10,142		8	%	9,594		7	%
Total revenue	$	46,960	100	%	$	44,044	100	%	$	131,627	100	%	$	131,753	100	%

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

For geographical revenue reporting, revenues are attributed to the geographic location in which the product is shipped.  Revenue by geographic region is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
United States	$	19,683	$	13,484	$	39,320	$	32,962
Taiwan	14,592		11,136		34,774		43,757
Japan	1,236		2,345		7,589		6,052
China	1,807		4,015		8,932		11,284
South Korea	1,434		1,928		9,873		6,995
Other Asia	1,942		5,552		14,528		14,127
Germany	3,166		1,771		8,418		4,242
Other Europe	3,100		3,813		8,193		12,334
Total revenue	$	46,960	$	44,044	$	131,627	$	131,753

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

The following customers each accounted for more than 10% of total revenues for the indicated periods.

	Nine Months Ended
	September 30,
	2014		2013
Customer A	7.4	%	13.0	%
Customer B	4.2	%	11.2	%

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Income Taxes - (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Taxes [Abstract]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest	$ 2,835	$ 37	$ (9,201)	$ 1,114
Income Tax Expense (Benefit)	3,833	(215)	(3,067)	(290)
Effective Income Tax Rate	135.20%	(581.10%)	33.30%	(26.00%)
Valuation Allowance, Amount	$ 1,646		$ 1,646

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Share Repurchase Program

9 Months Ended

Sep. 30, 2014

Share Repurchase Program [Abstract]

Share Repurchase [Text Block]

Share Repurchase Program

In 2008, the Board of Directors authorized a share repurchase program of up to 3,000 shares of the Company’s common stock with no established end date.  The program allows for repurchases to be made in the open market or through negotiated transactions from time to time. At September 30, 2014, 2,762 shares remained available for future stock repurchases under this repurchase program. The shares of common stock purchased under the share repurchase program are being retired.

The Company did not repurchase any shares of its common stock during the three and nine month periods ended September 30, 2013. The following table summarizes the Company’s stock repurchases for the three and nine month periods ended September 30, 2014:

	Three Months Ended		Nine Months Ended
	September 30, 2014		September 30, 2014
Shares of common stock repurchased	138		238
Cost of stock repurchased		$1,344		$2,331
Average price paid per share		$9.78		$9.81

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Balance Sheet Details - (Tables)

9 Months Ended

Sep. 30, 2014

Balance Sheet Detail [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories

Inventories are comprised of the following:

	September 30, 2014		December 31, 2013
Materials	$	29,822	$	31,194
Work-in-process	26,437		19,867
Finished goods	9,570		10,290
Total inventories	$	65,829	$	61,351

Property, Plant and Equipment [Table Text Block]

Property, Plant and Equipment

Property, plant and equipment, net is comprised of the following:

	September 30, 2014		December 31, 2013
Land and building	$	5,024	$	5,024
Machinery and equipment	21,322		20,827
Furniture and fixtures	3,498		4,043
Computer equipment	6,183		5,568
Leasehold improvements	7,797		7,744
	43,824		43,206
Less: Accumulated depreciation	31,580		30,148
Total property, plant and equipment, net	$	12,244	$	13,058

Schedule of Other Assets [Table Text Block]

Other assets

Other assets is comprised of the following:

	September 30, 2014		December 31, 2013
Deferred income taxes	$	27,377	$	25,547
Other	1,470		1,776
Total other assets	$	28,847	$	27,323

Other Current liabilities [Table Text Block]

Other current liabilities

Other current liabilities is comprised of the following:

	September 30, 2014		December 31, 2013
Litigation accrual	$	3,259	$	4,293
Deferred revenue	8,536		8,383
Contingent consideration - acquisitions	583		868
Other	6,365		5,374
Total other current liabilities	$	18,743	$	18,918

Other Non-current liabilities [Table Text Block]

Other non-current liabilities

Other non-current liabilities is comprised of the following:

	September 30, 2014		December 31, 2013
Unrecognized tax benefits (including interest)	$	3,537	$	2,806
Contingent consideration - acquisitions	4,320		4,340
Other	1,800		1,772
Total other non-current liabilities	$	9,657	$	8,918

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Share-Based Compensation Restricted Stock Units (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Restricted Stock Units Activity [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	672		731
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		1,247		1,116
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value		$ 10.68		$ 9.73
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		616
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 10.91
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period		442
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value		$ 8.60
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period		43
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value		$ 10.52
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized		$ 7,287		$ 5,755
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition		2 years 7 months 6 days		2 years 0 months 1 day

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Balance Sheet Details - Property Plant & Equipment (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Property Plant & Equipment [Abstract]
Buildings and Land Gross	$ 5,024	$ 5,024
Machinery and Equipment, Gross	21,322	20,827
Furniture and Fixtures, Gross	3,498	4,043
Computer Equipments And Software Gross	6,183	5,568
Leasehold Improvements, Gross	7,797	7,744
Property, Plant and Equipment, Gross	43,824	43,206
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	31,580	30,148
Property, Plant and Equipment, Net	$ 12,244	$ 13,058

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Statements of Comprehensive Income (Loss) Statement (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net Income (Loss) Attributable to Parent	$ (998)	$ 252	$ (6,134)	$ 1,404
Available-for-sale Securities, Change in Net Unrealized Holding Gain (Loss), Net of Tax	161	2	188	(39)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	(286)	563	(59)	(385)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ (1,123)	$ 817	$ (6,005)	$ 980

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Instruments and Hedging Activities

The Company, when it considers it to be appropriate, enters into forward contracts to hedge the economic exposures arising from foreign currency denominated transactions. At September 30, 2014 and December 31, 2013, these contracts included the future sale of Japanese Yen to purchase U.S. dollars. Derivative instruments are recognized as either “Prepaid expenses and other current assets” or “Other current liabilities” in the Condensed Consolidated Balance Sheets and are measured at fair value. The foreign currency forward contracts were entered into by the Company’s Japanese subsidiary to economically hedge a portion of certain intercompany obligations. The forward contracts are not designated as hedges for accounting purposes and an increase in the fair value of $132 and a decrease in the fair value of $259 for the nine month period ended September 30, 2014 and 2013, respectively, are recorded within the caption “Other expense (income)” in the Condensed Consolidated Statements of Operations.

The dollar equivalent of the U.S. dollar forward contracts and related fair values as of September 30, 2014 and December 31, 2013 were as follows:

	September 30, 2014		December 31, 2013
Notional amount	$	2,447	$	1,029
Fair value of asset	$	138	$	6

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Debt Obligations - (Tables)

9 Months Ended

Sep. 30, 2014

Debt Obligations [Abstract]

Schedule of carrying value of convertible senior notes [Table Text Block]

The following table reflects the net carrying value of the Notes:

	September 30, 2014		December 31, 2013
Convertible senior notes	$	60,000	$	60,000
Less: Unamortized interest discount	6,003		8,249
Net carrying value of convertible senior notes	$	53,997	$	51,751

Schedule of interest cost recognized on convertible senior notes [Table Text Block]

The following table presents the amount of interest cost recognized relating to the Notes during the three and nine months endedSeptember 30, 2014 and September 30, 2013.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Contractual interest coupon	$	563	$	562	$	1,688	$	1,686
Amortization of interest discount	772		700		2,246		2,037
Amortization of debt issuance costs	94		79		268		224
Total interest cost recognized	$	1,429	$	1,341	$	4,202	$	3,947

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Derivative Instruments and Hedging Activities - (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Derivative [Line Items]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ 132	$ 259
Derivative, Notional Amount	2,447		1,029
Derivative Asset, Fair Value, Gross Asset	$ 138		$ 6

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Segment Reporting and Geographic Information

9 Months Ended

Sep. 30, 2014

Segment Reporting and Geographic Information [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Reporting and Geographic Information

The Company is engaged in the design, development, manufacture and support of high-performance control metrology, defect inspection, advanced packaging lithography and data analysis systems used by microelectronics device manufacturers. The Company and its subsidiaries currently operate in a single operating segment: the design, development, manufacture and support of high-performance process control defect inspection, metrology, and process control software systems used by microelectronics device manufacturers, and therefore have one reportable segment. The Company’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the reporting segment level.

The following table lists the different sources of revenue:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2014				2013				2014				2013
Systems and Software:
Inspection	$	23,134	49	%	$	21,734	49	%	$	63,987	49	%	$	73,441	55	%
Metrology	2,692		6	%	5,470		12	%	13,093		10	%	11,627		9	%
Lithography	7,304		16	%	3,618		8	%	10,961		8	%	7,318		6	%
Data Analysis and Review	5,463		12	%	4,724		11	%	18,393		14	%	13,737		10	%
Parts	4,939		10	%	5,235		12	%	15,051		11	%	16,036		13	%
Services	3,428		7	%	3,263		8	%	10,142		8	%	9,594		7	%
Total revenue	$	46,960	100	%	$	44,044	100	%	$	131,627	100	%	$	131,753	100	%

For geographical revenue reporting, revenues are attributed to the geographic location in which the product is shipped.  Revenue by geographic region is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
United States	$	19,683	$	13,484	$	39,320	$	32,962
Taiwan	14,592		11,136		34,774		43,757
Japan	1,236		2,345		7,589		6,052
China	1,807		4,015		8,932		11,284
South Korea	1,434		1,928		9,873		6,995
Other Asia	1,942		5,552		14,528		14,127
Germany	3,166		1,771		8,418		4,242
Other Europe	3,100		3,813		8,193		12,334
Total revenue	$	46,960	$	44,044	$	131,627	$	131,753

The following customers each accounted for more than 10% of total revenues for the indicated periods.

	Nine Months Ended
	September 30,
	2014		2013
Customer A	7.4	%	13.0	%
Customer B	4.2	%	11.2	%