UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2014
CASCADE MICROTECH, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 000-51072
| Oregon | 93-0856709 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 9100 S.W. Gemini Drive Beaverton, Oregon |
97008 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (503) 601-1000
Former name or former address if changed since last report:
No Change
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On August 6, 2014, Cascade Microtech, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and six months ended June 30, 2014, and its expectations as to its financial results for the quarter ending September 30, 2014. The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated. The press release issued August 6, 2014 is furnished herewith as Exhibit No. 99.1 to this Report, and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is furnished herewith and this list is intended to constitute the exhibit index:
| 99.1 | Press Release issued by Cascade Microtech, Inc. dated August 6, 2014. |
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SIGNATURE
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 hereunto duly authorized.
| Date: August 6, 2014 | CASCADE MICROTECH, INC. | |||||
| (Registrant) | ||||||
| By: | /s/ JEFF KILLIAN | |||||
| Jeff Killian | ||||||
| Chief Financial Officer and Treasurer | ||||||
| (Principal Financial and Accounting Officer) | ||||||
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Exhibit 99.1
Cascade Microtech Reports Second Quarter 2014 Results
Revenue of $33.5 million
Record Gross Margin of 50.8%
Income from Operations of $2.9 million
GAAP EPS of $0.11
Non-GAAP EPS of $0.13
BEAVERTON, Ore.—(MARKETWIRE) — August 6, 2014 —Cascade Microtech, Inc. (NASDAQ:CSCD) today reported financial results for the second quarter ended June 30, 2014.
Financial summary
Results for the quarter ended June 30, 2014 were as follows:
| • | Total revenue of $33.5 million, compared to $33.8 million for Q1 2014 and $30.3 million for Q2 2013. |
| – | Systems revenue of $21.8 million, an increase of $0.3 million, or 1.2%, over Q1 2014, and an increase of $2.0 million, or 10.0%, over Q2 2013. |
| – | Probes revenue of $11.6 million, a decrease of $0.6 million, or -5.1%, from record high Q1 2014, and an increase of $1.2 million, or 11.2%, over Q2 2013. |
| • | Gross margin of 50.8%, up from 48.1% in Q1 2014 and 47.1% in Q2 2013. |
| – | Q2 2014 represents record gross margin performance overall and for each segment. |
| – | Systems gross margin of 46.5%, up from 42.7% in Q1 2014 and 44.1% in Q2 2013. |
| – | Probes gross margin of 58.9%, up from 57.8% in Q1 2014 and 52.7% in Q2 2013. |
| • | Income from operations of $2.9 million, an increase of $0.3 million, or 12.5%, over Q1 2014, and an increase of $0.4 million, or 16.3%, over Q2 2013. |
| • | GAAP net income of $1.8 million, or $0.11 per diluted share, compared to $1.6 million, or $0.10 per diluted share, for Q1 2014, and $2.2 million, or $0.15 per diluted share, for Q2 2013. |
| – | Q2 2014 includes tax expense of $1.1 million, or $0.06 per diluted share, compared to $0.9 million, or $0.06 per diluted share, for Q1 2014, and $0.2 million, or $0.02 per diluted share, for Q2 2013. |
| • | Non-GAAP net income of $0.13 per diluted share, compared to $0.13 per diluted share for Q1 2014, and $0.17 per diluted share for Q2 2013. |
| • | Depreciation, amortization and stock-based compensation expenses totaled $2.4 million, compared to $2.1 million for Q1 2014 and $1.7 million for Q2 2013. |
| • | Adjusted EBITDAS of $5.1 million, compared to $4.7 million for Q1 2014 and $4.3 million for Q2 2013. |
| • | Total cash, restricted cash and investments of $30.3 million, an increase of $1.8 million over March 31, 2014. |
| – | Q2 2014 includes stock repurchases of $0.2 million. |
| • | Book-to-bill ratio of 0.89 to 1. |
“We are very pleased with the continued improvement in both business segments as well as our financial results. In addition to setting record gross margins and validating the key first step to our Success Model, we strengthened our business through the introduction of our strategic partnership initiatives that we call MeasureOne. These initiatives expand our markets while leveraging our sales and service channel. Our leadership position with our customer base continues to be our major focus. This focus will manifest itself in increased investment in research and development to meet our customers request and road-maps. Based upon the engagement with our customers and a strong Q2 behind us, we are optimistic about the rest of 2014,” said Michael Burger, President and CEO.
Financial outlook
For the third quarter of 2014 we are projecting revenue in the range of $31.0 million to $34.0 million with diluted GAAP earnings per share in the range of $0.04 to $0.08, and non-GAAP earnings per share in the range of $0.07 to $0.11. Our guidance assumes a tax rate of 37%, consistent foreign currency rates and no significant one-time charges.
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We will host a conference call beginning at 2:00 p.m. PDT (5:00 p.m. EDT) on Wednesday, August 6, 2014, to discuss our results for the quarter ended June 30, 2014.
A simultaneous audio cast of the conference call may be accessed online from the investor relations page of www.cascademicrotech.com/investors. If you are interested in participating in the call, the live dial-in number is 866-953-6860, or international 617-399-3484, participant Passcode: 85034028. A replay will be available after 9:00 p.m. EDT at the same internet address. (For a telephone replay available after 9:00 p.m. EDT, dial: 888-286-8010, international: 617-801-6888, Passcode: 99609077).
Forward-Looking Statements
The statements in this release regarding performance to the Success Model, customer demand, investment in research and development, our optimism about the rest of 2014, and statements under “Financial Outlook” regarding projected revenue, GAAP earnings per share, and non-GAAP earnings per share, and other statements identified by terminology such as “will,” “should,” “expects,” “estimates,” “predicts,” and “continue” or other derivations of these or other comparable terms are “forward-looking” statements within the meaning of the Securities Litigation Reform act of 1995. Such statements are based on current expectations, estimates and projections about the Company’s business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including: changes in demand for the Company’s products; changes in product mix; potential delays and other factors affecting the timing of new product introductions; the timing of shipments and customer orders; constraints on supplies of components; excess or shortage of production capacity; potential failure of expected market opportunities to materialize; changes in foreign exchange rates; our ability or delay in integrating acquired businesses; and other risks discussed from time to time in the Company’s Securities and Exchange Commission filings and reports, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In addition, such statements could be affected by general industry and market conditions and growth rates and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company’s earnings release contains Non-GAAP financial measures which are defined below and reconciled to GAAP financial measures in a table later in this release:
| • | Non-GAAP net income is defined as GAAP net income before certain items (adjustments) such as restructuring, facility move and project costs, acquisition-related expenses, the amortization of intangibles and discrete tax items that we believe are either not representative of our ongoing operating performance or effect the comparability of results over time. Non-GAAP net income should not be construed as a substitute for net income as defined by GAAP. However, we regard non-GAAP net income as a complement to GAAP net income in assessing our financial performance over time and in the future. |
| • | Adjusted EBITDAS is defined as income from continuing operations before depreciation and amortization and stock-based compensation and certain other items (adjustments) such as restructuring, facility move and project costs, and acquisition-related expenses that we believe are not representative of our ongoing operating performance. Adjusted EBITDAS should not be construed as a substitute for net income from continuing operations or net cash provided by (used in) operating activities (all as determined in accordance with GAAP) for the purpose of analyzing our operating performance, financial position and cash flows, as adjusted EBITDAS is not defined by GAAP. However, we regard adjusted EBITDAS as a complement to net income from continuing operations and other GAAP financial performance measures, by including an indirect measure of operating cash flow. |
About Cascade Microtech, Inc.
Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in precision contact, electrical measurement and test of integrated circuits (ICs), optical devices and other small structures. For technology businesses and scientific institutions that need to evaluate small structures, Cascade Microtech delivers access to electrical data
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from wafers, ICs, IC packages, circuit boards and modules, MEMS, 3D TSV, LED devices and more. Cascade Microtech’s leading-edge stations, probes, probe cards, advanced thermal subsystems and integrated systems deliver precision accuracy and superior performance both in the lab and during production manufacturing of high-speed and high-density semiconductor chips. For more information, visit www.cascademicrotech.com.
FOR MORE INFORMATION, CONTACT:
Jeff A. Killian
Cascade Microtech, Inc.
(503) 601-1280
###
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CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| Revenue |
$ | 33,452 | $ | 33,810 | $ | 30,307 | $ | 67,262 | $ | 57,778 | ||||||||||
| Cost of sales |
16,466 | 17,537 | 16,032 | 34,003 | 31,960 | |||||||||||||||
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|
|||||||||||
| Gross profit |
16,986 | 16,273 | 14,275 | 33,259 | 25,818 | |||||||||||||||
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| Operating expenses: |
||||||||||||||||||||
| Research and development |
3,428 | 3,241 | 2,694 | 6,669 | 5,150 | |||||||||||||||
| Selling, general and administrative |
10,630 | 10,430 | 9,064 | 21,060 | 17,110 | |||||||||||||||
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| 14,058 | 13,671 | 11,758 | 27,729 | 22,260 | ||||||||||||||||
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| Income from operations |
2,928 | 2,602 | 2,517 | 5,530 | 3,558 | |||||||||||||||
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| Other income (expense): |
||||||||||||||||||||
| Interest income, net |
7 | 2 | 2 | 9 | 22 | |||||||||||||||
| Other, net |
(56 | ) | (69 | ) | (112 | ) | (125 | ) | (356 | ) | ||||||||||
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|||||||||||
| (49 | ) | (67 | ) | (110 | ) | (116 | ) | (334 | ) | |||||||||||
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| Income before income taxes |
2,879 | 2,535 | 2,407 | 5,414 | 3,224 | |||||||||||||||
| Income tax expense (benefit) |
1,051 | 943 | 221 | 1,994 | 291 | |||||||||||||||
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| Net income |
$ | 1,828 | $ | 1,592 | $ | 2,186 | $ | 3,420 | $ | 2,933 | ||||||||||
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| Net income per share: |
||||||||||||||||||||
| Basic |
$ | 0.11 | $ | 0.10 | $ | 0.15 | $ | 0.21 | $ | 0.21 | ||||||||||
| Diluted |
$ | 0.11 | $ | 0.10 | $ | 0.15 | $ | 0.20 | $ | 0.20 | ||||||||||
| Shares used in computing net income per share: |
||||||||||||||||||||
| Basic |
16,255 | 16,242 | 14,342 | 16,249 | 14,283 | |||||||||||||||
| Diluted |
16,751 | 16,679 | 14,652 | 16,725 | 14,626 | |||||||||||||||
4
CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
| June 30, 2014 |
December 31, 2013 |
|||||||
| Assets | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 27,764 | $ | 17,172 | ||||
| Marketable securities |
1,683 | 4,278 | ||||||
| Restricted cash |
825 | 1,082 | ||||||
| Accounts receivable, net |
21,912 | 26,520 | ||||||
| Inventories |
27,095 | 24,884 | ||||||
| Deferred income taxes |
2,273 | 2,268 | ||||||
| Prepaid expenses and other |
3,090 | 2,147 | ||||||
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|||||
| Total current assets |
84,642 | 78,351 | ||||||
| Fixed assets, net |
6,796 | 6,403 | ||||||
| Goodwill |
14,361 | 14,471 | ||||||
| Purchased intangible assets, net |
15,364 | 16,937 | ||||||
| Deferred income taxes |
1,273 | 1,235 | ||||||
| Other assets |
1,039 | 1,114 | ||||||
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|||||
| $ | 123,475 | $ | 118,511 | |||||
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| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: |
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| Accounts payable |
$ | 7,405 | $ | 7,229 | ||||
| Deferred revenue |
2,183 | 2,555 | ||||||
| Accrued liabilities |
9,757 | 8,859 | ||||||
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|||||
| Total current liabilities |
19,345 | 18,643 | ||||||
| Deferred revenue |
538 | 548 | ||||||
| Other long-term liabilities |
1,877 | 2,119 | ||||||
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| Total liabilities |
21,760 | 21,310 | ||||||
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| Shareholders’ equity: |
||||||||
| Common stock |
109,263 | 108,070 | ||||||
| Accumulated other comprehensive income (loss) |
19 | 118 | ||||||
| Accumulated deficit |
(7,567 | ) | (10,987 | ) | ||||
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|||||
| Total shareholders’ equity |
101,715 | 97,201 | ||||||
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| $ | 123,475 | $ | 118,511 | |||||
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CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share amounts)
(unaudited)
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | June 30, | Six Months Ended June 30, | |||||||||||||||||
| Non-GAAP Net Income |
2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| GAAP net income |
$ | 1,828 | $ | 1,592 | $ | 2,186 | $ | 3,420 | $ | 2,933 | ||||||||||
| Adjustments to net income: |
||||||||||||||||||||
| Restructuring |
249 | — | 112 | 249 | 112 | |||||||||||||||
| Acquisition and acquisition related |
(457 | ) | — | — | (457 | ) | — | |||||||||||||
| Amortization of intangibles |
780 | 785 | 234 | 1,565 | 470 | |||||||||||||||
| Income tax effect of non-GAAP adjustments |
(209 | ) | (291 | ) | (30 | ) | (500 | ) | (50 | ) | ||||||||||
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| Non-GAAP net income |
$ | 2,191 | $ | 2,086 | $ | 2,502 | $ | 4,277 | $ | 3,465 | ||||||||||
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| GAAP net income per diluted share |
$ | 0.11 | $ | 0.10 | $ | 0.15 | $ | 0.20 | $ | 0.20 | ||||||||||
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| Non-GAAP net income per diluted share |
$ | 0.13 | $ | 0.13 | $ | 0.17 | $ | 0.26 | $ | 0.24 | ||||||||||
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| Shares used in diluted share calculations |
16,751 | 16,679 | 14,652 | 16,725 | 14,626 | |||||||||||||||
| Three Months Ending September 30, 2014 | ||||||||
| Low Range Guidance | High Range Guidance | |||||||
| Forward-looking non-GAAP net income |
||||||||
| GAAP net income |
$ | 700 | $ | 1,400 | ||||
| Adjustments: |
||||||||
| Amortization of intangibles |
780 | 780 | ||||||
| Income tax effect of non-GAAP adjustments |
(289 | ) | (289 | ) | ||||
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| Non-GAAP net income |
$ | 1,191 | $ | 1,891 | ||||
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| GAAP net income per diluted share |
$ | 0.04 | $ | 0.08 | ||||
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| Non-GAAP net income per diluted share |
$ | 0.07 | $ | 0.11 | ||||
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| Shares used in diluted share calculations |
16,800 | 16,800 | ||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | June 30, | Six Months Ended June 30, | |||||||||||||||||
| EBITDAS and Adjusted EBITDAS |
2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| GAAP Income from operations |
$ | 2,928 | $ | 2,602 | $ | 2,517 | $ | 5,530 | $ | 3,558 | ||||||||||
| Adjustments: |
||||||||||||||||||||
| Depreciation |
799 | 829 | 944 | 1,628 | 1,906 | |||||||||||||||
| Amortization of intangibles |
780 | 785 | 234 | 1,565 | 470 | |||||||||||||||
| Stock-based compensation |
821 | 449 | 537 | 1,270 | 872 | |||||||||||||||
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| EBITDAS |
$ | 5,328 | $ | 4,665 | $ | 4,232 | $ | 9,993 | $ | 6,806 | ||||||||||
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| Adjustments: |
||||||||||||||||||||
| Restructuring |
249 | — | 112 | 249 | 112 | |||||||||||||||
| Acquisition and acquisition related |
(457 | ) | — | — | (457 | ) | — | |||||||||||||
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| Adjusted EBITDAS |
$ | 5,120 | $ | 4,665 | $ | 4,344 | $ | 9,785 | $ | 6,918 | ||||||||||
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