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Rudolph Technologies Reports 124 Percent Increase in Revenue and Exceeds Earnings Guidance for the Third Quarter 2010

^{Published on 2010-11-01 17:55:15 - Market Wire}
 

FLANDERS, N.J.--([ BUSINESS WIRE ])--[ Rudolph Technologies, Inc. ] (Nasdaq: RTEC), a leading provider of process characterization equipment and software for wafer fabs and advanced packaging facilities, today announced financial results for the third quarter of 2010.

"Our solid financial results for the third quarter, including reaching our historical high gross margin of 56 percent, reflect the success of our strategy of positioning Rudolph Technologies to capitalize on non-synchronized investment cycles in the front-end and back-end of the semiconductor equipment market"

Third Quarter 2010 Highlights:

• Revenue of $52.3 million increased 124 percent year-over-year.
• GAAP earnings per share was $0.28 as compared to a loss of ($0.16) in the prior year period.
• Gross margin exceeded long-term model and increased to 56 percent.
• Operating margins expanded leading to 17 percent net after tax earnings.
• Cash and marketable securities increased to $74.9 million.
• Year-to-date revenues of $141.3 million and GAAP earnings per share of $0.56.

aOur solid financial results for the third quarter, including reaching our historical high gross margin of 56 percent, reflect the success of our strategy of positioning Rudolph Technologies to capitalize on non-synchronized investment cycles in the front-end and back-end of the semiconductor equipment market,a noted Paul F. McLaughlin, Chairman and Chief Executive Officer. aStrong front-end and software sales fueled our success, despite some moderation in the industrya™s back-end capacity demand. We see continued successes with our new products, in particular those targeting the transparent and metal film Metrology markets, which we believe is translating into market share gains. With our balance of hardware and software solutions for both front-end and back-end customers producing results well within our long-term operating model, we forecast continued gains in the fourth quarter of 2010,a Mr. McLaughlin concluded.

Third Quarter 2010 Financial Results

Third quarter revenue totaled $52.3 million, a 124 percent increase compared with $23.3 million for the 2009 third quarter and the sixth consecutive quarter-over-quarter increase. During the third quarter, international sales represented approximately 84 percent of revenue, while domestic sales accounted for 16 percent. In the 2009 third quarter, international sales represented approximately 82 percent of revenue and domestic sales accounted for 18 percent. Revenue from front-end semiconductor customers accounted for approximately 66 percent of revenue and back-end customers accounted for the remaining 34 percent.

During the third quarter, Rudolph Technologies continued the restructuring of its New Jersey manufacturing operations, which are being consolidated into the Companya™s manufacturing operations in Minnesota. The Company incurred $440 thousand in charges in the quarter related to the consolidation. In addition, the Company incurred $597 thousand in the quarter for legal services related to ongoing litigation.

Third quarter gross margin rose to 56 percent, compared to 41 percent in the 2009 third quarter. The increase in gross margin was due to higher revenues, including an increase in software sales, higher average selling prices and lower reserves due to better inventory utilization.

Operating expenses for the third quarter of 2010 totaled $18.9 million, an increase of $4.5 million from the $14.4 million in the 2009 third quarter. Research and development (R&D) expenses for the third quarter totaled $8.3 million, compared with $6.4 million in the same period of 2009. The increase in R&D is primarily due to the Companya™s 2009 acquisition of Adventa Control Technologies, and higher compensation, project and litigation costs. Selling, general and administrative (S,G&A) expenses for the third quarter totaled $10.1 million, compared with $7.7 million in the 2009 third quarter. The increase in S,G&A was primarily due to higher compensation, sales commission and restructuring costs.

Other income, which represents foreign currency losses, totaled $902 thousand for the 2010 third quarter compared with $626 thousand in the third quarter of 2009.

GAAP net income for the third quarter of 2010 was $8.9 million, or $0.28 per share, compared with net loss of ($4.8) million or ($0.16) per share, for the third quarter of 2009. Excluding the after-tax impact of $2.4 million in non-GAAP adjustments, which included restructuring, litigation, and stock-based compensation charges, the third quarter non-GAAP net income was $10.7 million, or $0.34 per share. The 2009 third quarter non-GAAP net loss totaled ($2.3) million, or ($0.07) per share.

Balance Sheet Strength

At September 30, 2010, cash and marketable securities increased to $74.9 million. Accounts receivable ended the quarter at $43.9 million and DSOa™s decreased to 76 days. Working capital ended the quarter at $147.7 million.

Conference Call

Rudolph Technologies will discuss its 2010 third quarter results on a conference call it is hosting today at 4:45 PM EDT. A live audio webcast will also be available to investors on the Companya™s website at [ www.rudolphtech.com ]. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary software.

Discussion of Non-GAAP Financial Measures

In this press release, we have presented financial measures, which have not been determined in accordance with generally accepted accounting principles (GAAP) and are therefore non-GAAP financial measures. Non-GAAP financial measures exclude the impact of under-utilized manufacturing facilities costs, litigation fees, acquisition related expenses, share based compensation, and restructuring costs. We believe that this presentation of non-GAAP financial measures allows investors to better assess the Companya™s operating performance by comparing it to prior periods on a more consistent basis. We have included a reconciliation of various non-GAAP financial measures to those measures reported in accordance with GAAP. To that end, non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. Because our calculation of non-GAAP financial measures may differ from similar measures used by other companies, investors should be careful when comparing our non-GAAP financial measures to those of other companies.

About Rudolph Technologies

Rudolph Technologies is a worldwide leader in the design, development, manufacture and support of defect inspection, process control metrology, and data analysis systems used by semiconductor device manufacturers worldwide. Rudolph provides a full-fab solution through its families of proprietary products that provide critical yield-enhancing information, enabling microelectronic device manufacturers to drive down costs and time to market. Rudolph offers yield management solutions used in wafer processing and final manufacturing through a family of systems for macro-defect inspection (detection and classification), as well as transparent and opaque thin film measurements.

The Company has enhanced the competitiveness of its products in the marketplace by anticipating and addressing many emerging trends driving the semiconductor industry's growth. Rudolpha™s strategy for continued technological and market leadership includes aggressive research and development of complementary inspection and metrology solutions. Headquartered in Flanders, New Jersey, Rudolph supports its customers with a worldwide sales and service organization. Additional information can be found on the Companya™s web site at [ www.rudolphtech.com ].

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the aActa) which include Rudolpha™s business momentum and future growth; the benefit to customers of Rudolpha™s products and customer service; Rudolpha™s ability to both deliver products and services consistent with our customersa™ demands and expectations and strengthen its market position; Rudolpha™s expectations regarding its operating expenses; as well as other matters that are not purely historical data. Rudolph wishes to take advantage of the asafe harbora provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Rudolpha™s control. Such factors include, but are not limited to, the Companya™s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities; and the ability to target high-margin markets. Additional information and considerations regarding the risks faced by Rudolph are available in Rudolpha™s Form 10-K report for the year ended December 31, 2009 and other filings with the Securities and Exchange Commission. As the forward-looking statements are based on Rudolpha™s current expectations, the Company cannot guarantee any related future results, levels of activity, performance or achievements. Rudolph does not assume any obligation to update the forward-looking information contained in this press release.