August Technology Announces Plans to Restate Timing of Revenue Recognized in Prior Periods.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- August Technology Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AUGT), a leading provider of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. inspection and data analysis solutions for the microelectronic The miniaturization of electronic circuits. See chip. industries, today announced that the audit committee of the Company's board of directors has determined to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state the timing of revenue recognized from a series of transactions with one customer. In 2004 and the first half of 2005, the Company sold AXi 930 systems to a customer for an aggregate amount of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $12.2 million and recognized the revenue for these sales. During the same time periods, the Company accepted orders from the same customer for enhancement packages to the AXi 930 system but has not yet delivered these enhancement packages. In connection with preparing to report its results for the quarter ended September September: see month. 30, 2005, the Company determined that recognition of the $12.2 million of revenue from the AXi 930 systems should have been deferred until the delivery of the enhancement packages, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Emerging Issues Task Force Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables." The Company therefore will restate its financial statements for the annual and quarterly periods in the fiscal year ended December December: see month. 31, 2004, and the quarters ended March 31, 2005 and June June: see month. 30, 2005 to reduce the net revenues in those periods by an aggregate of approximately $12.2 million. Accordingly, the financial statements for those periods should no longer be relied upon. The customer cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. its orders for the enhancement packages on September 27, 2005, which will allow the Company to recognize the entire $12.2 million of restated revenue in the quarter ended September 30, 2005. On September 23, 2005, management and the audit committee discussed these issues regarding the Company's recognition of revenue with the Company's independent registered public accounting firm and concluded that revenue was improperly im·prop·er adj. 1. Not suited to circumstances or needs; unsuitable: improper shoes for a hike; improper medical treatment. 2. recognized. Accordingly, management and the audit committee concluded that the Company will restate its financial statements by filing with the Securities and Exchange Commission such amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Annual and Quarterly reports as management determines are appropriate. Based on its review to date of the transactions with the customer described above, management's preliminary estimates of the approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. effect of revenue recognition timing differences are set forth in the table below. If the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. process results in the deferral deferral - Waiting for quiet on the Ethernet. of revenues from other customers or other accounting changes, the preliminary estimates set forth in the table below may change. As set forth in the table, the restatement adjustments are expected to decrease revenues for the year ended December 31, 2004 by approximately $6.7 million and for the six months ended June 30, 2005 by approximately $5.5 million, resulting in an aggregate reduction in revenue of approximately $12.2 million. Because the Company expects to recognize this $12.2 million of restated revenue in the quarter ended September 30, 2005, the restatement essentially represents a change in the timing of revenue recognition.
Estimated Year Three Months Six Months
Adjustments to Net Revenues Ended Ended Ended
($ in thousands)
----------------------------- --------- ------------------ -----------
12/31/04 3/31/05 6/30/05 6/30/05
----------------------------- --------- --------- -------- -----------
Previously reported net
revenues $68,443 $18,417 $19,688 $38,105
----------------------------- --------- --------- -------- -----------
Estimated adjustments (6,704) (3,050) (2,401) (5,451)
----------------------------- --------- --------- -------- -----------
Net revenues, as restated $61,739 $15,367 $17,287 $32,654
Estimated Year Three Months Six Months
Adjustments to Net Ended Ended Ended
Income (Loss)
($ in thousands)
---------------------------- --------- ------------------- -----------
12/31/04 3/31/05 6/30/05 6/30/05
---------------------------- --------- --------- --------- -----------
Previously reported net
income (loss) $802 $(898) $(11,041) $(11,939)
---------------------------- --------- --------- --------- -----------
Estimated adjustments (3,993) (1,563) (1,144) (2,707)
---------------------------- --------- --------- --------- -----------
Net income (loss), as
restated $(3,191) $(2,461) $(12,185) $(14,646)
A schedule showing management's preliminary estimates of the quarterly impact of this revenue recognition restatement on the Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations for 2004 and the first two quarters of 2005 is provided below. The restatement estimated herein is confined con·fine v. con·fined, con·fin·ing, con·fines v.tr. 1. To keep within bounds; restrict: Please confine your remarks to the issues at hand. See Synonyms at limit. to revenue and the related cost of revenues and no significant income tax provision change is currently anticipated. A schedule is also included below which shows the primary impact of the restatement of the June 30, 2005 and December 31, 2004 Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. to be confined to be in childbed. See also: Confine to accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , inventory at customers under purchase orders and deferred revenues. The restatement will have no impact on cash balances or cash flows from operating activities. The discussion of the Company's revised financial results contained in this press release has been prepared by management and represents management's preliminary estimate of the revised results. These results are subject to change as management and the Company's independent registered public accounting firm complete their review. "We believe the proposed adjustments to the timing of revenue recognized from ongoing transactions with a valued customer reflect our commitment to the highest standards of applicable accounting treatment," commented Roger Gower Gower (gou`ər), Welsh Gŵyr, peninsula, c.15 mi (24 km) long and 5 mi (8 km) wide, Swansea, S Wales, between Swansea and Carmarthen bays. , Chairman of August Technology's Audit Committee. "This restatement resulted from a technical application of accounting principles and we have no reason to believe there has been any misconduct MISCONDUCT. Unlawful behaviour by a person entrusted in any degree: with the administration of justice, by which the rights of the parties and the justice of the, case may have been affected. 2. or wrongdoing wrong·do·er n. One who does wrong, especially morally or ethically. wrong  do by any August
Technology personnel," Gower concluded.Revised Guidance for the September Quarter Stan STAN Stanchion STAN Stärke- und Ausrüstungsnachweis (German) Stan Standard Man (human patient simulator) STAN SEMCIP Technical Assistance Network STAN System Trace Audit Number STAN Star Trek Area Network Piekos, August Technology's Chief Financial Officer, stated, "As we look ahead, we now anticipate that third quarter revenues will range from +5% to +10% as compared to previously reported second quarter revenues, before giving effect to the restatement, in the upper half of the range of our previous guidance of flat to +10%. We continue to believe our participation in advanced macro inspection will allow us to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. the industry in 2005." As indicated earlier, on a restated basis in addition to the forecasted results described above, the Company expects to recognize the $12.2 million of restated revenue in the quarter ended September 30, 2005. The Company currently estimates that the restatement of financial statements will delay the process of completing the Securities and Exchange Commission's review of the Form S-4 Registration Statement filed by Rudolph Rudolph: see Raoul, king of France. Rudolph his red nose lit the way for Santa and his sleigh. [Am. Pop. Music: “Rudolph the Red-Nosed Reindeer”] See : Nose Technologies, Inc. in connection with the Company's proposed merger with Rudolph. Although the Company plans to proceed as quickly as possible with the restatement, the time required will depend upon factors outside its control, including the extent of the review required by the Company's independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. . The restatement process may also delay the Company's announcement of its third quarter results and the filing of the Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the third quarter, currently planned for November November: see month. 9, 2005. About the Company: August Technology's automated inspection and data analysis solutions provide critical product and process enhancing information, which enables microelectronic device manufacturers to drive down costs and time to market. With the first all-surface advanced macro inspection solution, August Technology has incorporated frontside, backside BACKSIDE, estates. In England this term was formerly used in conveyances and even in pleadings, and is still, adhered to with reference to ancient descriptions in deeds, in continuing the transfer of the same. property. and wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. edge inspection in a single system. Following detection, August Technology's decision tools correlate the defect defect - bug data across surfaces and provide the comprehensive information necessary for device manufacturers to make process-enhancing decisions. Headquartered in Bloomington, Minnesota Bloomington is a city in Hennepin County, Minnesota, and a southern suburb of Minneapolis. As of 2005, it had a population of 84,347, making it the largest Twin Cities suburb, and the fifth largest city in the state[1]. , August Technology supports its customers with a worldwide sales and service organization. Additional information can be found on the company's web site at www.augusttech.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This release contains forward-looking statements including those regarding (i) the nature, scope and timing of the Company's restatement of its financial statements and the impact of the restatement on the Form S-4 Registration Statement of Rudolph Technologies, Inc. and the Company's Form 10-Q for the quarter ended September 30, 2005, (ii) the Company's expectation of recognizing the $12.2 million of restated revenue in the third quarter of 2005 and (iii) the Company's expectation to outperform the industry again in 2005 and achieve Q3 2005 sequential One after the other in some consecutive order such as by name or number. revenue change of +5 to +10% on a pre-restatement basis. These forward-looking statements involve risks and uncertainties which may cause actual results or timing to differ from those set forth in the forward-looking statements, including, but not limited to: (i) additional issues may arise in connection with the ongoing review of the Company's financial statements and accounting records by management, the audit committee and the Company's independent registered public accounting firm that may cause additional deferral of revenue or additional accounting changes; (ii) the Company's expectations for the third quarter of 2005 may change if additional issues arise in the course of the review associated with the restatement or in the course of closing its books for the third quarter; (iii) actions resulting from discussions with or required by the Securities and Exchange Commission may affect the results of the restatement and the Company's filings with the Securities and Exchange Commission; (iv) if the restatement causes the Company to delay the filing of its Form 10-Q for the quarter ended September 30, 2005, the Company will not be in compliance with the rules of the Securities and Exchange Commission and Nasdaq and may be the subject of sanctions Sanctions is the plural of sanction. Depending on context, a sanction can be either a punishment or a permission. The word is a contronym. Sanctions involving countries: When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. of the Company's securities from Nasdaq; (v) the restatement may delay or otherwise adversely affect the Company's proposed merger with Rudolph Technologies, Inc. increasing costs for the Company; (vi) no continuing improvement, or a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in general economic conditions and in the semiconductor and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. microelectronic industries; (vii) pre-order 1. (graph theory) pre-order - traversal. 2. (theory) pre-order - A relation R is a pre-order if it is reflexive (x R x) and transitive (x R y R z => x R z). If it is also antisymmetric (x R y R x => x = y) then it is a partial ordering. sales activities not resulting in orders, or customers delaying or canceling orders in backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. ; (viii) loss of potential sales to competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. based on pricing, product features or other factors; (ix) lack of customer acceptance in the upcoming quarters of the Company's newer products including All-Surface inspection solutions and DMS (1) (Document Management System) See document management. (2) (Defense Messaging System) An X.500-compliant messaging system developed by the U.S. Dept. of Defense. Decision that were or are planned to be shipped to them; (x) failure of the Company's recently completed and current product development efforts to meet customer needs and expectations including driving down their costs and time-to-market; (xi) unanticipated costs and expenses which increase operating costs operating costs npl → gastos mpl operacionales . Please refer to additional risk factors stated in August Technology's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the SEC on March 16, 2005. August Technology does not assume any obligation to update the forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information contained in this press release.
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31,
2004 2004 2004 2004
---------- ---------- --------- ----------
As Previously
Reported
-------------------
Net revenues $16,400 $19,855 $15,516 $16,672
Cost of revenues 7,058 9,059 8,187 7,621
---------- ---------- --------- ----------
Gross profit
9,342 10,796 7,329 9,051
Selling, general and
administrative expenses 5,189 5,390 6,202 6,017
Research and development
expenses 2,908 3,322 3,822 3,509
---------- ---------- --------- ----------
Operating income
1,245 2,084 (2,695) (475)
Merger expenses - - - -
Interest income 201 189 204 253
Other income - - 46 27
---------- ---------- --------- ----------
Income (loss) before
provision for income taxes 1,446 2,273 (2,445) (195)
Provision for
income taxes - 100 - 177
---------- ---------- --------- ----------
Net income (loss) $1,446 $2,173 $(2,445) $(372)
========== ========== ========= ==========
Net income (loss)
per share:
Basic $0.08 $0.12 $(0.14) $(0.02)
Diluted $0.08 $0.12 $(0.14) $(0.02)
Revenue Recognition
Restatement Summary
---------------------------
Net revenues - (2,210) (4,387) (107)
Cost of revenues - (900) (1,811) -
---------- ---------- --------- ----------
Gross profit
- (1,310) (2,576) (107)
---------- ---------- --------- ----------
As Restated
-------------------
Net revenues $16,400 $17,645 $11,129 $16,565
Cost of revenues 7,058 8,159 6,376 7,621
---------- ---------- --------- ----------
Gross profit
9,342 9,486 4,753 8,944
Selling, general and
administrative expenses 5,189 5,390 6,202 6,017
Research and development
expenses 2,908 3,322 3,822 3,509
---------- ---------- --------- ----------
Operating income
1,245 774 (5,271) (582)
Merger expenses - - - -
Interest income 201 189 204 253
Other income - - 46 27
---------- ---------- --------- ----------
Income (loss) before
provision for income taxes 1,446 963 (5,021) (302)
Provision for
income taxes - 100 - 177
---------- ---------- --------- ----------
Net income (loss) $1,446 $863 $(5,021) $(479)
========== ========== ========= ==========
Net income (loss)
per share:
Basic $0.08 $0.05 $(0.28) $(0.03)
Diluted $0.08 $0.05 $(0.28) $(0.03)
Weighted average shares
outstanding used to
calculate net income
(loss) per share:
Basic - As Previously
Reported and As
Restated 17,622 17,778 17,803 17,815
Diluted - As Previously
Reported 18,486 18,349 17,803 17,815
Diluted - As
Restated 18,486 18,349 17,803 17,815
Year Three Months Ended Six Months
Ended Ended
---------------------
Dec. 31, Mar. 31, June 30, June 30,
2004 2005 2005 2005
--------- ---------- ---------- ----------
As Previously
Reported
-------------------
Net revenues $68,443 $18,417 $19,688 $38,105
Cost of revenues 31,925 8,359 8,403 16,762
--------- ---------- ---------- ----------
Gross profit
36,518 10,058 11,285 21,343
Selling, general and
administrative expenses 22,798 6,290 7,236 13,526
Research and development
expenses 13,561 3,666 3,324 6,990
--------- ---------- ---------- ----------
Operating income
159 102 725 827
Merger expenses - (1,234) (11,991) (13,225)
Interest income 847 289 334 623
Other income 73 - - -
--------- ---------- ---------- ----------
Income (loss) before
provision for income taxes 1,079 (843) (10,932) (11,775)
Provision for
income taxes 277 55 109 164
--------- ---------- ---------- ----------
Net income (loss) $802 $(898) $(11,041) $(11,939)
========= ========== ========== ==========
Net income (loss)
per share:
Basic $0.05 $(0.05) $(0.61) $(0.67)
Diluted $0.04 $(0.05) $(0.61) $(0.67)
Revenue Recognition
Restatement Summary
-----------------------
Net revenues (6,704) (3,050) (2,401) (5,451)
Cost of revenues (2,711) (1,487) (1,257) (2,744)
--------- ---------- ---------- ----------
Gross profit
(3,993) (1,563) (1,144) (2,707)
--------- ---------- ---------- ----------
As Restated
-------------------
Net revenues $61,739 $15,367 $17,287 $32,654
Cost of revenues 29,214 6,872 7,146 14,018
--------- ---------- ---------- ----------
Gross profit
32,525 8,495 10,141 18,636
Selling, general and
administrative expenses 22,798 6,290 7,236 13,526
Research and development
expenses 13,561 3,666 3,324 6,990
--------- ---------- ---------- ----------
Operating income
(3,834) (1,461) (419) (1,880)
Merger expenses - (1,234) (11,991) (13,225)
Interest income 847 289 334 623
Other income 73 - - -
--------- ---------- ---------- ----------
Income (loss)
before provision
for income taxes (2,914) (2,406) (12,076) (14,482)
Provision for
income taxes 277 55 109 164
--------- ---------- ---------- ----------
Net income (loss) $(3,191) $(2,461) $(12,185) $(14,646)
========= ========== ========== ==========
Net income (loss)
per share:
Basic $(0.18) $(0.14) $(0.68) $(0.82)
Diluted $(0.18) $(0.14) $(0.68) $(0.82)
Weighted average shares
outstanding used to
calculate net income
(loss) per share:
Basic - As Previously
Reported and As
Restated 17,755 17,867 18,005 17,936
Diluted - As Previously
Reported 18,211 17,867 18,005 17,936
Diluted - As
Restated 17,755 17,867 18,005 17,936
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, 2005 December 31, 2004
-------------------- --------------------
As As As As
Previously Previously
Reported Restated Reported Restated
---------- --------- ---------- ---------
ASSETS
Current assets:
Cash and cash
equivalents $10,313 $10,313 $5,518 $5,518
Short-term marketable
debt securities 22,583 22,583 28,615 28,615
Accounts receivable, net 12,035 10,389 8,603 8,328
Inventories 21,393 21,393 20,131 20,131
Inventories at customers
under purchase orders 3,646 9,101 3,993 6,704
Prepaid expenses and
other current assets 1,651 1,951 2,306 2,531
---------- --------- ---------- ---------
Total current
assets 71,621 75,730 69,166 71,827
Property and equipment, net 5,342 5,342 5,994 5,994
Long-term marketable debt
securities 9,034 9,034 16,289 16,289
Purchased technology, net 3,098 3,098 3,703 3,703
Goodwill 498 498 498 498
Other assets 162 162 150 150
---------- --------- ---------- ---------
Total assets $89,755 $93,864 $95,800 $98,461
========== ========= ========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,947 $6,747 $3,366 $3,291
Accrued compensation 2,952 2,952 1,691 1,691
Other accrued
liabilities 2,353 2,353 2,306 2,306
Customer deposits and
deferred revenues 6,769 17,778 6,841 13,570
---------- --------- ---------- ---------
Total current
liabilities 19,021 29,830 14,204 20,858
Other non-current
liabilities 108 108 131 131
---------- --------- ---------- ---------
Total
liabilities 19,129 29,938 14,335 20,989
---------- --------- ---------- ---------
Shareholders' equity:
Common stock, no par
value 91,437 91,437 90,347 90,347
Undesignated capital
stock, no par value - - - -
Accumulated deficit (20,715) (27,415) (8,776) (12,769)
Accumulated other
comprehensive loss (96) (96) (106) (106)
---------- --------- ---------- ---------
Total
shareholders'
equity 70,626 63,926 81,465 77,472
---------- --------- ---------- ---------
Total
liabilities
and
shareholders'
equity $89,755 $93,864 $95,800 $98,461
========== ========= ========== =========
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