August Technology Announces Second Quarter 2002 Financial Results; Revenue Grows by Double Digits Compared to Q1.Business Editors August Technology Corporation (Nasdaq: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 solutions for the microelectronic The miniaturization of electronic circuits. See chip. industries, today announced results for its second quarter ended June June: see month. 30, 2002. Second quarter highlights: -- Quarterly revenues of $7.0 million, a 27% increase over last quarter. -- Successful completion of several key development projects including: NSX-105; 300mm film frame handler; expansion of the 3Di product family; several significant new product enhancements to YieldPilot defect and process data analysis solution. -- Maintained strong market diversity - nearly 80% of Q2 revenue outside the traditional semiconductor market. -- Strong Customer Application Partnership (CAP) activity implemented through Engineering Services group to meet customer-specific integration and automation requirements. The Company reported revenue of $7.0 million during the quarter, an increase of 27% from $5.5 million in the previous quarter and a 31% decrease from the second quarter of 2001. Gross margin for the quarter was 57.5%, compared to 57.1% in the previous quarter, and down from 61.4% in the second quarter of 2001. During the second quarter the Company recorded a valuation allowance against its deferred tax assets, resulting in a $1.5 million tax provision during the quarter. The valuation allowance was recorded as a result of the continued uncertainty surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the length of the industry downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , and its impact on current and projected results for the remainder of 2002. Including non-recurring expenses and the recording of the valuation allowance, net loss per share was $0.26 during the quarter, and $0.05 in the second quarter of 2001. For comparative purposes, excluding non-recurring charges and the recording of the valuation allowance, which would have resulted in a tax benefit of 40%, our net loss was $0.8 million or $0.06 per share, compared to net income of $0.9 million, or $0.07 per share, in the second quarter of 2001. "August Technology's automated inspection systems provide important defect defect - bug and process information necessary to ultimately drive down device manufacturing costs and time-to-market. Chip design and subsequent manufacturing is becoming more complex, increasing the awareness of the need for this type of process information," explained Jeff O'Dell, August Technology's chairman and chief executive officer. "August Technology's inspection solutions have proven particularly effective in later stages of fab and the early stages of final manufacturing, where manual operator inspection was previously the only option." "Although we are encouraged by many of the trends we see from our Q2 results, including continued market diversity and activity in pre-sales application evaluations, we believe visibility will remain unclear for the next 2-3 quarters. We are beginning to get reports from some customers that capital equipment spending will be significantly reduced or delayed through the end of this year," O'Dell explained. "Based on this information, we now believe that revenue could be down as much as 15% for both the third quarter and the full year, slightly better than Dataquest's overall semiconductor equipment industry projections of 21% down for the year. "As a result of the continued softness in the industry, we have been required to more closely watch our expenses, resulting in several cost reduction initiatives, including reduced travel budgets; mandatory Peremptory; obligatory; required; that which must be subscribed to or obeyed. Mandatory statutes are those that require, as opposed to permit, a particular course of action. time off during Q3 and Q4; and a reduction in workforce affecting approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25 contract and full time employees," O'Dell concluded. "We will continue to closely manage all expenses without limiting our ability to capture immediate and strategic opportunities. Specifically, important investments will continue in research and development, as well as sales and customer support to ensure that we are very well positioned as activity increases." August Technology will provide a live webcast of its earnings conference call with senior management, today at 3:30 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT to discuss first quarter financial performance. The webcast will be available live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the on August Technology's web site at www.augusttech.com and archived for replay shortly following the conference call and continuing through July July: see month. 24, 2002. To listen to the call, visit the web site at least fifteen minutes beforehand to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. 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 regarding projected third quarter and fiscal year 2002 revenues, 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 market conditions in the second half of 2002 and the beginning of 2003, and acceptance of new visual inspection solutions. These forward-looking statements involve risks and uncertainties which may cause actual results to differ from those set forth in the forward-looking statements, including, but not limited to: (i) further or continued 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 microelectronic industries; (ii) 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; (iii) possible failure to meet the revenue projections for inspection products in the third quarter and fiscal 2002 year; and (iv) lack of customer acceptance in the third quarter of the Company's newer products including the 3Di Series, NSX-105, 300mm Film Frame Handler A software routine that performs a particular task. It often refers to a routine that "handles" an exception of some kind, such as an error, but it can refer to mainstream processes as well. The term is typically used in operating systems and other system software. , or new YieldPilot enhancements that were or are planned to be shipped to them. 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 Securities and Exchange Commission. 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, based 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]. , is a leading supplier of automated visual defect inspection equipment for the microelectronic industries and has established service and sales representation in all major microelectronic manufacturing markets worldwide. The inspection solutions designed, manufactured and marketed by August Technology provide microelectronic device manufacturers with cost-saving quality and process information. August Technology is a founding member of the Advanced Packaging and Interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. Alliance (APiA) and is an active member of the Die Products Consortium (DPC DPC Department of Premier and Cabinet (Victoria, Australia) DPC Dutch Power Cows DPC Deferred Procedure Calls (Microsoft Windows NT 4. ). Additional information can be found by visiting August Technology's web site at www.augusttech.com.
AUGUST TECHNOLOGY CORPORATION
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2002 2001 2002 2001
-------- -------- -------- --------
(unaudited) (unaudited)
Net revenues $ 6,980 $10,155 $12,490 $21,059
Cost of revenues 2,965 3,923 5,329 8,194
-------- -------- -------- --------
Gross profit 4,015 6,232 7,161 12,865
Selling, general and
administrative expenses 2,832 3,071 5,658 6,248
Research and development expenses 2,729 2,176 4,864 4,340
Non-recurring expenses (1) 568 432 568 432
-------- -------- -------- --------
Operating income (loss) (2,114) 553 (3,929) 1,845
Interest income 174 371 382 847
Other expense - (17) - (17)
-------- -------- -------- --------
Income (loss) before provision for
(benefit from) income taxes (1,940) 907 (3,547) 2,675
Provision for (benefit from)
income taxes 1,491 290 687 909
-------- -------- -------- --------
Net income (loss) $(3,431) $ 617 $(4,234) $ 1,766
======== ======== ======== ========
GAAP per share amounts:
Basic net income (loss) per
share $ (0.26) $ 0.05 $ (0.33) $ 0.14
======== ======== ======== ========
Diluted net income (loss) per
share $ (0.26) $ 0.05 $ (0.33) $ 0.13
======== ======== ======== ========
Pro forma net income (loss) and
per share amounts: (2)
Net income (loss) $ (789) $ 902 $(1,576) $ 2,051
======== ======== ======== ========
Basic net income (loss) per
share $ (0.06) $ 0.07 $ (0.12) $ 0.16
======== ======== ======== ========
Diluted net income (loss) per
share $ (0.06) $ 0.07 $ (0.12) $ 0.15
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 13,033 12,687 12,939 12,664
Diluted 13,033 13,301 12,939 13,300
(1) Non-recurring expenses include: (i) for the three and six months
ended June 30, 2002 $184 of employee severance costs and $384 of
distributor termination costs; and (ii) for the three and six
months ended June 30, 2001 $84 of employee severance costs and
$348 of distributor termination costs.
(2) Pro forma net income (loss) is presented for comparative purposes
assuming a tax benefit of 40% and 45%, for the three and six month
periods ending June 30, 2002, respectively, and excludes
non-recurring expenses, net of income taxes, and the recording of
a valuation allowance against deferred tax assets.
AUGUST TECHNOLOGY CORPORATION
SUMMARY BALANCE SHEET DATA
(In thousands)
June 30, December 31,
2002 2001
------------ ------------
(unaudited)
Cash and cash equivalents $ 3,406 $ 1,523
Short-term investments 18,950 23,196
Current assets 37,045 41,678
Long-term investments 2,088 1,138
Total assets 43,561 47,155
Current liabilities 4,045 4,507
Total liabilities 4,155 4,632
Shareholders' equity 39,406 42,523
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