August Technology Reports Increased Revenue in First Quarter 2005 Results; Record All-Surface Front-End Inspection System Sales Drive Revenue Growth.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 reported revenues of $18.4 million during the first quarter ended March 31, 2005, an increase of 10% from the previous quarter and 12% from the first quarter of 2004. Gross margin in the first quarter was 54.6% compared with gross margin of 54.3% in the fourth quarter of 2004 and 57.0% in the first quarter of 2004. The Company reported a net loss of $0.05 per share in the quarter. Excluding merger expenses, the Company reported pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $0.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares to a net loss of $0.02 per share in the fourth quarter of 2004, and net income of $0.08 per diluted share in the first quarter of 2004. Highlights: --Q1 revenues increased 10% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen --Revenues derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from front end inspection systems grew sequentially to 52% of total revenues driven by record revenues from front end All-Surface inspection systems --Front end inspection system orders received from three new accounts including a multiple unit order received in the past three weeks --Released the next generation 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 data analysis solution --Cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has increased $1.8 million, as compared to December December: see month. 31, 2004 "We are very pleased with our first quarter financial performance in combination with record business in our front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. market segment," commented Jeff O'Dell, August Technology's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "As recently reported by Gartner (Gartner, Inc., Stamford, CT, www.gartner.com) The largest information technology consulting firm that specializes in research and analysis. Founded in 1979 by Gideon Gartner, it has grown through acquisitions, including Dataquest in 1995 and Techrepublic in 2000. , August Technology has achieved over 30%(a) marketshare for front-end macro inspection. This growth has been achieved since our expansion into front-end 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. processing inspection applications in 2003." O'Dell continued, "In just the past few weeks we have won new business at three leading semiconductor companies, including multiple unit orders, which we see as further confirmation of the value that device manufacturers are finding with our macro defect defect - bug inspection solutions." O'Dell concluded, "As we look ahead, without any convincing signs that capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. will increase industry-wide, we anticipate second quarter revenues will be relatively flat, ranging from -5% to + 5%. We continue to believe increased adoption of advanced macro inspection and our ability to bring to market innovative yield-enhancing solutions will allow us to grow revenues and 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." August Technology will provide a live conference call with senior management, today at 11:00a.m. ET/10:00a.m. CT to discuss first quarter financial performance. If you would like to participate, please call (719) 955-1564 prior to the start time and use participant code 1273041. A webcast of the conference call will also 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 beginning on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant April 29, 2005. To listen to the call live, 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. (a) Gartner Macro Inspection Share Report, April 2005, Mark Stromberg/Bob Johnson. 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 edge inspection in a single system. Following detection August Technology's decision tools correlate the defect 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 regarding our expectation to outperform the industry again in 2005 and our expectation for Q2 2005 sequential One after the other in some consecutive order such as by name or number. revenue change of -5% to +5%. 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) 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; (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, 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. ; (iii) loss of potential sales to competitors based on pricing, product features or other factors; (iv) lack of customer acceptance in the upcoming quarters of the Company's newer products including All-Surface inspection solutions and DMS Decision that were or are planned to be shipped to them; (v) failure of our recently completed and current product development efforts to meet customer needs and expectations including driving down their costs and time-to-market; (vi) unanticipated costs and expenses which increase operating costs operating costs npl → gastos mpl operacionales ; and (vii) delay in the merger transaction increasing costs. 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 March 31,
-----------------------------
2005 2004
-------------- --------------
Net revenues $18,417 $16,400
Cost of revenues 8,359 7,058
-------------- --------------
Gross profit 10,058 9,342
Selling, general and administrative
expenses 6,290 5,189
Research and development expenses 3,666 2,908
-------------- --------------
Operating income 102 1,245
Merger expenses (1,234) -
Interest income 289 201
-------------- --------------
Income (loss) before provision for
income taxes (843) 1,446
Provision for income taxes (1) 55 -
-------------- --------------
Net income (loss) $(898) $1,446
============== ==============
GAAP net income (loss) per share:
Basic $(0.05) $0.08
Diluted $(0.05) $0.08
Pro Forma Non-GAAP net income and net
income per share: (2)
Net income $336 $1,446
============== ==============
Basic $0.02 $0.08
Diluted $0.02 $0.08
Weighted average shares outstanding used
to calculate net income (loss) per
share:
Basic - GAAP and Pro Forma Non-GAAP 17,867 17,622
Diluted - GAAP 17,867 18,486
Diluted - Pro Forma Non-GAAP 18,316 18,486
(1) Due to the level of historical operating losses, the Company began
to record a valuation allowance against deferred tax assets in the
second quarter of 2002, and continues to do so at March 31, 2005. As a
result, the Company did not reflect a provision for income taxes
during the three months ended March 31, 2004. The Company has recorded
a provision for income taxes of $55 for the three months ended March
31, 2005, primarily to provide for foreign income taxes.
(2) Reconciliation of Pro Forma Non-GAAP financial measure:
GAAP net income (loss) $(898) $1,446
Add back:
Merger expenses 1,234 -
-------------- --------------
Pro Forma Non-GAAP net income $336 $1,446
============== ==============
The Company provides pro forma Non-GAAP net income and net income per
share in the press release as additional information regarding the
Company's operating results. These pro forma measures are not in
accordance with, or an alternative for, generally accepted accounting
principles in the United States and may be different from similar pro
forma Non-GAAP net income and net income per share measures used by
other companies. GAAP net income (loss) has been adjusted to exclude
the effects of the Company's expenses associated with the proposed
merger with Nanometrics, Inc., and the evaluation of the KLA-Tencor
Corporation and Rudolph Technologies, Inc. offers. The Company
believes this presentation of pro forma Non-GAAP net income and net
income per share provides useful information to investors regarding
trends relating to the Company's results of operations. There is no
effect to this pro forma adjustment for income taxes, due to the
Company's recording of a valuation allowance as described in note 1
above.
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
2005 2004
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents (1) $11,518 $5,518
Short-term marketable debt
securities (1) 25,265 28,615
Accounts receivable, net 9,618 8,603
Inventories 20,948 20,131
Inventories at customers under
purchase orders 3,791 3,993
Prepaid expenses and other current
assets 1,954 2,306
-------------- --------------
Total current assets 73,094 69,166
Property and equipment, net 5,531 5,994
Long-term marketable debt securities
(1) 15,439 16,289
Purchased technology, net 3,355 3,703
Goodwill 498 498
Other assets 139 150
-------------- --------------
Total assets $98,056 $95,800
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,975 $3,366
Accrued compensation 2,051 1,691
Other accrued liabilities 2,222 2,306
Customer deposits and deferred
revenues 6,767 6,841
-------------- --------------
Total current liabilities 17,015 14,204
Other non-current liabilities 112 131
-------------- --------------
Total liabilities 17,127 14,335
-------------- --------------
Shareholders' equity:
Common stock, no par value 90,815 90,347
Undesignated capital stock, no par
value - -
Accumulated deficit (9,674) (8,776)
Accumulated other comprehensive loss (212) (106)
-------------- --------------
Total shareholders' equity 80,929 81,465
-------------- --------------
Total liabilities and
shareholders' equity $98,056 $95,800
============== ==============
(1) Total cash and marketable debt
securities $52,222 $50,422
AUGUST TECHNOLOGY CORPORATION
SELECTED CONSOLIDATED STATEMENT OF CASH FLOWS DATA
(In thousands)
(Unaudited)
Three Months Ended March 31,
-----------------------------
2005 2004
-------------- --------------
Cash flows provided by (used in)
operating activities $1,962 $(6,779)
Cash flows provided by investing
activities 3,571 50
Cash flows provided by financing
activities 462 1,548
Effect of exchange rates on cash and
cash equivalents 5 (3)
-------------- --------------
Net increase (decrease) in cash and cash
equivalents $6,000 $(5,184)
============== ==============
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