August Technology Reports Profitability and Record Revenues for Third Quarter 2003.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Oct. 22, 2003 Expanding 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. applications, including the AXi Series, drive record orders and 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. 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 reported record revenues of $11.7 million during the third quarter ended September September: see month. 30, 2003, an increase of 51% from the previous quarter and 86% from the third quarter of 2002. Third quarter results include initial revenues from the new AXi advanced macro inspection systems. The Company's net income of $0.02 per share compared favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with a net loss of $0.10 per share in the second quarter of 2003 and a net loss of $0.19 per share in the third quarter of 2002. Other recent highlights: -- Revenues increased for the fourth consecutive quarter. The 51% sequential increase was the largest sequential increase in nearly two years. -- Third quarter book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can remained above parity parity or space parity, in physics, quantity that refers to the relationship between an object or process and the image that it can produce in a mirror. for the fifth consecutive quarter. -- Order highlights include a repeat order from the Company's joint development partner for another AXi Series system and an AXi Series order from a new customer. -- UMC UMC United Methodist Church UMC United Microelectronics Corporation UMC University Medical Center UMC United Microelectronics Corp (Republic of China) UMC University of Missouri-Columbia , one of the world's largest foundries, has adopted automated inspection for 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. quality control outgoing from the fab with the installation of a high throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. NSX NSX New Sportscar eXperimental (concept name for Acura vehicle; originally NS-X) NSX Namespace Extension (Windows Shell Programming) NSX N Syndrome NSX Network and Security Experts NSX New Sports Experimental Series system ordered and installed during the third quarter. -- Over one million dollars of accretive revenues in the quarter were from sales of the WAV Series of probe mark inspection systems, acquired in April 2003. -- Third quarter operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. improved over 100% sequentially. -- Cash 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 grew to $55 million due to the successful completion of a follow on stock offering. "I am pleased with the continued momentum we achieved in our third quarter results. This included record revenues, orders and backlog, along with profitable operating results," 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. . "Our business expansion has been primarily driven by the successful penetration of new front-end applications and growth in wafer level bump inspection. The acquisition of complementary inspection systems and technology from STI STI systolic time intervals. also contributed to the current momentum." O'Dell continued, "We have been able to achieve this significant improvement in financial performance while investing in innovative new products and software capabilities which will provide the catalyst for future growth. This month we started aggressively promoting our all-surface inspection solution which includes front, edge and 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. wafer inspection. We expect to ship a beta edge inspection solution to a customer during the fourth quarter. Our record backlog supports our expectation for further revenue growth of 5-15% in the fourth quarter, accompanied by continued improvement in profitability." August Technology will provide a live conference call with senior management, today at 10:00 a.m. CT to discuss third quarter financial performance. If you would like to participate, please call 913-981-5542 prior to the 10:00 a.m. start time and use participant code 663528. 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 shortly following the call and continuing through November November: see month. 5, 2003. 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. About the Company: August Technology's automated inspection and defect analysis (programming) defect analysis - Using defects as data for continuous quality improvement. Defect analysis generally seeks to classify defects into categories and identify possible causes in order to direct process improvement efforts. solutions provide critical product and process enhancing information, which enable microelectronic device manufacturers to drive down costs and time to market. 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]. , 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 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. 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 fourth quarter and fiscal year 2003 profitability and revenues for the remainder of 2003, shipment of an edge inspection tool in the fourth quarter, potential customer and market interest in our tools, expectations that our product will drive down customer costs and time to market, and acceptance of our new visual inspection solutions including the AXi Series, EXi Series and recently acquired WAV product line. 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 microelectronic industries; (ii) pre-order sales activities not resulting in orders, or customers delaying or canceling orders in backlog; (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 the AXi Series, EXi Series, 3Di Series, NSX-105, or new YieldPilot enhancements 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) failure to continue to effectively integrate the recently acquired businesses of STI and CSI CSI Crime Scene Investigator CSI CompuServe, Inc. CSI Commodity Systems, Inc. CSI Commodity Systems Inc. (Boca Raton, FL) CSI Crime Scene Investigation (CBS TV show) CSI Christian Schools International and their product lines to enhance our product offering. 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 information contained in this press release.
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2003 2002 2003 2002
--------- -------- -------- --------
Net revenues $11,685 $6,273 $26,005 $18,763
Cost of revenues 5,100 2,819 11,603 8,148
--------- -------- -------- --------
Gross profit 6,585 3,454 14,402 10,615
Selling, general and
administrative expenses 3,808 3,104 9,974 8,762
Research and development expenses 2,595 2,347 7,797 7,211
Restructuring expenses (1) - 676 254 1,244
--------- -------- -------- --------
Operating income (loss) 182 (2,673) (3,623) (6,602)
Interest income 71 124 247 506
--------- -------- -------- --------
Income (loss) before provision
for income taxes 253 (2,549) (3,376) (6,096)
Provision for income taxes (2) - - - 687
--------- -------- -------- --------
Net income (loss) $253 $(2,549) $(3,376) $(6,783)
========= ======== ======== ========
Net income (loss) per share:
Basic $0.02 $(0.19) $(0.25) $(0.52)
Diluted $0.02 $(0.19) $(0.25) $(0.52)
Weighted average shares
outstanding:
Basic 13,844 13,123 13,451 13,000
Diluted 14,578 13,123 13,451 13,000
(1) Restructuring expenses include the following items for the periods
indicated:
Three months ended September 30, 2002: $459 for the write-off
of acquisition costs, $173 of employee severance costs and $44
of distributor termination costs.
Nine months ended September 30, 2003: $254 of employee
severance costs.
Nine months ended September 30, 2002: $459 for the write-off
of acquisition costs, $427 of distributor termination costs
and $358 of employee severance costs.
(2) Due to the level of historical operating losses, the Company has
sufficient deferred tax assets to offset the level of income taxes
on the pre-tax income for the third quarter of 2003. As a result,
the Company did not reflect a provision for income taxes during
the period. The Company initially recorded a full valuation
allowance against deferred tax assets in the second quarter of
2002, resulting in a provision for income taxes rather than a tax
benefit on the pre-tax loss during the period. The Company has
continued to provide the allowance due to uncertainty as to the
extent of profitability in future periods.
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, December 31,
2003 2002
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $5,097 $1,895
Short-term marketable securities 48,623 15,438
Accounts receivable, net 5,497 7,054
Inventories 9,006 7,432
Inventories at customers under purchase
orders 2,727 1,012
Prepaid expenses and other current
assets 1,574 1,091
------------- ------------
Total current assets 72,524 33,922
Property and equipment, net 3,522 3,439
Purchased technology, net 1,248 -
Long-term marketable securities 1,585 1,444
Other assets 1,096 705
------------- ------------
Total assets $79,975 $39,510
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,975 $2,273
Accrued compensation 1,299 554
Accrued liabilities 1,138 451
Customer deposits 3,123 1,268
------------- ------------
Total current liabilities 9,535 4,546
Other non-current liabilities 73 97
------------- ------------
Total liabilities 9,608 4,643
------------- ------------
Shareholders' equity:
Common stock, no par value 81,046 42,158
Undesignated capital stock, no par
value - -
Deferred compensation related to stock
options (62) (105)
Accumulated deficit (10,605) (7,229)
Accumulated other comprehensive income (12) 43
------------- ------------
Total shareholders' equity 70,367 34,867
------------- ------------
Total liabilities and
shareholders' equity $79,975 $39,510
============= ============
Total cash and marketable securities $55,305 $18,777
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