Cascade Microtech Reports Fourth Quarter and Year End 2005 Results.PORTLAND Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Ore. -- Record annual revenues of $73.6 million, up 14%, and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.70, up 25% over last year; Fourth quarter revenues of $17.7 million and EPS of $0.12 in line with Preliminary results previously announced Cascade A connected series of devices or images. It often implies that the second and subsequent device takes over after the previous one is used up. For example, cascading tapes in a dual-tape backup system means the second tape is written after the first one is full. Microtech (Nasdaq:CSCD CSCD Community Supervision & Corrections Department (Harris County, Texas) CSCD Cascade & Columbia River Railroad CSCD CTAS Software Change Document CSCD Coupling-Strength-Control Defect ), today reported financial results for the fourth quarter and year ended December December: see month. 31, 2005. Highlights for 2005 include: --Revenues of $73.6 million, up 14% year over year --$63.5 million Engineering Products Division revenue, up 9% year over year --$10.1 million Production Probes Division revenue, up 69% year over year --EPS of $0.70 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, compared to $0.56 for 2004 --Cash and investments at the end of the year were $51.9 million, up $5.4 million from the end of last year. "We were pleased with our performance overall in 2005 despite the order delays we experienced in the fourth quarter in our Engineering Products Division. In particular, we continued to have strong growth in our Production Probe Division which achieved record revenues of $10.1 million and growth of 69% in 2005," said Eric ERIC Educational Research Information Clearinghouse ERIC Educational Resources Information Center ERIC ERISA Industry Committee ERIC Epidemiologic Research and Information Center (Durham, NC) Strid n. 1. A narrow passage between precipitous rocks or banks, which looks as if it might be crossed at a stride. This striding place is called the Strid. - Wordsworth. , 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. of Cascade Microtech. Revenue for the fourth quarter was $17.7 million, a decline of 4% over $18.4 million in the fourth quarter of the prior year. Net income for the fourth quarter was $1.4 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.12 on 12.0 million shares, compared to net income of $1.7 million and diluted earnings per share of $0.19 on 9.0 million shares for the fourth quarter of 2004. Gross margin for the fourth quarter declined to 42.8% from 46.7% in the third quarter of 2005 primarily due to the decline in revenue and related gross margin, product mix and increased investment in the Production Probe Division. At December 31, 2005, the Company had cash and investments of $51.9 million, up from $46.5 million at December 31, 2004. Financial Outlook Based on the current 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. and anticipated bookings, Cascade anticipates that first quarter 2006 revenues will be in the range of $18.4 million to $20.0 million compared to $17.7 million in the fourth quarter of 2005 and $18.7 million in the first quarter of 2005; and that diluted earnings per share will be in the range of $0.07 to $0.13, including stock compensation expense under SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R, on 12.1 million shares. Beginning in January January: see month. 2006 we are required to expense the costs of stock options through our income statement under SFAS 123R. We estimate that this will result in a charge to earnings of approximately $0.02 to $0.03 during the first quarter of 2006. This has been included in our expected range for EPS for the first quarter of 2006. About Cascade Microtech Cascade Microtech, Inc. (Nasdaq:CSCD) is a worldwide leader in the precise electrical measurement and test of integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. (ICs) and other small structures. For technology businesses and scientific institutions that need to evaluate small structures, Cascade Microtech delivers access to, and extraction of, electrical data from wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. , integrated circuits (ICs), IC packages, circuit boards and modules, MEMs, biological structures, electro-optic devices and more. Cascade Microtech's highly reliable production 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. test solutions provide the semiconductor industry with leading-edge probe cards A probe card is an interface between an electronic test system and a semiconductor wafer. Its purpose is to provide an electrical path between the test system and the circuits on the wafer, thereby permitting the testing and validation of the circuits at the wafer level, usually that reduce manufacturing costs of complex semiconductors. Information about Cascade Microtech can be found on the Web at www.cascademicrotech.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. The statements in this release regarding the Company's financial outlook as to revenue and diluted earnings per share in the first quarter of 2006 are "forward-looking" statements within the meaning of the Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including changes in demand for the Company's products, product mix, the timing of shipments and customer orders, constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. on supplies of components, excess or shortage of production capacity and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports, including the Company's Annual Report on 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. . In addition such statements could be affected by general industry and market conditions and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release. The company will host a conference call beginning at 5 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. (2 p.m. PST PST Paroxysmal supraventricular tachycardia, see there ) on February 14, 2006, to discuss its results for the fourth quarter and year ended December 31, 2005, and its outlook for the first quarter of 2006. A simultaneous audio cast of the conference call may be accessed online from the investor relations Investor relations The process by which the corporation communicates with its investors. page of www.cascademicrotech.com. A replay will be available after 7 p.m. EST at this same internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. . (For a telephone replay, dial 888-286-8010 pass code: 50975461; International: 617-801-6888.)
CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
Dec. 31, Sept. 30, Dec. 31,
Assets 2005 2005 2004
------ -------- --------- --------
Current assets:
Cash and cash equivalents $ 2,224 $ 2,268 $ 2,033
Marketable securities 48,122 43,223 41,714
Accounts receivable, net 16,182 17,015 13,640
Inventories 10,889 10,471 10,180
Prepaid expenses and other 3,000 2,807 1,579
Deferred income taxes 1,699 1,686 1,552
-------- --------- --------
Total current assets 82,116 77,470 70,698
Long-term investments 1,549 5,579 2,779
Fixed assets, net 4,422 3,974 4,008
Deferred income tax 336 206 65
Other assets 1,697 1,632 1,466
-------- --------- --------
$ 90,120 $ 88,861 $ 79,016
======== ========= ========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current portion of long-term debt
and capital leases $ 8 $ 8 $ 21
Accounts payable 3,904 4,513 3,951
Deferred revenue 516 505 579
Accrued liabilities 2,895 2,971 2,609
-------- --------- --------
Total current liabilities 7,323 7,997 7,160
Long-term debt and capital leases - 2 14
Deferred revenue 255 306 282
Other long-term liabilities 1,037 1,135 1,372
-------- --------- --------
Total liabilities 8,615 9,440 8,828
-------- --------- --------
Stockholders' equity:
Common stock 58,400 57,764 55,511
Deferred stock-based compensation (142) (171) (310)
Unrealized holding gain (loss) on
investments (76) (50) (17)
Retained earnings 23,323 21,878 15,004
-------- --------- --------
Total stockholders' equity 81,505 79,421 70,188
-------- --------- --------
$ 90,120 $ 88,861 $ 79,016
======== ========= ========
CASCADE MICROTECH, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months Ended Year to Date
---------------------------- Ended Dec. 31,
Dec. 31, Sept. 30, Dec. 31, ----------------
2005 2005 2004 2005 2004
-------- -------- -------- ------- -------
Sales $ 17,678 $ 18,987 $ 18,402 $73,637 $64,415
Cost of sales 10,100 10,110 9,736 39,351 35,625
Deferred stock
compensation 6 11 10 39 67
-------- -------- -------- ------- -------
Gross profit 7,572 8,866 8,656 34,247 28,723
-------- -------- -------- ------- -------
Operating expenses:
Research and
development 1,895 1,752 1,625 6,951 5,651
Selling, general and
administrative 5,037 4,915 4,437 19,712 16,602
Deferred stock
compensation 9 30 30 83 259
-------- -------- -------- ------- -------
Total operating
expenses 6,941 6,697 6,092 26,746 22,512
-------- -------- -------- ------- -------
Income from
operations 631 2,169 2,564 7,501 6,211
-------- -------- -------- ------- -------
Other income
(expense):
Interest income 315 276 64 1,061 133
Interest expense (2) 0 (104) (18) (465)
Other, net 176 (18) (10) 948 215
-------- -------- -------- ------- -------
Total other income
(expense) 489 258 (50) 1,991 (117)
-------- -------- -------- ------- -------
Income before
income taxes 1,120 2,427 2,514 9,492 6,094
Provision (benefit)
for income taxes (325) 279 849 1,173 1,387
-------- -------- -------- ------- -------
Net income 1,445 2,148 1,665 8,319 4,707
Accretion of
redeemable stock - - - - 113
-------- -------- -------- ------- -------
Net income
attributed to
common
shareholders $ 1,445 $ 2,148 $ 1,665 $ 8,319 $ 4,594
======== ======== ======== ======= =======
Net income per
share:
Basic $ 0.13 $ 0.19 $ 0.27 $ 0.75 $ 0.84
Diluted $ 0.12 $ 0.18 $ 0.19 $ 0.70 $ 0.56
Shares used in
computing net
income per share:
Basic 11,281 11,154 6,242 11,055 5,439
Diluted 11,955 11,933 8,996 11,816 8,452
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