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Rudolph Technologies Posts 2013 Fourth Quarter Results

February 6, 2014

Rudolph Technologies, Inc. , a provider of process characterization equipment, lithography equipment and software for wafer fabs and Advanced Packaging facilities, announced financial results for the fourth quarter and year ended 2013. In a release on February 3 , the company noted earnings details: 2013 Fourth Quarter Highlights: Received multiple orders for lithography systems, totaling more than $11 million . Sales include a repeat order for the JetStep Lithography System for leading-edge Advanced Packaging applications and an order for the PanelPrinter 9200 System for flat panel display lithography. Fourth quarter revenue of $44.5 million was in-line with Company guidance. Fourth quarter GAAP net income was $2.1 million , or $0.06 per diluted share; Non-GAAP net income per diluted share was $0.09 . Gross margins remained strong at 51 percent for the quarter. Fourth quarter Book-to-Bill ratio exceeded 1.2. Cash and marketable securities increased $8.8 million in the quarter to $167.4 million . Q4 Metrology Business Unit revenue hit a five year high for the quarter, with Company's flagship MetaPULSE metal thin film system leading the way with record shipments. Other 2013 Business Highlights: Received customer acceptance in Q1 of first JetStep System for Advanced Packaging applications, validating the commercialization of the 2X stepper total lithography solution. Substrate handling and large exposure field provide critical benefits in wafer level packaging process. In Q2 launched the S3000SX Transparent Thin Film Metrology System for 16nm and 14nm nodes and below for front-end applications. The new system features a modular architecture with small site measurement capability offering flexibility and cost of ownership advantage for process nodes. In Q2 purchased selected assets from Tamar Technology; adding 3D measurement capability for Advanced Packaging applications. These patented technologies deliver critical process control metrology for flip-chip copper pillar bumping and other applications. Announced the JetStep Panel Lithography System for Advanced Packaging in Q2. The stepper design is driven by the semiconductor Advanced Packaging transition from wafer to panel manufacturing and offers unequaled cost-of-ownership benefits. In Q3 announced three new application-specific configurations of its NSX 320 Automated Macro Defect Inspection System. The suite includes specially designed configurations for wafer level packaging, 2.5D (interposer) and 3DICs using through-silicon-via (TSV) as interconnects. New suite of Yield Management Software solutions gained traction in Advanced Packaging applications as back-end manufacturers adopted front-end strategies to maximize yields with analysis of inspection and metrology data reflecting the longer-term trend of the back-end markets looking more like the front-end. In Q4 Rudolph received a favorable ruling from the U.S. Federal Court of Appeals with respect to its ongoing patent infringement dispute with Integrated Technology Corp. Paul F. McLaughlin , Chairman and CEO, commented, "During the fourth quarter, we received two orders for our lithography systems, totaling more than $11 million . Purchase orders include a repeat order for the JetStep Lithography System for leading-edge advanced packaging (AP) applications and a repeat order for a PanelPrinter 9200 System for flat panel display (FPD) lithography. We shipped the JetStep system in January and the PanelPrinter system is scheduled to ship before the end of 2014. "Our position as a total value-added solutions provider has further strengthened; and in 2013, we continued to make significant customer inroads with our investments in R&D and our technological advancements, resulting in a rich and substantially stronger technology portfolio that has more than doubled in product offerings over the last five years. Our mission is to establish Rudolph as the vendor of choice for Advanced Packaging inspection, metrology, software and photolithography solutions. Our unique business model targets both front-end and back-end growth markets, and provides us a broad and expanding customer base with a more balanced product portfolio across all industry cycles. In fact, the process control and Advanced Packaging (back-end) markets are poised to grow faster than the overall industry, with the Advanced Packaging market showing a 17 percent CAGR over the next five years." McLaughlin concluded, "We believe our chosen markets will benefit from both cyclical and sector growth, comprised of strong demand for our expanding total package of leading-edge solutions. Most importantly there is considerable earnings leverage in our operating model, and we believe the Company is uniquely positioned to deliver notably more shareholder value in 2014." Fourth Quarter 2013 Financial Results Fourth quarter revenue totaled $44.5 million , a 1 percent increase compared with $44.0 million for the 2013 third quarter. During the fourth quarter, international sales represented approximately 82 percent of revenue, while domestic sales accounted for 18 percent. In the 2013 third quarter, international sales represented approximately 69 percent of revenue and domestic sales accounted for 31 percent. In the fourth quarter, revenue from front- end semiconductor customers accounted for approximately 70 percent of revenue, back-end customers accounted for 27 percent and the flat- panel display market accounted for 3 percent. Gross margin was 51 percent of revenues in both the 2013 fourth and third quarters, and was in line with the Company's guidance. The fourth quarter gross margin was positively impacted by strong metal metrology sales, and the 2013 third quarter was positively impacted by software revenue above the Company's target model. Operating expenses for the fourth quarter of 2013 totaled $21.0 million , a decrease of $0.2 million from $21.2 million in the 2013 third quarter. R&D expenses for the fourth quarter totaled $9.6 million , compared with $10.5 million in the 2013 third quarter. S,G&A expenses for the fourth quarter totaled $10.7 million , compared with $10.1 million in the third quarter of 2013. The decrease in operating expenses was primarily due to a restructuring that occurred in the fourth quarter that reduced the workforce by 3 percent and a re-prioritization of certain R&D projects to better align with market demand. The decrease was partially offset by severance charges recorded in the quarter. GAAP net income for the fourth quarter of 2013 was $2.1 million , or $0.06 per diluted share, compared with net income of $252 thousand , or $0.01 per diluted share, for the third quarter of 2013. The fourth quarter GAAP net income includes a $1.6 million tax benefit recorded in the quarter primarily related to lower than forecasted net income and adjustments to unrecognized tax benefits. On a non-GAAP basis, fourth quarter 2013 net income was $3.0 million , or $0.09 per diluted share, compared to $2.1 million , or $0.06 per diluted share, in the 2013 third quarter. Balance Sheet Strength At December 31, 2013 , cash and marketable securities totaled $167.4 million , an increase of $8.8 million from $158.6 million at the end of the 2013 third quarter. Accounts receivable decreased to $53.4 million and inventory decreased to $61.4 million as of December 31, 2013 . Working capital increased $100 thousand in the quarter, ending at $256.5 million at December 31, 2013 . More Information: ((Comments on this story may be sent to ))

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