Cascade Microtech Reports First Quarter 2016 Results
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Cascade Microtech Reports First Quarter 2016 Results

BEAVERTON, OR -- (Marketwired) -- Apr 26, 2016 -- Cascade Microtech, Inc. (NASDAQ: CSCD) today reported financial results for the first quarter ended March 31, 2016.

Financial Summary

Results for the quarter ended March 31, 2016 were as follows:

"We are pleased to report that the pending acquisition by FormFactor is progressing as planned. We are also very pleased with the strong start to 2016 as Cascade Microtech set quarterly revenue, gross margin, adjusted EBITDAS, and backlog records for a first quarter. Our continued financial success underscores the strength of our business model, achieving 33% growth in non-GAAP EPS with revenues up 10% and R&D investments up 40% over the same period," said Michael Burger, President and CEO. "Our R&D investments are aligning well with our customers' roadmaps. As an example, we shipped probe cards to multiple customers who are involved in 5G development programs. In addition, we experienced record design activity across our Probes segment. The growing demand for Cascade products and services, and strong backlog in both segments exiting Q1, indicate that we are growing faster than our served markets and we are well positioned for Q2 and beyond."

Financial Outlook

When viewing Cascade Microtech on a standalone basis, for the second quarter of 2016 we are projecting revenue in the range of $38.0 million to $42.0 million, with diluted GAAP earnings per share in the range of $0.18 to $0.24, and non-GAAP diluted earnings per share in the range of $0.20 to $0.26. Our guidance assumes a tax rate of 33%, consistent foreign currency exchange rates and no significant one-time charges. No acquisition-related costs are included in this financial outlook.

In light of the pending acquisition of Cascade Microtech by FormFactor, Inc., we will not hold a conference call to discuss these results.

Forward-Looking Statements

The statements in this release regarding our continued financial improvement and business model, our expectations relating to investment in new product development and positioning for continued success in 2016 and statements under "Financial Outlook" regarding projected revenue, GAAP earnings per share, and non-GAAP earnings per share and assumptions supporting those projections, and other statements identified by terminology such as "will," "should," "expects," "estimates," "predicts," and "continue" or other derivations of these or other comparable terms are "forward-looking" statements within the meaning of the Securities 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; changes in product mix; potential delays and other factors affecting the timing of new product introductions; the timing of shipments and customer orders; constraints on supplies of components; excess or shortage of production capacity; potential failure of expected market opportunities to materialize; changes in foreign exchange rates; our ability or delay in integrating acquired businesses; transaction expenses; 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 for the year ended December 31, 2015. In addition, such statements could be affected by general industry and market conditions and growth rates 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 after the date of this release.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains non-GAAP financial measures, which are defined below and reconciled to GAAP financial measures in a table later in this release:

About Cascade Microtech, Inc.

Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in precision contact, electrical measurement and test of integrated circuits (ICs), optical devices and other small structures. For technology businesses and scientific institutions that need to evaluate small structures, Cascade Microtech delivers access to electrical data from wafers, ICs, IC packages, circuit boards and modules, MEMS, 3D TSV, LED devices and more. Cascade Microtech's leading-edge stations, probes, probe cards, advanced thermal subsystems and integrated systems deliver precision accuracy and superior performance both in the lab and during production manufacturing of high-speed and high-density semiconductor chips. For more information, visit www.cascademicrotech.com.

                                                                            
                          CASCADE MICROTECH, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
              Condensed Consolidated Statements of Operations               
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                                                                            
                                                Three Months Ended          
                                       ------------------------------------ 
                                        March 31,  December 31,   March 31, 
                                          2016         2015         2015    
                                       ----------  ------------  ---------- 
                                                                            
Revenue                                $   34,803  $     40,411  $   31,742 
Cost of sales                              14,122        17,640      14,720 
                                       ----------  ------------  ---------- 
Gross profit                               20,681        22,771      17,022 
                                             59.4%         56.3%       53.6%
Operating expenses:                                                         
  Research and development                  5,144         4,757       3,676 
  Selling, general and administrative      12,660        11,474      10,547 
                                       ----------  ------------  ---------- 
                                           17,804        16,231      14,223 
                                       ----------  ------------  ---------- 
                                                                            
Income from operations                      2,877         6,540       2,799 
                                                                            
Other income (expense):                                                     
  Interest income, net                         11             7         (14)
  Other, net                                  (87)         (293)        231 
                                       ----------  ------------  ---------- 
                                              (76)         (286)        217 
                                       ----------  ------------  ---------- 
                                                                            
Income before income taxes                  2,801         6,254       3,016 
                                                                            
Income tax expense                            809         2,093         843 
                                       ----------  ------------  ---------- 
                                                                            
Net income                             $    1,992  $      4,161  $    2,173 
                                       ==========  ============  ========== 
                                                                       28.0%
Net income per share:                                                       
  Basic                                $     0.13  $       0.26  $     0.13 
  Diluted                              $     0.12  $       0.25  $     0.13 
                                                                            
Shares used in computing net income                                         
 per share:                                                                 
  Basic                                    15,893        15,933      16,523 
  Diluted                                  16,516        16,517      17,037 
                                                                            
                                                                            
                          CASCADE MICROTECH, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                (unaudited)                                 
                                                                            
                                                                            
                                                   March 31,   December 31, 
                     Assets                          2016          2015     
                                                 ------------  ------------ 
                                                                            
Current assets:                                                             
  Cash and cash equivalents                      $     34,905  $     32,107 
  Marketable securities                                 3,560         3,658 
  Restricted cash                                          11            10 
  Accounts receivable, net                             25,392        27,716 
  Inventories                                          25,402        23,229 
  Prepaid expenses and other                            5,846         6,597 
                                                 ------------  ------------ 
    Total current assets                               95,116        93,317 
                                                                            
Fixed assets, net                                      13,326        12,256 
Goodwill                                               12,069        11,592 
Purchased intangible assets, net                        8,920         9,143 
Deferred income taxes                                   5,345         5,326 
Other assets                                              697           677 
                                                 ------------  ------------ 
                                                                            
                                                 $    135,473  $    132,311 
                                                 ============  ============ 
                                                                            
                                                                            
      Liabilities and Stockholders' Equity                                  
                                                                            
Current liabilities:                                                        
  Accounts payable                                      7,480         8,834 
  Deferred revenue                                      2,757         1,617 
  Accrued liabilities                                   8,418         8,488 
                                                 ------------  ------------ 
    Total current liabilities                          18,655        18,939 
                                                                            
Deferred revenue                                          519           555 
Deferred income taxes                                   1,920         1,840 
Other long-term liabilities                             1,455         1,581 
                                                 ------------  ------------ 
                                                                            
    Total liabilities                                  22,549        22,915 
                                                 ------------  ------------ 
                                                                            
Stockholders' equity:                                                       
  Common stock                                        103,775       103,354 
  Accumulated other comprehensive loss                 (4,136)       (5,251)
  Retained earnings                                    13,285        11,293 
                                                 ------------  ------------ 
                                                                            
    Total stockholders' equity                        112,924       109,396 
                                                 ------------  ------------ 
                                                                            
                                                 $    135,473  $    132,311 
                                                 ============  ============ 
                                                                            
                                                                            
                          CASCADE MICROTECH, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
           Reconciliation of GAAP to Non-GAAP Financial Measures            
                  (in thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                                                                            
                                                Three Months Ended          
                                      ------------------------------------- 
                                       March 31,   December 31,   March 31, 
Non-GAAP Net Income                      2016          2015         2015    
                                      ----------  -------------  ---------- 
GAAP net income                       $    1,992  $       4,161  $    2,173 
                                                                            
Adjustments to net income:                                                  
  Restructuring                                -              -         118 
  Acquisition and acquisition related      1,533              -           - 
  Amortization of intangibles                550            582         647 
  Income tax effect of non-GAAP                                             
   adjustments                              (687)          (195)       (253)
  Discrete tax items                        (148)             -        (154)
                                      ----------  -------------  ---------- 
Non-GAAP net income                   $    3,240  $       4,548  $    2,531 
                                      ==========  =============  ========== 
                                                                            
GAAP net income per diluted share     $     0.12  $        0.25  $     0.13 
                                      ==========  =============  ========== 
Non-GAAP net income per diluted share $     0.20  $        0.28  $     0.15 
                                      ==========  =============  ========== 
                                                                            
Shares used in diluted share                                                
 calculations                             16,516         16,517      17,037 
                                                                            
                                                                            
                                                Three Months Ended          
                                      ------------------------------------- 
                                       March 31,   December 31,   March 31, 
EBITDAS and Adjusted EBITDAS             2016          2015          2015   
                                      ----------  -------------  ---------- 
GAAP Income from operations           $    2,877  $       6,540  $    2,799 
                                                                            
Adjustments:                                                                
  Depreciation                               912            852         750 
  Amortization of intangibles                550            582         647 
  Stock-based compensation                   760            816         587 
                                      ----------  -------------  ---------- 
EBITDAS                                    5,099          8,790       4,783 
                                                                            
Adjustments:                                                                
  Restructuring                                -              -         118 
  Acquisition and acquisition related      1,533              -           - 
                                      ----------  -------------  ---------- 
Adjusted EBITDAS                      $    6,632  $       8,790  $    4,901 
                                      ==========  =============  ========== 
                                                                            
                                                                            
                                         Three Months Ending June 30, 2016  
                                      ------------------------------------- 
                                       Low Range                  High Range
                                       Guidance                   Guidance  
                                      -----------                -----------
Forward-looking non-GAAP net income                                         
GAAP net income                       $    3,000                 $    4,000 
Adjustments:                                                                
  Amortization of intangibles                550                        550 
  Income tax effect of non-GAAP                                             
   adjustments                              (182)                      (182)
                                      ----------                 ---------- 
Non-GAAP net income                   $    3,368                 $    4,368 
                                      ==========                 ========== 
                                                                            
GAAP net income per diluted share     $     0.18                 $     0.24 
                                      ==========                 ========== 
Non-GAAP net income per diluted share $     0.20                 $     0.26 
                                      ==========                 ========== 
                                                                            
Shares used in diluted share                                                
 calculations                             16,600                     16,600 
                                                                            

FOR MORE INFORMATION, CONTACT:

Jeff A. Killian
Cascade Microtech, Inc.
(503) 601-1280