Rudolph Reports Third Quarter Results Exceeds Expected Operating Performance
FLANDERS, N.J.--(BUSINESS WIRE)--Oct. 29, 2001--Rudolph Technologies, Inc. (Nasdaq: RTEC - news), a worldwide leader in the design, development, manufacture and support of high-performance process control metrology systems used by semiconductor device companies, today announced financial results for the third quarter ended September 30, 2001.
The Company reported third quarter revenue of $15.1 million compared to $23.4 million in the prior year period. As anticipated, revenue on a sequential basis decreased 35% from $23.1 million in the second quarter of 2001. The lower year-over-year and sequential revenue is due to push-outs and cancellations associated with the well-documented industry slowdown.
Net income available to common shareholders was $859,000, or $0.05 per diluted share, compared to $5.6 million, or $0.24 per diluted share on a comparable pro forma basis for the third quarter ended September 30, 2000. Third quarter gross margin was 45%, compared to 51% in the prior year period and 52% in the second quarter ended June 30, 2001. The gross margin decrease in comparison to both periods is due to Customer Support and fixed manufacturing costs being a higher component of a lower revenue base.
``We exceeded our expected operating performance for the quarter even in this difficult environment,'' commented Paul F. McLaughlin, Chairman and Chief Executive Officer. ``However, our third quarter results clearly indicate that device companies have once again decided to push back deliveries. We continue to win business at the engineering level but spending in these uncertain times has been restricted by the CFO's office even for technology investments. The high level of uncertainty at our customers is caused not only by economics in the tech marketplace but also by political events. This must stabilize before we can leave this part of the cycle. Nonetheless, given our strong product offerings in copper, 0.13 micron and below metrology, low k dielectrics, and 300mm tools, we believe we remain extremely well positioned to lead the semiconductor equipment industry when end-user demand rises.''
Research & development (R&D) expenses for the quarter ended September 30, 2001 totaled $3.2 million, an increase of 34%, compared to $2.4 million in the comparable prior year period. As a percentage of revenue, R&D was 21%, compared to 10% in the September 2000 quarter. The increase in R&D is due to development projects related to recently released and future products. The Company expects R&D to represent approximately the same percentage of revenue in the fourth quarter of 2001.
Selling, general & administrative (S,G&A) expenses decreased to $2.9 million compared to $3.8 million in the prior year period, reflecting the effects of lower commissions and the Company's cost reduction initiatives. As a percentage of revenue, S,G&A was 19% in the 2001 third quarter, compared to 16% in the comparable prior year period. The Company expects SG&A will represent a lower percentage of revenue in the fourth quarter of 2001 as additional benefits from cost reduction initiatives materialize.
Nine Month Results
For the nine months ended September 30, 2001, total revenue rose 16% to $68.7 million, compared to $59.2 million in the first nine months of 2000. Operating income for the nine-month period ending September 30, 2001 increased 8% to $15.2 million compared to $14.1 million for the first nine months of 2000. R&D expenses for the nine months increased 58%.
Balance Sheet Strength
At the end of the first nine months of 2001, the Company's cash and cash equivalents totaled $96.0 million. At September 30, 2001, working capital was $125.9 million, compared to $70.2 million at September 30, 2000. This strong financial position gives Rudolph the flexibility to weather the industry's down cycle and to continue developing products for three ground-breaking trends - the evolution from aluminum to copper and low k dielectrics, the progression to 300 millimeter equipment and the emergence of ultra-thin gate process controls.
``We had the technological foresight and discipline to meet these trends as soon as they emerged, and as a result we've achieved competitive advantages in some of the semiconductor industry's fastest growing segments. Our commitment to R&D is reaffirmed by the fact that over 83% of third quarter orders were from the Company's MetaPULSE and MatrixMetrology products. We believe that our unique MetaPULSE tools have become the industry standard for copper measurement metrology,'' commented Rob Loiterman, Senior Vice President of Engineering.
Outlook
``Despite the industry's slowdown, we intend to continue to increase our market share in thin film metrology by providing the right tools and processes to meet metrology road map requirements spelled out in the International Technology Roadmap for Semiconductors. Overall, thirty-one customers have purchased MetaPULSE tools in order to meet aluminum and copper metrology needs for leading edge devices and thirty-four customers have purchased our MatrixMetrology(TM) tools for leading-edge transparent applications. We remain focused on balancing strategic investments in R&D and customer support infrastructure with prudent fiscal management, to ensure that Rudolph remains profitable and is well positioned for the next industry up-cycle,'' concluded McLaughlin.
The Company currently anticipates revenue for the fourth quarter ending December 31, 2001, to be approximately 20% to 30% below this year's third quarter revenue. The Company is forecasting to remain profitable and has recently taken steps including reductions in the workforce to balance operating costs with the temporary downturn in demand. These cuts are in addition to the downsizing taken when the Company first started to experience the impact of the downturn earlier this year.
For the full year ending December 31, 2001, the Company currently projects total revenue to be approximately 8% to 10% below the 2000 level of $88.1 million. The Company expects that 2001 earnings will be approximately $0.68 to $0.70 per diluted share.
Conference call
Rudolph Technologies will be hosting a conference call today at 4:45PM EST. A live webcast will also be available to investors at www.vcall.com. To listen to the live call, please go to the Web site at least fifteen minutes early to register, download and install any necessary audio software.
About Rudolph Technologies
Rudolph is a worldwide leader in the design, development, manufacture and support of high-performance process control metrology systems used by semiconductor device manufacturers. The Company provides a full-fab solution through its families of proprietary systems for both transparent and opaque thin film measurement. Rudolph's product development has successfully anticipated and addressed many emerging trends that are driving the semiconductor industry's growth. The Company's success in creating complementary metrology applications through aggressive research and development is key to Rudolph's strategy for continued technological and market leadership.
This press release contains forward-looking statements, including statements related to our anticipated leadership position in an industry recovery, and our revenue and earnings expectations for the fourth quarter and full year of 2001. Actual results may differ materially from those projected due to a number of risks, including the impact of the slowdown in the overall economy and the uncertainty of the current global political environment following the recent terrorist attacks, changes in customer demands for our existing and new products, the timing, cancellation or delay of customer orders and shipments and the timing of revenue recognition of shipments, new product offerings from our competitors, changes in or an inability to execute Rudolph Technologies' business strategy, unanticipated manufacturing or supply problems, and changes in tax rules. Rudolph Technologies cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading ``Risk Factors'' in Rudolph Technologies' Form 10K filed for the year ended December 31, 2000. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Rudolph Technologies does not assume any obligation to update the forward-looking information contained in this press release.
RUDOLPH TECHNOLOGIES
BALANCE SHEETS
($000)
Sept. 30, Dec. 31,
------------------------------
2001 2000
------------ ------------
ASSETS
Current assets
Cash $ 95,989 $ 29,736
Accounts receivable, net 14,438 27,132
Inventories 23,959 23,773
Prepaid and other assets 1,456 4,527
------------ ------------
Total current assets 135,842 85,168
Net property, plant and equipment 5,448 3,824
Intangibles 2,266 2,520
Deferred taxes 6,121 6,628
Other assets 324 414
------------ ------------
Total assets $ 150,001 $ 98,554
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 4,406 $ 7,062
Other current liabilities 5,517 7,919
------------ ------------
Total current liabilities 9,923 14,981
Other long-term liabilities 45 65
------------ ------------
Total liabilities 9,968 15,046
Stockholders' equity 140,033 83,508
------------ ------------
Total liabilities & stockholders'
equity $ 150,001 $ 98,554
============ ============
RUDOLPH TECHNOLOGIES
STATEMENTS OF OPERATIONS
($000)
Three Months Ended Nine Months Ended
---------------------- ----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenues $ 15,058 $ 23,440 $ 68,707 $ 59,183
Cost of revenues 8,323 11,512 33,225 28,714
---------- ---------- ---------- ----------
Gross profit 6,735 11,928 35,482 30,469
Operating Expenses
Research & development 3,183 2,384 9,610 6,090
Selling, general &
administrative 2,891 3,755 10,392 10,045
Amortization 85 84 254 254
---------- ---------- ---------- ----------
Operating income 576 5,705 15,226 14,080
Interest income and
other, net (681) (578) (2,255) (1,622)
Cumulative effect on
prior years of the
application of SAB
101, net of tax
of $924 - - - 1,458
Provision (benefit)
for income taxes 398 729 6,403 (505)
---------- ---------- ---------- ----------
Net income $ 859 $ 5,554 $ 11,078 $ 14,749
========== ========== ========== ==========
Net income per share:
Basic $ 0.05 $ 0.38 $ 0.70 $ 1.00
Diluted $ 0.05 $ 0.35 $ 0.67 $ 0.93
Pro forma net income per share (1):
Basic $ 0.05 $ 0.26 $ 0.70 $ 0.56
Diluted $ 0.05 $ 0.24 $ 0.67 $ 0.52
Weighted average shares outstanding:
Basic 16,081,194 14,801,773 15,816,201 14,744,316
Diluted 16,649,058 15,797,230 16,455,905 15,817,643
(1) Pro forma net income per share in 2000 excludes certain tax
adjustments recorded in the three and nine months ended
September 30, 2000 of $1.7 million and $6.5, respectively. |
