Cascade Microtech Reports Third Quarter 2011 Results

BEAVERTON, OR -- (MARKET WIRE) -- 11/01/11 -- Cascade Microtech, Inc. (NASDAQ: CSCD) today reported financial results for the third quarter ended September 30, 2011.

Financial summary from the third quarter:

Operating results from continuing operations for the quarter ended September 30, 2011 were as follows:

• Revenue of $23.8 million. Revenues are below the guidance range due to the sale of the Sockets business which was sold in the third quarter and delays in station shipments due primarily to customer timing.
• The Sockets business will now be accounted for as a discontinued operation.
• Gross margin of 37.1%.
  • Reflects $0.4M of planned factory consolidation costs and lower revenue.
• Operating expenses of $12.8 million.
  • Research and development expenses increased due primarily to the timing of R&D projects and lower government grants.
  • Increases in selling, general and administrative expenses were primarily attributed to planned restructuring costs of $2.2 million associated with vacating leased facilities.
• Loss from operations of $4.0 million after $2.6 million of restructuring/special charges and $1.7 million of depreciation, amortization and stock based compensation expenses.
• Net loss from continuing operations of $3.6 million or $0.24 per share for Q3 2011.
• Book-to-bill ratio of approximately 1.0.

"Q3 was an extremely active quarter for Cascade Microtech. We divested the non-strategic Sockets business, completed the factory consolidations on time and within budget, moved our corporate headquarters as we consolidated our Oregon facilities, announced a stock repurchase program, and recently introduced two new products," said Michael Burger, President and CEO of Cascade Microtech. "During the quarter, we experienced some revenue impact in our Systems business primarily due to customer timing. Despite the softness of revenue in Q3, we generated positive cash flows from operations and lowered future overhead costs to position the company for improved financial performance."

Financial outlook

We anticipate that Q4 2011 revenues will be in the range of $25.0 million to $29.0 million. This would result in an earnings range of $0.05 loss per share to $0.10 earnings per share, on a fully diluted basis, assuming no significant changes in foreign exchange rates.

The company will host a conference call beginning at 2 p.m. PDT (5 p.m. EDT) on Tuesday, November 1, 2011, to discuss its results for the third quarter ended September 30, 2011.

A simultaneous audio cast of the conference call may be accessed online from the investor relations page of www.cascademicrotech.com. A replay will be available after 8 p.m. EDT at this same internet address. (For a telephone replay available after 8 p.m. EDT dial: 888-286-8010, international: 617-801-6888, passcode: 36619507).

Forward-Looking Statements

The statements in this release regarding the Company's financial outlook as to revenue in the fourth quarter of 2011 and the comments by Mr. Burger regarding revenue and earnings (loss) per share impact related to customer push-outs, strong backlog that positions the Company for the fourth quarter and beyond, and lower overhead costs that position the Company for improved financial performance 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; the timing of shipments and customer orders; inability to achieve anticipated reductions of overhead; constraints on supplies of components; excess or shortage of production capacity; difficulties or unexpected costs or delays in the integration of the operations, employees, products, sales channels, strategies, and technologies of acquired businesses; potential failure of the expected market opportunities to materialize; the potential inability to realize expected benefits and synergies of acquisitions and the potential diversion of management's attention from our existing business as well as that of acquired businesses; potential adverse effects of acquisitions on relationships with our existing suppliers, customers or partners; 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. 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.

About Cascade Microtech, Inc.

Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in the precise 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 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
                      -------------------------------
                                                       Year to Date Ended
                       September            September     September 30,
                          30,     June 30,      30,    --------------------
                         2011       2011       2010       2011       2010
                      ---------  ---------  ---------  ---------  ---------

Revenue               $  23,750  $  26,549  $  24,424  $  77,312  $  66,556
Cost of sales            14,942     16,439     14,431     47,599     42,412
                      ---------  ---------  ---------  ---------  ---------
Gross profit              8,808     10,110      9,993     29,713     24,144
                      ---------  ---------  ---------  ---------  ---------

Operating expenses:
   Research and
    development           3,175      2,687      2,860      8,937      8,886
   Selling, general
    and
    administrative        9,444      8,827      6,557     25,471     23,444
   Amortization of
    purchased
    intangibles             204        203        200        610        580
                      ---------  ---------  ---------  ---------  ---------
                         12,823     11,717      9,617     35,018     32,910
                      ---------  ---------  ---------  ---------  ---------

Income (loss) from
 operations              (4,015)    (1,607)       376     (5,305)    (8,766)
                      ---------  ---------  ---------  ---------  ---------

Other income
 (expense):
   Interest income,
    net                      20         12          9         51         54
   Other, net               435       (167)      (437)       251         12
                      ---------  ---------  ---------  ---------  ---------
                            455       (155)      (428)       302         66
                      ---------  ---------  ---------  ---------  ---------

Loss from continuing
 operations before
 income taxes            (3,560)    (1,762)       (52)    (5,003)    (8,700)

Income tax expense
 (benefit)                   (9)       145         41        239       (303)
                      ---------  ---------  ---------  ---------  ---------

Net loss from
 continuing
 operations              (3,551)    (1,907)       (93)    (5,242)    (8,397)
Net loss from
 discontinued
 operations, net of
 tax                     (1,777)      (117)      (260)    (2,004)    (2,209)
                      ---------  ---------  ---------  ---------  ---------
Net loss              $  (5,328) $  (2,024) $    (353) $  (7,246) $ (10,606)
                      =========  =========  =========  =========  =========

Basic and diluted net
 loss per share from
 continuing
 operations:              (0.24)     (0.13)     (0.01)     (0.36)     (0.59)
Basic and diluted net
 loss per share from
 discontinued
 operations:              (0.12)     (0.01)     (0.02)     (0.14)     (0.16)
                      ---------  ---------  ---------  ---------  ---------
Basic and diluted net
 loss per share:      $   (0.36) $   (0.14) $   (0.02) $   (0.50) $   (0.75)
                      =========  =========  =========  =========  =========

Shares used in basic
 and diluted per
 share calculations:     14,713     14,611     14,361     14,618     14,232

                          CASCADE MICROTECH, INC.
                              AND SUBSIDIARIES

                   Condensed Consolidated Balance Sheets
                               (in thousands)
                                (unaudited)


                                               September 30,   December 31,
                    Assets                          2011           2010
                                               -------------  -------------

Current assets:
  Cash and cash equivalents                    $      13,537  $      21,871
  Marketable securities                                1,570            870
  Restricted cash                                      1,508          1,704
  Accounts receivable, net                            19,056         19,718
  Inventories                                         24,150         20,764
  Prepaid expenses and other                           4,076          2,032
                                               -------------  -------------
    Total current assets                              63,897         66,959

Long-term investments                                  3,482              -
Fixed assets, net                                      9,550          9,973
Purchased intangible assets, net                       2,532          3,142
Goodwill                                               1,007            985
Other assets                                           2,902          3,486
                                               -------------  -------------

                                               $      83,370  $      84,545
                                               =============  =============


     Liabilities and Stockholders' Equity

Current liabilities:
  Accounts payable                                     6,511          6,384
  Deferred revenue                                     3,975          3,338
  Accrued liabilities                                  8,297          6,293
                                               -------------  -------------
    Total current liabilities                         18,783         16,015

Deferred revenue                                         143            109
Other long-term liabilities                            4,542          2,815
                                               -------------  -------------

    Total liabilities                                 23,468         18,939
                                               -------------  -------------

Stockholders' equity:
  Common stock                                        92,333         91,112
  Accumulated other comprehensive loss                  (483)          (804)
  Accumulated deficit                                (31,948)       (24,702)
                                               -------------  -------------

    Total stockholders' equity                        59,902         65,606
                                               -------------  -------------

                                               $      83,370  $      84,545
                                               =============  =============

FOR MORE INFORMATION, CONTACT:

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

Source: Cascade Microtech