Cascade Microtech Reports First Quarter 2007 Results

Cascade Microtech (NASDAQ:CSCD), today reported financial results for the first quarter ended March 31, 2007. Highlights for the First Quarter 2007 include: Revenues of $22.5 million, flat sequentially and up 14% over Q1 last year $18.4 million Engineering Products Division revenue, up 4% sequentially and 13% over Q1 last year $4.1 million Production Products Division revenue, down 19% sequentially but up 19% over Q1 last year EPS of $0.09 per diluted share, up 13% sequentially and 50% over Q1 last year "Our Engineering Products Division continued to show strong performance in the first quarter of 2007. Although our Production Products Division revenue was down from the last quarter as expected, we built backlog in Production Probes and continued to invest during the quarter by adding employees and building out the facility to increase capacity,” said Eric Strid, CEO of Cascade Microtech. Revenue for the first quarter was $22.5 million, net income for the quarter was $1.0 million and diluted earnings per share were $0.09, compared to revenue of $22.6 million, net income of $0.9 million and diluted earnings per share of $0.08 for the fourth quarter of 2006. Gross margin for the first quarter improved to 45.7% from 43.4% in the fourth quarter of 2006 primarily due to product mix improvements in the Engineering Products Division. The effective tax rate for the first quarter was 26% compared to a tax benefit of 18% in the fourth quarter of 2006. Financial Outlook Based on the current backlog and anticipated bookings, Cascade anticipates that second quarter 2007 revenues for our organic business will be in the range of $21.5 million to $23.5 million and that diluted earnings per share for our organic business will be in the range of $0.06 to $0.11. This organic revenue and earnings range excludes the effect of the acquisition of Gryphics, Inc. which closed during the second quarter of 2007. Our independent valuation experts have not yet completed the valuation work related to the acquisition of Gryphics. We expect to incur normal acquisition-related charges that may significantly impact the second quarter results so we are unable to provide a meaningful range for reported diluted earnings per share for the second quarter of 2007. About Cascade Microtech Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in the precise electrical measurement and test of integrated circuits (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, integrated circuits (ICs), IC packages, circuit boards and modules, MEMs, biological structures, electro-optic devices and more. Cascade Microtech’s leading-edge semiconductor production test consumables include unique probe cards and test sockets that reduce manufacturing costs of high-speed and high-density semiconductor chips. Information about Cascade Microtech can be found on the Web at www.cascademicrotech.com. Forward-Looking Statements The statements in this release regarding the Company’s financial outlook as to revenue and earnings in the second quarter of 2007 and any acquisition-related charges 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, product mix, the timing of shipments and customer orders, constraints 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. 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. The company will host a conference call beginning at 5 p.m. EDT (2 p.m. PDT) on April 24, 2007 to discuss its results for the first quarter ended March 31, 2007 and its outlook for the second quarter of 2007. 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 7 p.m. EDT at this same internet address. (For a telephone replay, dial 888-286-8010 passcode: 70824132; International: 617-801-6888.) CASCADE MICROTECH, INC. AND SUBSIDIARIES   Condensed Consolidated Statements of Income (in thousands, except per share data) (unaudited)     Three Months Ended March 31, Dec. 31, March 31, 2007  2006  2006    Sales $ 22,471  $ 22,605  $ 19,699    Cost of sales 12,087  12,679  11,020  Stock-based compensation 122  111  112    Gross profit 10,262  9,815  8,567    Operating expenses: Research and development (includes $79, $75, $77, respectively, of stock-based compensation) 2,639  2,570  1,998  Selling, general and administrative (includes $361, $281, $264, respectively, of stock-based compensation) 6,770  6,910  6,009    Total operating expenses 9,409  9,480  8,007    Income from operations 853  335  560    Other income (expense): Interest income 455  420  362  Interest expense (1) (1) -  Other, net 110  28  57    Total other income (expense) 564  447  419    Income before income taxes 1,417  782  979    Provision for income taxes 369  (144) 323    Net income $ 1,048  $ 926  $ 656    Net income per share: Basic $ 0.09  $ 0.08  $ 0.06  Diluted $ 0.09  $ 0.08  $ 0.06    Shares used in computing net income per share: Basic 11,808  11,664  11,373  Diluted 12,207  12,084  11,907  CASCADE MICROTECH, INC. AND SUBSIDIARIES   Consolidated Balance Sheets   March 31, 2007 and December 31, 2006     Assets March 31, 2007 Dec. 31, 2006 (unaudited) Current assets: Cash and cash equivalents $ 2,650  $ 5,260  Marketable securities 43,738  38,534  Accounts receivable, net 18,767  17,642  Inventories 15,506  15,094  Prepaid expenses and other 2,112  2,293  Deferred income taxes 2,029  2,042    Total current assets 84,802  80,865    Long-term investments 6,597  9,662  Fixed assets, net 8,600  6,818  Deferred income tax 723  444  Goodwill 1,295  1,295  Other assets 4,679  4,702    $ 106,696  $ 103,786      Liabilities and Stockholders' Equity   Current liabilities: Current portion of long-term debt and capital leases $ 6  $ -  Accounts payable 5,614  6,013  Deferred revenue 1,009  1,184  Accrued liabilities 5,015  5,026    Total current liabilities 11,644  12,223    Long-term debt and capital leases 27  -  Deferred revenue 198  199  Other long-term liabilities 1,743  1,171    Total liabilities 13,612  13,593    Stockholders' equity: Common stock 65,107  63,261  Unrealized holding gain (loss) on investments (4) (1) Retained earnings 27,981  26,933    Total stockholders' equity 93,084  90,193    $ 106,696  $ 103,786