Cascade Microtech Reports Third Quarter 2011 Results

BEAVERTON, OR--(Marketwire - Nov 1, 2011) - 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
			September 30,				June 30,				September 30,				Year to Date Ended September 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