He continued, “We ended the year with another record for revenue. More importantly, we continue to invest in the expansion of our addressable markets where we see the opportunity to apply our ability to provide solutions to a growing set of customers and markets ranging across bare wafer inspection, front-end metrology, back-end lithography, 2D/3D inspection and metrology, and high definition displays. While we cannot control the overall market conditions in 2019, we will continue our commitment to developing the tools our customers need to improve the yields and reliability of their future products.”
Fourth Quarter 2018 GAAP Financial Results
Fourth quarter revenue totaled $62.8 million, an increase of 4 percent compared with $60.4 million for the third quarter of 2018 and $60.1 million in the fourth quarter of 2017. The quarter gross margin was 52 percent of revenues, in both the fourth and third quarters of 2018. For the full year, gross margin was 54 percent compared to 53 percent in 2017 due to strong software, metrology and display system sales during the year.
Operating expenses for the fourth quarter of 2018 totaled $23.4 million, compared to $23.8 million in the 2018 third quarter and $20.7 million in the fourth quarter of 2017. The increase in operating expenses over the prior year was primarily due to the Company’s initiative to enter the display market, an increase in compensation expense and an increase in third party commissions.
GAAP net income for the fourth quarter of 2018 was $8.1 million, or $0.26 per diluted share, compared with a net income of $7.2 million, or $0.22 per diluted share, for the 2018 third quarter. In the fourth quarter of 2017, the Company had a net loss of ($0.8) million or ($0.03) per share. The increase in GAAP net income over the prior year period was primarily due to a transition adjustment associated with the 2017 Tax Cut and Jobs Act and an increase in revenue between the periods.
Fourth Quarter Non-GAAP Financial Results
Fourth quarter 2018 non-GAAP net income was $9.2 million, or $0.29 detailed in the attached table. Third quarter of 2018, non-GAAP net income was $8.5 million, or $0.26 per diluted share. In the fourth quarter 2017 non-GAAP net income was $9.4 million, or $0.29 per diluted share.
Balance Sheet
At December 31, 2018, cash and marketable securities decreased $19.2 million over the previous quarter to $175.1 million. In the fourth quarter, we completed the purchase of shares under a previously Board authorized stock repurchase program. In addition, our Board of Directors authorized a new $40 million plan. During the fourth quarter, we repurchased $21.0 million of our stock under both these plans. Those purchases were the main contributor to the decrease in cash for the quarter. Cash provided by operating activities was $35.1 million for the year and represented another strong cash generation year. Accounts receivable decreased in the quarter to $64.2 million with our days sales outstanding decreasing to 92 days. Inventory increased to $96.8 million primarily due to inventory increases for the Company’s display market initiative and advanced packaging lithography business.
Outlook
The Company is currently anticipating revenue for the first quarter ended March 31, 2019 to be in the range of $56M to $63M. The Company is also expecting diluted GAAP net income per share to be in the range of $0.14 to $0.20 and non-GAAP net income per diluted share to be in the range of $0.19 to $0.25.
Conference Call
Rudolph Technologies will discuss its 2018
fourth quarter results on a conference call it is hosting today at 4:30
PM EST. To participate in the call, please dial 888-254-3590 (Domestic)
or +1-323-994-2093 (International), reference confirmation code #
751-0325 least five (5) minutes prior to the scheduled start time. A
live webcast will also be available on the Company’s website at
www.rudolphtech.com
To listen to the live webcast, please go to the website at least fifteen (15) minutes early to register, download and install any necessary audio software.
There will be a replay of the conference call available from 8:00 p.m. EST on February 4 until 11:59 p.m. EST on February 11, 2019. To access the replay, please dial 888-203-1112 (Domestic) or +1-719-457-0820 (International) at any time during that period and use confirmation code # 751-0325.
A replay will also be available on the Company’s website at
www.rudolphtech.com .
