Rudolph Technologies Reports 2018 Fourth Quarter and Full Year

Rudolph Technologies Reports 2018 Fourth Quarter and Full Year Results


RUDOLPH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) - (Unaudited)

	December 31,		December 31,
	2018		2017
			(Audited)
ASSETS
Current assets
Cash and marketable securities	$	175,072	$	177,359
Accounts receivable, net		64,194		65,283
Inventories		96,820		67,521
Prepaid and other assets		14,821		11,919
Total current assets		350,907		322,082
Net property, plant and equipment		18,874		17,342
Intangibles		29,943		31,127
Other assets		18,316		15,371
Total assets	$	418,040	$	385,922

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	30,681	$	26,800
Other current liabilities		14,310		15,507
Total current liabilities		44,991		42,307
Other non-current liabilities		11,161		10,461
Total liabilities		56,152		52,768
Stockholders’ equity		361,888		333,154
Total liabilities and stockholders’ equity	$	418,040	$	385,922


RUDOLPH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) - (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2018			2018			2017			2018			2017
Revenue	$	62,780		$	60,432		$	60,081		$	273,784		$	255,098
Cost of revenue		30,112			28,978			27,955			125,505			120,503
Gross profit		32,668			31,454			32,126			148,279			134,595
Operating expenses:
Research and development		12,224			12,313			10,810			49,053			46,986
Selling, general and administrative		10,741			11,128			9,501			46,608			39,381
Amortization		387			384			424			1,534			1,940
Patent litigation income		—			—			—			—			(13,000	)
Total operating expenses		23,352			23,825			20,735			97,195			75,307
Operating income		9,316			7,629			11,391			51,084			59,288
Interest income, net		(732	)		(607	)		(313	)		(2,206	)		(971	)
Other expense (income), net		34			(132	)		(76	)		(56	)		457
Income before income taxes		10,014			8,368			11,780			53,346			59,802
Provision for income taxes		1,932			1,181			12,584			8,250			26,893
Net income (loss)	$	8,082		$	7,187		$	(804	)	$	45,096		$	32,909
Earnings (loss) per share:
Basic	$	0.26		$	0.23		$	(0.03	)	$	1.42		$	1.05
Diluted	$	0.26		$	0.22		$	(0.03	)	$	1.40		$	1.02
Weighted average shares outstanding:
Basic		31,268			31,901			31,597			31,671			31,491
Diluted		31,645			32,408			31,597			32,200			32,162


RUDOLPH TECHNOLOGIES, INC.
NON-GAAP FINANCIAL SUMMARY
(In thousands, except percentage and per share amounts) - (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2018			2018			2017			2018			2017
Revenue	$	62,780		$	60,432		$	60,081		$	273,784		$	255,098
Gross profit	$	32,704		$	31,462		$	32,193		$	148,499		$	134,884
Gross margin as percentage of revenue		52.1	%		52.1	%		53.6	%		54.2	%		52.9	%
Operating expenses	$	21,818		$	22,158		$	19,134		$	89,819		$	78,368
Operating income	$	10,886		$	9,304		$	13,059		$	58,680		$	56,516
Operating margin as a percentage of revenue		17.3	%		15.4	%		21.7	%		21.4	%		22.2	%
Net income	$	9,164		$	8,504		$	9,437		$	50,566		$	38,900
Net income per diluted share	$	0.29		$	0.26		$	0.29		$	1.57		$	1.21


RECONCILIATION OF U.S. GAAP GROSS PROFIT,
OPERATING EXPENSES AND OPERATING INCOME TO NON-GAAP
GROSS PROFIT, OPERATING EXPENSES AND OPERATING INCOME
(In thousands, except percentages) - (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2018			2018			2017			2018			2017
U.S. GAAP gross profit	$	32,668		$	31,454		$	32,126		$	148,279		$	134,595
Pre-tax non-GAAP items:
Share-based compensation expense		36			8			67			220			289
Non-GAAP gross profit	$	32,704		$	31,462		$	32,193		$	148,499		$	134,884
U.S. GAAP gross margin as a percentage of revenue		52.0	%		52.0	%		53.5	%		54.2	%		52.8	%
Non-GAAP gross margin as a percentage of revenue		52.1	%		52.1	%		53.6	%		54.2	%		52.9	%
U.S. GAAP operating expenses	$	23,352		$	23,825		$	20,735		$	97,195		$	75,307
Pre-tax non-GAAP items:
Amortization of intangibles		387			384			424			1,534			1,940
Litigation fees		—			—			(13	)		—			2,618
Patent litigation income		—			—			—			—			(13,000	)
Share-based compensation expense		1,147			1,283			1,190			5,842			5,381
Non-GAAP operating expenses		21,818			22,158			19,134			89,819			78,368
Non-GAAP operating income	$	10,886		$	9,304		$	13,059		$	58,680		$	56,516
GAAP operating margin as a percentage of revenue		14.8	%		12.6	%		19.0	%		18.7	%		23.2	%
Non-GAAP operating margin as a percentage of revenue		17.3	%		15.4	%		21.7	%		21.4	%		22.2	%


RUDOLPH TECHNOLOGIES, INC.
RECONCILIATION OF U.S. GAAP NET INCOME TO
NON-GAAP NET INCOME
(In thousands, except share and per share data) - (Unaudited)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2018			2018			2017			2018			2017
U.S. GAAP net income (loss)	$	8,082		$	7,187		$	(804	)	$	45,096		$	32,909
Pre-tax non-GAAP items
Amortization of intangibles		387			384			424			1,534			1,940
Litigation fees		—			—			(13	)		—			2,618
Patent litigation income		—			—			—			—			(13,000	)
Share-based compensation expense		1,183			1,291			1,257			6,062			5,670
Net tax benefit adjustments		(488	)		(358	)		(883	)		(2,126	)		(693	)
Tax reform		—			—			9,456			—			9,456
Non-GAAP net income	$	9,164		$	8,504		$	9,437		$	50,566		$	38,900
Non-GAAP net income per diluted share	$	0.29		$	0.26		$	0.29		$	1.57		$	1.21


SUPPLEMENTAL INFORMATION - RECONCILIATION OF FIRST QUARTER 2019
GAAP TO NON-GAAP GUIDANCE (net of tax)

	Low		High
Estimated GAAP net income per diluted share	$	0.14	$	0.20
Estimated non-GAAP items:
Share-based compensation expense		0.04		0.04
Amortization of intangibles		0.01		0.01
Estimated non-GAAP net income per diluted share	$	0.19	$	0.25