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Cascade Microtech Inc. Reports Operating Results (10-Q)

May 07, 2009 | About:
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Cascade Microtech Inc. (CSCD) filed Quarterly Report for the period ended 2009-03-31.

Cascade Microtech designs develops and manufactures advanced wafer probing solutions for the electrical measurement and test of integrated circuits or ICs. Cascade's engineering probe stations and analytical probes are used in research and development to perform precise electrical measurements on increasingly complex and high speed ICs. Cascade's production probe cards reduce manufacturing costs of complex and high speed ICs by identifying defective ICs early in the process and by testing multiple ICs concurrently. Cascade Microtech Inc. has a market cap of $43.2 million; its shares were traded at around $3.26 with and P/S ratio of 0.6.

Highlight of Business Operations:

Cost of sales decreased $3.4 million, or 30.6%, to $7.6 million in the first quarter of 2009 compared to $11.0 million in the first quarter of 2008. Gross margin (gross profit as a percentage of net sales) was 33.6% and 47.1%, respectively, in the first quarter of 2009 and 2008. The decrease in cost of sales in the first quarter of 2009 compared to the first quarter of 2008 was primarily due to the decrease in sales.

SG&A expenses decreased $1.5 million, or 21.6%, to $5.4 million in the first quarter of 2009 compared to $6.9 million in the first quarter of 2008. The decrease was primarily due to the following:

Amortization of purchased intangibles includes amortization related to our acquisition of certain assets of the eVue product line in the fourth quarter of 2006, the acquisition of Gryphics, Inc. in the second quarter of 2007 and the acquisition of certain assets of Synatron GmbH in the third quarter of 2007. Amortization expense decreased $0.5 million to $0.1 million in the first quarter of 2009 compared to $0.6 million in the first quarter of 2008 due to the asset impairment charge recorded in the fourth quarter of 2008. Net purchased intangibles totaled $2.3 million at March 31, 2009.

Accounts receivable, net decreased by $1.7 million to $11.1 million at March 31, 2009, compared to $12.8 million at December 31, 2008. The decrease in accounts receivable was primarily due to lower sales in the first quarter of 2009 compared to the fourth quarter of 2008.

Inventories increased by $0.2 million to $19.3 million at March 31, 2009, compared to $19.1 million at December 31, 2008. The increase in inventory was primarily the result of lower than expected sales and the fulfillment of purchase commitments existing at December 31, 2008. We believe that our inventory reserves of $3.0 million are adequate at March 31, 2009. However, if our actual results are significantly different than our current projections for the remainder of 2009, we may be required to increase reserves for inventory in future periods.

Fixed assets additions were $1.3 million in the first quarter of 2009, including $0.9 million that were unpaid and accrued in accounts payable at March 31, 2009. These additions were primarily for socket production related equipment. We anticipate fixed asset additions for the remainder of 2009 of approximately $1.7 million, primarily for socket production related equipment and sustaining on-going capital requirements.

Read the The complete ReportCSCD is in the portfolios of Arnold Schneider of Schneider Capital Management.

Rating: 2.3/5 (6 votes)

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