cacade microtech investors presentation
DESCRIPTION
Achieving Market Dominance through Technology Leadership -Cascade Microtech, Inc. is the leading provider of advanced probing systems, non-memory probes and sockets, from design through productionTRANSCRIPT
Cascade Microtech, Inc.Investor Presentation
Safe Harbor and Non-GAAP Measures
This presentation includes “forward-looking” statements within the meaning of the Securities Litigation Reform Act of 1995. Such forward-looking statements include statements regarding Cascade’s anticipated revenue growth, increased revenue from certain products, related increases in customer demand, future quarterly earnings, correlation between bookings and revenues, facility changes and utilization, and integration and restructuring of product lines. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify these and other forward-looking statements. All 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 and product mix; the timing of shipments and customer orders; 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; difficulties or unexpected costs or delays in the consolidation of facilities and manufacturing operations; the inability to achieve anticipated savings from cost reduction efforts; the potential failure of expected market opportunities to materialize; the potential inability to realize expected benefits and synergies; potential diversion of management’s attention from our existing business as well as that of acquired businesses; potential adverse effects 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 presentation.
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Cascade Microtech is a Compelling Investment
Significant share in important select semiconductor markets– Unique high speed electrical and mechanical measurement expertise
protected by a strong IP portfolio (258 granted US patents)
Vast majority of semiconductor devices are characterized using Cascade products
High growth opportunities in adjacent markets
Scalable business model creating a clear path to significant profitability
New management practices and processes installed that have improved execution
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Premier Wafer Probing Company
Experts in enabling precision measurements of integrated circuits on-wafer.
Product portfolio probe systems engineering probes production probe cards sockets
Our products are used in a diverse set of applications Semiconductor companies,
universities, government, military and commercial entities.
This enables our customers to Accurately model and characterize
semiconductor devices and processes
Reduce their product costs with improved yield
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Outstanding Customers in All Major SectorsThe Who’s Who in the Semiconductor Industry
Integrated Device Manufacturer
Foundry
Fabless Government/Institute Research
Subcons
University ResearchThe vast majority of
semiconductor devices are characterized using Cascade products.
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Megatrends Fuel Opportunities for Cascade
Industry demands
accelerate the need for our
unique products
• Faster buses• Shrinking geometries• Device integration• Power
Computing Devices
Lower test costs
• Integration of functions• Shrinking geometries• Faster digital interfaces• Power mgmt
Consumer Devices
3D TSV stacksKnown- Good Die
• Higher voltages• Reliability• Power• LED
Green Power Devices
Measurement Diversification
• High-frequency RF• Shrinking geometries• Lower voltages• Power
Wireless Devices
Higher bandwidths
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Mar
ket S
ize
Gro
ss M
argi
ns
Our Customers’ Ecosystem Model
Physically touch the wafer to get signals to the end of a cable
Cable connects to an instrument to measure voltage, current, frequency, power, light
Measurement data is then analyzed to determine performance
Compare device measured performance to specifications/model
Source: 2009/10 industry reports; Cascade Microtech
30 – 49%
49 – 51%
43 – 55%
82 – 83%
$1.6B
$1.0B*Wafer test instruments
$1.8B
$1.3B
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Cascade enables our customers’
success through our
unique ability to
TOUCH the wafer.
Our Growth Opportunity in the Touch MarketTotal Available Market Size
$1,600M (2009)
$650
$80
$900
$30
Expanding into non-RF Production
Probe Cards is the major opportunity
2% Market Share
50% Market Share
80% Market Share
0% Market Share
Production Probes
Engineering Probes
Engineering Systems
Production Systems
8Source: Cascade Microtech, VLSI Research
FormFactorJEMMJC
SV Probe
TEL Accretech
Production Probe Cards: Growth opportunity is to expand beyond RF probe cards
2009 TAM: $900M
Product introductions, leveraging Cascade technology and customer base, significantly increase serviceable market
Source: Cascade Microtech
$-
$50
$100
$150
$200
$250
$300
2010 2011 2012 2013
SAM Profile for Cascade Microtech
3D-TSVMPUGPUWLCSPRF Wireless
Prod
uctio
n Pr
obe
Car
d SA
M ($
M)
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Second Growth Opportunity is to move Probe Systems into Measure-Analyze
Total Available Market Size$1,600M (2009)
$650
$80
$900
$30
*Wafer test instruments
Targeted growth will be driven by integrating measure and analyze
capabilities
*Wafer test instruments
2% Market Share
50% Market Share
80% Market Share
0% Market Share
Production Probes
Engineering Probes
Engineering Systems
Production Systems
10Source: Cascade Microtech, VLSI Research
FormFactorJEMMJC
SV Probe
TEL Accretech
Expansion into Adjacent Markets Creates Opportunities for Probe Systems
0
50
100
150
200
250
2010 2011 2012 2013
Prod
uctio
n Sy
stem
s SA
M ($
M)
SAM Profile for Cascade Microtech
Cryo/MEMs
HBLED
Power
Probe Systems
Source: 2009 VLSIR, Cascade Microtech
Product introductions, leveraging Cascade technology and customer base,dramatically increases the serviceable market by 2013
2009 TAM: $250M11
Cascade’s 2010 Income Statement
Strong revenue growth. Annual run rate based upon Q3 exceeds $100M Improving GAAP gross margins Reducing operating expenses Operating profit achieved in Q3 EBITDAS in Q3 of $1.7m, equaled 7% of revenue
(000's) Q1 2010 Q2 2010 Q3 2010 YTD 2010Revenue $19,959 $23,439 $25,273 $68,671Cost of Sales 14,573 15,120 14,850 44,543Gross Profit $5,386 $8,319 $10,423 $24,128
% 27.0% 35.5% 41.2% 35.1%
R & D 3,466 3,041 3,038 9,545SG & A 10,036 8,273 7,275 25,584Operating Exp $13,502 $11,314 $10,313 $35,129
% 67.6% 48.3% 40.8% 51.2%
Operating Profit -$8,116 -$2,995 $110 -$11,001% -40.7% -12.8% 0.4% -16.0%
Other -56 555 -423 76Taxes 772 -413 -42 317
Net Income -$7,400 -$2,853 -$355 -$10,608% -37.1% -12.2% -1.4% -15.4%
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Target Financial Model
Revenue Trough SuccessGM % 42% 48%Oper Exp % 42% 36%Oper Profit % 0% 12%EBITDAS 8% 18%
The financial model creates an infrastructure that reaches operating profit breakeven with quarterly revenue below Q3 2010 levels
The success model generates operating profit of 12% with significant EBITDAS
As larger markets are reached, revenue generation continues to grow, improving bottom line performance
Strong cash position and no debt coupled with strong cash flow, positions Cascade to invest and address larger markets
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Cascade Microtech Summary Leveraging unique technology and
expertise into high growth areas Investing in growth opportunities
– Strong differentiated leadership position Premier customers
– Strong relationships mean strong partnerships
Focused on delivering profitability via new business model – Encouraging results; improving balance
sheet Experienced management team focused
on execution of plan
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Appendix
Strong Balance Sheet
Strong cash position and no debt
Coupled with strong cash flow, positions Cascade to invest and address larger markets
Balance Sheet RatiosAverage DSO 62
Average Inventory Turns 2.8
Average Days AP 36
Current Ratio 4.9
Working Capital Position $50,562
Long Term Debt $0
Total Liabilities to Equity Ratio 0.25
(000's) Q3 2010Cash and investments 19,537Accounts receivable 18,315Inventories 21,282Prepaids and Other Current 4,392
Total Current Assets $63,526
Fixed assets 10,565Goodwill & Purchased intangibles 4,357Other assets 2,885
Total assets $81,333
Accounts payable 5,341Accrued liabilities 5,119Other Current Liabilities 2,504
Total Current Liabilities $12,964
Deferred Income Taxes 708Other Long-Term Liabilities 2,810
Total Liabilities $16,482
Equity $64,851Total Liabilities and Equity $81,333
Creating a Solid Financial Foundation
Focused on growing markets and business fundamentals, establishes Cascade as a leader that provides strong shareholder value and a sustainable business model.
(000s) 2009
Revenue $ 53,541
Cost of Sales 33,840
Gross Profit 19,701
% 36.8%
R&D 8,372
SG&A 22,291
OpEx 30,663
% 57.3%
Oper Profit -10,962
% -20.5%
Future Success Model
Revenue 100%
Cost of sales 52%
Gross margin 48%
OpEx 36%
Oper Profit 12%
SUSS Test acquisitionAdjacent Systems BusinessProduction Probes Broader MarketEngineering Probes Market Share
Fewer System DiscountsSystem Product ConsolidationFactory RationalizationProduction Probes Factory UtilizationSockets RestructuringSupply Chain Consolidation and focus
GM: 42% … 45% … 48% …
R&D: $10M - $13M per yearLeading Technology Innovator
Sales ChannelFacility ConsolidationBU Operating ExpensesCentralized Admin Functions
OpEx: 42% … 38% … 36% …
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Strong Executive Team
Eric StridCo-founder and CTO
Jeff KillianVP Finance and CFO
Steve HarrisExecutive Vice
President
Michael D. BurgerPresident and CEO
Mike KondratVP Marketing
Paul O’MaraVP Sales
and Support
Ellen RaimVP Human Resources
Steve MahonVP Operations
Extensive business, technical and market experience
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