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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

 

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

 

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File No. 000-51072

 

 

CASCADE MICROTECH, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Oregon		93-0856709
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
9100 S.W. Gemini Drive Beaverton, Oregon		97008
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (503) 601-1000

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		¨		Accelerated filer		¨
Non-accelerated filer		¨  (Do not check if a smaller reporting company)		Smaller reporting company		x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of common stock outstanding as of August 1, 2014 was 16,334,754.

 

 

 

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CASCADE MICROTECH, INC.

INDEX TO FORM 10-Q

 

				Page
PART I - FINANCIAL INFORMATION
Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets (unaudited) - June 30, 2014 and December 31, 2013			2
		Condensed Consolidated Statements of Operations (unaudited) - Three and Six Months Ended June 30, 2014 and 2013			3
		Condensed Consolidated Statements of Comprehensive Income (unaudited) - Three and Six Months Ended June 30, 2014 and 2013			4
		Condensed Consolidated Statements of Cash Flows (unaudited) - Six Months Ended June 30, 2014 and 2013			5
		Notes to Condensed Consolidated Financial Statements (unaudited)			6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			12
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			20
Item 4.		Controls and Procedures			20
PART II - OTHER INFORMATION
Item 1A.		Risk Factors			21
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			21
Item 6.		Exhibits			21
Signatures					22

 

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Cascade Microtech, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, In thousands, except per share amounts)

 

		June 30,				December 31,
		2014				2013
Assets
Current Assets:
Cash and cash equivalents		$	27,764			$	17,172
Short-term marketable securities			1,683				4,278
Restricted cash			825				1,082
Accounts receivable, net of allowances of $217 and $269			21,912				26,520
Inventories			27,095				24,884
Prepaid expenses and other			3,090				2,147
Deferred income taxes			2,273				2,268
Total Current Assets			84,642				78,351
Fixed assets, net of accumulated depreciation of $28,300 and $27,730			6,796				6,403
Goodwill			14,361				14,471
Purchased intangible assets, net of accumulated amortization of $6,681 and $5,228			15,364				16,937
Deferred income taxes			1,273				1,235
Other assets, net of accumulated amortization of $4,453 and $4,349			1,039				1,114
Total Assets		$	123,475			$	118,511
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable		$	7,405			$	7,229
Deferred revenue			2,183				2,555
Accrued liabilities			9,757				8,859
Total Current Liabilities			19,345				18,643
Deferred revenue			538				548
Other long-term liabilities			1,877				2,119
Total Liabilities			21,760				21,310
Shareholders’ Equity:
Common stock, $0.01 par value. Authorized 100,000 shares; issued and outstanding: 16,313 and 16,218			163				162
Additional paid-in capital			109,100				107,908
Accumulated other comprehensive income			19				118
Accumulated deficit			(7,567	)			(10,987	)
Total Shareholders’ Equity			101,715				97,201
Total Liabilities and Shareholders’ Equity		$	123,475			$	118,511

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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Cascade Microtech, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, In thousands, except per share amounts)

 

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2014				2013				2014				2013
Revenue		$	33,452			$	30,307			$	67,262			$	57,778
Cost of sales			16,466				16,032				34,003				31,960
Gross profit			16,986				14,275				33,259				25,818
Operating expenses:
Research and development			3,428				2,694				6,669				5,150
Selling, general and administrative			10,630				9,064				21,060				17,110
Total operating expenses			14,058				11,758				27,729				22,260
Income from operations			2,928				2,517				5,530				3,558
Other income (expense):
Interest income, net			7				2				9				22
Other, net			(56	)			(112	)			(125	)			(356	)
Total other income (expense), net			(49	)			(110	)			(116	)			(334	)
Income before income taxes			2,879				2,407				5,414				3,224
Income tax expense			1,051				221				1,994				291
Net income		$	1,828			$	2,186			$	3,420			$	2,933
Basic net income per share		$	0.11			$	0.15			$	0.21			$	0.21
Diluted net income per share		$	0.11			$	0.15			$	0.20			$	0.20
Shares used in per share calculations:
Basic			16,255				14,342				16,249				14,283
Diluted			16,751				14,652				16,725				14,626

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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Cascade Microtech, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited, In thousands)

 

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2014				2013				2014				2013
Net income		$	1,828			$	2,186			$	3,420			$	2,933
Unrealized holding losses			(3	)			(1	)			(3	)			(1	)
Change in cumulative translation adjustment			(110	)			267				(96	)			(255	)
Comprehensive income		$	1,715			$	2,452			$	3,321			$	2,677

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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Cascade Microtech, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, In thousands)

 

		For the Six Months Ended June 30,
		2014				2013
Cash flows from operating activities:
Net income		$	3,420			$	2,933
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			1,628				1,906
Amortization of intangibles			1,565				470
Stock-based compensation			1,270				872
Loss on write-down or disposal of long-lived assets			66				1
Deferred income taxes			(12	)			49
(Increase) decrease in:
Accounts receivable, net			4,586				(504	)
Inventories			(2,078	)			1,973
Prepaid expenses and other			(797	)			433
Increase (decrease) in:
Accounts payable			(985	)			88
Deferred revenue			(382	)			(2,092	)
Accrued and other long-term liabilities			1,331				(1,023	)
Net cash provided by operating activities			9,612				5,106
Cash flows from investing activities:
Purchase of marketable securities			(1,128	)			(5,374	)
Proceeds from sale of marketable securities			3,720				5,665
Purchase of fixed assets			(1,108	)			(851	)
Proceeds from sale of fixed assets			10				13
Decrease in restricted cash			249				1,061
Cash paid for acquisitions, net of cash acquired			(654	)			—
Net cash provided by investing activities			1,089				514
Cash flows from financing activities:
Principal payments on capital lease obligations			—				(2	)
Withholding taxes paid on net settlement of vested restricted stock units			(247	)			(202	)
Proceeds from issuances of common stock			1,203				578
Cash paid for repurchase of common stock			(1,033	)			(58	)
Net cash provided by (used in) financing activities			(77	)			316
Effect of exchange rate changes on cash and cash equivalents			(32	)			(94	)
Increase in cash and cash equivalents			10,592				5,842
Cash and cash equivalents:
Beginning of period			17,172				17,927
End of period		$	27,764			$	23,769
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net		$	717			$	440
Transfer to inventory from fixed assets			(213	)			—

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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CASCADE MICROTECH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The condensed consolidated financial information included herein has been prepared by Cascade Microtech, Inc. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). However, such information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The financial information as of December 31, 2013 is derived from our 2013 Annual Report on Form 10-K. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2013 Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.

Note 2. Inventories

Inventories are stated at the lower of standard cost, which approximates cost computed on a first-in, first-out basis, or market, and include materials, labor and manufacturing overhead. Demonstration goods, which are included as a component of finished goods, represent inventory that is used for customer demonstration purposes. This inventory is typically sold after 12 to 18 months. We analyze the carrying value of our inventory quarterly, considering a combination of factors including, but not limited to, the following: forecasted sales or usage, historical usage rates, estimated service period, product end-of-life dates, estimated current and future market values, service inventory requirements and new product introductions. We estimate market value based on factors including, but not limited to, replacement cost and estimated resale value with declines in value below cost being recorded quarterly as a component of cost of sales, therefore establishing a new cost basis for the inventory.

Inventory charges were as follows (in thousands):

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Inventory charges		$	344			$	356			$	799			$	749

Inventories consisted of the following (in thousands):

 

		June 30, 2014				December 31 2013
Raw materials		$	16,585			$	15,234
Work-in-process			2,945				2,958
Finished goods			7,565				6,692
		$	27,095			$	24,884

Note 3. Net Income Per Share

The following table reconciles the shares used in calculating basic net income per share and diluted net income per share (in thousands):

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Shares used to calculate basic net income per share			16,255				14,342				16,249				14,283
Dilutive effect of outstanding options and restricted stock units (“RSUs”)			496				310				476				343
Shares used to calculate diluted net income per share			16,751				14,652				16,725				14,626
Securities not considered as they would have been antidilutive			1,020				1,132				1,040				1,099

 

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Note 4. Product Warranty

We estimate a liability for costs to repair or replace products under warranty for periods ranging from 90 days to one year when the related product revenue is recognized. The liability for product warranties is calculated as a percentage of sales. The percentage is based on historical product repair costs. The liability for product warranties is included in Accrued liabilities on our Condensed Consolidated Balance Sheets.

Product warranty activity was as follows (in thousands):

 

		Six Months Ended June 30,
		2014				2013
Warranty accrual, beginning of period		$	745			$	716
Reductions for warranty charges			(490	)			(399	)
Additions to warranty reserve			493				288
Warranty accrual, end of period		$	748			$	605

Note 5. Goodwill and Intangible Assets

Goodwill

The change in goodwill was as follows (in thousands):

 

		Six Months Ended June 30, 2014				Year Ended December 31, 2013
Balance, beginning of period		$	14,471			$	990
Acquisition of the Reliability Test Product division of Aetrium Incorporated (“RTP”)			—				641
Acquisition of ATT Advanced Temperature Test Systems GmbH ATT (“ATT Systems”)			—				12,551
Effect of exchange rate changes			(110	)			289
Balance, end of period		$	14,361			$	14,471

Intangible Assets

Intangible assets, net included the following (in thousands):

 

		June 30, 2014				December 31, 2013
Purchased Intangible Assets
Customer relationships		$	7,171			$	7,198
Core technology			13,645				13,728
Trademarks and tradenames			1,229				1,239
			22,045				22,165
Less accumulated amortization			(6,681	)			(5,228	)
		$	15,364			$	16,937
Patents
Patents		$	4,632			$	4,632
Less accumulated amortization			(4,453	)			(4,349	)
		$	179			$	283

Intangible asset amortization is a component of Selling, general and administrative expense and was as follows (in thousands):

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Amortization expense		$	780			$	234			$	1,565			$	470

 

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The estimated amortization of intangible assets is as follows over the next five years and thereafter (in thousands):

 

Remainder of 2014		$	1,506
2015			2,896
2016			2,595
2017			2,577
2018			2,499
Thereafter			3,470
		$	15,543

Note 6. Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

 

		June 30, 2014				December 31, 2013
Accrued compensation and benefits		$	4,121			$	2,812
Accrued sales taxes and VAT			108				470
Accrued income taxes			1,773				492
Accrued warranty			748				745
Contingent consideration related to our acquisition of RTP			500				1,350
Payable to seller related to our acquisition of ATT Systems			514				746
Accrued restructuring costs			1,188				1,163
Other			805				1,081
		$	9,757			$	8,859

Note 7. Stock-Based Compensation and Stock-Based Plans

Stock-based compensation was included in our Condensed Consolidated Statements of Operations as follows (in thousands):

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Cost of sales		$	62			$	45			$	120			$	96
Research and development			76				47				140				100
Selling, general and administrative			683				446				1,010				676
		$	821			$	538			$	1,270			$	872

Stock Incentive Plans

Stock option activity for the first six months of 2014 was as follows:

 

		Options Outstanding				Weighted Average Exercise Price
Outstanding at December 31, 2013			1,042,937			$	6.52
Granted			90,000				9.61
Exercised			(98,686	)			8.98
Forfeited			(1,800	)			10.17
Outstanding at June 30, 2014			1,032,451				6.55

 

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RSU activity for the first six months of 2014 was as follows:

 

		Restricted Stock Units				Weighted Average Grant Date Per Share Fair Value
Outstanding at December 31, 2013			409,403			$	6.87
Granted			171,750				10.21
Vested			(98,020	)			7.46
Forfeited			—				—
Outstanding at June 30, 2014			483,133				7.93

As of June 30, 2014, total unrecognized stock-based compensation related to outstanding, but unvested, options and RSUs was $4.9 million, which will be recognized over the weighted average remaining vesting period of 2.5 years.

Employee Stock Purchase Plan

During the first six months of 2014, we issued 35,722 shares of our common stock pursuant to our 2013 Employee Share Purchase Plan (the “2013 ESPP”) at a price of $8.88 per share, which represented a discount of $1.90 per share from the fair value of our common stock on the date of issuance. As of June 30, 2014, a total of 964,278 shares remained available for issuance pursuant to the 2013 ESPP.

Note 8. Segment Reporting

The segment data below is presented in the same manner that management currently organizes the segments for assessing certain performance trends. Our Chief Operating Decision Maker monitors the revenue streams and the operating income of our Systems sales and our Probes sales. We do not track our assets on a segment level, and, accordingly, that information is not provided.

Revenue and operating income information by segment was as follows (dollars in thousands):

 

		Systems				Probes				Corporate Unallocated				Total
Three Months Ended June 30, 2014
Revenue		$	21,824			$	11,628			$	—			$	33,452
Gross profit		$	10,139			$	6,847			$	—			$	16,986
Gross margin			46.5	%			58.9	%			—				50.8	%
Income (loss) from operations		$	3,352			$	3,900			$	(4,324	)		$	2,928
Three Months Ended June 30, 2013
Revenue		$	19,847			$	10,460			$	—			$	30,307
Gross profit		$	8,760			$	5,515			$	—			$	14,275
Gross margin			44.1	%			52.7	%			—				47.1	%
Income (loss) from operations		$	3,268			$	2,990			$	(3,741	)		$	2,517

 

		Systems				Probes				Corporate Unallocated				Total
Six Months Ended June 30, 2014
Revenue		$	43,384			$	23,878			$	—			$	67,262
Gross profit		$	19,337			$	13,922			$	—			$	33,259
Gross margin			44.6	%			58.3	%			—				49.4	%
Income (loss) from operations		$	5,831			$	8,326			$	(8,627	)		$	5,530
Six Months Ended June 30, 2013
Revenue		$	37,547			$	20,231			$	—			$	57,778
Gross profit		$	15,472			$	10,346			$	—			$	25,818
Gross margin			41.2	%			51.1	%			—				44.7	%
Income (loss) from operations		$	4,910			$	5,414			$	(6,766	)		$	3,558

In preparing this financial information, certain expenses were allocated between the segments based on management estimates, while others were based on specific factors such as headcount. These factors can

 

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have a significant impact on the amount of income (loss) from operations for each segment. While we believe we have applied a reasonable methodology, assignment of other reasonable cost allocations to each segment could result in materially different segment income (loss) from operations.

No customer accounted for 10% or greater of our total revenue in the six-month periods ended June 30, 2014 or 2013, or in the three-month period ended June 30, 2014. We had one customer which represented 11.3% of our total revenue in the three-month period ended June 30, 2013.

Note 9. Fair Value Measurements

Various inputs are used in determining the fair value of our financial assets and liabilities and are summarized into three broad categories:

 

•

Level 1 – quoted prices in active markets for identical securities;

 

•

Level 2 – other significant observable inputs, including quoted prices for similar securities, interest rates, credit risk, etc.; and

 

•

Level 3 – significant unobservable inputs, including our own assumptions in determining fair value.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The disclosures related to our financial assets and (liabilities) that are reported at fair value on a recurring basis are as follows (in thousands):

 

		June 30, 2014								December 31, 2013
		Fair Value				Input Level				Fair Value				Input Level
Marketable securities – corporate equities		$	4				Level 1			$	1				Level 1
Marketable securities – corporate obligations		$	1,679				Level 2			$	4,277				Level 2
Forward sale contracts for Japanese yen		$	2,960				Level 2			$	523				Level 2
Forward purchase contract for euro		$	545				Level 2			$	2,061				Level 2
Forward sale contract for euro		$	25,203				Level 2			$	24,561				Level 2
Contingent consideration related to our acquisition of RTP		$	(500	)			Level 3			$	(1,350	)			Level 3

The fair value of our marketable securities is determined based on quoted market prices for similar or identical securities. The fair value of our forward contracts is based on quoted market prices for similar securities and is used for the purpose of determining any gain or loss on our foreign currency positions. We do not record the full value of the forward contracts on our Condensed Consolidated Balance Sheets. We record the net unrealized gain or loss in our Condensed Consolidated Balance Sheet and as a component of Other income (expense).

The fair value of the contingent consideration related to our acquisition of RTP is determined based on the present value of probability weighted payments expected to be made under the terms of the agreement.

The carrying values of Cash and cash equivalents, Restricted cash, Accounts receivable, Prepaid expenses and other, Accounts payable and Accrued liabilities approximate fair value due to their short maturities.

No changes were made to our valuation techniques during the first six months of 2014.

The following table summarizes our Level 3 activity for our contingent consideration liability (in thousands):

 

		Level 3
Balance at December 31, 2013		$	1,350
Decrease in contingent consideration due to re-measurement			(422	)
Payment of contingent consideration			(428	)
Balance at June 30, 2014		$	500

Note 10. Stock Repurchases

In November 2012, our Board of Directors authorized a stock repurchase program under which up to $2.0 million of our common stock could be repurchased from time to time in the open market or in privately negotiated transactions. In May 2014, our Board of Directors authorized an increase to the stock repurchase

 

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program of $2.0 million. In the first six months of 2014 we repurchased 111,256 shares of our common stock at a weighted average price of $9.28 per share, or a total of $1.0 million. As of June 30, 2014, $2.6 million remained available for repurchase under the program. The repurchase program does not have an expiration date.

Note 11. Restructuring Accrual

Restructuring charges related to adjustments to our lease abandonment reserve were recorded as a component of Selling, general and administrative as follows:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Lease abandonment and termination		$	249			$	112			$	249			$	112

The following tables summarize the charges, expenditures and write-offs and adjustments related to our restructuring accruals (in thousands):

 

		Beginning Accrued Liability				Charged to Expense, Net				Expend- itures				Write-Offs and Adjust- ments				Ending Accrued Liability
Six Months Ended June 30, 2014
Lease abandonment		$	2,129			$	249			$	—			$	(578	)		$	1,800

As of June 30, 2014, approximately $0.6 million of total accrued restructuring costs are included in Other long-term liabilities. The remainder is classified as a component of Accrued liabilities. We expect the lease abandonment costs will be paid by the end of 2015.

Note 12. Recent Accounting Guidance

ASU 2014-12

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-12, “Compensation – Stock Compensation (Topic 718).” ASU 2014-12 addresses accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. ASU 2014-12 indicates that, in such situations, the performance target should be treated as a performance condition and, accordingly, the performance target should not be reflected in estimating the grant-date fair value of the award. Instead, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 is effective for annual periods and interim periods beginning after December 15, 2015. We do not expect the adoption of ASU 2014-12 to have a material effect on our financial position, results of operations or cash flows.

ASU 2014-09

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and the International Accounting Standards Board. ASU 2014-09 is effective for annual and interim periods beginning on or after December 15, 2016. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

ASU 2013-11

In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 amends the guidance related to the presentation of unrecognized tax benefits and allows for the reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward whenever the NOL or tax credit carryforward would be available to reduce the additional taxable income or tax due if the tax position is disallowed. ASU 2013-11 is effective for annual and interim periods for fiscal years beginning after December 15, 2013, and

 

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early adoption is permitted. Since ASU 2013-11 relates only to the presentation of unrecognized tax benefits, our adoption of ASU 2013-11 in January 2014 did not have a material effect on our financial position, results of operations or cash flows.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact made in this Quarterly Report on Form10-Q are forward-looking including, among others, statements regarding: industry prospects; future results of operations, including estimated revenue for the quarter ending September 30, 2014; our future financial position; our expectations and beliefs regarding future revenue growth; the future impact of any off-balance sheet arrangements; our estimated costs to repair or replace products under warranty; our strategies and intentions and potential sources of funds regarding acquisitions; our accounting and tax policies and the impact of adoption of accounting guidance, if any, on our financial position, results of operations or cash flows; potential charges to write down inventory in future periods; our future capital requirements and fixed asset additions for 2014; seasonality of our revenues and expected increases in revenue in the last month of each quarter; and our ability to meet our cash requirements for the next 12 months and for the foreseeable future. These statements relate to future events of our future financial performance. In some cases, you can identify forward-looking statements by terminology, including “intend,” “could,” “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “future,” or “continue,” the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those expressed or implied such forward-looking statements. In evaluating these statements, you should specifically consider various factors, including: changes in demand for our products; changes in product mix; the timing of shipments, customer orders and capital expenditures; constraints on availability of components; excess or shortage of production capacity; potential failure of expected market opportunities to materialize; changes in foreign exchange rates; and other risks included in Item 1A to our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 5, 2014.

General

We design, develop, manufacture and market advanced wafer probing, thermal and reliability solutions for the electrical measurement and testing of high performance semiconductor devices. Our products enable precision on-wafer measurement of integrated circuits and are typically used in the early phases of the development of semiconductor processes where the accuracy and repeatability of measurements is critical to achieving yield from advanced process nodes. They are also used in production applications to test semiconductor devices prior to completion of the manufacturing process. We design, manufacture and assemble our products in Beaverton, Oregon, North St. Paul, Minnesota, Munich, Germany, and Dresden, Germany and maintain global sales, service and support centers in North America, Germany, Japan, Taiwan, China and Singapore.

We operate in two business segments: Systems and Probes. Sales of our probe stations, thermal subsystems and reliability test systems are included in the Systems segment and sales of our analytical probes and production probe cards are included in the Probes segment.

Our probe stations provide precise and accurate measurement of semiconductor electrical characteristics during device design or when optimizing the chip fabrication process. Our probe stations are highly configurable and are typically sold with various accessories, including our analytical probes, as well as accessories from third parties. In addition, we design and build custom probe stations to address the specific requirements of our customers. We also generate revenue through the sales of service contracts for our stations.

Our thermal subsystems are designed and produced by ATT Systems, a wholly-owned subsidiary based in Munich, Germany, which we acquired in October 2013. ATT Systems produces thermal chuck systems used in probe stations, as well as specific systems for testing electronic components, hybrids, PCBs or other assemblies at the test site. Designed for thermal and mechanical stability and precision, our thermal subsystems offer a broad range of modular solutions that can be used in new installations, as well as upgrades to existing equipment.

 

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Our reliability test products were acquired in July 2013 from Aetrium Incorporated and are designed and manufactured in St. Paul, Minnesota. The 1164 Reliability Test System is a modular and scalable test platform that can be used in a wide range of reliability test applications, including Electro Migration (“EM”), Stress Migration (“SM”), Time Dependent Dielectric Breakdown (“TDDB”), Stress Induced Leakage Current (“SILC”) and Bias Temperature Instability (“BTI”). In addition to the 1164 Reliability Test System, we also offer the Symphony Wafer Level Reliability (“WLR”) Test System which, when combined with either an automated or semi-automated probe station, and our Conductor software, provides users with the necessary tools for automated and unattended WRL testing to shorten product development cycles and enhance product quality.

Our analytical probes are sold to serve as components of our probe stations, or less often, to serve as components of test equipment manufactured by third parties. Our production probe cards are designed and sold for high-volume production test applications, ranging from very low current parametric testing to sophisticated, high-speed radio frequency integrated circuit (“RFIC”) testing. These probe cards are used in conjunction with third party equipment from manufacturers such as Advantest, Agilent and Teradyne.

Overview

Revenue and gross margin in the first six months of 2014 increased to $67.3 million and 49.4%, respectively, compared to $57.8 million and 44.7%, respectively, in the first six months of 2013, reflecting increased sales and gross margins in both the Systems and Probes segments. Net income was $3.4 million in the first six months of 2014 compared to $2.9 million in the first six months of 2013.

During the second quarter of 2014, we settled our contingent liability related to our acquisition of the Reliability Test Product division of Aetrium Incorporated (“RTP”) for $0.4 million, resulting in a $0.4 million credit to Selling, general and administrative expense since we had $0.8 million accrued for such payment. As of June 30, 2014, $0.5 million remained accrued for potential payments related to the seller’s indemnification obligations, which we expect to settle by February 2015.

Also during the second quarter of 2014, we recorded $0.2 million in additional lease abandonment costs as a component of Selling, general and administrative expense as a result of a change in our estimated income from sub-leasing the respective property.

Outlook

Based on our current backlog, projected bookings and scheduled shipments, we anticipate revenues will be in the range of $32 million to $35 million for the third quarter of 2014.

Critical Accounting Policies and the Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that have become increasingly difficult to make in the current economic environment. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period.

On an on-going basis we evaluate our estimates, including those related to revenue recognition, bad debts, inventory, lives and recoverability of equipment and other long-lived assets, warranty obligations, deferred income tax assets, unrecognized income tax benefits, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We reaffirm the critical accounting policies and estimates as reported in our Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the Securities and Exchange Commission on March 5, 2014.

 

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Results of Operations

The following table sets forth our condensed consolidated statement of operations data for the periods indicated as a percentage of revenue.⁽¹⁾

 

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2014				2013				2014				2013
Revenue			100.0	%			100.0	%			100.0	%			100.0	%
Cost of sales			49.2				52.9				50.6				55.3
Gross profit			50.8				47.1				49.4				44.7
Operating expenses:
Research and development			10.2				8.9				9.9				8.9
Selling, general and administrative			31.8				29.9				31.3				29.6
Total operating expenses			42.0				38.8				41.2				38.5
Income from operations			8.8				8.3				8.2				6.2
Other income (expense), net			(0.1	)			(0.4	)			(0.2	)			(0.6	)
Income before income taxes			8.6				7.9				8.0				5.6
Income tax expense			3.1				0.7				3.0				0.5
Net income			5.5	%			7.2	%			5.1	%			5.1	%

 

(1)	Percentages may not add due to rounding.

Certain financial information by segment was as follows (dollars in thousands):

 

		Systems				Probes				Corporate Unallocated				Total
Three Months Ended June 30, 2014
Revenue		$	21,824			$	11,628			$	—			$	33,452
Gross profit		$	10,139			$	6,847			$	—			$	16,986
Gross margin			46.5	%			58.9	%			—				50.8	%
Income (loss) from operations		$	3,352			$	3,900			$	(4,324	)		$	2,928
Three Months Ended June 30, 2013
Revenue		$	19,847			$	10,460			$	—			$	30,307
Gross profit		$	8,760			$	5,515			$	—			$	14,275
Gross margin			44.1	%			52.7	%			—				47.1	%
Income (loss) from operations		$	3,268			$	2,990			$	(3,741	)		$	2,517

 

		Systems				Probes				Corporate Unallocated				Total
Six Months Ended June 30, 2014
Revenue		$	43,384			$	23,878			$	—			$	67,262
Gross profit		$	19,337			$	13,922			$	—			$	33,259
Gross margin			44.6	%			58.3	%			—				49.4	%
Income (loss) from operations		$	5,831			$	8,326			$	(8,627	)		$	5,530
Six Months Ended June 30, 2013
Revenue		$	37,547			$	20,231			$	—			$	57,778
Gross profit		$	15,472			$	10,346			$	—			$	25,818
Gross margin			41.2	%			51.1	%			—				44.7	%
Income (loss) from operations		$	4,910			$	5,414			$	(6,766	)		$	3,558

 

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Revenue

Revenue information was as follows (dollars in thousands):

 

		Three Months Ended June 30,								Dollar
Revenue		2014				2013				Change				% Change
Systems		$	21,824			$	19,847			$	1,977				10.0	%
Probes			11,628				10,460				1,168				11.2	%
Total		$	33,452			$	30,307			$	3,145				10.4	%
		Six Months Ended June 30,								Dollar
Revenue		2014				2013				Change				% Change
Systems		$	43,384			$	37,547			$	5,837				15.5	%
Probes			23,878				20,231				3,647				18.0	%
Total		$	67,262			$	57,778			$	9,484				16.4	%

Systems

The increases in Systems revenue in the three- and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily related to increased unit sales related to our acquisitions from the second half of 2013. These increases were partially offset by decreases in average selling prices as we sold fewer 300mm stations, which have higher average selling prices.

Probes

The increases in Probes revenue in the three- and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily the result of increases in unit sales of both production probe cards and analytical probes.

Cost of Sales and Gross Margin

Cost of sales includes purchased materials, fabrication, assembly, test, installation labor, overhead, customer-specific engineering costs, warranty costs, royalties and provision for inventory valuation reserves.

Cost of sales information was as follows (dollars in thousands):

 

		Three Months Ended June 30,								Dollar
Cost of Sales		2014				2013				Change				% Change
Systems		$	11,685			$	11,087			$	598				5.4	%
Probes			4,781				4,945				(164	)			(3.3	)%
Total		$	16,466			$	16,032			$	434				2.7	%
		Six Months Ended June 30,								Dollar
Cost of Sales		2014				2013				Change				% Change
Systems		$	24,047			$	22,075			$	1,972				8.9	%
Probes			9,956				9,885				71				0.7	%
Total		$	34,003			$	31,960			$	2,043				6.4	%

Cost of sales was affected by changes in sales as discussed above combined with the factors that caused fluctuations in our gross margin (gross profit as a percentage of revenue), as discussed below.

Gross margins were as follows:

 

		Three Months Ended June 30,								Six Months Ended June 30,
Gross Margins		2014				2013				2014				2013
Systems			46.5	%			44.1	%			44.6	%			41.2	%
Probes			58.9	%			52.7	%			58.3	%			51.1	%
Overall			50.8	%			47.1	%			49.4	%			44.7	%

 

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Systems

The increases in Systems gross margins in the three- and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily due to our acquisitions during the second half of 2013. The acquired product lines increased the average gross margin of all Systems products.

Probes

The increases in Probes gross margins in the three- and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily due to increased unit sales, which increased factory utilization and decreased unabsorbed period expenses.

Overall

The overall increases in gross margins in the three and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily attributable to product mix, as we sold a higher number of Probes relative to total sales. The increases in gross margin were also positively affected by sales of products acquired in the second half of 2013 as discussed above.

Research and Development

Research and development costs are expensed as incurred and include compensation and related expenses for personnel, materials, consultants and overhead.

Information regarding our research and development expense was as follows (dollars in thousands):

 

		Three Months Ended June 30,								Dollar Change
		2014				2013								% Change
Research and development		$	3,428			$	2,694			$	734				27.2	%
		Six Months Ended June 30,								Dollar Change
		2014				2013								% Change
Research and development		$	6,669			$	5,150			$	1,519				29.5	%

The increases in research and development in the three- and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily due to:

 

•

increases of $0.5 million and $0.9 million, respectively, in salaries and benefits related primarily to our acquisitions in the second half of 2013;

 

•

increases of $0.2 million and $0.5 million, respectively, in project-related expenses; and

 

•

a $0.1 million decrease in government grant reimbursements for the six-month period ended June 30, 2014.

Selling, General and Administrative

Selling, general and administrative, or SG&A, expense includes compensation and related expenses for personnel, travel, outside services, manufacturers’ representative commissions, intangible asset amortization and overhead incurred in our sales, marketing, customer support, management, legal and other professional and administrative support functions, as well as costs to operate as a public company.

Information regarding our SG&A expense was as follows (dollars in thousands):

 

		Three Months Ended June 30,								Dollar Change
		2014				2013								% Change
Selling, general and administrative		$	10,630			$	9,064			$	1,566				17.3	%
		Six Months Ended June 30,								Dollar Change
		2014				2013								% Change
Selling, general and administrative		$	21,060			$	17,110			$	3,950				23.1	%

 

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The increases in SG&A in the three- and six-month periods ended June 30, 2014 compared to the same periods of 2013 were primarily due to increases of:

 

•

$0.8 million and $1.5 million, respectively, in salaries and benefits related primarily to our expanded workforce due to our acquisitions in the second half of 2013;

 

•

$0.5 million and $1.1 million, respectively, in amortization of purchased intangibles;

 

•

$0.1 million and a $0.4 million, respectively, in professional service fees;

$0.2 million and a $0.4 million, respectively, in selling expenses;

 

•

$0.2 million and a $0.3 million, respectively, in stock-based compensation; and

 

•

$0.1 million and a $0.1 million, respectively, in restructuring costs.

These factors were partially offset by a $0.4 million reduction in our contingent consideration accrual related to our acquisition of RTP.

Other Income (Expense)

Other income (expense) typically includes interest income, interest expense, gains and losses on foreign currency forward contracts and foreign currency gains and losses. Other income (expense) can also include other miscellaneous non-operating gains and losses.

Other income (expense) was comprised of the following (in thousands):

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Interest income, net		$	7			$	2			$	9			$	22
Foreign currency losses			(114	)			(249	)			(96	)			(690	)
Gains on foreign currency forward contracts			60				147				7				350
Other			(2	)			(10	)			(36	)			(16	)
		$	(49	)		$	(110	)		$	(116	)		$	(334	)

Interest income represents interest earned on cash and cash equivalents and investments in marketable securities.

Foreign currency gains and losses primarily result from a combination of changes in foreign currency exchange rates and the net value of monetary assets and liabilities denominated in yen, euro and other foreign currencies.

Income Taxes

Information regarding our income tax expense was as follows (dollars in thousands):

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Income tax provision		$	1,051			$	221			$	1,994			$	291
Income tax provision as a percentage of income before income taxes			36.5	%			9.2	%			36.8	%			9.0	%

Our income tax expense in the three and six-months periods ended June 30, 2014 and 2013 primarily related to estimated tax expense on income in the U.S. and foreign tax jurisdictions.

Our effective tax rate may differ from the U.S. federal statutory rate primarily as a result of the effects of state and foreign income taxes and may be affected by changes in statutory tax rates and laws in the U.S. and foreign jurisdictions. The increases in our effective tax rate for the three- and six-month periods ended June 30, 2014 compared to the same periods of the prior year were primarily the result of releasing the majority of our valuation allowance on deferred tax assets in the fourth quarter of 2013. The tax benefit of these deferred tax assets, which consisted primarily of net operating loss carryforwards, were fully recognized in the fourth quarter of 2013 and, therefore, were no longer available to offset current tax expense in future periods. In addition, the effective tax rate in the first six months of 2014 does not include any federal benefit from research and experimentation tax credits since legislation related to such credits expired and has not been renewed.

 

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Deferred tax assets arise from the tax benefit of amounts expensed for financial reporting purposes but not yet realized for tax purposes and from unutilized tax credits and net operating loss carryforwards. We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance is required. To the extent it is determined that it is more likely than not that we will not realize the benefit of our deferred tax assets, we record a valuation allowance against deferred tax assets.

As of June 30, 2014, the net deferred tax assets on our Consolidated Balance Sheets totaled $3.5 million, net of a valuation allowance of $0.2 million, and are primarily related to tax credits and other temporary differences.

Liquidity and Capital Resources

Changes in our assets and liabilities as presented in our Consolidated Statements of Cash Flows do not equal the changes in such assets and liabilities as calculated from our Consolidated Balance Sheets due to the effects of fluctuating foreign currency exchange rates and acquisitions.

Net cash provided by operating activities in the first six months of 2014 was $9.6 million and primarily consisted of our net income of $3.4 million, net non-cash charges of $4.5 million and net changes in our operating assets and liabilities as described below.

Accounts receivable, net decreased by $4.6 million to $21.9 million at June 30, 2014, compared to $26.5 million at December 31, 2013, primarily due to the timing of sales and collections.

Inventories increased by $2.2 million to $27.1 million at June 30, 2014, compared to $24.9 million at December 31, 2013. The increase in inventory was primarily related to lower than expected sales of probe stations, partially offset by inventory charges of $0.8 million in the first six months of 2014 for excess and obsolete inventory and sales of finished goods. If our actual results are significantly different than our current expectations for 2014, we may incur additional charges to write down inventory in future periods.

Long-term and short-term deferred revenue decreased by $0.4 million to $2.7 million at June 30, 2014, compared to $3.1 million at December 31, 2013, primarily due to a decrease in customer deposits on product orders.

Other long-term liabilities decreased by $0.2 million to $1.9 million at June 30, 2014, compared to $2.1 million at December 31, 2013, primarily due to a decrease in accrued lease abandonment costs.

Fixed asset purchases of $1.1 million in the first six months of 2014 primarily related to production-related equipment, research and development tools and leasehold improvements. We anticipate that cash used for fixed asset purchases for all of 2014 will be between $5.0 million and $6.0 million, depending on the timing of payments to vendors.

In November 2012, our Board of Directors authorized a stock repurchase program under which up to $2.0 million of our common stock could be repurchased from time to time in the open market or in privately negotiated transactions. In May 2014, our Board of Directors authorized an increase to the stock repurchase program of $2.0 million. In the first six months of 2014 we repurchased 111,256 shares of our common stock at a weighted average price of $9.28 per share, or a total of $1.0 million. As of June 30, 2014, $2.6 million remained available for repurchase under the program. The repurchase program does not have an expiration date.

In August 2013, we entered into a line of credit agreement with JPMorgan Chase Bank, N.A. for a maximum $10.0 million line of credit facility (the “LOC”), which may be limited by a borrowing base. The LOC expires August 31, 2015 and contains a $2.5 million sublimit for letters of credit. Interest is based primarily on the London Interbank Offered Rate (“LIBOR”). The LOC contains restrictive and financial covenants. On June 30, 2014, no amounts were outstanding under the LOC, no letters of credit were outstanding, $10.0 million was available for borrowing and we were in compliance with all covenants.

 

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We anticipate meeting our cash requirements for the next 12 months and for the foreseeable future from existing Cash and cash equivalents and Short-term marketable securities, which totaled $29.4 million at June 30, 2014. In addition, we currently have $10 million available under the LOC as discussed above.

We continue to evaluate opportunities for acquisition and expansion and any such transactions, if consummated, may use a portion of our cash and marketable securities or may result in the issuance by us of debt or equity securities. Issuances of debt securities would increase our leverage and interest exposure; issuances of equity securities could dilute the ownership interest of our shareholders.

Recent Accounting Guidance

See Note 12 of Notes to Condensed Consolidated Financial Statements.

Contractual Commitments

The following is a summary of our contractual commitments and obligations as of June 30, 2014 (in thousands):

 

		Payments Due By Period
Contractual Obligation		Total				Remainder of 2014				2015 and 2016				2017 and 2018				2019 and beyond
Operating leases		$	11,420			$	1,882			$	5,025			$	3,253			$	1,260
Purchase order commitments (1)			6,684				6,120				564				—				—
Forward contracts			28,708				28,708				—				—				—
Fair value of contingent consideration related to our acquisition of RTP			500				300				200				—				—
Additional consideration related to our acquisition of ATT Systems			1,028				514				514				—				—
		$	48,340			$	37,524			$	6,303			$	3,253			$	1,260

 

(1)	Purchase order commitments primarily represent open orders for inventory.

Seasonality

Typically, our first quarter revenues are lower than our revenues from the preceding fourth quarter. In addition, as is typical in our industry, we recognize a large percentage of our quarterly revenue in the last month of the quarter. However, our seasonality can be affected by general economic trends and it should not be expected that historical revenue patterns will continue.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our reported market risks or risk management policies since the filing of our 2013 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 5, 2014.

Item 4. Controls and Procedures

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Limitation on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all occurrences of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Control systems can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. In addition, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the control systems will detect all control issues, including instances of fraud, if any.

 

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PART II – OTHER INFORMATION

Item 1A. Risk Factors

Our Annual Report on Form 10-K for the year ended December 31, 2013 includes a discussion of our risk factors. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K. Accordingly, the information in this Form 10-Q should be read in conjunction with the risk factors and information disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, which was filed with the Securities and Exchange Commission on March 5, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases of Equity Securities

We made the following repurchases of our common stock during the second quarter of 2014:

 

		Total number of shares purchased				Average price paid per share				Total number of shares purchased as part of publicly announced plan				Maximum dollar amount of shares that may yet be purchased under the plan
April 1 – April 30			22,811			$	9.45				22,811			$	0.6 million
May 1 – May 31			—								—			$	2.6 million
June 1 – June 30			—								—			$	2.6 million
Total			22,811								22,811			$	2.6 million

These shares were repurchased pursuant to a plan approved by our board of directors in November 2012 and amended in May 2014, which authorized the repurchase of up to a total of $4.0 million of our common stock from time to time in the open market or in privately negotiated transactions. As of June 30, 2014, $2.6 million remained available for repurchase under the program. The repurchase program does not have an expiration date.

Item 6. Exhibits

The following exhibits are filed herewith or incorporated by reference hereto and this list is intended to constitute the exhibit index:

 

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
32.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
32.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: August 6, 2014		CASCADE MICROTECH, INC.
		(Registrant)
		By:		/s/ MICHAEL D. BURGER
		Michael D. Burger
		Director, President and Chief Executive Officer
		(Principal Executive Officer)
		By:		/s/ JEFF KILLIAN
		Jeff Killian
		Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

 

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