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| 8-K - FORM 8-K - CASCADE MICROTECH INC | d644463d8k.htm |
 Cascade Microtech
December 2013
Michael Burger, President & CEO
Jeff Killian, Vice President & CFO
Exhibit 99.1 |
 Safe
Harbor and Non-GAAP Measures 2
This
presentation
includes
“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
presentation
are
forward-looking
including,
among
others,
statements
regarding:
anticipated
growth
of
Cascade
Microtech
(the
“Company”);
market
opportunities;
new
products;
results
of
recent
acquisitions;
and
the
Company’s
target
model.
All
such
statements
are
only
predictions
and
are
based
on
current
expectations,
estimates
and
projections
about
the
Company’s
business
based
in
part
on
assumptions
made
by
management.
In
evaluating
these
statements,
you
should
specifically
consider
various
factors,
including:
changes
in
demand
for
the
Company’s
products;
trends
in
semiconductor
R&D
spending;
the
potential
failure
of
expected
market
opportunities
to
materialize;
potential
delays
in
product
introductions
or
market
acceptance;
potential
loss
of
customers;
general
challenges
in
integrating
acquired
businesses;
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.
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.
Please
refer
to
the
Appendix
for
a
description
and
reconciliation
of
Non-GAAP
financial
measures
used
in this
presentation:
EBITDAS
and
adjusted
EBITDAS. |
 Cascade Microtech at a Glance
3
Cascade Microtech, Inc. (NASDAQ: CSCD) is a
worldwide leader in precision mechanical,
electrical measurements which aid in the test of
integrated circuits (ICs), optical devices and
other small structures
Founded in 1983
Headquartered in Beaverton, OR
>400 employees worldwide
Dominant market share in our target markets
–
Focused on research and engineering
communities within the semiconductor
market
–
The majority of all new processes and
device types are characterized using
Cascade Microtech products
Last twelve months (LTM) Revenue of $116M
with 6% year on year growth
LTM Adjusted EBITDAS of $14M with 16% year
on year growth
Engineering Test
Systems
Production Test
Systems
Engineering Probes
Production Probe
Cards
Note: Revenue and adjusted EBITDAS do not include the impact of ATT Systems;
includes RTP from Aug 1, 2013. (1) Adjusted EBITDAS is a non-GAAP
measure, please refer to the Appendix for a reconciliation of this non-GAAP measure.
We operate our business in two segments:
Probes and Systems
(1) |
 New
product introductions and recent acquisitions drive segment SAM expansion
Strong revenue growth, expanding margins and cash flows with no debt
Diversified blue-chip customers across major capex spenders
Global service and support infrastructure aligned to customer locations
Critical enabler of next generation process technologies
Investment Highlights
4
Management team with a track record of execution and innovation
Product
portfolio
well-suited
to
solve
customers’
most
complex
test
challenges |
 Cascade team capable of leveraging deep industry and operations expertise to drive
results Cascade Microtech’s Seasoned Leadership
5
Michael Burger
President & CEO
Appointed President and CEO in 2010
Member of Board of Directors
CEO experience: Merix
Steven Harris
Executive Vice President
Appointed EVP in June 2009
Former Vice President of Research & Development at Electro Scientific
Industries Served in a variety of product development and engineering
positions at Tektronix Ellen Raim
Vice President, HR
Joined Cascade Microtech as Vice President of Human Resources
in
2010
Served as Vice President of Human Resources at Electro Scientific Industries
Former Director of World Wide Talent Acquisition at Intel
Steve Mahon
Vice President,
Operations
Joined Cascade Microtech as Vice President of Operations in 2010
Served as director of process engineering at TriQuint Semiconductor
Former fabrication manager of Electronic Designs
Debbora Ahlgren
Vice President, Marketing
Joined Cascade Microtech as Vice President of Marketing in 2012
Served as Vice President of Marketing at the CBA Group
Former Senior Vice President of Sales and Marketing for OptimalTest
Appointed CFO in 2010
Joined Cascade Microtech as Director of Finance in 2008
Held various position at TriQuint Semiconductor including treasurer, corporate
controller Jeff Killian
Vice President & CFO
Robert Selley
Vice President, Sales &
Service
Joined Cascade Microtech as Vice President of Sales and Service in 2013
Led the internationals sales organizations at both Apcon and ONPATH Technologies
Served as Director of Sales Operations at Electro Scientific Industries
|
 What
is Wafer Probing? 6
On-wafer testing is a growing
requirement
–
Identifies and characterizes
performance on the wafer
–
Enables significantly
improved yield
–
More cost effective than
packaged test
Advanced packaging
accelerates trend
–
Cascade Microtech enables
new developments at the
wafer level
Customer Wafer
Cascade Systems
Cascade Probes
Contacting a
Customer Circuit
Wafer probing refers to the functional
testing of semiconductor devices while
they are still in wafer form |
 A
Strong History of Innovation 2010
First multi-contact
probe for small pads
Acquires Test Division
of SUSS MicroTec
2000
1990
HP invests in
MicroChamber™
environment
First RF-capable GHz probe
card Infinity Probe®
introduced
1980
First 18 GHz µw probe
1995
First double-sided probe
system HF chucks for up
to 200 GHz
Alessi acquired for FA
1/f noise measurement system
First HP device
characterization system
DC/RF parametric probe card
New 300 mm on-wafer prober
1985
First submicron probe
holder
2005
300 mm ‘vertical probe’
system
First WLR system for 300 mm
BlueRay high-speed production
prober
ProbeShield®
technology
Acquires Aetrium’s Reliability
Test Business
Acquires ATT Test Systems
2013
7 |
 Consumer Trends Fuel Growth Opportunities
Wireless Devices
•
High-frequency RF
•
Shrinking geometries
•
Lower voltages
•
Power
Higher data rates
More data
Consumer Devices
•
Faster digital interfaces
•
Video
•
IC packaging innovation
Integration of functions
Shrinking
geometries
Green Power Devices
•
Higher voltages
•
Higher current
•
Reliability
•
LED
Lower cost of test
Computing Devices
•
Faster buses
•
Shrinking geometries
•
Device integration
•
Power
Measurement
diversification
Accelerating the Need for Cascade Microtech’s Products
8 |
 22
nm Cascade Microtech Growth Funnel
Production (FAB)
90
nm
65 nm
32/45
nm
28 nm
1 Silicon
Process nodes
Technology integration & materials
Device designs
Wafer diameter
450 mm
20 nm
14 nm
5 nm
HKMG
FinFET
RF-CMOS
Growth funnel driven by
-
New process nodes
-
New technology integrations and materials
-
New device structures and device designs
-
New wafer geometries
9
Advanced packages
Microbump
TSV
st |
 Products Cover Entire Semiconductor Lifecycle
Production (FAB)
Assembly & Test
1
Silicon
Virtual design
Support pre-production and validation activities
Engineering Products
Support application or production flow
Production Products
10
Engineering Probes
Engineering Probe Stations
Reliability Test Products
Production Probe Cards
Production Probers
(HBLED & High Power)
st
Thermal
Systems |
 Outstanding Customers in All Major Sectors
11
Fabless
Government/Institute Research
Integrated Device Manufacturer
University Research
Subcons
Foundry
The Who’s Who of the semiconductor industry with minimal concentration
|
 12
Market
Industry Participants
Market Share
Comments
Systems
Engineering
Probes
Production
Probe Cards
Focused primarily on engineering
applications
Accretech and TEL not competitors
Production platforms aimed at HB-LED
and Power markets
Significant long term opportunity in 450mm
Relatively small, but stable market
Addresses nearly all of the market and has
50% share today
Large, highly-fragmented market
Do not compete in memory
CSCD focuses only on advanced test
Strong position in RF with leading global
semiconductor vendors
Large opportunity in SoC
Significant Market Opportunities
Growth &
acquisitions
$654M
$210M
$100M
$310M
TAM
SAM
$39M
$35M
TAM
SAM
$1.2B
$59M
TAM
SAM |
 CM300 300mm lab probe station
–
Scalable configurations with enhancement roadmap
–
Semi-
or fully-
automated
–
New Velox™
test automation software
–
Announced January, 2013; Units shipped to customers
APS200TESLA fab prober (Power)
–
Advanced power IC testing with safety and anti-arcing technology
–
Addressing an emerging $20 billion IC market; $60 million SAM
–
3”-, 4”-, 6”-
and 8”-
wafer capable, production prober
–
Capable of withstanding up to 10.5 kV and 400 Amps
–
Announced in Q2 2012; First shipments in Q3 2013
SMART150 lab probe station
–
Protect extensive installed base of manual probe stations
–
Address
customer
pain
points
with
focused
applications
(mmW,
RF,
others)
–
Flexibility and scalability through upgradeable configurations
–
Announced in Q3 2012; Now shipping in volume
13
New Products, Expanding Markets
New products are aligned with market/customer requirements and expand
Cascade’s SAM |
 Acquisitions:
Aetrium’s RTP Products & ATT Systems
Closing Date
Purchase Price
LTM Revenue
LTM EBITDA
Valuation Multiple
Year Founded
Headquarters
Aetrium’s Reliability Test Products
ATT Test Systems
10/1/13
7/31/13
2001
First Product released in 1998
Munich, Germany
North St. Paul, MN
$2.4M in cash
Additional $1.0M upon achievement of
certain milestones
$10.3M
(2)
$3.3M
(1)
$0.6M
(1)
1.0x LTM Revenue
6.0x LTM EBITDA
$26.9 M
$11.2M in cash at close
$1.0M deferred cash payment
1.6M shares of CSCD Stock
~2.6x LTM Revenue
~6.2x LTM EBITDA
$4.4M
(2)
(1)
Based on Aetrium 8-K filed July 31, 2013. EBITDA based on GAAP operating
income. (2)
Annualized using the unaudited 11 months ending October 1, 2013
14
Business
Description
Offers package-
and wafer-level reliability
solutions for wafer process technologies
A leading manufacturer of advanced thermal
systems used in testing of semiconductor wafers
Strategic Rationale
Expands wafer-level reliability (WLR) test
capabilities
Enables Cascade to offer complete WLR solution
Leverage Cascade’s sales channel and global
support organization to drive additional revenue
Accelerates development of next-generation
system products with thermal capabilities
Current installed base of 1,500+ systems
Lowers product cost through vertical integration
of high-cost components |
 Global Support Infrastructure Aligned with Customer Centers
15
•
Coverage of all major engineering & production areas worldwide
•
Over 1,700 active customers
•
Nearly 8,000 probe stations installed worldwide
•
Cascade Microtech Certified Pre-owned business launched in 2012
Headquarters
Beaverton, OR
Manufacturing,
Customer Operations
North St Paul, Minnesota
Reliability Test Products
Munich, Germany
ATT Systems &
Customer Operations
Dresden, Germany
Manufacturing
Japan
Customer Operations
Shanghai
Customer Operations
Taiwan
Customer Operations
Singapore
Customer Operations |
 Key
Financials |
 Financial Highlights
Strong Growth
Complementary acquisitions expected to accelerate growth; achieved 30% revenue
CAGR from 2009 to 2012
Improving Margins
Success model goals of 50% gross margins and 20% EBITDAS;
Generated
45%
gross
margins
and
12%
Adjusted
EBITDAS
margins
over
LTM
(9/30/13)
Commitment to
Investing in R&D
Continued investment in R&D further builds upon technology leadership
position Stable Revenue
with Consistent
Profitability
Revenue has been much less cyclical than broader semi cap equipment industry
Positive earnings for last 8 consecutive quarters
Strong Balance
Sheet
Strong cash position with no debt
17
Newly introduced products expected to contribute to long-term growth
Minimal CapEx requirements
(1)
(1)
(1)
EBITDAS and Adjusted EBITDAS are non-GAAP measures, please refer to the Appendix for a
reconciliation of these non-GAAP measures.
|
 Track Record of Revenue Growth and Profitability
18
Revenue
Adjusted EBITDAS
2010:
Strong recovery with market
improvement and M&A
2011:
Growth outpaced the market and
totaled 13%
2012:
Consistently strong performance
quarter over quarter
2013:
Record Q3 and LTM revenue
EPS
(1)
(2)
Note: Graphs do not include the impact of ATT Systems.
Note: LTM Revenue represents the revenue for the 4 consecutive quarters ending 9/30/2013
(1)
Adjusted EBITDAS is a non-GAAP measure, please refer to the Appendix for a reconciliation of this
non-GAAP measure (2)
Earnings per share (EPS) shown is diluted EPS from continuing operations
|
 Strong Balance Sheet
19
$21 million in cash
and investments
Debt free
$10 million revolving
credit facility
(1)
Pro forma (PF) based on 8K/A filed December 2013 Note: 3/31/10 is
first quarter after Suss Microtech acquisition cost of $15.6M in cash and 0.7M shares of
Cascade Microtech stock
Assets
3/31/2010
12/31/2011
12/31/2012
9/30/2013
PF
(1)
Cash and Investments
$23
$15
$23
$32
$21
Accounts Receivable
13
24
21
18
19
Inventory
22
24
24
23
26
Prepaid and other current
5
5
4
3
4
Total Current
$63
$68
$72
$76
$70
Fixed Assets
12
9
8
7
7
Goodwill & purchased Intangibles
5
3
3
4
30
Other Assets
3
3
2
2
2
Total Assets
$83
$83
$85
$89
$109
Liabilities
Accounts Payable
$5
$6
$6
$6
$6
Accrued Liabilities
6
8
7
6
7
Other Current Liabilities
1
6
3
1
1
Total Current Liabilities
$12
$20
$16
$13
$14
Other Long-Term Liabilities
4
4
3
3
8
Total Liabilities
$16
$24
$19
$16
$22
Shareholders' Equity
Equity
67
59
66
73
87
Total Liabilities and Equity
$83
$83
$85
$89
$109 |
 Attractive Margin Structure
20
2010
2011
2012
Q1
2013
Q2
2013
Q3
2013
Revenue
100%
100%
100%
100%
100%
100%
Gross
Margin
38%
40%
44%
42%
47%
48%
Adjusted
EBITDAS(1)
3%
7%
12%
9%
14%
13%
Target
Success
Model
100%
50%
20%
Poised to leverage growth driven by new products and market expansion
Supply chain efficiencies
Channel leverage
(1) Adjusted EBITDAS is a non-GAAP measure, please refer to the Appendix for a
reconciliation of this non-GAAP measure. |
 Investment Highlights
21
Critical enabler of next generation process technologies
Critical enabler of next generation process technologies
Strong revenue growth and cash flows with expanding margins
Strong revenue growth and cash flows with expanding margins
Management team with a track record of execution and innovation
Management team with a track record of execution and innovation
Diversified blue-chip customers across major capex spenders
New product introductions and recent acquisitions drive segment SAM expansion
Global service and support infrastructure aligned to customer locations
Product
portfolio
well-suited
to
solve
customers’
most
complex
test
challenges |
 Appendix |
 Appendix: Reconciliations of GAAP to
Non-GAAP Financial Measures
In this presentation we use the following Non-GAAP financial measures, which
we define in this
Appendix
and
reconcile
to
GAAP
financial
measures
:
EBITDAS
and Adjusted
EBITDAS.
Definitions:
–
EBITDAS
is defined as operating income from continuing operations before depreciation and
amortization and stock-based compensation. EBITDAS should not be
construed as a substitute for net income or net cash provided by (used in)
operating activities (all as determined in accordance with GAAP) for the
purpose of analyzing the Company’s operating performance, financial position and
cash flows, as EBITDAS is not defined by GAAP. However, the Company regards
EBITDAS as a complement to net income and other GAAP financial performance
measures, including an indirect measure of operating cash flow.
–
Adjusted
EBITDAS
is
defined
as
operating
income
from
continuing
operations
before
depreciation
and amortization and stock-based compensation and certain other items
(adjustments) such as restructuring, facility move and project costs, and
acquisition related expenses that the Company believes are not
representative of its ongoing operating performance. Adjusted EBITDAS should not
be
construed
as
a
substitute
for
net
income
or
net
cash
provided
by
(used in) operating activities (all
as determined in accordance with GAAP) for the purpose of analyzing the
Company’s operating performance, financial position and cash flows, as
adjusted EBITDAS is not defined by GAAP. However,
the
Company
regards
adjusted
EBITDAS
as
a
complement
to
net income and other GAAP
financial
performance
measures,
including
an
indirect
measure
of
operating cash flow.
23 |
 Reconciliation of Pro Forma to GAAP
24
Twelve Months Ended
December 31,
2013 Quarterly Data
Nine Months Ended
September 30,
Twelve Months Ended
September 30,
2010
2011
2012
Q1 2013
Q2 2013
Q3 2013
2012
2013
2012
2013
Revenue
92,597
104,610
112,962
27,471
30,307
28,197
82,594
85,975
109,892
116,343
Reconciliation to EBITDAS
Income (Loss) from Operations
(8,108)
(4,190)
7,557
1,041
2,517
1,571
5,273
5,129
6,388
7,413
Depreciation and Amortization
4,374
4,559
4,629
1,200
1,176
1,146
3,407
3,522
4,505
4,744
Stock Based Comp
1,836
1,853
1,459
334
538
343
1,136
1,215
1,528
1,538
EBITDAS
(1,898)
2,222
13,645
2,575
4,231
3,060
9,816
9,866
12,421
13,695
EBITDAS %
-2.0%
2.1%
12.1%
9.4%
14.0%
10.9%
11.9%
11.5%
11.3%
11.8%
Reconciliation to Adjusted EBITDAS
EBITDAS
(1,898)
2,222
13,645
2,575
4,231
3,060
9,816
9,866
12,421
13,695
Restructuring
2,684
3,418
-
-
112
-
-
112
3
112
Acquisition and Acquisition Related
2,056
-
-
-
-
627
-
627
-
627
Facility Consolidation and Other
23
1,174
-
-
-
-
-
-
41
-
Adjusted EBITDAS
2,865
6,814
13,645
2,575
4,343
3,687
9,816
10,605
12,465
14,434
Adjusted EBITDAS %
3.1%
6.5%
12.1%
9.4%
14.3%
13.1%
11.9%
12.3%
11.3%
12.4% |