This excerpt taken from the RTEC 8-K filed Feb 7, 2007.
- Revenue of $201.2 million
(includes August Technology results from February 16, 2006)
Discussing the fourth quarter results, Paul F. McLaughlin, Chairman and Chief Executive Officer commented, "We are pleased that we were able to meet our previously stated guidance in a rather difficult period in which we experienced order push outs and cancellations. The well-publicized weakness in the back-end market continues to impact our results; however, our front-end logic business picked up nicely in the quarter allowing us to report peak 2006 quarterly earnings. I am also pleased to report that the integration of August Technology exceeded all our performance objectives. This merger was, in my estimation, a clear case of 1 + 1 equaling 3. We now have attained the scope and scale necessary to be increasingly important to our customers and to become a consolidator in our space."
The Company's fourth quarter revenue totaled $54.5 million, a 6% decrease compared to $58.2 million for the third quarter of 2006. During the fourth quarter, international sales represented approximately 67% of revenue while domestic sales accounted for 33%. In the 2006 third quarter, international sales represented approximately 73% of revenue and domestic sales accounted for 27%. Approximately 69% of the Company's fourth quarter tool revenue was from 300mm product sales.
Fourth quarter net income totaled $8.4 million, or $0.29 per share, compared to $8.1 million, or $0.28 per share for the 2006 third quarter. The Company reported net income of $206 thousand, or $0.01 per share, in the 2005 fourth quarter.
Fourth quarter gross margin was 51% and was negatively impacted by 1% due to purchase accounting adjustments. The 2006 third quarter gross margin was 53%. The decrease in margin was primarily due to product mix and lower revenue volumes.
Research and development (R&D) expenses for the fourth quarter totaled $7.4 million, compared to $7.5 million in the third quarter of 2006. As a percentage of revenue, R&D was 14% of revenue in the 2006 fourth quarter compared to 13% in the 2006 third quarter. The decrease in R&D in absolute dollars was primarily due to cost containment initiatives. The Company anticipates that first quarter 2007 spending on R&D will be approximately 15% to 16% of revenue.
Selling, general and administrative (S,G&A) expenses totaled $9.3 million in both the fourth and third quarters of 2006. S,G&A was 17% of revenue in the fourth quarter of 2006, and 16% in the 2006 third quarter. The Company expects that S,G&A will be approximately 18% to 19% of revenue in the first quarter of 2007.
The fourth quarter effective tax rate was 24% primarily due to the retroactive reinstatement of the research tax credit by the U.S. federal government in the fourth quarter 2006. Also contributing to the lower tax rate was the utilization of foreign subsidiary net operating loss carryovers.