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Cascade Microtech, Inc. (NASDAQ:CSCD)

Q2 2014 Earnings Conference Call

August 6, 2014 05:00 PM ET

Executives

Michael Burger - President and CEO

Jeff Killian - CFO

Analysts

Jaeson Schmidt - Lake Street Capital Markets

Brett Piira - B. Riley & Company

Josh Baribeau - Canaccord Genuity

Operator

Good day, ladies and gentlemen and welcome to the Second Quarter 2014 Cascade Microtech Earnings Conference Call. My name is Kim, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I’d now like to turn the conference over to your host for today, Mr. Jeff Killian, CFO. Please proceed, sir.

Jeff Killian

Thank you. Welcome everyone to Cascade Microtech’s second quarter 2014 earnings release conference call. We are pleased you could join us today. Before we begin, you should all be aware that we shall be commenting today on our business outlook and we will make other forward-looking statements based on our current expectations. Words such as expect, anticipate, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements.

All of our forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. I’d refer you to the press release we issued earlier today for description of factors that could cause actual results to differ materially from those forecasts. The forward-looking statements we make today speak only as of today and we do not undertake any obligation to update any such statements to reflect events or circumstances occurring after today.

Information provided in the materials includes non-GAAP net income, EPS, and adjusted EBITDA which are non-GAAP financial measures. Please refer to our description in reconciliation of GAAP to non-GAAP financial measures included in our press release earlier today. You can also find a reconciliation of GAAP and non-GAAP financial measures on our Web site.

With me on the call today is our President and Chief Executive Officer, Michael Burger. This call will begin with prepared remarks and then we’ll open the call for your questions.

With that said, I’ll now turn the call over to Michael Burger.

Michael Burger

Thanks Jeff. Since our last earnings call, we have entered into several strategic partnerships, announced new product, enhanced our direct sales channel, scheduled our annual users conference, received an industry award and achieved a quarterly gross margin milestone. I’d like to walk you through the highlights of these activities and milestones.

During the second quarter, we launched a strategic initiative which creates a framework for collaboration with the best of breed partners to offer test and measurement solutions with validated performance. We call this initiative MeasureOne. Under the MeasureOne framework, Cascade Microtech will join forces with carefully selected leaders in the measurement technologies to solve the problems our customers face, configuring and using various test equipment in order to perform the prescribed wafer measurements.

Through MeasureOne collaborations, customers will have access to validated test and measurement solutions, which will reduce the time to first measurement of their devices and processes. Under the MeasureOne framework, we jointly announced with Agilent Technologies, soon to be recognized as Keysight Technologies, a strategic alliance to provide fully configurated and validated RF measurement solutions to streamline wafer level measurements, while delivering guaranteed configuration, installation and support.

We also announced a new line of Terahertz Probes through our collaboration with Dominion MicroProbe. These new T-Wave probes will broaden the current capabilities of our probe stations. When we purchased as part of a comprehensive MeasureOne Terahertz solution, Cascade Microtech will provide installation, system integration, training and service.

Terahertz technology is finding used in an increasingly wide variety of applications such as communications technology, medical sciences, global environmental monitoring and ultra fast computing, just to name a few.

Cascade Microtech continues to meet new and emerging technology challenges by providing innovative solutions. Cascade's Second Annual Users Conference will be held in October to coincide with the European Microwave Week. This event provides an opportunity to collaborate with our customers and partners, showcasing innovations in on wafer probe products and solutions.

At this event, customers’ papers will illustrate how Cascade Microtech solutions deliver efficiencies and increase productivity moving from device characterization and modeling through lab automation and ultimately to production of semiconductor test devices.

During the second quarter, Cascade Microtech’s APS200TESLA was named the winner of the American Technology Award in the category of semiconductors and electronic components. This award represents an outstanding achievement and exemplifies the best of the United States technology sector. We are extremely proud to have received this honor.

On May 20th we announced our new Ultra High Power probe and enhanced thermal chuck, which complements our Tesla probe system. The Ultra High Power probe operates at up to 10,000 kilowatts or -- I’m sorry, up to 10 kilowatts at high temperatures to meet the needs of MOSFET and [IGBT] (ph) devices, which are particularly well suited for automotive and powertrain applications.

The financial highlights of the second quarter center on our achievements of 50.8% gross margin. This is an all-time record for Cascade Microtech and achieves our first milestone of our new success model, which we targeted gross margins of 50%. Both reporting segments improved gross margin sequentially as well as year-on-year, while total revenue of the second quarter was at $33.5 million which represents a midpoint of our guidance range.

The probes segment, in the second quarter totaled $11.6 million, which is down $600,000 from the record -- set in Q1 of 2014. Based on continuing factory efficiencies, the probe segment set gross margin record by achieving a 58.9% gross margin.

Systems revenue in the second quarter totaled $21.8 million, which was up $300,000, compared to Q1 of 2014. Based upon the mix of our systems revenue, gross margins for this segment also set a record at 46.5%. The newly announced partnerships and continued acceptance of our new systems products improves our ability to grow faster than the semiconductor capital equipment market, while our continued strength in the probe segment is driven in part by our enhanced product portfolio.

I’ll ask Jeff to provide further details of our financial results.

Jeff Killian

Thanks, Michael. I'll begin with a review of the income statement for the second quarter ended June 30, 2014. As a brief reminder, Cascade Microtech reports revenue and gross margins in two segments, our Systems segment and our Probes segment. The Systems segment includes our probe stations and product lines acquired in 2013 and the Probe segment includes our engineering probes and production probes.

Total revenue for the second quarter of 2014 was $33.5 million, a decrease of 1.1% compared to the $33.8 million in the first quarter 2014, and an increase of 10.4% compared to $30.3 million in the second quarter of 2013. We achieve the midpoint of our revenue guidance for the second quarter, which was $32 million to $35 million.

Revenue for our Systems segment for the second quarter of 2014 totaled $21.8 million, an increase of 1.2% compared to $21.6 million for the first quarter of 2014, and an increase of 10% compared to $19.8 million for the second quarter of 2013.

Revenue for our Probe segment for the second quarter of 2014 totaled $11.6 million, a decrease of 5.1% compared to the record of $12.3 million for the first quarter of ’14, but an increase of 11.2% compared to $10.5 million in the second quarter of 2013.

Revenues from Engineering Probe products for the second quarter of 2014 totaled $4.5 million, a decrease of 5.7% compared to $4.8 million for the first quarter of 2014, but an increase of 17.5% compared to $3.8 million for the second quarter of 2013. Engineering Probe revenues typically peaks in the first quarter of each year.

Revenue from Production Probe products in the second quarter of 2014 totaled $7.1 million, a decrease of 4.7% compared to the record $7.5 million for the first quarter of 2014, but an increase of 7.5% compared to $6.6 million for the second quarter of 2013.

Bookings in the second quarter were $26.4 million, which resulted in a book-to-bill ratio for the second quarter of .89 to 1. The book-to-bill in the second quarter was negatively impacted by the timing of volume purchase agreements for our Probes business, which typically depict an estimated annual consumption rate.

Our overall gross margin for the second quarter was a record of 50.8% compared to 48.1% in the first quarter of 2014 and 47.1% in the second quarter of 2013. Gross margin in the second quarter of 2014 was positively impacted by improved factory efficiency and favorable product mix.

Gross margin for our System segment in the second quarter of ’14 was a record 46.5% compared to 42.7% in the first quarter of 2014, and 44.1% in the second quarter of 2013. Gross margins in the second quarter were positively impacted by product mix and decreased material costs.

Gross margin for Probe segment in the second quarter of 2014 was 58.9%, compared to 57.8% in the first quarter of 2014 and 52.7% in the second quarter of 2013. Margins in the second quarter of 2014 were positively impacted by continued improvement and factory efficiency.

Total operating expense for the second quarter was $14.1 million which is an increase of $0.4 million compared to the first quarter of 2014 and an increase of $2.3 million compared to the second quarter of 2013. The second quarter of 2014, includes lease restructuring charges of $0.2 million and a credit of $0.4 million from the settlement of contingent liabilities related to our acquisition of RTP in the third quarter of 2013.

R&D expenses increased $0.2 million compared to the prior quarter of 2014 and $0.7 million compared to the second quarter of the prior year. The increase from Q1 2014 is primarily related to increased new product development. Based upon new product development opportunities including systems, thermal, software and probe, we expect to see continued incremental spending in R&D going forward. These investment opportunities may increase R&D spending over the next few quarters before returning to a stable level.

SG&A expenses increased $0.2 million compared to the prior quarter of 2014 and $1.6 million compared to the second quarter of the prior year. The increase from Q1 2014 was primarily related to our global sales conference, which was held in May and a $0.4 million increase in stock compensation expense due to the timing of Board grants. These increases were partially offset by decreases in professional service fees and the $0.2 million net credit related to changes in lease restructuring and contingent liabilities previously discussed.

Based on the changes above, income from operations in the second quarter was $2.9 million, an increase of $0.3 million compared to $2.6 million in the first quarter of 2014 and an increase of $0.4 million compared to $2.5 million in the second quarter of 2013.

Significant ongoing non-cash expenses in the second quarter were as follows: depreciation expense was $799,000, amortization expense was $780,000 and stock-based compensation expense was $821,000. These non-cash items totaled $2.4 million in the second quarter of 2014 compared to $2.1 million in the first quarter of 2014 and $1.7 million in the second quarter of 2013. For further details, ;please see the attachment to our press release financials entitled reconciliation of GAAP to non-GAAP financial measures as well as the supplemental information posted on the Investors Page of our Web site.

Adjusted EBITDA for the second quarter of 2014 was $5.1 million or 15.3% of revenue compared to $4.7 million or 13.8% of revenue for the first quarter of 2014.

Income tax expense for the second quarter was $1.1 million compared to $0.9 million in the first quarter of 2014 and $0.2 million for the second quarter of 2013. Tax expense in the second quarter of 2014 represents an effective rate of 36.5% compared to 36.8% in the first quarter of 2014 and 9.8% in the second quarter of 2013. We expect an effective rate of approximately 37% for the remainder of 2014.

GAAP net income for the second quarter of 2014 was $1.8 million or $0.11 per diluted share, compared to $1.6 million or $0.10 per diluted share for the first quarter of 2014 and $2.2 million or $0.15 per diluted share in the second quarter of 2013. The impact of the increase in effective tax rate from the second quarter of 2013 to the second quarter of 2014 was approximately $0.04 per diluted share.

Non-GAAP earnings per share for the second quarter of 2014 achieved the upper end of guidance and was $0.13 per diluted share compared to $0.13 per diluted share in the first quarter of 2014 and $0.17 per diluted share in the second quarter of 2013.

Turning to the balance sheet, cash, restricted cash, and investments at June 30, 2014 totaled $30.3 million, an increase of $1.8 million compared to $28.5 million at March 31, 2014. The second quarter includes $0.2 million of stock repurchases, and $0.4 million used for the settlement of contingent liabilities related to acquisitions.

Capital expenditures were $0.6 million in the second quarter of 2014 and $0.5 million in the first quarter of 2014. We expect total capital expenditures of between $5 million and $6 million for all of 2014 depending on the timing of payments. These expenditures include manufacturing equipment, research and development tools, and leasehold improvements related to our previously discussed factory move.

As noted in last quarter, many of these leasehold improvements will be reimbursed by the landlord and recorded as a deferred rent liability to be amortized against the rent expense over the remaining periods of the lease.

Before I return the call to Michael, we would like to inform you that Cascade Microtech will be presenting at the Canaccord Genuity Growth Conference in August 13th in Boston.

I’ll now return the call to, Michael.

Michael Burger

Thanks Jeff. In summary, Cascade Microtech posted a strong second quarter 2014 which includes a record gross margin number as well as a strong outlook for the balance of 2014. We achieved the midpoint of our revenue guidance while achieving the upper end of guidance for earnings. We announced new strategic platforms and partnerships which further differentiate Cascade from our competition.

Our customers continue to ask Cascade Microtech to help develop next generation solutions for their test and measurement requirements which will require us – which provides us the opportunity to strategically invest in R&D opportunities going forward. I am very pleased with our progress to date and the outlook for 2014.

Cascade Microtech is the clear leader in delivering on-wafer probing solutions to the engineering community. We have the technologies, roadmaps and a global support infrastructure to deliver what customers need and value. Our solutions help customers solve difficult challenges in targeted areas such as advanced process technologies and device assembly and packaging. With nearly a 100 field and service professionals located globally, we are positioned to support new product installations as well as our significant install base.

Our product portfolio is diversified and our roadmap continues to align with our customers ongoing needs. For the third quarter of 2014 we are projecting revenue in the range of $31 million to $34 million with diluted GAAP earnings per share in the range of $0.04 to $0.08 and non-GAAP earnings per share in the range of $0.07 to $0.11 per share. Our guidance assumes a tax rate of 37% consistent foreign currency rates, a sequential increase in quarterly R&D spending of approximately $400,000 and no significant onetime charges. It is our expectations based on our sales funnel that our second half revenue will exceed our first half results. We also expect Cascade Microtech will continue to outgrow the semiconductor capital equipment forecast for 2014.

Thank you very much for attending our conference call. I’ll now return the call to the operator to field your questions.

Question-and-Answer-Session

Operator

Thank you. (Operator Instructions) Your first question comes from the line of Jaeson Schmidt from Lake Street Capital Markets. Please proceed.

Jaeson Schmidt - Lake Street Capital Markets

Hi, guys thanks for taking my questions. Congrats on the good quarter. I just wanted to dig in more to the impressive gross margin. How should we look at gross margin building going forward? Do you think you can build upon that Q2 level?

Michael Burger

Well you know we don’t really define mix, our customers do. And we do believe that this current rate is sustainable and based on customer traction on new products, based on our transition to the Thermal Systems that I think we told you we’ll probably start being [ph] [implicated] into our products mid 2015. I think we should be able to build on to it. But I don’t -- I wouldn’t expect a 3% to 5% increase per quarter. I think this is probably from a modeling perspective, 50% was our target and we’ve achieved it. We’re now focused on below the line and getting to our EBITDA model of 20%.

Jaeson Schmidt - Lake Street Capital Markets

Okay. And then building upon that last comment you made, can you give us some updates on how the traction is going with each of your acquisitions you made last year?

Michael Burger

Well we’re not going to breakout the results. I will say overall Jaeson, they are exceeding our expectations. I think we bought them at the right time. Certainly we bought them at the right price, and with the integration behind us we feel like that we’re kind of hitting on all cylinders right now. So, I think we’re extremely pleased and the customer base seems to be responding.

Jaeson Schmidt - Lake Street Capital Markets

Okay. And then lastly, Jeff on the R&D investment, obviously a little boost here in Q3, would we expect that increase to carry through the first half of 2015?

Jeff Killian

Yes, so we give quarterly guidance, and we’d be happy to update you each quarter on how our R&D investments are going with the timing. But you know, from a historic perspective we saw the same opportunity in 2012, and R&D moved in a quarterly basis within a $600,000 range. And so, it’s great to have these opportunities in front of us because when the R&D is beginning to increase the opportunity that means the projects are going very well.

Jaeson Schmidt - Lake Street Capital Markets

All right. Thanks guys.

Michael Burger

Thank you, Jaeson. I appreciate your interest.

Operator

Your next question comes from the line of Brett Piira from B. Riley & Company. Please proceed.

Brett Piira - B. Riley & Company

Thanks for taking my question. Maybe if I can just drill in a little bit on your systems revenue. Can you just kind of help me with what's going on there, I mean in 2Q it looks like if you exclude acquisition that’s down pretty significantly year-over-year and was down quarter-over-quarter. So just what are the dynamics in the industry right now and what could be holding that back?

Michael Burger

Well, our 115, 200 millimeter product lines are actually doing really well. And the 300 millimeter is slow, and its primarily due to the, I think a lot of the things that you’ve read and we’ve all read about what's going on in the market place. I think we expect that we’ll end up the year basically high single-digit growth in our core business and our acquisitions are on top of that. So, I think it’s seasonal for us typically and we’ll see a recovery through the balance of the year. So, we’re not losing share, but I will say that the capital cycle has been longer than we would expect it on some of these larger items.

Brett Piira - B. Riley & Company

Okay, that makes sense. And then, not trying to dig for any sort of guidance or anything, but in 4Q it’s normally your seasonally strongest quarter especially in systems, would you see any change to that this year?

Michael Burger

Not at all. No. In fact we were very purposeful in basically saying even though we’re guiding down in Q3 by $1 million on each end of the range from a revenue perspective. We believe the second half will outperform the first half. And that is typical for us. It been that way through certainly last several years, and I think before that you really can't go back because the freaky stuff that was going on with the economy. And so, certainly in the last two years, second half is stronger seasonally. But we think that, that should be accentuated by the fact that a lot of the new products that have been introduced are gaining traction. And our experience is that, Q4 typically guys are trying to clean up their capital budgets and placing whatever capital they have left and that is held true for several years. So, yes we expect second half to be stronger than the first half, actually across the board in all segments.

Brett Piira - B. Riley & Company

All right. Thanks guys.

Michael Burger

Thanks, Brett.

Operator

Your next question comes from the line of Josh Baribeau from Canaccord. Please proceed.

Josh Baribeau - Canaccord Genuity

Hi, thanks. Have you ever broken out the mix of the 300 millimeter in the engineering versus 200, or lets call it 300 versus other?

Michael Burger

We haven’t publicly, no. But we obviously, we run our business that way Josh. Internally we have ownerships for each platform and we manage our business that way, because the customer base is kind of -- is diverse. So, but no, we have not publicly actually given you that level of detail.

Josh Baribeau - Canaccord Genuity

Okay. Anyway maybe any qualitative commentary around how much you are potentially being affected by the general pause in the lager semi cap space?

Michael Burger

Well, I think the way we kind of look at it is from a funnel perspective, number of opportunities and the number of opportunities is still quite strong. What we’ve seen is the delay in some of our -- some of the bigger customers and actually placing capital recently. That being said their forecast is still positive and still within 2014. So, we’re not really in control of the timing as much as ensuring that if within lead time and we can deliver. So, we are not panicked at all, in fact we think the second half will be extremely strong. So, we’re -- now we’re still bullish.

Josh Baribeau - Canaccord Genuity

Great. And just, if I may dig into gross margins a little bit more. You talked about favorable product mix, I think factory -- not utilization but factory efficiency. Is there anything else going on in terms of maybe better pricing than you expected or better synergies and cost or something like that?

Michael Burger

Not so much. No, I think we talked a couple of years go about really working the supply chain. And I believe that we’re beginning to get traction there. We are working very hard at developing an Eastern European supply chain and that’s beginning to find its way into the product mix. We are very focused on quality and the efficiency of the factories themselves. We are -- we continue to kind of with the two Probes factories now being under one roof we’re continuing to see better efficiencies particularly in the assembly side. All of that is kind of accelerated the fall through. We have not seen fundamental pricing pressures or change over the last couple of quarters from an ASP perspective. Our overall ASPs have changed because of mix, but not because of pricing or compression of pricing. So, I think we started this year with analyst basically calling the market up and I think that freed up capital. As you probably read over the last several quarters, people are basically a little skittish about Q3 and that’s kind of tightened capital and that’s kind of what we saw. But we do believe that we’re still kind of the equipment vendor of choice and still in their forecast it’s just kind of strung out longer than we hoped.

Josh Baribeau - Canaccord Genuity

Okay. And then finally for me, can you help me think about or maybe explain how you think about the operating expenses. If you drive R&D sort of on a project basis or if it’s really a target as a percentage of revenues or maybe somewhere in the middle and of course, if so, what that potential target may be?

Michael Burger

I’ll let Jeff, talk to the target percentage. We manage it -- we are investing in the Probe segment and it’s a mix of project expenses and headcount. On the system side, it’s primarily project expense. And we do, we’re very cognizant of what the financial industry basically has in terms of models and we do benchmark ourselves against kind of like competitors. If you want to kind of talk about the range -- revenue range?

Jeff Killian

Sure. So our EBITDA moved up quarter-on-quarter and we achieved over 15% EBITDA margins into Q2 and we march towards our 20%. And so when we modeled our SG&A, obviously it need to have the right target to get to 20% EBITDA and we need little more revenue on top and what we’re seeing today to get there. We’re still anxious about achieving that in 2015 or to our goals and we think we have the pipeline to successfully do that. So, one [ph] [swing] factor, just like Michael said at the R&D, our customers are coming to us to help us develop solutions for next generation requirement and it’s a perfect investment, actually if you can see that as evidenced in 2012 and the bandwidth we got in 2013. And so our timing will be based upon how these R&D investments fit on a quarterly swing factor to get to that 20% adjusted EBITDA.

Michael Burger

I think we’re -- a good way to look at it is, as we increase or we look like we’re going to increase by about $400,000 next quarter. I think you’ll see a marginal increase from that and then we do believe that it will retract ultimately to a steady state below that new level. So, yes we’re very cognizant of it, but we have a lot of opportunities and we really need to be very selective. And so we believe the Probe segment is a good place to start investing. We actually have not invested much in the production Probe side over the last several years and we’re getting a lot of poll. So, we think its time.

Josh Baribeau - Canaccord Genuity

Great. That’s it for me. Thank you.

Michael Burger

Thank you.

Jeff Killian

Thanks, Josh.

Operator

(Operator Instructions) Your next question comes from the line of (indiscernible). Please proceed.

Unidentified Analyst

Good afternoon.

Michael Burger

Hi.

Unidentified Analyst

Most of my questions have been answered. I was wondering if you could touch on geographic trends you’re seeing specifically in Asia?

Michael Burger

Yes, actually Asia was a little slower than we -- than the other regions as a percent of what their historical rates have been. I’ll give you kind of a Q4, I believe or Q1 correct me Jeff if I’m wrong, but we basically Q1 or Q4 I don’t recall, I don’t have it in front of me. But we were pretty much split almost 35% -- 33%, 33%, 33% between the major regions. That has changed always in favor of Asia and Asia has been as high as 50% of our revenue in the past. Asia was relatively quiet in Q2 and we expect them to come roaring back in the second half.

Unidentified Analyst

Okay, thanks. And just one last question, I’ll hop back in the queue. I know you talked a lot in the past by holding up cash. So, I was just wondering if you had any change in that and if you’re booking openly for acquisitions at this time or just really looking up for that towards R&D.

Michael Burger

We’re always looking for acquisitions. But we’re pretty selective and we have a pretty clear model about what it takes to kind of pull a trigger there. The first is does it accelerate the strategy. Second is does it leverage our customer base and our current infrastructure and then the third is, how fast can it become accretive. And I think we’ve proven that the ones that we pull the trigger on we’re actually able to get that really, really quickly. There is a bunch of companies that are looking for exit. The problem with the market being hot is valuations are probably inflated. So, I don’t know how well you know Mr. Killian sitting next to me, but it’s very difficult to get through that, through that third hurdle.

Jeff Killian

Since following you (multiple speakers) Michael.

Michael Burger

So, I think, yes we’re continuing to look. And I will say MeasureOne, this platform that we talk about, it really is an opportunity to formalize some partnerships and it give us a great view of kind of how to work with companies, and certainly they should be on our watch list.

Unidentified Analyst

Okay, thank you. That’s helpful Michael. I’ll hop back in the queue.

Michael Burger

Awesome. Thank you.

Operator

Your next question comes from the line of Gary Freeman. Please proceed.

Unidentified Analyst

Congratulations guys another great quarter. My question is about, in the Probe sector are you guys seeing any dynamics in the actual application sector, is there anything changing there as far as end applications or trends you’re seeing?

Michael Burger

Our strategy has been pretty much to focus almost exclusively in the RF space. That being said we have also exploited the parametric area and begin to focus products we announced in product I think several quarters ago aimed specifically at parametric probing. And we’re beginning to see traction there as well. Our strategy has been to actually grow our penetration in the RF space both through new customer acquisition and then penetration within each of those. I think we’ve been extremely successful and the revenue number -- the bulk of the revenue growth is really in that area. What's changing obviously is the promise of RF being able to be driven into a CMOS fab which frankly hasn’t -- it’s materialized, but I don’t think it’s what I would consider mainstream yet. That’s an opportunity for us to go beyond just testing RF products, but to expand into other areas within the RF consumer space. So that’s the dynamic that I think is, it’s a matter of if not win and certainly we’re very interested in participating in that.

Unidentified Analyst

Thank you very much. Thanks.

Michael Burger

Thank you. Thank you, Gary.

Operator

Thank you ladies and gentlemen. That concludes our question-and-answer session. I’ll now turn the conference back to Michael Burger for closing remarks.

Michael Burger

Well as you can tell we’re very excited about Q2. We believe the second half will be stronger for us and we really appreciate your time and interest in Cascade. If you have any questions, please don’t hesitate to call us. Thank you.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.

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Source: Cascade Microtech's (CSCD) CEO Michael Burger On Q2 2014 Results - Earnings Call Transcript

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