SAN JOSE, Calif., Feb. 6, 2007 (PRIME NEWSWIRE) -- PDF Solutions(r), Inc. (Nasdaq:PDFS), the leading provider of process-design integration technologies to enhance IC manufacturability, today announced financial results for its fourth fiscal quarter ended December 31, 2006.
Revenue for the fourth fiscal quarter of 2006 totaled $19.0 million, compared with revenue of $19.0 million for the fourth fiscal quarter of 2005. Gain share revenue for the fourth fiscal quarter of 2006 totaled $4.9 million, an increase of 28%, compared to the fourth fiscal quarter of 2005. Revenue for the full fiscal year ended December 31, 2006 totaled a record $76.2 million with gain share revenue contributing a record $20.0 million. On a GAAP basis, net loss for the fourth fiscal quarter of 2006 totaled approximately $559,000, or $0.02 per basic share, compared with net income of $2.3 million, or $0.09 per basic share, for the fourth fiscal quarter of 2005. The adoption of SFAS 123(R) during fiscal year 2006 and the previously announced acquisition of Si Automation S.A. in October 2006, resulted in $1.9 million in stock-based compensation expense and an $800,000 write-off of in-process research and development during the fourth fiscal quarter or approximately $0.10 per basic share.
In addition to using GAAP results in evaluating PDF Solutions' business, management also believes it is useful to measure results using a non-GAAP measure of net income, which excludes stock-based compensation expense, amortization of acquired intangible assets and the write-off of in-process research and development. Using this non-GAAP measure, net income for the fourth fiscal quarter of 2006 totaled approximately $2.3 million, or $0.08 per diluted share, compared with non-GAAP net income of approximately $3.9 million, or $0.14 per diluted share, for the fourth fiscal quarter of 2005.
As previously announced, PDF will hold a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today to discuss these results. A live webcast of this conference call will be available on PDF Solutions' website at http://ir.pdf.com/medialist.cfm. A replay of the call will be available at the same website address beginning approximately two hours after completion of the live call. Further, a copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the comparable GAAP measure, which non-GAAP measures may be used periodically by PDF Solutions' management when discussing financial results with investors and analysts, will be available on PDF Solutions' website at http://www.pdf.com/news_archive.phtml following the date of this release.
Information Regarding Use of Non-GAAP Financial Measures
In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), PDF Solutions also provides certain non-GAAP financial measures that exclude the effects of stock-based compensation expense, amortization of acquired intangible assets, the write-off of in-process research and development and their related income tax effects. PDF Solutions' management believes that the presentation of these measures provides useful supplemental information to investors regarding PDF's operating results. These non-GAAP financial measures are used by management internally to measure the company's profitability and performance. PDF's management believes that excluding the effects of stock-based compensation expense, amortization of acquired intangible assets, the write-off of in-process research and development and their related income tax effects, provides a useful supplemental measure of the company's ongoing operations in light of the fact that neither category of expense has a current effect on the future uses of cash nor do they have use with regards to the generation of current or future revenues. These non-GAAP results should not be considered an alternative to, or a substitute for, GAAP financial information, and may be different from similarly titled non-GAAP measures used by other companies. In particular, these non-GAAP financial measures are not a substitute for GAAP measures of income as a measure of performance, or to cash flows from operating, investing and financing activities as a measure of liquidity. Since management uses these non-GAAP financial measures internally to measure profitability and performance, PDF has included these non-GAAP measures to give investors an opportunity to see the company's financial results as viewed by management. A reconciliation of the non-GAAP financial measures to the comparable GAAP financial measure is provided at the end of the company's financial statements presented below.
About PDF Solutions
PDF Solutions, Inc. (Nasdaq:PDFS) is a leading provider of process-design integration technologies for manufacturing integrated circuits (ICs). PDF Solutions' software, methodologies and services enable semiconductor companies to create IC designs that can be more easily manufactured using manufacturing processes that are more capable. By simulating deep sub-micron product and process interactions, the PDF solution offers clients reduced time to market, increased IC yield and performance, and enhanced product reliability and profitability. PDF Solutions also offers the industry leading Yield Management System (YMS) software, dataPOWER(r), and Fault Detection and Classification (FDC) software, Maestria, to enhance yield improvement and production control activities at leading fabrication facilities around the world. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Europe, Japan and China. For more information, visit www.pdf.com.
dataPOWER and PDF Solutions are registered trademarks, and Maestria is a trademark, of PDF Solutions, Inc.
PDF SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
December 31,
--------------------
2006 2005
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 36,451 $ 60,506
Short-term investments 16,402 --
Accounts receivable, net of allowances 27,575 22,082
Prepaid expenses and other current assets 2,796 1,992
Deferred tax assets 2,581 908
-------- --------
Total current assets 85,805 85,488
Property and equipment, net 3,916 3,328
Goodwill 60,034 39,886
Intangible assets, net 13,605 9,787
Deferred tax assets 4,912 877
Other assets 503 526
-------- --------
Total assets $168,775 $139,892
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,182 $ 1,728
Accrued compensation and related benefits 3,325 4,922
Other accrued liabilities 3,843 1,469
Taxes payable 4,767 4,950
Deferred revenues 3,705 2,281
Billings in excess of
recognized revenue 95 1,604
Current portion of long-term debt 302 -
-------- --------
Total current liabilities 19,219 16,954
Long-term debt 1,198 -
Other liabilities 221 257
-------- --------
Total liabilities 20,638 17,211
-------- --------
Stockholders' equity:
Common stock 4 4
Additional paid-in-capital 167,370 141,720
Treasury stock, at cost (5,549) (5,549)
Deferred stock-based compensation -- (27)
Accumulated deficit (14,019) (13,451)
Accumulated other comprehensive (loss) gain 331 (16)
-------- --------
Total stockholders' equity 148,137 122,681
-------- --------
Total liabilities and
stockholders' equity $168,775 $139,892
======== ========
PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
----------------- -----------------
December 31, December 31,
2006 2005 2006 2005
------- ------- ------- -------
Revenue:
Design-to-silicon-yield
solutions:
Integrated solutions $11,523 $14,061 $45,382 $52,719
Software licenses 2,557 1,140 10,774 9,319
Gain share 4,873 3,821 20,028 11,890
------- ------- ------- -------
Total revenue 18,953 19,022 76,184 73,928
------- ------- ------- -------
Cost and expenses:
Cost of design-to-silicon-
yield solutions:
Direct costs of design-to-
silicon-yield solutions:
Integrated solutions 7,561 6,421 27,369 24,319
Software licenses 111 20 209 293
Amortization of acquired
core technology 1,472 1,266 5,270 5,064
Research and development 8,051 5,654 27,594 22,204
Selling, general and
administrative 5,079 3,964 19,929 16,146
Amortization of other acquired
intangible assets 754 235 1,459 940
Write-off of in-process
research and development 800 -- 800 --
------- ------- ------- -------
Total costs and expenses 23,828 17,560 82,630 68,966
------- ------- ------- -------
Income (loss) from operations (4,875) 1,462 (6,446) 4,962
Interest and other income, net 488 573 2,826 1,658
------- ------- ------- -------
Income (loss) before taxes (4,387) 2,035 (3,620) 6,620
Tax provision (benefit) (3,828) (217) (3,052) 96
------- ------- ------- -------
Net income (loss) $ (559) $ 2,252 $ (568) $ 6,524
======= ======= ======= =======
Net income (loss) per share:
Basic $ (0.02) $ 0.09 $ (0.02) $ 0.25
======= ======= ======= =======
Diluted $ (0.02) $ 0.08 $ (0.02) $ 0.24
======= ======= ======= =======
Weighted average common shares:
Basic 27,459 26,272 26,885 25,983
======= ======= ======= =======
Diluted 27,459 28,013 26,885 27,473
======= ======= ======= =======
PDF SOLUTIONS, INC.
IMPACT OF NON-GAAP ADJUSTMENTS ON REPORTED NET INCOME (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
December 31, 2006
-----------------------------------
As
reported Adjustments Non-GAAP
-------- -------- --------
Revenue:
Design to-silicon-yield
solutions:
Integrated solutions $ 11,523 $ -- $ 11,523
Software licenses 2,557 -- 2,557
Gain share 4,873 -- 4,873
-------- -------- --------
Total revenue 18,953 -- 18,953
-------- -------- --------
Cost and expenses:
Cost of design-to-silicon-
yield solutions:
Direct cost of design-to-
silicon-yield solutions:
Integrated solutions 7,561 (547)(a) 7,014
Software licenses 111 -- 111
Amortization of acquired
core technology 1,472 (1,472)(b) --
Research and development 8,051 (580)(a) 7,471
Selling, general
and administrative 5,079 (810)(a) 4,269
Amortization of other
acquired intangible assets 754 (754)(b) --
In-process research
and development 800 (800)(d) --
-------- -------- --------
Total costs and expenses 23,828 (4,963) 18,865
-------- -------- --------
Income (loss) from operations (4,875) 4,963 88
Interest and other income, net 488 -- 488
-------- -------- --------
Income (loss) before taxes (4,387) 4,963 576
Tax provision (benefit) (3,828) 2,150(a,b) (1,678)
-------- -------- --------
Net income (loss) $ (559) $ 2,813 $ 2,254
======== ======== ========
Net income (loss) per
share - diluted $ (0.02) $ 0.10 $ 0.08
======== ======== ========
Weighted average common
shares - diluted(c) 27,459 28,484 28,484
======== ======== ========
-----------------------------------
Three Months Ended
December 31, 2005
-----------------------------------
As
reported Adjustments Non-GAAP
-------- -------- --------
Revenue:
Design to-silicon-yield
solutions:
Integrated solutions $ 14,061 $ -- $ 14,061
Software licenses 1,140 -- 1,140
Gain share 3,821 -- 3,821
-------- -------- --------
Total revenue 19,022 -- 19,022
-------- -------- --------
Cost and expenses:
Cost of design-to-silicon-
yield solutions:
Direct cost of design-to-
silicon-yield solutions:
Integrated solutions 6,421 -- 6,421
Software licenses 20 -- 20
Amortization of acquired
core technology 1,266 (1,266)(b) --
Research and development 5,654 -- 5,654
Selling, general
and administrative 3,964 (13)(a) 3,951
Amortization of other
acquired intangible assets 235 (235)(b) --
In-process research
and development -- -- --
-------- -------- --------
Total costs and expenses 17,560 (1,514) 16,046
-------- -------- --------
Income (loss) from operations 1,462 1,514 2,976
Interest and other income, net 573 -- 573
-------- -------- --------
Income (loss) before taxes 2,035 1,514 3,549
Tax provision (benefit) (217) (159)(a,b) (376)
-------- -------- --------
Net income (loss) $ 2,252 $ 1,673 $ 3,925
======== ======== ========
Net income (loss) per
share - diluted $ 0.08 $ 0.06 $ 0.14
======== ======== ========
Weighted average common
shares - diluted(c) 28,013 28,013 28,013
======== ======== ========
Notes:
(a) The non-GAAP adjustments represent the reversal of stock-based
compensation, net of taxes.
(b) The non-GAAP adjustments represent the reversal of
amortization of intangible assets, net of taxes.
(c) The shares used in computing non-GAAP net income for the three
months ended December 31, 2006 and 2005 include the dilutive
impact of common stock options.
(d) The non-GAAP adjustment represent the reversal of in-process
research and development expense.