SAN JOSE, Calif., July 31, 2007 (PRIME NEWSWIRE) -- PDF Solutions, Inc. (Nasdaq:PDFS) the leading provider of process-design integration technologies to enhance IC manufacturability, today announced financial results for its second fiscal quarter ended June 30, 2007.
Revenue for the second fiscal quarter of 2007 totaled $23.7 million, an increase of 32%, compared with revenue of $18.0 million for the second fiscal quarter of 2006. Gain share revenue for the second fiscal quarter of 2007 totaled $5.9 million, compared to $5.7 million for the second fiscal quarter of 2006. On a GAAP basis, net loss for the second fiscal quarter of 2007 totaled approximately $701,000, or $0.02 per basic share, compared with a net loss of approximately $847,000, or $0.03 per basic share, for the second fiscal quarter of 2006.
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 their related income tax effects. Using this non-GAAP measure, net income for the second fiscal quarter of 2007 totaled approximately $5.0 million, or $0.17 per diluted share, compared with non-GAAP net income of approximately $3.6 million, or $0.13 per diluted share, for the second fiscal quarter of 2006.
As previously announced, PDF will discuss these results on a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today. The call will be simultaneously web cast on PDF Solutions' website at http://ir.pdf.com/medialist.cfm. A replay of the web cast 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, 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, 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 the leading provider of process-design integration technologies and services for manufacturing integrated circuits (ICs). PDF Solutions offers solutions that are designed to enable clients to lower costs, enhance time to market, and improve profitability by addressing design and manufacturing interactions from product design to initial process ramps to mature manufacturing operations. PDF Solutions' Characterization Vehicle(r) (CV(r)) test chips provide the core modeling capabilities, and are used by more leading manufacturers than any other test chips in the industry. PDF Solutions' industry leading yield management system software, dataPOWER(r), and fault detection and classification software, Maestria(r), enhance yield improvement and production control activities at leading fabs around the world. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in China, Europe, Japan and Korea. For the company's latest news and information, visit http://www.pdf.com/.
The PDF Solutions, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3199
Characterization Vehicle, CV, dataPOWER, Maestria, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc.
PDF SOLUTIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands) June 30, December 31, 2007 2006 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 35,652 $ 36,451 Short-term investments 18,300 16,402 Accounts receivable 32,323 27,575 Prepaid expenses and other current assets 2,936 2,796 Deferred tax assets 2,231 2,581 ---------- ---------- Total current assets 91,442 85,805 Property and equipment, net 4,005 3,916 Goodwill 63,386 60,034 Intangible assets, net 16,179 13,605 Deferred tax assets 5,155 4,994 Other assets 474 503 ---------- ---------- Total assets $ 180,641 $ 168,857 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 291 $ 302 Accounts payable 2,395 3,182 Accrued compensation and related benefits 4,704 3,325 Other accrued liabilities 5,245 3,843 Taxes payable 1,404 4,767 Deferred revenue 5,237 3,705 Billings in excess of recognized revenue 367 95 ---------- ---------- Total current liabilities 19,643 19,219 Long-term debt 1,130 1,198 Long-term taxes payable 5,145 -- Other liabilities 127 221 ---------- ---------- Total liabilities 26,045 20,638 ---------- ---------- Stockholders' equity: Common stock 4 4 Additional paid-in-capital 175,895 167,323 Treasury stock at cost (5,549) (5,549) Accumulated deficit (17,483) (13,890) Accumulated other comprehensive income 1,729 331 ---------- ---------- Total stockholders' equity 154,596 148,219 ---------- ---------- Total liabilities and stockholders' equity $ 180,641 $ 168,857 ========== ========== PDF SOLUTIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Three Months Ended Six Months Ended ------------------ ------------------ June 30, June 30, June 30, June 30, 2007 2006 2007 2006 -------- -------- -------- -------- Revenue: Design-to-silicon-yield solutions Integrated solutions $ 16,032 $ 10,477 $ 29,796 $ 22,706 Software licenses 1,776 1,794 5,261 4,406 Gain share 5,890 5,739 10,783 10,755 -------- -------- -------- -------- Total revenue 23,698 18,010 45,840 37,867 -------- -------- -------- -------- Cost of design-to-silicon- yield solutions: Direct costs of design-to -silicon-yield solutions Integrated solutions 7,082 6,645 14,790 13,074 Software licenses 27 29 86 40 Amortization of acquired core technology 1,610 1,266 3,185 2,532 -------- -------- -------- -------- Total cost of design-to- silicon-yield solutions 8,719 7,940 18,061 15,646 -------- -------- -------- -------- Gross margin 14,979 10,070 27,779 22,221 Operating expenses: Research and development 8,797 6,871 17,167 13,127 Selling, general and administrative 6,645 4,866 12,489 9,822 Amortization of other acquired intangible assets 1,031 235 2,044 470 -------- -------- -------- -------- Total operating expenses 16,473 11,972 31,700 23,419 -------- -------- -------- -------- Loss from operations (1,494) (1,902) (3,921) (1,198) Interest and other income, net 529 811 1,025 1,446 -------- -------- -------- -------- Income (loss) before taxes (965) (1,091) (2,896) 248 Tax provision (benefit) (264) (244) 160 827 -------- -------- -------- -------- Net loss $ (701) $ (847) $ (3,056) $ (579) ======== ======== ======== ======== Net loss per share: Basic and diluted $ (0.02) $ (0.03) $ (0.11) $ (0.02) ======== ======== ======== ======== Weighted average common shares: Basic and diluted 28,155 26,680 28,067 26,611 ======== ======== ======== ======== PDF SOLUTIONS, INC. IMPACT OF NON-GAAP ADJUSTMENTS ON REPORTED NET INCOME / (LOSS) (UNAUDITED) (In thousands, except per share amounts) Three Months Ended Three Months Ended June 30, 2007 June 30, 2006 --------------------------- --------------------------- As As reported Adjustment Non-GAAP reported Adjustment Non-GAAP ------- ------- ------- ------- ------- ------- Revenue: Design-to- silicon- yield solutions Integrated solutions $16,032 $ -- $16,032 $10,477 $ -- $10,477 Software licenses 1,776 1,776 1,794 1,794 Gainshare 5,890 5,890 5,739 5,739 ------- ------- ------- ------- ------- ------- Total revenue 23,698 0 23,698 18,010 -- 18,010 ------- ------- ------- ------- ------- ------- Cost of design-to- silicon-yield solutions: Direct costs of design-to -silicon- yield solutions Integrated solutions 7,082 $ (478)(a) 6,604 6,645 $ (455)(a) 6,190 Software licenses 27 27 29 29 Amortization of acquired core technology 1,610 (1,610)(b) 0 1,266 (1,266)(b) 0 ------- ------- ------- ------- ------- ------- Total cost of design-to silicon- yield solutions 8,719 (2,088) 6,631 7,940 (1,721) 6,219 ------- ------- ------- ------- ------- ------- Gross margin 14,979 2,088 17,067 10,070 1,721 11,791 Operating expenses: Research and development 8,797 (615)(a) 8,182 6,871 (568)(a) 6,303 Selling, general and administra- tive 6,645 (852)(a) 5,793 4,866 (764)(a) 4,102 Amortization of other acquired intangible assets 1,031 (1,031)(b) 0 235 (235)(b) 0 ------- ------- ------- ------- ------- ------- Total operating expenses 16,473 (2,498) 13,975 11,972 (1,567) 10,405 ------- ------- ------- ------- ------- ------- Income (loss) from operations (1,494) 4,586 3,092 (1,902) 3,288 1,386 Interest and other income, net 529 529 811 811 ------- ------- ------- ------- ------- ------- Income (loss) before taxes (965) 4,586 3,621 (1,091) 3,288 2,197 Tax benefit (264) (1,088)(c) (1,352) (244) (1,201)(c) (1,445) ------- ------- ------- ------- ------- ------- Net income (loss) $ (701) $ 5,674 $ 4,973 $ (847) $ 4,489 $ 3,642 ======= ======= ======= ======= ======= ======= Net income (loss) per share - diluted $ (0.02) $ 0.19 $ 0.17 $ (0.03) $ 0.16 $ 0.13 ======= ======= ======= ======= ======= ======= Weighted average common shares - diluted 28,155 28,698(d) 28,698 26,680 27,866(d) 27,866 ======= ======= ======= ======= ======= ======= Notes: (a) The non-GAAP adjustments represent the reversal of stock-based compensation. (b) The non-GAAP adjustments represent the reversal of amortization of intangible assets. (c) The non-GAAP adjustments represent the tax benefit from the reversal of stock-based compensation and amortization of intangible assets. (d) The shares used in computing non-GAAP net income for the three months ended June 30, 2007 and 2006 include the dilutive impact of common stock options.