SAN JOSE, Calif., Oct. 31, 2007 (PRIME NEWSWIRE) -- PDF Solutions, Inc. (Nasdaq:PDFS) the leading provider of yield improvement technologies and services for the integrated circuit (IC) manufacturing process lifecycle, today announced financial results for its third fiscal quarter ended September 30, 2007.
Revenue for the third fiscal quarter of 2007 totaled $24.1 million, an increase of 24%, compared with revenue of $19.4 million for the third fiscal quarter of 2006. Gain share revenue for the third fiscal quarter of 2007 totaled $6.8 million, an increase of 55%, compared to $4.4 million for the third fiscal quarter of 2006. On a GAAP basis, net loss for the third fiscal quarter of 2007 totaled approximately $939,000, or $0.03 per basic share, compared with net income of approximately $570,000, or $0.02 per basic and diluted share, for the third 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 third fiscal quarter of 2007 totaled approximately $5.3 million, or $0.19 per diluted share, compared with non-GAAP net income of approximately $3.6 million, or $0.13 per diluted share, for the third fiscal quarter of 2006.
Additionally, during the third quarter ended September 30, 2007, PDF Solutions utilized the remaining balance available under the $10 million share repurchase plan previously authorized by its Board of Directors. During the quarter, PDF Solutions repurchased 437,287 of its shares on the open market at a weighted average cost of $10.18, for a total repurchase value of approximately $4.5 million. On October 29, 2007, PDF Solutions' Board of Directors authorized an additional $10.0 million share repurchase, to be utilized over the upcoming three years.
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 yield improvement technologies and services for the IC manufacturing process lifecycle. PDF Solutions offers solutions that are designed to enable clients to lower costs of IC design and manufacture, 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/.
Characterization Vehicle, CV, dataPOWER, Maestria, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc.
The PDF Solutions, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3199
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
September 30, December 31,
2007 2006
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 38,461 $ 36,451
Short-term investments 11,500 16,402
Accounts receivable 32,609 27,575
Prepaid expenses and other current assets 2,825 2,796
Deferred tax assets 2,644 2,581
------------ ------------
Total current assets 88,039 85,805
Property and equipment, net 3,761 3,916
Goodwill 64,593 60,034
Intangible assets, net 13,855 13,605
Deferred tax assets 6,265 4,994
Other assets 472 503
------------ ------------
Total assets $ 176,985 $ 168,857
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 403 $ 302
Accounts payable 2,424 3,182
Accrued compensation and related benefits 5,430 3,325
Other accrued liabilities 2,541 3,843
Taxes payable 2,919 4,767
Deferred revenue 4,221 3,705
Billings in excess of recognized revenue 301 95
------------ ------------
Total current liabilities 18,239 19,219
Long-term debt 946 1,198
Long-term taxes payable 5,355 --
Other liabilities 78 221
------------ ------------
Total liabilities 24,618 20,638
------------ ------------
Stockholders' equity:
Common stock 4 4
Additional paid-in-capital 177,992 167,323
Treasury stock at cost (10,001) (5,549)
Accumulated deficit (18,423) (13,890)
Accumulated other comprehensive income 2,795 331
------------ ------------
Total stockholders' equity 152,367 148,219
------------ ------------
Total liabilities and stockholders'
equity $ 176,985 $ 168,857
============ ============
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------ ------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2007 2006 2007 2006
-------- -------- -------- --------
Revenue:
Design-to-silicon-yield
solutions
Integrated solutions $ 16,294 $ 11,153 $ 46,090 $ 33,859
Software licenses 967 3,811 6,228 8,217
Gain share 6,807 4,400 17,590 15,155
-------- -------- -------- --------
Total revenue 24,068 19,364 69,908 57,231
-------- -------- -------- --------
Cost of design-to-silicon-yield
solutions:
Direct costs of design-to-
silicon-yield solutions
Integrated solutions 8,052 6,734 22,842 19,808
Software licenses 48 58 134 98
Amortization of acquired
core technology 1,331 1,266 4,516 3,798
-------- -------- -------- --------
Total cost of design-to
silicon-yield solutions 9,431 8,058 27,492 23,704
-------- -------- -------- --------
Gross margin 14,637 11,306 42,416 33,527
Operating expenses:
Research and development 9,008 6,416 26,175 19,543
Selling, general and
administrative 5,789 5,028 18,278 14,850
Amortization of other acquired
intangible assets 985 235 3,029 705
-------- -------- -------- --------
Total operating expenses 15,782 11,679 47,482 35,098
-------- -------- -------- --------
Loss from operations (1,145) (373) (5,066) (1,571)
Interest and other income, net 322 892 1,347 2,338
-------- -------- -------- --------
Income (loss) before taxes (823) 519 (3,719) 767
Tax provision (benefit) 116 (51) 276 776
-------- -------- -------- --------
Net income (loss) $ (939) $ 570 $ (3,995) $ (9)
======== ======== ======== ========
Net income (loss) per share:
Basic $ (0.03) $ 0.02 $ (0.14) $ (0.00)
======== ======== ======== ========
Diluted $ (0.03) $ 0.02 $ (0.14) $ (0.00)
======== ======== ======== ========
Weighted average common shares:
Basic 28,223 26,860 28,127 26,694
======== ======== ======== ========
Diluted 28,223 27,621 28,127 26,694
======== ======== ======== ========
PDF SOLUTIONS, INC.
IMPACT OF NON-GAAP ADJUSTMENTS ON REPORTED NET INCOME (LOSS)
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
September 30, 2007
------------------------------------
As reported Adjustment Non-GAAP
----------- ---------- ---------
Revenue:
Design-to-silicon-yield solutions
Integrated solutions $ 16,294 $ -- $ 16,294
Software licenses 967 -- 967
Gain share 6,807 -- 6,807
-------- ------- --------
Total revenue 24,068 -- 24,068
Cost of design-to-silicon-yield
solutions:
Direct costs of design-to-silicon-
yield solutions
Integrated solutions 8,052 (435)(a) 7,617
Software licenses 48 -- 48
Amortization of acquired core
technology 1,331 (1,331)(b) --
-------- ------- --------
Total cost of design-to-silicon-
yield solutions 9,431 (1,766) 7,665
-------- ------- --------
Gross margin 14,637 1,766 16,403
Operating expenses:
Research and development 9,008 (553)(a) 8,455
Selling, general and
administrative 5,789 (682)(a) 5,107
Amortization of other acquired
intangible assets 985 (985)(b) --
-------- ------- --------
Total operating expenses 15,782 (2,220) 13,562
-------- ------- --------
Income (loss) from operations (1,145) 3,986 2,841
Interest and other income, net 322 -- 322
-------- ------- --------
Income (loss) before taxes (823) 3,986 3,163
Tax provision (benefit) 116 (2,280)(c) (2,164)
-------- ------- --------
Net income (loss) $ (939) $ 6,266 $ 5,327
======== ======= ========
Net income (loss) per share -
diluted $ (0.03) $ 0.22 $ 0.19
======== ======= ========
Weighted average common shares -
diluted 28,223 28,713(d) 28,713
======== ======= ========
Three Months Ended
September 30, 2006
------------------------------------
As reported Adjustment Non-GAAP
----------- ---------- ---------
Revenue:
Design-to-silicon-yield solutions
Integrated solutions $ 11,153 $ -- $ 11,153
Software licenses 3,811 -- 3,811
Gain share 4,400 -- 4,400
-------- ------- --------
Total revenue 19,364 -- 19,364
Cost of design-to-silicon-yield
solutions:
Direct costs of design-to-silicon-
yield solutions
Integrated solutions 6,734 (443)(a) 6,291
Software licenses 58 -- 58
Amortization of acquired core
technology 1,266 (1,266)(b) --
-------- ------- --------
Total cost of design-to-silicon-
yield solutions 8,058 (1,709) 6,349
-------- ------- --------
Gross margin 11,306 1,709 13,015
Operating expenses:
Research and development 6,416 (443)(a) 5,973
Selling, general and
administrative 5,028 (621)(a) 4,407
Amortization of other acquired
intangible assets 235 (235)(b) --
-------- ------- --------
Total operating expenses 11,679 (1,299) 10,380
-------- ------- --------
Income (loss) from operations (373) 3,008 2,635
Interest and other income, net 892 -- 892
-------- ------- --------
Income (loss) before taxes 519 3,008 3,527
Tax provision (benefit) (51) (51)(c) (102)
-------- ------- --------
Net income (loss) $ 570 $ 3,059 $ 3,629
======== ======= ========
Net income (loss) per share -
diluted $ 0.02 $ 0.11 $ 0.13
======== ======= ========
Weighted average common shares -
diluted 27,621 27,621(d) 27,621
======== ======= ========
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 impact 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 September 30, 2007 and 2006 include the dilutive
impact of common stock options.