EX-99.1 2 f22233exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
News Release
     
Investor Relations Contact:
  Corporate Communications Contact:
Steven Melman, V.P. of Investor Relations
  Abbie Kendall, Principal
PDF Solutions, Inc.
  Armstrong Kendall, Inc.
Tel: (408) 938-6445
  Tel: (503) 672-4681
Email: steven.melman@pdf.com
  Email: abbie@akipr.com
PDF Solutions® Reports Second Quarter
2006 Results
     SAN JOSE, Calif.—July 20, 2006—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, 2006.
     Revenue for the second fiscal quarter of 2006 totaled $18.0 million, a decrease of 2%, compared with revenue of $18.4 million for the second fiscal quarter of 2005. Gain share revenue for the second fiscal quarter of 2006 totaled a record $5.7 million, an increase of 98%, compared to the second fiscal quarter of 2005. On a GAAP basis, net loss for the second fiscal quarter of 2006 totaled approximately $847,000, or $0.03 per basic and diluted share, compared with net income of $1.3 million, or $0.05 per basic and diluted share, for the second fiscal quarter of 2005. The adoption of SFAS 123(R) for fiscal year 2006 resulted in $1.8 million in stock-based compensation expense during the second fiscal quarter or approximately $0.06 per diluted 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 or loss, which excludes stock-based compensation expense and amortization of acquired intangible assets. Using this non-GAAP measure, net income for the second fiscal quarter of 2006 totaled approximately $3.6 million, or $0.13 per diluted share, compared with non-GAAP net income of approximately $2.9 million, or $0.11 per diluted share, for the second 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
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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 and amortization of acquired intangible assets. 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 and amortization of acquired intangible assets 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 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. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Europe, Japan and China. For more information, visit www.pdf.com.
PDF SolutionsÒ is a registered trademark of PDF Solutions, Inc.
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PDF SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
                 
    June 30,     December 31,  
    2006     2005  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 39,986     $ 60,506  
Short-term investments
     29,118       —  
Accounts receivable, net of allowances
     20,583       22,082  
Prepaid expenses and other current assets
     1,864       1,992  
Deferred tax assets
     726       908  
 
            
Total current assets
     92,277       85,488  
Property and equipment, net
     3,595       3,328  
Goodwill
     39,886       39,886  
Intangible assets, net
     6,785       9,787  
Deferred tax assets
     1,139       877  
Other assets
     644       526  
 
            
Total assets
   $ 144,326     $ 139,892  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 2,443     $ 1,728  
Accrued compensation and related benefits
     2,091       4,922  
Other accrued liabilities
     1,399       1,469  
Taxes payable
     4,744       4,950  
Deferred revenues
     2,989       2,281  
Billings in excess of recognized revenue
     80       1,604  
 
            
Total current liabilities
     13,746       16,954  
Long-term liabilities
     231       257  
 
            
Total liabilities
     13,977       17,211  
 
            
 
                
Stockholders’ equity:
                
Common stock
     4       4  
Additional paid-in-capital
     149,932       141,720  
Treasury stock, at cost
     (5,549 )     (5,549 )
Deferred stock-based compensation
     —       (27 )
Accumulated deficit
     (14,030 )     (13,451 )
Accumulated other comprehensive loss
     (8 )     (16 )
 
            
 
                
Total stockholders’ equity
     130,349       122,681  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 144,326     $ 139,892  
 
            
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PDF SOLUTIONS, INC.
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,  
    2006     2005     2006     2005  
Revenue:
                                
Design-to-silicon-yield solutions:
                                
Integrated solutions
   $ 10,477     $ 12,267     $ 22,706     $ 24,824  
Software licenses
     1,794       3,197       4,406       6,646  
Gain share
     5,739       2,892       10,755       4,979  
 
                        
 
                                
Total revenue
     18,010       18,356       37,867       36,449  
 
                        
Cost and expenses:
                                
Cost of design-to-silicon-yield solutions:
                                
Direct costs of design-to-silicon-yield solutions:
                                
Integrated solutions
     6,645       5,766       13,074       11,516  
Software licenses
     29       101       40       258  
Amortization of acquired core technology
     1,266       1,266       2,532       2,532  
Research and development
     6,871       5,687       13,127       11,065  
Selling, general and administrative
     4,866       4,289       9,822       8,203  
Amortization of other acquired intangible assets
     235       235       470       470  
 
                        
Total costs and expenses
     19,912       17,344       39,065       34,044  
 
                        
 
                                
Income (loss) from operations
     (1,902 )     1,012       (1,198 )     2,405  
Interest and other income, net
     811       350       1,446       622  
 
                        
Income (loss) before taxes
     (1,091 )     1,362       248       3,027  
Tax provision (benefit)
     (244 )     20       827       291  
 
                        
Net income (loss)
   $ (847 )   $ 1,342     $ (579 )   $ 2,736  
 
                        
 
                                
Net income (loss) per share:
                                
Basic
   $ (0.03 )   $ 0.05     $ (0.02 )   $ 0.11  
 
                        
Diluted
   $ (0.03 )   $ 0.05     $ (0.02 )   $ 0.10  
 
                        
 
                                
Weighted average common shares:
                                
Basic
     26,680       25,862       26,611       25,779  
 
                        
Diluted
     26,680       26,986       26,611       27,057  
 
                        
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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, 2006     June 30, 2005  
    As reported     Adjustments     Non-GAAP     As reported     Adjustments     Non-GAAP  
Revenue:
                                                
Design to-silicon-yield solutions:
                                                
Integrated solutions
   $ 10,477     $ —     $ 10,477     $ 12,267     $ —     $ 12,267  
Software licenses
     1,794       —       1,794       3,197       —       3,197  
Gain share
     5,739       —       5,739       2,892       —       2,892  
 
                                    
Total revenue
     18,010       —       18,010       18,356       —       18,356  
 
                                    
 
                                                
Cost and expenses:
                                                
Cost of design-to-silicon-yield solutions:
                                                
Direct cost of design-to-silicon-yield solutions:
                                                
Integrated solutions
     6,645       (455 ) (a)     6,190       5,766       —       5,766  
Software licenses
     29       —       29       101       —       101  
Amortization of acquired core technology
     1,266       (1,266 )(b)     —       1,266       (1,266 ) (b)     —  
Research and development
     6,871       (568 )(a)     6,303       5,687       (32 ) (a)     5,655  
Selling, general and administrative
     4,866       (764 )(a)     4,102       4,289       —       4,289  
Amortization of other acquired intangible assets
     235       (235 )(b)     —       235       (235 )(b)     —  
 
                                    
Total costs and expenses
     19,912       (3,288 )     16,624       17,344       (1,533 )     15,811  
 
                                    
 
Income (loss) from operations
     (1,902 )     3,288       1,386       1,012       1,533       2,545  
 
                                                
Interest and other income
     811       —       811       350       —       350  
 
                                    
Income (loss) before taxes
     (1,091 )     3,288       2,197       1,362       1,533       2,895  
 
                                                
Tax provision (benefit)
     (244 )     (1,201 )(a,b)     (1,445 )     20       22 (b)     42  
 
                                    
Net income (loss)
   $ (847 )   $ 4,489     $ 3,642     $ 1,342     $ 1,511     $ 2,853  
 
                                    
 
                                                
Net income (loss) per share — diluted
   $ (0.03 )   $ 0.16     $ 0.13     $ 0.05     $ 0.06     $ 0.11  
 
                                    
Weighted average common shares — diluted (c)
     26,680       27,866       27,866       26,986       26,986       26,986  
 
                                    
 
Notes:
 
(a)   The non-GAAP adjustments represent the reversal of stock-based compensation expense, 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 June 30, 2006 and 2005 include the dilutive impact of common stock options.
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