EX-99.1 2 f27118exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
News Release
     
Investor Relations Contact:
  Investor Relations Contact:
Steven Melman, V.P. of Investor Relations
  Sonia Segovia, IR Coordinator
PDF Solutions, Inc.
  PDF Solutions, Inc.
Tel: (408) 938-6445
  Tel: (408) 938-6491
Email: steve.melman@pdf.com
  Email: sonia.segovia@pdf.com
PDF Solutions® Reports Fourth Quarter
2006 Results
Record Gain Share for Fiscal 2006 Highlights Record Total Year Revenue
     SAN JOSE, Calif.—February 6, 2007—PDF Solutions, 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
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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
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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®, 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.
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PDF SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
                 
    December 31,     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  
 
            
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PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,     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  
 
                        
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PDF SOLUTIONS, INC.
IMPACT OF NON-GAAP ADJUSTMENTS ON REPORTED NET INCOME (UNAUDITED)
(In thousands, except per share amounts)
                                                                 
    Three Months Ended     Three Months Ended  
    December 31, 2006     December 31, 2005  
    As reported     Adjustments             Non-GAAP     As reported     Adjustments             Non-GAAP  
Revenue:
                                                                
Design to-silicon-yield solutions:
                                                                
Integrated solutions
   $ 11,523     $ —             $ 11,523     $ 14,061     $ —             $ 14,061  
Software licenses
     2,557       —               2,557       1,140       —               1,140  
Gain share
     4,873       —               4,873       3,821       —               3,821  
 
                                                
Total revenue
     18,953       —               18,953       19,022       —               19,022  
 
                                                
 
                                                                
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       6,421       —               6,421  
Software licenses
     111       —               111       20       —               20  
Amortization of acquired core technology
     1,472       (1,472 )     (b )     —       1,266       (1,266 )     (b )     —  
Research and development
     8,051       (580 )     (a )     7,471       5,654       —               5,654  
Selling, general and administrative
     5,079       (810 )     (a )     4,269       3,964       (13 )     (a )     3,951  
Amortization of other acquired intangible assets
     754       (754 )     (b )     —       235       (235 )     (b )     —  
In-process research and development
     800       (800 )     (d )     —       —       —               —  
 
                                                
Total costs and expenses
     23,828       (4,963 )             18,865       17,560       (1,514 )             16,046  
 
                                                
 
                                                                
Income (loss) from operations
     (4,875 )     4,963               88       1,462       1,514               2,976  
Interest and other income, net
     488       —               488       573       —               573  
 
                                                
Income (loss) before taxes
     (4,387 )     4,963               576       2,035       1,514               3,549  
 
                                                                
Tax provision (benefit)
     (3,828 )     2,150       (a,b )     (1,678 )     (217 )     (159 )     (a,b )     (376 )
 
                                                
Net income (loss)
   $ (559 )   $ 2,813             $ 2,254     $ 2,252     $ 1,673             $ 3,925  
 
                                                
 
                                                                
Net income (loss) per share — diluted
   $ (0.02 )   $ 0.10             $ 0.08     $ 0.08     $ 0.06             $ 0.14  
 
                                                
 
                                                                
Weighted average common shares — diluted (c)
     27,459       28,484               28,484       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.
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