EX-99.1 2 f29581exv99w1.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 First Quarter
2007 Results
Total Quarterly Revenue Exceeds $20 Million
     SAN JOSE, Calif.—April 25, 2007—PDF Solutions, Inc. (NASDAQ: PDFS) the leading provider of process-design integration technologies to enhance IC manufacturability, today announced financial results for its first fiscal quarter ended March 31, 2007.
     Revenue for the first fiscal quarter of 2007 totaled $22.1 million, an increase of 12%, compared with revenue of $19.9 million for the first fiscal quarter of 2006. Gain share revenue for the first fiscal quarter of 2007 totaled $4.9 million, compared to $5.0 million for the first fiscal quarter of 2006. On a GAAP basis, net loss for the first fiscal quarter of 2007 totaled approximately $2.4 million, or $0.08 per basic share, compared with net income of $268,000, or $0.01 per diluted share, for the first 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 first fiscal quarter of 2007 totaled approximately $3.9 million, or $0.14 per diluted share, compared with non-GAAP net income of approximately $3.3 million, or $0.12 per diluted share, for the first fiscal quarter of 2006.
     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 web cast of this conference call will be available on PDF Solutions’ website at http://ir.pdf.com/medialist.cfm. A
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web cast replay 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 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®, 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, Maestria and PDF Solutions are registered trademarks of PDF Solutions, Inc.
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PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
                 
    March 31,     December 31,  
    2007     2006  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 32,083     $ 36,451  
Short-term investments
     18,419       16,402  
Accounts receivable, net of allowances
     35,099       27,575  
Prepaid expenses and other current assets
     2,720       2,796  
Deferred tax assets
     3,087       2,581  
 
            
Total current assets
     91,408       85,805  
Property and equipment, net
     3,742       3,916  
Goodwill
     60,997       60,034  
Intangible assets, net
     11,004       13,605  
Deferred tax assets
     6,603       4,994  
Other assets
     533       503  
 
            
Total assets
   $ 174,287     $ 168,857  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Current portion of long-term debt
   $ 289     $ 302  
Accounts payable
     2,554       3,182  
Accrued compensation and related benefits
     5,364       3,325  
Other accrued liabilities
     2,283       3,843  
Taxes payable
     1,533       4,767  
Deferred revenues
     6,572       3,705  
Billings in excess of recognized revenue
     888       95  
 
            
Total current liabilities
     19,483       19,219  
Long-term debt
     1,173       1,198  
Long-term taxes payable
     4,757       —  
Other liabilities
     177       221  
 
            
Total liabilities
     25,590       20,638  
 
            
 
                
Stockholders’ equity:
                
Common stock
     4       4  
Additional paid-in-capital
     169,580       167,323  
Treasury stock, at cost
     (5,549 )     (5,549 )
Accumulated deficit
     (16,774 )     (13,890 )
Accumulated other comprehensive income
     1,436       331  
 
            
 
                
Total stockholders’ equity
     148,697       148,219  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 174,287     $ 168,857  
 
            
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PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
                 
    Three Months Ended  
    March 31,     March 31,  
    2007     2006  
Revenue:
                
Design-to-silicon-yield solutions:
                
Integrated solutions
   $ 13,764     $ 12,229  
Software licenses
     3,485       2,612  
Gain share
     4,893       5,016  
 
            
Total revenue
     22,142       19,857  
 
            
 
                
Cost and expenses:
                
Cost of design-to-silicon-yield solutions:
                
Direct costs of design-to-silicon-yield solutions:
                
Integrated solutions
     7,708       6,429  
Software licenses
     59       11  
Amortization of acquired core technology
     1,575       1,266  
Research and development
     8,370       6,256  
Selling, general and administrative
     5,844       4,956  
Amortization of other acquired intangible assets
     1,013       235  
 
            
Total costs and expenses
     24,569       19,153  
 
            
 
                
Income (loss) from operations
     (2,427 )     704  
Interest and other income, net
     496       635  
 
            
Income (loss) before taxes
     (1,931 )     1,339  
 
                
Tax provision
     424       1,071  
 
            
Net income (loss)
   $ (2,355 )   $ 268  
 
            
 
                
Net income (loss) per share:
                
Basic
   $ ( 0.08 )   $ 0.01  
 
            
Diluted
   $ ( 0.08 )   $ 0.01  
 
            
 
                
Weighted average common shares:
                
Basic
     27,980       26,542  
 
            
Diluted
     27,980       28,223  
 
            
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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  
    March 31, 2007     March 31, 2006  
    As reported     Adjustments     Non-GAAP     As reported     Adjustments     Non-GAAP  
Revenue:
                                                
Design to-silicon-yield solutions:
                                                
Integrated solutions
   $ 13,764             $ 13,764     $ 12,229             $ 12,229  
Software licenses
     3,485               3,485       2,612               2,612  
Gain share
     4,893               4,893       5,016               5,016  
 
                                    
Total revenue
     22,142       —       22,142       19,857       —       19,857  
 
                                    
 
                                                
Cost and expenses:
                                                
Cost of design-to-silicon-yield solutions:
                                                
Direct cost of design-to-silicon-yield solutions:
                                                
Integrated solutions
     7,708       (493 )(a)     7,215       6,429       (621 )(a)     5,808  
Software licenses
     59               59       11               11  
Amortization of acquired core technology
     1,575       (1,575 )(b)     —       1,266       (1,266 )(b)     —  
Research and development
     8,370       (562 )(a)     7,808       6,256       (618 )(a)     5,638  
Selling, general and administrative
     5,844       (782 )(a)     5,062       4,956       (929 )(a)     4,027  
Amortization of other acquired intangible assets
     1,013       (1,013 )(b)     —       235       (235 )(b)     —  
 
                                    
Total costs and expenses
     24,569       (4,425 )     20,144       19,153       (3,669 )     15,484  
 
                                    
 
                                                
Income (loss) from operations
     (2,427 )     4,425       1,998       704       3,669       4,373  
Interest and other income
     496               496       635               635  
 
                                    
Income (loss) before taxes
     (1,931 )     4,425       2,494       1,339       3,669       5,008  
 
                                                
Tax provision (benefit)
     424       (1,810 )(a,b)     (1,386 )     1,071       673  (a,b)     1,744  
 
                                    
Net income (loss)
   $ (2,355 )   $ 6,235     $ 3,880     $ 268     $ 2,996     $ 3,264  
 
                                    
 
                                                
Net income (loss) per share — diluted
   $ (0.08 )   $ 0.22     $ 0.14     $ 0.01     $ 0.11     $ 0.12  
 
                                    
 
                                                
Weighted average common shares — diluted
     27,980       28,590       28,590  (c)     28,223       28,223       28,223  
 
                                    
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 March 31, 2007 and 2006 include the dilutive impact of common stock options.

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