EX-99.1 2 f10997exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1

News Release
 
     
Investor Relations Contact:
  Corporate Communications Contact:
Sonia Segovia, IR Coordinator
  Abbie Kendall, Principal
PDF Solutions, Inc.
  Armstrong Kendall, Inc.
Tel: (408) 938-6491
  Tel: (503) 672-4681
Email: sonia.segovia@pdf.com
  Email: abbie@akipr.com
PDF Solutions®Reports Record
Second Quarter 2005 Revenue
Results Represent 10th Sequential Quarter of Revenue Growth
     SAN JOSE, Calif.—July 21, 2005—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, 2005.
     Revenue for the second fiscal quarter of 2005 totaled a record $18.4 million, an increase of 21%, compared with revenue of $15.2 million for the second fiscal quarter of 2004. On a GAAP basis, net income for the second fiscal quarter of 2005 totaled approximately $1.3 million, or $0.05 per diluted share, compared with a net loss of approximately $460,000, or $0.02 per diluted share, for the second fiscal quarter of 2004.
     In addition to using GAAP results in evaluating PDF Solutions’ business, management also believes it useful to measure results using a non-GAAP measure of net income or loss, which excludes amortization of stock-based compensation and acquired intangible assets. Using this non-GAAP measure, net income for the second fiscal quarter of 2005 totaled $2.9 million, or $0.11 per diluted share, compared with non-GAAP net income of approximately $1.0 million, or $0.04 per diluted share, for the second fiscal quarter of 2004.

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     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 quarterly 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 most directly 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.
     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 and Japan. 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,
    2005   2004
ASSETS
               
Current assets:
                
Cash and cash equivalents
   $ 51,862     $ 45,660  
Accounts receivable, net of allowances
     18,852       15,978  
Prepaid expenses and other current assets
     2,436       2,685  
Deferred tax assets
     1,998       1,586  
 
                
Total current assets
     75,148       65,909  
Property and equipment, net
     3,614       3,321  
Goodwill
     39,886       39,886  
Intangible assets, net
     12,789       15,791  
Other assets
     608       500  
 
                
Total assets
   $ 132,045     $ 125,407  
 
                
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 1,827     $ 1,023  
Accrued compensation and related benefits
     3,012       3,209  
Other accrued liabilities
     2,036       2,593  
Taxes payable
     4,013       3,286  
Deferred revenues
     2,949       2,905  
Billings in excess of recognized revenue
     1,921       1,581  
 
                
Total current liabilities
     15,758       14,597  
Long-term liabilities
    290       311  
Deferred tax liabilities
     1,469       1,701  
 
                
Total liabilities
     17,517       16,609  
 
                
 
                
Stockholders’ equity:
                
Common stock
     4       4  
Additional paid-in-capital
     137,181       134,191  
Treasury stock
    (4,806 )     (4,806 )
Deferred stock-based compensation
     (75 )     (148 )
Notes receivable from stockholders
     (550 )     (550 )
Accumulated deficit
     (17,239 )     (19,975 )
Accumulated other comprehensive income
     13       82  
 
                
 
                
Total stockholders’ equity
     114,528       108,798  
 
                
 
                
Total liabilities and stockholders’ equity
   $ 132,045     $ 125,407  
 
                

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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,
    2005   2004   2005   2004
Revenue:
                                
Design-to-silicon-yield solutions:
                                
Integrated solutions
   $ 12,267     $ 13,352     $ 24,824     $ 22,858  
Software licenses
     3,197       161       6,646       2,350  
Gain share
     2,892       1,656       4,979       2,637  
 
                                
Total revenue
     18,356       15,169       36,449       27,845  
 
                                
 
                                
Cost and expenses:
                                
Cost of design-to-silicon-yield solutions:
                                
Direct costs of design-to-silicon-yield solutions:
                                
Integrated solutions
     5,766       5,308       11,516       9,660  
Software licenses
     101       61       258       63  
Amortization of acquired core technology
     1,266       1,327       2,532       2,677  
Research and development
     5,655       4,822       10,991       10,040  
Selling, general and administrative
     4,289       3,622       8,203       7,419  
Stock-based compensation amortization*
     32       292       74       547  
Amortization of other acquired intangible assets
     235       410       470       820  
 
                                
Total costs and expenses
     17,344       15,842       34,044       31,226  
 
                                
 
                                
Income (loss) from operations
     1,012       (673 )     2,405       (3,381 )
Interest and other income, net
     350       138       622       291  
 
                                
Income (loss) before taxes
     1,362       (535 )     3,027       (3,090 )
Tax provision (benefit)
     20       (75 )     291       (788 )
 
                                
Net income (loss)
   $ 1,342     $ (460 )   $ 2,736     $ (2,302 )
 
                                
 
                                
Net income (loss) per share:
                                
Basic
   $ 0.05     $ (0.02 )   $ 0.11     $ (0.09 )
 
                                
Diluted
   $ 0.05     $ (0.02 )   $ 0.10     $ (0.09 )
 
                                
 
                                
Weighted average common shares:
                                
Basic
     25,862       25,337       25,779       25,319  
 
                                
Diluted
     26,986       25,337       27,057       25,319  
 
                                

 
                                 
* Stock-based compensation amortization:
                                
Cost of design-to-silicon-yield solutions
   $ —     $ 9     $ —     $ 37  
Research and development
     32       274       74       476  
Selling, general and administrative
     —       9       —       34  
 
                                
 
   $ 32     $ 292     $ 74     $ 547  
 
                                

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PDF SOLUTIONS, INC.
RECONCILIATION OF REPORTED GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME
(UNAUDITED)
(In thousands, except per share amounts)
                 
    Three Months Ended
    June 30,   June 30,
    2005   2004
GAAP net income (loss)
   $ 1,342     $ (460 )
 
                
Stock-based compensation amortization
     32       292  
 
                
Amortization of intangibles, net of taxes
     1,479       1,198  
 
                
 
                
Non-GAAP net income
   $ 2,853     $ 1,030  
 
                
 
                
Non-GAAP net income per share –diluted
   $ 0.11     $ 0.04  
 
                
 
                
Weighted average common shares — diluted
     26,986       26,136  
 
                
Use of Non-GAAP Information
In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles (GAAP), PDF Solutions also provides certain Non-GAAP financial measures that exclude certain charges as additional information relating to its operating results. PDF Solutions’ management believes that the presentation of these measures provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations. PDF Solutions has also chosen to provide this information to investors to enable them to perform meaningful comparisons of PDF Solutions’ past, present and future operating results. These measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. The calculations of non-GAAP financial measures have been adjusted to exclude the effects of amortization of stock-based compensation and acquired intangible assets.

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