PDF Solutions(R) Reports Second Fiscal Quarter 2012 Results

SAN JOSE, Calif., Aug. 8, 2012 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. (Nasdaq:PDFS), the leading provider of yield improvement technologies and services for the integrated circuit (IC) manufacturing process life cycle, today announced financial results for its second fiscal quarter ended June 30, 2012.

Total revenues for the second fiscal quarter of 2012 totaled $22.5 million, up 9% from $20.6 million for the first fiscal quarter of 2012 and up 31% when compared with total revenues of $17.2 million for the second fiscal quarter of 2011. Gainshare performance incentives revenues totaled $8.7 million, up 20% from $7.3 million for the first fiscal quarter of 2012 and up 110% when compared to gainshare performance incentives revenues of $4.2 million for the second fiscal quarter of 2011.

On a GAAP basis, net income for the second fiscal quarter of 2012 was $4.8 million, or $0.17 per basic and $0.16 per diluted share, compared to net income of $3.5 million, or $0.12 per basic and diluted share, in the first fiscal quarter of 2012 and net loss of $(0.1) million, or $(0.00) per basic and diluted share, in the second fiscal quarter of 2011.

In addition to using GAAP results in evaluating PDF Solutions' business, PDF Solutions' management also believes it is useful to measure results using a non-GAAP measure of net income (loss), excluding stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, restructuring charges, and their related income tax effects, as applicable. Using this non-GAAP measure, non-GAAP net income for the second fiscal quarter of 2012 totaled $6.4 million, or $0.22 per diluted share, compared with a non-GAAP net income of $4.6 million, or $0.16 per diluted share, for the first fiscal quarter of 2012, and a non-GAAP net income of $1.5 million, or $0.05 per diluted share, for the second fiscal quarter of 2011.

Cash and cash equivalents were $50.2 million at June 30, 2012 compared to cash and cash equivalents of $46.0 million at December 31, 2011.

As previously announced, PDF Solutions will discuss these results on a live conference call beginning at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time today. The call will be simultaneously web cast on PDF Solutions' website at http:// www.pdf.com/events. A replay of the web cast will be available at the same website address beginning approximately two hours after completion of the live call. A copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the comparable GAAP measures, which non-GAAP measures may be used periodically by PDF Solutions' management when discussing financial results with investors and analysts, will also be available on PDF Solutions' website at http://www.pdf.com/press-releases 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 expenses, amortization of acquired technology and other acquired intangible assets, restructuring charges, and their related income tax effects, as applicable. 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 Solutions' management believes that excluding the effects of stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, restructuring charges, and their related income tax effects, as applicable, provides a useful supplemental measure of the company's ongoing operations in light of the fact that none of these categories of expense has a current effect on the future uses of cash (with the exception of restructuring charges) 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 or loss 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 Solutions 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 measures 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 life cycle.  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® (CV®) 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®, and fault detection and classification software, mæstria®, 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, Korea, Singapore, and Taiwan. For the company's latest news and information, visit http://www.pdf.com/ .

Characterization Vehicle, CV, dataPOWER® , mæstria® , PDF Solutions®, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries.

The PDF Solutions, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3199
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
     
     
  June 30, December 31,
  2012 2011
     
ASSETS    
Current assets:    
Cash and cash equivalents   $ 50,176  $ 46,041
Short-term investments  784  --
Accounts receivable, net   26,976  20,863
Prepaid expenses and other current assets   2,800  3,717
Total current assets   80,736  70,621
Non-current investments   --  784
Property and equipment, net   2,420  777
Intangible assets, net   177  539
Other non-current assets   1,414  1,663
Total assets   84,747  74,384
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable   $ 1,546  $ 974
Accrued compensation and related benefits   7,107  5,026
Accrued and other current liabilities   2,587  2,335
Deferred revenues   2,646  2,961
Billings in excess of recognized revenues   901  2,089
Total current liabilities   14,787  13,385
Long-term income taxes payable   3,111  3,489
Other non-current liabilities   315  667
Total liabilities   18,213  17,541
     
Stockholders' equity:    
Common stock and additional paid-in-capital  212,416  208,830
Treasury stock at cost   (25,062)  (22,899)
Accumulated deficit   (120,470)  (128,789)
Accumulated other comprehensive loss  (350)  (299)
Total stockholders' equity   66,534  56,843
Total liabilities and stockholders' equity   $ 84,747  $ 74,384
 
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
           
           
  Three months ended Six months ended
           
  June 30, March 31, June 30, June 30, June 30,
  2012 2012 2011 2012 2011
           
Revenues:          
Design-to-silicon-yield solutions   $ 13,793  $ 13,386  $ 13,003  $ 27,179  $ 23,570
Gainshare performance incentives   8,738  7,257 4,157  15,995 8,607
Total revenues  22,531 20,643 17,160 43,174 32,177
           
Cost of design-to-silicon-yield solutions:          
Direct costs of design-to-silicon-yield solutions  8,801 8,572 7,263 17,373 13,701
Amortization of acquired technology  105 156 156 261 312
Total cost of design-to-silicon-yield solutions  8,906 8,728 7,419 17,634 14,013
Gross profit  13,625 11,915 9,741 25,540 18,164
           
Operating expenses:          
Research and development  3,291 3,157 3,717 6,448 7,544
Selling, general and administrative  4,719 4,905 5,242 9,624 10,081
Amortization of other acquired intangible assets  51 51 51 102 102
Restructuring charges (credits) 91 (8) (122) 83 (133)
Total operating expenses  8,152 8,105 8,888 16,257 17,594
           
Income from operations  5,473 3,810 853 9,283 570
Interest and other income (expense), net  155 (142) (32) 13 (411)
Income before income taxes  5,628 3,668 821 9,296 159
Income tax provision 808 169 922 977  1,018
Net income (loss)   $ 4,820  $ 3,499  $ (101)  $ 8,319  $ (859)
           
Net income (loss) per share:           
Basic   $ 0.17  $ 0.12  $ (0.00)  $ 0.29  $ (0.03)
Diluted   $ 0.16  $ 0.12  $ (0.00)  $ 0.28  $ (0.03)
           
Weighted average common shares:          
Basic  28,560 28,384 28,110 28,472 27,960
Diluted  29,560 29,046 28,110 29,303 27,960
 
PDF SOLUTIONS, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) (UNAUDITED)
(In thousands, except per share amounts)
           
           
  Three months ended Six months ended
  June 30, March 31, June 30, June 30, June 30,
  2012 2012 2011 2012 2011
GAAP net income (loss)  $ 4,820  $ 3,499  $ (101)  $ 8,319  $ (859)
Adjustments to reconcile GAAP net income to non-GAAP net income:          
Stock-based compensation expense 1,319 905 1,473 2,224 2,594
Amortization of acquired technology 105 156 156 261 312
Amortization of other acquired intangible assets 51 51 51 102 102
Restructuring charges (credits) 91 (8) (122) 83 (133)
Non-GAAP net income  $ 6,386  $ 4,603  $ 1,457  $ 10,989  $ 2,016
           
GAAP net income per diluted share  $ 0.16  $ 0.12  $ (0.00)  $ 0.28  $ (0.03)
Non-GAAP net income per diluted share  $ 0.22  $ 0.16  $ 0.05  $ 0.38  $ 0.07
           
Shares used in diluted shares calculation 29,560 29,046 28,578 29,303 28,429
CONTACT: Company Contacts:         Gregory Walker,         VP, Finance and CFO         Tel: (408) 938-6457         Email: gregory.walker@pdf.com                  Sonia Segovia, IR Coordinator         PDF Solutions, Inc.         Tel: (408) 938-6491         Email: sonia.segovia@pdf.com

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