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PDF Solutions(R) Reports Third Fiscal Quarter 2013 Results

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SAN JOSE, Calif., Oct. 23, 2013 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. ("PDF Solutions" or the "Company") (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 third fiscal quarter ended September 30, 2013.

Total revenues for the third fiscal quarter of 2013 totaled $25.5 million, up 3% from $24.8 million for the second fiscal quarter of 2013 and up 13% when compared with total revenues of $22.6 million for the third fiscal quarter of 2012. Gainshare performance incentives revenues totaled $8.5 million, down 14% from $9.8 million for the second fiscal quarter of 2013 and up 17% when compared to gainshare performance incentives revenues of $7.2 million for the third fiscal quarter of 2012.

On a GAAP basis, net income for the third fiscal quarter of 2013 was $4.8 million, or $0.16 per basic and $0.15 per diluted share, compared to net income of $4.6 million, or $0.15 per basic and diluted share, for the second fiscal quarter of 2013, and net income of $5.0 million, or $0.17 per basic and diluted share, for the third fiscal quarter of 2012.

Cash and cash equivalents were $85.2 million at September 30, 2013 compared to cash and cash equivalents of $61.6 million at December 31, 2012.

Non-GAAP net income for the third fiscal quarter of 2013 was $8.6 million, or $0.27 per diluted share, compared to non-GAAP net income of $7.7 million, or $0.25 per diluted share, for the second fiscal quarter of 2013, and non-GAAP net income of $6.3 million, or $0.21 per diluted share, for the third fiscal quarter of 2012. EBITDAR for the third fiscal quarter of 2013 was $9.8 million, or $0.31 per diluted share, compared to EBITDAR of $9.4 million, or $0.30 per diluted share, for the second fiscal quarter of 2013, and EBITDAR of $6.6 million, or $0.22 per diluted share, for the third fiscal quarter of 2012.

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. Non-GAAP net income excludes 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, as well as adjusts for the non-cash portion of income taxes. EBITDAR is calculated by taking GAAP net income, adding back stock-based compensation expenses, amortization of acquired technology and other acquired intangibles, restructuring charges, depreciation expense and income tax provision (benefit). These non-GAAP financial measures are used by management internally to measure the company's profitability and performance. PDF Solutions' management believes that these non-GAAP measures provide useful supplemental measures to investors regarding 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 impact 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 comparable GAAP financial measures to the non-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®) electrical test chip infrastructure provides the core modeling capabilities, and is used by more leading manufacturers than any other test chips in the industry. Proprietary Template™ layout patterns provide optimum area, performance, and manufacturability for designing IC products. The proprietary Exensio™ solution for YieldAware™ FDC enables world-class variability control in manufacturing, in part by leveraging PDF Solutions' industry-leading dataPOWER® yield management system (YMS) and mæstria® fault detection and classification (FDC) software. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Canada, China, France, Germany, Italy, 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.

PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
September 30, December 31,
2013 2012
ASSETS
Current assets:
Cash and cash equivalents $ 85,233 $ 61,637
Accounts receivable, net 28,288 33,959
Deferred tax assets - current portion 4,868 3,589
Prepaid expenses and other current assets 3,524 3,413
Total current assets 121,913 102,598
Property and equipment, net 6,265 3,898
Deferred tax assets - long-term portion 10,971 16,471
Other non-current assets 1,893 1,293
Total assets 141,042 124,260
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 659 $ 2,054
Accrued compensation and related benefits 6,871 10,723
Accrued and other current liabilities 1,352 2,882
Deferred revenues 2,375 3,232
Billings in excess of recognized revenues 286 807
Total current liabilities 11,543 19,698
Non-current liabilities 3,557 3,502
Total liabilities 15,100 23,200
Stockholders' equity:
Common stock and additional paid-in-capital 231,130 220,365
Treasury stock at cost (28,017) (27,778)
Accumulated deficit (77,471) (91,578)
Accumulated other comprehensive income 300 51
Total stockholders' equity 125,942 101,060
Total liabilities and stockholders' equity $ 141,042 $ 124,260
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, June 30, September 30, September 30, September 30,
2013 2013 2012 2013 2012
Revenues:
Design-to-silicon-yield solutions $ 17,015 $ 14,950 $ 15,305 $ 46,813 $ 42,484
Gainshare performance incentives 8,474 9,826 7,246 27,562 23,241
Total revenues 25,489 24,776 22,551 74,375 65,725
Cost of design-to-silicon-yield solutions:
Direct costs of design-to-silicon-yield solutions 10,507 9,741 9,457 29,905 26,830
Amortization of acquired technology -- -- -- -- 261
Total cost of design-to-silicon-yield solutions 10,507 9,741 9,457 29,905 27,091
Gross profit 14,982 15,035 13,094 44,470 38,634
Operating expenses:
Research and development 3,396 3,184 3,203 9,944 9,651
Selling, general and administrative 3,812 4,404 4,498 13,010 14,122
Amortization of other acquired intangible assets 19 19 51 56 153
Restructuring charges (credits) 8 9 -- (35) 83
Total operating expenses 7,235 7,616 7,752 22,975 24,009
Income from operations 7,747 7,419 5,342 21,495 14,625
Interest and other income (expense), net (283) (76) (179) (109) (166)
Income before income taxes 7,464 7,343 5,163 21,386 14,459
Income tax provision 2,640 2,791 170 7,279 1,147
Net income $ 4,824 $ 4,552 $ 4,993 $ 14,107 $ 13,312
Net income per share:
Basic $ 0.16 $ 0.15 $ 0.17 $ 0.48 $ 0.47
Diluted $ 0.15 $ 0.15 $ 0.17 $ 0.45 $ 0.45
Weighted average common shares:
Basic 30,000 29,650 28,720 29,668 28,555
Diluted 31,623 31,154 30,180 31,198 29,596
PDF SOLUTIONS, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (UNAUDITED)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, June 30, September 30, September 30, September 30,
2013 2013 2012 2013 2012
GAAP net income $ 4,824 $ 4,552 $ 4,993 $ 14,107 $ 13,312
Adjustments to reconcile GAAP net income to non-GAAP net income:
Stock-based compensation expense 1,924 1,709 1,253 4,942 3,476
Amortization of acquired technology -- -- -- 55 261
Amortization of other acquired intangible assets 19 19 51 38 153
Restructuring charges (credits) 8 9 -- (35) 83
Non-cash portion of income tax expense (benefit) 1,832 1,416 (26) 3,977 (32)
Non-GAAP net income $ 8,607 $ 7,705 $ 6,271 $ 23,084 $ 17,253
GAAP net income per diluted share $ 0.15 $ 0.15 $ 0.17 $ 0.45 $ 0.45
Non-GAAP net income per diluted share $ 0.27 $ 0.25 $ 0.21 $ 0.74 $ 0.58
Shares used in diluted shares calculation 31,623 31,154 30,180 31,198 29,596
PDF SOLUTIONS, INC.
RECONCILIATION OF GAAP NET INCOME TO EBITDAR (UNAUDITED)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, June 30, September 30, September 30, September 30,
2013 2013 2012 2013 2012
GAAP net income 4,824 4,552 4,993 14,107 13,312
Adjustments to reconcile GAAP net income to EBITDAR:
Stock-based compensation expense 1,924 1,709 1,253 4,942 3,476
Amortization of acquired technology -- -- -- 55 261
Amortization of other acquired intangible assets 19 19 51 38 153
Restructuring charges (credits) 8 9 0 (35) 83
Depreciation expense 386 318 125 961 316
Income tax provision (benefit) 2,640 2,791 170 7,279 1,147
EBITDAR $ 9,801 $ 9,398 $ 6,592 $ 27,347 $ 18,748
EBITDAR per diluted share $ 0.31 $ 0.30 $ 0.22 $ 0.88 $ 0.63
Shares used in diluted shares calculation 31,623 31,154 30,180 31,198 29,596

CONTACT: Company Contacts: Gregory Walker, VP, Finance and CFO Tel: (408) 938-6457 Email:gregory.walker@pdf.com Sonia Segovia, IR Coordinator Tel: (408) 938-6491 Email: sonia.segovia@pdf.com

Source:PDF Solutions, Inc.