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
Fiscal 2005 Revenue & Net Income
Fiscal 2005 Revenue & Net Income
Record Gain Share Contributes to 12thSequential Quarter of Revenue Growth
SAN JOSE, Calif.—January 26, 2006—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 and fiscal year ended December 31, 2005.
Revenue for the fourth fiscal quarter of 2005 totaled a record $19.0 million, an increase of 5%, compared with revenue of $18.1 million for the fourth fiscal quarter of 2004. Gain share revenue for the fourth fiscal quarter of 2005 totaled a record $3.8 million, an increase of 39%, compared to the fourth fiscal quarter of 2004. On a GAAP basis, net income for the fourth fiscal quarter of 2005 totaled a record $2.3 million, or $0.08 per diluted share, compared with net income of $1.6 million, or $0.06 per diluted share, for the fourth fiscal quarter of 2004.
Revenue for the full fiscal year ended December 31, 2005 totaled a record $73.9 million, an increase of 19%, compared with revenue of $62.3 million for the full fiscal year ended December 31, 2004. On a GAAP basis, net income for the full fiscal year of 2005 totaled a record $6.5 million, or $0.24 per diluted share, compared with a net loss of approximately $614,000, or $0.02 per diluted share, for the full fiscal year of 2004.
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 or loss, which excludes amortization of stock-based compensation and acquired intangible assets. Using this non-GAAP measure, net income for the fourth fiscal quarter of 2005 totaled approximately
-more-
$3.9 million, or $0.14 per diluted share, compared with non-GAAP net income of approximately $3.6 million, or $0.13 per diluted share, for the fourth fiscal quarter of 2004.
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 amortization of stock-based compensation and acquired intangible assets. 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 amortization of stock-based compensation and acquired intangible assets 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 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.
PDF SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 60,506 | $ | 45,660 | ||||
Accounts receivable, net of allowances | 22,082 | 15,978 | ||||||
Prepaid expenses and other current assets | 1,992 | 2,685 | ||||||
Deferred tax assets | 908 | 1,586 | ||||||
Total current assets | 85,488 | 65,909 | ||||||
Property and equipment, net | 3,328 | 3,321 | ||||||
Goodwill | 39,886 | 39,886 | ||||||
Intangible assets, net | 9,787 | 15,791 | ||||||
Deferred tax assets | 877 | — | ||||||
Other assets | 526 | 500 | ||||||
Total assets | $ | 139,892 | $ | 125,407 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,728 | $ | 1,023 | ||||
Accrued compensation and related benefits | 4,922 | 3,209 | ||||||
Other accrued liabilities | 1,469 | 2,593 | ||||||
Taxes payable | 4,950 | 3,286 | ||||||
Deferred revenues | 2,281 | 2,905 | ||||||
Billings in excess of recognized revenue | 1,604 | 1,581 | ||||||
Total current liabilities | 16,954 | 14,597 | ||||||
Long-term liabilities | 257 | 311 | ||||||
Deferred tax liabilities | — | 1,701 | ||||||
Total liabilities | 17,211 | 16,609 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 4 | 4 | ||||||
Additional paid-in-capital | 141,720 | 134,191 | ||||||
Treasury stock, at cost | (5,549 | ) | (4,806 | ) | ||||
Deferred stock-based compensation | (27 | ) | (148 | ) | ||||
Notes receivable from stockholders | — | (550 | ) | |||||
Accumulated deficit | (13,451 | ) | (19,975 | ) | ||||
Accumulated other comprehensive income (loss) | (16 | ) | 82 | |||||
Total stockholders’ equity | 122,681 | 108,798 | ||||||
Total liabilities and stockholders’ equity | $ | 139,892 | $ | 125,407 | ||||
-more-
PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
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, | |||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Revenue: | ||||||||||||||||
Design-to-silicon-yield solutions: | ||||||||||||||||
Integrated solutions | $ | 14,061 | $ | 13,491 | $ | 52,719 | $ | 49,573 | ||||||||
Software licenses | 1,140 | 1,809 | 9,319 | 4,971 | ||||||||||||
Gain share | 3,821 | 2,751 | 11,890 | 7,802 | ||||||||||||
Total revenue | 19,022 | 18,051 | 73,928 | 62,346 | ||||||||||||
Cost and expenses: | ||||||||||||||||
Cost of design-to-silicon-yield solutions: | ||||||||||||||||
Direct costs of design-to-silicon-yield solutions: | ||||||||||||||||
Integrated solutions | 6,421 | 6,230 | 24,319 | 21,772 | ||||||||||||
Software licenses | 20 | 15 | 293 | 83 | ||||||||||||
Amortization of acquired core technology | 1,266 | 1,266 | 5,064 | 5,209 | ||||||||||||
Research and development | 5,641 | 5,352 | 22,106 | 20,332 | ||||||||||||
Selling, general and administrative | 3,964 | 3,987 | 16,138 | 15,207 | ||||||||||||
Stock-based compensation amortization* | 13 | 61 | 106 | 742 | ||||||||||||
Amortization of other acquired intangible assets | 235 | 235 | 940 | 1,406 | ||||||||||||
Total costs and expenses | 17,560 | 17,146 | 68,966 | 64,751 | ||||||||||||
Income (loss) from operations | 1,462 | 905 | 4,962 | (2,405 | ) | |||||||||||
Interest and other income, net | 573 | 234 | 1,658 | 675 | ||||||||||||
Income (loss) before taxes | 2,035 | 1,139 | 6,620 | (1,730 | ) | |||||||||||
Tax provision (benefit) | (217 | ) | (414 | ) | 96 | (1,116 | ) | |||||||||
Net income (loss) | $ | 2,252 | $ | 1,553 | $ | 6,524 | $ | (614 | ) | |||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.09 | $ | 0.06 | $ | 0.25 | $ | (0.02 | ) | |||||||
Diluted | $ | 0.08 | $ | 0.06 | $ | 0.24 | $ | (0.02 | ) | |||||||
Weighted average common shares: | ||||||||||||||||
Basic | 26,272 | 25,391 | 25,983 | 25,330 | ||||||||||||
Diluted | 28,013 | 26,975 | 27,473 | 25,330 | ||||||||||||
* Stock-based compensation amortization: | ||||||||||||||||
Cost of design-to-silicon-yield solutions | $ | — | $ | — | $ | — | $ | 39 | ||||||||
Research and development | 13 | 61 | 98 | 667 | ||||||||||||
Selling, general and administrative | — | — | 8 | 36 | ||||||||||||
$ | 13 | $ | 61 | $ | 106 | $ | 742 | |||||||||
-more-
PDF SOLUTIONS, INC.
RECONCILIATION OF REPORTED GAAP NET INCOME TO NON-GAAP NET INCOME
(UNAUDITED)
(In thousands, except per share amounts)
RECONCILIATION OF REPORTED GAAP NET INCOME TO NON-GAAP NET INCOME
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended | ||||||||
December 31, 2005 | December 31, 2004 | |||||||
GAAP net income | $ | 2,252 | $ | 1,553 | ||||
Stock-based compensation amortization | 13 | 61 | ||||||
Amortization of intangibles, net of taxes | 1,660 | 2,019 | ||||||
Non-GAAP net income | $ | 3,925 | $ | 3,633 | ||||
Non-GAAP net income per share — diluted | $ | 0.14 | $ | 0.13 | ||||
Weighted average common shares — diluted. | 28,013 | 26,975 | ||||||
###