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(R) REPORTS RECORD
THIRD QUARTER REVENUE
Results Represent 7th Sequential Quarter of Revenue Growth
SAN JOSE, Calif. -- October 21, 2004 -- PDF Solutions, Inc. (Nasdaq: PDFS)
the leading provider of process-design integration technologies to enhance IC
manufacturability, today announced financial results for its third fiscal
quarter ended September 30, 2004.
Revenue for the third fiscal quarter of 2004 totaled a record $16.5
million, an increase of 46%, compared with revenue of $11.3 million for the
third fiscal quarter of 2003. On a GAAP basis, net income for the third fiscal
quarter of 2004 totaled approximately $135,000, or $0.01 per diluted share,
compared with a net loss of approximately $1.2 million, or $0.05 per diluted
share, for the third fiscal quarter of 2003.
In addition to using GAAP results in evaluating PDF's 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 and the write-off of in-process research and
development resulting from the acquisition of IDS Software Systems, Inc. in
September 2003. Using this non-GAAP measure, net income for the third fiscal
quarter of 2004 totaled $1.5 million, or $0.06 per diluted share, compared with
non-GAAP net income of approximately $332,000, or $0.01 per diluted share, for
the third fiscal quarter of 2003.
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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's
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's management when discussing financial results with
investors and analysts, will be available on PDF's 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's
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 Solutions(R) is a registered trademark of PDF Solutions, Inc.
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PDF SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
SEPTEMBER 30, DECEMBER 31,
2004 2003
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ASSETS
Current assets:
Cash and cash equivalents ...................................... $ 42,939 $ 39,110
Accounts receivable, net of allowances ......................... 15,468 11,869
Prepaid expenses and other current assets ...................... 2,653 2,614
Deferred tax assets ............................................ 1,433 1,808
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Total current assets ...................................... 62,493 55,401
Property and equipment, net ....................................... 3,444 4,110
Goodwill .......................................................... 40,590 40,548
Intangible assets, net ............................................ 17,292 22,906
Other assets ...................................................... 798 1,002
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Total assets ............................................... $ 124,617 $ 123,967
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................... $ 1,594 $ 835
Accrued compensation and related benefits ...................... 2,970 1,952
Other accrued liabilities ...................................... 2,310 1,485
Other acquisition obligations .................................. 552 1,880
Taxes payable .................................................. 3,285 2,871
Deferred revenue ............................................... 3,346 3,300
Billings in excess of recognized revenue ....................... 2,807 465
--------- ---------
Total current liabilities .................................. 16,864 12,788
Long term liabilities ............................................. 310 287
Deferred tax liabilities .......................................... 2,584 4,340
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Total liabilities .......................................... 19,758 17,415
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Stockholders' equity
Common stock ................................................. 4 4
Additional paid-in-capital ................................... 131,910 129,568
Treasury stock ............................................... (4,806) --
Deferred stock-based compensation ............................ (209) (688)
Notes receivable from stockholders ........................... (550) (3,025)
Accumulated deficit .......................................... (21,530) (19,361)
Accumulated other comprehensive income ....................... 40 54
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Total stockholders' equity ................................. 104,859 106,552
--------- ---------
Total liabilities and stockholders' equity ................. $ 124,617 $ 123,967
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PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2004 2003 2004 2003
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Revenue:
Design-to-silicon-yield solutions .............................. $ 14,036 $ 9,033 $ 39,244 $ 25,175
Gain share ..................................................... 2,414 2,267 5,051 5,282
-------- -------- -------- --------
Total revenue ................................................ 16,450 11,300 44,295 30,457
-------- -------- -------- --------
Cost and expenses:
Cost of design-to-silicon-yield solutions:
Direct costs of design-to-silicon-yield
solutions: ................................................ 5,887 3,768 15,610 10,726
Amortization of acquired core technology ................... 1,266 652 3,943 818
Research and development ....................................... 4,940 4,421 14,980 13,123
Selling, general and administrative ............................ 3,801 3,106 11,220 8,720
Stock-based compensation amortization* ......................... 134 366 681 1,344
Amortization of other acquired intangible assets ............... 351 137 1,172 137
Write-off of in-process research and development ............... -- 800 -- 800
-------- -------- -------- --------
Total costs and expenses ................................... 16,379 13,250 47,606 35,668
-------- -------- -------- --------
Income (loss) from operations ..................................... 71 (1,950) (3,311) (5,211)
Interest and other income ......................................... 150 278 441 998
-------- -------- -------- --------
Income (loss) before taxes ........................................ 221 (1,672) (2,870) (4,213)
Tax (benefit) provision ........................................... 86 (441) (702) (972)
-------- -------- -------- --------
Net income (loss) ................................................. $ 135 $ (1,231) $ (2,168) $ (3,241)
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Net income (loss) per share:
Basic .......................................................... $ 0.01 $ (0.05) $ (0.09) $ (0.14)
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Diluted ........................................................ $ 0.01 $ (0.05) $ (0.09) $ (0.14)
======== ======== ======== ========
Weighted average common shares:
Basic .......................................................... 25,293 23,002 25,310 22,701
======== ======== ======== ========
Diluted ........................................................ 25,983 23,002 25,310 22,701
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* Stock-based compensation amortization:
Cost of design-to-silicon yield solutions ..................... $ 2 $ 77 $ 39 $ 293
Research and development ...................................... 130 222 606 785
Selling, general and administrative ........................... 2 67 36 266
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$ 134 $ 366 $ 681 $ 1,344
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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
----------------------------
SEPTEMBER 30, SEPTEMBER 30,
2004 2003
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GAAP net income (loss) .................................. $ 135 $ (1,231)
Stock-based compensation amortization ................... 134 366
Amortization of intangibles, net of taxes ............... 1,226 397
Write-off of in-process research and development ........ -- 800
-------- --------
Non-GAAP net income ..................................... $ 1,495 $ 332
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Non-GAAP net income per share - diluted ................. $ 0.06 $ 0.01
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Weighted average common shares - diluted ................ 25,983 24,383
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USE OF NON-GAAP INFORMATION
In addition to providing results that are determined in accordance with
Generally Accepted Accounting Principles (GAAP), PDF also provides certain
Non-GAAP financial measures that exclude certain charges as additional
information relating to its operating results. PDF's 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 has also chosen to provide
this information to investors to enable them to perform meaningful comparisons
of PDF's 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 intangibles and the write-off of in-process
research and development.
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