PDF Solutions, Inc. (“PDF Solutions” or the “Company”)
(NASDAQ:PDFS), the leading provider of process-design integration
technologies to enhance integrated circuit (IC) manufacturability,
today announced financial results for its second fiscal quarter
ended June 30, 2016.
Total revenues for the second fiscal quarter of
2016 totaled $26.7 million, up 6% from $25.1 million for the first
fiscal quarter of 2016 and up 15% from $23.2 million for the second
fiscal quarter of 2015. Design-to-silicon-yield solutions revenue
for the second fiscal quarter of 2016 totaled $20.6 million, up 11%
from $18.6 million for the first fiscal quarter of 2016 and up 45%
from $14.2 million for the second fiscal quarter of 2015. Gainshare
performance incentives revenue for the second fiscal quarter of
2016 totaled $6.1 million, down 6% from $6.5 million for the first
fiscal quarter of 2016 and down 32% from $9.1 million for the
second fiscal quarter of 2015.
On a GAAP basis, net income for the second
fiscal quarter of 2016 was $2.2 million, or $0.07 per basic and
diluted share, compared to $2.1 million, or $0.07 per basic and
diluted share, for the first fiscal quarter of 2016, and compared
to $2.1 million, or $0.07 per basic and diluted share, for the
second fiscal quarter of 2015.
Cash and cash equivalents were $122.2 million at
June 30, 2016, compared to $126.2 million at December 31, 2015.
Non-GAAP net income for the second fiscal
quarter of 2016 was $5.3 million, or $0.17 per diluted share,
compared to $5.4 million, or $0.17 per diluted share, for the first
fiscal quarter of 2016, and compared to $5.9 million, or $0.18 per
diluted share, for the second fiscal quarter of 2015. EBITDAR for
the second quarter of 2016 was $7.1 million, compared to $6.8
million for the first fiscal quarter of 2016, and compared to $7.2
million for the second fiscal quarter of 2015.
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 non-recurring items, stock-based
compensation expenses, amortization of acquired technology and
other acquired intangible assets, 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 the effects of non-recurring items, stock-based
compensation expenses, amortization of acquired technology and
other acquired intangibles, 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 certain
non-recurring items) 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. For a more detailed
reconciliation of the adjustments made to comparable GAAP measures,
please refer the “GAAP to Non-GAAP and EBITDAR Reconciliation”
provided in the Investor Relations section of our website at
http://ir.pdf.com/sec.cfm.
Forward-Looking Statements
The statements made on the conference call
regarding PDF Solutions' financial results for its second fiscal
quarter ended June 30, 2016, including the success of any new
products, continued or increased adoption of the Company’s
solutions, and the Company's future expected financial results, are
forward looking and are subject to events and circumstances of the
future. Actual results could differ materially from those expressed
in these forward-looking statements. Risks and uncertainties that
could cause results to differ materially include risks associated
with: customers' production volumes at gainshare-covered
facilities; adoption of the Company's new and existing solutions by
new and existing customers; project milestones or delays and
performance criteria achieved; the provision of technology and
services prior to the execution of a final contract; and other
risks set forth in PDF Solutions' periodic public filings with the
Securities and Exchange Commission, including, without limitation,
its Annual Reports on Form 10-K, most recently filed for the year
ended December 31, 2015, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K and amendments to such reports. The
forward-looking statements made in the conference call are made as
of the date hereof, and PDF Solutions does not assume any
obligation to update such statements nor the reasons why actual
results could differ materially from those projected in such
statements.
About PDF Solutions
PDF Solutions enables customers to reduce the
time to market of integrated circuits (“ICs”), lower the cost of IC
design and manufacturing and improve profitability. The Company has
developed proprietary products and provides services that target
the entire Process Life Cycle, which is a term used to mean the
time from technology development and the design of an IC to volume
manufacturing of that IC to product assembly and test.
PDF Solutions’ products and services consist of
proprietary test structures and electrical test systems, physical
intellectual property, enterprise platform software and
professional services. The Company’s Characterization
Vehicle® (CV®) electrical test chip infrastructure provides
core modeling capabilities, and is used by more leading
manufacturers than any other test chips in the industry. The
Design-for-Inspection™ (DFI™) solution extends the Company’s
electrical characterization technologies into the e-beam
measurement of extremely dense test structures, or DFI cells,
across an entire fabrication process. Proprietary Template™ layout
patterns for standard cell libraries optimize area, performance,
and manufacturability for designing IC products. The Exensio™
platform for big data unlocks relevant, actionable information
buried in wafer fabrication, process control and test data. The
Exensio platform is available either on-premise or via software as
a service (SaaS).
Headquartered in San Jose, Calif., PDF Solutions
operates worldwide with additional offices in Canada, China,
France, Germany, Italy, Japan, Korea, and Taiwan. PDF Solutions is
listed on The NASDAQ National Market under the ticker symbol PDFS.
For the Company’s latest news and information, visit
http://www.pdf.com/.
Characterization Vehicle, CV, PDF Solutions, and
the PDF Solutions logo are registered trademarks of PDF Solutions,
Inc. or its subsidiaries. Design-for-Inspection, DFI, Exensio and
Template are trademarks of PDF Solutions, Inc. or its
subsidiaries.
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PDF SOLUTIONS,
INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
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|
December 31, |
|
|
|
|
|
|
2016 |
|
|
|
|
|
2015 |
|
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|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
|
$ |
|
122,222 |
|
|
|
$ |
|
126,158 |
|
Accounts
receivable, net |
|
|
|
|
|
34,786 |
|
|
|
|
|
33,438 |
|
Prepaid
expenses and other current assets |
|
|
|
|
|
4,728 |
|
|
|
|
|
3,655 |
|
Total
current assets |
|
|
|
|
|
161,736 |
|
|
|
|
|
163,251 |
|
Property and equipment,
net |
|
|
|
|
|
16,076 |
|
|
|
|
|
11,325 |
|
Deferred tax
assets |
|
|
|
|
|
10,106 |
|
|
|
|
|
10,299 |
|
Goodwill |
|
|
|
|
|
215 |
|
|
|
|
|
215 |
|
Intangible assets,
net |
|
|
|
|
|
4,603 |
|
|
|
|
|
5,028 |
|
Other non-current
assets |
|
|
|
|
|
9,497 |
|
|
|
|
|
1,651 |
|
Total
assets |
|
|
|
$ |
|
202,233 |
|
|
|
$ |
|
191,769 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
|
$ |
|
2,469 |
|
|
|
$ |
|
1,293 |
|
Accrued
compensation and related benefits |
|
|
|
|
|
5,150 |
|
|
|
|
|
4,812 |
|
Accrued
and other current liabilities |
|
|
|
|
|
2,924 |
|
|
|
|
|
2,382 |
|
Deferred
revenues - current portion |
|
|
|
|
|
5,740 |
|
|
|
|
|
4,702 |
|
Billings
in excess of recognized revenue |
|
|
|
|
|
312 |
|
|
|
|
|
1,267 |
|
Total
current liabilities |
|
|
|
|
|
16,595 |
|
|
|
|
|
14,456 |
|
Long-term income taxes
payable |
|
|
|
|
|
2,594 |
|
|
|
|
|
2,540 |
|
Other non-current
liabilities |
|
|
|
|
|
328 |
|
|
|
|
|
466 |
|
Total
liabilities |
|
|
|
|
|
19,517 |
|
|
|
|
|
17,462 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
|
Common
stock and additional paid-in-capital |
|
|
|
|
|
272,891 |
|
|
|
|
|
266,013 |
|
Treasury
stock at cost |
|
|
|
|
|
(53,301 |
) |
|
|
|
|
(50,383 |
) |
Accumulated deficit |
|
|
|
|
|
(35,504 |
) |
|
|
|
|
(39,780 |
) |
Accumulated other comprehensive loss |
|
|
|
|
|
(1,370 |
) |
|
|
|
|
(1,543 |
) |
Total
stockholders’ equity |
|
|
|
|
|
182,716 |
|
|
|
|
|
174,307 |
|
Total
liabilities and stockholders’ equity |
|
|
|
$ |
|
202,233 |
|
|
|
$ |
|
191,769 |
|
|
|
|
|
|
|
|
|
|
|
PDF SOLUTIONS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) |
(In thousands, except per share amounts) |
|
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|
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|
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|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
June 30, |
|
June 30, |
|
|
|
2016 |
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Design-to-silicon-yield solutions |
|
|
$ |
|
20,574 |
|
|
$ |
|
18,578 |
|
|
$ |
14,159 |
|
$ |
|
39,152 |
|
|
$ |
32,311 |
Gainshare
performance incentives |
|
|
|
|
6,114 |
|
|
|
|
6,503 |
|
|
|
9,051 |
|
|
|
12,617 |
|
|
|
17,716 |
Total
revenues |
|
|
|
|
26,688 |
|
|
|
|
25,081 |
|
|
|
23,210 |
|
|
|
51,769 |
|
|
|
50,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of
Design-to-silicon-yield solutions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
costs of Design-to-silicon-yield solutions |
|
|
|
|
10,558 |
|
|
|
|
10,110 |
|
|
|
9,888 |
|
|
|
20,668 |
|
|
|
18,692 |
Amortization of acquired technology |
|
|
|
|
96 |
|
|
|
|
96 |
|
|
|
- |
|
|
|
192 |
|
|
|
- |
Total
costs of Design-to-silicon-yield solutions |
|
|
|
|
10,654 |
|
|
|
|
10,206 |
|
|
|
9,888 |
|
|
|
20,860 |
|
|
|
18,692 |
Gross profit |
|
|
|
|
16,034 |
|
|
|
|
14,875 |
|
|
|
13,322 |
|
|
|
30,909 |
|
|
|
31,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
|
|
7,060 |
|
|
|
|
6,311 |
|
|
|
4,437 |
|
|
|
13,371 |
|
|
|
8,525 |
Selling,
general and administrative |
|
|
|
|
5,094 |
|
|
|
|
5,124 |
|
|
|
5,216 |
|
|
|
10,218 |
|
|
|
9,672 |
Amortization of other acquired intangible assets |
|
|
|
|
117 |
|
|
|
|
117 |
|
|
|
- |
|
|
|
234 |
|
|
|
- |
Total
operating expenses |
|
|
|
|
12,271 |
|
|
|
|
11,552 |
|
|
|
9,653 |
|
|
|
23,823 |
|
|
|
18,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
|
|
3,763 |
|
|
|
|
3,323 |
|
|
|
3,669 |
|
|
|
7,086 |
|
|
|
13,138 |
Interest and other
income (expense), net |
|
|
|
|
(51 |
) |
|
|
|
(236 |
) |
|
|
52 |
|
|
|
(287 |
) |
|
|
103 |
Income before income
taxes |
|
|
|
|
3,712 |
|
|
|
|
3,087 |
|
|
|
3,721 |
|
|
|
6,799 |
|
|
|
13,241 |
Income tax
provision |
|
|
|
|
1,498 |
|
|
|
|
1,025 |
|
|
|
1,572 |
|
|
|
2,523 |
|
|
|
5,125 |
Net income |
|
|
$ |
|
2,214 |
|
|
$ |
|
2,062 |
|
|
$ |
2,149 |
|
|
|
4,276 |
|
|
|
8,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
|
0.07 |
|
|
$ |
|
0.07 |
|
|
$ |
0.07 |
|
|
|
0.14 |
|
|
|
0.26 |
Diluted |
|
|
$ |
|
0.07 |
|
|
$ |
|
0.07 |
|
|
$ |
0.07 |
|
|
|
0.13 |
|
|
|
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
31,276 |
|
|
|
|
31,168 |
|
|
|
31,522 |
|
|
|
31,222 |
|
|
|
31,429 |
Diluted |
|
|
|
|
32,023 |
|
|
|
|
31,722 |
|
|
|
32,400 |
|
|
|
31,872 |
|
|
|
32,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PDF SOLUTIONS, INC. |
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
(UNAUDITED) |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
June 30, |
|
June 30, |
2016 |
|
2016 |
|
2015 |
|
|
2016 |
2015 |
GAAP net income |
|
|
$ |
2,214 |
|
$ |
2,062 |
|
$ |
2,149 |
|
$ |
4,276 |
|
|
$ |
|
8,116 |
|
Adjustments to reconcile
GAAP net income to non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
|
2,291 |
|
|
2,666 |
|
|
2,355 |
|
|
4,957 |
|
|
|
|
4,554 |
|
Previously impaired
deferred costs (1) |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
(1,892 |
) |
Amortization of
acquired technology |
|
|
|
96 |
|
|
96 |
|
|
- |
|
|
192 |
|
|
|
|
- |
|
Amortization of other
acquired intangible assets |
|
|
|
117 |
|
|
117 |
|
|
- |
|
|
234 |
|
|
|
|
- |
|
Acquisition costs
(2) |
|
|
|
- |
|
|
- |
|
|
482 |
|
|
- |
|
|
|
|
482 |
|
Acquisition related
deferred revenue adjustment (2) |
|
|
|
50 |
|
|
115 |
|
|
- |
|
|
165 |
|
|
|
|
- |
|
Non-cash portion of
income tax expense |
|
|
|
528 |
|
|
299 |
|
|
882 |
|
|
827 |
|
|
|
|
2,845 |
|
Non-GAAP
net income |
|
|
$ |
5,296 |
|
$ |
5,355 |
|
$ |
5,868 |
|
$ |
10,651 |
|
|
$ |
|
14,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income per
diluted share |
|
|
$ |
0.07 |
|
$ |
0.07 |
|
$ |
0.07 |
|
$ |
0.13 |
|
|
$ |
|
0.25 |
|
Non-GAAP net income per
diluted share |
|
|
$ |
0.17 |
|
$ |
0.17 |
|
$ |
0.18 |
|
$ |
0.33 |
|
|
$ |
|
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in diluted
shares calculation |
|
|
|
32,023 |
|
|
31,722 |
|
|
32,400 |
|
|
31,872 |
|
|
|
|
32,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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PDF SOLUTIONS, INC. |
RECONCILIATION OF GAAP NET INCOME TO EBITDAR
(UNAUDITED) |
(In thousands, except per share
amounts) |
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Three months ended |
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Six months ended |
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June 30, |
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March 31, |
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June 30, |
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June 30, |
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June 30, |
2016 |
2016 |
2015 |
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2016 |
2015 |
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GAAP net income |
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$ |
2,214 |
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$ |
2,062 |
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$ |
2,149 |
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$ |
4,276 |
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$ |
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8,116 |
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Adjustments to reconcile
GAAP net income to EBITDAR: |
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Stock-based
compensation expense |
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2,291 |
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2,666 |
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2,355 |
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4,957 |
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4,554 |
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Previously impaired
deferred costs (1) |
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- |
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- |
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- |
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- |
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(1,892 |
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Amortization of
acquired technology |
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96 |
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96 |
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- |
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192 |
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- |
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Amortization of other
acquired intangible assets |
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117 |
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117 |
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- |
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234 |
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- |
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Acquisition costs
(2) |
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- |
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- |
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482 |
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- |
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482 |
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Acquisition related
deferred revenue adjustment (2) |
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50 |
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115 |
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- |
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165 |
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- |
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Depreciation
expense |
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859 |
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765 |
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632 |
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1,624 |
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1,237 |
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Income tax
provision |
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1,498 |
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1,025 |
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1,572 |
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2,523 |
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5,125 |
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EBITDAR |
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$ |
7,125 |
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$ |
6,846 |
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$ |
7,190 |
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$ |
13,971 |
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$ |
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17,622 |
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(1) As announced on September 29, 2014, we were unable to
close two Design-to-silicon-yield solutions contracts, which
restricted our ability to book revenue relating to work on these
projects and required us to impair previously deferred costs
of $1.9 million in the three months ended September 30, 2014.
As reported on January 7, 2015, in the three months ended March 31,
2015, we executed those two contacts, which increased our
Design-to-Silicon-Yield Solutions revenue in the quarter by
approximately $6.0 million. Reinstatement of previously impaired
costs is not allowed under US GAAP. Accordingly, in order to match
the revenue and the cost associated with these two contracts,
management has included these costs in the current period as a
non-GAAP reconciling item. |
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(2) As announced on July 20, 2015, the Company completed the
acquisition of Syntricity, Inc., the industry leading hosted
solution for characterization and yield management. In relation to
this acquisition, the company incurred direct acquisition costs and
recorded an adjustment to reduce revenue recognized from deferred
revenue arising from the acquisition. Accordingly, for
non-GAAP purposes, the Company is excluding these expenses and the
reduction to revenue in order to provide better comparability
between periods. |
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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
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