PDF Solutions, Inc. (“PDF Solutions” or the “Company”) (NASDAQ:
PDFS), a leading provider of differentiated data and analytics
solutions to the semiconductor and electronics industries, today
announced financial results for its second quarter ended June 30,
2020.
Highlights of Second Quarter 2020
Financial Results
Total revenues for the second quarter of 2020
were $21.4 million, compared to $21.2 million for the first quarter
of 2020 and $20.6 million for the second quarter of 2019. Analytics
revenue for the second quarter of 2020 was $15.2 million, compared
to $13.2 million for the first quarter of 2020 and $12.0 million
for the second quarter of 2019. Integrated Yield Ramp revenue
for the second quarter of 2020 was $6.2 million, compared to $7.9
million for the first quarter of 2020 and $8.6 million for the
second quarter of 2019.
GAAP gross margin for the second quarter of 2020
was 58%, compared to 60% for the first quarter of 2020 and 62% for
the second quarter of 2019.
Non-GAAP gross margin for the second quarter of
2020 was 63%, compared to 65% for the first quarter of 2020 and 67%
for the second quarter of 2019.
On a GAAP basis, net loss for the second quarter
of 2020 was $3.7 million, or ($0.11) per basic and diluted share,
compared to a net loss of $0.5 million, or ($0.02) per basic and
diluted share, for the first quarter of 2020, and compared to a net
loss of $0.7 million, or ($0.02) per basic and diluted share, for
the second quarter of 2019.
Non-GAAP net income for the second quarter of
2020 was $0.5 million, or $0.01 per diluted share, compared to a
net loss of $0.1 million, or ($0.00) per diluted share, for the
first quarter of 2020, and compared to net income of $1.0 million,
or $0.03 per diluted share, for the second quarter of 2019.
Cash and cash equivalents at June 30, 2020, were
$103.4 million, compared to $97.6 million at December 31, 2019, an
increase of $5.8 million. Operating activities generated $5.2
million in cash during the second quarter of 2020.
Conference Call
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 webcast on PDF Solutions’ website at
http://ir.pdf.com/webcasts. A replay of the webcast 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.
Second Quarter 2020 Financial Commentary
Available Online
A Management Report reviewing the Company’s
second quarter of 2020 financial results will be furnished to the
SEC on Form 8-K and published on the Company’s website at
http://ir.pdf.com/financial-reports. Analysts and investors are
encouraged to review this commentary prior to participating in the
conference call. Information Regarding Use of
Non-GAAP Financial MeasuresIn 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 (loss) excludes the effects of non-recurring
items (including restructuring charges and severance payments, and
expenses related to an arbitration proceeding for a disputed
contract with a customer), write-down in value of property and
equipment, stock-based compensation expense, amortization of
acquired technology and other acquired intangible assets, and their
related income tax effects, as applicable, as well as adjustments
for the non-cash portion of income taxes and tax impact of the
CARES Act. 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 information 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 differ 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.
Forward-Looking StatementsThe statements
planned to be made on the planned conference call regarding the
Company’s future expected business performance and financial
results and the Company’s recent strategic agreement with Advantest
are forward looking and are subject to future events and
circumstances. 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 under
contracts that provide Gainshare royalties, cost and schedule of
new product development; continued adoption of the Company’s
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,
the potential impact of the coronavirus (COVID-19) on the
semiconductor industry and on the Company’s operations or demand
for the Company’s products; the Company’s strategic partnerships;
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, 2019, 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 SolutionsPDF Solutions (NASDAQ: PDFS)
offers an end-to-end analytics platform that empowers engineers and
data scientists across the semiconductor ecosystem to rapidly
improve the yield, quality, and profitability of their products. By
combining industry-leading data analytics and professional services
with exclusive, differentiated product data generated during the
manufacturing process, PDF Solutions is delivering on the promise
of Industry 4.0 today by transforming how the ecosystem collects,
analyzes, and shares data. Key Fortune 500 organizations around the
world rely on PDF Solutions to remove the data barriers that
encumber and constrain new product introductions and to deliver the
machine learning insights that drive efficient and profitable
high-volume manufacturing.
Headquartered in Santa Clara, California, PDF
Solutions also operates worldwide in Canada, China, France,
Germany, Italy, Japan, Korea, and Taiwan. For the Company’s latest
news and information, visit http://www.pdf.com/.
Characterization Vehicle, Design-for-Inspection,
DFI, Exensio, PDF Solutions, and the PDF Solutions logo are
trademarks or registered trademarks of PDF Solutions, Inc. or its
subsidiaries.
|
|
PDF
SOLUTIONS, INC. |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|
(In
thousands) |
|
|
|
|
|
June 30,2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
103,441 |
|
|
$ |
97,605 |
|
Accounts receivable, net |
|
|
28,666 |
|
|
|
40,651 |
|
Prepaid expenses and other current assets |
|
|
8,627 |
|
|
|
9,320 |
|
Total current assets |
|
|
140,734 |
|
|
|
147,576 |
|
Property and equipment,
net |
|
|
40,412 |
|
|
|
40,798 |
|
Operating lease right-of-use
assets, net |
|
|
7,056 |
|
|
|
7,609 |
|
Goodwill |
|
|
2,293 |
|
|
|
2,293 |
|
Intangible assets, net |
|
|
5,586 |
|
|
|
6,221 |
|
Deferred tax assets, net |
|
|
29,522 |
|
|
|
25,327 |
|
Other non-current assets |
|
|
8,093 |
|
|
|
9,720 |
|
Total assets |
|
$ |
233,696 |
|
|
$ |
239,544 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,763 |
|
|
$ |
7,636 |
|
Accrued compensation and related benefits |
|
|
5,285 |
|
|
|
5,072 |
|
Accrued and other current liabilities |
|
|
1,368 |
|
|
|
1,665 |
|
Operating lease liabilities ‒ current portion |
|
|
1,880 |
|
|
|
1,867 |
|
Deferred revenues ‒ current portion |
|
|
10,087 |
|
|
|
10,639 |
|
Billings in excess of recognized revenues |
|
|
497 |
|
|
|
1,117 |
|
Total current liabilities |
|
|
21,880 |
|
|
|
27,996 |
|
Long-term income taxes
payable |
|
|
5,264 |
|
|
|
5,368 |
|
Non-current operating lease
liabilities |
|
|
7,033 |
|
|
|
7,677 |
|
Other non-current
liabilities |
|
|
1,814 |
|
|
|
2,346 |
|
Total liabilities |
|
|
35,991 |
|
|
|
43,387 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock and additional
paid-in-capital |
|
$ |
333,162 |
|
|
$ |
325,202 |
|
Treasury stock at cost |
|
|
(93,968 |
) |
|
|
(91,695 |
) |
Accumulated deficit |
|
|
(40,050 |
) |
|
|
(35,870 |
) |
Accumulated other
comprehensive loss |
|
|
(1,439 |
) |
|
|
(1,480 |
) |
Total stockholders’ equity |
|
|
197,705 |
|
|
|
196,157 |
|
Total liabilities and stockholders’ equity |
|
$ |
233,696 |
|
|
$ |
239,544 |
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 (1) |
|
|
2020 |
|
|
2019 (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytics |
|
$ |
15,172 |
|
|
$ |
13,248 |
|
|
$ |
11,974 |
|
|
$ |
28,420 |
|
|
$ |
23,408 |
|
Integrated yield ramp |
|
|
6,237 |
|
|
|
7,910 |
|
|
|
8,594 |
|
|
|
14,147 |
|
|
|
17,701 |
|
Total revenues |
|
|
21,409 |
|
|
|
21,158 |
|
|
|
20,568 |
|
|
|
42,567 |
|
|
|
41,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of revenues |
|
|
8,946 |
|
|
|
8,487 |
|
|
|
7,832 |
|
|
|
17,433 |
|
|
|
15,700 |
|
Research and development |
|
|
7,754 |
|
|
|
8,590 |
|
|
|
7,312 |
|
|
|
16,344 |
|
|
|
15,558 |
|
Selling, general and administrative |
|
|
7,737 |
|
|
|
7,895 |
|
|
|
6,940 |
|
|
|
15,632 |
|
|
|
13,950 |
|
Amortization of other acquired intangible assets |
|
|
174 |
|
|
|
173 |
|
|
|
154 |
|
|
|
347 |
|
|
|
262 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
92 |
|
Interest and other expense (income), net |
|
|
150 |
|
|
|
20 |
|
|
|
(111 |
) |
|
|
170 |
|
|
|
(105 |
) |
Loss before income taxes |
|
|
(3,352 |
) |
|
|
(4,007 |
) |
|
|
(1,559 |
) |
|
|
(7,359 |
) |
|
|
(4,348 |
) |
Income tax expense
(benefit) |
|
|
300 |
|
|
|
(3,479 |
) |
|
|
(849 |
) |
|
|
(3,179 |
) |
|
|
(947 |
) |
Net loss |
|
$ |
(3,652 |
) |
|
$ |
(528 |
) |
|
$ |
(710 |
) |
|
$ |
(4,180 |
) |
|
$ |
(3,401 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.11 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
32,886 |
|
|
|
32,703 |
|
|
|
32,339 |
|
|
|
32,795 |
|
|
|
32,412 |
|
Diluted |
|
|
32,886 |
|
|
|
32,703 |
|
|
|
32,339 |
|
|
|
32,795 |
|
|
|
32,412 |
|
_______________________
(1) In the fourth quarter of 2019, in
order to improve the transparency of the Company’s revenue
reporting, the Company updated its Condensed Consolidated
Statements of Comprehensive Loss to change its historical
presentation of revenue categories. Previously, the Company
presented revenue on two lines: Solutions and Gainshare performance
incentives. Included within Solutions, was revenue from
software and related revenue, SaaS solutions, Design-for-Inspection
(DFI™) licenses, and fixed-price project-based solution
implementation services. The previous Gainshare performance
incentive category included only revenue from performance incentive
programs. The Company now presents revenue in the following
categories: Analytics and Integrated Yield Ramp. Integrated
Yield Ramp revenue is comprised of all revenue from
the Company’s Integrated Yield Ramp services engagements that
include performance incentives based on customers’ yield
achievement, i.e. both fixed-fees and Gainshare royalty from
such engagements. Analytics comprises all other revenue, including
from the Company’s licenses and services for Exensio
Software, Exensio SaaS, DFI™ and Characterization Vehicle systems
that do not include performance incentives based on
customers’ yield achievement. This prior period presentation
had been reclassified to conform to the new revenue
presentation.
PDF SOLUTIONS, INC.RECONCILIATION OF
GAAP TO NON-GAAP GROSS MARGIN (UNAUDITED)(In
thousands)
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
21,409 |
|
|
$ |
21,158 |
|
|
$ |
20,568 |
|
|
$ |
42,567 |
|
|
$ |
41,109 |
|
Costs of revenues |
|
|
8,946 |
|
|
|
8,487 |
|
|
|
7,832 |
|
|
|
17,433 |
|
|
|
15,700 |
|
GAAP gross profit |
|
$ |
12,463 |
|
|
$ |
12,671 |
|
|
$ |
12,736 |
|
|
$ |
25,134 |
|
|
$ |
25,409 |
|
GAAP gross margin |
|
|
58 |
% |
|
|
60 |
% |
|
|
62 |
% |
|
|
59 |
% |
|
|
62 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
12,463 |
|
|
$ |
12,671 |
|
|
$ |
12,736 |
|
|
$ |
25,134 |
|
|
$ |
25,409 |
|
Adjustments to reconcile GAAP
to non-GAAP gross margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
883 |
|
|
|
909 |
|
|
|
799 |
|
|
|
1,792 |
|
|
|
1,659 |
|
Amortization of acquired technology |
|
|
143 |
|
|
|
144 |
|
|
|
143 |
|
|
|
287 |
|
|
|
287 |
|
Non-GAAP gross profit |
|
$ |
13,489 |
|
|
$ |
13,724 |
|
|
$ |
13,678 |
|
|
$ |
27,213 |
|
|
$ |
27,355 |
|
Non-GAAP gross margin |
|
|
63 |
% |
|
|
65 |
% |
|
|
67 |
% |
|
|
64 |
% |
|
|
67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
GAAP net loss |
|
$ |
(3,652 |
) |
|
$ |
(528 |
) |
|
$ |
(710 |
) |
|
$ |
(4,180 |
) |
|
$ |
(3,401 |
) |
Adjustments to reconcile GAAP
net loss to non-GAAP net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense |
|
|
2,978 |
|
|
|
3,368 |
|
|
|
2,434 |
|
|
|
6,346 |
|
|
|
5,910 |
|
Amortization of acquired
technology |
|
|
143 |
|
|
|
144 |
|
|
|
143 |
|
|
|
287 |
|
|
|
287 |
|
Amortization of other acquired
intangible assets |
|
|
174 |
|
|
|
173 |
|
|
|
154 |
|
|
|
347 |
|
|
|
262 |
|
Expenses of arbitration
(1) |
|
|
363 |
|
|
|
101 |
|
|
|
— |
|
|
|
464 |
|
|
|
— |
|
Write-down in value of
property and equipment |
|
|
311 |
|
|
|
— |
|
|
|
— |
|
|
|
311 |
|
|
|
— |
|
Restructuring charges and
severance payments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
92 |
|
Tax impact of adjustments |
|
|
167 |
|
|
|
(1,143 |
) |
|
|
(993 |
) |
|
|
(976 |
) |
|
|
(1,280 |
) |
Tax impact of the CARES Act
(2) |
|
|
— |
|
|
|
(2,261 |
) |
|
|
— |
|
|
|
(2,261 |
) |
|
|
— |
|
Non-GAAP net income (loss) |
|
$ |
484 |
|
|
$ |
(146 |
) |
|
$ |
1,028 |
|
|
$ |
338 |
|
|
$ |
1,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per diluted
share |
|
$ |
(0.11 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
Non-GAAP net income (loss) per
diluted share |
|
$ |
0.01 |
|
|
$ |
(0.00 |
) |
|
$ |
0.03 |
|
|
$ |
0.01 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in diluted shares
calculation |
|
|
33,874 |
|
|
|
32,703 |
|
|
|
33,055 |
|
|
|
33,718 |
|
|
|
33,038 |
|
______________________
(1) Represents the expenses related to an arbitration
proceeding over a disputed contract with a customer, which expenses
are expected to continue until the arbitration is
resolved.
(2) Represents the discrete tax
benefit recognized from the carryback of net operating losses
(NOLs) under the Coronavirus Aid, Relief, and Economic Security Act
(the “CARES Act”) enacted in March 2020. The Company does not
have any NOLs on a non-GAAP basis and, therefore, it did not
recognize this discrete tax benefit in calculating its non-GAAP tax
expense and net income (loss).
|
|
|
Company Contacts: |
|
|
Adnan Raza |
Sonia Segovia |
Joe Diaz, Robert Blum, Joe Dorame |
Chief Financial Officer |
IR Coordinator |
Lytham Partners, LLC |
Tel: (408) 516-0237 |
Tel: (408) 938-6491 |
Tel: (602) 889-9700 |
Email: adnan.raza@pdf.com |
Email: sonia.segovia@pdf.com |
Email: pdfs@lythampartners.com |
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