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CST: 19/11/2019 17:17:50   

PDF Solutions® Reports Third Fiscal Quarter Results

19 Days ago

SANTA CLARA, Calif., Oct. 31, 2019 (GLOBE NEWSWIRE) -- 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 third fiscal quarter ended September 30, 2019.

Highlights of Third Fiscal Quarter 2019 Financial Results

Total revenues for the third fiscal quarter of 2019 were $21.9 million, compared to $20.6 million for the second fiscal quarter of 2019 and $20.2 million for the third fiscal quarter of 2018. Solutions revenue for the third fiscal quarter of 2019 was $16.2 million, compared to $13.4 million for the second fiscal quarter of 2019 and $14.0 million for the third fiscal quarter of 2018. “With more than 50% of total Solutions revenue in the third quarter coming from analytics-based deals and another strong bookings quarter of primarily analytics-based deals, PDF Solutions continues its strategic evolution to be the provider of choice for end-to-end analytics and manufacturing controls to the semiconductor and electronics industry,” said John Kibarian, Chief Executive Officer and President of the company.

Gainshare performance incentives revenue for the third fiscal quarter of 2019 was $5.7 million, compared to $7.1 million for the second fiscal quarter of 2019 and $6.2 million for the third fiscal quarter of 2018.

Third fiscal quarter 2019 gross margin of 60%, an improvement from 47% in the third fiscal quarter of 2018, was due primarily to higher Solutions revenue and lower headcount, primarily related to reductions in our yield ramp engagements as we focus on our analytics opportunities.

On a GAAP basis, net loss for the third fiscal quarter of 2019 was $0.7 million, or ($0.02) per basic and diluted share, compared to net loss of $0.7 million, or ($0.02) per basic and diluted share, for the second fiscal quarter of 2019, and compared to net loss of $2.1 million, or ($0.06) per basic and diluted share, for the third fiscal quarter of 2018.

Non-GAAP net income for the third fiscal quarter of 2019 was $1.6 million, or $0.05 per diluted share, compared to net income of $1.0 million, or $0.03 per diluted share, for the second fiscal quarter of 2019, and compared to net income of $0.2 million, or $0.01 per diluted share, for the third fiscal quarter of 2018.

Cash and cash equivalents at September 30, 2019, were $100.3 million, compared to $96.1 million at December 31, 2018, an increase of $4.2 million. Operating activities generated $23.0 million in cash during the nine months ended September 30, 2019, in part due to the collection of a significant amount of long-outstanding accounts receivables during the third quarter of fiscal 2019.

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 web cast on PDF Solutions’ website at http://ir.pdf.com/webcasts. 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.

Third Fiscal Quarter 2019 Financial Commentary Available Online

A Management Report reviewing the Company’s third fiscal quarter 2019 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 webcast.

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 (including adjustment to contingent consideration related to acquisition, restructuring charges and severance payments), stock-based compensation expense, 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. 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 Statements

The statements made in this press release and on the planned conference call regarding the Company’s future expected business performance and financial results 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; 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, 2018, 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 (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/.

CV, Exensio, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries. DFI is a trademark of PDF Solutions, Inc. or its subsidiaries.

PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)

    September 30,
    December 31,
 
    2019     2018  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 100,259     $ 96,089  
Accounts receivable, net     34,556       51,570  
Prepaid expenses and other current assets     8,026       9,562  
Total current assets     142,841       157,221  
Property and equipment, net     38,969       35,681  
Operating lease right-of-use assets, net     7,581        
Goodwill     2,293       1,923  
Intangible assets, net     6,538       5,064  
Deferred tax assets     23,100       19,044  
Other non-current assets     8,025       6,972  
Total assets   $ 229,347     $ 225,905  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 2,203     $ 2,454  
Accrued compensation and related benefits     4,313       4,727  
Accrued and other current liabilities     2,452       3,235  
Operating lease liabilities - current portion     1,826        
Deferred revenues - current portion     8,612       8,477  
Billings in excess of recognized revenues     1,219       635  
Total current liabilities     20,625       19,528  
Long-term income taxes payable     3,565       3,751  
Non-current operating lease liabilities     7,726        
Other non-current liabilities     2,444       2,831  
Total liabilities     34,360       26,110  
                 
Stockholders’ equity:                
Common stock and additional paid-in-capital     322,188       310,665  
Treasury stock at cost     (90,908 )     (79,142 )
Accumulated deficit     (34,540 )     (30,452 )
Accumulated other comprehensive loss     (1,753 )     (1,276 )
Total stockholders’ equity     194,987       199,795  
Total liabilities and stockholders’ equity   $ 229,347     $ 225,905  
                 

 

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,  
    2019     2019     2018     2019     2018  
                                         
Revenues:                                        
Solutions   $ 16,208     $ 13,429     $ 13,976     $ 46,298     $ 47,431  
Gainshare performance incentives     5,706       7,139       6,237       16,725       18,638  
Total revenues     21,914       20,568       20,213       63,023       66,069  
                                         
Cost of Solutions:                                        
Direct costs of solutions     8,571       7,689       10,539       23,984       32,651  
Amortization of acquired technology     144       143       144       431       431  
Total cost of solutions     8,715       7,832       10,683       24,415       33,082  
Gross profit     13,199       12,736       9,530       38,608       32,987  
                                         
Operating expenses:                                        
Research and development     8,435       7,312       6,755       23,993       21,100  
Selling, general and administrative     5,990       6,940       5,507       19,940       17,801  
Amortization of other acquired intangible assets     174       154       108       436       326  
Restructuring charges                       92        
Total operating expenses     14,599       14,406       12,370       44,461       39,227  
                                         
Loss from operations     (1,400 )     (1,670 )     (2,840 )     (5,853 )     (6,240 )
Interest and other income (expense), net     202       111       223       307       283  
Loss before income taxes     (1,198 )     (1,559 )     (2,617 )     (5,546 )     (5,957 )
Income tax benefit     (511 )     (849 )     (535 )     (1,458 )     (1,355 )
Net loss   $ (687 )   $ (710 )   $ (2,082 )   $ (4,088 )   $ (4,602 )
                                         
Net loss per share:                                        
Basic   $ (0.02 )   $ (0.02 )   $ (0.06 )   $ (0.13 )   $ (0.14 )
Diluted   $ (0.02 )   $ (0.02 )   $ (0.06 )   $ (0.13 )   $ (0.14 )
                                         
Weighted average common shares:                                        
Basic     32,392       32,339       32,184       32,405       32,105  
Diluted     32,392       32,339       32,184       32,405       32,105  

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,  
    2019     2019     2018     2019     2018  
GAAP net loss   $ (687 )   $ (710 )   $ (2,082 )   $ (4,088 )   $ (4,602 )
Adjustments to reconcile GAAP net loss to non-GAAP net income:                                        
Stock-based compensation expense     2,732       2,434       2,268       8,642       7,825  
Amortization of acquired technology     144       143       144       431       431  
Amortization of other acquired intangible assets     174       154       108       436       326  
Adjustment to contingent consideration related to acquisition     30                   30        
Restructuring charges and severance payments                 48       92       331  
Tax impact of adjustments     (805 )     (993 )     (281 )     (2,085 )     (1,124 )
Non-GAAP net income   $ 1,588     $ 1,028     $ 205     $ 3,458     $ 3,187  
                                         
GAAP net loss per diluted share   $ (0.02 )   $ (0.02 )   $ (0.06 )   $ (0.13 )   $ (0.14 )
Non-GAAP net income per diluted share   $ 0.05     $ 0.03     $ 0.01     $ 0.10     $ 0.10  
                                         
Shares used in diluted shares calculation     32,997       33,055       32,385       33,025       32,444  
                                         


Company Contacts:    
Christine Russell Sonia Segovia Joe Diaz, Robert Blum, Joe Dorame
Chief Financial Officer IR Coordinator Lytham Partners, LLC
Tel: (408) 938-6466 Tel: (408) 938-6491 Tel: (602) 889-9700
Email: christine.russell@pdf.com  Email: sonia.segovia@pdf.com  Email: pdfs@lythampartners.com 

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