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CST: 23/03/2019 22:08:59   

PDF Solutions Reports Fourth Fiscal Quarter and Fiscal Year 2018 Results

37 Days ago

SANTA CLARA, Calif., Feb. 14, 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 fourth fiscal quarter and fiscal year ended December 31, 2018.

Total revenues for the fourth fiscal quarter of 2018 were $19.7 million, down 2% from $20.2 million for the third fiscal quarter of 2018 and down 26% from $26.8 million for the fourth fiscal quarter of 2017. Design-to-silicon-yield solutions revenue for the fourth fiscal quarter of 2018 was $12.6 million, down 9% from $14.0 million for the third fiscal quarter of 2018 and down 33% from $19.0 million for the fourth fiscal quarter of 2017. Gainshare performance incentives revenue for the fourth fiscal quarter of 2018 was $7.1 million, up 13% from $6.2 million for the third fiscal quarter of 2018 and down 9% from $7.8 million for the fourth quarter of 2017.

Total revenues for the fiscal year ended December 31, 2018, were $85.8 million, down 16% when compared with total revenues of $101.9 million for the fiscal year ended December 31, 2017. Design-to-silicon-yield solutions revenue for the fiscal year ended December 31, 2018, was $60.1 million, down 19% when compared with Design-to-silicon-yield solutions revenues of $74.4 million for the fiscal year ended December 31, 2017. Gainshare performance incentives revenue for the fiscal year ended December 31, 2018, was $25.7 million, down 6% when compared with Gainshare performance incentives revenue of $27.4 million for the fiscal year ended December 31, 2017. 

On a GAAP basis, net loss for the fourth fiscal quarter of 2018 was $3.1 million, or $(0.10) per basic and diluted share, compared to net loss of $2.1 million, or $(0.06) per basic and diluted share, for the third fiscal quarter of 2018, and compared to net loss of $2.6 million, or $(0.08) per basic and diluted share, for the fourth fiscal quarter of 2017. Net loss for the fiscal year ended December 31, 2018, was $7.7 million, or $(0.24) per basic and diluted share, compared to net loss of $1.3 million, or $(0.04) per basic and diluted share, for the fiscal year ended December 31, 2017.

Cash and cash equivalents at December 31, 2018, were $96.1 million, compared to $101.3 million at December 31, 2017.

Non-GAAP net loss for the fourth fiscal quarter of 2018 was $0.4 million, or $(0.01) per diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, for the third fiscal quarter of 2018, and compared to net income of $4.2 million, or $0.13 per diluted share, for the fourth fiscal quarter of 2017. Non-GAAP net income for the fiscal year ended December 31, 2018, was $2.8 million, or $0.09 per diluted share, compared to non-GAAP net income of $13.0 million, or $0.39 per diluted share, for the fiscal year ended December 31, 2017.

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.

Recent Accomplishments

  • Commercial deployment of the 2nd generation of the Company’s DFI™ solution with high-density electrical metrology at a major Asian foundry
  • Early renewal of a contract for Exensio® Yield and Control with CV® infrastructure at a Top-5 Japanese semiconductor company with a multi-million dollar increase in the total contract value
  • Execution of a multi-million dollar Exensio® Control contract with professional services at a leading integrated device manufacturer
  • Further gains into China’s ecosystem with a multi-million dollar Exensio® Yield contract and professional services at a major foundry

Fourth Quarter and Fiscal Year 2018 Financial Commentary Available Online

A Management Report reviewing the Company’s fourth quarter and fiscal year 2018 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 (loss) excludes the effects of non-recurring items (including severance payments, restructuring charges, write-down in value of property and equipment, and adjustment to contingent consideration related to acquisition), 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 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 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; the impact of ASC 606; 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, 2017, 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/.

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.

 

             
PDF SOLUTIONS, INC.           
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)           
(In thousands)           
             
    December 31,  
  2018       2017  
             
ASSETS            
Current assets:            
Cash and cash equivalents  $   96,089       $   101,267  
Accounts receivable, net      51,570           57,564  
Prepaid expenses and other current assets      9,562           5,069  
Total current assets      157,221           163,900  
Property and equipment, net      35,681           25,386  
Goodwill     1,923           1,923  
Intangible assets, net     5,064           6,074  
Deferred tax assets     19,044           16,348  
Other non-current assets      6,972           10,545  
Total assets  $   225,905       $   224,176  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities:            
Accounts payable  $   2,454       $   2,536  
Accrued compensation and related benefits      4,727           6,493  
Accrued and other current liabilities      3,235           2,627  
Deferred revenues - current portion     8,477           7,981  
Billings in excess of recognized revenues     635           —   
Total current liabilities      19,528           19,637  
Long-term income taxes payable     3,751           3,902  
Other non-current liabilities     2,831           2,269  
Total liabilities      26,110           25,808  
             
Stockholders’ equity:            
Common stock and additional paid-in-capital     310,665           297,955  
Treasury stock at cost      (79,142 )         (71,793 )
Accumulated deficit      (30,452 )         (27,089 )
Accumulated other comprehensive loss     (1,276 )         (705 )
Total stockholders’ equity      199,795           198,368  
Total liabilities and stockholders’ equity  $   225,905       $   224,176  
             

 

PDF SOLUTIONS, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 
(In thousands, except per share amounts) 
                             
  Three months ended     Year ended  
  December 31,   September 30,   December 31,   December 31,   December 31,
  2018    2018    2017    2018
  2017
                             
                             
Revenues:                            
Design-to-silicon-yield solutions  $   12,650     $   13,976     $   19,010     $   60,081     $   74,436  
Gainshare performance incentives      7,075         6,237         7,766         25,713         27,435  
Total revenues      19,725         20,213         26,776         85,794         101,871  
                             
Costs of Design-to-silicon-yield solutions:                            
Direct costs of Design-to-silicon-yield solutions      9,577       10,539       12,137         42,228         47,050  
Amortization of acquired technology     144         144         144         575         471  
Total costs of Design-to-silicon-yield solutions     9,721         10,683         12,281         42,803       47,521  
Gross profit      10,004       9,530       14,495         42,991       54,350  
                             
Operating expenses:                            
Research and development      6,898         6,755         7,646         27,998         30,078  
Selling, general and administrative      6,133         5,507         5,909         23,934         23,684  
Amortization of other acquired intangible assets      109         108         107         435         398  
Restructuring charges     576        —         —          576        —   
Total operating expenses      13,716         12,370         13,662         52,943       54,160  
                             
Income (loss) from operations      (3,712 )     (2,840 )     833         (9,952 )     190  
Interest and other income (expense), net      210       223       42         493         (264 )
Income (loss) before income taxes      (3,502 )       (2,617 )       875         (9,459 )     (74 )
Income tax provision (benefit)     (388 )       (535 )       3,509         (1,743 )       1,263  
Net loss $   (3,114 )   $   (2,082 )   $   (2,634 )   $   (7,716 )   $   (1,337 )
                             
Net loss per share:                             
Basic  $   (0.10 )    $    (0.06 )   $   (0.08 )   $   (0.24 )   $   (0.04 )
Diluted  $   (0.10 )    $    (0.06 )   $   (0.08 )   $   (0.24 )   $   (0.04 )
                             
Weighted average common shares:                            
Basic      32,306       32,184       31,971         32,169       32,038  
Diluted      32,306       32,184       31,971         32,169       32,038  
                             

 

PDF SOLUTIONS, INC. 
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME (LOSS) (UNAUDITED) 
(In thousands, except per share amounts) 
                             
  Three months ended     Year ended  
  December 31,   September 30,   December 31,   December 31,   December 31,
2018    2018    2017    2018    2017 
GAAP net loss $   (3,114 )   $   (2,082 )   $   (2,634 )   $   (7,716 )   $   (1,337 )
Adjustments to reconcile GAAP net loss to non-GAAP net income (loss):                            
Stock-based compensation expense   2,470       2,268       3,073         10,295         11,810  
Amortization of acquired technology     144         144         144         575         471  
Amortization of other acquired intangible assets     109         108         107         435         398  
Restructuring charges and severance payments     576         48         30         907         400  
Write-down in value of property and equipment     227        —         —          227        —   
Adjustment to contingent consideration related to acquisition     90        —         —          90        —   
Tax impact of adjustments     (868 )       (281 )       3,444         (1,992 )       1,231  
  Non-GAAP net income (loss) $   (366 )   $   205     $   4,164     $   2,821     $   12,973  
                             
GAAP net loss per diluted share $   (0.10 )   $   (0.06 )   $   (0.08 )   $   (0.24 )   $   (0.04 )
Non-GAAP net income (loss) per diluted share $   (0.01 )   $   0.01     $   0.13     $   0.09     $   0.39  
                             
                             
Shares used in diluted shares calculation     32,476       32,385       32,866         32,466       33,204  
                             


Company Contacts:  
Christine Russell, Sonia Segovia,
Chief Financial Officer IR Coordinator
Tel: (408) 938-6466 Tel: (408) 938-6491
Email: christine.russell@pdf.com Email: sonia.segovia@pdf.com 

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