Market Overview

PDF Solutions® Reports Second Fiscal Quarter Results

Share:

SANTA CLARA, Calif., Aug. 01, 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 second fiscal quarter ended June 30, 2019.

Second Fiscal Quarter 2019 Financial Results

Total revenues for the second fiscal quarter of 2019 were $20.6 million, compared to $20.5 million for the first fiscal quarter of 2019 and $21.1 million for the second fiscal quarter of 2018. Solutions revenue for the second fiscal quarter of 2019 was $13.4 million, compared to $16.7 million for the first fiscal quarter of 2019 and $15.3 million for the second fiscal quarter of 2018. Deferred revenue for the second fiscal quarter of 2019 includes $1.0 million associated with one customer in China that is significantly delinquent in payments, which revenue we expect to recognize in the future when such payments are made. Gainshare performance incentives revenue for the second fiscal quarter of 2019 was $7.1 million, compared to $3.9 million for the first fiscal quarter of 2019 and $5.9 million for the second fiscal quarter of 2018.

Second quarter 2019 gross margin of 62% improved from 48% in the second fiscal quarter of 2018, reflecting a lower headcount primarily related to reductions in our yield ramp business as we focus on our software business and an increase in our Gainshare performance incentives.

On a GAAP basis, net loss for the second fiscal quarter of 2019 was $0.7 million, or ($0.02) per basic and diluted share, compared to net loss of $2.7 million, or ($0.08) per basic and diluted share, for the first fiscal quarter of 2019, and compared to net loss of $2.1 million, or ($0.07) per basic and diluted share, for the second fiscal quarter of 2018.

Non-GAAP net income for the second fiscal quarter of 2019 was $1.0 million, or $0.03 per diluted share, compared to net income of $0.8 million, or $0.03 per diluted share, for the first fiscal quarter of 2019, and compared to net income of $0.8 million, or $0.02 per diluted share, for the second fiscal quarter of 2018.

Cash and cash equivalents at June 30, 2019, were $86.8 million, compared to $96.1 million at December 31, 2018, a decrease of $9.3 million. Although operating activities generated $5.0 million in cash during the six months ended June 30, 2019, $10.4 million was used during the same period to repurchase 614,000 shares at an average price of $12.54 per share, for a total of $7.7 million, and to acquire certain assets from StreamMosaic, Inc., a privately held provider of artificial intelligence and machine learning solutions, for approximately $2.7 million. Both the repurchase of shares and the acquisition demonstrate continued commitment to the Company's on-going evolution to be the provider of choice for advanced data analytics for semiconductors and electronics and expectations of future results based on a successful evolution. 

Operating Highlights

  • Two major Asian pure-play foundries signed contracts to incorporate Exensio® – Control into their new fabs, extending our leadership position in FDC at 300mm. 
  • A leading Asian foundry and a Top-10 semiconductor customer have each renewed and extended contracts for use of our CV® infrastructure to support overall fab management strategy and to provide quality and reliability "screens" for their respective semiconductor manufacturing environments.
  • Three new fabless semiconductor companies with various offerings in the marketplace have each signed deals to adopt our Exensio® Software Platform, validating its scalability from startup fabless to the largest semiconductor companies in the world.
  • Various Top 20 semiconductor customers in the United States and Japan have engaged with us for proof-of-concept projects based on our production-proven machine-learning (ML) capabilities to gain insight into their product quality and quickly identify manufacturing issues.
  • A Top 10 global electronics company has closed a significant deal for Exensio® –Yield™, demonstrating the opportunity for the Exensio® Software Platform in this market segment.

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.

Second Fiscal Quarter 2019 Financial Commentary Available Online

A Management Report reviewing the Company's second fiscal year 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 severance payments, and restructuring charges), 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. ALPS, DFI, Stream.AI, and StreamMosaic are trademarks of PDF Solutions, Inc. or its subsidiaries.



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


 

 
  June 30,     December 31,  
    2019     2018  
 

ASSETS
               
Current assets:                
Cash and cash equivalents   $ 86,817     $ 96,089  
Accounts receivable, net     52,381       51,570  
Prepaid expenses and other current assets     8,843       9,562  
Total current assets     148,041       157,221  
Property and equipment, net     35,846       35,681  
Operating lease right-of-use assets, net     7,974        
Goodwill     2,293       1,923  
Intangible assets, net     6,855       5,064  
Deferred tax assets     21,378       19,044  
Other non-current assets     7,284       6,972  
Total assets   $ 229,671     $ 225,905  
 

LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:                
Accounts payable   $ 1,813     $ 2,454  
Accrued compensation and related benefits     5,158       4,727  
Accrued and other current liabilities     2,404       3,235  
Operating lease liabilities - current portion     1,875        
Deferred revenues - current portion     9,026       8,477  
Billings in excess of recognized revenues     1,088       635  
Total current liabilities     21,364       19,528  
Long-term income taxes payable     3,571       3,751  
Non-current operating lease liabilities     8,107        
Other non-current liabilities     1,737       2,831  
Total liabilities     34,779       26,110  
                 
Stockholders' equity:                
Common stock and additional paid-in-capital     318,361       310,665  
Treasury stock at cost     (88,324 )     (79,142 )
Accumulated deficit     (33,853 )     (30,452 )
Accumulated other comprehensive loss     (1,292 )     (1,276 )
Total stockholders' equity     194,892       199,795  
Total liabilities and stockholders' equity   $ 229,671     $ 225,905  

    


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,  
    2019     2019     2018     2019     2018  
                                         
Revenues:                                        
Solutions   $ 13,429     $ 16,661     $ 15,266     $ 30,090     $ 33,456  
Gainshare performance incentives     7,139       3,880       5,853       11,019       12,400  
Total revenues     20,568       20,541       21,119       41,109       45,856  
                                         
Cost of Solutions:                                        
Direct costs of solutions     7,689       7,723       10,774       15,413       22,112  
Amortization of acquired technology     143       144       143       287       287  
Total cost of solutions     7,832       7,867       10,917       15,700       22,399  
Gross profit     12,736       12,674       10,202       25,409       23,457  
                                         
Operating expenses:                                        
Research and development     7,312       8,246       7,100       15,558       14,345  
Selling, general and administrative     6,940       7,011       5,919       13,950       12,294  
Amortization of other acquired intangible assets     154       108       108       262       217  
Restructuring charges           92             92        
Total operating expenses     14,406       15,457       13,127       29,862       26,856  
                                         
Loss from operations     (1,670 )     (2,783 )     (2,925 )     (4,453 )     (3,399 )
Interest and other income (expense), net     111       (6 )     390       105       59  
Loss before income taxes     (1,559 )     (2,789 )     (2,535 )     (4,348 )     (3,340 )
Income tax benefit     (849 )     (98 )     (439 )     (947 )     (820 )
Net loss   $ (710 )   $ (2,691 )   $ (2,096   $ (3,401 )   $ (2,520
                                         
Net loss per share:                                        
Basic   $ (0.02 )   $ (0.08 )   $ (0.07   $ (0.10 )   $ (0.08
Diluted   $ (0.02 )   $ (0.08 )   $ (0.07   $ (0.10 )   $ (0.08
                                         
Weighted average common shares:                                        
Basic     32,339       32,485       31,962       32,412       32,065  
Diluted     32,339       34,485       31,962       32,412       32,065  


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,  
    2019     2019     2018     2019     2018  
GAAP net loss   $ (710 )   $ (2,691 )   $ (2,096   $ (3,401 )   $ (2,520
Adjustments to reconcile GAAP net loss to non-GAAP net income:                                        
Stock-based compensation expense     2,434       3,476       2,701       5,910       5,557  
Amortization of acquired technology     143       144       143       287       287  
Amortization of other acquired intangible assets     154       108       108       262       217  
Restructuring charges and severance payments           92             92       283  
Tax impact of adjustments     (993 )     (287 )     (96 )     (1,280 )     (843 )
Non-GAAP net income   $ 1,028     $ 842     $ 760     $ 1,870     $ 2,981  
                                         
GAAP net loss per diluted share   $ (0.02 )   $ (0.08 )   $ (0.07   $ (0.10 )   $ (0.08
Non-GAAP net income per diluted share   $ 0.03     $ 0.03     $ 0.02     $ 0.06     $ 0.09  
                                         
Shares used in diluted shares calculation     33,055       33,022       32,304       33,038       32,474  


                                                                                                                                                                                 

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

 

PDF Solutions, Inc. Logo

View Comments and Join the Discussion!