View:
Download DOC
Download PDF
Download XLS
e8vk
Table of Contents

 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported) July 21, 2005

 

PDF SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

000-31311
(Commission File Number)

     
Delaware
(State or Other Jurisdiction of
Incorporation) 		  25-1701361
(I.R.S. Employer Identification No.)

333 West San Carlos Street, Suite 700
San Jose, CA 95110
(Address of principal executive offices, with zip code)

(408) 280-7900
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1
EXHIBIT 99.2

Table of Contents

Item 2.02. Results of Operations and Financial Condition

     The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), subject to the liabilities of that section, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

     On July 21, 2005, PDF Solutions, Inc. (the “Company”) issued a press release regarding its financial results for the three-month period ended June 30, 2005. A copy of the press release announcing these financial results is attached hereto as Exhibit 99.1 pursuant to Item 2.02 of Form 8-K and is incorporated herein by reference. Also on July 21, 2005, the Company issued a press release regarding the financial outlook for the third and fourth quarters of fiscal 2005.

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits.

  99.1   Press Release of PDF Solutions, Inc. dated July 21, 2005, entitled “PDF Solutions Reports Record Second Quarter 2005 Revenue.”

  99.2   Press Release of PDF Solutions, Inc. dated July 21, 2005 entitled “PDF Solutions Provides Financial Outlook for the Third and Fourth Quarters of Fiscal 2005.”

2

Table of Contents

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
  PDF Solutions, Inc.
 		  
  By:   /s/ P. Steven Melman    
    Name:   P. Steven Melman   
    Title:   Vice President, Finance and Administration
and Chief Financial Officer 		  
 

Dated: July 21, 2005

3

Table of Contents

EXHIBIT INDEX

     
Exhibit    
Number   Description
99.1
  Press Release of PDF Solutions, Inc. dated July 21, 2005, entitled “PDF Solutions Reports Record Second Quarter 2005 Revenue.”
99.2
  Press Release of PDF Solutions, Inc. dated July 21, 2005 entitled “PDF Solutions Provides Financial Outlook for the Third and Fourth Quarters of Fiscal 2005.”

-more-

exv99w1
 

Exhibit 99.1

News Release

     
Investor Relations Contact:   Corporate Communications Contact:
Sonia Segovia, IR Coordinator
PDF Solutions, Inc.
Tel: (408) 938-6491
Email: sonia.segovia@pdf.com 		  Abbie Kendall, Principal
Armstrong Kendall, Inc.
Tel: (503) 672-4681
Email: abbie@akipr.com

PDF SolutionsÒ Reports Record
Second Quarter 2005 Revenue

Results Represent 10th Sequential Quarter of Revenue Growth

     SAN JOSE, Calif. — July 21, 2005 — PDF Solutions, Inc. (Nasdaq: PDFS) the leading provider of process-design integration technologies to enhance IC manufacturability, today announced financial results for its second fiscal quarter ended June 30, 2005.

     Revenue for the second fiscal quarter of 2005 totaled a record $18.4 million, an increase of 21%, compared with revenue of $15.2 million for the second fiscal quarter of 2004. On a GAAP basis, net income for the second fiscal quarter of 2005 totaled approximately $1.3 million, or $0.05 per diluted share, compared with a net loss of approximately $460,000, or $0.02 per diluted share, for the second fiscal quarter of 2004.

     In addition to using GAAP results in evaluating PDF Solutions’ business, management also believes it useful to measure results using a non-GAAP measure of net income or loss, which excludes amortization of stock-based compensation and acquired intangible assets. Using this non-GAAP measure, net income for the second fiscal quarter of 2005 totaled $2.9 million, or $0.11 per diluted share, compared with non-

-more-

 

GAAP net income of approximately $1.0 million, or $0.04 per diluted share, for the second fiscal quarter of 2004.

     As previously announced, PDF will hold a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today to discuss these quarterly results. A live webcast of this conference call will be available on PDF Solutions’ website at http://ir.pdf.com/medialist.cfm. A replay of the call will be available at the same website address beginning approximately two hours after completion of the live call. Further, a copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the most directly comparable GAAP measure, which non-GAAP measures may be used periodically by PDF Solutions’ management when discussing financial results with investors and analysts, will be available on PDF Solutions’ website at http://www.pdf.com/news_archive.phtml following the date of this release.

     About PDF Solutions

     PDF Solutions, Inc. (Nasdaq: PDFS) is the leading provider of process-design integration technologies for manufacturing integrated circuits (ICs). PDF Solutions’ software, methodologies and services enable semiconductor companies to create IC designs that can be more easily manufactured using manufacturing processes that are more capable. By simulating deep sub-micron product and process interactions, the PDF solution offers clients reduced time to market, increased IC yield and performance, and enhanced product reliability and profitability. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Europe and Japan. For more information, visit www.pdf.com.

     PDF SolutionsÒ is a registered trademark of PDF Solutions, Inc.

-more-

 

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

                 
    June 30,     December 31,  
    2005     2004  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 51,862     $ 45,660  
Accounts receivable, net of allowances
     18,852       15,978  
Prepaid expenses and other current assets
     2,436       2,685  
Deferred tax assets
     1,998       1,586  
 
            
Total current assets
     75,148       65,909  
Property and equipment, net
     3,614       3,321  
Goodwill
     39,886       39,886  
Intangible assets, net
     12,789       15,791  
Other assets
     608       500  
 
            
Total assets
   $ 132,045     $ 125,407  
 
            
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 1,827     $ 1,023  
Accrued compensation and related benefits
     3,012       3,209  
Other accrued liabilities
     2,036       2,593  
Taxes payable
     4,013       3,286  
Deferred revenues
     2,949       2,905  
Billings in excess of recognized revenue
     1,921       1,581  
 
            
Total current liabilities
     15,758       14,597  
Long-term liabilities
     290       311  
Deferred tax liabilities
     1,469       1,701  
 
            
Total liabilities
     17,517       16,609  
 
            
Stockholders’ equity:
                
Common stock
     4       4  
Additional paid-in-capital
     137,181       134,191  
Treasury stock
     (4,806 )     (4,806 )
Deferred stock-based compensation
     (75 )     (148 )
Notes receivable from stockholders
     (550 )     (550 )
Accumulated deficit
     (17,239 )     (19,975 )
Accumulated other comprehensive income
     13       82  
 
            
Total stockholders’ equity
     114,528       108,798  
 
            
Total liabilities and stockholders’ equity
   $ 132,045     $ 125,407  
 
            

 

 

PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,     June 30,  
    2005     2004     2005     2004  
Revenue:
                                
Design-to-silicon-yield solutions:
                                
Integrated solutions
   $ 12,267     $ 13,352     $ 24,824     $ 22,858  
Software licenses
     3,197       161       6,646       2,350  
Gain share
    2,892       1,656       4,979       2,637  
 
                        
Total revenue
     18,356       15,169       36,449       27,845  
 
                        
Cost and expenses:
                                
Cost of design-to-silicon-yield solutions:
                                
Direct costs of design-to-silicon-yield solutions:
                                
Integrated solutions
     5,766       5,308       11,516       9,660  
Software licenses
     101       61       258       63  
Amortization of acquired core technology
     1,266       1,327       2,532       2,677  

 

 

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,     June 30,  
    2005     2004     2005     2004  
Research and development
     5,655       4,822       10,991       10,040  
Selling, general and administrative
     4,289       3,622       8,203       7,419  
Stock-based compensation amortization*
     32       292       74       547  
Amortization of other acquired intangible assets
     235       410       470       820  
Total costs and expenses
     17,344       15,842       34,044       31,226  
 
                        
Income (loss) from operations
     1,012       (673 )     2,405       (3,381 )
Interest and other income, net
     350       138       622       291  
 
                        
Income (loss) before taxes
     1,362       (535 )     3,027       (390 )
Tax provision (benefit)
     20       (75 )     291       (788 )
 
                        
Net income (loss)
   $ 1,342     $ (460 )   $ 2,736     $ (2,302 )
 
                        
Net income (loss) per share:
                                
Basic
   $ 0.05     $ (0.02 )   $ 0.11     $ (0.09 )
 
                        
Diluted
   $ 0.05     $ (0.02 )   $ 0.10     $ (0.09 )
 
                        
Weighted average common shares:
                                
Basic
     25,862       25,337       25,779       25,319  
 
                        
Diluted
     26,986       25,337       27,057       25,319  
 
                        
* Stock-based compensation amortization:
                                
Cost of design-to-silicon-yield solutions
   $ —     $ 9     $ —     $ 37  
Research and development
     32       274       74       476  
Selling, general and administrative
     —       9       —       34  
 
                        
 
   $ 32     $ 292     $ 74     $ 547  
 
                        

 

 

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

                 
    June 30,     December 31,  
    2003     2002  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 67,073     $ 71,490  
Accounts receivable, net of allowances
     6,584       7,924  
Prepaid expenses and other current assets
     5,006       4,406  
 
            
Total current assets
     78,663       83,820  
Property and equipment, net
     3,453       3,533  
Goodwill
     662       662  
Intangible assets, net
     4,195       220  
Other assets
     1,815       1,564  
 
            
Total assets
   $ 88,788     $ 89,799  
 
            
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 1,370     $ 499  
Accrued compensation and related benefits
     1,910       1,143  
Other accrued liabilities
     1,364       1,652  
Taxes payable
     686       1,838  
Deferred revenues
     2,163       4,496  
Billings in excess of recognized revenue
     274       606  
Other liabilities
     1,500       —  
Current portion of long-term debt
     17       17  
 
            
Total current liabilities
     9,284       10,251  
Long-term debt
     6       15  
Deferred tax liability
     753       752  
Deferred rent
     49       39  
Stockholders’ equity:
                
Common stock
     3       3  
Additional paid-in-capital
     100,641       99,884  
Deferred stock-based compensation
     (545 )     (1,340 )
Notes receivable from stockholders
     (4,614 )     (4,998 )
Accumulated deficit
     (16,855 )     (14,845 )
Cumulative other comprehensive income
     66       38  
 
            
Total stockholders’ equity
     78,696       78,742  
 
            
Total liabilities and stockholders’ equity
   $ 88,788     $ 89,799  
 
            

 

 

PDF SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)

                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,     June 30,     June 30,  
    2003     2002     2003     2002  
Revenue:
                                
Design-to-silicon yield solutions
   $ 8,034     $ 9,505     $ 16,142     $ 17,885  
Gain share
     2,056       2,731       3,015       5,808  
 
                        
Total revenue
   $ 10,090     $ 12,236     $ 19,157     $ 23,693  
 
                        
Cost and expenses:
                                
Cost of design-to-silicon yield
     3,514       4,110       6,958       7,974  
Research and development
     4,453       3,964       8,785       7,154  
Selling, general and administrative
     2,994       2,614       5,697       5,168  
Stock-based compensation amortization*
     329       770       978       1,558  
 
                        
Total costs and expenses
     11,290       11,458       22,418       21,854  
 
                        
Income (loss) from operations
     (1,200 )     778       (3,261 )     1,839  
Interest and other income
     345       338       720       697  
 
                        
Income (loss) before taxes
     (855 )     1,116       (2,541 )     2,536  
Tax (benefit) provision
     (179 )     551       (531 )     1,391  
 
                        
Net income (loss)
   $ (676 )   $ 565     $ (2,010 )   $ 1,145  
 
                        
Net income (loss) per share:
                                
Basic
   $ (0.03 )   $ 0.03     $ (0.09 )   $ .0.05  
Diluted
   $ (0.03 )   $ 0.02     $ (0.09 )   $ 0.05  
Weighted average common shares:
                                
Basic
     22,614       21,814       22,551       21,726  
Diluted
     22,614       22,943       22,551       23,192  
* Stock-based compensation amortization:
                                
Cost of design-to-silicon yield solutions
   $ 86     $ 223     $ 216     $ 486  
Research and development
     155       366       563       804  
Selling, general and administrative
     88       181       199       268  
 
                        
 
   $ 329     $ 770     $ 978     $ 1,558  
 
                        

 

 

PDF SOLUTIONS, INC.
RECONCILIATION OF REPORTED GAAP NET INCOME (LOSS) TO PRO FORMA NET INCOME (LOSS) (UNAUDITED)
(In thousands, except per share data)

                 
    Three Months Ended  
    June 30,     June 30,  
    2003     2002  
Net income (loss)
   $ (676 )   $ 565  
Stock-based compensation amortization
     329       770  
Amortization of intangibles, net
     82       28  
 
            
Pro forma net income (loss)
   $ (265 )   $ 1,363  
 
            
Pro forma net income (loss) per share — diluted
   $ (0.01 )   $ 0.06  
 
            
Weighted average common shares — diluted
     22,614       22,943  
 
            

 

exv99w2
 

Exhibit 99.2

News Release

     
Investor Relations Contact:   Corporate Communications Contact:
Sonia Segovia, IR Coordinator
PDF Solutions, Inc.
Tel: (408) 938-6491
Email: sonia.segovia@pdf.com 		  Abbie Kendall, Principal
Armstrong Kendall, Inc.
Tel: (503) 672-4681
Email: abbie@akipr.com

PDF SOLUTIONSÒ PROVIDES FINANCIAL
OUTLOOK FOR
THE THIRD AND FOURTH QUARTERS OF FISCAL 2005

     SAN JOSE, Calif. — July 21, 2005 — PDF Solutions, Inc. (Nasdaq: PDFS), the leading provider of process-design integration technologies to enhance IC manufacturability, today provided its updated financial outlook for the third and fourth fiscal quarters ending September 30, 2005 and December 31, 2005, respectively.

     PDF Solutions expects total revenue in the range of $18.7 million to $19.5 million for the third fiscal quarter ending September 30, 2005. Gain share revenue for the third quarter is expected to be in the range of $2.8 million to $3.2 million. On a GAAP basis, net income for the third fiscal quarter of 2005 is projected in a range of $1.5 million to $2.0 million, or $0.05 to $0.07 per diluted share.

     For the fourth fiscal quarter ending December 31, 2005, PDF Solutions expects total revenue in the range of $19.8 million to $20.8 million. On a GAAP basis, net income for the fourth fiscal quarter of 2005 is projected in a range of $1.8 million to $2.5 million, or $0.07 to $0.09 per diluted share.

     In addition to using GAAP results in evaluating PDF Solutions’ business, management also believes it useful to measure results using a non-GAAP measure of net income, which excludes amortization of stock-based compensation and acquired intangible assets. Non-GAAP net income for the third fiscal quarter ending September 30, 2005

-more-

 

is projected in a range of $2.6 million to $3.1 million, or $0.10 to $0.12 per diluted share. Non-GAAP net income for the fourth fiscal quarter ending December 31, 2005 is projected in a range of $3.0 million to $3.7 million, or $0.11 to $0.13 per diluted share.

     As previously announced, PDF will hold a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today to discuss its second quarter 2005 results and financial outlook for the third and fourth fiscal quarters of 2005. A live webcast of this conference call will be available on PDF Solutions’ website at http://ir.pdf.com/medialist.cfm. A replay of the call will be available at the same website address beginning approximately two hours after completion of the live call. Further, a copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the most directly comparable GAAP measure, which non-GAAP measures may be used periodically by PDF Solutions’ management when discussing financial results with investors and analysts, will be available on the company’s website at http://www.pdf.com/news_archive.phtml following the date of this release.

     Effectiveness of Guidance

     The outlook set forth above represents PDF Solutions’ expectations only as of the date of this release, and should not be viewed as a statement about PDF Solutions’ expectations after this date. Although this release will remain available on PDF Solutions’ website, its continued availability does not indicate that PDF Solutions is reaffirming or confirming its continued validity. PDF Solutions does not intend to report on its progress, or provide comments to analysts or investors on, or otherwise, update such guidance until it releases its quarterly results.

     About PDF Solutions

     PDF Solutions, Inc. (Nasdaq: PDFS) is the leading provider of process-design integration technologies for manufacturing integrated circuits (ICs). PDF Solutions’ software, methodologies and services enable semiconductor companies to create IC designs that can be more easily manufactured using manufacturing processes that are more capable. By simulating deep sub-micron product and process interactions, the PDF solution offers clients reduced time to market, increased IC yield and performance,

-more-

 

and enhanced product reliability and profitability. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Europe and Japan. For more information, visit www.pdf.com.

     PDF SolutionsÒ is a registered trademark of PDF Solutions, Inc.

     Forward-Looking Statements

The statements in this press release regarding PDF Solutions’ 2005 third and fourth fiscal quarter outlook, including expected revenue, net income, and net income per share, are forward looking. 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: any unforeseen industry changes; difficulties in modifying PDF’s solutions on a timely basis; and changes in the marketplace for our solutions, including the introduction of products or services competitive with PDF Solutions’ products and services. Readers should also refer to the risk disclosures set forth in PDF Solutions’ periodic public filings with the Securities and Exchange Commission, including, without limitation, its annual report on Form 10-K, most recently filed on March 16, 2005, and its quarterly reports on Form 10-Q, most recently filed on May 10, 2005. The forward-looking statements contained in this release 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.

 

 

PDF SOLUTIONS, INC.
RECONCILIATION OF PROJECTED GAAP NET INCOME TO PROJECTED
NON-GAAP NET INCOME
(In thousands, except per share data)

                         
    Three Months Ending  
PROJECTED RESULTS   September 30, 2005  
GAAP net income per share — diluted
   $ 0.05     to   $ 0.07  
 
                    
GAAP net income
   $ 1,465     to   $ 1,965  
Stock-based compensation amortization
     25               25  
Amortization of acquired intangible assets, net of taxes
     1,150               1,150  
 
                    
Non-GAAP net income
   $ 2,640     to     3,140  
 
                    
Non-GAAP net income per share — diluted.
   $ 0.10     to     0.12  
 
                    
Weighted average common shares — diluted
     27,250               27,250  
 
                    
                         
    Three Months Ending  
PROJECTED RESULTS   December 31, 2005  
GAAP net income per share — diluted
   $ 0.07     to   $ 0.09  
 
                    
GAAP net income
   $ 1,790     to     2,490  
Stock-based compensation amortization
     20               20  
Amortization of acquired intangible assets, net of taxes
     1,150               1,150  
 
                    
Non-GAAP net income
   $ 2,960     to     3,660  
 
                    
Non-GAAP net income per share — diluted.
   $ 0.11     to     0.13  
 
                    
Weighted average common shares — diluted
     27,500               27,500  
 
                    

 

 

Use of Non-GAAP Information
In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles (GAAP), PDF Solutions also provides certain Non-GAAP financial measures that exclude certain charges as additional information relating to its operating results. PDF Solutions’ management believes that the presentation of these measures provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations. PDF Solutions has also chosen to provide this information to investors to enable them to perform meaningful comparisons of PDF Solutions’ past, present and future operating results. These measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. The calculations of non-GAAP financial measures have been adjusted to exclude the effects of amortization of stock-based compensation and acquired intangible assets.