updated 2/10/2011 5:17:33 PM ET 2011-02-10T22:17:33

SAN JOSE, Calif., Feb. 10, 2011 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. (Nasdaq:PDFS) the leading provider of yield improvement technologies and services for the integrated circuit (IC) manufacturing process life cycle, today announced financial results for its fiscal quarter and year ended December 31, 2010.

Total revenues for the fourth fiscal quarter of 2010 totaled $16.2 million, up 9% from $14.8 million for each of the third fiscal quarter of 2010 and the fourth fiscal quarter of 2009. Gainshare performance incentives revenues totaled $4.9 million, up 12% from $4.3 million for the third fiscal quarter of 2010 and down 14% when compared to $5.6 million for the fourth fiscal quarter of 2009.

Net income for the fourth fiscal quarter of 2010 was $156,000, or $0.01 per basic and diluted share, compared to net income of $50,000, or $0.00 per basic and diluted share, for the third fiscal quarter of 2010, and net loss for the fourth fiscal quarter of 2009 of $(701,000), or $(0.03) per basic and diluted share.

Total revenues for the fiscal year ended December 31, 2010 were $61.7 million, up 27% from $48.4 million for the fiscal year ended December 31, 2009. Gainshare performance incentives revenues for the fiscal year ended December 31, 2010 totaled $18.6 million, up 18% from $15.8 million for the fiscal year ended December 31, 2009.

Net income for the fiscal year ended December 31, 2010 was $227,000, or $0.01 per basic and diluted share, compared to net loss of $(17.5) million, or $(0.66) per basic and diluted share for the fiscal year ended December 31, 2009.

In addition to using GAAP results in evaluating PDF Solutions' business, PDF Solutions' management also believes it is useful to measure results using a non-GAAP measure of net income (loss), excluding stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, restructuring charges, and their related income tax effects, as applicable. Using this non-GAAP measure, the non-GAAP net income for the fourth fiscal quarter of 2010 totaled $2.2 million, or $0.08 per diluted share, compared to the non-GAAP net income of $1.9 million, or $0.07 per diluted share, for the third fiscal quarter of 2010, and the non-GAAP net income of $1.4 million, or $0.05 per diluted share for the fourth fiscal quarter of 2009. Also, using this non-GAAP measure, the non-GAAP net income for the fiscal year ended December 31, 2010 totaled $7.9 million, or $0.28 per diluted share, compared to a non-GAAP net loss of $(6.9) million, or $(0.26) per diluted share for the fiscal year ended December 31, 2009.

As previously announced, PDF Solutions will discuss these results on a live conference call beginning at 3:00 p.m. Pacific Time/6:00 p.m. Eastern Time today, February 10, 2010. The call will be simultaneously web cast on PDF Solutions' website at http://www.pdf.com/events . 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.

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 that exclude the effects of stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, restructuring charges, and their related income tax effects, as applicable. PDF Solutions' management believes that the presentation of these measures provides useful supplemental information to investors regarding PDF's operating results. These non-GAAP financial measures are used by management internally to measure the company's profitability and performance. PDF Solutions' management believes that excluding the effects of stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, restructuring charges, and their related income tax effects, as applicable, provides a useful supplemental measure of 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 restructuring charges) nor do they have use with regards to 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 be different 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 non-GAAP financial measures to the comparable GAAP financial measures is provided at the end of the company's financial statements presented below.

About PDF Solutions

PDF Solutions, Inc. (Nasdaq:PDFS) is the leading provider of yield improvement technologies and services for the IC manufacturing process life cycle. PDF Solutions offers solutions that are designed to enable clients to lower costs of IC design and manufacture, enhance time to market, and improve profitability by addressing design and manufacturing interactions from product design to initial process ramps to mature manufacturing operations. PDF Solutions' Characterization Vehicle® (CV®) test chips provide the core modeling capabilities, and are used by more leading manufacturers than any other test chips in the industry. PDF Solutions' industry leading yield management system software, dataPOWER®, and fault detection and classification software, mæstria®, enhance yield improvement and production control activities at leading fabs around the world. Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in China, Europe, Japan, Korea, Singapore, and Taiwan. For the company's latest news and information, visit http://www.pdf.com/ .

The PDF Solutions, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3199

Characterization Vehicle, CV, dataPOWER®, mæstria®, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries.

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

 
 December 31,

 2010 
 December 31,

 2009 
     
ASSETS    
Current assets:    
Cash and cash equivalents $ 38,154 $ 34,899
Accounts receivable, net  23,442  19,809
Prepaid expenses and other current assets  3,246  3,029
Total current assets  64,842  57,737
Property and equipment, net  797  1,573
Non-current investments  718  718
Intangible assets, net  1,369  2,954
Other non-current assets  727  495
Total assets $ 68,453 $ 63,477
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Current portion of long-term debt $ 108 $ 115
Accounts payable  1,080  959
Accrued compensation and related benefits  3,964  4,438
Taxes payable and other accrued liabilities  2,400  3,502
Deferred revenues  3,021  1,584
Billings in excess of recognized revenues  1,802  1,953
Total current liabilities  12,375  12,551
Long-term debt  --  117
Long-term income taxes payable  3,668  3,218
Other non-current liabilities  1,495  1,704
Total liabilities  17,538  17,590
     
Stockholders' equity:     
Common stock  4  4
Additional paid-in-capital  200,144  194,081
Treasury stock at cost  (19,298)  (18,715)
Accumulated deficit  (129,884)  (130,111)
Accumulated other comprehensive income  (51)  628
Total stockholders' equity  50,915  45,887
Total liabilities and stockholders' equity $ 68,453 $ 63,477
 
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
 
    Three Months Ended December 31,    Twelve Months Ended December 31, 
   2010   2009   2010   2009 
  (In thousands, except per share amounts)
         
Revenues:        
Design-to-silicon-yield solutions  $ 11,352  $ 9,137  $ 43,080  $ 32,662
Gainshare performance incentives   4,866   5,650   18,570   15,776
Total revenues   16,218   14,787   61,650   48,438
         
Cost of design-to-silicon-yield solutions:        
Direct costs of design-to-silicon-yield solutions  6,348  6,356  24,389  22,779
Amortization of acquired technology   207   360   1,285   1,439
Total cost of design-to-silicon-yield solutions   6,555   6,716   25,674   24,218
Gross profit  9,663  8,071  35,976  24,220
         
Operating expenses:        
Research and development  4,599  4,226   17,187  19,773
Selling, general and administrative  3,689  3,719   15,989  16,561
Amortization of other acquired intangible assets  57   89  295  349
Restructuring charges   543   934   885   4,512
Total operating expenses   8,888   8,968   34,356   41,195
         
Income (loss) from operations  775  (897)  1,620  (16,975)
Interest and other income (expense), net    (30)    116   0   237
Income (loss) before income taxes  745  (781)  1,620  (16,738)
Income tax provision (benefit)   589   (80)   1,393   753
Net income (loss)  $ 156  $ (701)  $ 227  $ (17,491)
         
Net income (loss) per share:        
Basic  $ 0.01  $ (0.03)  $ 0.01  $ (0.66)
Diluted  $ 0.01  $ (0.03)  $ 0.01  $ (0.66)
         
Weighted average common shares:        
Basic   27,566   26,588    27,257   26,377
Diluted   27,767   26,588    27,478   26,377
 
PDF SOLUTIONS, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(UNAUDITED)
(In thousands, except per share amounts)
 
  Three Months Ended December 31,  Twelve Months Ended December 31, 
   2010   2009   2010   2009 
         
GAAP net income (loss) $ 156  $ (701) $ 227  $ (17,491)
Stock-based compensation expenses  1,200  724  5,230  4,269
Amortization of acquired technology  207  360  1,285  1,439
Amortization of other acquired intangible assets  57  89  295  349
Restructuring charges  543   934  885   4,512
Non-GAAP net income (loss) $ 2,163  $ 1,406 $ 7,922 $ (6,922)
         
GAAP net income (loss) per diluted share $ 0.01  $ (0.03) $ 0.01  $ (0.66)
Non-GAAP net income (loss) per diluted share $ 0.08  $ 0.05 $ 0.28  $ (0.26)
Shares used in computing diluted non-GAAP measure of net

income (loss) per share
 28,248   27,430  27,993   26,377
CONTACT: Company Contacts:
         Joy Leo, EVP, Chief Administration Officer and Acting CFO
         PDF Solutions, Inc.
         Tel: (408) 938-6477
         Email: joy.leo@pdf.com
         
         Sonia Segovia, IR Coordinator
         PDF Solutions, Inc.
         Tel: (408) 938-6491
         Email: sonia.segovia@pdf.com

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