pdfs20180802_8k.htm

 

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): August 2, 2018

 

PDF SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

000-31311

(Commission File Number)

 

Delaware

25-1701361

(State or Other Jurisdiction of Incorporation)

(I.R.S. Employer Identification No.)

 

333 West San Carlos Street, Suite 1000

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:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 



 

 

 

 

TABLE OF CONTENTS

 

Item 2.02. Results of Operations and Financial Condition

Item 9.01. Financial Statements and Exhibits

SIGNATURES

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 2, 2018 PDF Solutions (the “Company”) issued a press release regarding its financial results and certain other information related to the second fiscal quarter ended June 30, 2018. The Company also posted on the Investor Relations section of its website (www.pdf.com) a management report with regard to the quarter ended June 30, 2018. Copies of the press release and management report are attached to this report as Exhibit 99.1 and 99.2, respectively. Information on the website is not, and will not be deemed, a part of this report or incorporated into any other filings the Company makes with the Securities and Exchange Commission.

 

The information in this Item 2.02, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities under that Section, and shall not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

 

Exhibit No.

 

Description

99.1

 

Press Release dated August 2, 2018, regarding financial results and certain other information related to the first fiscal quarter ended June 30, 2018.

 

 

 

99.2

 

Management Report by PDF Solutions, Inc. as of August 2, 2018.

  

 

 

 

 

 

 

 

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.

(Registrant)

 

 

 

 

 

 

By:

/s/Gregory C. Walker

 

 

 

Gregory C. Walker

VP, Finance, and Chief Financial Officer

(principal financial and accounting officer)

 

 

Dated: August 2, 2018

  

ex_119939.htm

Exhibit 99.1

  

News Release 

 

Company Contacts:

 

Gregory Walker,

Sonia Segovia,

VP, Finance and CFO

IR Coordinator

Tel: (408) 938-6457

Tel: (408) 938-6491

Email:gregory.walker@pdf.com

Email: sonia.segovia@pdf.com

 

PDF Solutions® Reports Second Fiscal Quarter Results

 

SAN JOSE, Calif.- August 2, 2018-PDF Solutions, Inc. (“PDF Solutions” or the “Company”) (NASDAQ: PDFS), the leading provider of process-design integration technologies to enhance integrated circuit (IC) manufacturability, today announced financial results for its second fiscal quarter ended June 30, 2018.

 

Total revenues for the second fiscal quarter of 2018 were $21.1 million, down 15% from $24.7 million for the first fiscal quarter of 2018 and down 13% from $24.3 million for the second fiscal quarter of 2017. Design-to-silicon-yield solutions revenue for the second fiscal quarter of 2018 was $15.3 million, down 16% from $18.2 million for the first fiscal quarter of 2018 and down 7% from $16.5 million for the second fiscal quarter of 2017. Gainshare performance incentives revenue for the second fiscal quarter of 2018 was $5.9 million, down 11% from $6.5 million for the first fiscal quarter of 2018 and down 25% from $7.8 million for the second fiscal quarter of 2017.

 

On a GAAP basis, net loss for the second fiscal quarter of 2018 was $2.1 million, or $0.07 per basic and diluted share, compared to net loss of $0.4 million, or $0.01 per basic and diluted share, for the first fiscal quarter of 2018, and compared to net income of $0.2 million, or $0.01 per basic and diluted share, for the second fiscal quarter of 2017.

 

Cash and cash equivalents at June 30, 2018, were $100.9 million, compared to $101.3 million at December 31, 2017.

 

Non-GAAP net income for the second fiscal quarter of 2018 was $0.8 million, or $0.02 per diluted share, compared to $2.2 million, or $0.07 per diluted share, for the first fiscal quarter of 2018, and compared to $2.7 million, or $0.08 per diluted share, for the second fiscal quarter of 2017. EBITDAR for the second fiscal quarter of 2018 was $1.7 million, compared to $3.8 million for the first fiscal quarter of 2018 and compared to $3.7 million for the second fiscal quarter of 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.

 

Second Fiscal Quarter 2018 Financial Commentary Available Online

 

A Management Report reviewing the Company’s second fiscal quarter 2018 financial results, as well as providing updated third quarter and full year 2018 financial outlook, 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), stock-based compensation expenses, 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. EBITDAR is calculated by taking GAAP net income, adding back the effects of non-recurring items, stock-based compensation expenses, amortization of acquired technology and other acquired intangibles, depreciation expense and income tax provision (benefit). 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 measures 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 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 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 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 at Gainshare-covered facilities; 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, 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 enables customers to reduce the time to market of integrated circuits (“ICs”), lower the cost of IC design and manufacturing and improve both quality and profitability. The Company has developed proprietary hardware and software and provides services that target the entire systems value chain, which is a term we use that means the activities from technology development and the design of a semiconductor product through volume manufacturing of devices and subsequent system assembly and test.

 

PDF Solutions’ products and services consist of proprietary test structures and electrical test systems, physical intellectual property, enterprise platform software and professional services. The Company’s Characterization Vehicle ®  (CV ® ) electrical test chip infrastructure provides core modeling capabilities, and is used by more leading manufacturers than any other test chips in the industry. The Design-for-Inspection solution includes the proprietary eProbe ® e-beam tool and extends the Company’s electrical characterization technologies into the e-beam measurement of extremely dense test structures, or DFI cells, across an entire fabrication process. Proprietary Template layout patterns for standard cell libraries optimize area, performance, and manufacturability for designing IC products. The Exensio ® platform for big data unlocks relevant, actionable information buried in wafer fabrication, process control and test data through key components: Exensio ® -Yield, Exensio ® -Control, Exensio ® -Test, Exensio ® -ALPS, and Exensio ® -Char. The Exensio ® platform is available either on-premise or via software as a service (SaaS).

 

Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Canada, China, France, Germany, Italy, Japan, Korea, and Taiwan. PDF Solutions is listed on The NASDAQ National Market under the ticker symbol PDFS. For the Company’s latest news and information, visit http://www.pdf.com/.

 

Characterization Vehicle, CV, Exensio, eProbe, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries. ALPS, Design-for-Inspection, DFI, and Template are trademarks of PDF Solutions, Inc. or its subsidiaries.

 

 

 

 

 

PDF SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands)

 

   

June 30,

   

December 31,

 
   

2018

   

2017

 
                 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 100,916     $ 101,267  

Accounts receivable, net

    53,919       57,564  

Prepaid expenses and other current assets

    8,660       5,069  

Total current assets

    163,495       163,900  

Property and equipment, net

    28,095       25,386  

Goodwill

    1,923       1,923  

Intangible assets, net

    5,569       6,074  

Deferred tax assets

    17,747       16,348  

Other non-current assets

    8,943       10,545  

Total assets

  $ 225,772     $ 224,176  
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

Current liabilities:

               

Accounts payable

  $ 2,495     $ 2,536  

Accrued compensation and related benefits

    5,608       6,493  

Accrued and other current liabilities

    2,330       2,627  

Deferred revenues - current portion

    9,369       7,981  

Total current liabilities

    19,802       19,637  

Long-term income taxes payable

    4,652       3,902  

Other non-current liabilities

    994       2,269  

Total liabilities

    25,448       25,808  
                 

Stockholders’ equity:

               

Common stock and additional paid-in-capital

    304,953       297,955  

Treasury stock at cost

    (78,422 )     (71,793 )

Accumulated deficit

    (25,256 )     (27,089 )

Accumulated other comprehensive loss

    (951 )     (705 )

Total stockholders’ equity

    200,324       198,368  

Total liabilities and stockholders’ equity

  $ 225,772     $ 224,176  

 

 

 

 

 

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,

 
   

2018

   

2018

   

2017

   

2018

   

2017

 
                                         

Revenues:

                                       

Design-to-silicon-yield solutions

  $ 15,266     $ 18,190     $ 16,500     $ 33,456     $ 36,198  

Gainshare performance incentives

    5,853       6,547       7,789       12,400       12,380  

Total revenues

    21,119       24,737       24,289       45,856       48,578  
                                         

Costs of Design-to-silicon-yield solutions:

                                       

Direct costs of Design-to-silicon-yield solutions

    10,774       11,338       11,283       22,112       22,618  

Amortization of acquired technology

    143       144       96       287       192  

Total costs of Design-to-silicon-yield solutions

    10,917       11,482       11,379       22,399       22,810  

Gross profit

    10,202       13,255       12,910       23,457       25,768  
                                         

Operating expenses:

                                       

Research and development

    7,100       7,245       7,276       14,345       14,557  

Selling, general and administrative

    5,919       6,375       6,195       12,294       12,095  

Amortization of other acquired intangible assets

    108       109       92       217       184  

Total operating expenses

    13,127       13,729       13,563       26,856       26,836  
                                         

Loss from operations

    (2,925 )     (474 )     (653 )     (3,399 )     (1,068 )

Interest and other income (expense), net

    390       (331 )     27       59       (202 )

Loss before income taxes

    (2,535 )     (805 )     (626 )     (3,340 )     (1,270 )

Income tax benefit

    (439 )     (381 )     (815 )     (820 )     (1,976 )

Net income (loss)

  $ (2,096 )   $ (424 )   $ 189     $ (2,520 )   $ 706  
                                         

Net income (loss) per share:

                                       

Basic

  $ (0.07 )   $ (0.01 )   $ 0.01     $ (0.08 )   $ 0.02  

Diluted

  $ (0.07 )   $ (0.01 )   $ 0.01     $ (0.08 )   $ 0.02  
                                         

Weighted average common shares:

                                       

Basic

    31,962       32,168       32,111       32,065       32,051  

Diluted

    31,962       32,168       33,388       32,065       33,491  

 

 

 

 

 

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,

 
   

2018

   

2018

   

2017

   

2018

   

2017

 

GAAP net income (loss)

  $ (2,096 )   $ (424 )   $ 189     $ (2,520 )   $ 706  

Adjustments to reconcile GAAP net income to non-GAAP net income:

                                       

Stock-based compensation expense

    2,701       2,856       2,904       5,557       5,788  

Amortization of acquired technology

    143       144       96       287       192  

Amortization of other acquired intangible assets

    108       109       92       217       184  

Non-recurring severance payment (1)

    -       283       -       283       -  

Tax impact of adjustments

    (96 )     (747 )     (629 )     (843 )     (1,624 )

Non-GAAP net income

  $ 760     $ 2,220     $ 2,652     $ 2,981     $ 5,246  
                                         

GAAP net income (loss) per diluted share

  $ (0.07 )   $ (0.01 )   $ 0.01     $ (0.08 )   $ 0.02  

Non-GAAP net income per diluted share

  $ 0.02     $ 0.07     $ 0.08     $ 0.09     $ 0.16  
                                         
                                         

Shares used in diluted shares calculation

    32,304       32,645       33,388       32,474       33,491  

 

PDF SOLUTIONS, INC.

RECONCILIATION OF GAAP NET INCOME TO EBITDAR (UNAUDITED)

(In thousands, except per share amounts)

 

   

Three months ended

   

Six months ended

 
   

June 30,

   

March 31,

   

June 30,

   

June 30,

   

June 30,

 
   

2018

   

2018

   

2017

   

2018

   

2017

 
                                         

GAAP net income (loss)

  $ (2,096 )   $ (424 )   $ 189     $ (2,520 )   $ 706  

Adjustments to reconcile GAAP net income to EBITDAR:

                                       

Stock-based compensation expense

    2,701       2,856       2,904       5,557       5,788  

Amortization of acquired technology

    143       144       96       287       192  

Amortization of other acquired intangible assets

    108       109       92       217       184  

Non-recurring severance payment (1)

    -       283       -       283       -  

Depreciation expense

    1,271       1,260       1,196       2,531       2,286  

Income tax benefit

    (439 )     (381 )     (815 )     (820 )     (1,976 )

EBITDAR

  $ 1,688     $ 3,847     $ 3,662     $ 5,535     $ 7,180  

 

(1) These are non-recurring severance payments related to reduction in workforce. The Company is excluding these costs in order to provide better comparability between periods.

 

 

Image Exhibit

Exhibit 99.2