Revenue at High End of Guidance and Net Loss Better Than Forecast
Third Quarter 2006 Results
Revenues in the third quarter of 2006 were $2.7 million, compared with $2.8 million in the second quarter of 2006.
Net loss in the third quarter of 2006 was $1.7 million, or $0.09 per share, compared with a net loss of $1.7 million, or $0.09 per share, reported in the second quarter of 2006.
Gross margins in the third quarter were 72 percent, compared with 76 percent in the second quarter of 2006.
Operating expenses were $3.7 million in the third quarter, including $98,000 of stock-based employee compensation charges in accordance with SFAS 123(R). This compares with $3.9 million of operating expenses in the second quarter of 2006, including $124,000 of stock-based employee compensation charges in accordance with SFAS 123(R).
At September 30, 2006, LogicVision had $8.0 million in cash, cash equivalents and investments, compared with $9.6 million at June 30, 2006. The company has no bank debt.
New orders received during the third quarter totaled $3.8 million. The company exited the third quarter with a backlog of $21.4 million, including $6.6 million of deferred revenues, compared with a backlog of $19.8 million, including $6.4 million of deferred revenues, at the end of the second quarter. Approximately $9.4 million of the total backlog is expected to become recognized as revenue ratably over the next 12 months.
"In the third quarter, we achieved revenues at the high end of our guidance range and net loss better than forecasted on our last earnings conference call. We were able to lower our operating expenses again this quarter, making this the sixth consecutive quarter of reduced operating expenses. While new orders received during the quarter were good, they were not as high as we had anticipated which is why we used more cash than expected during the quarter. We expect our cash balances at the end of the fourth quarter to remain at approximately the current level," said James T. Healy, president and CEO of LogicVision.
"During the quarter, we focused on the key drivers of our long-term success -- developing and introducing innovative technologies, forging relationships with key partners and working with our customers to find ways to accelerate the sales cycle. We believe we are well positioned to capitalize on the Built-In-Self-Test market over the next year as more companies move to 90nm manufacturing processes and our customer evaluations are completed," Mr. Healy said.
Guidance for the Fourth Quarter of 2006 * Revenues are expected to be in the range of $2.7 million to $3.0 million. * Net loss is expected to be in the range of $1.2 million to $1.5 million or a net loss in the range of $0.06 to $0.08 per share. * Cash, cash equivalents and investments are expected to be approximately $8.0 million at the end of the fourth quarter. Conference Call
LogicVision will broadcast its conference call discussion of third quarter 2006 financial results today, October 24, 2006 at 2 p.m. Pacific time. To listen to the call, please dial 800-857-5485, pass code: "LogicVision." A taped replay will be made available approximately one hour after the conclusion of the call and will remain available for one week. To access the replay, dial 866-514-4267. The LogicVision financial results conference call will be available via a live web cast on the investor relations section of the company's web site at http://www.logicvision.com. An archived web cast of the call will be available at http://www.logicvision.com for one year.
About LogicVision, Inc.
LogicVision, Inc. provides unique test and yield learning capabilities in the design for manufacturing space. These capabilities enable its customers, leading semiconductor companies, to more quickly and efficiently learn to improve product yields. The company's advanced Design for Test (DFT) product line, ETCreate, works together with ETAccess and Yield Insight yield learning applications to enable increased profit by reducing device field returns, reducing test costs, and accelerating both time to market and time to yield. LogicVision solutions are used in the development of semiconductor ICs for products ranging from digital consumer goods to wireless communications devices and satellite systems. LogicVision was founded in 1992 and is headquartered in San Jose, Calif. For more information visit http://www.logicvision.com.
FORWARD LOOKING STATEMENTS
Except for the historical information contained herein, the matters set forth in this press release, including statements as to the Company's outlook, expected bookings, the features, benefits and enhancements of the Company's products, market opportunities, and the Company's expected financial results, including revenues, net loss, and cash, cash equivalents and investments are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the possibility that orders could be modified, cancelled or not renewed, the ability of the Company to negotiate and sign customer agreements and obtain purchase orders, trends in capital spending in the semiconductor industry, the timing and nature of customer orders, whether customers accept the Company's new products, the impact of competitive products and alternative technological advances, and other risks detailed in LogicVision's Form 10-K for the year ended December 31, 2005, Form 10-Q for the quarter ended June 30, 2006 and from time to time in LogicVision's SEC reports. These forward-looking statements speak only as of the date hereof. LogicVision disclaims any obligation to update these forward-looking statements.
LogicVision, Embedded Test and LogicVision logos are trademarks or registered trademarks of LogicVision, Inc. in the United States and other countries. All other trademarks and service marks are the property of their respective owners.
LOGICVISION, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2006 2005 2006 2005 Revenues: License $1,332 $1,250 $3,856 $5,440 Service 1,312 892 3,809 2,804 Product 10 58 110 168 Total revenues 2,654 2,200 7,775 8,412 Cost of revenues: License 259 261 746 650 Service 486 468 1,339 1,568 Product - 25 - 75 Total cost of revenues 745 754 2,085 2,293 Gross profit 1,909 1,446 5,690 6,119 Operating expenses: Research and development 1,014 1,394 3,137 4,461 Sales and marketing 1,745 1,943 5,404 5,693 General and administrative 956 1,054 2,957 3,622 Total operating expenses 3,715 4,391 11,498 13,776 Loss from operations (1,806) (2,945) (5,808) (7,657) Interest and other income, net 81 81 243 211 Loss before provision for income taxes (1,725) (2,864) (5,565) (7,446) Provision for income taxes 15 9 91 39 Net loss $(1,740) $(2,873) $(5,656) $(7,485) Net loss per common share, basic and diluted $(0.09) $(0.15) $(0.29) $(0.40) Weighted average number of shares outstanding, basic and diluted 20,058 18,836 19,326 18,621 LOGICVISION, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) September 30, December 31, 2006 2005 ASSETS Current Assets: Cash and cash equivalents $5,247 $3,620 Short-term investments 2,740 7,076 Accounts receivable, net of allowance for doubtful accounts of $15 and $25, respectively 1,449 2,512 Prepaid expenses and other current assets 1,149 1,544 Total current assets 10,585 14,752 Property and equipment, net 873 1,097 Intangible assets, net 238 464 Goodwill 6,846 6,846 Other long-term assets 788 1,182 Total assets $19,330 $24,341 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $572 $484 Accrued liabilities 1,962 1,702 Deferred revenue, current portion 4,849 3,137 Total current liabilities 7,383 5,323 Deferred revenue 1,714 3,580 Total liabilities 9,097 8,903 Commitments and contingencies Stockholders' Equity: Preferred stock, $0.0001 par value: Authorized: 5,000 shares; Issued and outstanding: no shares issued and outstanding - - Common stock, $0.0001 par value: Authorized: 125,000 shares; Issued and outstanding: 20,081 shares at September 30, 2006 and 18,892 shares at December 31, 2005 2 2 Additional paid-in capital 104,845 104,417 Accumulated other comprehensive income (loss) 16 (7) Accumulated deficit (94,630) (88,974) Total stockholders' equity 10,233 15,438 Total liabilities and stockholders' equity $19,330 $24,341
Web site: http://www.logicvision.com/