Results Ahead of Guidance
Fourth Quarter 2005 Results
Revenues in the fourth quarter of 2005 were $2.5 million, compared with $2.2 million in the third quarter of 2005.
Net loss in the fourth quarter of 2005 was $2.5 million, or a net loss of $0.13 per share, compared with a net loss of $2.9 million, or a net loss of $0.15 per share, reported in the third quarter of 2005.
Gross margins in the fourth quarter were 67 percent, compared with 66 percent in the third quarter.
Operating expenses, including restructuring charges, were $4.3 million in the fourth quarter, compared with $4.4 million in the third quarter of 2005. During Q4 the Company announced and executed a restructuring plan, incurring restructuring charges of $0.7 million. Reductions in personnel, primarily in administration, engineering and marketing, and the closing of a facility in Canada, together with the downsizing of its facility in India, accounted for these charges. The decrease in operating expenses resulted from lower payroll costs, as headcount was trimmed from 106 to 78 employees and a portion of accrued bonus expense was reversed as operating results were below planned thresholds.
At Dec. 31, 2005, LogicVision had $10.7 million in cash, cash equivalents and investments, and no bank debt.
New orders received during the fourth quarter totaled $3.3 million. The company exited the fourth quarter with a backlog of $20.3 million, including $6.7 million of deferred revenues, compared with a backlog of $19.8 million, including $5.7 million of deferred revenues, at the end of the third quarter. Approximately $7.2 million of the total backlog is expected to become recognized as revenue during 2006.
Fiscal Year 2005 Results
For the fiscal year ended Dec. 31, 2005, LogicVision reported revenues of $10.9 million, an 8 percent increase from revenues of $10.1 million in 2004. The net loss for 2005 was $10.0 million, or a net loss of $0.53 per share, compared with the 2004 net loss of $8.4 million or a net loss of $0.51 per share. Gross margins in 2005 were 71 percent, compared with 68 percent in the prior year.
"We are pleased that we are on a growth path again. We had annual bookings of $13.5 million in 2005. This is a 37% increase over 2004 and positions us well for 2006," said James T. Healy, president and CEO of LogicVision.
"Last quarter we introduced ATPG Compression, an additional LV2005 capability, allowing our customers to use our embedded test with ATPG compression in a single flow. We expect this capability will extend the usage of LV2005 to less complex designs, thus expanding our market coverage. Last quarter we also had our first sale of our SiVision yield learning solution to one of our top embedded test customers," Healy said.
Guidance for the First Quarter of 2006 * Revenues in Q1 are expected to be in the range of $2.2 million to $2.3 million * Net loss in Q1 is expected to be in the range of $2.0 million to $2.2 million, or a net loss in the range of $0.11 to $0.12 per share. * Cash, cash equivalents and investments are expected to be no less than $9 million at the end of Q1. Conference Call
LogicVision will broadcast its conference call discussion of fourth quarter and 2005 financial results today, Jan. 31, 2006 at 2 p.m. Pacific time. To listen to the call, please dial (800) 619-7886, 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 (203) 369-3735. 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 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 SiVision 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 and net loss, 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, the Company's ability to realize anticipated savings from the restructuring, and other risks detailed in LogicVision's Form 10-K for the year ended December 31, 2004, Form 10-Q for the quarter ended Sept. 30, 2005 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.
- Summary financial data follows - LOGICVISION, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amount) (Unaudited) Twelve Months Three Months Ended Ended December 31, December 31, 2005 2004 2005 2004 Revenues: License $1,295 $1,575 $6,735 $5,686 Service 1,147 1,118 3,951 4,095 Product 28 35 196 313 Total revenues 2,470 2,728 10,882 10,094 Cost of revenues: License 266 187 916 323 Service 548 639 2,116 2,616 Product 13 33 88 299 Total cost of revenues 827 859 3,120 3,238 Gross profit 1,643 1,869 7,762 6,856 Operating expenses: Research and development 1,387 1,452 5,848 5,111 Sales and marketing 1,824 1,707 7,517 6,075 General and administrative 1,103 1,020 4,725 4,386 Total operating expenses 4,314 4,179 18,090 15,572 Loss from operations (2,671) (2,310) (10,328) (8,716) Interest and other income, net 75 71 286 395 Loss before provision for income taxes (2,596) (2,239) (10,042) (8,321) Provision for income taxes (108) 31 (69) 67 Net loss $(2,488) $(2,270) $(9,973) $(8,388) Net loss per common share, basic and diluted $(0.13) $(0.13) $(0.53) $(0.51) Weighted average number of shares outstanding, basic and diluted 18,841 17,394 18,677 16,338 LOGICVISION, INC CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) December 31, December 31, 2005 2004 ASSETS Current Assets: Cash and cash equivalents $3,620 $5,790 Short-term investments 7,076 15,552 Accounts receivable, net of allowance for doubtful accounts of $25 and $12 2,512 1,125 Prepaid expenses and other current assets 1,544 1,459 Total current assets 14,752 23,926 Property and equipment, net 1,097 907 Long-term investments - 4,960 Intangible assets, net 464 767 Goodwill 6,846 6,846 Other long-term assets 1,182 1,837 Total assets $24,341 $39,243 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-term debt $ - $3,500 Accounts payable 484 481 Accrued liabilities 1,702 2,385 Deferred revenue, current portion 3,137 4,885 Total current liabilities 5,323 11,251 Deferred revenue 3,580 3,184 Total liabilities 8,903 14,435 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: 18,892 shares at December 31, 2005 and 18,170 shares at December 31, 2004 2 2 Additional paid-in capital 104,417 103,734 Deferred stock-based compensation - (1) Accumulated other comprehensive income (loss) (7) 74 Accumulated deficit (88,974) (79,001) Total stockholders' equity 15,438 24,808 Total liabilities and stockholders' equity $24,341 $39,243