Revenues at High End of Guidance and a Record Backlog
First Quarter 2006 Results
Revenues in the first quarter of 2006 were $2.3 million, compared with $2.5 million in the fourth quarter of 2005.
Net loss in the first quarter of 2006 was $2.2 million, or $0.12 per share, compared with a net loss of $2.5 million, or $0.13 per share, reported in the fourth quarter of 2005.
Gross margins in the first quarter improved to 71 percent, compared with 67 percent in the fourth quarter of 2005.
Operating expenses were $3.9 million in the first quarter, including $0.1 million of stock-based employee compensation charges in accordance with SFAS 123 (R). This compares with $4.3 million of operating expenses in the fourth quarter of 2005, including $0.7 million of restructuring charges. The fourth quarter also reflected the reversal of accrued bonus expense of $0.5 million as operating results were below planned thresholds.
At March 31, 2006, LogicVision had $9.4 million in cash, cash equivalents and investments, and no bank debt.
New orders received during the first quarter totaled $3.3 million, of which $2.4 million is expected to be recognized as revenue ratably over the next 12 months. The company exited the first quarter with a record backlog of $21.0 million, including $7.4 million of deferred revenues, compared with a backlog of $20.3 million, including $6.7 million of deferred revenues, at the end of the fourth quarter. Approximately $8.5 million of the total backlog is expected to become recognized as revenue ratably over the next 12 months.
"This quarter, we are pleased to have achieved the highest first quarter bookings since 2002, and an increase of three times the bookings from a year ago. We entered the second quarter of 2006 with a record backlog. Our goal remains to achieve positive cash flow and profitability by the end of the year, and we believe we are on track to meet that goal," said James T. Healy, president and CEO of LogicVision.
"We booked four first-time customers in the first quarter, including AMD and AMI Semiconductor. In addition, we booked new business with ten existing accounts and eleven accounts renewed their current contracts. We believe that market momentum for our products continues to build, as companies move to using smaller manufacturing geometries, and the very real need for our eyes- in-the-die products becomes more and more apparent," Healy said.
Guidance for the Second Quarter of 2006 -- Revenues are expected to be in the range of $2.6 million to $2.7 million, an expected increase of 11% to 15%. -- Net loss is expected to be in the range of $1.8 million to $2.0 million, or a net loss in the range of $0.10 to $0.11 per share. -- Cash, cash equivalents and investments are expected to be approximately $9 million at the end of the second quarter Conference Call
LogicVision will broadcast its conference call discussion of first quarter 2006 financial results today, Apr. 25, 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 203-369-0265. 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 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, 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, 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amount) (Unaudited) Three Months Ended March 31, 2006 2005 Revenues: License $ 1,219 $ 2,697 Service 1,130 928 Product 52 Total revenues 2,349 3,677 Cost of revenues: License 257 186 Service 424 569 Product 25 Total cost of revenues 681 780 Gross profit 1,668 2,897 Operating expenses: Research and development 1,087 1,690 Sales and marketing 1,880 1,776 General and administrative 964 1,289 Total operating expenses 3,931 4,755 Loss from operations (2,263) (1,858) Interest and other income, net 72 62 Loss before provision for income taxes (2,191) (1,796) Provision for income taxes 57 16 Net loss $(2,248) $(1,812) Net loss per common share, basic and diluted $ (0.12) $ (0.10) Weighted average number of shares outstanding, basic and diluted 18,921 18,389 LOGICVISION, INC CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) March 31, December 31, 2006 2005 ASSETS Current Assets: Cash and cash equivalents $7,658 $3,620 Short-term investments 1,718 7,076 Accounts receivable, net of allowance for doubtful accounts of $29 and $25 2,930 2,512 Prepaid expenses and other current assets 1,396 1,544 Total current assets 13,702 14,752 Property and equipment, net 974 1,097 Intangible assets, net 389 464 Goodwill 6,846 6,846 Other long-term assets 1,092 1,182 Total assets $23,003 $24,341 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $482 $484 Accrued liabilities 1,787 1,702 Deferred revenue, current portion 5,010 3,137 Total current liabilities 7,279 5,323 Deferred revenue 2,393 3,580 Total liabilities 9,672 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: 18,934 shares at March 31, 2006 and 18,892 shares at December 31, 2005 2 2 Additional paid-in capital 104,543 104,417 Accumulated other comprehensive income (loss) 8 (7) Accumulated deficit (91,222) (88,974) Total stockholders' equity 13,331 15,438 Total liabilities and stockholders' equity $23,003 $24,341