LogicVision Reports First Quarter 2006 Financial Results

Revenues at High End of Guidance and a Record Backlog

SAN JOSE, Calif., Apr. 25 /PRNewswire-FirstCall/ -- LogicVision, Inc. (NASDAQ: LGVN), a leading provider of yield learning capabilities that enable its customers to quickly and effectively improve product yields, today announced its financial results for the first quarter ended March 31, 2006.

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.


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
                   (in thousands, except per share amount)

                                              Three Months Ended
                                                   March 31,
                                               2006       2005

     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)

                                                                                                          March  31,      December  31,
                                                                                                              2006                      2005

        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


        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

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