LogicVision Reports Third Quarter Financial Results

SAN JOSE, Calif., Oct. 21 /PRNewswire/ -- Cash Balances Increase to $7.5 M

SAN JOSE, Calif., Oct. 21 /PRNewswire-FirstCall/ -- LogicVision, Inc. (NASDAQ: LGVN), a leading provider of semiconductor built-in-self-test (BIST) and diagnostic solutions, today announced its financial results for the third quarter of 2008, ended September 30, 2008.

Third Quarter 2008 Results

Revenues in the third quarter of 2008 were $3.2 million, compared with $3.0 million in the second quarter of 2008.

Net loss in the third quarter of 2008 was $499,000, or $0.05 per share, compared with a net loss of $1.0 million, or $0.10 per share, reported in the second quarter of 2008. The third quarter net loss was the smallest reported by LogicVision since 2001 when the Company went public.

Gross margins in the third quarter were 74 percent, compared with 73 percent in second quarter of 2008.

Operating expenses were $2.9 million in the third quarter, including $137,000 of stock-based employee compensation charges in accordance with SFAS 123 ( R ). This compares with $3.3 million of operating expenses in the second quarter of 2008, including $116,000 of stock-based employee compensation charges in accordance with SFAS 123(R).

At September 30, 2008 LogicVision had $7.5 million in cash, cash equivalents and investments, compared with $6.2 million at June 30, 2008. The company has no outstanding bank debt.

New orders received during the third quarter totaled $1.3 million. The Company exited the third quarter with a 12-month backlog of $10.4 million, compared with a 12-month backlog of $10.5 million at the end of the second quarter. The Company's total backlog is greater than $20 million.

"We are pleased with our third quarter financial results. Our revenue was at the high end of the guidance we gave in July, our net loss was better than the guidance we gave, and our cash balance increased to $7.5 million," said James T. Healy, president and CEO of LogicVision. "We are seeing some booking volatility. The current state of the economy has resulted in delayed orders. On the other hand we believe that are building good momentum with leading semiconductor companies for adoption of our test and diagnostic solutions to help them streamline production and yield ramp of customer's designs at the right costs. As companies move to lower nodes, larger designs and convergent technologies the problem of affordable quality becomes more pronounced and therefore our value more compelling thus driving broader adoption of logic-BIST," said Mr. Healy.

Guidance for the Fourth Quarter of 2008

    --  Revenues are expected to be in the range of $3.0 million to $3.2
    --  Net loss is expected to be in the range of $600,000 to $800,000, or a
        net loss in the range of $0.06 to $0.08 per share.
    --  Cash, cash equivalents and investments are expected to be between
        approximately $5.0 million and $5.5 million at the end of the fourth

Conference Call

LogicVision will broadcast its conference call discussion of third quarter of 2008 financial results today, October 21, 2008 at 2 p.m. Pacific time. To listen to the call, please dial 888-946-7494, 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 866-369-3652. 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 (NASDAQ: LGVN) provides proprietary technologies for embedded test and yield learning that enable more efficient manufacturing test of complex semiconductors. LogicVision's embedded test solutions allow integrated circuit designers to embed test functionality into a semiconductor design that is used during semiconductor production test and throughout the useful life of the chip. The company's advanced Design for Test (DFT) product line, ETCreate, works together with Silicon Insight applications and Yield Insight to improve profit margins by reducing device field returns and test costs, accelerating silicon bring-up times and shortening both time to market and time to yield. For more information on the company and its products, please visit the LogicVision website at 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, expansion in use of the Company's products and increases in the adoption of the Company's products by customers, interest in the Company's products, growth in the market potential for the Company's products, 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 or cancelled, existing customer orders may not be renewed, customers may not adopt or expand their use of the Company's products, 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 and existing products, the impact of competitive products and alternative technological advances, and other risks detailed in LogicVision's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 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 data)

                                          Three Months       Nine Months
                                              Ended             Ended
                                          September 30,     September 30,
                                           2008    2007     2008     2007

      License                                         $1,582    $1,465      $4,374      $4,027
            Service                                                          1,598      1,566        4,803        4,717
                    Total  revenues                                    3,180      3,031        9,177        8,744

        Cost  of  revenues:
            License                                                              167          229            513            685
            Service                                                              673          611        1,985        1,686
                    Total  cost  of  revenues                        840          840        2,498        2,371
        Gross  profit                                                    2,340      2,191        6,679        6,373

        Operating  expenses:
              Research  and  development                          736          920        2,545        2,802
              Sales  and  marketing                                1,252      1,175        4,297        4,023
              General  and  administrative                      868          896        2,678        2,885
                    Total  operating  expenses                2,856      2,991        9,520        9,710

        Loss  from  operations                                      (516)      (800)    (2,841)    (3,337)
        Interest  and  other  income,  net                      17          112              93            284

        Loss  before  provision  (benefit)
          for  income  taxes                                            (499)      (688)    (2,748)    (3,053)
        Income  tax  provision  (benefit)                        -              -              14            (42)

        Net  loss                                                            $(499)    $(688)  $(2,762)  $(3,011)

        Net  loss  per  common  share,
          basic  and  diluted                                      $(0.05)  $(0.07)    $(0.29)    $(0.31)
        Weighted  average  number  of  shares
          outstanding,  basic  and  diluted              9,545      9,660        9,606        9,651

                                                              LOGICVISION,  INC.
                                          (in  thousands,  except  per  share  data)

                                                                                              September  30,    December  31,
                                                                                                        2008                  2007

        Current  Assets:
              Cash  and  cash  equivalents                                            $6,928              $6,783
              Short-term  investments                                                        599                1,544
              Accounts  receivable,  net  of  allowance
                for  doubtful  accounts  of  $16  and  $20,
                respectively                                                                      1,559                    996
              Prepaid  expenses  and  other  current
                assets                                                                                      653                1,345
                    Total  current  assets                                                  9,739              10,668
        Property  and  equipment,  net                                                    488                    510
        Goodwill                                                                                      6,846                6,846
        Other  long-term  assets,  net                                                    231                    239
                    Total  assets                                                              $17,304            $18,263

        Current  Liabilities:
              Accounts  payable                                                                  $461                  $413
              Accrued  liabilities                                                          1,613                2,015
              Deferred  revenue,  current  portion                              7,339                5,859
                    Total  current  liabilities                                        9,413                8,287
        Deferred  revenue                                                                      1,078                    605
        Other  long-term  liabilities                                                    116                    165
                    Total  liabilities                                                      10,607                9,057

        Commitments  and  contingencies

        Stockholders'  Equity:
              Preferred  stock,  $0.0001  par  value:
                    Authorized:  5,000,000  shares;
                    Issued  and  outstanding:  no  shares  issued
                      and  outstanding                                                                  -                        -
              Common  stock,  $0.0001  par  value:
                    Authorized:  50,000,000  shares;
                    Issued  and  outstanding:  9,550,000  shares
                      at  September  30,  2008  and  9,666,000
                      shares  at  December  31,  2007                                          1                        1
        Additional  paid-in  capital                                              109,214            108,921
        Accumulated  other  comprehensive  income                                28                      68
        Accumulated  deficit                                                          (102,546)          (99,784)
                    Total  stockholders'  equity                                      6,697                9,206
                    Total  liabilities  and  stockholders'
                      equity                                                                        $17,304            $18,263

Web site: http://www.logicvision.com/

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