Cadence Announces Record Fourth Quarter; Revenue Grew 46 Percent; Fourth Quarter Bookings and Revenue at Record High.Business Editors SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Jan. 23, 2001 Cadence Design Systems (company) Cadence Design Systems - A company that sells electronic design automation software and services. http://cadence.com/. See also Verilog. , Inc. (NYSE NYSE See: New York Stock Exchange :CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. ), the world's leading supplier of electronic design products and services, today announced fourth quarter revenues of $391 million and $0.24 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . Total revenue for 2000 was $1.3 billion, and diluted earnings per share were $ 0.47. For the quarter, Cadence cadence, in music, the ending of a phrase or composition. In singing the voice may be raised or lowered, or the singer may execute elaborate variations within the key. (R) booked 46 percent of its software products under subscription licenses, well above its goal of 30 percent. For comparative purposes, except where noted, the results discussed throughout this release reflect earnings before unusual items and amortization of acquired intangibles. The $391 million in fourth-quarter revenue represents a 46 percent increase over the comparable quarter in 1999. Product revenue for the fourth quarter totaled $216 million, an 81 percent increase over the fourth quarter of 1999. Total services revenue was $93 million in the fourth quarter, a 25 percent increase over the fourth quarter of 1999. Services revenue for the full year totaled $336 million, up 14 percent from 1999. Tality(R) Corporation, Cadence's Design Services business, contributed $56 million of this services revenue in the fourth quarter, representing a sequential One after the other in some consecutive order such as by name or number. growth of eight percent. For the full year, Tality's revenues totaled $199 million and grew 52 percent over 1999. Including amortization of acquired intangibles, deferred stock compensation and unusual items totaling $28 million, the company reported diluted earnings per share of $0.16 for the fourth quarter. "We have just completed our best quarter ever and have significantly overachieved on our six-quarter plan," said Ray Bingham Bing·ham , George Caleb 1811-1879. American painter noted for his portraits and genre paintings of the American frontier. , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Cadence. "Moving into 2001, Cadence has a good wind in its sails, driven by strong demand for our design solutions, particularly in networking and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. . Customers continue to invest in next-generation designs, and need new-generation technology to accomplish those designs. Cadence is uniquely positioned to meet the changing needs of our customers." Fourth Quarter Business Highlights Among the achievements in the fourth quarter was the announcement that Philips (company) Philips - A Dutch multinational electronics company. It produces washing machines, consumer electronics, integrated circuits and light bulbs. Together with Sony they set the Compact Disc standard, especially Green Book CD-ROM. Semiconductors has renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. and increased its license agreement for Cadence design technology, including Cadence Synthesis Place-and-Route (SP&R), Cadence Analog/Mixed Signal Designer, Assura (TM) physical verification Physical verification A procedure auditors use to ensure that inventory recorded in the book is correct by actually checking out the physical inventory. and extraction tool suite, and Verification Cockpit This article is about the flight deck of an aircraft. For other uses, see Cockpit (disambiguation). A cockpit is the area usually nearer the front of a piloted aircraft from which a pilot controls the aircraft. . In methodology services, Cadence entered into a collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. , multi-million dollar Virtual Computer Automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. Design (VCAD) contract with Metalink
Not to be confused with the unrelated Oracle MetaLink, Oracle Corporation's support website. , a leading fabless semiconductor company A fabless semiconductor company specializes in the design and sale of hardware devices implemented on semiconductor chips. It achieves an advantage by outsourcing the fabrication of the devices to a specialized semiconductor manufacturer called a semiconductor foundry or "fab. . Cadence will help create and maintain Metalink's design environments while also serving as a design consultant. Metalink utilized an integrated Cadence SP&R implementation flow to design three high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. (ICs) targeted at the competitive xDSL Refers to DSL technologies in general, including ADSL, HDSL, SDSL and VDSL. See DSL. xDSL - Digital Subscriber Line market. While growth in every technology segment was strong, it was an exceptional year for SP&R. Bookings for the year were more than $110 million, growing nearly 300 percent. Twelve of Cadence's top 20 contracts in the fourth quarter included Physically Knowledgeable Synthesis (PKS PKS Penalty Kicks Saved (soccer; goalie save) PKS Partai Keadilan Sejahtera (Indonesia) PKS Phi Kappa Sigma (international male fraternity) PKS Pallister-Killian Syndrome ) and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. Silicon Ensemble The word ensemble can refer to
pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. on Cadence Ambit (language) AMBIT - Algebraic Manipulation by Identity Translation (also claimed: "Acronym May Be Ignored Totally"). An early pattern-matching language, developed by C. Christensen of Massachusetts Computer Assocs in 1964, aimed at algebraic manipulation. (R) and PKS as their synthesis tool. The growing importance of analog--driven by communications--led to a strong quarter for the Custom IC segment with 19 of the top 20 contracts including Custom IC solutions. Cadence also announced that it has signed a definitive agreement to acquire CadMOS Design Technology, a privately held design tools firms based in San Jose, CA. The acquisition will enhance Cadence's signal integrity capabilities with the integration of CadMOS's world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. signal integrity analysis capability into Cadence's SP&R design solutions and Assura physical verification and extraction tool suite. Business Outlook The following statements are based on current expectations. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed after Dec. 30, 2000. Cadence anticipates that total revenue in the first quarter of 2001 will show a typical seasonal decline of approximately 10 percent from fourth quarter revenues of $391 million. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the first quarter of 2001 are expected to be in the mid-teens. For the full year 2001, Cadence anticipates total revenue growth of at least twenty percent, and operating margin for the year in the 20 percent range. The statements by Ray Bingham and the above statements contained in this Outlook are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on current expectations or beliefs, as well as a number of assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties and other factors, many of which are outside the control of Cadence, including among others: Cadence's ability to compete successfully in the design automation product and the commercial electronic design and methodology services industries; the mix of products and services sold and the timing of significant orders for its products; recent economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries; and the acquisition of other companies or the failure to successfully integrate them. For a detailed discussion of these and other cautionary statements, please refer to the Company's filings with the Securities and Exchange Commission. These include the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January January: see month. 1, 2000 and the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2000. Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings Cadence may reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it the Outlook published in this press release. At the same time, Cadence will keep this press release, including the outlook, publicly available on its Web site (www.cadence.com). Prior to the start of the Quiet Period (described below), the public can continue to rely on the Outlook on the Web site as still being Cadence's current expectations on matters covered, unless Cadence publishes a notice stating otherwise. Beginning March 17, 2001, Cadence will observe a "Quiet Period" during which the Outlook as provided in this press release and the company's quarterly report on Form 10-Q no longer constitute the company's current expectations. During the Quiet Period, the Outlook in these documents should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company. During the Quiet Period, Cadence representatives will not comment concerning Outlook or Cadence's financial results or expectations. The Quiet Period will extend until the day when Cadence's next quarterly Earnings Release is published, presently scheduled for April 17, 2001. About Cadence Cadence is the largest supplier of electronic design automation products, methodology services, and design services used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment, consumer electronics, and a variety of other electronics-based products. With approximately 5,400 employees and 2000 revenues of approximately $1.3 billion, Cadence has sales offices, design centers, and research facilities around the world. The Company is headquartered in San Jose, Calif. and traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol CDN. More information about the company, its products and services may be obtained from the World Wide Web at http://www.cadence.com. Cadence, the Cadence logo, Silicon Ensemble and Ambit are registered trademarks, and Assura is a trademark, of Cadence Design Systems, Inc. Tality is a trademark of Tality Corporation. All other trademarks are properties of their owners.
Cadence Design Systems, Inc.
Supplemental Condensed Consolidated Statements of Operations
Excluding Unusual Items, Amortization of Acquired Intangibles, and
Amortization of Deferred Stock Compensation For the
Quarters and Years Ended December 30, 2000, and January 1, 2000
(in $000's, except per share amounts)
Supplemental
-------------------------------------------------------
Quarters Ended Years Ended
------------------ -----------------
Dec. 30, Jan. 1, Dec. 30, Jan. 1,
2000 2000 %Change 2000 2000 %Change
-------- ------- ------- -------- --------- -------
Revenue
Product $ 216,173 $119,554 81% $ 627,429 $ 505,459 24%
Services 92,655 74,374 25% 335,967 294,916 14%
Maintenance 82,086 74,094 11% 316,154 292,928 8%
--------- -------- --------- --------
Total revenue 390,914 268,022 46% 1,279,550 1,093,303 17%
--------- -------- --------- --------
Costs and Expenses
Cost of
product 26,027 20,499 27% 89,937 79,504 13%
Cost of
services 58,431 48,099 21% 215,605 191,760 12%
Cost of
maintenance 16,614 14,136 18% 63,315 53,579 18%
Marketing and
sales 111,096 103,003 8% 390,139 354,205 10%
Research and
development 68,988 59,507 16% 263,947 219,181 20%
General and
administrative 24,074 22,123 9% 94,478 86,735 9%
--------- -------- --------- --------
Total costs
and expenses 305,230 267,367 14% 1,117,421 984,964 13%
--------- -------- --------- --------
Income
from
operations 85,684 655 162,129 108,339
Other income,
net 555 574 4,581 1,370
--------- -------- --------- --------
Income
before
provision
for income
taxes 86,239 1,229 166,710 109,709
Provision
for income
taxes 22,853 350 44,178 31,313
--------- -------- --------- --------
Net income $ 63,386 $ 879 $ 122,532 $ 78,396
========= ======== ======== ========
Diluted net
income
per share $ 0.24 $ 0.00 $ 0.47 $ 0.31
========= ======== ======== ========
Weighted average
common and
potential
common shares
outstanding --
assuming
dilution 265,377 258,425 3% 262,696 256,641 2%
========= ======== ======== ========
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Quarters and Years Ended
December 30, 2000, and January 1, 2000
(in $000's, except per share amounts)
Quarters Ended Years Ended
-------------------- -------------------
Dec. 30, Jan. 1, Dec. 30, Jan. 1,
2000 2000 2000 2000
--------- -------- --------- ---------
Revenue
Product $ 216,173 $ 119,554 $ 627,429 $ 505,459
Services 92,655 74,374 335,967 294,916
Maintenance 82,086 74,094 316,154 292,928
--------- --------- --------- ---------
Total revenue 390,914 268,022 1,279,550 1,093,303
--------- --------- --------- ---------
Costs and Expenses
Cost of product 26,027 20,499 89,937 79,504
Cost of services 58,431 48,099 215,605 191,760
Cost of maintenance 16,614 14,136 63,315 53,579
Amortization of
acquired intangibles 20,321 19,385 80,503 61,788
Marketing and sales 111,096 103,003 390,139 354,205
Research and
development 68,988 59,507 263,947 219,181
General and
administrative 24,074 22,123 94,478 86,735
Amortization of
deferred stock
compensation 6,226 -- 11,390 --
Unusual items 1,884 13,290 6,821 59,301
--------- --------- --------- ---------
Total costs and
expenses 333,661 300,042 1,216,135 1,106,053
--------- --------- --------- ---------
Income (loss) from
operations 57,253 (32,020) 63,415 (12,750)
Other income, net 555 574 4,581 1,370
--------- --------- --------- ---------
Income (loss) before
provision (benefit)
for income taxes 57,808 (31,446) 67,996 (11,380)
Provision (benefit)
for income taxes 15,319 (8,962) 18,019 2,695
--------- --------- --------- ---------
Net income (loss) $ 42,489 $ (22,484) $ 49,977 $ (14,075)
========= ========= ========= ========
Basic net income (loss)
per share $ 0.17 $ (0.09) $ 0.20 $ (0.06)
========= ========= ========= ========
Diluted net income
(loss) per share $ 0.16 $ (0.09) $ 0.19 $ (0.06)
========= ========= ========= ========
Weighted average common
shares outstanding 244,629 243,217 244,565 242,037
========= ========= ========= ========
Weighted average common
and potential common
shares outstanding --
assuming dilution 265,377 243,217 262,696 242,037
========= ========= ========= ========
----------------------------------------------------------------------
Supplemental diluted
earnings per share
before unusual items,
amortization of
acquired intangibles,
and amortization of
deferred stock
compensation $ 0.24 $ 0.00 $ 0.47 $ 0.31
========= ========= ========= ========
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
December 30, 2000, and January 1, 2000
(In $000's)
Dec. 30, Jan. 1,
2000 2000
------------- ------------
Cash and short-term investments $ 136,969 $ 118,758
Receivables, net 289,468 248,034
Inventories 20,149 19,872
Prepaid expenses and other 110,262 93,248
------------- ------------
Total current assets 556,848 479,912
Property, plant and equipment, net 368,879 330,409
Software development costs, net 10,738 10,692
Acquired intangibles, net 326,518 402,154
Installment contract receivables 38,420 84,160
Other assets 175,918 152,332
------------- ------------
Total assets $ 1,477,321 $ 1,459,659
============= ============
Notes payable and current portion
of capital leases $ 2,212 $ 3,924
Accounts payable and accrued
liabilities 273,594 265,518
Income taxes payable -- --
Deferred revenue 215,768 152,116
------------- ------------
Total current liabilities 491,574 421,558
Long-term debt and capital leases 3,298 25,024
Other long-term liabilities 72,984 26,928
Stockholders' equity 909,465 986,149
------------- ------------
Total liabilities and stockholders'
equity $ 1,477,321 $ 1,459,659
============= ============
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