Cadence Reports First Quarter Results.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)--April 21, 2004 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. ) today announced total revenue for the first quarter of 2004 of $266 million compared to $263 million in the same period last year. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, 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) recognized a net loss of $9 million, or $0.03 per share in the first quarter of 2004, compared to a net loss of $13 million, or $0.05 per share in the same period last year. In addition to using GAAP results in evaluating Cadence's business, management also believes it useful to measure results using a non-GAAP measure of net income (loss), which excludes as applicable amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and deferred stock compensation, in-process research and development charges, integration and other acquisition-related expenses, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and equity in losses from investments. Non-GAAP net income (loss) is reduced by the amount of additional taxes or tax benefit that the company would accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. if it used non-GAAP results instead of GAAP results to calculate the company's tax liability. Using this non-GAAP measure, earnings in the first quarter were $28 million, or $0.10 per share, on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis as compared to $12 million, or $0.05 per share, on a fully diluted basis, in the same period last year. "In the first quarter we executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. to our financial and technology goals, and introduced our fourth technology platform, Allegro (operating system) Allegro - The code name for the major Mac OS release due in mid-1998. http://devworld.apple.com/mkt/informed/appledirections/mar97/roadmap.html. (R)," said Ray Bingham Bing·ham , George Caleb 1811-1879. American painter noted for his portraits and genre paintings of the American frontier. , Cadence president and chief executive officer. "Customer adoption continued to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our platform strategy, particularly in digital design, where our Encounter(TM) platform is rapidly gaining momentum for the design of big, complex SoCs." Business Highlights of Q1 2004 The number of tapeouts with the full SoC Encounter flow grew to over 150, more than 30 of which were 90 nanometer One billionth of a meter. Nanometers are used to measure the wavelengths of light. See angstrom and metric system. designs, including a 35 million gate processor chip. Leaders such as ARM, Artisan, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) and TSMC TSMC Taiwan Semiconductor Manufacturing Company, Ltd TSMC Taiwan Semiconductor Manufacturing Corporation TSMC Traffic Systems Management Center TSMC Toll Station Management Controller TSMC Transportation Supply Maintenance Command TSMC Technical Services Manager Code validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. Encounter RTL (Register Transfer Level) A high-level hardware description language (HDL) for defining digital circuits. The circuits are described as a collection of registers, Boolean equations, control logic such as "if-then-else" statements as well as complex event sequences; Compiler compiler Computer software that translates (compiles) source code written in a high-level language (e.g., C++) into a set of machine-language instructions that can be understood by a digital computer's CPU. global synthesis A combination, derivation or compilation. See logic synthesis. (programming, specification) synthesis - The process of deriving (efficient) programs from (clear) specifications. See also program transformation. for support in their reference flows. The Incisive incisive /in·ci·sive/ (-si´siv) 1. having the power or quality of cutting. 2. pertaining to the incisor teeth. in·ci·sive adj. 1. Having the power to cut. (TM) platform, introduced just one year ago, further demonstrated the strength of our platform approach. In the first quarter, 70 percent of Cadence's software-based verification See verify. verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. business was generated by sales of the full platform -- up from 50 percent for the prior quarter. The Incisive platform provides the fastest, most complete verification solution for big, complex SoCs. Cadence continued to focus on its custom/analog platform integration, which enhances tool interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. and makes designers more productive. In September September: see month. 2003 Cadence introduced the Virtuoso(R) custom design platform on the OpenAccess OpenAccess is a community effort to provide interoperability, including unified data exchange among integrated circuit design tools through an open standard data API and reference database supporting that API for IC design. database, and introduced the new chip integration flow, which reduces time for full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: physical integration by half. In April, Cadence completed its acquisition of Neolinear, Inc. This will enhance the analog/mixed-signal and radio frequency capability in the Virtuoso platform, and deliver higher-performance designs, with improved yield, in less time for customers. "We are gaining widespread customer support for our best-of-breed The best product of its type. Organizations often purchase software from different vendors in order to obtain the best-of-breed for each application area; for example, a human resources package from one vendor and an accounting package from another. technologies, integrating them into platforms, and validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. them through open collaboration Working together on a project. See collaborative software. ," said Bingham. "Our focus is to deliver design automation solutions that generate more profit for our customers." The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially. These statements do not include the impact of any mergers, acquisitions or other business combinations that may be completed after April 21, 2004. Business Outlook For the second quarter of 2004, the company expects total revenue in the range of $285 million to $295 million. Second quarter GAAP earnings per fully diluted share are expected to be in the range of $0.03 to $0.05. 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 using our non-GAAP measure defined below are expected to be in the range of $0.14 to $0.16. For the full year 2004, the company expects total revenue in the range of $1.175 billion to $1.225 billion. On a GAAP basis, we expect net income per fully diluted share for fiscal 2004 in the range of $0.31 to $0.38. Using our non-GAAP measure defined below, we expect fully diluted earnings per share for fiscal 2004 to be in the range of $0.70 to $0.77. A schedule showing a reconciliation of the business outlook from GAAP net income (loss) and diluted net income (loss) per share to our non-GAAP net income (loss) and diluted net income (loss) per share is included with this release. Audio Webcast Scheduled Cadence Design Systems, Inc.'s Ray Bingham, Chief Executive Officer, and Bill Porter Bill Porter may refer to:
About Cadence Cadence is the largest supplier of electronic design technologies, methodology services, and design services. Cadence solutions are 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4800 employees and 2003 revenues of approximately $1.1 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 is available at www.cadence.com. Cadence, the Cadence logo, Allegro and Virtuoso are registered trademarks, and Encounter and Incisive are trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners. The statements contained above regarding the company's first quarter 2004 results, those contained in the Business Outlook section above and the statements by Ray Bingham include forward looking statements based on current expectations or beliefs, as well as a number of preliminary 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 Cadence's control, 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; economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; and the acquisition of other companies or the failure to successfully integrate those it acquires. 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. 3, 2004. GAAP to non-GAAP Reconciliation The company's management evaluates and makes operating decisions using various operating measures. These measures are generally based on the revenues of its product, maintenance and services business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets and certain costs of those operations, such as cost of revenues, research and development, sales and marketing and general and administrative expenses. One such measure is non-GAAP net income (loss), which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . This measure consists of GAAP net income (loss) excluding, as applicable, amortization of intangible assets and deferred stock compensation, in-process research and development charges, integration and other acquisition-related expenses, restructuring charges (severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and benefits, excess facilities and asset-related restructuring charges) and equity in losses (income) from investments. Intangible assets consist primarily of purchased technology, backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , patents, trademarks, distribution rights, customer contracts and related relationships and non-compete agreements. Non-GAAP net income (loss) is reduced by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability. Management believes it is useful in measuring Cadence's operations to exclude amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , deferred stock compensation, in-process research and development and acquisition-related expenses because these costs are primarily fixed at the time of an acquisition and generally cannot be changed by management in the short term. Management believes that it also is useful to exclude restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs. Cadence has dramatically reduced the size of its design services business and portions of its product and maintenance businesses over the past three years. As a result, in 2001, 2002 and 2003, Cadence's GAAP statements of operations have included significant charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc such restructurings. Cadence believes that in measuring its operations it is useful to exclude such restructuring costs because the company's level of restructuring activities is expected to significantly decrease in the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future. Management also believes it is useful to exclude the equity in losses (income) from investments and investment write-downs, as these costs are not part of the company's direct cost of operations. Rather, these are non-operating costs that are included in other income (expense) and are part of the company's investment activities. Management believes that non-GAAP net income (loss) provides useful supplemental information to management and investors regarding the performance of the company's business operations and facilitates comparisons to our historical operating results. Management also uses this information internally for forecasting and budgeting. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with their most directly comparable GAAP financial results. The following table reconciles the specific items excluded from GAAP in the calculation of non-GAAP net income for the periods shown below:
Statement of Operations Reconciliation Quarter Ended
------------------------------------------------ ---------------------
Restated
April 3, March 29,
2004 2003
------------------------------------------------ ---------- ----------
(in thousands)
Net loss on a GAAP basis $ (8,755) $ (13,038)
Amortization of intangible assets 26,158 25,286
Amortization of deferred stock compensation 7,958 6,081
Restructuring charges 5,435 - - - -
In-process research and development charges - - - - 1,700
Integration and other acquisition-related
expenses 825 - - - -
Equity in losses from investments 8,384 - - - -
Tax effect (12,229) (7,788)
Net income on a non-GAAP basis $ 27,776 $ 12,241
------------------------------------------------ ---------- ----------
Statement of Operations Reconciliation per Share Quarter Ended
------------------------------------------------ ---------------------
Restated
April 3, March 29,
2004 2003
------------------------------------------------ ---------- ----------
(in thousands, except per share data)
Diluted net loss per share on a GAAP basis $ (0.03) $ (0.05)
Amortization of intangible assets 0.09 0.09
Amortization of deferred stock compensation 0.03 0.02
Restructuring charges 0.02 - - - -
In-process research and development charges - - - - 0.01
Integration and other acquisition-related
expenses - - - - - - - -
Equity in losses from investments 0.03 - - - -
Tax effect (0.04) (0.02)
Diluted net income per share on a non-GAAP basis $ 0.10 $ 0.05
Shares used in calculation of net (loss) -- GAAP 271,477 268,358
Shares used in calculation of net income --
non-GAAP(1) 280,586 271,910
------------------------------------------------ ---------- ----------
(1) Shares used in the calculation of GAAP earnings per share are
expected to be the same as shares used in the calculation of
non-GAAP earnings per share except when the company reports a GAAP
loss and non-GAAP income, or GAAP income and a non-GAAP loss.
Investors are encouraged to look at GAAP results as the best measure of financial performance. For example, amortization of intangibles or amortization of deferred stock compensation or in-process technology are important to consider because they may represent initial expenditures that under GAAP are reported across future fiscal periods. Likewise, deferred stock compensation expense is an obligation of the company that should be considered. Restructuring charges can be triggered by acquisitions or product adjustments as well as overall company performance within a given business environment. All of these metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. are important to financial performance generally. Though Cadence management finds its non-GAAP measure useful to evaluate the performance of Cadence's business, its reliance on this measure is limited because items excluded from such measures often have a material effect on Cadence's earnings and earnings per share calculated in accordance with GAAP. Therefore, Cadence management typically uses its non-GAAP earnings and earnings per share measures in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with GAAP earnings and earnings per share measures, to address these limitations. Cadence believes that presenting its non-GAAP measure of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the company's business, which management uses in its own evaluation of performance, and an additional base line for assessing the future earnings potential of the company. While the GAAP results are more complete, the company prefers to allow investors to have this supplemental measure since, with a reconciliation to GAAP, it may provide additional insight into our financial results. 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 Business 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/company/investor_relations/index.html). Prior to the start of the Quiet Period (described below), the public may continue to rely on the Business Outlook herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise. Beginning June June: see month. 18, 2004, Cadence will observe TO OBSERVE, civil law. To perform that which has been prescribed by some law or usage. Dig., 1, 3, 32. a "Quiet Period" during which the Business Outlook as provided in this press release and the company's most recent quarterly report on Form 10-Q Form 10-Q See 10-Q. no longer constitute the company's current expectations. During the Quiet Period, the Business 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 the outlook or Cadence's financial results or expectations. The Quiet Period will extend until the day when Cadence's Second Quarter 2004 Earnings Release is published, currently scheduled for July July: see month. 21, 2004.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
April 3, 2004 and January 3, 2004
(In thousands)
April 3, January 3,
2004 2004
----------- -----------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 466,900 $ 384,525
Short-term investments 27,233 33,898
Receivables, net 354,878 348,680
Inventories 26,040 16,926
Prepaid expenses and other 64,356 58,212
----------- -----------
Total current assets 939,407 842,241
Property, plant and equipment, net 403,478 403,847
Goodwill 928,623 922,797
Acquired intangibles, net 212,585 237,508
Installment contract receivables, net 80,770 121,627
Other assets 280,639 289,882
----------- -----------
Total Assets $ 2,845,502 $ 2,817,902
=========== ===========
Current Liabilities:
Current portion of capital lease
obligations $ 183 $ 388
Accounts payable and accrued liabilities 251,415 243,062
Current portion of deferred revenue 240,908 238,478
----------- -----------
Total current liabilities 492,506 481,928
----------- -----------
Long-term Liabilities:
Long-term portion of capital lease
obligations 54 61
Long-term portion of deferred revenue 14,857 16,287
Convertible notes 420,000 420,000
Other long-term liabilities 297,720 327,345
----------- -----------
Total long-term liabilities 732,631 763,693
----------- -----------
Stockholders' Equity 1,620,365 1,572,281
----------- -----------
Total Liabilities and Stockholders' Equity $ 2,845,502 $ 2,817,902
=========== ===========
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Quarters Ended April 3, 2004 and March 29, 2003
(In thousands, except per share amounts)
(Unaudited)
Quarters Ended
------------------------
Restated
April 3, March 29,
2004 2003
----------- -----------
Revenue:
Product $ 154,737 $ 148,458
Services 32,364 32,388
Maintenance 78,623 82,206
----------- -----------
Total revenue 265,724 263,052
----------- -----------
Costs and Expenses:
Cost of product 18,514 17,364
Cost of services 23,099 24,395
Cost of maintenance 13,705 15,600
Marketing and sales 81,223 83,615
Research and development 87,151 85,122
General and administrative 19,768 26,677
Amortization of acquired intangibles 15,910 14,840
Amortization of deferred stock compensation 7,958 6,081
Restructuring and other charges 5,435 -
Write-off of acquired in-process technology - 1,700
----------- -----------
Total costs and expenses 272,763 275,394
----------- -----------
Loss from operations (7,039) (12,342)
Interest expense (1,557) (674)
Other loss, net (2,629) (3,509)
----------- -----------
Loss before benefit for income
taxes (11,225) (16,525)
Benefit for income taxes (2,470) (3,487)
----------- -----------
Net loss $ (8,755) $ (13,038)
=========== ===========
Basic net loss per share $ (0.03) $ (0.05)
=========== ===========
Diluted net loss per share $ (0.03) $ (0.05)
=========== ===========
Weighted average common shares outstanding 271,477 268,358
=========== ===========
Weighted average common and potential common
shares outstanding - assuming dilution 271,477 268,358
=========== ===========
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Quarters Ended April 3, 2004 and March 29, 2003
(In thousands)
(Unaudited)
Quarter Ended
---------------------
Restated
April 3, March 29,
2004 2003
---------- ----------
Cash and Cash Equivalents at Beginning of Period $ 384,525 $ 371,327
---------- ----------
Cash Flows from Operating Activities:
Net loss (8,755) (13,038)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 45,359 47,437
Amortization of deferred stock compensation 7,958 6,081
Equity in loss from investments, net 6,263 1,834
Gain on sale of investments (4,608) -
Write-off of investment securities 1,924 1,476
Write-off of acquired in-process technology - 1,700
Provisions for losses on trade accounts
receivable and sales returns 1,000 289
Other non-cash items 1,111 -
Changes in operating assets and
liabilities, net of effect of acquired and
disposed businesses:
Receivables 8,316 (5,397)
Proceeds from the sale of receivables 5,149 20,053
Inventories (9,114) 854
Prepaid expenses and other (2,024) 943
Installment contract receivables 20,194 14,796
Other assets 5,309 17,356
Accounts payable and accrued liabilities (14,554) (95,849)
Deferred revenue 1,000 (13,967)
Other long-term liabilities (4,868) 16,467
---------- ----------
Net cash provided by operating
activities 59,660 1,035
---------- ----------
Cash Flows from Investing Activities:
Proceeds from sale and maturities of short-term
investments - available-for-sale 3,557 -
Proceeds from the sale of long-term investments 3,328 -
Purchases of property, plant and equipment (17,829) (17,180)
Purchases of software licenses (650) (1,750)
Investment in venture capital partnerships and
equity investments (5,653) (5,569)
Net cash paid in business combinations - (24,682)
---------- ----------
Net cash used for investing activities (17,247) (49,181)
---------- ----------
Cash Flows from Financing Activities:
Proceeds from credit facility - 10,000
Principal payments on credit facility and
capital leases (212) (52,594)
Payment of convertible notes issuance costs (2,081) -
Proceeds from issuance of common stock 40,361 21,890
Purchases of treasury stock - (61,964)
---------- ----------
Net cash provided by (used for)
financing activities 38,068 (82,668)
---------- ----------
Effect of exchange rate changes on cash 1,894 (1,118)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 82,375 (131,932)
---------- ----------
Cash and Cash Equivalents at End of Period $ 466,900 $ 239,395
========== ==========
Cadence Design Systems, Inc.
As of April 21, 2004
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income
per Share
(Unaudited)
Quarter ended Year ended
July 3, 2004 January 1, 2005
---------------- ----------------
Forecast Forecast
---------------- ----------------
Diluted net income per share on a
GAAP basis $0.03 to $0.05 $0.31 to $0.38
Amortization of intangible assets 0.09 0.34
Amortization of deferred stock
compensation 0.02 0.09
Restructuring charges 0.01 0.03
In-process research and development
charges 0.01 0.01
Integration and other acquisition-
related expenses - 0.01
Equity in losses from investments 0.02 0.07
Tax effect (0.04) (0.16)
---------------- ----------------
Diluted net income per share on a $0.14 to $0.16 $0.70 to $0.77
non-GAAP basis
================ ================
Cadence Design Systems, Inc.
As of April 21, 2004
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
Quarter ended Year ended
July 3, 2004 January 1, 2005
---------------- ----------------
($ in Millions) Forecast Forecast
---------------- ----------------
Net income on a GAAP basis $8 to $13 $87 to $107
Amortization of intangible assets 26 96
Amortization of deferred stock
compensation 6 25
Restructuring charges 2 9
In-process research and development
charges 3 3
Integration and other acquisition-
related expenses 1 3
Equity in losses from investments 6 20
Tax effect (12) (45)
---------------- ----------------
Net income on a non-GAAP basis $40 to $45 $198 to $218
================ ================
Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2003 2004
------------------------- -------
GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1
------------------------------------------------------------- -------
North America 55% 54% 59% 64% 58% 53%
Europe 17% 15% 19% 16% 17% 16%
Japan 20% 22% 13% 13% 17% 22%
Asia 8% 9% 9% 7% 8% 9%
Total 100% 100% 100% 100% 100% 100%
Revenue Mix by Product Group (% of Total Revenue)
2003 2004
------------------------- -------
PRODUCT GROUP Q1 Q2 Q3 Q4 Year Q1
------------------------------------------------------------- -------
Functional Verification 20% 18% 18% 20% 19% 20%
Digital IC Design 24% 22% 27% 20% 23% 25%
Custom IC Design 27% 28% 27% 27% 27% 27%
Design for Manufacturing 9% 10% 7% 13% 10% 6%
System Interconnect 8% 9% 8% 10% 9% 10%
Services 12% 13% 13% 10% 12% 12%
Total 100% 100% 100% 100% 100% 100%
Note: Product Group total revenue includes Product + Maintenance
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