Cadence Reports Q2 Revenue up 12% over Q2 2004.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. -- 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. )(Nasdaq:CDN) today reported second quarter, 2005 revenue of $321 million, an increase of 12 percent over the $287 million reported for 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 net income of $0.5 million, or $0.00 per share in the second quarter of 2005, compared to $4 million, or $0.01 per share, in the same period last year. In addition to using GAAP results in evaluating Cadence's business, management believes it is 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 compensation, in-process research and development charges, integration and other acquisition-related expenses, non-recurring executive 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 payments, 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 (income) from investments. Non-GAAP net income is adjusted 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. See "GAAP to non-GAAP Reconciliation" below for further information on our non-GAAP measure. Using this non-GAAP measure, net income in the second quarter 2005 was $53 million, or $0.17 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 $42 million, or $0.14 per share on a fully diluted basis, in the same period last year. "We saw good growth in both our global accounts and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. regions during the second quarter, confirming for us that both our technologies and our strategies are well positioned to help all types of customers meet their market demands," said Mike Fister Fister is a small village near Stavanger in the Hjelmeland municipality on the south-western Norwegian coast. Fister has the highest average temperature in Norway. It is visited by many tourists each year. , 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 Design Systems, Inc. "We are looking forward to CDNLive!, our new expanded user group meeting in September September: see month. , where we will share more about our new technology and products with our customers." Added Bill Porter Bill Porter may refer to:
verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. . Our diversified diversified (di·verˑ·s portfolio is a significant driver of our consistent results." 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 July July: see month. 27, 2005. Business Outlook For the third quarter of 2005, the company expects total revenue in the range of $320 million to $330 million. Third quarter GAAP earnings per fully diluted share are expected to be in the range of $0.05 to $0.07. 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 the non-GAAP measure defined below are expected to be in the range of $0.18 to $0.20. For the full year 2005, the company expects total revenue in the range of $1.275 billion to $1.315 billion. On a GAAP basis, net income per fully diluted share for fiscal 2005 is expected in the range of $0.21 to $0.27. Using the non-GAAP measure defined below, fully diluted earnings per share for fiscal 2005 are expected to be in the range of $0.75 to $0.81. A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to the non-GAAP net income and diluted net income per share is included with this release. Audio Webcast Scheduled Cadence Design Systems, Inc.'s Mike Fister, president and chief executive officer, and Bill Porter, chief financial officer, will host a second quarter 2005 financial results audio webcast today, July 27, 2005, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the Web site at least 10 minutes prior to the scheduled webcast. An archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. of the webcast will be available starting July 27, 2005 at 5 p.m. Pacific time and ending at 5 p.m. Pacific time on August 3, 2005. Webcast access is available at www.cadence.com/company/investor_relations. About Cadence Cadence (NYSE and Nasdaq:CDN) enables global electronic design innovation and plays an essential role in the creation of today's 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. and electronics. Customers use Cadence software and hardware, methodologies, and services to design and verify (1) To prove the correctness of data. (2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. advanced semiconductors, consumer electronics, networking and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment, and computer systems. Cadence reported 2004 revenues of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.2 billion, and has approximately 5,000 employees. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company, its products, and services is available at www.cadence.com. Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners. The statements contained above regarding the company's second quarter 2005 results, those contained in the Business Outlook section above and the statements by Mike Fister and Bill Porter 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. 1, 2005, and the quarterly report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended April 2, 2005. GAAP to non-GAAP Reconciliation Cadence 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 compensation, in-process research and development charges, integration and other acquisition-related expenses, restructuring charges (severance and benefits, excess facilities and asset-related restructuring charges), non-recurring executive severance payments 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 adjusted 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 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 several 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
-------------------------------------------- -------------------------
July 2, 2005 July 3, 2004
-------------------------------------------- ------------ ------------
(in thousands)
-------------------------------------------- ------------ ------------
Net income on a GAAP basis $ 483 $ 3,803
-------------------------------------------- ------------ ------------
Amortization of acquired intangibles 29,862 26,394
-------------------------------------------- ------------ ------------
Deferred compensation 8,635 8,028
-------------------------------------------- ------------ ------------
Restructuring and other charges 13,514 2,929
-------------------------------------------- ------------ ------------
In-process research and development
Charges 9,400 7,000
-------------------------------------------- ------------ ------------
Non-recurring executive severance
Payments 3,213 - - - -
-------------------------------------------- ------------ ------------
Integration and acquisition-related
Costs 1,751 792
-------------------------------------------- ------------ ------------
Equity in losses from investments, gain
on Non-Qualified Deferred Compensation
plan assets 4,844 6,273
-------------------------------------------- ------------ ------------
Income tax effect of non-GAAP
Adjustments (18,243) (13,655)
-------------------------------------------- ------------ ------------
Net income on a non-GAAP basis $ 53,459 $ 41,564
-------------------------------------------- ------------ ------------
-------------------------------------------- -------------------------
Statement of Operations Reconciliation per Quarter Ended
Share
-------------------------------------------- -------------------------
July 2, 2005 July 3, 2004
-------------------------------------------- ------------ ------------
(in thousands, except per share data)
-------------------------------------------- ------------ ------------
Diluted net income per share on a GAAP basis $ 0.00 $ 0.01
-------------------------------------------- ------------ ------------
Amortization of acquired intangibles 0.10 0.09
-------------------------------------------- ------------ ------------
Deferred compensation 0.03 0.03
-------------------------------------------- ------------ ------------
Restructuring and other charges 0.04 0.01
-------------------------------------------- ------------ ------------
In-process research and development
Charges 0.03 0.02
-------------------------------------------- ------------ ------------
Non-recurring executive severance
Payments 0.01 - - - -
-------------------------------------------- ------------ ------------
Integration and acquisition-related
Costs 0.01 - - - -
-------------------------------------------- ------------ ------------
Equity in losses from investments, gain
on Non-Qualified Deferred Compensation
plan assets 0.02 0.02
-------------------------------------------- ------------ ------------
Income tax effect of non-GAAP
Adjustments (0.07) (0.04)
-------------------------------------------- ------------ ------------
Diluted net income per share on a non-GAAP
basis $ 0.17 $ 0.14
-------------------------------------------- ------------ ------------
Shares used in calculation of diluted net
income per share -- GAAP 310,822 305,482
-------------------------------------------- ------------ ------------
Shares used in calculation of diluted net
income per share -- non-GAAP(A) 310,822 305,482
-------------------------------------------- ------------ ------------
(A) 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 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 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 in evaluating 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 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. Prior to the start of the Quiet Period (described below), the public may continue to rely on the Business Outlook contained herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise. Beginning September 16, 2005, 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 annual report on Form 10-K and quarterly report on Form 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 on Cadence's business outlook or its financial results or expectations. The Quiet Period will extend until the day when Cadence's Third Quarter 2005 Earnings Release is published, currently scheduled for October October: see month. 26, 2005.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
July 2, 2005 and January 1, 2005
(In thousands)
July 2, 2005 January 1, 2005
--------------- ---------------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 543,555 $ 448,517
Short-term investments 22,951 144,491
Receivables, net of allowance for
doubtful accounts of $12,734 and
$12,734, respectively 297,252 384,114
Inventories 22,089 20,481
Prepaid expenses and other 82,293 72,312
--------------- ---------------
Total current assets 968,140 1,069,915
Property, plant and equipment, net of
accumulated depreciation of $518,087
and $498,424, respectively 353,541 390,367
Goodwill 1,237,906 995,065
Acquired intangibles, net 202,043 195,655
Installment contract receivables 68,034 96,038
Other assets 234,205 242,799
--------------- ---------------
Total Assets $ 3,063,869 $ 2,989,839
=============== ===============
Current Liabilities:
Accounts payable and accrued
liabilities $ 257,953 $ 277,992
Current portion of deferred revenue 283,275 270,966
--------------- ---------------
Total current liabilities 541,228 548,958
--------------- ---------------
Long-term Liabilities:
Long-term portion of deferred
revenue 21,711 20,847
Convertible notes 420,000 420,000
Other long-term liabilities 309,009 300,064
--------------- ---------------
Total long-term liabilities 750,720 740,911
--------------- ---------------
Stockholders' Equity 1,771,921 1,699,970
--------------- ---------------
Total Liabilities and Stockholders'
Equity $ 3,063,869 $ 2,989,839
=============== ===============
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Quarters and Six Months Ended July 2, 2005 and July 3, 2004
(In thousands, except per share amounts)
(Unaudited)
Quarters Ended Six Months Ended
------------------- -------------------
July 2, July 3, July 2, July 3,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue:
Product $ 201,844 $ 165,286 $ 375,253 $ 320,023
Services 29,386 37,253 61,829 69,617
Maintenance 89,681 84,540 176,366 163,163
--------- --------- --------- ---------
Total revenue 320,911 287,079 613,448 552,803
--------- --------- --------- ---------
Costs and Expenses:
Cost of product 22,161 15,043 44,094 33,557
Cost of services 23,283 23,295 45,771 46,394
Cost of maintenance 14,882 13,465 29,149 27,170
Marketing and sales 86,572 80,172 166,266 161,395
Research and development 91,418 91,090 181,804 178,241
General and administrative 36,183 20,125 62,116 40,129
Amortization of acquired
intangibles 14,677 16,021 25,288 31,931
Deferred compensation 8,635 8,028 19,992 12,061
Restructuring and other
charges 13,514 2,929 31,003 8,364
Write-off of acquired in-
process technology 9,400 7,000 9,400 7,000
--------- --------- --------- ---------
Total costs and expenses 320,725 277,168 614,883 546,242
--------- --------- --------- ---------
Income (loss) from
operations 186 9,911 (1,435) 6,561
Interest expense (1,345) (1,699) (2,726) (3,256)
Other income (expense), net 2,182 (3,461) 6,689 (9,779)
--------- --------- --------- ---------
Income (loss) before
provision (benefit) for
income taxes 1,023 4,751 2,528 (6,474)
Provision (benefit) for
income taxes 540 948 1,022 (1,522)
--------- --------- --------- ---------
Net income (loss) $ 483 $ 3,803 $ 1,506 $ (4,952)
========= ========= ========= =========
Basic net income (loss) per
share $ 0.00 $ 0.01 $ 0.01 $ (0.02)
========= ========= ========= =========
Diluted net income (loss) per
share $ 0.00 $ 0.01 $ 0.01 $ (0.02)
========= ========= ========= =========
Weighted average common
shares outstanding 277,000 272,362 275,603 272,210
========= ========= ========= =========
Weighted average common and
potential common shares
outstanding -- assuming
dilution 310,822 305,482 309,506 272,210
========= ========= ========= =========
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended July 2, 2005 and July 3, 2004
(In thousands)
(Unaudited)
Six-Months Ended
---------------------
July 2, July 3,
2005 2004
---------- ----------
Cash and Cash Equivalents at Beginning of
Period $ 448,517 $ 309,175
---------- ----------
Cash Flows from Operating Activities:
Net income (loss) 1,506 (4,952)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 95,405 92,870
Deferred compensation 19,992 12,061
Equity in loss from investments, net 4,704 12,370
Gain on investments, net (11,422) (3,206)
Write-down of investment securities 7,106 1,924
Write-off of acquired in-process technology 9,400 7,000
Non-cash restructuring and other charges 1,874 -
Proceeds from the sale of receivables 111,452 5,149
Provisions (recoveries) for losses (gains)
on trade accounts receivable and sales
returns (23) 1,268
Other non-cash items (48) (263)
Changes in operating assets and liabilities,
net of effect of acquired businesses:
Receivables 61,070 (174)
Inventories (245) (7,218)
Prepaid expenses and other (1,053) (5,968)
Installment contract receivables (60,062) 43,741
Other assets 265 1,050
Accounts payable and accrued liabilities (38,737) (12,789)
Deferred revenue 11,503 1,885
Other long-term liabilities (16,269) 16,272
---------- ----------
Net cash provided by operating
activities 196,418 161,020
---------- ----------
Cash Flows from Investing Activities:
Proceeds from sale of available-for-sale
securities 13,068 3,557
Proceeds from sale of short-term investments 289,225 279,760
Purchases of short-term investments (180,975) (301,360)
Proceeds from the sale of long-term
investments 4,715 6,942
Proceeds from sale of property, plant and
equipment 33,625 3,625
Purchases of property, plant and equipment (33,261) (33,688)
Purchases of software licenses - (650)
Investment in venture capital partnerships
and equity investments (6,934) (13,417)
Cash paid in business combinations, net of
cash acquired (277,441) (96,803)
---------- ----------
Net cash used for investing activities (157,978) (152,034)
---------- ----------
Cash Flows from Financing Activities:
Principal payments on capital leases (51) (321)
Payment of convertible notes issuance costs - (1,920)
Proceeds from issuance of common stock 51,915 45,866
Purchases of treasury stock - (69,846)
---------- ----------
Net cash provided by (used for) financing
activities 51,864 (26,221)
---------- ----------
Effect of exchange rate changes on cash and
cash equivalents 4,734 831
---------- ----------
Increase (decrease) in cash and cash
equivalents 95,038 (16,404)
---------- ----------
Cash and Cash Equivalents at End of Period $ 543,555 $ 292,771
========== ==========
Cadence Design Systems, Inc.
As of July 27, 2005
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income
per Share
(Unaudited)
Quarter ended Year ended
October 1, 2005 December 31, 2005
------------------ ------------------
Forecast Forecast
------------------ ------------------
Diluted net income per share on
a GAAP basis $0.05 to $0.07 $0.21 to $0.27
Amortization of intangible
assets 0.09 0.33
Deferred compensation expense 0.03 0.12
Restructuring and other charges 0.01 0.10
In-process research and
development charges - 0.03
Non-recurring executive
severance payments 0.01 0.02
Integration and other
acquisition-related expenses - 0.02
Equity in losses from
investments 0.01 0.04
Tax effect (0.02) (0.12)
------------------ ------------------
Diluted net income per share on
a non-GAAP basis $0.18 to $0.20 $0.75 to $0.81
================== ==================
Cadence Design Systems, Inc.
As of July 27, 2005
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
Quarter ended Year ended
October 1, 2005 December 31, 2005
------------------ ------------------
($ in Millions) Forecast Forecast
------------------ ------------------
Net income on a GAAP basis $17 to $23 $64 to $83
Amortization of intangible
assets 28 105
Deferred compensation expense 11 38
Restructuring and other charges 2 34
In-process research and
development charges - 9
Non-recurring executive
severance payments 3 7
Integration and other
acquisition-related expenses 1 4
Equity in losses from
investments 2 12
Tax effect (8) (38)
------------------ ------------------
Net income on a non-GAAP basis $56 to $62 $235 to $254
================== ==================
Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2003 2004
------------------------ ------------------------
GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
--------------- ------------------------ ------------------------
North America 55% 54% 59% 64% 58% 53% 57% 56% 45% 52%
Europe 17% 15% 19% 16% 17% 16% 19% 20% 30% 22%
Japan 20% 22% 13% 13% 17% 22% 14% 15% 14% 16%
Asia 8% 9% 9% 7% 8% 9% 10% 9% 11% 10%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
2005
-----------
GEOGRAPHY Q1 Q2
--------------- -----------
North America 46% 49%
Europe 16% 17%
Japan 30% 25%
Asia 8% 9%
Total 100% 100%
Revenue Mix by Product Group (% of Total Revenue)
2003 2004
------------------------ ------------------------
PRODUCT GROUP Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
--------------- ------------------------ ------------------------
Functional
Verification 20% 18% 18% 20% 19% 20% 20% 18% 19% 19%
Digital IC
Design 24% 22% 27% 20% 23% 25% 21% 24% 27% 24%
Custom IC
Design 27% 28% 27% 27% 27% 27% 24% 27% 27% 27%
Design for
Manufacturing 9% 10% 7% 13% 10% 6% 9% 12% 8% 9%
System
Interconnect 8% 9% 8% 10% 9% 10% 9% 8% 9% 9%
Services &
Other 12% 13% 13% 10% 12% 12% 17% 11% 10% 12%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
2005
----------
PRODUCT GROUP Q1 Q2
--------------- ----------
Functional
Verification 20% 19%
Digital IC
Design 26% 23%
Custom IC
Design 24% 31%
Design for
Manufacturing 9% 9%
System
Interconnect 10% 9%
Services &
Other 11% 9%
Total 100% 100%
Note: Product Group total revenue includes Product + Maintenance
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