Cadence Reports Third Quarter Results.Business Editors/High-Tech Writers 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)--Oct. 15, 2003 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 third quarter of 2003 of $269 million. Subscription licenses were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 81 percent of software product bookings. Pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. were $33 million or $0.12 per share based on 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. shares outstanding. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, including 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). , amortization of acquired intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and other charges, the results were a net loss of $15 million or $0.06 per share. A reconciliation of GAAP to pro forma earnings is included with this press release. "Again this 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. 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 plan," 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 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. . "We delivered ground-breaking ground-breaking Adjective innovative innovations from our R&D organization, integrated acquisitions into our platforms, and reduced costs. With these actions, we continue to deliver market-leading technologies that improve customer productivity." Business Highlights of Q3 2003 -- Cadence(R) introduced the Virtuoso(R) custom design platform, the world's first comprehensive platform for fast, silicon-accurate custom, analog, RF and mixed-signal design. Virtuoso represents the broadest, deepest analog mixed/signal technology available in the industry and is used on 9 out of 10 designs worldwide. Virtuoso offers the industry's only specification-driven environment, the first multi-mode simulation The mathematical representation of the interaction of real-world objects. See scientific application and simulator. Simulation A broad collection of methods used to study and analyze the behavior and performance of actual or theoretical systems. utilizing common models and equations, up to 10 times performance increase, advanced silicon analysis for 130, 90 nanometers and below, and a full-chip, mixed-signal integration environment. -- Cadence shipped version 3.2 of the Cadence Encounter(TM) digital IC design platform, with enhanced timing closure, low-power In electronics, the term low-power means one of two things about a device:
result is shorter overall development time for digital design teams. -- The company also announced a strategic alliance with CoWare CoWare, Inc is the leading supplier of platform-driven electronic system level (ESL) design software and services. CoWare is headquartered in San Jose, Calif., and has offices around the world, major R&D offices in Belgium, Germany and India. Inc. to provide a unified solution for electronic system-level (ESL (1) An earlier family of client/server development tools for Windows and OS/2 from Ardent Software (formerly VMARK). It was originally developed by Easel Corporation, which was acquired by VMARK. ) design through to 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; implementation. The alliance involves joint development, cross-licensing In patent law, a cross-licensing agreement is an agreement according to which two parties grant a license to each other for the exploitation of the subject-matter claimed in patents. , a coordinated go-to-market strategy, and a Cadence investment in CoWare. -- This quarter, nine additional EDA companies  The external links in this article or section may require cleanup to comply with Wikipedia's content policies. , including Mentor Mentor, in Greek mythologyMentor (mĕn`tər, –tôr'), in Greek mythology, friend of Odysseus and tutor of Telemachus. Graphics, have publicly stated their plans to move products to 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. . OpenAccess is a 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" , nanometer-ready database and API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. , created by Cadence and managed by Si2, an industry consortium of EDA (1) (Electronic Design Automation) Using the computer to design, lay out, verify and simulate the performance of electronic circuits on a chip or printed circuit board. customers and vendors. Cadence's Virtuoso and Encounter platforms now run on the OpenAccess database. 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 September September: see month. 27, 2003. Business Outlook For Q4, the company expects total revenue in the range of $295 million to $305 million. Subscriptions should continue to make up 80 percent to 90 percent of total software bookings, and about 60 percent of software revenue should come from ratable That which can be appraised, assessed, or adjusted through the application of a formula or percentage. Ratable property is that which is taxable or capable of being appraised or assessed. ratable adj. 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. . Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma 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 are expected to be in the range of $0.23 to $0.25. On a GAAP basis, including amortization of acquired intangibles, restructuring, and other charges, Q4 earnings are expected to be in the range of $0.09 to $0.11. For the full year 2003, the company expects total revenues to be in the range of $1.095 billion to $1.105 billion. Pro forma diluted earnings per share for 2003 are expected to be in the range of $0.48 to $0.50. On a GAAP basis, including amortization of acquired intangibles, restructuring, and other charges, the results for fiscal 2003 are expected to be a loss in the range of $0.05 to $0.07. A schedule showing a reconciliation of the business outlook from GAAP to pro forma diluted net income 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 4800 employees and 2002 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 is available at www.cadence.com. Cadence, the Cadence logo and Virtuoso are registered trademarks, and Encounter is a trademark of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners. The statements contained above regarding the company's third quarter 2003 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 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; 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 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 December December: see month. 28, 2002 and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June June: see month. 28, 2003. In the calculation of the company's pro forma earnings and pro forma diluted earnings per share for this and other periods, Cadence has excluded one or more of the following items: amortization of acquired intangibles, amortization of deferred stock compensation, restructuring and other charges and write off of in-process technology from acquisitions, tax provisions, inventory write-downs, equity investment write-downs and certain non-routine legal costs. Cadence management uses pro forma earnings and pro forma diluted earnings per share to evaluate the performance of its core business of developing and selling its products and services and to estimate its future core performance, before taking into account the effect of typically non-cash items that are variable and difficult to predict from period to period. Cadence management believes that the items excluded from its pro forma calculations are generally infrequent in·fre·quent adj. 1. Not occurring regularly; occasional or rare: an infrequent guest. 2. and somewhat unpredictable events An Unpredictable Event is an event in which the predictability cannot be measured. An unpredictable event is usually an unfavorable event, because people tend not to plan an unfavorable event. Its result, most likely, affects many lives. or events whose impact on earnings will be resolved over a reasonably short, finite finite - compact period of time. By excluding these variable and unpredictable, generally non-cash items that do not arise from the company's core 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 , Cadence management believes it can better compare the revenues and costs of its operating business to the past and future operations of that operating business. Though Cadence management finds these pro forma measures useful for evaluating aspects of Cadence's business, its reliance on these measures is limited because these excluded items often have a material effect on Cadence's earnings and earnings per share calculated 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. Therefore, Cadence management always uses the pro forma 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. Just because an item may be non-cash does not mean it is not important to an understanding of a company's financial statements. In fact, investors are encouraged to look at GAAP results as the best measure of financial performance. For example, amortization of intangibles, write-downs of assets or in-process technology are important to consider because they represent initial cash expenditures that are merely reported under GAAP across future fiscal periods. Likewise, deferred stock compensation expense is an obligation of the company that should be considered. 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. require cash outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. and 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. Therefore, Cadence management typically uses the pro forma earnings and earnings per share measures in conjunction with GAAP earnings and earnings per share measures, to address these limitations. Cadence believes that presenting pro forma earnings and earnings per share measures provides investors with an additional tool for evaluating the company's core performance that management uses in its own evaluation of performance, and a pro forma 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 metric since, with a reconciliation to GAAP, it may provide greater 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 December 22, 2003, 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 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 Fiscal Year 2003 Earnings Release is published, currently scheduled for January January: see month. 28, 2004.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
September 27, 2003 and December 28, 2002
(In $000's)
Sept. 27, Dec. 28,
2003 2002
---------- ----------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 394,203 $ 371,327
Short-term investments 30,146 24,286
Receivables, net 288,658 313,968
Inventories 15,141 9,614
Prepaid expenses and other 60,674 39,448
---------- ----------
Total current assets 788,822 758,643
Property, plant and equipment, net 394,889 434,491
Acquired intangibles, net 1,126,111 883,339
Installment contract receivables, net 126,434 113,185
Other assets 235,069 248,603
---------- ----------
Total Assets $2,671,325 $2,438,261
========== ==========
Current Liabilities:
Current portion of capital lease
obligations $ 801 $ 1,609
Accounts payable and accrued liabilities 311,905 297,399
Deferred revenue 219,859 212,882
---------- ----------
Total current liabilities 532,565 511,890
---------- ----------
Long-term Liabilities:
Long-term portion of capital lease
obligations 80 659
Long-term debt 420,000 52,000
Other long-term liabilities 267,118 214,407
---------- ----------
Total long-term liabilities 687,198 267,066
---------- ----------
Stockholders' equity 1,451,562 1,659,305
---------- ----------
Total Liabilities and Stockholders' Equity $2,671,325 $2,438,261
========== ==========
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Quarters and Nine Months Ended
September 27, 2003 and September 28, 2002
(In $000's, except per share amounts)
(Unaudited)
Quarters Ended Nine Months Ended
----------------- -------------------
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
2003 2002 2003 2002
-------- -------- -------- ---------
Revenue:
Product $151,678 $210,286 $453,590 $ 655,399
Services 33,773 33,992 100,962 114,284
Maintenance 83,025 82,958 246,237 247,087
-------- -------- -------- ---------
Total revenue 268,476 327,236 800,789 1,016,770
-------- -------- -------- ---------
Costs and Expenses:
Cost of product 5,075 14,630 20,305 62,552
Cost of services 22,192 28,078 69,790 89,628
Cost of maintenance 12,662 16,007 41,666 49,775
Marketing and sales 80,758 103,216 249,638 296,167
Research and development 84,179 84,647 257,677 241,092
General and administrative 18,814 26,267 65,598 89,349
Amortization of acquired
intangibles 27,790 22,034 79,093 59,731
Amortization of deferred
stock compensation 12,548 10,465 31,685 21,412
Mentor settlement (14,500) - (14,500) -
Restructuring and other
charges 62,874 - 64,226 73,231
Write-off of acquired in-
process technology 2,000 6,600 7,500 34,000
-------- -------- -------- ---------
Total costs and expenses 314,392 311,944 872,678 1,016,937
-------- -------- -------- ---------
Income (loss) from
operations (45,916) 15,292 (71,889) (167)
Interest expense (2,392) (663) (3,706) (1,563)
Other income (loss), net 2,295 171 (2,989) (3,748)
-------- -------- -------- ---------
Income (loss)before provision
(benefit) for income taxes (46,013) 14,800 (78,584) (5,478)
Provision (benefit) for
income taxes (31,018) 6,569 (36,620) 11,267
-------- -------- -------- ---------
Net income (loss) $(14,995) $ 8,231 $(41,964) $ (16,745)
======== ======== ======== =========
Basic net income (loss) per
share $ (0.06) $ 0.03 $ (0.16) $ (0.07)
======== ======== ======== =========
Diluted net income (loss) per
share $ (0.06) $ 0.03 $ (0.16) $ (0.07)
======== ======== ======== =========
Weighted average common
shares outstanding 266,755 267,300 267,605 256,461
======== ======== ======== =========
Weighted average common and
potential common shares
outstanding - assuming
dilution 266,755 271,437 267,605 256,461
======== ======== ======== =========
---------------------------------------------------------------------
Supplemental diluted earnings
per share before amortization of acquired
intangibles, amortization of deferred stock
compensation, Mentor settlement, net of
related costs, restructuring and other
charges, write-off of acquired in-process
technology, write-down of equity investments
to fair value, reserve against inventory,
non-recurring legal costs, and income
tax effect of
pro forma adjustments $ 0.12 $ 0.15 $ 0.25 $ 0.61
======== ======== ======== =========
Cadence Design Systems, Inc.
Pro Forma Condensed Consolidated Statements of Operations
Impact of Pro Forma Adjustments on Reported Net Income (Loss)
For the Quarters Ended September 27, 2003 and September 28, 2002
(In $000's, except per share amounts)
(Unaudited)
Quarter Ended
September 27, 2003
------------------------------
As
Reported Adjustments Pro Forma
Revenue:
Product $151,678 $ - $151,678
Services 33,773 - 33,773
Maintenance 83,025 - 83,025
-------- -------- --------
Total revenue 268,476 - 268,476
-------- -------- --------
Costs and Expenses:
Cost of product 5,075 - 5,075
Cost of services 22,192 - 22,192
Cost of maintenance 12,662 - 12,662
Marketing and sales 80,758 - 80,758
Research and development 84,179 - 84,179
General and administrative 18,814 - 18,814
Amortization of acquired
intangibles 27,790 (27,790)(A) -
Amortization of deferred stock
compensation 12,548 (12,548)(B) -
Mentor settlement (14,500) 14,500 (C) -
Restructuring and other charges 62,874 (62,874)(D) -
Write-off of acquired in-process
technology 2,000 (2,000)(E) -
-------- -------- --------
Total costs and expenses 314,392 (90,712) 223,680
-------- -------- --------
Income (loss) from operations (45,916) 90,712 44,796
Interest expense (2,392) - (2,392)
Other income, net 2,295 - 2,295
-------- -------- --------
Income (loss) before provision
(benefit) for income taxes (46,013) 90,712 44,699
Provision (benefit) for income
taxes (31,018) 42,640 (F) 11,622
-------- -------- --------
Net Income (loss) $(14,995) $ 48,072 $ 33,077
======== ======== ========
Basic net income (loss) per share $ (0.06) $ 0.12
======== ========
Diluted net income (loss) per share $ (0.06) $ 0.12
======== ========
Weighted average common shares
outstanding 266,755 266,755
======== ========
Weighted average common and potential
common shares outstanding
- assuming dilution 266,755 274,889
======== ========
Quarter Ended
September 28, 2002
------------------------------
As
Reported Adjustments Pro Forma
Revenue:
Product $210,286 $ - $210,286
Services 33,992 - 33,992
Maintenance 82,958 - 82,958
-------- -------- --------
Total revenue 327,236 - 327,236
-------- -------- --------
Costs and Expenses:
Cost of product 14,630 - 14,630
Cost of services 28,078 - 28,078
Cost of maintenance 16,007 - 16,007
Marketing and sales 103,216 - 103,216
Research and development 84,647 - 84,647
General and administrative 26,267 - 26,267
Amortization of acquired
intangibles 22,034 (22,034)(A) -
Amortization of deferred stock
compensation 10,465 (10,465)(B) -
Mentor settlement - - -
Restructuring and other charges - - -
Write-off of acquired in-process
technology 6,600 (6,600)(E) -
-------- -------- --------
Total costs and expenses 311,944 (39,099) 272,845
-------- -------- --------
Income (loss) from operations 15,292 39,099 54,391
Interest expense (663) - (663)
Other income, net 171 - 171
-------- -------- --------
Income (loss) before provision
(benefit) for income taxes 14,800 39,099 53,899
Provision (benefit) for income taxes 6,569 7,445 (F) 14,014
-------- -------- --------
Net Income (loss) $ 8,231 $ 31,654 $ 39,885
======== ======== ========
Basic net income (loss) per share $ 0.03 $ 0.15
======== ========
Diluted net income (loss) per share $ 0.03 $ 0.15
======== ========
Weighted average common shares
outstanding 267,300 267,300
======== ========
Weighted average common and potential
common shares outstanding
- assuming dilution 271,437 271,437
======== ========
Notes:
(A) Non-cash amortization of acquired intangibles
(B) Non-cash amortization of deferred stock compensation
(C) Mentor settlement, net of related costs
(D) Restructuring and other charges
(E) Write-off of acquired in-process technology
(F) Income tax effect of pro forma adjustments
Cadence Design Systems, Inc.
Pro Forma Condensed Consolidated Statements of Operations
Impact of Pro Forma Adjustments on Reported Net Loss
For the Nine Months Ended September 27, 2003 and September 28, 2002
(In $000's, except per share amounts)
(Unaudited)
Nine Months Ended
September 27, 2003
--------------------------------
As
Reported Adjustments Pro Forma
Revenue:
Product $453,590 $ - $453,590
Services 100,962 - 100,962
Maintenance 246,237 - 246,237
-------- -------- --------
Total revenue 800,789 - 800,789
-------- -------- --------
Costs and Expenses:
Cost of product 20,305 - 20,305
Cost of services 69,790 - 69,790
Cost of maintenance 41,666 - 41,666
Marketing and sales 249,638 - 249,638
Research and development 257,677 - 257,677
General and administrative 65,598 - 65,598
Amortization of acquired
intangibles 79,093 (79,093) (A) -
Amortization of deferred stock
compensation 31,685 (31,685) (B) -
Mentor settlement (14,500) 14,500 (C) -
Restructuring and other charges 64,226 (64,226) (D) -
Write-off of acquired in-process
technology 7,500 (7,500) (E) -
-------- -------- --------
Total costs and expenses 872,678 (168,004) 704,674
-------- -------- --------
Income (loss) from operations (71,889) 168,004 96,115
Interest expense (3,706) - (3,706)
Other income (loss), net (2,989) 3,623 (H) 634
-------- -------- --------
Income (loss) before provision
(benefit) for income taxes (78,584) 171,627 93,043
Provision (benefit) for income
taxes (36,620) 60,812 (I) 24,192
-------- -------- --------
Net Income (loss) $(41,964) $110,815 $ 68,851
======== ======== ========
Basic net income (loss) per share $ (0.16) $ 0.26
======== ========
Diluted net income (loss) per
share $ (0.16) $ 0.25
======== ========
Weighted average common shares
outstanding 267,605 267,605
======== ========
Weighted average common and
potential common shares
outstanding - assuming dilution 267,605 273,776
======== ========
Nine Months Ended
September 28, 2002
---------------------------------
As Reported Adjustments Pro Forma
Revenue:
Product $ 655,399 $ - $ 655,399
Services 114,284 - 114,284
Maintenance 247,087 - 247,087
---------- -------- ---------
Total revenue 1,016,770 - 1,016,770
---------- -------- ---------
Costs and Expenses:
Cost of product 62,552 (13,805) (F) 48,747
Cost of services 89,628 - 89,628
Cost of maintenance 49,775 - 49,775
Marketing and sales 296,167 - 296,167
Research and development 241,092 - 241,092
General and administrative 89,349 (11,100) (G) 78,249
Amortization of acquired
intangibles 59,731 (59,731) (A) -
Amortization of deferred stock
compensation 21,412 (21,412) (B) -
Mentor settlement - - -
Restructuring and other charges 73,231 (73,231) (D) -
Write-off of acquired in-process
technology 34,000 (34,000) (E) -
---------- -------- ---------
Total costs and expenses 1,016,937 (213,279) 803,658
---------- -------- ---------
Income (loss) from operations (167) 213,279 213,112
Interest expense (1,563) - (1,563)
Other income (loss), net (3,748) 10,000 (H) 6,252
---------- -------- ---------
Income (loss) before provision
(benefit) for income taxes (5,478) 223,279 217,801
Provision (benefit) for income
taxes 11,267 45,362 (I) 56,629
---------- -------- ---------
Net Income (loss) $ (16,745) $177,917 $ 161,172
========== ======== =========
Basic net income (loss) per
share $ (0.07) $ 0.63
========== =========
Diluted net income (loss) per
share $ (0.07) $ 0.61
========== =========
Weighted average common shares
outstanding 256,461 256,461
========== =========
Weighted average common and
potential common shares
outstanding - assuming dilution 256,461 264,977
========== =========
Notes:
(A) Non-cash amortization of acquired intangibles
(B) Non-cash amortization of deferred stock compensation
(C) Mentor settlement, net of related costs
(D) Restructuring and other charges
(E) Write-off of acquired in-process technology
(F) Reserve against inventory
(G) Non-recurring legal costs
(H) Write-down of equity investments to fair value
(I) Income tax effect of pro forma adjustments
Cadence Design Systems, Inc.
As of October 15, 2003
Impact of Pro Forma Adjustments on Forward Looking
Diluted Net Income per Share
(Unaudited)
Quarter Ended Year Ended
January 3, 2004 January 3, 2004
---------------- ------------------
GAAP net income (loss) per share $0.09 to $0.11 $(0.05) to $(0.07)
Amortization of acquired
intangibles 0.09 0.38
Amortization of deferred stock
compensation 0.04 0.16
Mentor settlement - (0.05)
Restructuring and other charges 0.01 0.25
Write-off of in-process
technology - 0.03
Write-down of equity
investments - 0.01
Income tax effect of
reconciling items - (0.23)
---------------- ------------------
Pro Forma diluted net income per $0.23 to $0.25 $0.48 to $0.50
share ================ ==================
Cadence Design Systems, Inc.
2001-2003 Revenue Detail by Product Group ($ Millions)
2001
---------------------------------
Q1 Q2 Q3 Q4 Year
---------------------------------
Product Revenue:
IC Implementation 96.3 96.3 135.6 117.3 445.5
IP Creation 64.9 71.0 63.7 93.3 292.9
PSD 20.1 22.9 18.1 31.1 92.2
---------------------------------
Total Product Revenue 181.3 190.2 217.4 241.7 830.5
Services 80.0 73.8 58.0 51.5 263.4
Maintenance 83.4 83.6 84.6 85.0 336.6
TOTAL REVENUE 344.7 347.6 360.0 378.2 1,430.4
2001-2003 Revenue Detail by Product Group ($ Millions)
2002
---------------------------------
Q1 Q2 Q3 Q4 Year
---------------------------------
Product Revenue:
IC Implementation 122.6 137.8 122.4 91.3 474.2
IP Creation 73.8 71.0 68.0 47.8 260.5
PSD 22.7 17.2 19.9 17.4 77.2
---------------------------------
Total Product Revenue 219.0 226.1 210.3 156.5 811.9
Services 43.3 37.0 34.0 35.5 149.8
Maintenance 82.4 81.7 83.0 84.3 331.3
TOTAL REVENUE 344.7 344.8 327.2 276.3 1,293.1
2001-2003 Revenue Detail by Product Group ($ Millions)
2003
-------------------
Q1 Q2 Q3
-------------------
Product Revenue:
IC Implementation 77.6 94.1 89.3
IP Creation 54.2 53.5 52.2
PSD 9.5 13.0 10.2
-------------------
Total Product Revenue 141.3 160.6 151.7
Services 32.4 34.8 33.8
Maintenance 82.2 81.0 83.0
TOTAL REVENUE 255.9 276.4 268.5
2001-2003 Revenue Detail by Geography ($ Millions)
2001
---------------------------------
Q1 Q2 Q3 Q4 Year
---------------------------------
North America 217.0 201.2 178.8 224.1 821.0
Europe 59.6 85.6 118.3 70.1 333.6
Japan 48.9 43.5 30.1 58.8 181.3
Asia 19.1 17.4 32.9 25.2 94.5
TOTAL REVENUE 344.7 347.6 360.0 378.2 1,430.4
2001-2003 Revenue Detail by Geography ($ Millions)
2002
---------------------------------
Q1 Q2 Q3 Q4 Year
---------------------------------
North America 204.5 185.7 193.6 160.7 744.4
Europe 56.6 95.9 61.1 44.3 257.9
Japan 61.6 36.5 47.1 43.5 188.7
Asia 22.0 26.7 25.5 27.8 102.0
TOTAL REVENUE 344.7 344.8 327.2 276.3 1,293.1
2001-2003 Revenue Detail by Geography ($ Millions)
2003
-------------------
Q1 Q2 Q3
-------------------
North America 135.5 151.1 155.9
Europe 44.7 41.6 52.1
Japan 53.4 59.6 35.3
Asia 22.2 24.1 25.2
TOTAL REVENUE 255.9 276.4 268.5
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