Cadence and SEC Conclude Discussions On In-Process R&D Charges; Cadence Restates Earnings for 1998.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 5, 1999--Cadence Design Systems, 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 that in response to recent guidance from the Securities and Exchange Commission ("SEC") and subsequent discussions with the staff of the SEC, 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. has restated its in-process research and development charges for the following four acquisitions: Ambit (language) AMBIT - Algebraic Manipulation by Identity Translation (also claimed: "Acronym May Be Ignored Totally"). An early pattern-matching language, developed by C. Christensen of Massachusetts Computer Assocs in 1964, aimed at algebraic manipulation. Design Systems, Inc. ("Ambit"), Bell Labs Integrated Circuit integrated circuit (IC), electronic circuit built on a semiconductor substrate, usually one of single-crystal silicon. The circuit, often called a chip, is packaged in a hermetically sealed case or a nonhermetic plastic capsule, with leads extending from it for Design Automation Group 6 ("BLDA BLDA Bell Labs Design Automation BLDA Busse Longlife Design Award BLDA Ballroom and Latin Dance Association (University of Chicago) BLDA Black Dahlia BLDA Birmingham Lindy Dancers Association (Birmingham, AL) "), Excellent Design, Inc. ("EXD EXD Executive Director EXD External Device EXD Expected Departure (immigration) EXD Exhaust Direct EXD Exact Duplicate EXD External Display ") and Symbionics Group Ltd. ("Symbionics"). The Company acquired 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. with an aggregate value of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $406 million in connection with the above-described acquisitions. The aggregate write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of acquired in-process technologies related to the four acquisitions has been reduced from an aggregate of approximately $339 million to approximately $194 million. The write-off of acquired in-process technologies related to the acquisition of each of Ambit, BLDA, EXD and Symbionics has been reduced to approximately $107 million, $30 million, $28 million and $29 million, respectively. In addition, acquired intangible assets recorded in the four transactions have been increased from an aggregate of approximately $67 million to approximately $212 million ($274 million after providing for deferred taxes). The revised results for the fiscal year ending January January: see month. 2, 1999 reflect net income of approximately $32 million, or 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 of $0.14. Exclusive of unusual items and amortization of goodwill, net income for the fiscal year ending January 2, 1999 was $281 million, or $1.20 per share on a 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. In May of 1997, Cadence merged with Cooper Cooper may refer to:
CCT Commission Canadienne du Tourisme (Canadian Tourism Commission) CCT Correlated Color Temperature CCT Common Customs Tariff (EU) CCT Certificate of Completion of Training "). The merger was accounted for using the pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. method of accounting. Cadence believed the operations of CCT were not material to Cadence's consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operations and financial position and, therefore, prior period financial statements were not restated and the results of CCT were only recorded in the Company's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge prospectively from the date of acquisition. Following discussions with the staff of the Securities and Exchange Commission, the Company has restated all prior period financial statements as if the merger with CCT had taken place at the beginning of such periods. About Cadence Cadence is the largest supplier of software products, consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , and design services used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment, consumer electronics, and a variety of other electronics-based products. With more than 4,000 employees and 1998 annual sales of $1.2 billion, Cadence has sales offices, design centers, and research facilities around the world. The Company is headquartered in San Jose, Calif. and traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol CDN. More information about the company, its products and services may be obtained from the World Wide Web at http://www.cadence.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on current expectations or beliefs, as well as a number of assumptions about future events, that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The reader is 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. Risks about the Company's business are detailed from time to time in the Company's Securities and Exchange Commission reports, including the 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 2, 1999. Cadence and the Cadence logo are registered trademarks of Cadence Design Systems (company) Cadence Design Systems - A company that sells electronic design automation software and services. http://cadence.com/. See also Verilog. , Inc. All others are properties of their holders. -0-
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
April 4, 1998
As Restated As Reported
Revenue:
Product $ 154,049 $ 154,049
Services 52,302 52,302
Maintenance 63,872 63,872
Total revenue 270,223 270,223
Costs and expenses:
Cost of product 11,844 12,337
Cost of services 39,601 39,654
Cost of maintenance 10,343 10,343
Amortization of acquired intangibles 546 --
Marketing and sales 69,245 69,245
Research and development 41,707 41,707
General and administrative 16,521 16,521
Unusual items 60,857 85,957
Total costs and expenses 250,664 275,764
Income (loss) from operations 19,559 (5,541)
Other income (expense), net 2,619 2,619
Income (loss) before provision for income
taxes 22,178 (2,922)
Provision for income taxes 22,537 22,537
Net income (loss) $ (359) $ (25,459)
Basic net income (loss) per share $ -- $ (0.12)
Diluted net income (loss) per share $ -- $ (0.12)
Weighted average common
shares outstanding 210,014 210,014
Weighted average common and potential
common shares outstanding -- assuming
dilution 210,014 210,014
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
July 4, 1998
As Restated As Reported
Revenue:
Product $ 162,547 $ 162,547
Services 64,727 64,727
Maintenance 64,514 64,514
Total revenue 291,788 291,788
Costs and expenses:
Cost of product 11,542 12,374
Cost of services 48,001 48,351
Cost of maintenance 10,188 10,188
Amortization of acquired intangibles 2,627 --
Marketing and sales 71,366 71,366
Research and development 42,961 42,961
General and administrative 16,303 16,303
Unusual items -- --
Total costs and expenses 202,988 201,543
Income from operations 88,800 90,245
Other income, net 2,576 2,576
Income before provision for
income taxes 91,376 92,821
Provision for income taxes 26,264 26,454
Net income $ 65,112 $ 66,367
Basic net income per share $ 0.31 $ 0.31
Diluted net income per share $ 0.28 $ 0.28
Weighted average common shares
outstanding 212,210 212,210
Weighted average common and potential
common shares outstanding -- assuming
dilution 236,205 236,205
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
October 3, 1998
As Restated As Reported
Revenue:
Product $ 173,269 $ 173,269
Services 67,704 67,704
Maintenance 67,634 67,634
Total revenue 308,607 308,607
Costs and expenses:
Cost of product 14,782 15,614
Cost of services 49,482 50,061
Cost of maintenance 12,338 12,338
Amortization of acquired intangibles 2,856 --
Marketing and sales 76,052 76,052
Research and development 44,854 44,854
General and administrative 16,660 16,660
Unusual items 158,033 278,333
Total costs and expenses 375,057 493,912
Income (loss) from operations (66,450) (185,305)
Other income, net 1,328 1,328
Income (loss) before provision
for income taxes (65,122) (183,977)
Provision for income taxes 13,555 8,785
Net income (loss) $ (78,677) $ (192,762)
Basic net income (loss) per share $ (0.37) $ (0.91)
Diluted net income (loss) per
share $ (0.37) $ (0.91)
Weighted average common shares
outstanding 212,292 212,292
Weighted average common and potential
common shares outstanding -- assuming
dilution 212,292 212,292
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Year Ended
January 2, 1999
As Restated As Reported
Revenue:
Product $ 695,036 $ 695,036
695,036
Services 255,787 255,787
Maintenance 265,247 265,247
Total revenue 1,216,070 1,216,070
Costs and expenses:
Cost of product 51,539 56,734
Cost of services 185,683 187,060
Cost of maintenance 43,453 43,453
Amortization of acquired intangibles 17,443 --
Marketing and sales 302,332 302,332
Research and development 179,394 179,394
General and administrative 67,444 67,444
Unusual items 263,594 408,994
Total costs and expenses 1,110,882 1,245,411
Income (loss) from operations 105,188 (29,341)
Other income, net 7,479 7,479
Income (loss) before provision
for income taxes 112,667 (21,862)
Provision for income taxes 80,685 78,358
Net income (loss) $ 31,982 $ (100,220)
Basic net income (loss) per share $ 0.15 $ (0.47)
Diluted net income (loss) per
share $ 0.14 $ (0.47)
Weighted average common shares
outstanding 211,975 211,975
Weighted average common and potential
common shares outstanding --
assuming dilution 233,647 211,975
CADENCE DESIGN SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
ASSETS As Restated As Reported
January 2, 1999 January 2, 1999
Current Assets:
Cash and cash equivalents $ 183,066 $ 183,066
Short-term investments 26,686 26,686
Receivables, net 277,599 277,599
Prepaid expenses and other 92,359 92,359
Total current assets 579,710 579,710
Property, plant and equipment, net 262,675 262,675
Software development costs, net 13,045 13,045
Acquired intangibles, net 282,489 86,400
Installment contract receivables 100,529 100,529
Other assets 167,510 172,470
$ 1,405,958 $1,214,829
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of capital leases $ 1,273 $ 1,273
Accounts payable and accrued
liabilities 211,220 211,220
Income taxes payable 19,133 19,133
Deferred revenue 96,286 96,286
Total current liabilities 327,912 327,912
Long-Term Liabilities:
Long-term debt and capital leases 136,380 136,380
Deferred income taxes 58,927 --
Minority interest liability 377 377
Other long-term liabilities 24,883 24,883
Total long-term liabilities 220,567 161,640
Stockholders' Equity:
Total stockholders' equity 857,479 725,277
$ 1,405,958 $1,214,829
SCHEDULE OF AMORTIZATION OF ACQUIRED
INTANGIBLES
Fiscal Year 1999 $ 46.4 million
Fiscal Year 2000 $ 45.5 million
Fiscal Year 2001 $ 45.0 million
Fiscal Year 2002 $ 44.2 million
Fiscal Year 2003 $ 36.3 million
Fiscal Year 2004 $ 28.9 million
Fiscal Year 2005 $ 21.7 million
CADENCE DESIGN SYSTEMS, INC.
SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF INCOME
EXCLUDING UNUSUAL ITEMS AND GOODWILL
(In thousands, except per share amounts)
(Unaudited)
Year Ended
January 2, 1999
As Restated As Reported
Revenue:
Product $ 695,036 $ 695,036
Services 255,787 255,787
Maintenance 265,247 265,247
Total revenue 1,216,070 1,216,070
Costs and expenses:
Cost of product 51,539 56,734
Cost of services 185,683 187,060
Cost of maintenance 43,453 43,453
Amortization of acquired intangibles -- --
Marketing and sales 302,332 302,332
Research and development 179,394 179,394
General and administrative 67,444 67,444
Unusual items -- --
Total costs and expenses 829,845 836,417
Income from operations 386,225 379,653
Other income, net 7,479 7,479
Income before provision for
income taxes 393,704 387,132
Provision for income taxes 112,206 110,333
Net income $ 281,498 $ 276,799
Diluted net income per share $ 1.20 $ 1.18
Weighted average common and potential
common shares outstanding -- assuming
dilution 233,647 233,647
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