Attached files
file | filename |
---|---|
8-K - FORM 8-K - CADENCE DESIGN SYSTEMS INC | f58179e8vk.htm |
Exhibit 99.01
Cadence Reports Fourth Quarter and Fiscal Year 2010 Financial Results
SAN JOSE, Calif. February 2, 2011 Cadence Design Systems, Inc. (NASDAQ: CDNS) today
announced results for the fourth quarter and fiscal year 2010.
Cadence reported fourth quarter 2010 revenue of $249 million, compared to revenue of $220
million reported for the same period in 2009. On a GAAP basis, Cadence recognized a net loss of $21
million, or $(0.08) per share on a diluted basis in the fourth quarter of 2010, compared to a net
income of $2 million, or $0.01 per share on a diluted basis, in the same period in 2009. Revenue
for fiscal year 2010 totaled $936 million, compared to revenue of $853 million in fiscal year 2009.
Net income for fiscal year 2010 was $142 million, or $0.54 per share on a diluted basis, compared
to a net loss of $150 million or $(0.58) per share on a diluted basis for fiscal year 2009. The
GAAP net income for fiscal year 2010 included a $148 million income tax benefit related to the
settlement of an Internal Revenue Service examination of Cadences federal income tax returns for
the tax years 2000 through 2002 and a $67 million acquisition-related income tax benefit.
Using Cadences non-GAAP measure, net income in the fourth quarter of 2010 was $18 million, or
$0.07 per share on a diluted basis, as compared to net income of $15 million, or $0.06 per share on
a diluted basis, in the same period in 2009. For fiscal year 2010, non-GAAP net income was $53
million, or $0.20 per share on a diluted basis, compared to non-GAAP net loss of $16 million or $(0.06) per share on a diluted basis in fiscal year 2009.
The Cadence team delivered a strong performance in the fourth quarter. Revenue,
operating margin and cash flow all improved in the period and fiscal year 2010.
Throughout the year, we strengthened key customer and partner relationships by
demonstrating our technology leadership and delivering superior solutions to their
complex challenges, said Lip-Bu Tan, president and chief executive officer. We remain
laser-focused on executing our strategy and achieving our long-term objectives. We are
entering 2011 with good customer momentum, and a strong pipeline of technology across
System, SoC, and Silicon Realization that deliver on our EDA360 vision.
1
Cadence capped a successful 2010 with a strong fourth quarter. We made significant
improvements in all of our key operating metrics in 2010, added Geoff Ribar, senior
vice president and chief financial officer. As you can see from our outlook, we expect
further growth in business levels and improvement in profitability in 2011.
In addition to using GAAP results to evaluate Cadences business, management believes it is
useful to measure results using a non-GAAP measure of net income or net loss, which excludes, as
applicable, amortization of intangible assets, stock-based compensation expense, integration and
acquisition-related costs, acquisition-related income tax benefits, income tax benefits related to
settlement of an IRS examination, shareholder litigation costs, gains or losses and expenses or
credits related to non-qualified deferred compensation plan assets, executive severance costs,
restructuring charges and credits, amortization of discount on convertible notes, losses on
extinguishment of debt, equity in losses or income from investments, write-down of investments, and
gains or losses on the sale of investments. Non-GAAP net income or net 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 companys tax liability. See GAAP to non-GAAP
Reconciliation below for further information on the non-GAAP measure.
The following statements are based on current expectations. These statements are
forward-looking, and actual results may differ materially.
Business Outlook
For the first quarter of 2011, the company expects total revenue in the range of $255 million
to $265 million. First quarter GAAP net loss per diluted share is expected to be in the range of
$(0.02) to $0.00. Net income per diluted share using the non-GAAP measure defined below is expected
to be in the range of $0.06 to $0.08.
For the full year 2011, the company expects total revenue in the range of $1,030 million to
$1,070 million. On a GAAP basis, net income per diluted share for fiscal year 2011 is expected to
be in the range of $0.00 to $0.10. Using the non-GAAP measure defined below, net income per diluted
share for fiscal year 2011 is expected to be in the range of $0.30 to $0.40.
2
A schedule showing a reconciliation of the business outlook from GAAP net income or net loss
and diluted net income or net loss per share to non-GAAP net income and diluted net income per
share is included with this release.
Audio Webcast Scheduled
Lip-Bu Tan, Cadences president and chief executive officer, and Geoff Ribar, Cadences
senior vice president and chief financial officer, will host a fourth quarter and fiscal year 2010
financial results audio webcast today, February 2, 2011, at 2 p.m. (Pacific) / 5 p.m. (Eastern).
Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast.
An archive of the webcast will be available starting February 2, 2011 at 5 p.m. (Pacific) and
ending February 16, 2011 at 5 p.m. (Pacific). Webcast access is available at
www.cadence.com/company/investor_relations.
About Cadence
Cadence
enables global electronic design innovation and plays an essential role in the
creation of todays integrated circuits and electronics. Customers use Cadence software and
hardware, methodologies, and services to design and verify advanced semiconductors, consumer
electronics, networking and telecommunications equipment, and
computer systems. 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 and 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 Cadences fourth quarter and fiscal year 2010
results, as well as the information in the Business Outlook section and the statements by Lip-Bu
Tan and Geoff Ribar, 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 risks, uncertainties
and other factors, many of which are outside Cadences control, including,
3
among others: (i) Cadences ability to compete successfully in the electronic design
automation product and the commercial electronic design and methodology services industries; (ii)
Cadences ability to successfully complete and realize the expected benefits of its restructurings
without significant unexpected costs or delays, and the success of Cadences other efforts to
improve operational efficiency and growth; (iii) the mix of products and services sold and the
timing of significant orders for Cadences products, and its shift to a ratable license structure,
which may result in changes in the mix of license types; (iv) change in customer demands, including
the possibility that restructurings and other efforts to improve operational efficiency could
result in delays in customers purchases of products and services; (v) economic and industry
conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange
between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii)
capital expenditure requirements, legislative or regulatory requirements, interest rates and
Cadences ability to access capital and debt markets; (viii) the acquisition of other companies or
technologies or the failure to successfully integrate and operate these companies or technologies
Cadence acquires; (ix) the effects of restructurings and other efforts to improve operational
efficiency on Cadences business, including its strategic and customer relationships, ability to
retain key employees and stock prices; (x) events that affect the reserves or settlement
assumptions Cadence may take from time to time with respect to accounts receivable, taxes,
litigation or other matters; and (xi) the effects of any litigation or other proceedings to which
Cadence is or may become a party.
For a detailed discussion of these and other cautionary statements related to our business,
please refer to Cadences filings with the Securities and Exchange Commission. These include
Cadences Annual Report on Form 10-K for the year ended January 2, 2010, Cadences Quarterly Report
on Form 10-Q for the period ended October 2, 2010 and Cadences future filings.
4
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 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 or net loss, which is a non-GAAP financial measure under Section 101 of
Regulation G under the Securities Exchange Act of 1934, as amended, and is GAAP net income or net
loss excluding, as applicable, amortization of intangible assets, stock-based compensation expense,
integration and acquisition-related costs, acquisition-related income tax benefits, income tax
benefits related to the settlement of an IRS examination, shareholder litigation costs, gains or
losses and expenses or credits related to non-qualified deferred compensation plan assets,
executive severance costs, restructuring charges and credits, amortization of discount on
convertible notes, losses on extinguishment of debt, equity in losses or income from investments,
write-down of investments and gains or losses on the sale of investments. Intangible assets consist
primarily of purchased or licensed technology, backlog, patents, trademarks, distribution rights,
customer contracts and related relationships and non-compete agreements. Non-GAAP net income or net
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 companys tax liability.
Cadences management believes it is useful in measuring Cadences operations to exclude
amortization of intangible assets and integration and acquisition-related costs because these costs
are primarily fixed at the time of an acquisition and generally cannot be changed by Cadences
management in the short term. In addition, Cadences management believes it is useful to exclude
stock-based compensation expense because such exclusion enhances investors ability to review
Cadences business from the same perspective as Cadences management, which believes that
stock-based compensation expense is based on many subjective inputs at a point in time and many of
these inputs are not necessarily directly attributable to the underlying performance of Cadences
business operations. Cadences management also believes it is useful to exclude costs related to
shareholder litigation because these costs are not related to Cadences core business operations.
Cadences management also believes that it is useful to exclude restructuring charges and credits.
During each of fiscal year 2009 and 2010, Cadence commenced a restructuring program and expects to
have paid substantially all termination benefits and costs by the first fiscal quarter of 2011 and
the fourth fiscal quarter of 2011, respectively. Cadences management believes that in measuring
the companys operations, it is useful to exclude any such restructuring charges and credits
because exclusion of such charges and credits permits consistent evaluations of Cadences
performance before and after such actions are taken. Cadences management also believes it is
useful to exclude gains or losses and expenses or credits related to the non-qualified deferred
compensation plan assets because these gains or losses and expenses or credits are not part of
Cadences direct costs of operations, but reflect changes in the value of assets held in the
non-qualified deferred compensation plan. Cadences management also believes it is useful to
exclude executive severance costs as these costs do not occur frequently. Cadences management also
believes it is useful to exclude the amortization of the discount on convertible notes because this
incremental cost recorded as interest expense does not represent a cash obligation of the company
and is not part of Cadences direct cost of operations. Finally, Cadences management believes it
is useful to exclude the equity in losses or income from investments, write-down of investments and
gains or losses on the sale of
5
investments because these items are not part of Cadences direct cost of operations. Rather,
these are non-operating items that are included in other income or expense and are part of the
companys investment activities.
During fiscal year 2010, Cadences non-GAAP net income also excluded the effect of an income
tax benefit associated with Cadences effective settlement of an Internal Revenue Service, or IRS,
examination of Cadences federal income tax returns for the tax years 2000 through 2002. Cadences
management believes it is useful to exclude the income tax benefit associated with this settlement
because Cadence does not expect settlements resulting in income tax provisions or benefits of the
magnitude recorded during the third quarter of 2010 to occur frequently.
During fiscal year 2010, Cadences non-GAAP net income also excluded losses associated with
its repurchase of a portion of its 1.375% Convertible Senior Notes Due December 15, 2011 and a
portion of its 1.500% Convertible Senior Notes Due December 15, 2013. Cadences management believes
it is useful to exclude the losses on the extinguishment of debt as the losses are not directly
related to Cadences core business operations and similar transactions are not expected to occur
frequently.
During fiscal year 2010, Cadences non-GAAP net income also excluded the effect of an income
tax benefit associated with Cadences acquisition of Denali Software, Inc. Cadences management
believes it is useful to exclude the tax benefit associated with this acquisition because Cadence
does not expect an acquisition-related income tax benefit of the magnitude recorded in the second
quarter of 2010 to be recorded frequently.
During fiscal year 2009, Cadences non-GAAP net loss also excluded the effect of an income tax
benefit associated with the temporary increase in the net operating loss carryback period for
operating losses Cadence incurred in the United States. Cadences management believes it is useful
to exclude the tax benefit associated with this change in the United States tax law because the
extended net operating loss carryback period is only applicable for operating losses incurred
during either fiscal year 2008 or fiscal year 2009.
Cadences management believes that non-GAAP net income or net loss provides useful
supplemental information to Cadences management and investors regarding the performance of the
companys business operations and facilitates comparisons to the companys historical operating
results. Cadences management also uses this information internally for forecasting and budgeting.
Non-GAAP financial measures should not be considered as a substitute for or superior to measures of
financial performance prepared in accordance 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 tables reconcile the specific items excluded from GAAP net income or net loss
and GAAP net income or net loss per diluted share in the calculation of non-GAAP net income or net
loss and non-GAAP net income or net loss per diluted share for the periods shown below:
6
Net Income (Loss) Reconciliation
Three Months Ended | ||||||||
January 1, 2011 | January 2, 2010 | |||||||
(unaudited) | ||||||||
(in thousands) | ||||||||
Net income (loss) on a GAAP basis |
$ | (21,237 | ) | $ | 1,790 | |||
Amortization of acquired intangibles |
6,655 | 4,391 | ||||||
Stock-based compensation expense |
10,643 | 11,016 | ||||||
Non-qualified deferred compensation expenses |
2,416 | 3,389 | ||||||
Restructuring and other charges |
13,225 | 13,543 | ||||||
Shareholder litigation costs |
14 | | ||||||
Integration and acquisition-related costs |
4,265 | 135 | ||||||
Amortization of debt discount |
6,352 | 4,870 | ||||||
Other income or expense related to
investments and non-qualified deferred
compensation plan assets* |
(2,347 | ) | (3,177 | ) | ||||
Loss on extinguishment of debt |
384 | | ||||||
Income tax effect of the increase in United
States net operating loss carryback period |
| (14,825 | ) | |||||
Income tax effect of non-GAAP adjustments |
(2,806 | ) | (6,070 | ) | ||||
Net income on a non-GAAP basis |
$ | 17,564 | $ | 15,062 | ||||
* | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in Other income (expense), net. |
7
Net Income (Loss) Reconciliation
Years Ended | ||||||||
January 1, 2011 | January 2, 2010 | |||||||
(unaudited) | ||||||||
(in thousands) | ||||||||
Net income (loss) on a GAAP basis |
$ | 142,338 | $ | (149,871 | ) | |||
Amortization of acquired intangibles |
20,808 | 19,941 | ||||||
Stock-based compensation expense |
43,460 | 54,706 | ||||||
Non-qualified deferred compensation expenses
(credits) |
2,906 | (644 | ) | |||||
Restructuring and other charges |
10,152 | 31,376 | ||||||
Shareholder litigation costs |
4,328 | | ||||||
Executive severance costs |
1,627 | | ||||||
Integration and acquisition-related costs |
12,170 | 665 | ||||||
Amortization of debt discount |
22,936 | 19,104 | ||||||
Other income or expense related to
investments and non-qualified deferred
compensation plan assets* |
(5,875 | ) | 6,738 | |||||
Loss on extinguishment of debt |
5,705 | | ||||||
Acquisition-related income tax benefit |
(66,707 | ) | | |||||
Income tax benefit of IRS settlement |
(148,302 | ) | | |||||
Income tax effect of the increase in United
States net operating loss carryback period |
| (14,825 | ) | |||||
Income tax effect of non-GAAP adjustments |
7,179 | 16,812 | ||||||
Net income (loss) on a non-GAAP basis |
$ | 52,725 | $ | (15,998 | ) | |||
* | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in Other income (expense), net. |
8
Diluted Net Income (Loss) per Share Reconciliation
Three Months Ended | ||||||||
January 1, 2011 | January 2, 2010 | |||||||
(unaudited) | ||||||||
(in thousands, except per share data) | ||||||||
Diluted net income (loss) per share on a GAAP
basis |
$ | (0.08 | ) | $ | 0.01 | |||
Amortization of acquired intangibles |
0.03 | 0.02 | ||||||
Stock-based compensation expense |
0.04 | 0.04 | ||||||
Non-qualified deferred compensation
expenses |
0.01 | 0.01 | ||||||
Restructuring and other charges |
0.05 | 0.05 | ||||||
Shareholder litigation costs |
| | ||||||
Integration and acquisition-related costs |
0.02 | | ||||||
Amortization of debt discount |
0.02 | 0.02 | ||||||
Other income or expense related to
investments and non-qualified deferred
compensation plan assets* |
(0.01 | ) | (0.01 | ) | ||||
Loss on extinguishment of debt |
| | ||||||
Income tax effect of the increase in United
States net operating loss carryback period |
| (0.06 | ) | |||||
Income tax effect of non-GAAP adjustments |
(0.01 | ) | (0.02 | ) | ||||
Diluted net income per share on a non-GAAP
basis |
$ | 0.07 | $ | 0.06 | ||||
Shares used in calculation of diluted net
income (loss) per share GAAP** |
259,781 | 265,093 | ||||||
Shares used in calculation of diluted net
income per share non-GAAP** |
266,275 | 265,093 |
* | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in Other income (expense), net. | |
** | Shares used in the calculation of GAAP net income (loss) per share are expected to be the same as shares used in the calculation of non-GAAP net income (loss) per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss. |
9
Diluted Net Income (Loss) per Share Reconciliation
Years Ended | ||||||||
January 1, 2011 | January 2, 2010 | |||||||
(unaudited) | ||||||||
(in thousands, except per share data) | ||||||||
Diluted net income (loss) per share on a GAAP
basis |
$ | 0.54 | $ | (0.58 | ) | |||
Amortization of acquired intangibles |
0.08 | 0.08 | ||||||
Stock-based compensation expense |
0.16 | 0.21 | ||||||
Non-qualified deferred compensation
expenses (credits) |
0.01 | | ||||||
Restructuring and other charges |
0.04 | 0.12 | ||||||
Shareholder litigation costs |
0.02 | | ||||||
Executive severance costs |
0.01 | | ||||||
Integration and acquisition-related costs |
0.05 | | ||||||
Amortization of debt discount |
0.08 | 0.07 | ||||||
Other income or expense related to
investments and non-qualified deferred
compensation plan assets* |
(0.02 | ) | 0.03 | |||||
Loss on extinguishment of debt |
0.02 | | ||||||
Acquisition-related income tax benefit |
(0.25 | ) | | |||||
Income tax benefit of IRS settlement |
(0.56 | ) | | |||||
Income tax effect of the increase in United
States net operating loss carryback period |
| (0.06 | ) | |||||
Income tax effect of non-GAAP adjustments |
0.02 | 0.07 | ||||||
Diluted net income (loss) per share on a
non-GAAP basis |
$ | 0.20 | $ | (0.06 | ) | |||
Shares used in calculation of diluted net
income (loss) per share GAAP** |
265,871 | 257,782 | ||||||
Shares used in calculation of diluted net
income (loss) per share non-GAAP** |
265,871 | 257,782 |
* | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in Other income (expense), net. | |
** | Shares used in the calculation of GAAP net income (loss) per share are expected to be the same as shares used in the calculation of non-GAAP net income (loss) per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss. |
Investors are encouraged to look at the GAAP results as the best measure of financial
performance. For example, amortization of intangibles is important to consider because it may
represent an initial expenditure that under GAAP is reported across future fiscal periods.
Likewise, stock-based 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 are
important to financial performance generally.
10
Although Cadences management finds the non-GAAP measures useful in evaluating the performance of
Cadences business, reliance on these measures is limited because items excluded from such measures
often have a material effect on Cadences earnings and earnings per share calculated in accordance
with GAAP. Therefore, Cadences management typically uses the non-GAAP earnings and earnings per
share measures, in conjunction with the GAAP earnings and earnings per share measures, to address
these limitations.
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 the
business outlook published in this press release. At the same time, Cadence will keep this press
release, including the business outlook, publicly available on its website.
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 Cadences current expectations on matters covered
unless Cadence publishes a notice stating otherwise.
Beginning March 18, 2011, Cadence will observe a Quiet Period during which the business outlook as
provided in this press release and the companys most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q no longer constitute the companys 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 any update by the company. During
the Quiet Period, Cadences representatives will not comment on Cadences business outlook,
financial results or expectations. The Quiet Period will extend until the day when Cadences First
Quarter 2011 Earnings Release is published, which is currently scheduled for April 27, 2011.
# # #
11
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
January 1, 2011 and January 2, 2010
(In thousands)
(Unaudited)
Condensed Consolidated Balance Sheets
January 1, 2011 and January 2, 2010
(In thousands)
(Unaudited)
January 1, 2011 | January 2, 2010 | |||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 557,409 | $ | 569,115 | ||||
Short-term investments |
12,715 | 2,184 | ||||||
Receivables, net of allowances of $7,604 and
$14,020, respectively |
191,893 | 200,628 | ||||||
Inventories |
39,034 | 24,165 | ||||||
Prepaid expenses and other |
54,155 | 54,655 | ||||||
Total current assets |
855,206 | 850,747 | ||||||
Property, plant and equipment, net of accumulated
depreciation of $648,676 and $637,107, respectively |
285,115 | 311,502 | ||||||
Goodwill |
158,893 | | ||||||
Acquired intangibles, net of accumulated amortization of
$105,158 and $124,507, respectively |
179,198 | 28,841 | ||||||
Installment contract receivables, net of allowances of
$0 and $9,724, respectively |
23,380 | 58,448 | ||||||
Other assets |
206,124 | 161,049 | ||||||
Total Assets |
$ | 1,707,916 | $ | 1,410,587 | ||||
Current Liabilities: |
||||||||
Convertible notes |
$ | 143,258 | $ | | ||||
Accounts payable and accrued liabilities |
176,864 | 150,207 | ||||||
Current portion of deferred revenue |
337,426 | 247,691 | ||||||
Total current liabilities |
657,548 | 397,898 | ||||||
Long-Term Liabilities: |
||||||||
Long-term portion of deferred revenue |
85,400 | 92,298 | ||||||
Convertible notes |
406,404 | 436,012 | ||||||
Other long-term liabilities |
266,110 | 376,006 | ||||||
Total long-term liabilities |
757,914 | 904,316 | ||||||
Stockholders Equity |
292,454 | 108,373 | ||||||
Total Liabilities and Stockholders Equity |
$ | 1,707,916 | $ | 1,410,587 | ||||
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Three Months and Years Ended January 1, 2011 and January 2, 2010
(In thousands, except per share amounts)
(Unaudited)
Condensed Consolidated Statements of Operations
For the Three Months and Years Ended January 1, 2011 and January 2, 2010
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Years Ended | |||||||||||||||
January 1, | January 2, | January 1, | January 2, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue: |
||||||||||||||||
Product |
$ | 133,545 | $ | 114,478 | $ | 471,598 | $ | 400,773 | ||||||||
Services |
25,768 | 22,871 | 100,891 | 106,555 | ||||||||||||
Maintenance |
89,705 | 82,930 | 363,465 | 345,304 | ||||||||||||
Total revenue |
249,018 | 220,279 | 935,954 | 852,632 | ||||||||||||
Costs and Expenses: |
||||||||||||||||
Cost of product |
8,249 | 8,286 | 31,421 | 32,114 | ||||||||||||
Cost of services |
20,385 | 20,934 | 82,968 | 90,536 | ||||||||||||
Cost of maintenance |
10,215 | 11,170 | 42,054 | 46,593 | ||||||||||||
Marketing and sales |
83,218 | 72,230 | 305,558 | 286,833 | ||||||||||||
Research and development |
97,828 | 81,309 | 376,413 | 354,703 | ||||||||||||
General and administrative |
21,421 | 21,337 | 86,394 | 122,648 | ||||||||||||
Amortization of acquired intangibles |
4,459 | 2,726 | 14,160 | 11,420 | ||||||||||||
Restructuring and other charges |
13,225 | 13,543 | 10,152 | 31,376 | ||||||||||||
Total costs and expenses |
259,000 | 231,535 | 949,120 | 976,223 | ||||||||||||
Loss from operations |
(9,982 | ) | (11,256 | ) | (13,166 | ) | (123,591 | ) | ||||||||
Interest expense |
(10,464 | ) | (7,280 | ) | (36,343 | ) | (28,872 | ) | ||||||||
Other income (expense), net |
2,574 | 4,723 | 2,541 | (1,042 | ) | |||||||||||
Loss before
provision (benefit)
for income taxes |
(17,872 | ) | (13,813 | ) | (46,968 | ) | (153,505 | ) | ||||||||
Provision (benefit) for income taxes |
3,365 | (15,603 | ) | (189,306 | ) | (3,634 | ) | |||||||||
Net income (loss) |
$ | (21,237 | ) | $ | 1,790 | $ | 142,338 | $ | (149,871 | ) | ||||||
Basic net income (loss) per share |
$ | (0.08 | ) | $ | 0.01 | $ | 0.55 | $ | (0.58 | ) | ||||||
Diluted net income (loss) per share |
$ | (0.08 | ) | $ | 0.01 | $ | 0.54 | $ | (0.58 | ) | ||||||
Weighted average common shares outstanding basic |
259,781 | 260,752 | 260,787 | 257,782 | ||||||||||||
Weighted average common shares outstanding diluted |
259,781 | 265,093 | 265,871 | 257,782 | ||||||||||||
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Years Ended January 1, 2011 and January 2, 2010
(In thousands)
(Unaudited)
Condensed Consolidated Statements of Cash Flows
For the Years Ended January 1, 2011 and January 2, 2010
(In thousands)
(Unaudited)
Years Ended | ||||||||
January 1, | January 2, | |||||||
2011 | 2010 | |||||||
Cash and Cash Equivalents at Beginning of Period |
$ | 569,115 | $ | 568,255 | ||||
Cash Flows from Operating Activities: |
||||||||
Net income (loss) |
142,338 | (149,871 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
88,335 | 93,139 | ||||||
Amortization of debt discounts and fees |
25,352 | 20,912 | ||||||
Loss on extinguishment of debt |
5,705 | | ||||||
Stock-based compensation |
43,460 | 54,706 | ||||||
Loss from equity method investments |
133 | 481 | ||||||
(Gain) loss on investments, net |
(7,617 | ) | (1,292 | ) | ||||
Gain on sale of property, plant and equipment |
(799 | ) | | |||||
Write-down of investment securities |
1,500 | 5,207 | ||||||
Non-cash restructuring and other charges (credits) |
4,086 | (358 | ) | |||||
Impairment of property, plant and equipment |
491 | 6,730 | ||||||
Deferred income taxes |
(64,191 | ) | (3,438 | ) | ||||
Proceeds from the sale of receivables, net |
| 5,827 | ||||||
Provisions (recoveries) for losses (gains) on trade and installment contract receivables |
(17,098 | ) | 20,947 | |||||
Other non-cash items |
1,838 | (759 | ) | |||||
Changes in operating assets and liabilities, net of effect of acquired businesses: |
||||||||
Receivables |
(33,459 | ) | 61,966 | |||||
Installment contract receivables |
104,834 | 114,346 | ||||||
Inventories |
(26,528 | ) | 3,896 | |||||
Prepaid expenses and other |
1,808 | (1,393 | ) | |||||
Other assets |
(44,972 | ) | 12,044 | |||||
Accounts payable and accrued liabilities |
20,281 | (94,851 | ) | |||||
Deferred revenue |
62,531 | (95,135 | ) | |||||
Other long-term liabilities |
(108,885 | ) | (27,467 | ) | ||||
Net cash provided by operating activities |
199,143 | 25,637 | ||||||
Cash Flows from Investing Activities: |
||||||||
Proceeds from the sale of available-for-sale securities |
| 4,135 | ||||||
Proceeds from the sale of short-term investments |
317 | | ||||||
Proceeds from the sale of long-term investments |
10,276 | | ||||||
Proceeds from the sale of property, plant and equipment |
900 | 3,864 | ||||||
Purchases of property, plant and equipment |
(34,782 | ) | (41,308 | ) | ||||
Purchases of software licenses |
(2,706 | ) | (774 | ) | ||||
Investment in venture capital partnerships and equity investments |
(3,000 | ) | (2,300 | ) | ||||
Cash paid in business combinations and asset acquisitions, net of cash acquired |
(256,117 | ) | (14,126 | ) | ||||
Net cash used for investing activities |
(285,112 | ) | (50,509 | ) | ||||
Cash Flows from Financing Activities: |
||||||||
Principal payments on receivable sale financing |
(3,540 | ) | (2,467 | ) | ||||
Proceeds from issuance of 2015 Notes |
350,000 | | ||||||
Payment of Convertible Senior Notes |
(192,364 | ) | | |||||
Payment of 2015 Notes issuance costs |
(10,532 | ) | | |||||
Purchase of 2015 Notes Hedges |
(76,635 | ) | | |||||
Proceeds from termination of Convertible Senior Notes Hedges |
311 | | ||||||
Proceeds from sale of 2015 Warrants |
37,450 | | ||||||
Tax effect related to employee stock transactions allocated to equity |
(9,458 | ) | 1,383 | |||||
Proceeds from issuance of common stock |
13,643 | 28,010 | ||||||
Stock received for payment of employee taxes on vesting of restricted stock |
(8,940 | ) | (5,959 | ) | ||||
Purchases of treasury stock |
(39,997 | ) | | |||||
Net cash provided by financing activities |
59,938 | 20,967 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
14,325 | 4,765 | ||||||
Increase (decrease) in cash and cash equivalents |
(11,706 | ) | 860 | |||||
Cash and Cash Equivalents at End of Period |
$ | 557,409 | $ | 569,115 | ||||
Cadence Design Systems, Inc.
As of February 2, 2011
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income (Loss) Per Share
(Unaudited)
As of February 2, 2011
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income (Loss) Per Share
(Unaudited)
Three Months Ending | Year Ending | |||||||
April 2, 2011 | December 31, 2011 | |||||||
Forecast | Forecast | |||||||
Diluted net income (loss) per share on a GAAP basis |
$(0.02) to $0.00 | $0.00 to $0.10 | ||||||
Amortization of acquired intangibles |
0.03 | 0.10 | ||||||
Stock-based compensation expense |
0.04 | 0.16 | ||||||
Restructuring and other charges |
| | ||||||
Integration and acquisition-related costs |
| | ||||||
Amortization of debt discount |
0.02 | 0.10 | ||||||
Income tax effect of non-GAAP adjustments |
(0.01) | (0.06) | ||||||
Diluted net income per share on a non-GAAP basis |
$0.06 to $0.08 | $0.30 to $0.40 | ||||||
Cadence Design Systems, Inc.
As of February 2, 2011
Impact of Non-GAAP Adjustments on Forward Looking Net Income (Loss)
(Unaudited)
As of February 2, 2011
Impact of Non-GAAP Adjustments on Forward Looking Net Income (Loss)
(Unaudited)
Three Months Ending | Year Ending | |||||||
April 2, 2011 | December 31, 2011 | |||||||
($ in Millions) | Forecast | Forecast | ||||||
Net income (loss) on a GAAP basis |
$(6) to $0 | $0 to $26 | ||||||
Amortization of acquired intangibles |
7 | 26 | ||||||
Stock-based compensation expense |
10 | 45 | ||||||
Restructuring and other charges |
1 | 1 | ||||||
Integration and acquisition-related costs |
| 1 | ||||||
Amortization of debt discount |
7 | 26 | ||||||
Income tax effect of non-GAAP adjustments |
(3) | (16) | ||||||
Net income on a non-GAAP basis |
$16 to $22 | $83 to $109 | ||||||
Cadence Design Systems, Inc.
(Unaudited)
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2009 | 2010 | |||||||||||||||||||||||||||||||||||||||
GEOGRAPHY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | ||||||||||||||||||||||||||||||
Americas |
42 | % | 48 | % | 43 | % | 51 | % | 46 | % | 40 | % | 46 | % | 43 | % | 45 | % | 43 | % | ||||||||||||||||||||
Europe |
24 | % | 21 | % | 20 | % | 24 | % | 22 | % | 22 | % | 23 | % | 20 | % | 23 | % | 22 | % | ||||||||||||||||||||
Japan |
19 | % | 17 | % | 23 | % | 12 | % | 18 | % | 23 | % | 14 | % | 20 | % | 14 | % | 18 | % | ||||||||||||||||||||
Asia |
15 | % | 14 | % | 14 | % | 13 | % | 14 | % | 15 | % | 17 | % | 17 | % | 18 | % | 17 | % | ||||||||||||||||||||
Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Revenue Mix by Product Group (% of Total Revenue)
2009 | 2010 | |||||||||||||||||||||||||||||||||||||||
PRODUCT GROUP | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | ||||||||||||||||||||||||||||||
Functional Verification |
20 | % | 23 | % | 21 | % | 22 | % | 22 | % | 22 | % | 26 | % | 25 | % | 22 | % | 24 | % | ||||||||||||||||||||
Digital IC Design |
19 | % | 24 | % | 19 | % | 22 | % | 21 | % | 21 | % | 21 | % | 23 | % | 26 | % | 23 | % | ||||||||||||||||||||
Custom IC Design |
26 | % | 25 | % | 28 | % | 28 | % | 27 | % | 27 | % | 26 | % | 24 | % | 27 | % | 26 | % | ||||||||||||||||||||
Design for
Manufacturing |
9 | % | 5 | % | 9 | % | 7 | % | 7 | % | 9 | % | 6 | % | 8 | % | 7 | % | 7 | % | ||||||||||||||||||||
System Interconnect |
12 | % | 10 | % | 11 | % | 11 | % | 11 | % | 9 | % | 10 | % | 10 | % | 8 | % | 9 | % | ||||||||||||||||||||
Services & Other |
14 | % | 13 | % | 12 | % | 10 | % | 12 | % | 12 | % | 11 | % | 10 | % | 10 | % | 11 | % | ||||||||||||||||||||
Total |
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Note: Product Group total revenue includes Product + Maintenance
For more information, please contact:
Investors and Shareholders
Jennifer Jordan
Cadence Design Systems, Inc.
408-944-7100
investor_relations@cadence.com
Jennifer Jordan
Cadence Design Systems, Inc.
408-944-7100
investor_relations@cadence.com
Media and Industry Analysts
Nancy Szymanski
Cadence Design Systems, Inc.
408-473-8382
publicrelations@cadence.com
Nancy Szymanski
Cadence Design Systems, Inc.
408-473-8382
publicrelations@cadence.com