Cadence Reports Q3 2011 Financial Results
(firmenpresse) - SAN JOSE, CA -- (Marketwire) -- 10/26/11 -- Cadence Design Systems, Inc. (NASDAQ: CDNS)
today announced results for the third quarter of fiscal year 2011.
Cadence reported third quarter 2011 revenue of $292 million, compared to
revenue of $238 million reported for the same period in 2010. On a GAAP
basis, Cadence recognized net income of $28 million, or $0.10 per share on
a diluted basis in the third quarter of 2011, compared to net income of
$127 million, or $0.48 per share on a diluted basis in the same period in
2010. GAAP net income for the third quarter of 2010 included $148 million
in income tax benefit related to the settlement of an Internal Revenue
Service examination of Cadence's federal income tax returns for the tax
years 2000 through 2002.
Using Cadence's non-GAAP measure, net income in the third quarter of 2011
was $37 million, or $0.14 per share on a diluted basis, as compared to net
income of $11 million, or $0.04 per share on a diluted basis in the same
period in 2010.
"Strong design activity in multiple market segments continues to drive
demand for our products and solutions," said Lip-Bu Tan, president and
chief executive officer. "In response to customer requirements, we have
established our readiness for 20-nanometer design and demonstrated product
leadership for the design of SoCs using advanced multi-core processors."
"Cadence again posted strong results as operating profitability continues
to improve," added Geoff Ribar, senior vice president and chief financial
officer. "Given the risks in the world economy we looked at our prospective
Q4 business very closely but still see good demand for products and
services as reflected in our increased outlook."
In addition to using GAAP results to evaluate Cadence's business,
management believes it is useful to measure results using a non-GAAP
measure of net income, which excludes, as applicable, amortization of
intangible assets, stock-based compensation expense, integration and
acquisition-related costs including changes in the fair value of contingent
consideration related to prior acquisitions, acquisition-related income tax
benefits, income tax benefits related to the settlement of IRS
examinations, shareholder litigation costs and charges, gains or losses and
expenses or credits related to non-qualified deferred compensation plan
assets, executive and other employee 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 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. 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 fourth quarter of 2011, the company expects total revenue in the
range of $295 million to $305 million. Fourth quarter GAAP net income per
diluted share is expected to be in the range of $0.08 to $0.10. Net income
per diluted share using the non-GAAP measure defined below is expected to
be in the range of $0.14 to $0.16.
For 2011, the company expects total revenue in the range of $1,135 million
to $1,145 million. On a GAAP basis, net income per diluted share for 2011
is expected to be in the range of $0.31 to $0.33. Using the non-GAAP
measure defined below, net income per diluted share for 2011 is expected to
be in the range of $0.48 to $0.50.
A schedule showing a reconciliation of the business outlook from GAAP net
income and diluted net income per share to non-GAAP net income and diluted
net income per share is included with this release.
Audio Webcast Scheduled
Lip-Bu Tan, Cadence's president and chief executive officer, and Geoff
Ribar, Cadence's senior vice president and chief financial officer, will
host a third quarter 2011 financial results audio webcast today, October
26, 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 October 26, 2011 at 5
p.m. (Pacific) and ending November 9, 2011 at 5 p.m. (Pacific). Webcast
access is available at .
About Cadence
Cadence enables global electronic design innovation and plays an essential
role in the creation of today's integrated circuits and electronics.
Customers use Cadence software, hardware, IP, and services to design and
verify advanced semiconductors, consumer electronics, networking and
telecommunications equipment, and computer systems. The company is
headquartered in San Jose, California, 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 .
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 Cadence's third quarter 2011
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 Cadence's
control, including, among others: (i) Cadence's ability to compete
successfully in the electronic design automation product and the commercial
electronic design and methodology services industries; (ii) the success of
Cadence's other efforts to improve operational efficiency and growth; (iii)
the mix of products and services sold and the timing of significant orders
for Cadence's 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 Cadence's
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
Cadence's 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 Cadence's business, please refer to Cadence's filings with the
Securities and Exchange Commission. These include Cadence's Annual Report
on Form 10-K for the year ended January 1, 2011, and Cadence's future
filings.
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, 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 excluding, as applicable, amortization of
intangible assets, stock-based compensation expense, integration and
acquisition-related costs, including changes in the fair value of
contingent consideration related to prior acquisitions, acquisition-related
income tax benefits, income tax benefits related to the settlement of IRS
examinations, shareholder litigation costs and charges, gains or losses and
expenses or credits related to non-qualified deferred compensation plan
assets, executive and other employee 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 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.
Cadence's management believes it is useful in measuring Cadence's
operations to exclude amortization of intangible assets and integration and
acquisition-related costs, including changes in the fair value of
contingent consideration related to prior acquisitions, because these costs
are primarily fixed at the time of an acquisition and generally cannot be
changed by Cadence's management in the short term. In addition, Cadence's
management believes it is useful to exclude stock-based compensation
expense because such exclusion enhances investors' ability to review
Cadence's business from the same perspective as Cadence's 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 Cadence's business
operations. Cadence's management also believes it is useful to exclude
costs and charges related to shareholder litigation because these costs and
charges are not related to Cadence's core business operations. Cadence's
management also believes that it is useful to exclude restructuring charges
and credits. During the fourth quarter of 2010, Cadence commenced a
restructuring program and expects to have paid substantially all
termination benefits and costs by the fourth quarter of 2011. Cadence's
management believes that in measuring the company's operations, it is
useful to exclude any such restructuring charges and credits because
exclusion of such charges and credits permits consistent evaluations of
Cadence's performance before and after such actions are taken. Cadence's
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 Cadence's direct costs of operations, but reflect changes in the value
of assets held in the non-qualified deferred compensation plan. Cadence's
management also believes it is useful to exclude executive and other
employee severance costs as these costs do not occur frequently. Cadence's
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 Cadence's direct cost of operations. Finally, Cadence's
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 investments because these items are not part of Cadence's direct cost of
operations. Rather, these are non-operating items that are included in
other income or expense and are part of the company's investment
activities.
During the second quarter of 2011, Cadence's non-GAAP net income also
excluded the effect of an income tax benefit associated with Cadence's
effective settlement of an Internal Revenue Services, or IRS, examination
of Cadence's federal income tax returns for the tax years 2003 through
2005. During the third quarter of 2010, Cadence's non-GAAP net income also
excluded the effect of an income tax benefit associated with Cadence's
effective settlement of an IRS examination of Cadence's federal income tax
returns for the tax years 2000 through 2002. Cadence's management believes
it is useful to exclude the income tax benefits associated with these
settlements because exclusion of such tax benefits permits consistent
evaluations of Cadence's performance. 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 the second and fourth quarters of 2010, Cadence's 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. Cadence's
management believes it is useful to exclude the losses on the
extinguishment of debt as the losses are not directly related to Cadence's
core business operations and similar transactions are not expected to occur
frequently.
During the second quarter of 2011, Cadence's non-GAAP net income also
excluded the effect of an income tax benefit associated with an acquisition
Cadence completed during the second quarter of 2011. During the second
quarter of 2010, Cadence's non-GAAP net income also excluded the effect of
an income tax benefit associated with Cadence's acquisition of Denali
Software, Inc. Cadence's management believes it is useful to exclude the
tax benefits associated with these acquisitions because exclusion of such
tax benefits permits consistent evaluations of Cadence's performance.
Cadence does not expect an acquisition-related income tax benefit of the
magnitude recorded in the second quarter of 2010 to be recorded frequently.
Cadence's management believes that non-GAAP net income provides useful
supplemental information to Cadence's management and investors regarding
the performance of the company's business operations and facilitates
comparisons to the company's historical operating results. Cadence's
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 and GAAP net income per diluted share in the calculation of non-GAAP
net income and non-GAAP net income per diluted share for the periods shown
below:
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.
Although Cadence's management finds the non-GAAP measures useful in
evaluating the performance of Cadence's business, reliance on these
measures 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's 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
Cadence's current expectations on matters covered unless Cadence publishes
a notice stating otherwise.
Beginning December 16, 2011, Cadence will observe 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 any update by the company. During the Quiet Period,
Cadence's representatives will not comment on Cadence's business outlook,
financial results or expectations. The Quiet Period will extend until the
day when Cadence's Fourth Quarter 2011 Earnings Release is published, which
is currently scheduled for February 1, 2012.
For more information, please contact:
Investors and Shareholders
Alan Lindstrom
Cadence Design Systems, Inc.
408-944-7100
Media and Industry Analysts
Nancy Szymanski
Cadence Design Systems, Inc.
408-473-8382
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Datum: 26.10.2011 - 20:05 Uhr
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