Exhibit 99.1
Cadence Design Systems, Inc.
Consolidated Balance Sheets
January 1, 2005 and January 3, 2004
(In thousands)
January 1, 2005 | January 3, 2004 | |||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 556,766 | $ | 384,525 | ||||
Short-term investments | 36,241 | 33,898 | ||||||
Receivables, net of allowance for doubtful accounts of $8,151 and $10,967, respectively | 384,114 | 348,680 | ||||||
Inventories | 20,481 | 16,926 | ||||||
Prepaid expenses and other | 87,702 | 58,212 | ||||||
Total current assets | 1,085,304 | 842,241 | ||||||
Property, plant and equipment, net | 390,367 | 403,847 | ||||||
Goodwill | 995,065 | 922,797 | ||||||
Acquired intangibles, net | 195,655 | 237,508 | ||||||
Installment contract receivables, net | 96,038 | 121,627 | ||||||
Other assets | 242,799 | 289,882 | ||||||
Total Assets | $ | 3,005,228 | $ | 2,817,902 | ||||
Current Liabilities: | ||||||||
Accounts payable and accrued liabilities | 277,992 | 243,450 | ||||||
Current portion of deferred revenue | 270,966 | 238,478 | ||||||
Total current liabilities | 548,958 | 481,928 | ||||||
Long-term Liabilities: | ||||||||
Long-term portion of deferred revenue | 20,847 | 16,287 | ||||||
Convertible notes | 420,000 | 420,000 | ||||||
Other long-term liabilities | 313,043 | 327,406 | ||||||
Total long-term liabilities | 753,890 | 763,693 | ||||||
Stockholders’ Equity | 1,702,380 | 1,572,281 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 3,005,228 | $ | 2,817,902 | ||||
Cadence Design Systems, Inc.
Consolidated Statements of Operations
For the Quarters and Years Ended January 1, 2005 and January 3, 2004
(In thousands, except per share amounts)
Quarters Ended | Years Ended | |||||||||||||||||||
January 1, 2005 | January 3, 2004 | January 1, 2005 | January 3, 2004 | |||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Product | $ | 226,730 | $ | 202,319 | $ | 729,783 | $ | 663,513 | ||||||||||||
Services | 32,982 | 30,187 | 137,046 | 131,149 | ||||||||||||||||
Maintenance | 83,384 | 78,585 | 330,651 | 324,822 | ||||||||||||||||
Total revenue | 343,096 | 311,091 | 1,197,480 | 1,119,484 | ||||||||||||||||
Costs and Expenses: | ||||||||||||||||||||
Cost of product | 23,421 | 17,373 | 82,011 | 67,036 | ||||||||||||||||
Cost of services | 21,467 | 21,624 | 90,993 | 93,153 | ||||||||||||||||
Cost of maintenance | 13,236 | 13,061 | 53,049 | 56,460 | ||||||||||||||||
Marketing and sales | 87,806 | 79,586 | 325,937 | 326,579 | ||||||||||||||||
Research and development | 87,713 | 82,444 | 351,254 | 340,121 | ||||||||||||||||
General and administrative | 20,524 | 16,968 | 83,414 | 82,566 | ||||||||||||||||
Amortization of acquired intangibles | 11,028 | 16,310 | 55,700 | 62,573 | ||||||||||||||||
Amortization of deferred stock compensation | 9,484 | 15,566 | 31,408 | 41,124 | ||||||||||||||||
Legal settlements | — | — | — | (14,500 | ) | |||||||||||||||
Restructuring and other charges | 4,142 | 2,610 | 13,542 | 66,836 | ||||||||||||||||
Write-off of acquired in-process technology | — | — | 9,000 | 7,500 | ||||||||||||||||
Total costs and expenses | 278,821 | 265,542 | 1,096,308 | 1,129,448 | ||||||||||||||||
Income (loss) from operations | 64,275 | 45,549 | 101,172 | (9,964 | ) | |||||||||||||||
Interest expense | (1,378 | ) | (1,296 | ) | (6,198 | ) | (5,002 | ) | ||||||||||||
Other income (expense), net | 1,479 | (5,400 | ) | (8,537 | ) | (15,599 | ) | |||||||||||||
Income (loss) before provision (benefit) for income taxes | 64,376 | 38,853 | 86,437 | (30,565 | ) | |||||||||||||||
Provision (benefit) for income taxes | 4,581 | 23,621 | 11,963 | (12,999 | ) | |||||||||||||||
Net income (loss) | $ | 59,795 | $ | 15,232 | $ | 74,474 | $ | (17,566 | ) | |||||||||||
Basic net income (loss) per share | $ | 0.22 | $ | 0.06 | $ | 0.27 | $ | (0.07 | ) | |||||||||||
Diluted net income (loss) per share | $ | 0.20 | $ | 0.05 | $ | 0.25 | $ | (0.07 | ) | |||||||||||
Weighted average common shares outstanding | 270,734 | 264,178 | 271,328 | 266,794 | ||||||||||||||||
Weighted average common and potential common shares outstanding—assuming dilution | 303,858 | 301,203 | 305,774 | 266,794 | ||||||||||||||||
Cadence Design Systems, Inc.
Consolidated Statements of Cash Flows
For the Years Ended January 1, 2005 and January 3, 2004
(In thousands)
Year Ended | ||||||||
January 1, | January 3, | |||||||
2005 | 2004 | |||||||
Cash and Cash Equivalents at Beginning of Year | $ | 384,525 | $ | 371,327 | ||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | 74,474 | (17,566 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 179,205 | 191,608 | ||||||
Amortization of deferred stock compensation | 31,407 | 41,124 | ||||||
Equity in loss from investments, net | 16,944 | 10,875 | ||||||
Gain on sale of investments | (12,467 | ) | — | |||||
Write-off of long-term investment securities | 4,236 | 4,785 | ||||||
Write-off of acquired in-process technology | 9,000 | 7,500 | ||||||
Non-cash restructuring and other charges | 4,142 | 18,438 | ||||||
Tax benefits from employee stock transactions | 17,260 | 14,875 | ||||||
Deferred income taxes | (30,772 | ) | (60,048 | ) | ||||
Proceeds from the sale of receivables | 30,070 | 87,355 | ||||||
Provisions for losses on trade accounts receivable and sales returns | 775 | 11,428 | ||||||
Other non-cash items | (1,070 | ) | 3,678 | |||||
Changes in operating assets and liabilities, net of effect of acquired and disposed businesses: | ||||||||
Receivables | (49,361 | ) | (1,326 | ) | ||||
Inventories | (3,555 | ) | (7,312 | ) | ||||
Prepaid expenses and other | (3,410 | ) | (6,820 | ) | ||||
Installment contract receivables | 20,556 | (107,929 | ) | |||||
Other assets | 16,417 | 31,941 | ||||||
Accounts payable and accrued liabilities | 193 | (106,687 | ) | |||||
Deferred revenue | 34,878 | 14,642 | ||||||
Other long-term liabilities | 31,791 | 40,440 | ||||||
Net cash provided by operating activities | 370,713 | 171,001 | ||||||
Cash Flows from Investing Activities: | ||||||||
Proceeds from sale and maturities of short-term investments—available-for-sale | 8,301 | — | ||||||
Proceeds from the sale of long-term investments | 9,900 | 3,274 | ||||||
Proceeds from sale of equipment | 3,625 | 9,147 | ||||||
Purchases of property, plant and equipment | (61,779 | ) | (82,881 | ) | ||||
Purchases of software licenses | (4,157 | ) | (33,507 | ) | ||||
Investment in venture capital partnerships and equity investments | (22,773 | ) | (39,761 | ) | ||||
Net cash paid in business combinations | (115,170 | ) | (182,247 | ) | ||||
Net cash used for investing activities | (182,053 | ) | (325,975 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from credit facility | — | 45,000 | ||||||
Principal payments on credit facility and capital leases | (372 | ) | (98,856 | ) | ||||
Proceeds from issuance of convertible notes | — | 420,000 | ||||||
Payment of convertible notes issuance costs | (1,920 | ) | (11,463 | ) | ||||
Proceeds from sale of common stock warrants | — | 56,441 | ||||||
Purchase of call options | — | (134,637 | ) | |||||
Proceeds from issuance of common stock | 77,126 | 86,567 | ||||||
Purchases of treasury stock | (94,103 | ) | (213,832 | ) | ||||
Net cash provided by (used for) financing activities | (19,269 | ) | 149,220 | |||||
Effect of exchange rate changes on cash | 2,850 | 18,952 | ||||||
Net increase in cash and cash equivalents | 172,241 | 13,198 | ||||||
Cash and Cash Equivalents at End of Year | $ | 556,766 | $ | 384,525 | ||||
Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2003 | 2004 | |||||||||||||||||||||||||||||||||||||||||
GEOGRAPHY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | ||||||||||||||||||||||||||||||||
North America | 55 | % | 54 | % | 59 | % | 64 | % | 58 | % | 53 | % | 57 | % | 56 | % | 45 | % | 52 | % | ||||||||||||||||||||||
Europe | 17 | % | 15 | % | 19 | % | 16 | % | 17 | % | 16 | % | 19 | % | 20 | % | 30 | % | 22 | % | ||||||||||||||||||||||
Japan | 20 | % | 22 | % | 13 | % | 13 | % | 17 | % | 22 | % | 14 | % | 15 | % | 14 | % | 16 | % | ||||||||||||||||||||||
Asia | 8 | % | 9 | % | 9 | % | 7 | % | 8 | % | 9 | % | 10 | % | 9 | % | 11 | % | 10 | % | ||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Revenue Mix by Product Group (% of Total Revenue)
2003 | 2004 | |||||||||||||||||||||||||||||||||||||||||
PRODUCT GROUP | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | ||||||||||||||||||||||||||||||||
Functional Verification | 20 | % | 18 | % | 18 | % | 20 | % | 19 | % | 20 | % | 20 | % | 18 | % | 19 | % | 19 | % | ||||||||||||||||||||||
Digital IC Design | 24 | % | 22 | % | 27 | % | 20 | % | 23 | % | 25 | % | 21 | % | 24 | % | 27 | % | 24 | % | ||||||||||||||||||||||
Custom IC Design | 27 | % | 28 | % | 27 | % | 27 | % | 27 | % | 27 | % | 24 | % | 27 | % | 27 | % | 27 | % | ||||||||||||||||||||||
Design for Manufacturing | 9 | % | 10 | % | 7 | % | 13 | % | 10 | % | 6 | % | 9 | % | 12 | % | 8 | % | 9 | % | ||||||||||||||||||||||
System Interconnect | 8 | % | 9 | % | 8 | % | 10 | % | 9 | % | 10 | % | 9 | % | 8 | % | 9 | % | 9 | % | ||||||||||||||||||||||
Services & Other | 12 | % | 13 | % | 13 | % | 10 | % | 12 | % | 12 | % | 17 | % | 11 | % | 10 | % | 12 | % | ||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Note: Product Group total revenue includes Product + Maintenance