Exhibit 99.1
Investors and Shareholders: Media and Industry Analysts:
- -------------------------- ---------------------------
Alan Lindstrom Jenny Gispen-Schultz
Cadence Design Systems, Inc. Cadence Design Systems, Inc.
408-944-7100 408-944-7280
investor_relations@cadence.com jennyg@cadence.com
CADENCE REPORTS FIRST QUARTER RESULTS
SAN JOSE, Calif. -- April 15, 2003 -- Cadence Design Systems, Inc. (NYSE:
CDN) today announced total revenue for the first quarter of 2003 of $256
million, with subscriptions licenses approximately 82 percent of software
product bookings. Pro forma diluted earnings per share were $0.04.
Including amortization of acquired intangibles and deferred stock
compensation, and write-offs of acquired in-process technology, on a GAAP basis
the quarter's results were a loss per share of $0.07. A reconciliation of GAAP
to pro forma earnings is included with this press release.
"We executed against our targets in one of the toughest business climates
on record and within the guidance we presented last quarter," said Ray Bingham,
Cadence president and chief executive officer. "We will continue to execute with
the financial discipline needed to respond to market dynamics when the market
improves."
BUSINESS HIGHLIGHTS
The company continued to see adoption of the Cadence Encounter platform
for digital IC design and early market acceptance of the Cadence Incisive(TM)
verification platform, both of which are targeted at customers' most pressing
technical needs. As a result of sales of the Incisive verification platform,
Cadence also saw record sales of its emulation products.
"Our platform approach and our solutions, which address both digital and
analog design, are enabling us to take share," said Bingham. "We delivered our
new Incisive verification platform to early market success, and we continue to
grow and acquire technologies that will give customers a clear path beyond
legacy tools. Ours is the most complete technology design portfolio in the
world, and now it's the most advanced as well."
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 March 31, 2003.
Page 1 of 4
BUSINESS OUTLOOK
Subscriptions are expected to make up 80 to 90 percent of software product
bookings for the year.
For Q2, the company expects total revenue in the range of $265 to $275 and
65-70 percent of software product revenue from ratable backlog. Pro forma EPS is
expected to be in the range of 9 to 10 cents, with GAAP EPS in the range of 0 to
1 cent.
For the full year 2003, Pro forma EPS is expected to be in the range of 50
to 55 cents. GAAP EPS is expected to be in the range of 12 to 17 cents.
A schedule showing a reconciliation of the business outlook for GAAP to
pro forma EPS is included with this release.
AUDIO WEBCAST SCHEDULED
Cadence Design Systems, Inc.'s Ray Bingham, chief executive officer, and
Bill Porter, chief financial officer, will host a first-quarter Financial
Results Audio webcast today, April 15, 2003, at 1:45 p.m. (Pacific) / 4:45 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 April 15 at 5:00 p.m. Pacific time and ending at 5:00 p.m. on April 22.
Webcast access is available at HTTP://WWW.CADENCE.COM/COMPANY/INVESTOR_RELATIONS
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 equipment, consumer electronics, and a variety of other
electronics-based products. With approximately 5200 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 under the symbol CDN. More
information about the company, its products and services is available at
www.cadence.com.
Cadence and the Cadence logo are registered trademarks, and Incisive is a
trademark of Cadence Design Systems, Inc. All other trademarks are the property
of their respective owners.
Page 2 of 4
The statements contained above regarding the company's first-quarter 2003
results, those contained in the Business Outlook section above and the
statements by Ray Bingham are 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; recent economic uncertainty; fluctuations in rates of
exchange between the U.S. dollar and the currencies of other countries;
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 for the year ended December 28,
2002.
In the calculation of the company's pro forma earnings, Cadence excludes certain
items such as amortization of acquired intangibles, amortization of deferred
stock compensation and write-off of in-process R&D from acquisitions. Also
excluded are non-operating and non-recurring items such as unusual items and
restructure expenses/asset impairments. Cadence believes that excluding
amortization of acquired intangibles and deferred stock compensation, write-offs
of acquired in process technology and unusual items provides investors with a
representation of the Company's core performance, and a pro forma base line for
assessing the future earnings potential of the company.
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
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 can 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.
Page 3 of 4
Beginning June 16, 2003, Cadence will observe 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 next quarterly Earnings Release is published, currently scheduled for
July 15, 2003.
# # #
Page 4 of 4
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 29, 2003 AND DECEMBER 28, 2002
(IN $000'S)
MARCH 29, 2003 DECEMBER 28, 2002
-------------- -----------------
(UNAUDITED)
Current Assets:
Cash and cash equivalents $ 239,395 $ 371,327
Short-term investments 21,853 24,286
Receivables, net 297,570 313,968
Inventories 8,760 9,614
Prepaid expenses and other 41,360 39,448
---------- ----------
Total current assets 608,938 758,643
Property, plant and equipment, net 425,983 434,491
Acquired intangibles, net 921,019 883,339
Installment contract receivables, net 105,333 113,185
Other assets 231,512 248,603
---------- ----------
Total Assets $2,292,785 $2,438,261
========== ==========
Current Liabilities:
Current portion of capital lease obligations $ 1,451 $ 1,609
Accounts payable and accrued liabilities 237,302 297,399
Deferred revenue 208,729 212,882
---------- ----------
Total current liabilities 447,482 511,890
---------- ----------
Long-term Liabilities:
Long-term debt and capital lease obligations 10,223 52,659
Other long-term liabilities 230,874 214,407
---------- ----------
Total long-term liabilities 241,097 267,066
---------- ----------
Stockholders' equity 1,604,206 1,659,305
---------- ----------
Total Liabilities and Stockholders' Equity $2,292,785 $2,438,261
========== ==========
CADENCE DESIGN SYSTEMS, INC.
Condensed Consolidated Statements of Operations
For the Quarters Ended March 29, 2003 and March 30, 2002
(In $000's, except per share amounts)
(Unaudited)
QUARTERS ENDED
---------------------------------
March 29, 2003 March 30, 2002
-------------- --------------
Revenue
Product $ 141,282 $ 219,049
Services 32,388 43,266
Maintenance 82,206 82,399
--------- ---------
Total revenue 255,876 344,714
--------- ---------
Costs and Expenses
Cost of product 8,211 18,100
Cost of services 23,627 32,766
Cost of maintenance 15,075 16,428
Marketing and sales 83,615 96,781
Research and development 85,122 78,190
General and administrative 26,677 37,530
Amortization of acquired intangibles 25,286 18,649
Amortization of deferred stock compensation 9,620 3,493
Restructuring and other charges -- 17,708
Write-off of acquired in-process technology 1,700 --
--------- ---------
Total costs and expenses 278,933 319,645
--------- ---------
Income (loss) from operations (23,057) 25,069
Other income, net 234 5,003
--------- ---------
Income (loss) before provision (benefit) for income taxes (22,823) 30,072
Provision (benefit) for income taxes (3,707) 8,727
--------- ---------
Net income (loss) $ (19,116) $ 21,345
========= =========
Basic net income (loss) per share $ (0.07) $ 0.09
========= =========
Diluted net income (loss) per share $ (0.07) $ 0.08
========= =========
Weighted average common shares outstanding 268,358 249,720
========= =========
Weighted average common and potential common shares
outstanding - assuming dilution 268,358 260,871
========= =========
Supplemental diluted earnings per share before
amortization of acquired intangibles, amortization of deferred
stock compensation, restructuring and other charges and
write-off of acquired in-process technology $ 0.04 $ 0.23
========= =========
CADENCE DESIGN SYSTEMS, INC.
2000-2003 REVENUE DETAIL BY PRODUCT GROUP ($ MILLIONS)
2000 2001
--------------------------------------- ---------------------------------------
Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR
----- ----- ----- ----- ------- ----- ----- ----- ----- -------
Product Revenue:
IC Implementation 34.3 45.6 62.8 98.7 241.5 96.3 96.3 135.6 117.3 445.5
IP Creation 58.7 71.4 74.8 89.6 294.6 64.9 71.0 63.7 93.3 292.9
PSD 12.5 23.4 27.7 27.8 91.4 20.1 22.9 18.1 31.1 92.2
----- ----- ----- ----- ------- ----- ----- ----- ----- -------
Total Product Revenue 105.5 140.4 165.3 216.2 627.4 181.3 190.2 217.4 241.7 830.5
Services 75.8 80.2 87.3 92.7 336.0 80.0 73.8 58.0 51.5 263.4
Maintenance 76.1 78.1 79.8 82.1 316.2 83.4 83.6 84.6 85.0 336.6
TOTAL REVENUE 257.5 298.7 332.5 390.9 1,279.6 344.7 347.6 360.0 378.2 1,430.4
2002 2003
--------------------------------------- -----
Q1 Q2 Q3 Q4 YEAR Q1
----- ----- ----- ----- ------- -----
Product Revenue:
IC Implementation 122.6 137.8 122.4 91.3 474.2 77.6
IP Creation 73.8 71.0 68.0 47.8 260.5 54.2
PSD 22.7 17.2 19.9 17.4 77.2 9.5
----- ----- ----- ----- ------- -----
Total Product Revenue 219.0 226.1 210.3 156.5 811.9 141.3
Services 43.3 37.0 34.0 35.5 149.8 32.4
Maintenance 82.4 81.7 83.0 84.3 331.3 82.2
TOTAL REVENUE 344.7 344.8 327.2 276.3 1,293.1 255.9
2000-2003 REVENUE DETAIL BY GEOGRAPHY ($ MILLIONS)
2000 2001
--------------------------------------- ---------------------------------------
Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR
----- ----- ----- ----- ------- ----- ----- ----- ----- -------
North America 157.3 169.7 205.0 223.0 755.0 217.0 201.2 178.8 224.1 821.0
Europe 50.3 71.6 67.8 76.9 266.5 59.6 85.6 118.3 70.1 333.6
Japan 39.1 44.1 38.0 74.5 195.6 48.9 43.5 30.1 58.8 181.3
Asia 10.7 13.4 21.7 16.6 62.4 19.1 17.4 32.9 25.2 94.5
TOTAL REVENUE 257.5 298.7 332.5 390.9 1,279.6 344.7 347.6 360.0 378.2 1,430.4
2002 2003
--------------------------------------- -----
Q1 Q2 Q3 Q4 YEAR Q1
----- ----- ----- ----- ------- -----
North America 204.5 185.7 193.6 160.7 744.4 135.5
Europe 56.6 95.9 61.1 44.3 257.9 44.7
Japan 61.6 36.5 47.1 43.5 188.7 53.4
Asia 22.0 26.7 25.5 27.8 102.0 22.2
TOTAL REVENUE 344.7 344.8 327.2 276.3 1,293.1 255.9
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 March 29, 2003 and March 30, 2002
(In $000's, except per share amounts)
(Unaudited)
QUARTER ENDED QUARTER ENDED
March 29, 2003 March 30, 2002
--------------------------------------- -------------------------------------
AS REPORTED ADJUSTMENTS PRO FORMA AS REPORTED ADJUSTMENTS PRO FORMA
----------- ----------- --------- ----------- ----------- ---------
Revenue
Product $ 141,282 $ -- $ 141,282 $ 219,049 $ -- $ 219,049
Services 32,388 -- 32,388 43,266 -- 43,266
Maintenance 82,206 -- 82,206 82,399 -- 82,399
----------- -------- --------- ----------- -------- ---------
Total revenue 255,876 -- 255,876 344,714 -- 344,714
----------- -------- --------- ----------- -------- ---------
Costs and Expenses
Cost of product 8,211 -- 8,211 18,100 -- 18,100
Cost of services 23,627 -- 23,627 32,766 -- 32,766
Cost of maintenance 15,075 -- 15,075 16,428 -- 16,428
Marketing and sales 83,615 -- 83,615 96,781 -- 96,781
Research and development 85,122 -- 85,122 78,190 -- 78,190
General and administrative 26,677 -- 26,677 37,530 (11,100)(E) 26,430
Amortization of acquired intangibles 25,286 (25,286)(A) - 18,649 (18,649)(A) -
Amortization of deferred stock compensation 9,620 (9,620)(B) - 3,493 (3,493)(B) -
Restructuring and other charges -- -- - 17,708 (17,708)(D) -
Write-off of acquired in-process technology 1,700 (1,700)(C) - -- -- -
----------- -------- --------- ----------- -------- ---------
Total costs and expenses 278,933 (36,606) 242,327 319,645 (50,950) 268,695
----------- -------- --------- ----------- -------- ---------
Income (loss) from operations (23,057) 36,606 13,549 25,069 50,950 76,019
Other income, net 234 -- 234 5,003 -- 5,003
----------- -------- --------- ----------- -------- ---------
Income (loss) before provision
(benefit) for income taxes (22,823) 36,606 13,783 30,072 50,950 81,022
Provision (benefit) for income taxes (3,707) 7,291 3,584 8,727 12,339 21,066
----------- -------- --------- ----------- -------- ---------
Net Income (loss) $ (19,116) $ 29,315 $ 10,199 $ 21,345 $ 38,611 $ 59,956
=========== ======== ========= =========== ======== =========
Basic net income (loss) per share $ (0.07) $ 0.04 $ 0.09 $ 0.24
=========== ========= =========== =========
Diluted net income (loss) per share $ (0.07) $ 0.04 $ 0.08 $ 0.23
=========== ========= =========== =========
Weighted average common shares outstanding 268,358 268,358 249,720 249,720
=========== ========= =========== =========
Weighted average common and potential common
shares outstanding - assuming dilution 268,358 271,910 260,871 260,871
=========== ========= =========== =========
Notes:
(A) Non-cash amortization of acquired intangibles
(B) Non-cash amortization of deferred stock compensation
(C) Write-off of acquired in-process technology
(D) Restructuring and other charges
(E) Non-recurring legal costs
CADENCE DESIGN SYSTEMS, INC.
As of April 15, 2003
IMPACT OF PRO FORMA ADJUSTMENTS ON FORWARD LOOKING DILUTED NET INCOME PER SHARE
(IN $000,000'S, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
QUARTER ENDED YEAR ENDED
June 28, 2003 January 3, 2004
----------------- ----------------
GAAP diluted net income per share* $0.00 to $0.01 $0.12 to $0.17
Amortization of acquired intangibles 0.03 0.15
Amortization of deferred stock compensation 0.09 0.35
Income tax effect of reconciling items (0.03) (0.12)
----------------- ----------------
Pro Forma diluted net income per share $0.09 to $0.10 $0.50 to $0.55
================= ================
* Excludes impact of Get2Chip acquisition on amortization of intangibles and
in-process R&D charges as these were not known as of the reporting date.