EXHIBIT 99.1
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JULY 3, 2004 AND JANUARY 3, 2004
(IN THOUSANDS)
JULY 3, 2004 JANUARY 3, 2004
------------ ---------------
(UNAUDITED)
Current Assets:
Cash and cash equivalents $ 389,721 $ 384,525
Short-term investments 21,989 33,898
Receivables, net of allowance for doubtful accounts of
$9,328 and $9,067, respectively 347,631 348,680
Inventories 24,144 16,926
Prepaid expenses and other 71,227 58,212
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Total current assets 854,712 842,241
Property, plant and equipment, net 398,535 403,847
Goodwill 984,690 922,797
Acquired intangibles, net 244,503 237,508
Installment contract receivables, net 74,354 121,627
Other assets 239,059 289,882
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Total Assets $ 2,795,853 $ 2,817,902
============ ===============
Current Liabilities:
Accounts payable and accrued liabilities 261,516 243,450
Current portion of deferred revenue 242,580 238,478
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Total current liabilities 504,096 481,928
------------ ---------------
Long-term Liabilities:
Long-term portion of deferred revenue 14,588 16,287
Convertible notes 420,000 420,000
Other long-term liabilities 290,050 327,406
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Total long-term liabilities 724,638 763,693
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Stockholders' Equity 1,567,119 1,572,281
------------ ---------------
Total Liabilities and Stockholders' Equity $ 2,795,853 $ 2,817,902
============ ===============
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED JULY 3, 2004 AND JUNE 28, 2003
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
QUARTERS ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
JULY 3, 2004 JUNE 28, 2003 JULY 3, 2004 JUNE 28, 2003
------------ ------------- ------------ -------------
Revenue:
Product $ 165,286 $ 160,774 $ 320,023 $ 309,232
Services 37,253 34,801 69,617 67,189
Maintenance 84,540 81,006 163,163 163,212
------------ ------------- ------------ -------------
Total revenue 287,079 276,581 552,803 539,633
------------ ------------- ------------ -------------
Costs and Expenses:
Cost of product 15,043 16,881 33,557 34,245
Cost of services 23,295 24,456 46,394 48,851
Cost of maintenance 13,465 14,533 27,170 30,133
Marketing and sales 80,172 82,620 161,395 166,235
Research and development 91,090 88,376 178,241 173,498
General and administrative 20,205 20,107 39,973 46,784
Amortization of acquired intangibles 16,021 15,066 31,931 29,906
Amortization of deferred stock compensation 8,194 7,851 16,152 13,932
Restructuring and other charges 2,929 1,352 8,364 1,352
Write-off of acquired in-process technology 7,000 3,800 7,000 5,500
------------ ------------- ------------ -------------
Total costs and expenses 277,414 275,042 550,177 550,436
------------ ------------- ------------ -------------
Income (loss) from operations 9,665 1,539 2,626 (10,803)
Interest expense (1,699) (640) (3,256) (1,314)
Other expense, net (3,215) (7,898) (5,844) (11,407)
------------ ------------- ------------ -------------
Income (loss) before provision (benefit) for income taxes 4,751 (6,999) (6,474) (23,524)
Provision (benefit) for income taxes 948 (1,695) (1,522) (5,182)
------------ ------------- ------------ -------------
Net income (loss) $ 3,803 $ (5,304) $ (4,952) $ (18,342)
============ ============= ============ =============
Basic net income (loss) per share $ 0.01 $ (0.02) $ (0.02) $ (0.07)
============ ============= ============ =============
Diluted net income (loss) per share $ 0.01 $ (0.02) $ (0.02) $ (0.07)
============ ============= ============ =============
Weighted average common shares outstanding 272,362 267,887 272,210 268,128
============ ============= ============ =============
Weighted average common and potential common shares
outstanding - assuming dilution 278,645 267,887 272,210 268,128
============ ============= ============ =============
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 3, 2004 AND JUNE 28, 2003
(IN THOUSANDS)
(UNAUDITED)
SIX MONTHS ENDED
----------------------
JULY 3, JUNE 28,
2004 2003
--------- ---------
Cash and Cash Equivalents at Beginning of Period $ 384,525 $ 371,327
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Cash Flows from Operating Activities:
Net Loss (4,952) (18,342)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization 92,870 95,215
Amortization of deferred stock compensation 16,152 13,932
Equity in loss from investments, net 11,150 5,382
Gain on sale of investments (7,297) --
Write-off of investment securities 1,924 4,460
Write-off of acquired in-process technology 7,000 5,500
Proceeds from sale of receivables 5,149 27,880
Provisions for losses on trade accounts receivable and sales returns 14 13,582
Other non-cash items (263) 3,249
Changes in operating assets and liabilities, net of effect of acquired and disposed
businesses:
Receivables 1,080 (5,078)
Inventories (7,218) (1,663)
Prepaid expenses and other (5,968) (2,859)
Installment contract receivables 43,741 (33,529)
Other assets 1,050 20,953
Accounts payable and accrued liabilities (11,569) (89,712)
Deferred revenue 1,885 (6,802)
Other long-term liabilities 16,272 8,393
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Net cash provided by operating activities 161,020 40,561
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Cash Flows from Investing Activities:
Proceeds from sale and maturities of short-term investments - available-for-sale 3,557 --
Proceeds from the sale of long-term investments 6,942 --
Proceeds from sale of equipment 3,625 --
Purchases of property, plant and equipment (33,688) (40,105)
Purchases of software licenses (650) (2,282)
Investment in venture capital partnerships and equity investments (13,417) (9,402)
Net cash paid in business combinations (96,803) (102,353)
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Net cash used for investing activities (130,434) (154,142)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from credit facility -- 45,000
Principal payments on credit facility and capital leases (321) (63,247)
Payment of convertible notes issuance costs (1,920) --
Proceeds from issuance of common stock 45,866 28,796
Purchases of treasury stock (69,846) (61,964)
--------- ---------
Net cash used for financing activities (26,221) (51,415)
--------- ---------
--------- ---------
Effect of exchange rate changes on cash 831 882
--------- ---------
--------- ---------
Net increase (decrease) in cash and cash equivalents 5,196 (164,114)
--------- ---------
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Cash and Cash Equivalents at End of Period $ 389,721 $ 207,213
========= =========
CADENCE DESIGN SYSTEMS, INC.
(UNAUDITED)
REVENUE MIX BY GEOGRAPHY (% OF TOTAL REVENUE)
2003 2004
------------------------------------ ------------
GEOGRAPHY Q1 Q2 Q3 Q4 YEAR Q1 Q2
---- ---- ---- ---- ---- ---- ----
North America 55% 54% 59% 64% 58% 53% 57%
Europe 17% 15% 19% 16% 17% 16% 19%
Japan 20% 22% 13% 13% 17% 22% 14%
Asia 8% 9% 9% 7% 8% 9% 10%
TOTAL 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
---- ---- ---- ---- ---- ---- ----
Functional Verification 20% 18% 18% 20% 19% 20% 20%
Digital IC Design 24% 22% 27% 20% 23% 25% 21%
Custom IC Design 27% 28% 27% 27% 27% 27% 24%
Design for Manufacturing 9% 10% 7% 13% 10% 6% 9%
System Interconnect 8% 9% 8% 10% 9% 10% 9%
Services & Other 12% 13% 13% 10% 12% 12% 17%
TOTAL 100% 100% 100% 100% 100% 100% 100%
Note: Product Group total revenue includes Product + Maintenance