EXHIBIT 99.1
FOR MORE INFORMATION, PLEASE CONTACT:
Alan Lindstrom
Investors and Shareholders
Cadence Design Systems, Inc.
408-944-7100
investor_relations@cadence.com
Adolph Hunter
Media and Industry Analysts
Cadence Design Systems, Inc.
408-914-6016
publicrelations@cadence.com
CADENCE REPORTS SOLID THIRD QUARTER RESULTS
SAN JOSE, Calif., Oct. 20, 2004 -- Cadence Design Systems, Inc. (NYSE: CDN)
(Nasdaq: CDN) today announced total revenue for the third quarter of 2004 of
$302 million compared to $269 million in the same period last year. On a GAAP
basis, Cadence recognized net income of $20 million, or $0.07 per share in the
third quarter of 2004, compared to a net loss of $14 million, or $0.05 per share
in the same period last year.
In addition to using GAAP results in evaluating Cadence's business,
management also believes it is useful to measure results using a non-GAAP
measure of net income (loss), which excludes, as applicable, amortization of
intangible assets and deferred stock compensation, in-process research and
development charges, integration and other acquisition-related expenses,
restructuring charges and equity in losses (income) from investments. Non-GAAP
net income (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 company's tax liability. See "GAAP to non-GAAP
Reconciliation" below for further information on our non-GAAP measure. Using
this non-GAAP measure, earnings in the third quarter were $52 million, or $0.19
per share, on a fully diluted basis as compared to $34 million, or $0.12 per
share, on a fully diluted basis, in the same period last year.
"Cadence once again executed to plan, delivering consistent performance in
an environment that remains challenging," said Michael J. Fister, Cadence
President and CEO. "By partnering with our customers to help them tackle their
biggest design challenges, we continue to gain traction with our world-class
technology."
BUSINESS HIGHLIGHTS OF Q3 2004
Cadence continued its advance in the digital IC design space. Cadence(R)
Encounter(TM) 4.1, introduced last quarter, has been adopted by more than half
the company's digital customers. AMI Semiconductor chose Encounter over a
competitor's offerings because of the ease of integrating digital and analog
design through a common database. NEC Electronics agreed to adopt Encounter 4.1
and the Cadence Virtuoso(R) custom design platform.
The Cadence Palladium(R) accelerator/emulator, an integral component in the
Incisive(TM) functional verification platform, has replaced competitors'
offerings at a number of companies, including ATI and Broadcom.
"Our customers are increasingly receptive to the technology and
customer-centric philosophy Cadence brings to the table," Fister said. "Our
successes this past quarter have been driven by our broad product mix, deep
partnerships and an outstanding global employee base passionate about customer
success."
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 OCTOBER 20, 2004.
BUSINESS OUTLOOK
In August 2003, Cadence issued $420 million of senior notes convertible
into common stock. Subsequent to the issuance of the notes the Emerging Issues
Task Force (or EITF) reached a consensus on Issue No. 04-08 "Accounting Issues
Related to Certain Features of Contingently Convertible Debt and the Effect on
Diluted Earnings per Share". This consensus, which is expected to be effective
during the fourth quarter of 2004, will require Cadence to include in the
calculation of its fully diluted earnings per share an additional 26.8 million
shares of its common stock. Therefore, earnings per share on a fully diluted
basis as presented in this Outlook include the expected impact of EITF 04-08.
For the fourth quarter of 2004, the company expects total revenue in the
range of $335 million to $345 million. Fourth quarter GAAP earnings per fully
diluted share are expected to be in the range of $0.16 to $0.18, including a
$0.02 reduction for the impact of EITF 04-08. Diluted earnings per share using
our non-GAAP measure defined below are expected to be in the range of $0.24 to
$0.26, including a $0.03 reduction for the impact of EITF 04-08.
For the full year 2004, the company expects total revenue in the range of
$1.190 billion to $1.200 billion. On a GAAP basis, we expect net income per
fully diluted share for fiscal 2004 in the range of $0.21 to $0.23, including a
$0.02 reduction for the impact of EITF 04-08. Using our non-GAAP measure defined
below, we expect fully diluted earnings per share for fiscal 2004 to be in the
range of $0.63 to $0.65, including a $0.07 reduction for the impact of EITF
04-08.
A schedule showing a reconciliation of the business outlook from GAAP net
income (loss) and diluted net income (loss) per share to our non-GAAP net income
and diluted net income per share, as well as a reconciliation showing the effect
of EITF 04-08, is included with this release.
AUDIO WEBCAST SCHEDULED
Cadence Design Systems, Inc.'s H. Raymond Bingham, Executive Chairman of
the Board, Michael J. Fister, President and Chief Executive Officer, and William
Porter, Chief Financial Officer, will host a third quarter Financial Results
audio webcast today, October 20, 2004, at 2:00 p.m. (Pacific) / 5:00 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 20, 2004 at 5:00 p.m. Pacific time and ending at 5:00 p.m.
Pacific time on October 27, 2004. Webcast access is available at
www.cadence.com/company/investor_relations.
ABOUT CADENCE
Cadence is the world's largest supplier of electronic design technologies
and engineering services. Cadence products and services are used to accelerate
and manage the design of semiconductors, computer systems, networking equipment,
telecommunications equipment, consumer electronics, and other electronics-based
products. With approximately 4,850 employees and 2003 revenues of approximately
$1.1 billion, Cadence has sales offices, design centers, and research facilities
around the world. The company is headquartered in San Jose, Calif., and trades
on both the New York Stock Exchange and the NASDAQ National Market under the
symbol CDN. More information is available at www.cadence.com.
Cadence, the Cadence logo, Virtuoso and Palladium are registered
trademarks and Encounter and Incisive are trademarks of Cadence Design Systems,
Inc. All other trademarks are the property of their respective owners.
THE STATEMENTS CONTAINED ABOVE REGARDING THE COMPANY'S THIRD QUARTER 2004
RESULTS, THOSE CONTAINED IN THE BUSINESS OUTLOOK SECTION ABOVE AND THE
STATEMENTS BY MICHAEL J. FISTER 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 UNCERTAINTIES AND OTHER FACTORS, MANY OF WHICH ARE
OUTSIDE CADENCE'S CONTROL, 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; ECONOMIC
UNCERTAINTY; FLUCTUATIONS IN RATES OF EXCHANGE BETWEEN THE U.S. DOLLAR AND THE
CURRENCIES OF OTHER COUNTRIES IN WHICH CADENCE DOES BUSINESS; AND THE
ACQUISITION OF OTHER COMPANIES OR THE FAILURE TO SUCCESSFULLY INTEGRATE THOSE IT
ACQUIRES.
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 JANUARY 3,
2004 AND QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JULY 3, 2004.
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 (loss), which is a non-GAAP financial measure under Section 101 of
Regulation G under the Securities Exchange Act of 1934, as amended. This measure
consists of GAAP net income (loss) excluding, as applicable, amortization of
intangible assets and deferred stock compensation, in-process research and
development charges, integration and other acquisition-related expenses,
restructuring charges (severance and benefits, excess facilities and
asset-related restructuring charges) and equity in losses (income) from
investments. Intangible assets consist primarily of purchased technology,
backlog, patents, trademarks, distribution rights, customer contracts and
related relationships and non-compete agreements. Non-GAAP net income (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
company's tax liability.
Management believes it is useful in measuring Cadence's operations to
exclude amortization of intangibles, deferred stock compensation, in-process
research and development and acquisition-related expenses because these costs
are primarily fixed at the time of an acquisition and generally cannot be
changed by management in the short term. Management believes that it also is
useful to exclude restructuring costs. Cadence has dramatically reduced the size
of its design services business and portions of its product and maintenance
businesses over the past three years. As a result, in 2001, 2002 and 2003,
Cadence's GAAP statements of operations have included significant charges
relating to such restructurings. Cadence believes that in measuring its
operations it is useful to exclude such restructuring costs because the
company's level of restructuring activities is expected to significantly
decrease in the foreseeable future. Management also believes it is useful to
exclude the equity in losses (income) from investments and investment
write-downs, as these costs are not part of the company's direct cost of
operations. Rather, these are non-operating costs that are included in other
income (expense) and are part of the company's investment activities.
Management believes that non-GAAP net income (loss) provides useful
supplemental information to management and investors regarding the performance
of the company's business operations and facilitates comparisons to our
historical operating results. Management also uses this information internally
for forecasting and budgeting. Non-GAAP financial measures should not be
considered as a substitute for 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 table reconciles the specific items excluded from GAAP in the
calculation of non-GAAP net income for the periods shown below:
STATEMENT OF OPERATIONS RECONCILIATION QUARTER ENDED
-----------------------------
RESTATED
OCTOBER 2, SEPTEMBER 27,
2004 2003
----------- -------------
(IN THOUSANDS)
Net income (loss) on a GAAP basis $ 19,631 $(14,456)
Amortization of intangible assets 26,660 27,790
Amortization of deferred stock compensation 5,772 11,626
Legal settlements -- (14,500)
Restructuring charges 1,036 62,874
In-process research and development charges 2,000 2,000
Integration and other acquisition-related expenses 694 --
Equity in losses from investments 4,912 1,641
Tax effect (9,194) (43,277)
-------- --------
Net income on a non-GAAP basis $ 51,511 $ 33,698
======== ========
STATEMENT OF OPERATIONS RECONCILIATION PER SHARE QUARTER ENDED
-----------------------------
RESTATED
OCTOBER 2, SEPTEMBER 27,
2004 2003
----------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Diluted net income (loss) per share on a GAAP basis $ 0.07 $ (0.05)
Amortization of intangible assets 0.10 0.10
Amortization of deferred stock compensation 0.02 0.04
Legal settlements -- (0.05)
Restructuring charges -- 0.23
In-process research and development charges 0.01 0.01
Integration and other acquisition-related expenses -- --
Equity in losses from investments 0.02 0.01
Tax effect (0.03) (0.17)
-------- --------
Diluted net income per share on a non-GAAP basis $ 0.19 $ 0.12
======== ========
Shares used in calculation of net (loss) -- GAAP 274,877 266,755
Shares used in calculation of net income -- non-GAAP (A) 274,877 274,889
(A) Shares used in the calculation of GAAP earnings per share are expected to
be the same as shares used in the calculation of non-GAAP earnings per
share except when the company reports a GAAP loss and non-GAAP income, or
GAAP income and a non-GAAP loss.
INVESTORS ARE ENCOURAGED TO LOOK AT GAAP RESULTS AS THE BEST MEASURE OF
FINANCIAL PERFORMANCE. FOR EXAMPLE, AMORTIZATION OF INTANGIBLES OR AMORTIZATION
OF DEFERRED STOCK COMPENSATION OR IN-PROCESS TECHNOLOGY ARE IMPORTANT TO
CONSIDER BECAUSE THEY MAY REPRESENT INITIAL EXPENDITURES THAT UNDER GAAP ARE
REPORTED ACROSS FUTURE FISCAL PERIODS. LIKEWISE, DEFERRED STOCK 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.
THOUGH CADENCE MANAGEMENT FINDS ITS NON-GAAP MEASURE USEFUL IN EVALUATING THE
PERFORMANCE OF CADENCE'S BUSINESS, ITS RELIANCE ON THIS MEASURE 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 MANAGEMENT TYPICALLY USES ITS NON-GAAP EARNINGS AND EARNINGS
PER SHARE MEASURES IN CONJUNCTION WITH GAAP EARNINGS AND EARNINGS PER SHARE
MEASURES, TO ADDRESS THESE LIMITATIONS.
CADENCE BELIEVES THAT PRESENTING ITS NON-GAAP MEASURE OF EARNINGS AND EARNINGS
PER SHARE PROVIDES INVESTORS WITH AN ADDITIONAL TOOL FOR EVALUATING THE
PERFORMANCE OF THE COMPANY'S BUSINESS, WHICH MANAGEMENT USES IN ITS OWN
EVALUATION OF PERFORMANCE, AND AN ADDITIONAL BASE LINE FOR ASSESSING THE FUTURE
EARNINGS POTENTIAL OF THE COMPANY. WHILE THE GAAP RESULTS ARE MORE COMPLETE, THE
COMPANY PREFERS TO ALLOW INVESTORS TO HAVE THIS SUPPLEMENTAL MEASURE SINCE, WITH
RECONCILIATION TO GAAP, IT MAY PROVIDE ADDITIONAL INSIGHT INTO OUR FINANCIAL
RESULTS.
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.
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 17, 2004, 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 ON CADENCE'S BUSINESS OUTLOOK OR ITS FINANCIAL
RESULTS OR EXPECTATIONS. THE QUIET PERIOD WILL EXTEND UNTIL THE DAY WHEN
CADENCE'S 2004 YEAR END EARNINGS RELEASE IS PUBLISHED, CURRENTLY SCHEDULED FOR
JANUARY 26, 2005.
# # #
CADENCE DESIGN SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
OCTOBER 2, 2004 AND JANUARY 3, 2004
(IN THOUSANDS)
OCTOBER 2, JANUARY 3,
2004 2004
---------- ----------
(UNAUDITED)
Current Assets:
Cash and cash equivalents $ 423,557 $ 384,525
Short-term investments 28,943 33,898
Receivables, net of allowance for doubtful accounts of
$9,832 and $9,067, respectively 355,692 348,680
Inventories 20,293 16,926
Prepaid expenses and other 67,725 58,212
---------- ----------
Total current assets 896,210 842,241
Property, plant and equipment, net 394,723 403,847
Goodwill 988,919 922,797
Acquired intangibles, net 218,869 237,508
Installment contract receivables, net 85,986 121,627
Other assets 235,259 289,882
---------- ----------
Total Assets $2,819,966 $2,817,902
========== ==========
Current Liabilities:
Accounts payable and accrued liabilities 244,820 243,450
Current portion of deferred revenue 250,559 238,478
---------- ----------
Total current liabilities 495,379 481,928
---------- ----------
Long-term Liabilities:
Long-term portion of deferred revenue 18,019 16,287
Convertible notes 420,000 420,000
Other long-term liabilities 292,490 327,406
---------- ----------
Total long-term liabilities 730,509 763,693
---------- ----------
Stockholders' Equity 1,594,078 1,572,281
---------- ----------
Total Liabilities and Stockholders' Equity $2,819,966 $2,817,902
========== ==========
CADENCE DESIGN SYSTEMS, INC.
Condensed Consolidated Statements of Operations
For the Quarters and Nine Months Ended October 2, 2004 and September 27, 2003
(In thousands, except per share amounts)
(Unaudited)
QUARTERS ENDED NINE MONTHS ENDED
-------------------------- ---------------------------
October 2, September 27, October 2, September 27,
2004 2003 2004 2003
--------- ------------- --------- -------------
Revenue:
Product $ 183,030 $ 151,962 $ 503,053 $ 461,194
Services 34,447 33,773 104,064 100,962
Maintenance 84,104 83,025 247,267 246,237
--------- --------- --------- ---------
Total revenue 301,581 268,760 854,384 808,393
--------- --------- --------- ---------
Costs and Expenses:
Cost of product 25,033 15,418 58,590 49,663
Cost of services 23,132 22,678 69,526 71,529
Cost of maintenance 12,643 13,266 39,813 43,399
Marketing and sales 76,736 80,758 238,131 246,993
Research and development 85,300 84,179 263,541 257,677
General and administrative 22,917 18,814 62,890 65,598
Amortization of acquired intangibles 12,741 16,357 44,672 46,263
Amortization of deferred stock compensation 5,772 11,626 21,924 25,558
Legal settlements -- (14,500) -- (14,500)
Restructuring and other charges 1,036 62,874 9,400 64,226
Write-off of acquired in-process technology 2,000 2,000 9,000 7,500
--------- --------- --------- ---------
Total costs and expenses 267,310 313,470 817,487 863,906
--------- --------- --------- ---------
Income (loss) from operations 34,271 (44,710) 36,897 (55,513)
Interest expense (1,564) (2,392) (4,820) (3,706)
Other income (expense), net (4,172) 1,208 (10,016) (10,199)
--------- --------- --------- ---------
Income (loss) before provision (benefit) for income taxes 28,535 (45,894) 22,061 (69,418)
Provision (benefit) for income taxes 8,904 (31,438) 7,382 (36,620)
--------- --------- --------- ---------
Net income (loss) $ 19,631 $ (14,456) $ 14,679 $ (32,798)
========= ========= ========= =========
Basic net income (loss) per share $ 0.07 $ (0.05) $ 0.05 $ (0.12)
========= ========= ========= =========
Diluted net income (loss) per share $ 0.07 $ (0.05) $ 0.05 $ (0.12)
========= ========= ========= =========
Weighted average common shares outstanding 270,509 266,755 271,514 267,605
========= ========= ========= =========
Weighted average common and potential common shares
outstanding - assuming dilution 274,877 266,755 280,050 267,605
========= ========= ========= =========
CADENCE DESIGN SYSTEMS, INC.
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended October 2, 2004 and September 27, 2003
(In thousands)
(Unaudited)
NINE MONTHS ENDED
------------------------------
OCTOBER 2, SEPTEMBER 27,
2004 2003
--------- ------------
Cash and Cash Equivalents at Beginning of Period $ 384,525 $ 371,327
--------- ---------
Cash Flows from Operating Activities:
Net Income (loss) 14,679 (32,798)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 138,510 143,347
Amortization of deferred stock compensation 23,078 25,558
Equity in loss from investments, net 16,867 7,059
Gain on sale of investments (7,297) --
Write-off of investment securities 3,028 4,785
Write-off of acquired in-process technology 9,000 7,500
Non-cash restructuring and other charges -- 19,035
Proceeds from sale of receivables 15,198 33,661
Provisions for losses on trade accounts receivable and sales returns 2,168 16,598
Other non-cash items 1,008 3,309
Changes in operating assets and liabilities, net of effect of
acquired and disposed businesses:
Receivables 6,411 69,414
Inventories (3,367) (5,527)
Prepaid expenses and other (4,470) (11,357)
Installment contract receivables 6,514 (74,949)
Other assets 8,301 20,842
Accounts payable and accrued liabilities (24,700) (74,741)
Deferred revenue 13,295 (19,668)
Other long-term liabilities 15,721 (21,102)
--------- ---------
Net cash provided by operating activities 233,944 110,966
--------- ---------
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 9,147
Purchases of property, plant and equipment (46,788) (54,998)
Purchases of software licenses (757) (2,282)
Investment in venture capital partnerships and equity investments (17,353) (34,341)
Net cash paid in business combinations (115,170) (140,854)
--------- ---------
Net cash used for investing activities (165,944) (223,328)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from credit facility -- 45,000
Principal payments on credit facility and capital leases (354) (98,424)
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 65,842 54,323
Purchases of treasury stock (94,103) (210,952)
--------- ---------
Net cash provided by (used for) financing activities (30,535) 120,288
--------- ---------
Effect of exchange rate changes on cash 1,567 14,950
--------- ---------
Net increase in cash and cash equivalents 39,032 22,876
--------- ---------
Cash and Cash Equivalents at End of Period $ 423,557 $ 394,203
========= =========
CADENCE DESIGN SYSTEMS, INC.
As of October 20, 2004
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income per Share
(Unaudited)
QUARTER ENDED YEAR ENDED
January 1, 2005 January 1, 2005
--------------- ---------------
Forecast Forecast
--------------- ---------------
Diluted net income per share on a GAAP basis $0.18 to $0.20 $0.23 to $0.25
Amortization of intangible assets 0.09 0.37
Amortization of deferred stock compensation 0.02 0.11
Restructuring charges - 0.03
In-process research and development charges - 0.03
Integration and other acquisition-related expenses - 0.01
Equity in losses from investments 0.01 0.08
Tax effect (0.03) (0.16)
--------------- ---------------
Diluted net income per share on a non-GAAP basis
not including dilutive effect of convertible notes $0.27 to $0.29 $0.70 to $0.72
Expected dilutive effect of convertible notes on net income
per share * (0.03) (0.07)
--------------- ---------------
Diluted net income per share on a non-GAAP basis
including dilutive effect of convertible notes $0.24 to $0.26 $0.63 to $0.65
=============== ===============
* Expected impact of Emerging Issues Task Force No. 04-08 "Accounting Issues
Related to Certain Features of Contingently Convertible Debt and the Effect on
Diluted Earnings per Share" effective for periods ending after December 15,
2004.
Cadence Design Systems, Inc.
As of October 20, 2004
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
QUARTER ENDED YEAR ENDED
January 1, 2005 January 1, 2005
--------------- ---------------
($ IN MILLIONS) Forecast Forecast
--------------- ---------------
Net income on a GAAP basis $49 to $54 $64 to $69
Amortization of intangible assets 24 103
Amortization of deferred stock compensation 7 29
Restructuring charges - 9
In-process research and development charges - 9
Integration and other acquisition-related expenses 1 3
Equity in losses from investments 2 21
Tax effect (8) (43)
--------------- ---------------
Net income on a non-GAAP basis $75 to $80 $195 to $200
=============== ===============
CADENCE DESIGN SYSTEMS, INC.
(UNAUDITED)
REVENUE MIX BY GEOGRAPHY (% OF TOTAL REVENUE)
2003 2004
----------------------------------------------- -----------------------------
GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2 Q3
- --------- ----------------------------------------------- -----------------------------
North America 55% 54% 59% 64% 58% 53% 57% 56%
Europe 17% 15% 19% 16% 17% 16% 19% 20%
Japan 20% 22% 13% 13% 17% 22% 14% 15%
Asia 8% 9% 9% 7% 8% 9% 10% 9%
TOTAL 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
- ------------- ----------------------------------------------- -----------------------------
Functional Verification 20% 18% 18% 20% 19% 20% 20% 18%
Digital IC Design 24% 22% 27% 20% 23% 25% 21% 24%
Custom IC Design 27% 28% 27% 27% 27% 27% 24% 27%
Design for Manufacturing 9% 10% 7% 13% 10% 6% 9% 12%
System Interconnect 8% 9% 8% 10% 9% 10% 9% 8%
Services & Other 12% 13% 13% 10% 12% 12% 17% 11%
TOTAL 100% 100% 100% 100% 100% 100% 100% 100%
Note: Product Group total revenue includes Product + Maintenance