EXHIBIT 99.1
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
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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
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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
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Total current liabilities 495,379 481,928
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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
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Total long-term liabilities 730,509 763,693
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Stockholders' Equity 1,594,078 1,572,281
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Total Liabilities and Stockholders' Equity $2,819,966 $2,817,902
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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
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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
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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 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)
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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)
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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
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Cash and Cash Equivalents at End of Period $ 423,557 $ 394,203
========= =========
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
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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