Q4 2013 Financial Highlights

(PRNewswire) —  Synopsys, Inc. (Nasdaq: SNPS), a global leader providing software, IP and services used to accelerate innovation in chips and electronic systems, today reported results for its fourth quarter and fiscal year 2013.

For the fourth quarter of fiscal 2013, Synopsys reported revenue of $504.9 million, compared to $454.2 million for the fourth quarter of fiscal 2012. Revenue for fiscal year 2013 was $1.962 billion, an increase of 11.7 percent from $1.756 billion in fiscal 2012.

"Synopsys achieved excellent results in fiscal year 2013, and we are seeing strong product and customer momentum," said Aart de Geus, chairman and co-CEO of Synopsys. "Amid a landscape characterized by a mix of economic uncertainty and aggressive investment in designs, Synopsys is in a very strong competitive position, as many key customers rely on us to accelerate their differentiation and speed their time to market."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal 2013 was $56.9 million, or $0.36 per share, compared to $29.1 million, or $0.19 per share, for the fourth quarter of fiscal 2012. GAAP net income for fiscal year 2013 was $247.8 million, or $1.58 per share, compared to $182.4 million, or $1.21 per share, for fiscal 2012.

Non-GAAP Results

On a non-GAAP basis, net income for the fourth quarter of fiscal 2013 was $88.3 million, or $0.56 per share, compared to non-GAAP net income of $72.4 million, or $0.47 per share, for the fourth quarter of fiscal 2012. Non-GAAP net income for fiscal 2013 was $381.4 million, or $2.44 per share, compared to non-GAAP net income of $315.5 million, or $2.10 per share, for fiscal 2012. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Financial Targets

Synopsys also provided its financial targets for the first quarter and full fiscal year 2014. These targets do not include any future acquisition costs that may be incurred in fiscal year 2014. These targets constitute forward-looking information and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.

First Quarter of Fiscal Year 2014 Targets:

• Revenue: $475 million - $485 million
• GAAP expenses: $422 million - $444 million
• Non-GAAP expenses: $377 million - $387 million
• Other income and expense: $6 million - $8 million
• Tax rate applied in non-GAAP net income calculations: approximately 24 percent
• Fully diluted outstanding shares: 154 million - 158 million
• GAAP earnings per share: $0.30 - $0.38
• Non-GAAP earnings per share: $0.51 - $0.53

Full Fiscal Year 2014 Targets:

• Revenue: $2.06 billion - $2.085 billion
• Other income and expense: $7 million - $10 million
• Tax rate applied in non-GAAP net income calculations: approximately 24 percent
• Fully diluted outstanding shares: 154 million - 158 million
• GAAP earnings per share: $1.69 - $1.82
• Non-GAAP earnings per share: $2.55 - $2.60
• Cash flow from operations: $425 million - $450 million
• Revenue from beginning of year backlog: approximately 75 percent

GAAP Reconciliation

Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes. Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, including inventory fair value adjustments, (iv) other significant items, including facilities restructuring and the effect of tax settlements with tax authorities, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods. Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed below.

Reconciliation of Fourth Quarter and Fiscal Year 2013 Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income and earnings per share for the periods indicated below.