Cadence reported fourth quarter 2013 revenue of $377 million, compared to revenue of $346 million reported for the same period in 2012. On a GAAP basis, Cadence recognized net income of $38 million, or $0.13 per share on a diluted basis, in the fourth quarter of 2013, compared to net income of $314 million, or $1.10 per share on a diluted basis, in the same period in 2012. Revenue for 2013 totaled $1.460 billion, compared to revenue of $1.326 billion for 2012. Net income for 2013 was $164 million, or $0.56 per share on a diluted basis, compared to net income of $440 million, or $1.57 per share on a diluted basis, for 2012. GAAP net income for the fourth quarter of 2012 included a $220 million income tax benefit from releasing a valuation allowance against Cadence's deferred tax assets and a $37 million income tax benefit related to the settlement of a State of California examination of Cadence's state income tax returns for the tax years 2001 through 2003.
Using the non-GAAP measure defined below, net income in the fourth quarter of 2013 was $67 million, or $0.23 per share on a diluted basis, as compared to net income of $58 million, or $0.20 per share on a diluted basis, in the same period in 2012. For 2013, non-GAAP net income was $252 million, or $0.86 per share on a diluted basis, compared to non-GAAP net income of $217 million, or $0.77 per share on a diluted basis, in 2012.
"In 2013, our talented development teams delivered six new innovative products, revenue grew 10 percent, and we completed three important acquisitions in the IP space," said Lip-Bu Tan, president and chief executive officer. "Our differentiated design IP portfolio led to wins at over ten top tier customers, including head-to-head wins at advanced FinFET nodes."
"Our continuing focus on execution with customers and ecosystem partners, as well as product development, M&A and financial performance, drove strong revenue, cash flow and operating profits in Q4 and throughout 2013," added Geoff Ribar, senior vice president and chief financial officer. "Even after the acquisition-related write-downs of deferred revenue, we still achieved our operating margin goal."
Cadence also announced today that its Board of Directors has approved the repurchase of up to $100 million of its common stock under its stock repurchase program, and Cadence expects to repurchase up to $50 million of its common stock during each of fiscal years 2014 and 2015. The actual timing and amount of the repurchases will be based on an evaluation of market conditions, share price and other factors. The stock repurchase program may be suspended, modified or discontinued at any time.
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Business Outlook
For the first quarter of 2014, the company expects total revenue in the range of $373 million to $383 million. First quarter GAAP net income per diluted share is expected to be in the range of $0.08 to $0.10. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.18 to $0.20.
For 2014, the company expects total revenue in the range of $1.550 billion to $1.585 billion. On a GAAP basis, net income per diluted share for 2014 is expected to be in the range of $0.55 to $0.65. Using the non-GAAP measure defined below, net income per diluted share for 2014 is expected to be in the range of $0.92 to $1.02.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included with this release.
Audio Webcast Scheduled
Lip-Bu Tan, president and chief executive officer, and Geoff Ribar, senior vice president and chief financial officer, will host a fourth quarter and fiscal year 2013 financial results audio webcast today, January 29, 2014, at 2 p.m. (Pacific) / 5 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 January 29, 2014 at 5 p.m. (Pacific) and ending March 14, 2014 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations.
About Cadence
Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.
Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
The statements contained above regarding Cadence's fourth quarter and fiscal year 2013 financial results and Cadence's intention to repurchase shares of its common stock under its share repurchase program, as well as the information in the Business Outlook section and the statements by Lip-Bu Tan and Geoff Ribar, include forward-looking statements based on current expectations or beliefs and 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. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) Cadence's ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence's efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence's products; (iv) change in customer demands, including those resulting from consolidation among Cadence's customers and the possibility that the restructurings and other efforts to improve operational efficiency of Cadence's customers could result in delays in purchases of Cadence's products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence's efforts to improve operational efficiency on Cadence's business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.
