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 business outlook, publicly available on its website.
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 June 15, 2012, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the company's most recent Annual Report on Form 10-K and 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 any update by the company. During the Quiet Period, Cadence's representatives will not comment on Cadence's business outlook, financial results or expectations. The Quiet Period will extend until the day when Cadence's Second Quarter 2012 Earnings Release is published, which is currently scheduled for July 25, 2012.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
March 31, 2012 and December 31, 2011
(In thousands)
(Unaudited)
March 31, December 31,
2012 2011
------------- -------------
Current Assets:
Cash and cash equivalents $ 659,687 $ 601,602
Short-term investments 3,287 3,037
Receivables 79,997 136,772
Inventories 41,720 43,243
2015 notes hedges 257,775 215,113
Prepaid expenses and other 69,178 64,216
------------- -------------
Total current assets 1,111,644 1,063,983
Property, plant and equipment, net of
accumulated depreciation of $662,068 and
$658,990, respectively 257,743 262,517
Goodwill 192,445 192,125
Acquired intangibles, net of accumulated
amortization of $82,530 and $91,542,
respectively 166,528 173,234
Long-term receivables 7,555 11,371
Other assets 58,917 58,039
------------- -------------
Total Assets $ 1,794,832 $ 1,761,269
============= =============
Current Liabilities:
Convertible notes $ 297,653 $ 294,061
2015 notes embedded conversion derivative 257,775 215,113
Accounts payable and accrued liabilities 143,760 165,791
Current portion of deferred revenue 312,238 340,401
------------- -------------
Total current liabilities 1,011,426 1,015,366
------------- -------------
Long-Term Liabilities:
Long-term portion of deferred revenue 62,634 73,959
Convertible notes 133,459 131,920
Other long-term liabilities 126,561 128,894
------------- -------------
Total long-term liabilities 322,654 334,773
------------- -------------
Stockholders' Equity 460,752 411,130
------------- -------------
Total Liabilities and Stockholders' Equity $ 1,794,832 $ 1,761,269
============= =============
Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months Ended March 31, 2012 and April 2, 2011
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
--------------------------
March 31, April 2,
2012 2011
------------ ------------
Revenue:
Product $ 190,024 $ 141,819
Services 29,542 27,805
Maintenance 96,264 96,478
------------ ------------
Total revenue 315,830 266,102
------------ ------------
Costs and Expenses:
Cost of product 15,401 14,194
Cost of services 19,374 20,075
Cost of maintenance 11,811 10,898
Marketing and sales 83,795 78,372
Research and development 108,594 101,299
General and administrative 27,770 19,302
Amortization of acquired intangibles 3,786 4,459
Restructuring and other charges (credits) (51) (41)
------------ ------------
Total costs and expenses 270,480 248,558
------------ ------------
Income from operations 45,350 17,544
Interest expense (8,537) (10,986)
Other income, net 2,434 4,469
------------ ------------
Income before provision for income
taxes 39,247 11,027
Provision for income taxes 8,143 4,704
------------ ------------
Net income $ 31,104 $ 6,323
============ ============
Basic net income per share $ 0.12 $ 0.02
============ ============
Diluted net income per share $ 0.11 $ 0.02
============ ============
Weighted average common shares outstanding -
basic 267,940 261,533
============ ============
Weighted average common shares outstanding -
diluted 277,733 268,578
============ ============
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2012 and April 2, 2011
(In thousands)
(Unaudited)
Three Months Ended
--------------------------
March 31, April 2,
2012 2011
------------ ------------
Cash and Cash Equivalents at Beginning of Period $ 601,602 $ 557,409
------------ ------------
Cash Flows from Operating Activities:
Net income 31,104 6,323
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 21,939 22,907
Amortization of debt discount and fees 5,734 7,263
Stock-based compensation 11,525 9,357
Gain on investments, net (1,949) (4,447)
Non-cash restructuring and other charges 63 65
Deferred income taxes 223 65
Provisions (recoveries) for losses (gains)
on trade and installment contract
receivables, net - (5,197)
Other non-cash items 683 488
Changes in operating assets and liabilities,
net of effect of acquired businesses:
Current and long-term receivables 60,172 37,642
Inventories (154) (4,016)
Prepaid expenses and other (5,545) (5,456)
Other assets (577) 1,662
Accounts payable and accrued liabilities (19,582) (20,681)
Deferred revenue (39,315) 15,607
Other long-term liabilities (3,612) (5,217)
------------ ------------
Net cash provided by operating
activities 60,709 56,365
------------ ------------
Cash Flows from Investing Activities:
Proceeds from the sale of available-for-sale
securities - 1,497
Proceeds from the sale of long-term
investments 44 2,677
Purchases of property, plant and equipment (8,201) (5,181)
Investment in venture capital partnerships and
equity investments (250) (608)
Cash paid in business combinations and asset
acquisitions, net of cash acquired, and
acquisition of intangibles (1,041) (2,538)
------------ ------------
Net cash used for investing activities (9,448) (4,153)
------------ ------------
Cash Flows from Financing Activities:
Principal payments on receivable sale
financing - (2,829)
Tax effect related to employee stock
transactions allocated to equity 2,842 160
Payment of acquisition-related contingent
consideration (39) -
Proceeds from issuance of common stock 12,761 8,897
Stock received for payment of employee taxes
on vesting of restricted stock (6,173) (2,854)
------------ ------------
Net cash provided by financing
activities 9,391 3,374
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents (2,567) (787)
------------ ------------
Increase in cash and cash equivalents 58,085 54,799
------------ ------------
Cash and Cash Equivalents at End of Period $ 659,687 $ 612,208
============ ============
Cadence Design Systems, Inc.
As of April 25, 2012
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per
Share
(Unaudited)
Three Months Ending Year Ending
June 30, 2012 December 29, 2012
------------------- -------------------
Forecast Forecast
------------------- -------------------
Diluted net income per share on a
GAAP basis $0.13 to $0.14 $0.45 to $0.49
Amortization of acquired
intangibles 0.02 0.09
Stock-based compensation expense 0.04 0.17
Non-qualified deferred
compensation expenses - 0.01
Integration and acquisition-
related costs - -
Amortization of debt discount 0.02 0.08
Other income or expense related to
investments and non-qualified
deferred compensation plan
assets* - (0.01)
Income tax effect of non-GAAP
adjustments (0.04) (0.13)
------------------- -------------------
Diluted net income per share on a
non-GAAP basis $0.17 to $0.18 $0.66 to $0.70
=================== ===================
* Includes, as applicable, equity in losses or income from investments,
write-down of investments, gains or losses on sale of investments and
gains or losses on non-qualified deferred compensation plan assets
recorded in Other income, net.
Cadence Design Systems, Inc.
As of April 25, 2012
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
Three Months Ending Year Ending
June 30, 2012 December 29, 2012
------------------- -------------------
($ in Millions) Forecast Forecast
------------------- -------------------
Net income on a GAAP basis $35 to $40 $126 to $138
Amortization of acquired
intangibles 7 26
Stock-based compensation expense 10 49
Non-qualified deferred
compensation expenses - 2
Integration and acquisition-
related costs - 1
Amortization of debt discount 5 21
Other income or expense related to
investments and non-qualified
deferred compensation plan
assets* - (2)
Income tax effect of non-GAAP
adjustments (10) (37)
------------------- -------------------
Net income on a non-GAAP basis $47 to $52 $186 to $198
=================== ===================
* Includes, as applicable, equity in losses or income from investments,
write-down of investments, gains or losses on sale of investments and
gains or losses on non-qualified deferred compensation plan assets
recorded in Other income, net.
Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2010 2011 2012
------------------------ ------------------------ ----
GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Americas 40% 46% 43% 45% 43% 44% 47% 44% 44% 45% 44%
Europe 22% 23% 20% 23% 22% 21% 20% 21% 20% 20% 19%
Japan 23% 14% 20% 14% 18% 19% 17% 18% 17% 18% 18%
Asia 15% 17% 17% 18% 17% 16% 16% 17% 19% 17% 19%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Revenue Mix by Product Group (% of Total Revenue)
2010 2011 2012
------------------------ ------------------------ ----
PRODUCT GROUP Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Functional
Verification and
Design IP 22% 26% 25% 22% 24% 28% 33% 30% 32% 30% 30%
Digital IC Design 21% 21% 23% 26% 23% 24% 21% 22% 21% 22% 23%
Custom IC Design 27% 26% 24% 27% 26% 20% 22% 23% 23% 22% 23%
Design for
Manufacturing 9% 6% 8% 7% 7% 8% 6% 6% 6% 7% 7%
System Interconnect 9% 10% 10% 8% 9% 10% 8% 9% 8% 9% 8%
Services & Other 12% 11% 10% 10% 11% 10% 10% 10% 10% 10% 9%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Note: Product Group total revenue includes Product + Maintenance
