Cadence Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Jan 29, 2014, 16:05 ET from Cadence Design Systems, Inc.

SAN JOSE, Calif., Jan. 29, 2014 /PRNewswire/ -- Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the fourth quarter and fiscal year 2013.

(Logo: http://photos.prnewswire.com/prnh/20140102/SF39436LOGO)

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.

For a detailed discussion of these and other cautionary statements related to Cadence's business, please refer to Cadence's filings with the Securities and Exchange Commission. These include Cadence's most recent reports on Form 10-K and Form 10-Q, including Cadence's future filings.

GAAP to Non-GAAP Reconciliation

To supplement Cadence's financial results presented on a generally accepted accounting principles, or GAAP, basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence's performance.  One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP, and is calculated by taking GAAP net income and excluding, as applicable, amortization and sale of intangible assets and debt discount related to our convertible notes, stock-based compensation expense, acquisition and integration-related costs including changes in fair value of contingent consideration and retention expenses for employees added from our 2013 acquisitions, executive severance costs, investment gains or losses, income or expenses related to Cadence's non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence's core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence's management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company's core business operations and therefore provides useful supplemental information to Cadence's management and investors regarding the performance of the company's business operations, facilitates comparisons to the company's historical operating results and enhances investors' ability to review Cadence's business from the same perspective as Cadence's management. Cadence's management also uses non-GAAP net income internally for forecasting and budgeting. Non-GAAP financial measures should not be considered as a substitute for or superior to 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.  Investors are encouraged to look at the GAAP results as the best measure of financial performance.

The following tables reconcile the specific items excluded from GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:

 

Net Income Reconciliation

Three Months Ended

December 28, 2013

December 29, 2012

(unaudited)

(in thousands)

Net income on a GAAP basis

$

37,705

$

313,874

Amortization of acquired intangibles

12,422

7,649

Stock-based compensation expense

18,798

13,276

Non-qualified deferred compensation expenses

1,256

1,216

Restructuring and other charges

15,405

64

Integration and acquisition-related costs

8,903

2,187

Executive severance costs

216

Amortization of debt discount

5,515

5,354

Other income or expense related to investments and non-qualified deferred compensation plan assets*

(1,553)

(4,081)

Income tax benefit of valuation allowance release

(219,601)

Income tax benefit of State of California settlement

(36,564)

Income tax effect of non-GAAP adjustments

(31,775)

(25,363)

Net income on a non-GAAP basis

$

66,892

$

58,011

*

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 or expense.

 

Net Income Reconciliation

Years Ended

December 28, 2013

December 29, 2012

(unaudited)

(in thousands)

Net income on a GAAP basis

$

164,243

$

439,948

Amortization and sale of acquired intangibles

44,134

28,618

Stock-based compensation expense

66,285

47,561

Non-qualified deferred compensation expenses

3,293

4,453

Restructuring and other charges

17,999

113

Shareholder litigation costs

46

Integration and acquisition-related costs

31,972

9,278

Executive severance costs

961

Amortization of debt discount

22,315

20,846

Other income or expense related to investments and non-qualified deferred compensation plan assets*

(5,280)

(6,296)

Income tax benefit of valuation allowance release

(219,601)

Income tax benefit of State of California settlement

(36,564)

Income tax benefit due to a release of an uncertain tax position

(33,719)

Acquisition-related income tax benefit

(14,806)

Income tax effect of non-GAAP adjustments

(60,104)

(56,857)

Net income on a non-GAAP basis

$

252,099

$

216,739

*

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 or expense.

 

Diluted Net Income per Share Reconciliation

Three Months Ended

December 28, 2013

December 29, 2012

(unaudited)

(in thousands, except per share data)

Diluted net income per share on a GAAP basis

$

0.13

$

1.10

Amortization of acquired intangibles

0.04

0.03

Stock-based compensation expense

0.06

0.05

Non-qualified deferred compensation expenses

0.01

Restructuring and other charges

0.05

Integration and acquisition-related costs

0.03

0.01

Executive severance costs

Amortization of debt discount

0.02

0.02

Other income or expense related to investments and non-qualified deferred compensation plan assets*

(0.02)

Income tax benefit of valuation allowance release

(0.77)

Income tax benefit of State of California settlement

(0.13)

Income tax effect of non-GAAP adjustments

(0.11)

(0.09)

Diluted net income per share on a non-GAAP basis

$

0.23

$

0.20

Shares used in calculation of diluted net income per share — GAAP**

294,663

286,289

Shares used in calculation of diluted net income per share — non-GAAP**

294,663

286,289

*

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 or expense.

**

Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

 

Diluted Net Income per Share Reconciliation

Years Ended

December 28, 2013

December 29, 2012

(unaudited)

(in thousands, except per share data)

Diluted net income per share on a GAAP basis

$

0.56

$

1.57

Amortization and sale of acquired intangibles

0.15

0.10

Stock-based compensation expense

0.23

0.17

Non-qualified deferred compensation expenses

0.01

0.02

Restructuring and other charges

0.06

Shareholder litigation costs

Integration and acquisition-related costs

0.11

0.03

Executive severance costs

Amortization of debt discount

0.08

0.07

Other income or expense related to investments and non-qualified deferred compensation plan assets*

(0.02)

(0.02)

Income tax benefit of valuation allowance release

(0.78)

Income tax benefit of State of California settlement

(0.13)

Income tax benefit due to a release of an uncertain tax position

(0.11)

Acquisition-related income tax benefit

(0.05)

Income tax effect of non-GAAP adjustments

(0.21)

(0.21)

Diluted net income per share on a non-GAAP basis

$

0.86

$

0.77

Shares used in calculation of diluted net income per share — GAAP**

294,564

280,667

Shares used in calculation of diluted net income per share — non-GAAP**

294,564

280,667

*

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 or expense.

**

Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

 

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 March 14, 2014, 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 first quarter 2014 earnings release is published, which is currently scheduled for April 21, 2014.

For more information, please contact:

Investors and Shareholders Alan Lindstrom Cadence Design Systems, Inc. 408-944-7100 investor_relations@cadence.com

Media and Industry Analysts Anna del Rosario Cadence Design Systems, Inc. 408-914-6884 publicrelations@cadence.com

 

Cadence Design Systems, Inc.

Condensed Consolidated Balance Sheets

December 28, 2013 and December 29, 2012

(In thousands)

(Unaudited)

December 28, 2013

December 29, 2012

Current assets:

Cash and cash equivalents

$                   536,260

$                   726,357

Short-term investments

96,788

100,704

Receivables, net of allowances of $0 and $85, respectively

107,624

97,821

Inventories

50,220

36,163

2015 notes hedges

306,817

303,154

Prepaid expenses and other

123,382

127,036

Total current assets

1,221,091

1,391,235

Property, plant and equipment, net of accumulated depreciation of $568,494 and $635,450, respectively

238,715

244,439

Goodwill

456,905

233,266

Acquired intangibles, net of accumulated amortization of $139,820 and $104,351, respectively

311,693

184,938

Long-term receivables

3,672

7,559

Other assets

196,525

225,566

Total assets

$                2,428,601

$                2,287,003

Current liabilities:

Convertible notes

$                   324,826

$                   447,011

2015 notes embedded conversion derivative

306,817

303,154

Accounts payable and accrued liabilities

216,594

171,318

Current portion of deferred revenue

299,973

295,787

Total current liabilities

1,148,210

1,217,270

Long-term liabilities:

Long-term portion of deferred revenue

52,850

50,529

Other long-term liabilities

71,436

104,033

Total long-term liabilities

124,286

154,562

Stockholders' equity

1,156,105

915,171

Total liabilities and stockholders' equity

$                2,428,601

$                2,287,003

 

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three Months and Years Ended December 28, 2013 and December 29, 2012

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

Years Ended

December 28, 2013

December 29, 2012

December 28, 2013

December 29, 2012

Revenue:

Product and maintenance

$    350,079

$    318,513

$    1,357,934

$    1,212,429

Services

26,643

27,072

102,182

113,995

Total revenue

376,722

345,585

1,460,116

1,326,424

Costs and expenses:

Cost of product and maintenance

41,757

24,437

132,245

118,516

Cost of services

17,274

19,353

67,956

72,607

Marketing and sales

94,384

95,604

378,157

342,278

Research and development

135,465

118,382

534,022

454,085

General and administrative

29,481

27,712

121,314

112,076

Amortization of acquired intangibles

5,157

3,772

19,416

15,077

Restructuring and other charges 

15,405

64

17,999

113

Total costs and expenses

338,923

289,324

1,271,109

1,114,752

Income from operations

37,799

56,261

189,007

211,672

Interest expense

(9,208)

(8,902)

(37,581)

(34,742)

Other income, net

842

5,369

7,570

11,341

Income before benefit for income taxes 

29,433

52,728

158,996

188,271

Benefit for income taxes

(8,272)

(261,146)

(5,247)

(251,677)

Net income 

$    37,705

$    313,874

$     164,243

$      439,948

Net income per share - basic

$        0.13

$          1.15

$           0.59

$            1.63

Net income per share - diluted

$        0.13

$          1.10

$           0.56

$            1.57

Weighted average common shares outstanding - basic

280,083

272,884

277,796

270,479

Weighted average common shares outstanding - diluted

294,663

286,289

294,564

280,667

 

Cadence Design Systems, Inc. 

Condensed Consolidated Statements of Cash Flows

For the Years Ended December 28, 2013 and December 29, 2012

(In thousands)

(Unaudited)

Years Ended

December 28,

December 29,

2013

2012

Cash and cash equivalents at beginning of period

$        726,357

$        601,602

Cash flows from operating activities:

   Net income

164,243

439,948

   Adjustments to reconcile net income to net cash provided by operating activities:

      Depreciation and amortization

98,308

89,217

      Amortization of debt discount and fees

25,384

23,513

      Stock-based compensation

66,285

47,561

      Gain on investments, net

(5,311)

(6,320)

      Deferred income taxes

(2,366)

(240,424)

      Provisions (recoveries) for losses (gains) on receivables, net

(85)

215

      Other non-cash items

4,017

3,315

      Changes in operating assets and liabilities, net of effect of acquired businesses:

         Receivables

(3,609)

45,630

         Inventories

(14,594)

5,245

         Prepaid expenses and other

30,368

(12,426)

         Other assets

(2,530)

(4,902)

         Accounts payable and accrued liabilities

41,727

17,523

         Deferred revenue

2,506

(69,662)

         Other long-term liabilities

(36,738)

(22,439)

            Net cash provided by operating activities

367,605

315,994

Cash flows from investing activities:

  Purchases of available-for-sale securities

(111,702)

(121,154)

  Proceeds from the sale of available-for-sale securities

77,621

18,338

  Proceeds from the maturity of available-for-sale securities

38,706

4,150

  Proceeds from the sale of long-term investments

6,234

74

  Purchases of property, plant and equipment

(44,929)

(35,966)

  Investment in venture capital partnerships and equity investments

-

(250)

  Cash paid in business combinations and asset acquisitions, net of cash acquired

(392,825)

(66,432)

           Net cash used for investing activities

(426,895)

(201,240)

Cash flows from financing activities:

  Proceeds from revolving credit facility

100,000

-

  Payment on revolving credit facility

(100,000)

-

  Payment of convertible notes

(144,639)

-

  Principal payments on receivable financing

(2,526)

(5,776)

  Payment of debt issuance costs

-

(1,372)

  Payment of acquisition-related contingent consideration

(677)

(39)

  Tax effect related to employee stock transactions allocated to equity

9,034

6,061

  Proceeds from issuance of common stock 

42,657

32,687

  Stock received for payment of employee taxes on vesting of restricted stock

(20,140)

(15,728)

           Net cash provided by (used for) financing activities

(116,291)

15,833

Effect of exchange rate changes on cash and cash equivalents

(14,516)

(5,832)

Increase (decrease) in cash and cash equivalents 

(190,097)

124,755

Cash and cash equivalents at end of period

$        536,260

$        726,357

 

Cadence Design Systems, Inc.

As of January 29, 2014

Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share

(Unaudited)

Three Months Ending

Year Ending

March 29, 2014

January 3, 2015

Forecast

Forecast

Diluted net income per share on a GAAP basis

 $0.08 to $0.10 

 $0.55 to $0.65 

Amortization of acquired intangibles

0.04

0.16

Stock-based compensation expense

0.07

0.28

Integration and acquisition-related costs

0.02

0.05

Amortization of debt discount

0.01

0.06

Income tax effect of non-GAAP adjustments

(0.04)

(0.18)

Diluted net income per share on a non-GAAP basis

 $0.18 to $0.20 

 $0.92 to $1.02 

Cadence Design Systems, Inc.

As of January 29, 2014

Impact of Non-GAAP Adjustments on Forward Looking Net Income 

(Unaudited)

Three Months Ending

Year Ending

March 29, 2014

January 3, 2015

($ in millions)

Forecast

Forecast

Net income on a GAAP basis

 $25 to $31 

 $167 to $197 

Amortization of acquired intangibles

12

50

Stock-based compensation expense

19

83

Integration and acquisition-related costs

6

15

Amortization of debt discount

4

18

Income tax effect of non-GAAP adjustments

(13)

(56)

Net income on a non-GAAP basis

 $53 to $59 

 $277 to $307 

 

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)

2012

2013

GEOGRAPHY

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Americas 

44%

46%

43%

45%

45%

44%

45%

48%

47%

46%

 Europe, Middle East and Africa 

19%

20%

20%

21%

20%

22%

21%

20%

20%

21%

 Japan 

18%

16%

17%

14%

16%

15%

13%

12%

14%

13%

 Asia 

19%

18%

20%

20%

19%

19%

21%

20%

19%

20%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Revenue Mix by Product Group (% of Total Revenue)

2012

2013

PRODUCT GROUP

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Q1 

 Q2 

 Q3 

 Q4 

 Year 

 Functional Verification, including Emulation

 Hardware and IP 

30%

33%

30%

30%

30%

26%

28%

31%

32%

29%

 Custom IC Design 

23%

22%

24%

24%

23%

25%

25%

25%

24%

25%

 Digital IC Design and Signoff 

23%

22%

23%

23%

23%

25%

23%

21%

21%

23%

 System Interconnect Design 

8%

8%

9%

9%

9%

10%

11%

10%

10%

10%

 Design for Manufacturing 

7%

6%

6%

6%

6%

7%

6%

6%

6%

6%

 Services 

9%

9%

8%

8%

9%

7%

7%

7%

7%

7%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Note: Product Group total revenue includes product and maintenance revenue

 

Cadence Design Systems, Inc.

Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures

For the Three Months Ended December 28, 2013

(In thousands)

(Unaudited)

Three Months Ended

December 28, 2013

GAAP

Adjustments

Non-GAAP

Revenue:

Product and maintenance

$            350,079

$                                    -

$                350,079

Services

26,643

-

26,643

Total revenue

376,722

-

376,722

Costs and expenses:

Cost of product and maintenance

41,757

(7,743)

 (A) 

34,014

Cost of services

17,274

(698)

 (A) 

16,576

Marketing and sales

94,384

(5,201)

 (A) 

89,183

Research and development

135,465

(15,666)

 (A) 

119,799

General and administrative

29,481

(7,130)

 (A) 

22,351

Amortization of acquired intangibles

5,157

(5,157)

 (A) 

-

Restructuring and other charges 

15,405

(15,405)

-

Total costs and expenses

338,923

(57,000)

281,923

Income from operations

37,799

57,000

94,799

Interest expense

(9,208)

5,515

 (B) 

(3,693)

Other income (expense), net

842

(1,553)

(C)

(711)

Income before provision (benefit) for income taxes

29,433

60,962

90,395

Provision (benefit) for income taxes

(8,272)

31,775

(D)

23,503

Net income 

$              37,705

$                            29,187

$                  66,892

Notes: 

(A) For the three months ended December 28, 2013 adjustments to GAAP are as follows for the line items specified:

Amortization

of acquired

intangibles

Stock-based

compensation

expense

Non-qualified

deferred

compensation

expenses

Integration

and

acquisition-

related costs

Executive

severance

costs

Total

adjustments

Cost of product and maintenance

$              7,265

$                 471

$                     7

$                    -

$                -

$           7,743

Cost of services

-

689

9

-

-

698

Marketing and sales

-

4,703

68

430

-

5,201

Research and development

-

9,605

683

5,378

-

15,666

General and administrative

-

3,330

489

3,095

216

7,130

Amortization of acquired intangibles

5,157

-

-

-

-

5,157

    Total

$            12,422

$            18,798

$              1,256

$             8,903

$           216

$          41,595

(B) Amortization of debt discount related to convertible notes

(C) Other income or expense related to investments and non-qualified deferred compensation plan assets

(D) Income tax effect of non-GAAP adjustments 

 

Cadence Design Systems, Inc.

Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures

For the Three Months Ended December 29, 2012

(In thousands)

(Unaudited)

Three Months Ended

December 29, 2012

GAAP

Adjustments

Non-GAAP

Revenue:

Product and maintenance

$            318,513

$                                    -

$                318,513

Services

27,072

-

27,072

Total revenue

345,585

-

345,585

Costs and expenses:

Cost of product and maintenance

24,437

(4,263)

 (E) 

20,174

Cost of services

19,353

(554)

 (E) 

18,799

Marketing and sales

95,604

(3,082)

 (E) 

92,522

Research and development

118,382

(8,725)

 (E) 

109,657

General and administrative

27,712

(3,932)

 (E) 

23,780

Amortization of acquired intangibles

3,772

(3,772)

 (E) 

-

Restructuring and other charges 

64

(64)

-

Total costs and expenses

289,324

(24,392)

264,932

Income from operations

56,261

24,392

80,653

Interest expense

(8,902)

5,354

(F)

(3,548)

Other income, net

5,369

(4,081)

(G)

1,288

Income before provision (benefit) for income taxes

52,728

25,665

78,393

Provision (benefit) for income taxes

(261,146)

281,528

(H)

20,382

Net income 

$            313,874

$                        (255,863)

$                  58,011

Notes: 

(E) For the three months ended December 29, 2012 adjustments to GAAP are as follows for the line items specified:

Amortization

of acquired

intangibles

Stock-based

compensation

expense

Non-qualified

deferred

compensation

expenses

Integration

 and

acquisition-

related costs

Total

adjustments

Cost of product and maintenance

$            3,877

$                  375

$                    11

$                     -

$            4,263

Cost of services

-

538

16

-

554

Marketing and sales

-

2,907

110

65

3,082

Research and development

-

6,293

623

1,809

8,725

General and administrative

-

3,163

456

313

3,932

Amortization of acquired intangibles

3,772

-

-

-

3,772

    Total

$            7,649

$             13,276

$              1,216

$             2,187

$          24,328

(F) Amortization of debt discount related to convertible notes

(G) Other income or expense related to investments and non-qualified deferred compensation plan assets

(H) Income tax effect of non-GAAP adjustments 

 

Cadence Design Systems, Inc.

Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures

For the Year Ended December 28, 2013

(In thousands)

(Unaudited)

Year Ended

December 28, 2013

GAAP

Adjustments

Non-GAAP

Revenue:

Product and maintenance

$     1,357,934

$                                  -

$ 1,357,934

Services

102,182

-

102,182

Total revenue

1,460,116

-

1,460,116

Costs and expenses:

Cost of product and maintenance

132,245

(26,352)

 (I) 

105,893

Cost of services

67,956

(2,373)

 (I) 

65,583

Marketing and sales

378,157

(17,828)

 (I) 

360,329

Research and development

534,022

(53,403)

 (I) 

480,619

General and administrative

121,314

(27,273)

 (I) 

94,041

Amortization of acquired intangibles

19,416

(19,416)

 (I) 

-

Restructuring and other charges

17,999

(17,999)

-

Total costs and expenses

1,271,109

(164,644)

1,106,465

Income from operations

189,007

164,644

353,651

Interest expense

(37,581)

22,315

 (J) 

(15,266)

Other income, net

7,570

(5,280)

(K)

2,290

Income before provision (benefit) for income taxes

158,996

181,679

340,675

Provision (benefit) for income taxes

(5,247)

93,823

(L)

88,576

Net income 

$        164,243

$                           87,856

$    252,099

Notes: 

(I) For the year ended December 28, 2013 adjustments to GAAP are as follows for the line items specified:

Amortization

and sale of

acquired

intangibles

Stock-based

compensation

expense

Non-qualified

deferred

compensation

expenses

Integration

and

acquisition-

related costs

Executive

severance

costs

Total

adjustments

Cost of product and maintenance

$         24,718

$              1,596

$                   38

$                    -

$                -

$          26,352

Cost of services

-

2,321

52

-

-

2,373

Marketing and sales

-

15,642

239

1,467

480

17,828

Research and development

-

32,999

1,700

18,704

-

53,403

General and administrative

-

13,727

1,264

11,801

481

27,273

Amortization of acquired intangibles

19,416

-

-

-

-

19,416

    Total

$         44,134

$            66,285

$              3,293

$           31,972

$           961

$        146,645

(J) Amortization of debt discount related to convertible notes

(K) Other income or expense related to investments and non-qualified deferred compensation plan assets

(L) Income tax effect of non-GAAP adjustments 

 

Cadence Design Systems, Inc.

Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures

For the Year Ended December 29, 2012

(In thousands)

(Unaudited)

Year Ended

December 29, 2012

GAAP

Adjustments

Non-GAAP

Revenue:

Product and maintenance

$     1,212,429

$                                  -

$ 1,212,429

Services

113,995

-

113,995

Total revenue

1,326,424

-

1,326,424

Costs and expenses:

Cost of product and maintenance

118,516

(14,905)

 (M) 

103,611

Cost of services

72,607

(1,957)

 (M) 

70,650

Marketing and sales

342,278

(11,247)

 (M) 

331,031

Research and development

454,085

(29,860)

 (M) 

424,225

General and administrative

112,076

(16,910)

 (M) 

95,166

Amortization of acquired intangibles

15,077

(15,077)

 (M) 

-

Restructuring and other charges

113

(113)

-

Total costs and expenses

1,114,752

(90,069)

1,024,683

Income from operations

211,672

90,069

301,741

Interest expense

(34,742)

20,846

 (N) 

(13,896)

Other income, net

11,341

(6,296)

(O)

5,045

Income before provision (benefit) for income taxes

188,271

104,619

292,890

Provision (benefit) for income taxes

(251,677)

327,828

(P)

76,151

Net income 

$        439,948

$                       (223,209)

$    216,739

Notes: 

(M) For the year ended December 29, 2012 adjustments to GAAP are as follows for the line items specified:

Amortization

of acquired

intangibles

Stock-based

compensation

expense

Non-qualified

deferred

compensation

expenses

Integration

and

acquisition-

related costs

 

Shareholder

litigation

costs

Total

adjustments

Cost of product and maintenance

$          13,541

$               1,317

$                    47

$                     -

$                   -

$          14,905

Cost of services

-

1,889

68

-

-

1,957

Marketing and sales

-

10,193

492

562

-

11,247

Research and development

-

21,516

2,144

6,200

-

29,860

General and administrative

-

12,646

1,702

2,516

46

16,910

Amortization of acquired intangibles

15,077

-

-

-

-

15,077

    Total

$          28,618

$             47,561

$               4,453

$             9,278

$                46

$          89,956

(N) Amortization of debt discount related to convertible notes

(O) Other income or expense related to investments and non-qualified deferred compensation plan assets

(P) Income tax effect of non-GAAP adjustments 

 

 

 

SOURCE Cadence Design Systems, Inc.



RELATED LINKS

http://www.cadence.com