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 September 14, 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 Third Quarter 2012 Earnings Release is published, which is currently scheduled for October 24, 2012.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(In thousands)
(Unaudited)
June 30, December 31,
2012 2011
------------ ------------
Current Assets:
Cash and cash equivalents $ 661,658 $ 601,602
Short-term investments 51,304 3,037
Receivables 123,243 136,772
Inventories 41,066 43,243
2015 notes hedges 219,199 215,113
Prepaid expenses and other 61,976 64,216
------------ ------------
Total current assets 1,158,446 1,063,983
Property, plant and equipment, net of accumulated
depreciation of $668,328 and $658,990,
respectively 251,920 262,517
Goodwill 192,238 192,125
Acquired intangibles, net of accumulated
amortization of $89,572 and $91,542, respectively 159,807 173,234
Long-term receivables 7,750 11,371
Other assets 59,096 58,039
------------ ------------
Total Assets $ 1,829,257 $ 1,761,269
============ ============
Current Liabilities:
Convertible notes $ 301,292 $ 294,061
2015 notes embedded conversion derivative 219,199 215,113
Accounts payable and accrued liabilities 153,957 165,791
Current portion of deferred revenue 328,405 340,401
------------ ------------
Total current liabilities 1,002,853 1,015,366
------------ ------------
Long-Term Liabilities:
Long-term portion of deferred revenue 58,213 73,959
Convertible notes 135,006 131,920
Other long-term liabilities 131,172 128,894
------------ ------------
Total long-term liabilities 324,391 334,773
------------ ------------
Stockholders' Equity 502,013 411,130
------------ ------------
Total Liabilities and Stockholders' Equity $ 1,829,257 $ 1,761,269
============ ============
Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three and Six Months Ended June 30, 2012 and July 2, 2011
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
------------------------ ------------------------
June 30, July 2, June 30, July 2,
2012 2011 2012 2011
----------- ----------- ----------- -----------
Revenue:
Product $ 208,301 $ 157,938 $ 398,325 $ 299,757
Services 28,966 29,477 58,508 57,282
Maintenance 89,209 95,855 185,473 192,333
----------- ----------- ----------- -----------
Total revenue 326,476 283,270 642,306 549,372
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of product 21,585 20,074 36,986 34,268
Cost of services 17,071 20,616 36,445 40,691
Cost of maintenance 10,821 10,716 22,632 21,614
Marketing and sales 80,418 77,006 164,213 155,378
Research and
development 112,031 99,268 220,625 200,567
General and
administrative 30,244 25,377 58,014 44,679
Amortization of
acquired intangibles 3,643 4,505 7,429 8,964
Restructuring and other
charges (credits) 43 751 (8) 710
----------- ----------- ----------- -----------
Total costs and
expenses 275,856 258,313 546,336 506,871
----------- ----------- ----------- -----------
Income from
operations 50,620 24,957 95,970 42,501
Interest expense (8,566) (10,768) (17,103) (21,754)
Other income, net 3,669 8,394 6,103 12,863
----------- ----------- ----------- -----------
Income before
provision (benefit)
for income taxes 45,723 22,583 84,970 33,610
Provision (benefit) for
income taxes 9,337 (4,325) 17,480 379
----------- ----------- ----------- -----------
Net income $ 36,386 $ 26,908 $ 67,490 $ 33,231
=========== =========== =========== ===========
Basic net income per
share $ 0.13 $ 0.10 $ 0.25 $ 0.13
=========== =========== =========== ===========
Diluted net income per
share $ 0.13 $ 0.10 $ 0.24 $ 0.12
=========== =========== =========== ===========
Weighted average common
shares outstanding -
basic 269,739 263,191 268,840 262,362
=========== =========== =========== ===========
Weighted average common
shares outstanding -
diluted 275,318 270,885 276,526 269,732
=========== =========== =========== ===========
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2012 and July 2, 2011
(In thousands)
(Unaudited)
Six Months Ended
------------------------
June 30, July 2,
2012 2011
----------- -----------
Cash and Cash Equivalents at Beginning of Period $ 601,602 $ 557,409
----------- -----------
Cash Flows from Operating Activities:
Net income 67,490 33,231
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 43,736 46,283
Amortization of debt discount and fees 11,529 14,587
Stock-based compensation 21,886 19,698
Gain on investments, net (4,169) (13,676)
Non-cash restructuring and other charges 125 136
Deferred income taxes 459 (4,811)
Provisions (recoveries) for losses (gains) on
trade and installment contract receivables,
net - (5,885)
Other non-cash items 3,439 2,518
Changes in operating assets and liabilities,
net of effect of acquired businesses:
Current and long-term receivables 16,513 64,535
Inventories 499 (6,987)
Prepaid expenses and other 414 1,969
Other assets (169) 1,479
Accounts payable and accrued liabilities (4,694) (48,650)
Deferred revenue (27,446) 25,979
Other long-term liabilities (1,424) (4,628)
----------- -----------
Net cash provided by operating activities 128,188 125,778
----------- -----------
Cash Flows from Investing Activities:
Proceeds from the sale and maturity of
available-for-sale securities 136 9,588
Purchases of available-for-sale securities (49,083) -
Proceeds from the sale of long-term investments 44 2,785
Purchases of property, plant and equipment (18,269) (11,312)
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) (22,865)
----------- -----------
Net cash used for investing activities (68,463) (22,412)
----------- -----------
Cash Flows from Financing Activities:
Principal payments on receivable sale financing (2,907) (2,829)
Tax effect related to employee stock
transactions allocated to equity 4,075 967
Payment of acquisition-related contingent
consideration (39) -
Proceeds from issuance of common stock 13,063 10,302
Stock received for payment of employee taxes on
vesting of restricted stock (9,897) (7,389)
----------- -----------
Net cash provided by financing activities 4,295 1,051
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents (3,964) 3,491
----------- -----------
Increase in cash and cash equivalents 60,056 107,908
----------- -----------
Cash and Cash Equivalents at End of Period $ 661,658 $ 665,317
=========== ===========
Cadence Design Systems, Inc.
As of July 25, 2012
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per
Share
(Unaudited)
Three Months
Ending Year Ending
September 29, 2012 December 29, 2012
------------------ ------------------
Forecast Forecast
------------------ ------------------
Diluted net income per share on a
GAAP basis $0.17 to $0.18 $0.51 to $0.55
Amortization of acquired
intangibles 0.03 0.10
Stock-based compensation expense 0.04 0.18
Non-qualified deferred
compensation expenses - 0.01
Integration and acquisition-
related costs 0.01 0.03
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 (0.09) (0.20)
------------------ ------------------
Diluted net income per share on a
non-GAAP basis $0.18 to $0.19 $0.70 to $0.74
================== ==================
* Includes, as applicable, equity in losses or income from investments,
write-down of investments, gains or losses on sale of investments and
gains or losses on non-qualified deferred compensation plan assets
recorded in Other income (expense), net.
Cadence Design Systems, Inc.
As of July 25, 2012
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
Three Months
Ending Year Ending
September 29, 2012 December 29, 2012
------------------ ------------------
($ in millions) Forecast Forecast
------------------ ------------------
Net income on a GAAP basis $46 to $51 $141 to $153
Amortization of acquired
intangibles 8 28
Stock-based compensation expense 13 50
Non-qualified deferred
compensation expenses - 4
Integration and acquisition-
related costs 2 8
Amortization of debt discount 5 21
Other income or expense related
to investments and non-
qualified deferred compensation
plan assets* - (4)
Income tax effect of non-GAAP
adjustments (25) (54)
------------------ ------------------
Net income on a non-GAAP basis $49 to $54 $194 to $206
================== ==================
