Cadence's management believes that non-GAAP net income provides useful supplemental information to Cadence's management and investors regarding the performance of the company's business operations and facilitates comparisons to the company's historical operating results. Cadence's management also uses this information 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.
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
------------------------------
September 29, October 1,
2012 2011
-------------- --------------
(unaudited)
(in thousands)
Net income on a GAAP basis $ 58,584 $ 28,106
Amortization of acquired intangibles 7,750 6,692
Stock-based compensation expense 12,399 11,891
Non-qualified deferred compensation
expenses (credits) (839) 229
Restructuring and other charges (credits) 57 (433)
Shareholder litigation costs - - - - 179
Executive and other employee severance
costs - - - - 1,331
Integration and acquisition-related costs 3,016 766
Amortization of debt discount 5,279 6,697
Other income or expense related to
investments and non-qualified deferred
compensation plan assets* 1,954 (5,544)
Acquisition-related income tax benefit (14,806) - - - -
Income tax effect of non-GAAP adjustments (14,054) (12,619)
-------------- --------------
Net income on a non-GAAP basis $ 59,340 $ 37,295
============== ==============
* 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.
Diluted Net Income per Share Reconciliation Three Months Ended
------------------------------
September 29, October 1,
2012 2011
-------------- --------------
(unaudited)
(in thousands, except per share data)
Diluted net income per share on a GAAP basis $ 0.21 $ 0.10
Amortization of acquired intangibles 0.03 0.03
Stock-based compensation expense 0.04 0.04
Non-qualified deferred compensation
expenses (credits) - - - - - - - -
Restructuring and other charges (credits) - - - - - - - -
Shareholder litigation costs - - - - - - - -
Executive and other employee severance
costs - - - - 0.01
Integration and acquisition-related costs 0.01 - - - -
Amortization of debt discount 0.02 0.02
Other income or expense related to
investments and non-qualified deferred
compensation plan assets* - - - - (0.02)
Acquisition-related income tax benefit (0.05) - - - -
Income tax effect of non-GAAP adjustments (0.05) (0.04)
-------------- --------------
Diluted net income per share on a non-GAAP
basis $ 0.21 $ 0.14
============== ==============
Shares used in calculation of diluted net
income per share --GAAP** 283,328 270,741
Shares used in calculation of diluted net
income per share --non-GAAP** 283,328 270,741
* 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.
** 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.
