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 15, 2013, 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 2013 Earnings Release is published, which is currently scheduled for April 24, 2013.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
December 29, 2012 and December 31, 2011
(In thousands)
(Unaudited)
December 29, 2012 December 31, 2011
----------------- -----------------
Current assets:
Cash and cash equivalents $ 726,357 $ 601,602
Short-term investments 100,704 3,037
Receivables, net of allowances of $85
and $0, respectively 97,821 136,772
Inventories 36,163 43,243
2015 notes hedges 303,154 215,113
Prepaid expenses and other 127,036 64,216
----------------- -----------------
Total current assets 1,391,235 1,063,983
Property, plant and equipment, net of
accumulated depreciation of $635,450
and $658,990, respectively 244,439 262,517
Goodwill 233,266 192,125
Acquired intangibles, net of accumulated
amortization of $104,351 and $91,542,
respectively 184,938 173,234
Long-term receivables 7,559 11,371
Other assets 225,566 58,039
----------------- -----------------
Total assets $ 2,287,003 $ 1,761,269
================= =================
Current liabilities:
Convertible notes $ 447,011 $ 294,061
2015 notes embedded conversion
derivative 303,154 215,113
Accounts payable and accrued
liabilities 171,318 165,791
Current portion of deferred revenue 295,787 340,401
----------------- -----------------
Total current liabilities 1,217,270 1,015,366
----------------- -----------------
Long-term liabilities:
Long-term portion of deferred revenue 50,529 73,959
Convertible notes - 131,920
Other long-term liabilities 104,033 128,894
----------------- -----------------
Total long-term liabilities 154,562 334,773
----------------- -----------------
Stockholders' equity 915,171 411,130
----------------- -----------------
Total liabilities and stockholders'
equity $ 2,287,003 $ 1,761,269
================= =================
Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months and Years Ended December 29, 2012 and December 31,
2011
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Years Ended
-------------------------- --------------------------
December 29, December 31, December 29, December 31,
2012 2011 2012 2011
------------ ------------ ------------ ------------
Revenue:
Product $ 224,243 $ 177,113 $ 839,129 $ 640,836
Services 27,072 30,308 113,995 116,692
Maintenance 94,270 100,585 373,300 392,307
------------ ------------ ------------ ------------
Total revenue 345,585 308,006 1,326,424 1,149,835
------------ ------------ ------------ ------------
Costs and expenses:
Cost of product 13,069 17,204 73,392 69,657
Cost of services 19,353 20,397 72,607 81,498
Cost of
maintenance 11,368 11,164 45,124 44,001
Marketing and
sales 95,604 88,506 342,278 323,798
Research and
development 118,382 97,024 454,085 400,745
General and
administrative 27,712 24,143 112,076 92,863
Amortization of
acquired
intangibles 3,772 3,786 15,077 16,536
Restructuring and
other charges 64 83 113 360
------------ ------------ ------------ ------------
Total costs and
expenses 289,324 262,307 1,114,752 1,029,458
------------ ------------ ------------ ------------
Income from
operations 56,261 45,699 211,672 120,377
Interest expense (8,902) (10,441) (34,742) (43,025)
Other income
(expense), net 5,369 (2,033) 11,341 18,074
------------ ------------ ------------ ------------
Income before
provision
(benefit) for
income taxes 52,728 33,225 188,271 95,426
Provision
(benefit) for
income taxes (261,146) 22,333 (251,677) 23,197
------------ ------------ ------------ ------------
Net income $ 313,874 $ 10,892 $ 439,948 $ 72,229
============ ============ ============ ============
Net income per share
- basic $ 1.15 $ 0.04 $ 1.63 $ 0.27
============ ============ ============ ============
Net income per share
- diluted $ 1.10 $ 0.04 $ 1.57 $ 0.27
============ ============ ============ ============
Weighted average
common shares
outstanding - basic 272,884 266,120 270,479 263,892
============ ============ ============ ============
Weighted average
common shares
outstanding -
diluted 286,289 273,057 280,667 270,816
============ ============ ============ ============
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 29, 2012 and December 31, 2011
(In thousands)
(Unaudited)
Years Ended
--------------------------
December 29, December 31,
2012 2011
------------ ------------
Cash and cash equivalents at beginning of period $ 601,602 $ 557,409
------------ ------------
Cash flows from operating activities:
Net income 439,948 72,229
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 89,217 91,648
Amortization of debt discount and fees 23,513 29,266
Stock-based compensation 47,561 43,588
Gain on investments, net (6,320) (15,737)
Non-cash restructuring and other charges 252 240
Tax impact of convertible notes interest - 8,486
Deferred income taxes (240,424) (7,811)
Provisions (recoveries) for losses (gains)
on receivables, net 215 (6,596)
Other non-cash items 3,063 3,196
Changes in operating assets and liabilities,
net of effect of acquired businesses:
Receivables 45,630 76,785
Inventories 5,245 (6,820)
Prepaid expenses and other (12,426) 20,053
Other assets (4,902) (2,220)
Accounts payable and accrued liabilities 17,523 (46,950)
Deferred revenue (69,662) (13,408)
Other long-term liabilities (22,439) (5,607)
------------ ------------
Net cash provided by operating
activities 315,994 240,342
------------ ------------
Cash flows from investing activities:
Purchases of available-for-sale securities (121,154) -
Proceeds from the sale of available-for-sale
securities 18,338 9,793
Proceeds from the maturity of available-for-
sale securities 4,150 -
Proceeds from the sale of long-term
investments 74 9,791
Purchases of property, plant and equipment (35,966) (31,421)
Investment in venture capital partnerships and
equity investments (250) (608)
Cash paid in business combinations and asset
acquisitions, net of cash acquired (66,432) (44,052)
------------ ------------
Net cash used for investing activities (201,240) (56,497)
------------ ------------
Cash flows from financing activities:
Principal payments on receivable sale
financing (5,776) (5,842)
Payment of 2011 notes - (150,000)
Payment of debt issuance costs (1,372) -
Payment of acquisition-related contingent
consideration (39) -
Tax effect related to employee stock
transactions allocated to equity 6,061 5,549
Proceeds from issuance of common stock 32,687 19,714
Stock received for payment of employee taxes
on vesting of restricted stock (15,728) (14,225)
------------ ------------
Net cash provided by (used for)
financing activities 15,833 (144,804)
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents (5,832) 5,152
------------ ------------
Increase in cash and cash equivalents 124,755 44,193
------------ ------------
Cash and cash equivalents at end of period $ 726,357 $ 601,602
============ ============
Cadence Design Systems, Inc.
As of January 30, 2013
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per
Share
(Unaudited)
Three Months Ending Year Ending
March 30, 2013 December 28, 2013
------------------- -------------------
Forecast Forecast
------------------- -------------------
Diluted net income per share on a
GAAP basis $0.23 to $0.24 $0.58 to $0.68
Amortization of acquired
intangibles 0.03 0.09
Stock-based compensation expense 0.05 0.22
Integration and acquisition-
related costs 0.01 0.03
Amortization of debt discount 0.02 0.08
Income tax effect of non-GAAP
adjustments (0.15) (0.18)
------------------- -------------------
Diluted net income per share on a
non-GAAP basis $0.19 to $0.20 $0.82 to $0.92
=================== ===================
Cadence Design Systems, Inc.
As of January 30, 2013
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
Three Months Ending Year Ending
March 30, 2013 December 28, 2013
------------------- -------------------
($ in millions) Forecast Forecast
------------------- -------------------
Net income on a GAAP basis $66 to $71 $168 to $198
Amortization of acquired
intangibles 8 28
Stock-based compensation expense 14 64
Integration and acquisition-
related costs 2 8
Amortization of debt discount 6 22
Income tax effect of non-GAAP
adjustments (42) (51)
------------------- -------------------
Net income on a non-GAAP basis $54 to $59 $239 to $269
=================== ===================
Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2011 2012
------------------------- -------------------------
GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
------------------------ ------------------------- -------------------------
Americas 44% 47% 44% 44% 45% 44% 46% 43% 45% 45%
EMEA 21% 20% 21% 20% 20% 19% 20% 20% 21% 20%
Japan 19% 17% 18% 17% 18% 18% 16% 17% 14% 16%
Asia 16% 16% 17% 19% 17% 19% 18% 20% 20% 19%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Revenue Mix by Product Group (% of Total Revenue)
2011 2012
------------------------- -------------------------
PRODUCT GROUP Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year
------------------------ ------------------------- -------------------------
Functional
Verification and
Design IP 28% 33% 30% 32% 30% 30% 33% 30% 30% 30%
Digital IC Design 24% 21% 22% 21% 22% 23% 22% 23% 23% 23%
Custom IC Design 20% 22% 23% 23% 22% 23% 22% 24% 24% 23%
Design for
Manufacturing 8% 6% 6% 6% 7% 7% 6% 6% 6% 6%
System Interconnect 10% 8% 9% 8% 9% 8% 8% 9% 9% 9%
Services & Other 10% 10% 10% 10% 10% 9% 9% 8% 8% 9%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Note: Product Group total revenue includes Product and Maintenance revenue
