Synopsys Posts Financial Results for Fourth Quarter and Full-Year Fiscal 2004

CIMdata PLM Industry Summary Online Archive

1 December 2004

Financial News

Synopsys Posts Financial Results for Fourth Quarter and Full-Year Fiscal 2004

Synopsys, Inc. reported results for its fourth quarter and fiscal year ended October 31, 2004.

For the fourth quarter of fiscal 2004, Synopsys reported revenue of $230.6 million, a 27% decrease compared to revenue of $316.5 million for the fourth quarter of fiscal 2003. The decrease is due primarily to a further shift in Synopsys' license mix away from software licenses on which revenue is recognized when the product is shipped ("upfront" licenses) and toward licenses on which revenue is recognized over the term of the license. During the fourth quarter of fiscal 2004, revenue from upfront licenses was $69 million less than revenue from such licenses in the fourth quarter of fiscal 2003.

For fiscal year 2004, Synopsys reported annual revenue of $1.09 billion, a 7.2% decrease compared to revenue of $1.18 billion in 2003. The decrease in annual revenue reflects primarily the shift in license mix in the fourth quarter of fiscal 2004, a lower level of orders than expected in fiscal 2004, and a decrease in maintenance revenue.

GAAP Results

On a generally accepted accounting principles (GAAP) basis, for the fourth quarter of fiscal 2004, net loss was $(28.4) million, or $(0.19) per share, compared to net income of $44.6 million, or $0.27 per share, for the fourth quarter of fiscal 2003. GAAP net income for the fiscal year ended October 31, 2004 was $74.3 million, or $0.46 per share, compared to $149.7 million, or $0.95 per share, for the fiscal year ended October 31, 2003. The decrease in net income for the fiscal year was due primarily to lower revenue and other income, an increase in cost of services revenue due to increased field support headcount and an increase in amortization of intangible assets from acquisitions.

Non-GAAP Results

On a non-GAAP basis, for the fourth quarter of fiscal 2004, net income was $1.8 million, or $0.01 per share, compared to non-GAAP net income of $71.6 million, or $0.44 per share, for the fourth quarter of fiscal 2003. Non-GAAP net income for the fiscal year ended October 31, 2004 was $166.4 million, or $1.04 per share, compared to $252.1 million, or $1.59 per share, for the fiscal year ended October 31, 2003. A description of the items excluded from non-GAAP results and a reconciliation of GAAP and non-GAAP results are contained in the section entitled "GAAP Reconciliation" below. Per share data for the periods presented reflect Synopsys' two-for-one stock split completed on September 23, 2003.

Fourth Quarter Business Environment

"We made solid progress in the fourth quarter, executing on the planned shift in our license mix with ratable licenses accounting for, as expected, for over 90% of our license orders for the quarter," said Aart de Geus, chairman and chief executive officer. "We also saw the initial customer benefits of major technology advancements in our core GalaxyT design and Discovery T verification platforms, while making strategic investments in Design for Manufacturing and reusable Intellectual Property. With a good Q4, we have positioned the company well for competitive wins in 2005."?Reconciliation of Fourth Quarter and Full-Fiscal Year End Results

Additional Financial Information Available on Synopsys Website

In connection with the issuance of this earnings release, Synopsys is making available to investors supplemental financial information, which can be found on Synopsys' website at http://www.synopsys.com/corporate/invest/finsupp/q404.pdf . Synopsys currently intends to provide this information on a quarterly basis.

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m., Pacific Time. A live webcast of the call will be available at Synopsys' corporate website at http://www.synopsys.com/corporate/invest/invest.html . A recording of the call will be available by calling 1-888-428-4470 (612-332-0530 for international callers), access code 754504, beginning at 5:30 p.m. Pacific Time today. A webcast replay will also be available at http://www.synopsys.com/corporate/invest/invest.html from approximately 5:30 p.m. Pacific Time today through the time of the announcement of Synopsys' results for the first quarter of fiscal 2005 in February 2005. In addition, Synopsys will post copies of the prepared remarks of Aart de Geus, Chairman and Chief Executive Officer, and Steve Shevick, Chief Financial Officer, on its website at http://www.synopsys.com/corporate/invest/invest.html following the call.

Additional Financial Information Available on Synopsys Website

Become a member of the CIMdata PLM Community to receive your daily PLM news and much more.

Tell us what you think of the CIMdata Newsletter. Send your feedback.

CIMdata is committed to your privacy. Your personal information will never be sold or shared outside of CIMdata without your express permission.