CIMdata PLM Industry Summary Online Archive
27 April 2005
Financial News
Cadence Reports Q1 Revenue of $293 Million, up 10% over Q1 2004
Cadence Design Systems, Inc. reported first quarter, 2005 revenue of $293 million, an increase of 10 percent over the $266 million reported for the same period last year. On a GAAP basis, Cadence® recognized net income of $1.0 million, or $0.00 per share in the first quarter of 2005, compared to a net loss of $9 million, or $(0.03) per share, in the same period last year.
In addition to using GAAP results in evaluating Cadence's business, management believes it is useful to measure results using a non-GAAP measure of net income (loss), which excludes, as applicable, amortization of intangible assets and deferred compensation, in-process research and development charges, integration and other acquisition-related expenses, restructuring charges and equity in losses (income) from investments. Non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability.
Using this non-GAAP measure, net income in the first quarter 2005 was $45 million, or $0.15 per share on a fully diluted basis as compared to $28 million, or $0.09 per share on a fully diluted basis, in the same period last year.
"Once again this quarter, we executed to plan," said Mike Fister, president and CEO of Cadence Design Systems, Inc. "Cadence performed well because of the strength of our technology, the diversity of our products and our relentless focus on what makes our customers successful."
Business Highlights of Q1 2005
Verification is a significant growth opportunity for Cadence. The company delivered solid results in this business segment in Q1. Incisive(TM) Palladium® II, Cadence's processor-based emulator, continued the robust sales track it began when it was introduced to the market last quarter. Palladium II is being deployed by a wide spectrum of customers, including leaders in wireless, telecom and aerospace technologies. The acquisition of Verisity Ltd. was completed shortly after the close of the quarter, further strengthening Cadence's ability to significantly improve time to market and design closure in an era of ever more complex chips.
Continuing the positive momentum from previous quarters, the Cadence Encounter(TM) digital platform helped customers design faster, larger and more complex chips. Since Encounter GPS, Cadence's global physical synthesis offering, was introduced last summer as part of the Encounter Platform, customers have completed more than 150 tapeouts. Encounter RTL Compiler added more than 20 new customers during the quarter.
Results in Q1 also demonstrated the depth of Cadence's broad product lines, including custom and analog chip design and in our Silicon-Package-Board business.
"In the current environment, reputation and relationships become key elements in closing business," said Fister. "We will continue to seek out opportunities for growth in our core businesses through technology innovation, new business and pricing models, and expanding into adjacencies such as verification and manufacturability."
Added Bill Porter, senior vice president and chief financial officer: "I am pleased Cadence continued to grow revenue, and improve profitability and cash flow."
The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially. These statements do not include the impact of any mergers, acquisitions or other business combinations that may be completed after April 27, 2005.
Business Outlook
For the second quarter of 2005, the company expects total revenue in the range of $300 million to $310 million. Second quarter GAAP earnings per fully diluted share are expected to be in the range of $0.01 to $0.03. Diluted earnings per share using the non-GAAP measure defined below are expected to be in the range of $0.14 to $0.16.
For the full year 2005, the company expects total revenue in the range of $1.24 billion to $1.30 billion. On a GAAP basis, net income per fully diluted share for fiscal 2005 is expected in the range of $0.27 to $0.35. Using the non-GAAP measure defined below, fully diluted earnings per share for fiscal 2005 are expected to be in the range of $0.73 to $0.81.
For the full press release including financial tables, visit: http://www.cadence.com/company/newsroom/press_releases/pr.aspx?xml=042705_q1earnings .
Cadence Design Systems, Inc.'s Ray Bingham, executive chairman of the board, Mike Fister, president and chief executive officer, and Bill Porter, chief financial officer, will host a first quarter 2005 financial results audio webcast today, April 27, 2005, at 2 p.m. (Pacific) / 5 p.m. (Eastern). An archive of the webcast will be available starting April 27, 2005 at 5 p.m. Pacific time and ending at 5 p.m. Pacific time on May 4, 2005. Webcast access is available at http://www.cadence.com/company/investor_relations .
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