CIMdata PLM Industry Summary Online Archive
30 January 2008
Financial News
Cadence Reports Q4 Revenue up 6% Over Q4 2006
Cadence Design Systems, Inc. reported fourth quarter 2007 revenue of $458 million, an increase of 6 percent over the $431 million reported for the same period in 2006. On a GAAP basis, Cadence recognized net income of $120 million, or $0.41 per share on a diluted basis, in the fourth quarter of 2007, compared to $48 million, or $0.16 per share on a diluted basis, in the same period in 2006. Revenues for the fiscal year 2007 totaled $1.62 billion, an increase of 9 percent over 2006 total revenues of $1.48 billion. Net income for the fiscal year 2007 was $296 million, or $1.01 per share, compared to net income of $143 million, or $0.46 per share for the year 2006. Net income on a GAAP basis for the fourth quarter and fiscal year 2007 includes the income tax benefit of a settlement with the Internal Revenue Service of $28 million, or $0.10 per share on a diluted basis for the fourth quarter of 2007, and $0.09 per share on a diluted basis for the fiscal year 2007.
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, which excludes, as applicable, amortization of intangible assets, stock-based compensation expense, in-process research and development charges, certain termination and legal costs, integration and acquisition-related costs, gains and expenses related to non-qualified deferred compensation plan assets, executive severance payments, restructuring charges and credits, losses on extinguishment of debt 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. See "GAAP to non-GAAP Reconciliation" below for further information on the non-GAAP measure.
Using this non-GAAP measure, net income in the fourth quarter of 2007 was $133 million, or $0.46 per share on a diluted basis, as compared to $116 million, or $0.38 per share on a diluted basis, in the same period in 2006. For the fiscal year 2007, non-GAAP net income was $397 million, or $1.35 per share, compared to $336 million and $1.08 per share in 2006.
"Our strategy is on track, our technology has never been stronger, and we continue to focus on delivering solutions to help our customers manage their businesses in a challenging environment," said Mike Fister, president and CEO of Cadence.
"We achieved our long standing goal for operating margin for the year, and will keep our focus on improving our operating efficiency through 2008," added Bill Porter, executive vice president and chief financial officer.
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 completed after Dec. 29, 2007.
Business Outlook
For the first quarter of 2008, the company expects total revenue in the range of $280 million to $290 million. First quarter GAAP net loss per diluted share is expected to be in the range of $(0.06) to $(0.04). Diluted earnings per share using the non-GAAP measure defined below are expected to be in the range of $0.03 to $0.05.
For the full year 2008, the company expects total revenue in the range of $1.490 billion to $1.540 billion. On a GAAP basis, net income per diluted share for fiscal 2007 is expected to be in the range of $0.69 to $0.77. Using the non-GAAP measure defined below, diluted earnings per share for fiscal 2008 are expected to be in the range of $1.11 to $1.19.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to the non-GAAP net income and diluted net income per share is included with this release.
Click here for the Q4 2007 Financial Schedules
Audio Webcast Scheduled
Fister and Porter will host a fourth quarter 2007 financial results audio webcast today, Jan. 30, 2008, at 2 p.m. (Pacific) / 5 p.m. (Eastern). An archive of the webcast will be available starting Jan. 30, 2008, at 5 p.m. Pacific time and ending at 5 p.m. Pacific time on Feb. 6, 2008. Webcast access is available at http://www.cadence.com/company/investor_relations.
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