4/17/2003 - Cadence Design Systems, Inc. (NYSE: CDN) announced total revenue for the first quarter of 2003 of $256 million, with subscriptions licenses approximately 82 percent of software product bookings. Pro forma diluted earnings per share were $0.04.
Including amortization of acquired intangibles and deferred stock compensation, and write-offs of acquired in-process technology, on a GAAP basis the quarter's results were a loss per share of $0.07. A reconciliation of GAAP to pro forma earnings is included with this press release.
"We executed against our targets in one of the toughest business climates on record and within the guidance we presented last quarter," said Ray Bingham, Cadence president and chief executive officer. "We will continue to execute with the financial discipline needed to respond to market dynamics when the market improves."
The company continued to see adoption of the Cadence Encounter platform for digital IC design and early market acceptance of the Cadence IncisiveTM verification platform, both of which are targeted at customers' most pressing technical needs. As a result of sales of the Incisive verification platform, Cadence also saw record sales of its emulation products.
"Our platform approach and our solutions, which address both digital and analog design, are enabling us to take share," said Bingham. "We delivered our new Incisive verification platform to early market success, and we continue to grow and acquire technologies that will give customers a clear path beyond legacy tools. Ours is the most complete technology design portfolio in the world, and now it's the most advanced as well."
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 March 31, 2003.
Subscriptions are expected to make up 80 to 90 percent of software product bookings for the year.
For Q2, the company expects total revenue in the range of $265 to $275 and 65-70 percent of software product revenue from ratable backlog. Pro forma EPS is expected to be in the range of 9 to 10 cents, with GAAP EPS in the range of 0 to 1 cent.
For the full year 2003, Pro forma EPS is expected to be in the range of 50 to 55 cents. GAAP EPS is expected to be in the range of 12 to 17 cents.
A schedule showing a reconciliation of the business outlook for GAAP to pro forma EPS is included with this release.
Cadence is the largest supplier of electronic design technologies, methodology services, and design services. Cadence solutions are used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications equipment, consumer electronics, and a variety of other electronics based products. With approximately 5200 employees and 2002 revenues of approximately $1.3 billion, Cadence has sales offices, design centers, and research facilities around the world. The company is headquartered in San Jose, Calif., and traded on the New York Stock Exchange under the symbol CDN. More information about the company, its products and services is available at www.cadence.com.
Cadence and the Cadence logo are registered trademarks, and Incisive is a trademark of Cadence Design Systems, Inc.
The statements contained above regarding the company's first quarter 2003 results, those contained in the Business Outlook section above and the statements by Ray Bingham are forward looking statements based on current expectations or beliefs, as well as a number of preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Readers are cautioned not to put undue reliance on these forward looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties and other factors, many of which are outside the control of Cadence, including, among others:
Cadence's ability to compete successfully in the design automation product and the commercial electronic design and methodology services industries; the mix of products and services sold and the timing of significant orders for its products; recent economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries; and the acquisition of other companies or the failure to successfully integrate them.
For a detailed discussion of these and other cautionary statements, please refer to the company's filings with the Securities and Exchange Commission. These include the company's Annual Report on Form 10 K for the year ended December 28, 2002.
In the calculation of the company's pro forma earnings, Cadence excludes certain items such as amortization of acquired intangibles, amortization of deferred stock compensation and write off of in process R&D from acquisitions. Also excluded are non operating and non recurring items such as unusual items and restructure expenses/asset impairments. Cadence believes that excluding amortization of acquired intangibles and deferred stock compensation, write-offs of acquired in process technology and unusual items provides investors with a representation of the Company's core performance, and a pro forma base line for assessing the future earnings potential of the company.
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 outlook, publicly available on its Web site (www.cadence.com/company/investor_relations/index.html). Prior to the start of the Quiet Period (described below), the public can continue to rely on the Business Outlook herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise.
Beginning June 16, 2003, Cadence will observe a "Quiet Period" during which the Business Outlook as provided in this press release and the company's most recent 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 update by the company. During the Quiet Period, Cadence representatives will not comment concerning the outlook or Cadence's financial results or expectations. The Quiet Period will extend until the day when Cadence's next quarterly Earnings Release is published, currently scheduled for July 15, 2003.
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