Annual Revenue Grows by 11% to $1.33 Billion for Cadence Design Systems

2/2/2006 - Cadence Design Systems, Inc. (NASDAQ: CDNS) today reported fourth quarter 2005 revenue of $378 million, an increase of 10 percent over the $343 million reported for the same period in 2004. On a GAAP basis, Cadence® recognized net income of $27 million, or $0.08 per share, in the fourth quarter of 2005, compared to $60 million, or $0.20 per share, in the same period in 2004. Revenues for the fiscal year 2005 totalled $1.33 billion, an increase of 11 percent over 2004 total revenues of $1.20 billion. Net income for the fiscal year 2005 was $49 million, or $0.16 per share, compared to net income of $74 million, or $0.25 per share for the year 2004. Net income for both the fourth quarter and fiscal year 2005 includes incremental tax expense of $30 million, or $0.09 and $0.10 per share respectively for the fourth quarter and full year 2005, associated with the repatriation of foreign earnings.

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 and deferred compensation, in-process research and development charges, integration and other acquisition-related expenses, executive severance payments, 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. 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 2005 was $93 million, or $0.29 per share, on a diluted basis as compared to $80 million, or $0.26 per share, on a diluted basis in the same period in 2004. For the fiscal year 2005, non-GAAP net income was $258 million, or $0.83 per share, compared to $201 million and $0.66 per share in 2004.

"We had a terrific fourth quarter and finished 2005 with good momentum. Our product portfolio is very competitive, our new initiatives such as kits and segmentation are starting to ramp, and our enterprise approach is winning with customers," said Bill Porter, senior vice president and chief financial officer.

"Throughout 2005 we delivered on our strategy to grow our core business through technology innovation, to expand into adjacencies such as verification and manufacturability, and to pursue pricing and business models for value," said Mike Fister, president and CEO of Cadence Design Systems, Inc. "With our success this past year, we've laid the groundwork for growth and market expansion in 2006 and beyond."

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. 31, 2005.

Q4 2005 Financial Schedules are available.

Business Outlook
For the first quarter of 2006, the company expects total revenue in the range of $315 million to $325 million. First quarter GAAP earnings per diluted share are expected to be in the range of $0.07 to $0.09. Diluted earnings per share using the non-GAAP measure defined below are expected to be in the range of $0.19 to $0.21.

For the full year 2006, the company expects total revenue in the range of $1.400 billion to $1.450 billion. On a GAAP basis, net income per diluted share for fiscal 2006 is expected in the range of $0.47 to $0.55. Using the non-GAAP measure defined below, diluted earnings per share for fiscal 2006 are expected to be in the range of $0.96 to $1.04.

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.

Audio Webcast Scheduled
Fister and Porter will host a fourth quarter 2005 financial results audio webcast today, Feb. 1, 2006, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the Web site at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting Feb. 1, 2006, at 5 p.m. Pacific time and ending at 5 p.m. Pacific time on Feb. 8, 2006. Webcast access is available.

About Cadence
Cadence enables global electronic-design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence software and hardware, methodologies, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. Cadence reported 2005 revenues of approximately $1.3 billion, and has approximately 5,000 employees. The company is headquartered in San Jose, Calif., with sales offices, design centres, and research facilities around the world to serve the global electronics industry.

Previous Page | News by Category | News Search

If you found this page useful, bookmark and share it on: