CUPERTINO, CA - July 19, 2000 -- IKOS Systems Inc. (NASDAQ:IKOS), a leading provider of design verification solutions, today announced results for the third quarter of fiscal 2000. Revenues for the quarter ended July 1, 2000, grew 23 percent to $18.4 million, compared with $15.0 million for the same quarter of fiscal 1999. Net income nearly tripled for the quarter to $2.3 million, or $0.23 per diluted share, compared with net income of $784,000, or $0.08 per diluted share, for the same quarter last year.
"We are very pleased with our record results and with the continued market adoption of our latest emulation products," said Ramon Nunez, president and chief executive officer of IKOS. "The quarter marked a significant milestone in our transition to the emulation market, with emulation products accounting for approximately 50 percent of international product bookings and over 65 percent of worldwide product bookings. The emulation segment of our business continues to grow at an impressive rate, with emulation product revenues for the quarter growing by over 70 percent versus the same period last year and by over 40 percent sequentially. This growth rate is several times the projected growth rate of the EDA industry, according to recent data published by Dataquest," he said.Overall product revenues for the third quarter of fiscal 2000 were $13.9 million, up 25 percent from $11.1 million last year. Maintenance revenues increased 17 percent to $4.6 million, up from $3.9 million a year ago.
For the first nine months of fiscal 2000, revenues increased 26 percent to $50.7 million, compared with $40.0 million for the nine-month period of fiscal 1999. Net income for the first nine months of fiscal 2000 was $5.0 million, or $0.52 per diluted share, compared with $1.1 million, or $0.12 per diluted share, for the same period last year.
During the quarter, the company announced the introduction of its Vstation-5M (Verification Station) system. The Vstation-5M provides SoC design engineers with a better productivity tool for enhanced verification performance, as well as added flexibility in adapting to newer verification protocols. "This system is one of several new products we plan to launch in the coming months, as part of our long-term strategy to address a broad spectrum of verification methods," said Nunez.About IKOS Systems
IKOS Systems, Inc. is a technology leader in high-performance design verification solutions including hardware and software simulation for language-based design, logic emulation for system integration and compatibility verification, and verification services. The Company's mission is to help customers realize their high complexity electronic systems through innovative design verification solutions. IKOS supports direct sales operation in North America, UK, France, Germany, Japan and India, and a distribution network throughout Asia-Pacific and Israel. The corporate headquarters are located at 19050 Pruneridge Ave., Cupertino, Calif., 95014, (408) 255-4567.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance and development of the company's existing and new products, increased levels of competition for the company, new products and technological changes, the company's dependence upon third-party suppliers, intellectual property rights, and other risks detailed from time-to-time in the company's periodic reports filed with the Securities and Exchange Commission.
IKOS is a registered trademark of IKOS Systems. All other brand or product names may be trademarks or registered trademarks of their respective companies and should be treated as such.
IKOS SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
| 1, | | |||||||
| | | |||||||
| | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents.................................... | $13,277 | $7,664 | ||||||
| Short-term investments............................................ | 4,026 | 2,870 | ||||||
| Accounts receivable (net of allowances for | ||||||||
| doubtful accounts of $801 and $801, respectively).... | 12,897 | 10,549 | ||||||
| Inventories............................................................ | 3,735 | 3,455 | ||||||
| Prepaid expenses and other assets................... | 183 | 435 | ||||||
| Total current assets.......................................... | 34,118 | 24,973 | ||||||
| Equipment and leasehold improvements | ||||||||
| Office and evaluation equipment..................... | 6,543 | 5,663 | ||||||
| Machinery and equipment.................................. | 11,207 | 10,513 | ||||||
| Leasehold improvements.......................... | 844 | 718 | ||||||
| 18,594 | 16,894 | |||||||
| Less allowances for depreciation and amortization.. | (13,737) | (11,832) | ||||||
| 4,857 | 5,062 | |||||||
| Intangible assets (net of amortization of | ||||||||
| $883 and $716, respectively)..................................... | 979 | 1,146 | ||||||
| Other assets................................................................... | 516 | 609 | ||||||
| $40,470 | $31,790 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Accounts payable............................................. | $3,414 | $3,763 | ||||||
| Accrued payroll and related expenses...................... | 2,924 | 2,709 | ||||||
| Accrued commissions...................................... | 1,016 | 1,052 | ||||||
| Income taxes payable................................................. | 2,399 | 1,019 | ||||||
| Other accrued liabilities............................................ | 2,134 | 2,815 | ||||||
| Deferred revenues................................................ | 7,784 | 5,337 | ||||||
| Total current liabilities....................................... | 19,671 | 16,695 | ||||||
| Accrued Rent..................................................................... | -- | 64 | ||||||
| Commitments | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $.01 par value; 10,000 shares | ||||||||
| authorized, none issued and outstanding....................... | -- | -- | ||||||
| Common stock, $.01 par value; 50,000 shares | ||||||||
| authorized 8,797 and 8,797 shares, | ||||||||
| issued and 8,625 and 8,401 outstanding, respectively | 88 | 88 | ||||||
| Additional paid-in capital............................................ | 57,868 | 58,312 | ||||||
| Treasury stock, at cost, 173 shares in 2000 and 396 in 1999.......................................................................... | (1,115) | (2,536) | ||||||
| Accumulated other comprehensive income.................................. | (747) | (498) | ||||||
| Accumulated deficit.................................................. | (35,295) | (40,335) | ||||||
| Total stockholders' equity................................. | 20,799 | 15,031 | ||||||
| $40,470 | $31,790 | |||||||
IKOS SYSTEMS INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
| Ended | Nine Months Ended | |||||||||||
| 1, | 3, | July 1, | July 3, | |||||||||
| | | 2000 | 1999 | |||||||||
| Net Revenues | ||||||||||||
| Product.............. | $13,876 | $11,098 | $37,328 | $28,669 | ||||||||
| Maintenance....... | 4,567 | 3,914 | 13,319 | 11,369 | ||||||||
| Total net revenues....... | 18,443 | 15,012 | 50,647 | 40,038 | ||||||||
| Cost of revenues | ||||||||||||
| Product | 2,834 | 2,681 | 7,995 | 7,121 | ||||||||
| Maintenance | 1,102 | 1,057 | 3,340 | 2,851 | ||||||||
| Total cost of revenues | 3,936 | 3,738 | 11,335 | 9,972 | ||||||||
| Gross profit | 14,507 | 11,274 | 39,312 | 30,066 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 4,198 | 3,411 | 11,405 | 9,859 | ||||||||
| Sales and marketing | 6,161 | 5,719 | 17,842 | 15,859 | ||||||||
| General and administration | 1,231 | 1,103 | 3,572 | 3,017 | ||||||||
| Amortization of intangibles | 42 | 103 | 167 | 309 | ||||||||
| Total operating expenses | 11,632 | 10,336 | 32,986 | 29,044 | ||||||||
| Income (loss) from operations | 2,875 | 938 | 6,326 | 1,022 | ||||||||
| Other income (expense) | ||||||||||||
| Interest income | 198 | 111 | 389 | 392 | ||||||||
| Income before provision for income taxes | 3,073 | 1,049 | 6,715 | 1,414 | ||||||||
| Provision for income taxes | 770 | 265 | 1,675 | 320 | ||||||||
| Net income | $2,303 | $784 | $5,040 | $1,094 | ||||||||
| Basic net income per share | $0.27 | $0.09 | $0.59 | $0.13 | ||||||||
| Common and Common equivalent shares used in computing basic per share amounts | 8,611 | 8,288 | 8,520 | 8,285 | ||||||||
| Dilutive net income per share | $0.23 | $0.08 | $0.52 | $0.12 | ||||||||
| Common and common equivalent shares used in computing dilutive per share amounts | 9,897 | 9,406 | 9,781 | 9,008 | ||||||||
| IKOS Systems | ||
| Joseph Rockom, CFO | ||
| Tel. (408) 366-8514 | ||
| Fax (408) 366-8698 | ||
| joe@ikos.com | ||