SAN JOSE, Calif. - Oct 26, 2011 -- Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the third quarter of fiscal year 2011. Cadence reported third quarter 2011 revenue of $292 million, compared to revenue of $238 million reported for the same period in 2010. On a GAAP basis, Cadence recognized net income of $28 million, or $0.10 per share on a diluted basis in the third quarter of 2011, compared to net income of $127 million, or $0.48 per share on a diluted basis in the same period in 2010. GAAP net income for the third quarter of 2010 included $148 million in income tax benefit related to the settlement of an Internal Revenue Service examination of Cadence’s federal income tax returns for the tax years 2000 through 2002.
Using Cadence’s non-GAAP measure, net income in the third quarter of 2011 was $37 million, or $0.14 per share on a diluted basis, as compared to net income of $11 million, or $0.04 per share on a diluted basis in the same period in 2010.
“Strong design activity in multiple market segments continues to drive demand for our products and solutions,” said Lip-Bu Tan, president and chief executive officer. “In response to customer requirements, we have established our readiness for 20-nanometer design and demonstrated product leadership for the design of SoCs using advanced multi-core processors.”
“Cadence again posted strong results as operating profitability continues to improve,” added Geoff Ribar, senior vice president and chief financial officer. “Given the risks in the world economy we looked at our prospective Q4 business very closely but still see good demand for products and services as reflected in our increased outlook.”
In addition to using GAAP results to evaluate 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, integration and acquisition-related costs including changes in the fair value of contingent consideration related to prior acquisitions, acquisition-related income tax benefits, income tax benefits related to the settlement of IRS examinations, shareholder litigation costs and charges, gains or losses and expenses or credits related to non-qualified deferred compensation plan assets, executive and other employee severance costs, restructuring charges and credits, amortization of discount on convertible notes, losses on extinguishment of debt, equity in losses or income from investments, write-down of investments, and gains or losses on the sale of 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.
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
For the fourth quarter of 2011, the company expects total revenue in the range of $295 million to $305 million. Fourth quarter GAAP net income per diluted share is expected to be in the range of $0.08 to $0.10. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.14 to $0.16.
For 2011, the company expects total revenue in the range of $1,135 million to $1,145 million. On a GAAP basis, net income per diluted share for 2011 is expected to be in the range of $0.31 to $0.33. Using the non-GAAP measure defined below, net income per diluted share for 2011 is expected to be in the range of $0.48 to $0.50.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included with this release.
To read financial tables, click here
Audio Webcast Scheduled
Lip-Bu Tan, Cadence’s president and chief executive officer, and Geoff Ribar, Cadence’s senior vice president and chief financial officer, will host a third quarter 2011 financial results audio webcast today, October 26, 2011, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting October 26, 2011 at 5 p.m. (Pacific) and ending November 9, 2011 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations.
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, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.