Synopsys Posts Financial Results for Second Quarter Fiscal Year 2009

MOUNTAIN VIEW, Calif., May 20, 2009 -- Synopsys, Inc. (NASDAQ: SNPS), a world leader in software and IP for semiconductor design, verification and manufacturing, today reported results for its second quarter ended April 30, 2009.

For the second quarter of fiscal 2009, Synopsys reported revenue of $336.8 million, a 3.8 percent increase compared to $324.6 million for the second quarter of fiscal 2008.

"Synopsys continues to execute well in an environment that still shows signs of economic stress," said Aart de Geus, chairman and CEO of Synopsys. "Customers are choosing Synopsys for its strong technology, global support, continued investment in the future, and financial strength."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal 2009 was $48.3 million, or $0.33 per share, compared to $39.4 million, or $0.27 per share, for the second quarter of fiscal 2008.

Non-GAAP Results

On a non-GAAP basis, net income for the second quarter of fiscal 2009 was $65.9 million, or $0.45 per share, compared to non-GAAP net income of $59.7 million, or $0.41 per share, for the second quarter of fiscal 2008. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Financial Targets

Synopsys also provided its financial targets for the third quarter and full fiscal year 2009. These targets constitute forward-looking information and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.

Third Quarter of Fiscal Year 2009 Targets:

• Revenue: $342 million - $350 million
• GAAP expenses: $284.5 million - $300 million
• Non-GAAP expenses: $261 million - $271 million
• Other income and expense: $0 - $3 million
• Tax rate applied in non-GAAP net income calculations: approximately 27 percent
• Fully diluted outstanding shares: 144 million - 149 million
• GAAP earnings per share: $0.26 - $0.31
• Non-GAAP earnings per share: $0.40 - $0.42
• Revenue from backlog: greater than 90 percent

Full-Year Fiscal Year 2009 Targets:

• Revenue: approximately $1.35 billion - $1.38 billion
• Other income and expense: $14 million - $18 million
• Tax rate applied in non-GAAP net income calculations: approximately 27 percent
• Fully diluted outstanding shares: 144 million - 149 million
• GAAP earnings per share: $1.11 - $1.26
• Non-GAAP earnings per share: $1.62 - $1.72
• Cash flow from operations: $170 million - $190 million (excludes potential impact of a tentative settlement with the Internal Revenue Service, described below)

In the second quarter, the Company reached a tentative settlement with the IRS that would resolve a dispute regarding its 2002-2004 returns, primarily associated with the acquisition of Avant!. The tentative settlement is subject to further approval by the government. If approved, we do not expect a material impact to the Company's income statement. However, we do expect it to result in a cash payment to the IRS of approximately $50 million, most likely within the next 12 months. If the tentative settlement is approved, this payment would be fully offset by tax reductions in future years.

Financial Tables

To download financial tables, click here

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m., Pacific Time. A live webcast of the call will be available at Synopsys' corporate website at http://www.synopsys.com/. A recording of the call will be available by calling +1-800-475-6701 (+1-320-365-3844 for international callers), access code 999158, beginning at 5:30 p.m. Pacific Time today. A webcast replay will also be available on the website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the third quarter fiscal 2009 in August 2009. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and chief executive officer, and Brian Beattie, chief financial officer, on its website following the call. In addition, Synopsys makes additional financial information available in a financial supplement also posted on the corporate website.

Availability of Final Financial Statements

Synopsys will include final financial statements for the second quarter in its Quarterly Report on Form 10-Q to be filed by June 11, 2009.

About Synopsys

Synopsys, Inc. (NASDAQ: SNPS) is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, intellectual property (IP) and services used in semiconductor design and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and field-programmable gate array (FPGA) solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, software-to-silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has more than 60 offices located throughout North America, Europe, Japan, Asia and India. Visit Synopsys online at http://www.synopsys.com/.