Cadence Reports Q1 2011 Financial Results

SAN JOSE, Calif. , 27 Apr 2011

Click here for the Q1 2011 Financial Schedules.

Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the first quarter of fiscal year 2011.

Cadence reported first quarter 2011 revenue of $266 million, compared to revenue of $222 million reported for the same period in 2010. On a GAAP basis, Cadence recognized net income of $6 million, or $0.02 per share on a diluted basis in the first quarter of 2011, compared to a net loss of $12 million, or $(0.04) per share on a diluted basis, in the same period in 2010.

Using Cadence’s non-GAAP measure, net income in the first quarter of 2011 was $23 million, or $0.09 per share on a diluted basis, as compared to net income of $6 million, or $0.02 per share on a diluted basis, in the same period in 2010.

“Demand was strong for our products and services across all regions in the first quarter,” said Lip-Bu Tan, president and chief executive officer. “Demand for the Cadence Verification Computing Platform continued to be strong. We also introduced the industry’s first complete DDR4 memory controller solution, and saw strong renewals and increasing run rates in our Silicon Realization products.”

“We met or exceeded expectations for our key operating metrics in Q1,” added Geoff Ribar, senior vice president and chief financial officer. “The continuing momentum in our business gives us the confidence to increase our outlook for fiscal 2011.”

The company also announced today that Charlie Huang, currently senior vice president and chief strategy officer, has been appointed senior vice president, worldwide field operations, effective immediately. Tom Cooley, who previously held that role, is leaving the company. “I want to thank Tom for his many years of significant contributions and dedication to Cadence,” said Lip-Bu Tan. “Most notable among his accomplishments were leading a successful transition to a highly ratable business model and building a world class sales team.”

Mr. Tan continued, “I am pleased that Charlie Huang, an EDA veteran with deep technical expertise and a successful track record, will be leading our field organization. Charlie led the development of our strategy and is well positioned to further develop highly collaborative technology-based relationships with customers and partners. I am excited to have Charlie take on this new role.”

Mr. Huang has served as senior vice president and chief strategy officer of Cadence since January 2009. Since April 2010, he has also served as chief of staff. From 2007 to 2009, he served as senior vice president of business development. Mr. Huang was general partner at Telos Venture Partners, a Cadence-affiliated venture capital firm, from 2004 to 2005. From 2001 to 2007, he held several positions at Cadence in engineering management and business development. Before joining Cadence, Mr. Huang co-founded and was chief executive officer of CadMOS Design Technology, Inc., an EDA company that was acquired by Cadence in 2001.

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 or net loss, which excludes, as applicable, amortization of intangible assets, stock-based compensation expense, integration and acquisition-related costs, acquisition-related income tax benefits, income tax benefits related to the settlement of an IRS examination, shareholder litigation costs and charges, gains or losses and expenses or credits related to non-qualified deferred compensation plan assets, executive 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 or net loss 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.

Business Outlook

For the second quarter of 2011, the company expects total revenue in the range of $270 million to $280 million. Second quarter GAAP net income per diluted share is expected to be in the range of $0.04 to $0.06. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.09 to $0.11.

For the full year 2011, the company expects total revenue in the range of $1,075 million to $1,115 million. On a GAAP basis, net income per diluted share for fiscal year 2011 is expected to be in the range of $0.11 to $0.19. Using the non-GAAP measure defined below, net income per diluted share for fiscal year 2011 is expected to be in the range of $0.36 to $0.44.

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.

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 first quarter of fiscal year 2011 financial results audio webcast today, April 27, 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 April 27, 2011 at 5 p.m. (Pacific) and ending May 11, 2011 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

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. 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.