Synopsys Posts Financial Results for Third Quarter Fiscal Year 2013

MOUNTAIN VIEW, Calif., Aug. 21, 2013 -- Synopsys, Inc. (Nasdaq: SNPS), a global leader providing software, IP and services used to accelerate innovation in chips and electronic systems, today reported results for its third quarter of fiscal year 2013.

For the third quarter of fiscal year 2013, Synopsys reported revenue of $482.9 million, compared to $443.7 million for the third quarter of fiscal year 2012, an increase of 8.8 percent.

"Synopsys continues to demonstrate broad strength and innovation in technology and customer relationships, as well as excellent execution and financial results," said Aart de Geus, chairman and co-CEO of Synopsys.  "While our customers are dealing with yet another quarter of a relatively weak global economy, many have a sharp focus on new technology and continue to aggressively drive design activity.  The result is high demand for advanced tools and IP, areas in which we continue to lead and have a track record of excellence."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2013 was $52.3 million, or $0.33 per share, compared to $75.7 million, or $0.50 per share, for the third quarter of fiscal year 2012.

Non-GAAP Results

On a non-GAAP basis, net income for the third quarter of fiscal year 2013 was $86.5 million, or $0.55 per share, compared to non-GAAP net income of $82.3 million, or $0.55 per share, for the third quarter of fiscal year 2012.

Financial Targets

Synopsys also provided its financial targets for the fourth quarter and full fiscal year 2013.  These targets do not include any future acquisition-related expenses that may be incurred in fiscal year 2013.  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.

Fourth Quarter of Fiscal Year 2013 Targets:

• Revenue: $500 million - $510 million
• GAAP expenses: $432 million - $449 million
• Non-GAAP expenses: $386 million - $396 million
• Other income and expense: ($1) million - $1 million
• Tax rate applied in non-GAAP net income calculations: 23 percent - 24 percent
• Fully diluted outstanding shares: 155 million - 159 million
• GAAP earnings per share: $0.29 - $0.35
• Non-GAAP earnings per share: $0.54 - $0.56

Full Fiscal Year 2013 Targets:

• Revenue: $1.957 billion - $1.967 billion
• Other income and expense: $8 million - $10 million
• Tax rate applied in non-GAAP net income calculations: approximately 22 percent
• Fully diluted outstanding shares: 155 million - 159 million
• GAAP earnings per share: $1.51- $1.57
• Non-GAAP earnings per share: $2.42 - $2.44
• Cash flow from operations: approximately $400 million

GAAP Reconciliation

Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures.  Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes.  Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.  Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, including inventory fair value adjustments, (iv) other significant items, including facilities restructuring and the effect of benefits from tax settlements with tax authorities, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods.  Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure.  Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed below.

Reconciliation of Third Quarter Fiscal Year 2013 Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income and earnings per share for the periods indicated below.

GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2013 Results
(Unaudited and in thousands, except per share amounts)

The following tables reconcile the specific items excluded from GAAP in the calculation of target non-GAAP operating results for the periods indicated below.

GAAP to Non-GAAP Reconciliation of Fourth Quarter Fiscal Year 2013 Targets
(in thousands, except per share amounts)

 GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2013 Targets

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 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 299801, beginning at 4:00 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 fourth quarter and fiscal year 2013 in December 2013.  Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and co-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.

Effectiveness of Information

The targets included in this release, the statements made during the earnings conference call and the information contained in the financial supplement (available in the Investor Relations section of Synopsys' website at www.synopsys.com) represent Synopsys' expectations and beliefs as of the date of this release only.  Although this press release, copies of the prepared remarks of the co-chief executive officer and chief financial officer made during the call, and the financial supplement will remain available on Synopsys' website through the date of the fourth quarter and fiscal year 2013 earnings call in December 2013, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity.  Synopsys does not currently intend to report on its progress during the fourth quarter of fiscal 2013 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release.

Availability of Final Financial Statements

Synopsys will include final financial statements for the third quarter fiscal 2013 in its quarterly report on Form 10-Q to be filed by September 12, 2013.

Financial Tables

To read financial tables, click here

About Synopsys

Synopsys, Inc. (Nasdaq:SNPS) accelerates innovation in the global electronics market. As a leader in electronic design automation (EDA) and semiconductor IP, its software, IP and services help engineers address their design, verification, system and manufacturing challenges. Since 1986, engineers around the world have been using Synopsys technology to design and create billions of chips and systems. Learn more at http://www.synopsys.com.

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