Revenue for the quarter ended June 30, 2007 was $16.8 million. This compares to the $15.4 million of revenue reported for the quarter ended June 30, 2006. On a generally accepted accounting principles (GAAP) basis, net income was $641,000, or $0.02 per diluted share, for the quarter ended June 30, 2007, as compared to a GAAP net income of $1.1 million, or $0.04 per diluted share, for the quarter ended June 30, 2006. For the quarter ended June 30, 2007, GAAP net income included non-cash charges of $430,000 of intangible amortization expense from acquisitions and $814,000 of stock-based compensation expense. In addition, the 2007 quarter included expenses associated with the sale of HARDI products, HARDI personnel costs and expenses related to a combination of non-recurring charges and the costs of the DAC tradeshow which occurred in the June quarter of 2007 but in the September quarter of 2006. For the quarter ended June 30, 2006, GAAP net income included $222,000 of intangible amortization expense from acquisitions and $935,000 of stock-based compensation expense.
For the six months ended June 30, 2007, revenue was $31.7 million, compared to revenue of $29.9 million for the six months ended June 30, 2006. For the six months ended June 30, 2007, the Company reported GAAP net income of $1.3 million, or $0.05 per diluted share. Included in GAAP net income for the six month period ended June 30, 2007 were non-cash charges of $678,000 of intangible amortization expense from acquisitions and $1.7 million of stock-based compensation expense. For the six months ended June 30, 2006, the Company reported a GAAP net loss of $63,000, or $(0.00) per diluted share. The loss included $445,000 of intangible amortization expense from acquisitions, $1.9 million of stock-based compensation and a restructuring charge of $854,000.
"This was an exciting quarter for Synplicity as we completed the acquisition of HARDI Electronics, expanded our market share in FPGA implementation with strong Synplify Premier sales, introduced the ASIC edition of Synplify DSP, announced our Identify Pro product as part of our Confirma(TM) platform for ASIC verification, and formed a new partnership with Synopsys, all while delivering solid revenue growth," said Gary Meyers, the Company's president and CEO. "The remainder of 2007 will see continued revenue growth and the rollout of new products paving the way for a strong 2008," concluded Meyers.
Business Outlook
The following statements are based on current expectations. This guidance reflects the acquisition of HARDI Electronics AB in June 2007. We do not intend to update, confirm or change this guidance until our earnings conference call for the third quarter of 2007.
-- Revenue for 2007 is expected to be in the range of $70.0 to $72.0 million, an increase from prior guidance.
-- GAAP net income per fully diluted share for 2007 is expected to be in the range of $0.13 to $0.15, reflecting the increase in intangible amortization expense resulting from the HARDI acquisition. GAAP net income is expected to include non-cash charges of approximately $3.5 million relating to stock compensation expense and $2.5 million of intangible amortization expense from acquisitions. Tax expense for 2007 is expected to be about 32% percent of pretax GAAP income.
-- Revenue for the third quarter of 2007 is expected to be in the range of $19.0 to $19.5 million.
-- GAAP net income per fully diluted share for the third quarter of 2007 is expected to be in the range of $0.03 to $0.05. GAAP net income for the quarter is expected to include non-cash charges of approximately $850,000 relating to stock-based compensation and $941,000 of amortization expense from acquisitions.
Audio Webcast
The Company's earnings call will be webcast today at 2:00 p.m. Pacific, and may be accessed at investor.synplicity.com The Company will discuss its second quarter 2007 results. Following completion of the call, a rebroadcast of the webcast will be available at investor.synplicity.com through September 30, 2007. For those without access to the Internet, a replay of the call will be available from 5:00 p.m. Pacific on August 1, 2007 through August 15, 2007. To listen to a replay, call (719) 457-0820, access code 5178174.
About Synplicity
Synplicity(R), Inc. (Nasdaq: SYNP) is a leading supplier of innovative IC design and verification solutions that serve a wide range of communications, military/aerospace, consumer, semiconductor, computer, and other electronic systems markets. Synplicity's tools provide outstanding performance, cost and time-to-market benefits by simplifying, improving and automating design planning, logic synthesis and physical synthesis for FPGA and DSP designs, as well as at-speed verification and prototyping for ASIC & ASSP designs. Synplicity is the number one supplier of FPGA synthesis solutions and has been rated #1 in customer satisfaction since 2004 in EE Times' Annual FPGA Customer Survey. Synplicity products support industry-standard design languages (VHDL and Verilog) and run on popular platforms. The company operates in over 20 facilities worldwide and is headquartered in Sunnyvale, California. For more information visit http://www.synplicity.com.
Forward-Looking Statements
This press release contains forward-looking statements including, but not limited to, statements regarding the Company's execution and results, the benefits of our acquisition of HARDI AB, the release of our products and upgrades, revenue, the estimated net income, net income per share, non-cash charges, the effective tax rate and certain expenses for 2007 and our expected growth in 2008. These statements relate to future events and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual financial results, levels of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements including continued demand for the Company's FPGA products, the Company's ability to increase revenue from its FPGA products, the integration of HARDI and its products as well as employee retention. For additional information and considerations regarding the risks faced by the Company, see its annual report on Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission, as well as other periodic reports filed with the SEC from time to time. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. In addition, neither the Company nor any other person assumes responsibility for the accuracy or completeness of these forward-looking statements. The Company disclaims any obligation to update information contained in any forward-looking statement.
Synplicity, Synplify and Identify are registered trademarks of Synplicity, Inc. All other brands or products are the trademarks or registered trademarks of their owners.
SYNPLICITY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2007 2006 (1)
------------- ------------
(unaudited)
Assets:
Current assets:
Cash and cash equivalents and short-term
investments $ 45,365 $ 65,397
Accounts receivable, net 11,764 10,323
Inventories 975 -
Prepaid expenses(2) 1,864 1,314
Other current assets(2) 894 915
------------- ------------
Total current assets 60,862 77,949
Restricted cash 5,401 -
Property and equipment, net 2,889 2,390
Goodwill 8,554 1,272
Intangible assets, net 12,027 1,035
Other assets 1,195 1,163
------------- ------------
Total assets $ 90,928 $ 83,809
============= ============
Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable $ 1,682 $ 1,299
Accrued liabilities 2,007 1,537
Accrued compensation(2) 4,374 4,360
Deferred revenue 18,916 18,409
------------- ------------
Total current liabilities 26,979 25,605
Other liabilities(2) 192 89
Deferred income taxes 3,561 -
Shareholders' equity:
Common stock(2) 63,498 62,699
Accumulated deficit (2,960) (4,255)
Accumulated other comprehensive loss (342) (329)
------------- ------------
Total shareholders' equity 60,196 58,115
------------- ------------
Total liabilities and
shareholders' equity $ 90,928 $ 83,809
============= ============
(1) Derived from audited financial statements.
(2) Amounts reported for 2006 have been reclassified to conform to the
current period presentation.
SYNPLICITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------
2007 2006 2007 2006
------- ------- ------- --------
Revenue:
License and systems $ 5,591 $ 4,357 $ 9,475 $ 7,447
Maintenance 6,879 6,766 13,496 13,456
Bundled license and services 4,283 4,264 8,681 8,953
------- ------- ------- --------
Total revenue 16,753 15,387 31,652 29,856
Cost of revenue:(3)
Cost of license and systems 399 21 429 35
Cost of maintenance 428 404 810 883
Cost of bundled license and
services 98 81 193 229
Amortization of intangible assets 382 222 630 445
------- ------- ------- --------
Total cost of revenue 1,307 728 2,062 1,592
------- ------- ------- --------
Gross profit 15,446 14,659 29,590 28,264
Operating expenses:(3)
Research and development 6,006 5,904 11,796 12,477
Sales and marketing 7,003 6,019 13,249 12,350
General and administrative 2,202 1,862 4,261 3,986
Amortization of intangible assets
from acquisition 48 - 48 -
Restructuring charge - - - 854
------- ------- ------- --------
Total operating expenses 15,259 13,785 29,354 29,667
------- ------- ------- --------
Income (loss) from operations 187 874 236 (1,403)
Other income, net 756 699 1,669 1,317
------- ------- ------- --------
Income (loss) before income taxes 943 1,573 1,905 (86)
Income tax provision (benefit) 302 458 610 (23)
------- ------- ------- --------
Net income (loss) $ 641 $ 1,115 $ 1,295 $ (63)
======= ======= ======= ========
Net income (loss) per share:
Basic and diluted net income
(loss) per share $ 0.02 $ 0.04 $ 0.05 $ (0.00)
======= ======= ======= ========
Shares used in basic per share
calculation 26,752 26,950 26,736 26,983
======= ======= ======= ========
Shares used in diluted per share
calculation 27,789 27,755 27,734 26,983
======= ======= ======= ========
(3) Amortization of stock-based compensation expense relates to the
following:
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2007 2006 2007 2006
--------- --------- -------- --------
Cost of maintenance $ 21 $ 25 $ 44 $ 48
Research and development 353 437 747 890
Sales and marketing 224 244 457 482
General and administrative 216 229 445 475
Contact:
Synplicity, Inc.
John J. Hanlon, 408-215-6000 (Investor Relations)
Email Contact
or
Tsantes
Consulting Group
Nancy Sheffield, 408-410-9928 (Public Relations)
Email Contact