Synopsys Reports 11.7% Higher Revenue

Q1 2013 Financial Highlights

(PRNewswire) — 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 first quarter of fiscal year 2013.

For the first quarter of fiscal year 2013, Synopsys reported revenue of $475.1 million, compared to $425.5 million for the first quarter of fiscal 2012, an increase of 11.7 percent.  

"In the first fiscal quarter of 2013 our business, technology progress, and customer engagements were strong across the board," said Aart de Geus, chairman and co-CEO of Synopsys.  "Semiconductor companies are aggressively pushing both technology and efficiency to develop differentiated products within very tight market windows, and Synopsys is a key partner in these quests. Because of our strong first fiscal quarter results, including the impact of the reinstatement of the federal R&D tax credit, and confidence in our business, we are raising our non-GAAP earnings per share target for the year."

GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal 2013 was $69.9 million, or $0.45 per share, compared to $56.7 million, or $0.39 per share, for the first quarter of fiscal 2012. Due to our fiscal calendar, the first quarter of fiscal year 2012 included an extra week.

Non-GAAP Results
On a non-GAAP basis, net income for the first quarter of fiscal 2013 was $103.0 million, or $0.67 per share, compared to non-GAAP net income of $82.3 million, or $0.56 per share, for the first quarter of fiscal 2012. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release. Due to our fiscal calendar, the first quarter of fiscal year 2012 included an extra week. 

Fiscal first quarter GAAP and non-GAAP results included the impact of the reinstatement of the federal R&D tax credit for 2012 and 2013. The fiscal first quarter results include a retroactive benefit of $6 million for fiscal year 2012, as well as a $2 million current quarter impact.

Financial Targets
Synopsys also provided its financial targets for the second quarter and full fiscal year 2013.  These targets do not include any impact of future acquisition-related activities. 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. 

Second Quarter of Fiscal Year 2013 Targets:

  • Revenue: $490 million - $500 million
  • GAAP expenses: $409 million - $425 million
  • Non-GAAP expenses: $362 million - $372 million
  • Other income and expense: ($1) million - $1 million
  • Tax rate applied in non-GAAP net income calculations: 24 - 25 percent
  • Fully diluted outstanding shares: 154 million - 158 million
  • GAAP earnings per share: $0.38- $0.44
  • Non-GAAP earnings per share: $0.63 - $0.65
  • Revenue from backlog: approximately 90 percent

Full Fiscal Year 2013 Targets:

  • Revenue: $1.955 billion - $1.975 billion
  • Other income and expense: $1 million - $5 million
  • Tax rate applied in non-GAAP net income calculations: approximately 23 percent
  • Fully diluted outstanding shares: 155 million - 159 million
  • GAAP earnings per share: $1.44 - $1.56
  • Non-GAAP earnings per share: $2.35 - $2.40
  • Cash flow from operations: at least $350 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 charges 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 First 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 First Quarter Fiscal Year 2013 Results

(unaudited and in thousands, except per share amounts)






Three Months Ended


January 31,


2013


2012

GAAP net income

$   69,922


$ 56,694

Adjustments:




Amortization of intangible assets

32,403


16,909

Stock compensation

17,701


16,248

Acquisition-related costs

1,836


1,235

Inventory fair value adjustment

1,809


-

Facility restructuring charges

(272)


470

Tax adjustments

(20,432)


(9,226)

Non-GAAP net income 

$ 102,967


$ 82,330














Three Months Ended


January 31,


2013


2012

GAAP net income per share

$       0.45


$     0.39

Adjustments:




Amortization of intangible assets

0.21


0.11

Stock compensation

0.12


0.11

Acquisition-related costs

0.01


0.01

Inventory fair value adjustment

0.01


-

Facility restructuring charges

(0.00)


0.00

Tax adjustments

(0.13)


(0.06)

Non-GAAP net income per share

$       0.67


$     0.56





Shares used in calculation

154,531


147,113


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