SAN JOSE, CA -- (MARKET WIRE) -- Feb 02, 2011 -- Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the fourth quarter and fiscal year 2010.
Cadence reported fourth quarter 2010 revenue of $249 million, compared to revenue of $220 million reported for the same period in 2009. On a GAAP basis, Cadence recognized a net loss of $21 million, or $(0.08) per share on a diluted basis in the fourth quarter of 2010, compared to a net income of $2 million, or $0.01 per share on a diluted basis, in the same period in 2009. Revenue for fiscal year 2010 totaled $936 million, compared to revenue of $853 million in fiscal year 2009. Net income for fiscal year 2010 was $142 million, or $0.54 per share on a diluted basis, compared to a net loss of $150 million or $(0.58) per share on a diluted basis for fiscal year 2009. The GAAP net income for fiscal year 2010 included a $148 million income tax benefit related to the settlement of an Internal Revenue Service examination of Cadence's federal income tax returns for the tax years 2000 through 2002 and a $67 million acquisition-related income tax benefit.
Using Cadence's non-GAAP measure, net income in the fourth quarter of 2010 was $18 million, or $0.07 per share on a diluted basis, as compared to net income of $15 million, or $0.06 per share on a diluted basis, in the same period in 2009. For fiscal year 2010, non-GAAP net income was $53 million, or $0.20 per share on a diluted basis, compared to non-GAAP net loss of $16 million or $(0.06) per share on a diluted basis in fiscal year 2009.
"The Cadence team delivered a strong performance in the fourth quarter. Revenue, operating margin and cash flow all improved in the period and fiscal year 2010. Throughout the year, we strengthened key customer and partner relationships by demonstrating our technology leadership and delivering superior solutions to their complex challenges," said Lip-Bu Tan, president and chief executive officer. "We remain laser-focused on executing our strategy and achieving our long-term objectives. We are entering 2011 with good customer momentum, and a strong pipeline of technology across System, SoC, and Silicon Realization that deliver on our EDA360 vision."
"Cadence capped a successful 2010 with a strong fourth quarter. We made significant improvements in all of our key operating metrics in 2010," added Geoff Ribar, senior vice president and chief financial officer. "As you can see from our outlook, we expect further growth in business levels and improvement in profitability in 2011."
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 settlement of an IRS examination, shareholder litigation costs, 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.
For the first quarter of 2011, the company expects total revenue in the range of $255 million to $265 million. First quarter GAAP net loss per diluted share is expected to be in the range of $(0.02) to $0.00. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.06 to $0.08.
For the full year 2011, the company expects total revenue in the range of $1,030 million to $1,070 million. On a GAAP basis, net income per diluted share for fiscal year 2011 is expected to be in the range of $0.00 to $0.10. Using the non-GAAP measure defined below, net income per diluted share for fiscal year 2011 is expected to be in the range of $0.30 to $0.40.
A schedule showing a reconciliation of the business outlook from GAAP net income or net loss and diluted net income or net loss 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 fourth quarter and fiscal year 2010 financial results audio webcast today, February 2, 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 February 2, 2011 at 5 p.m. (Pacific) and ending February 16, 2011 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations.
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, Calif., 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.
Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
The statements contained above regarding Cadence's fourth quarter and fiscal year 2010 results, as well as the information in the Business Outlook section and the statements by Lip-Bu Tan and Geoff Ribar, include forward-looking statements based on current expectations or beliefs, as well as a number of preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) Cadence's ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) Cadence's ability to successfully complete and realize the expected benefits of its restructurings without significant unexpected costs or delays, and the success of Cadence's other efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence's products, and its shift to a ratable license structure, which may result in changes in the mix of license types; (iv) change in customer demands, including the possibility that restructurings and other efforts to improve operational efficiency could result in delays in customers' purchases of products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires; (ix) the effects of restructurings and other efforts to improve operational efficiency on Cadence's business, including its strategic and customer relationships, ability to retain key employees and stock prices; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.
For a detailed discussion of these and other cautionary statements related to our business, please refer to Cadence's filings with the Securities and Exchange Commission. These include Cadence's Annual Report on Form 10-K for the year ended January 2, 2010, Cadence's Quarterly Report on Form 10-Q for the period ended October 2, 2010 and Cadence's future filings.