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Cadence Announces Second Quarter 1998 Results
Record Revenue Highlights Another Strong Quarter
SAN JOSE, Calif., July 22 /PRNewswire/ -- Cadence Design Systems, Inc. (NYSE: CDN - news)today announced record revenue and strong operating results for the second
quarter of 1998. For comparative purposes, except where noted, the results discussed throughout this release exclude the effects of unusual items recorded in the second
quarter of 1997.
Revenue of $291.8 million for the second quarter increased 39% compared to the prior year quarter while diluted earnings per share of $0.28 increased 33%. Software product
revenue for the second quarter was up 39% from the prior year quarter to $162.5 million, while services revenue increased 63% to $64.7 million for the quarter. Maintenance
revenue for the second quarter was up 19% from the prior year quarter to $64.5 million.
Cadence saw strong revenue growth across its product line portfolio. Place and route product revenue for the quarter grew over 60% compared to the prior year second quarter
led by Silicon Ensemble(TM) DSM which experienced revenue growth of over 100%. Design planning products also experienced significant revenue growth for the quarter as
customers increasingly incorporate the use of design planning products in combination with Silicon Ensemble DSM and IC Craftsman (R) for the physical implementation of
system-on-a-chip (SOC) designs. The Company's Custom IC business unit experienced strong revenue growth in physical verification, mixed signal and physical design as the
shift to .25 micron designs continue. During the quarter, the Company closed several large volume deals that involved a combination of tools and services, demonstrating the
continued synergy the Company is achieving between those two businesses.
''Cadence continues to execute extremely well across all aspects of our business despite uncertainty in some market segments,'' said Jack Harding, president and CEO of
Cadence. ''Our technology portfolio continues to grow with leading-edge capabilities for SOC design, our services capacity is expanding, and our internal infrastructures
continue to be fine-tuned to deliver optimal performance throughout the Company.''
The second quarter was highlighted by Cadence's presence at the Design Automation Conference (DAC), the annual event for electronic design automation (EDA) suppliers.
Cadence used the occasion of DAC to introduce several new pieces of technology, including a formal verification tool incubated over the past several years at its Cadence Labs
operation, and advance packaging technology that bridges the IC and high-speed printed circuit board worlds. Cadence also announced its expansion into the embedded
software design market with the introduction of new capacity in its services organization to perform embedded software design for its customers.
Cadence also continued to leverage its position as the supplier of the broadest set of EDA technology by refining advanced methodologies for chip and system design. Tighter
and more efficient integration of individual tools to form smoother flows of design technology give Cadence a strong competitive advantage in solving complex design
challenges.
Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve risks and uncertainties. Risks
about the Company's business are detailed from time to time in the Company's SEC reports, including the reports on Form 10-K for the year ended January 3, 1998 and Form
10-Q for the quarter ended April 4, 1998.
About Cadence
Cadence Design Systems, Inc. provides comprehensive services and software for the product development requirements of the world's leading electronics companies. Cadence
is the largest supplier of software products, consulting services, and design services used to accelerate and manage the design of semiconductors, computer systems,
networking and telecommunications equipment, consumer electronics, and a variety of other electronic-based products. With more than 4,000 employees and 1997 annual sales
of $916 million, Cadence has sales offices, design centers, and research facilities around the world. The Company is headquartered in San Jose, Calif. and traded on the New
York Stock Exchange under the symbol CDN. More information about the Company and its products and services may be obtained from the World Wide Web at
cadence.com.
NOTE: Cadence and IC Craftsman are registered trademarks, and the Cadence logo and Silicon Ensemble are trademarks of Cadence Design Systems, Inc. All others are
properties of their holders.
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
July 4, 1998 and January 3, 1998
(in 000's)
July 4, January 3,
1998 1998
(Unaudited)
Cash and Short Term Investments $260,740 $304,204
Accounts Receivable, Net 230,565 205,006
Other Current Assets 79,854 99,849
Total Current Assets 571,159 609,059
Property & Equipment, Net 230,421 197,421
Software Development Costs, Net 14,050 15,068
Purchased Software & Other Intangibles, Net 31,546 10,117
Installment Contract Receivables 103,966 61,326
Other Assets 135,042 130,859
Total Assets $1,086,184 $1,023,850
Current Portion of Long-Term Debt $802 $794
Accounts Payable and Accrued Liabilities 148,367 156,426
Income Taxes Payable 8,710 5,161
Deferred Revenue 104,256 106,414
Total Current Liabilities 262,135 268,795
Long-Term Debt 1,048 1,599
Minority Interest 196 121
Other Non-Current Liabilities 33,529 26,238
Stockholders' Equity 789,276 727,097
Total Liabilities & Stockholders' Equity $1,086,184 $1,023,850
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Income
For the Quarters and Six Months Ended July 4, 1998 and June 28, 1997
(in 000's, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
Revenue:
Product Revenue $162,547 $116,540 316,596 218,863
Services Revenue 64,727 39,614 117,029 73,368
Maintenance Revenue 64,514 54,312 128,386 105,784
Total Revenue 291,788 210,466 562,011 398,015
Costs and Expenses:
Cost of Product 12,374 10,090 24,711 19,043
Cost of Services 48,351 27,868 88,005 52,062
Cost of Maintenance 10,188 5,634 20,531 11,386
Marketing and Sales 71,366 59,689 140,611 114,858
Research and Development 42,961 33,799 84,668 65,052
General and Administrative 16,303 13,638 32,824 25,842
Unusual Items -- 22,366 85,957 34,114
Total Costs and Expenses 201,543 173,084 477,307 322,357 Income From Operations 90,245 37,382 84,704 75,658 Other Income, Net 2,576 3,255 5,195 18,011 Income Before
Provision
for Income Taxes 92,821 40,637 89,899 93,669
Provision for Income Taxes 26,454 12,191 48,991 28,101
Net Income $66,367 $28,446 $40,908 $65,568
Basic Net Income Per Share $0.31 $0.15 $0.19 $0.36
Diluted Net Income Per Share $0.28 $0.13 $0.17 $0.32
Weighted Average Common
Shares Outstanding 212,210 191,194 211,112 183,564
Weighted Average Common
and Potential Common Shares
Outstanding -- Assuming
Dilution 236,205 213,732 235,601 206,643
Supplemental Diluted Earnings
Per Share Before Unusual Items $0.28 $0.21 $0.53 $0.43
Cadence Design Systems, Inc.
Supplemental Condensed Consolidated Statements of Income
Excluding Unusual Items
For the Quarters Ended July 4, 1998 and June 28, 1997
(in 000's, except per share amounts)
(Unaudited)
Supplemental
Quarter Ended
July 4, June 28,
1998 1997 % Change Revenue:
Product Revenue $162,547 $116,540 39%
Services Revenue 64,727 39,614 63%
Maintenance Revenue 64,514 54,312 19%
Total Revenue 291,788 210,466 39% Costs and Expenses:
Cost of Product 12,374 10,090 23%
Cost of Services 48,351 27,868 74%
Cost of Maintenance 10,188 5,634 81%
Marketing and Sales 71,366 59,689 20%
Research and Development 42,961 33,799 27%
General and Administrative 16,303 13,638 20%
Total Costs and Expenses 201,543 150,718 34% Income From Operations 90,245 59,748 51% Other Income, Net 2,576 3,255 -21% Income Before Provision for
Income Taxes 92,821 63,003 47%
Provision for Income Taxes 26,454 18,901 40%
Net Income $66,367 $44,102 50%
Diluted Net Income Per Share $0.28 $0.21 33%
Weighted Average Common and
Potential Common Shares
Outstanding -- Assuming Dilution 236,205 213,732 11%
SOURCE: Cadence Design Systems, Inc. |
