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Technology Stocks : Cadence Design Systems -- Ignore unavailable to you. Want to Upgrade?

To: Nevin S. who wrote (324)	1/27/1999 1:21:00 PM
From: Nevin S.	Read Replies (1) \| Respond to of 668

Digging further into the earnings announcement, it looks like gross margins on "products" (software sales) declined from 93.6% (qtr. ending Jan. 3, 98) to 92% in this most recent qtr. even though gross sales revenues increased 16.5% year-over-year. This may be why the stock is not showing greater strength today although techs seem to be weak overall (Intel off over 3 points as of this writing). I wonder if the decline in gross marging on software sales is due to their shift to short term leases (1-3 years) vs sales (see Lehman report). Looking at the balance sheet, shareholder equity increase by $191 MM y-over-y but with total shares outstanding increasing by approx. 14 MM (233,647 vs 219,552) per share equity went from $4.66 to $5.20. Cash and investments down near $100 MM. AR up $72 MM. PP&E up $65 MM probably reflecting acquisitions throughout the year. Anyone else get into this and have any comments?