Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OtAQTfoDjUthK5ZjsIXoEgkAKalzWXb7k+/Ps9gVDswg0t0TBlEqhTM9zf/cova3 tGO7pI/XbHeSXnuE9WKeLg== 0000891618-03-001847.txt : 20030415 0000891618-03-001847.hdr.sgml : 20030415 20030415161658 ACCESSION NUMBER: 0000891618-03-001847 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030415 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CADENCE DESIGN SYSTEMS INC CENTRAL INDEX KEY: 0000813672 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 770148231 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10606 FILM NUMBER: 03650739 BUSINESS ADDRESS: STREET 1: 2655 SEELY ROAD BLDG 5 CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4089431234 MAIL ADDRESS: STREET 1: 555 RIVER OAKS PARKWAY CITY: SAN JOSE STATE: CA ZIP: 95134 FORMER COMPANY: FORMER CONFORMED NAME: ECAD INC /DE/ DATE OF NAME CHANGE: 19880609 8-K 1 f89276e8vk.htm FORM 8-K Form 8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): April 15, 2003

CADENCE DESIGN SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)


DELAWARE (State or Other Jurisdiction of Incorporation)		1-10606 (Commission File Number)		77-0148231 (IRS Employer Identification No.)

2655 SEELY AVENUE, BUILDING 5
SAN JOSE, CALIFORNIA 95134

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (408) 943-1234

Item 9. Regulation FD Disclosure

The following information is furnished pursuant to Item 9, Regulation FD Disclosure and Item 12, Disclosure of Results of Operations and Financial Condition.

On April 15, 2003, Cadence Design Systems, Inc. (“Cadence”) issued a press release announcing its financial results for the first quarter of 2003. A copy of the press release is attached hereto as Exhibit 99.1. The press release includes discussions of Cadence’s earnings per share on an adjusted pro forma basis (a non-GAAP financial measure), both on a historical basis and forward looking basis. Cadence calculates pro forma earnings per share by excluding amortization of acquired intangibles, amortization of deferred stock compensation, and unusual items. Cadence believes that excluding amortization of acquired intangibles and deferred stock compensation, write-offs of acquired in process technology and unusual items provides investors with a representation of the Company’s core performance, and a pro forma base line for assessing the future earnings potential of the company.

The following exhibits are filed with this report on Form 8-K.


Exhibit No.		Description

99.1		Press Release issued by Cadence Design Systems, Inc., dated April 15, 2003.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Dated as of April 15, 2003

	CADENCE DESIGN SYSTEMS, INC.

	By:	/s/ William Porter

		William Porter
		Senior Vice President and
		Chief Financial Officer

EXHIBIT INDEX


Exhibit No.		Description

99.1		Press Release issued by Cadence Design Systems, Inc., dated April 15, 2003.

4 EX-99.1 3 f89276exv99w1.txt EXHIBIT 99.1 Exhibit 99.1 Investors and Shareholders: Media and Industry Analysts: - -------------------------- --------------------------- Alan Lindstrom Jenny Gispen-Schultz Cadence Design Systems, Inc. Cadence Design Systems, Inc. 408-944-7100 408-944-7280 investor_relations@cadence.com jennyg@cadence.com CADENCE REPORTS FIRST QUARTER RESULTS SAN JOSE, Calif. -- April 15, 2003 -- Cadence Design Systems, Inc. (NYSE: CDN) today announced total revenue for the first quarter of 2003 of $256 million, with subscriptions licenses approximately 82 percent of software product bookings. Pro forma diluted earnings per share were $0.04. Including amortization of acquired intangibles and deferred stock compensation, and write-offs of acquired in-process technology, on a GAAP basis the quarter's results were a loss per share of $0.07. A reconciliation of GAAP to pro forma earnings is included with this press release. "We executed against our targets in one of the toughest business climates on record and within the guidance we presented last quarter," said Ray Bingham, Cadence president and chief executive officer. "We will continue to execute with the financial discipline needed to respond to market dynamics when the market improves." BUSINESS HIGHLIGHTS The company continued to see adoption of the Cadence Encounter platform for digital IC design and early market acceptance of the Cadence Incisive(TM) verification platform, both of which are targeted at customers' most pressing technical needs. As a result of sales of the Incisive verification platform, Cadence also saw record sales of its emulation products. "Our platform approach and our solutions, which address both digital and analog design, are enabling us to take share," said Bingham. "We delivered our new Incisive verification platform to early market success, and we continue to grow and acquire technologies that will give customers a clear path beyond legacy tools. Ours is the most complete technology design portfolio in the world, and now it's the most advanced as well." The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the impact of any mergers, acquisitions or other business combinations that may be completed after March 31, 2003. Page 1 of 4 BUSINESS OUTLOOK Subscriptions are expected to make up 80 to 90 percent of software product bookings for the year. For Q2, the company expects total revenue in the range of $265 to $275 and 65-70 percent of software product revenue from ratable backlog. Pro forma EPS is expected to be in the range of 9 to 10 cents, with GAAP EPS in the range of 0 to 1 cent. For the full year 2003, Pro forma EPS is expected to be in the range of 50 to 55 cents. GAAP EPS is expected to be in the range of 12 to 17 cents. A schedule showing a reconciliation of the business outlook for GAAP to pro forma EPS is included with this release. AUDIO WEBCAST SCHEDULED Cadence Design Systems, Inc.'s Ray Bingham, chief executive officer, and Bill Porter, chief financial officer, will host a first-quarter Financial Results Audio webcast today, April 15, 2003, at 1:45 p.m. (Pacific) / 4:45 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 April 15 at 5:00 p.m. Pacific time and ending at 5:00 p.m. on April 22. Webcast access is available at HTTP://WWW.CADENCE.COM/COMPANY/INVESTOR_RELATIONS ABOUT CADENCE Cadence is the largest supplier of electronic design technologies, methodology services, and design services. Cadence solutions are used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications equipment, consumer electronics, and a variety of other electronics-based products. With approximately 5200 employees and 2002 revenues of approximately $1.3 billion, 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, its products and services is available at www.cadence.com. Cadence and the Cadence logo are registered trademarks, and Incisive is a trademark of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners. Page 2 of 4 The statements contained above regarding the company's first-quarter 2003 results, those contained in the Business Outlook section above and the statements by Ray Bingham are 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 uncertainties and other factors, many of which are outside the control of Cadence, including, among others: Cadence's ability to compete successfully in the design automation product and the commercial electronic design and methodology services industries; the mix of products and services sold and the timing of significant orders for its products; recent economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries; and the acquisition of other companies or the failure to successfully integrate them. For a detailed discussion of these and other cautionary statements, please refer to the company's filings with the Securities and Exchange Commission. These include the company's Annual Report on Form 10-K for the year ended December 28, 2002. In the calculation of the company's pro forma earnings, Cadence excludes certain items such as amortization of acquired intangibles, amortization of deferred stock compensation and write-off of in-process R&D from acquisitions. Also excluded are non-operating and non-recurring items such as unusual items and restructure expenses/asset impairments. Cadence believes that excluding amortization of acquired intangibles and deferred stock compensation, write-offs of acquired in process technology and unusual items provides investors with a representation of the Company's core performance, and a pro forma base line for assessing the future earnings potential of the company. Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings Cadence may reiterate the Business Outlook published in this press release. At the same time, Cadence will keep this press release, including the outlook, publicly available on its Web site (www.cadence.com/company/investor_relations/index.html). Prior to the start of the Quiet Period (described below), the public can continue to rely on the Business Outlook herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise. Page 3 of 4 Beginning June 16, 2003, Cadence will observe a "Quiet Period" during which the Business Outlook as provided in this press release and the company's most recent quarterly report on Form 10-Q no longer constitute the company's current expectations. During the Quiet Period, the Business Outlook in these documents should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the company. During the Quiet Period, Cadence representatives will not comment concerning the outlook or Cadence's financial results or expectations. The Quiet Period will extend until the day when Cadence's next quarterly Earnings Release is published, currently scheduled for July 15, 2003. # # # Page 4 of 4 CADENCE DESIGN SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 29, 2003 AND DECEMBER 28, 2002 (IN $000'S)
MARCH 29, 2003 DECEMBER 28, 2002 -------------- ----------------- (UNAUDITED) Current Assets: Cash and cash equivalents $ 239,395 $ 371,327 Short-term investments 21,853 24,286 Receivables, net 297,570 313,968 Inventories 8,760 9,614 Prepaid expenses and other 41,360 39,448 ---------- ---------- Total current assets 608,938 758,643 Property, plant and equipment, net 425,983 434,491 Acquired intangibles, net 921,019 883,339 Installment contract receivables, net 105,333 113,185 Other assets 231,512 248,603 ---------- ---------- Total Assets $2,292,785 $2,438,261 ========== ========== Current Liabilities: Current portion of capital lease obligations $ 1,451 $ 1,609 Accounts payable and accrued liabilities 237,302 297,399 Deferred revenue 208,729 212,882 ---------- ---------- Total current liabilities 447,482 511,890 ---------- ---------- Long-term Liabilities: Long-term debt and capital lease obligations 10,223 52,659 Other long-term liabilities 230,874 214,407 ---------- ---------- Total long-term liabilities 241,097 267,066 ---------- ---------- Stockholders' equity 1,604,206 1,659,305 ---------- ---------- Total Liabilities and Stockholders' Equity $2,292,785 $2,438,261 ========== ==========
CADENCE DESIGN SYSTEMS, INC. Condensed Consolidated Statements of Operations For the Quarters Ended March 29, 2003 and March 30, 2002 (In $000's, except per share amounts) (Unaudited)
QUARTERS ENDED --------------------------------- March 29, 2003 March 30, 2002 -------------- -------------- Revenue Product $ 141,282 $ 219,049 Services 32,388 43,266 Maintenance 82,206 82,399 --------- --------- Total revenue 255,876 344,714 --------- --------- Costs and Expenses Cost of product 8,211 18,100 Cost of services 23,627 32,766 Cost of maintenance 15,075 16,428 Marketing and sales 83,615 96,781 Research and development 85,122 78,190 General and administrative 26,677 37,530 Amortization of acquired intangibles 25,286 18,649 Amortization of deferred stock compensation 9,620 3,493 Restructuring and other charges -- 17,708 Write-off of acquired in-process technology 1,700 -- --------- --------- Total costs and expenses 278,933 319,645 --------- --------- Income (loss) from operations (23,057) 25,069 Other income, net 234 5,003 --------- --------- Income (loss) before provision (benefit) for income taxes (22,823) 30,072 Provision (benefit) for income taxes (3,707) 8,727 --------- --------- Net income (loss) $ (19,116) $ 21,345 ========= ========= Basic net income (loss) per share $ (0.07) $ 0.09 ========= ========= Diluted net income (loss) per share $ (0.07) $ 0.08 ========= ========= Weighted average common shares outstanding 268,358 249,720 ========= ========= Weighted average common and potential common shares outstanding - assuming dilution 268,358 260,871 ========= ========= Supplemental diluted earnings per share before amortization of acquired intangibles, amortization of deferred stock compensation, restructuring and other charges and write-off of acquired in-process technology $ 0.04 $ 0.23 ========= =========
CADENCE DESIGN SYSTEMS, INC. 2000-2003 REVENUE DETAIL BY PRODUCT GROUP ($ MILLIONS)
2000 2001 --------------------------------------- --------------------------------------- Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR ----- ----- ----- ----- ------- ----- ----- ----- ----- ------- Product Revenue: IC Implementation 34.3 45.6 62.8 98.7 241.5 96.3 96.3 135.6 117.3 445.5 IP Creation 58.7 71.4 74.8 89.6 294.6 64.9 71.0 63.7 93.3 292.9 PSD 12.5 23.4 27.7 27.8 91.4 20.1 22.9 18.1 31.1 92.2 ----- ----- ----- ----- ------- ----- ----- ----- ----- ------- Total Product Revenue 105.5 140.4 165.3 216.2 627.4 181.3 190.2 217.4 241.7 830.5 Services 75.8 80.2 87.3 92.7 336.0 80.0 73.8 58.0 51.5 263.4 Maintenance 76.1 78.1 79.8 82.1 316.2 83.4 83.6 84.6 85.0 336.6 TOTAL REVENUE 257.5 298.7 332.5 390.9 1,279.6 344.7 347.6 360.0 378.2 1,430.4

2002 2003 --------------------------------------- ----- Q1 Q2 Q3 Q4 YEAR Q1 ----- ----- ----- ----- ------- ----- Product Revenue: IC Implementation 122.6 137.8 122.4 91.3 474.2 77.6 IP Creation 73.8 71.0 68.0 47.8 260.5 54.2 PSD 22.7 17.2 19.9 17.4 77.2 9.5 ----- ----- ----- ----- ------- ----- Total Product Revenue 219.0 226.1 210.3 156.5 811.9 141.3 Services 43.3 37.0 34.0 35.5 149.8 32.4 Maintenance 82.4 81.7 83.0 84.3 331.3 82.2 TOTAL REVENUE 344.7 344.8 327.2 276.3 1,293.1 255.9
2000-2003 REVENUE DETAIL BY GEOGRAPHY ($ MILLIONS)
2000 2001 --------------------------------------- --------------------------------------- Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR ----- ----- ----- ----- ------- ----- ----- ----- ----- ------- North America 157.3 169.7 205.0 223.0 755.0 217.0 201.2 178.8 224.1 821.0 Europe 50.3 71.6 67.8 76.9 266.5 59.6 85.6 118.3 70.1 333.6 Japan 39.1 44.1 38.0 74.5 195.6 48.9 43.5 30.1 58.8 181.3 Asia 10.7 13.4 21.7 16.6 62.4 19.1 17.4 32.9 25.2 94.5 TOTAL REVENUE 257.5 298.7 332.5 390.9 1,279.6 344.7 347.6 360.0 378.2 1,430.4

2002 2003 --------------------------------------- ----- Q1 Q2 Q3 Q4 YEAR Q1 ----- ----- ----- ----- ------- ----- North America 204.5 185.7 193.6 160.7 744.4 135.5 Europe 56.6 95.9 61.1 44.3 257.9 44.7 Japan 61.6 36.5 47.1 43.5 188.7 53.4 Asia 22.0 26.7 25.5 27.8 102.0 22.2 TOTAL REVENUE 344.7 344.8 327.2 276.3 1,293.1 255.9
CADENCE DESIGN SYSTEMS, INC. Pro Forma Condensed Consolidated Statements of Operations Impact of Pro Forma Adjustments on Reported Net Income (Loss) For the Quarters Ended March 29, 2003 and March 30, 2002 (In $000's, except per share amounts) (Unaudited)
QUARTER ENDED QUARTER ENDED March 29, 2003 March 30, 2002 --------------------------------------- ------------------------------------- AS REPORTED ADJUSTMENTS PRO FORMA AS REPORTED ADJUSTMENTS PRO FORMA ----------- ----------- --------- ----------- ----------- --------- Revenue Product $ 141,282 $ -- $ 141,282 $ 219,049 $ -- $ 219,049 Services 32,388 -- 32,388 43,266 -- 43,266 Maintenance 82,206 -- 82,206 82,399 -- 82,399 ----------- -------- --------- ----------- -------- --------- Total revenue 255,876 -- 255,876 344,714 -- 344,714 ----------- -------- --------- ----------- -------- --------- Costs and Expenses Cost of product 8,211 -- 8,211 18,100 -- 18,100 Cost of services 23,627 -- 23,627 32,766 -- 32,766 Cost of maintenance 15,075 -- 15,075 16,428 -- 16,428 Marketing and sales 83,615 -- 83,615 96,781 -- 96,781 Research and development 85,122 -- 85,122 78,190 -- 78,190 General and administrative 26,677 -- 26,677 37,530 (11,100)(E) 26,430 Amortization of acquired intangibles 25,286 (25,286)(A) - 18,649 (18,649)(A) - Amortization of deferred stock compensation 9,620 (9,620)(B) - 3,493 (3,493)(B) - Restructuring and other charges -- -- - 17,708 (17,708)(D) - Write-off of acquired in-process technology 1,700 (1,700)(C) - -- -- - ----------- -------- --------- ----------- -------- --------- Total costs and expenses 278,933 (36,606) 242,327 319,645 (50,950) 268,695 ----------- -------- --------- ----------- -------- --------- Income (loss) from operations (23,057) 36,606 13,549 25,069 50,950 76,019 Other income, net 234 -- 234 5,003 -- 5,003 ----------- -------- --------- ----------- -------- --------- Income (loss) before provision (benefit) for income taxes (22,823) 36,606 13,783 30,072 50,950 81,022 Provision (benefit) for income taxes (3,707) 7,291 3,584 8,727 12,339 21,066 ----------- -------- --------- ----------- -------- --------- Net Income (loss) $ (19,116) $ 29,315 $ 10,199 $ 21,345 $ 38,611 $ 59,956 =========== ======== ========= =========== ======== ========= Basic net income (loss) per share $ (0.07) $ 0.04 $ 0.09 $ 0.24 =========== ========= =========== ========= Diluted net income (loss) per share $ (0.07) $ 0.04 $ 0.08 $ 0.23 =========== ========= =========== ========= Weighted average common shares outstanding 268,358 268,358 249,720 249,720 =========== ========= =========== ========= Weighted average common and potential common shares outstanding - assuming dilution 268,358 271,910 260,871 260,871 =========== ========= =========== =========
Notes: (A) Non-cash amortization of acquired intangibles (B) Non-cash amortization of deferred stock compensation (C) Write-off of acquired in-process technology (D) Restructuring and other charges (E) Non-recurring legal costs CADENCE DESIGN SYSTEMS, INC. As of April 15, 2003 IMPACT OF PRO FORMA ADJUSTMENTS ON FORWARD LOOKING DILUTED NET INCOME PER SHARE (IN $000,000'S, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
QUARTER ENDED YEAR ENDED June 28, 2003 January 3, 2004 ----------------- ---------------- GAAP diluted net income per share* $0.00 to $0.01 $0.12 to $0.17 Amortization of acquired intangibles 0.03 0.15 Amortization of deferred stock compensation 0.09 0.35 Income tax effect of reconciling items (0.03) (0.12) ----------------- ---------------- Pro Forma diluted net income per share $0.09 to $0.10 $0.50 to $0.55 ================= ================
* Excludes impact of Get2Chip acquisition on amortization of intangibles and in-process R&D charges as these were not known as of the reporting date. -----END PRIVACY-ENHANCED MESSAGE-----