-----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, HvvxZD1j2o2nAfVYDu7mwJddYN7416XQ05DQZFUC4cj41hZafY+BRL5ZdYx3qG3H Y+wHYeouHg/oPkI+teNxqA== 0001012870-99-001427.txt : 19990507 0001012870-99-001427.hdr.sgml : 19990507 ACCESSION NUMBER: 0001012870-99-001427 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990420 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990506 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: SEC FILE NUMBER: 001-10606 FILM NUMBER: 99611855 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 FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 20, 1999 CADENCE DESIGN SYSTEMS, INC. (Exact Name of Registrant as Specified in Charter) Delaware 1-10606 77-0148231 (State or Other Jurisdiction (Commission File (I.R.S. Employer of Incorporation) Number) Identification Number) 2655 Seely Road, Building 5 San Jose, California 95134 (Address of Principal Executive Offices)(Zip Code) Registrant's telephone number, including area code: (408) 943-1234 ================================================================================ Item 5. Other Events. - ------------------------ On April 20, 1999, Cadence Design Systems, Inc. (the "Registrant") announced its first quarter 1999 results. In addition, on April 27, 1999, the Registrant announced the appointment of H. Raymond Bingham to the position of President and Chief Executive Officer. Mr. Bingham has served as the Registrant's Chief Financial Officer since 1993, and replaces John R. Harding who resigned the position of President and CEO. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. - ------------------------------------------------------------------------------ (c) Exhibits Exhibit No. Description ----------- ----------- 99.1 Press Release issued April 20, 1999. 99.2 Press Release issued April 27, 1999. SIGNATURES 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 May 3, 1999. CADENCE DESIGN SYSTEMS, INC. By: /s/ R.L. Smith McKeithen --------------------------- R.L. Smith McKeithen Senior Vice President and General Counsel EXHIBIT INDEX Exhibit No. Document - ------------ ---------------------------------------------- Exhibit 99.1 Press Release issued April 20, 1999 Exhibit 99.2 Press Release issued April 27, 1999. EX-99.1 2 PRESS RELEASE DATED APRIL 20, 1999 Exhibit 99.1 FOR IMMEDIATE RELEASE For more information, contact: Ray Bingham Chief Financial Officer Cadence Design Systems, Inc. (408) 944-7503 bingham@cadence.com CADENCE ANNOUNCES FIRST QUARTER 1999 RESULTS Operational Initiatives Strengthen Company's Performance SAN JOSE, Calif. -- April 20, 1999 -- Cadence Design Systems, Inc. (NYSE: CDN) today announced that first quarter revenue increased 13% over the prior year quarter to reach $305 million. Earnings per share (before unusual items and goodwill amortization) of $0.31 was 23% higher than in the first quarter of 1998. Including the effects of unusual items and goodwill amortization, diluted earnings per share was $0.22. Cadence improved margins substantially in the first quarter in the Company's design services business, leading to record margins in services overall. Gross margins for services came in at 34%, ten percentage points higher than the 24% posted in the first quarter of 1998. Cadence leveraged this services margin improvement to achieve a first-quarter record 34% in operating margin. Software product revenue for the first quarter of 1999 totaled $166 million, up 8% from the prior year quarter, while services revenue increased to $71 million, up 35% over the same period. The Company was pleased with the progress in improving services margins; however, services revenues remained below their targets. During the first quarter, Cadence recorded unusual charges of $14 million, primarily due to the write-off of in-process research and development expenses associated with the acquisition of Design Acceleration, Inc. (DAI), and the completion of the restructuring program initiated in the fourth quarter of 1998. Quarterly results included $12 million in goodwill amortization, including amortization of assets acquired from DAI and other acquisitions concluded in prior years. The Company commented that revenue and earnings growth are anticipated to be slower for the remainder of 1999, and that the growth rate for services revenues will be constrained by the company's emphasis on accepting higher margin engagements. --more-- Cadence Announces First Quarter 1999 Results Page 2 "I am pleased with the progress we've made in addressing our margin issues, but there is more to be done with respect to our top line growth," said Jack Harding, CEO and president at Cadence. "We are aggressively marketing a product portfolio that underscores our total design capability for managing the transition to 0.18 micron and systems on a chip. We will continue to focus on our services margin goals, building backlog visibility, and exploiting future growth opportunities that leverage our enormous depth and breadth of software and electronics expertise." According to Harding, the Company's new electronics infusion business is expected to significantly expand the market opportunity for Cadence's electronics consulting services. Cadence broke ground in this area during the first quarter by launching the Electronics Infusion group, and by establishing a strategic alliance with the Ingersoll-Rand Company, an industrial product supplier. The Electronics Infusion group provides strategic consulting to industrial and consumer companies who can benefit from incorporating more electronics capabilities into their products and services. In order to provide a consistent view of the operating results of the Company, Cadence is now using a new EPS metric: Earnings Before Goodwill (EBG). This figure has been adopted by many financial research services as the metric reported for comparative purposes, and represents earnings per share, excluding unusual items and goodwill amortization associated with purchase acquisitions. For comparative purposes, except where noted, all references to earnings per share (EPS) throughout this release are on a diluted basis, excluding the effects of unusual items and goodwill amortization. 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 report on Form 10-K for the year ended January 2, 1999. --more-- Cadence Announces First Quarter 1999 Results Page 3 About Cadence Cadence is the largest supplier of software products, methodology 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 electronics-based products. With more than 4,000 employees and 1998 annual sales of $1.2 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 may be obtained from the World Wide Web at http://www.cadence.com. ---------------------- Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All others are properties of their holders. CADENCE DESIGN SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS APRIL 3, 1999 AND JANUARY 2, 1999 (IN 000'S) April 3, January 2, 1999 1999 ------------ ---------- (Unaudited) Cash and Short-term Investments $ 216,908 $ 209,752 Receivables, Net 252,113 277,599 Prepaid Expenses and Other 98,902 92,359 ---------- ---------- Total Current Assets 567,923 579,710 Property, Plant and Equipment, Net 278,453 262,675 Software Development Costs, Net 12,039 13,045 Acquired Intangibles, Net 289,796 282,489 Installment Contract Receivables 105,297 100,529 Other Assets 164,842 167,510 ---------- ---------- Total Assets $1,418,350 $1,405,958 ========== ========== Notes Payable and Current Portion of Capital Leases $ 1,230 $ 1,273 Accounts Payable and Accrued Liabilities 158,794 211,220 Income Taxes Payable 7,359 19,133 Deferred Revenue 102,677 96,286 ---------- ---------- Total Current Liabilities 270,060 327,912 Long-term Debt and Capital Leases 86,083 136,380 Deferred Income Taxes 69,097 58,927 Minority Interest Liability 240 377 Other Long-term Liabilities 24,306 24,883 Stockholders' Equity 968,564 857,479 ---------- ---------- Total Liabilities & Stockholders' Equity $1,418,350 $1,405,958 ========== ========== CADENCE DESIGN SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE QUARTERS ENDED APRIL 3, 1999 AND APRIL 4, 1998 (IN 000'S, EXCEPT PER SHARE AMOUNTS) Quarters Ended --------------- ----------- April 3, April 4, 1999 1998 --------------- ----------- (Unaudited) (Unaudited) Revenue: Product $166,095 $154,049 Services 70,560 52,302 Maintenance 68,579 63,872 -------- -------- Total Revenue $305,234 $270,223 ======== ======== Costs and Expenses: Cost of Product 12,971 11,844 Cost of Services 46,492 39,601 Cost of Maintenance 10,700 10,343 Amortization of Acquired Intangibles 12,457 546 Marketing and Sales 70,168 69,245 Research and Development 45,201 41,707 General and Administrative 16,484 16,521 Unusual Items 14,192 60,857 -------- -------- Total Costs and Expenses $228,665 $250,664 ======== ======== Income From Operations 76,569 19,559 Other Income (Expense), Net (605) 2,619 -------- -------- Income Before Provision for Income Taxes 75,964 22,178 Provision for Income Taxes 24,186 22,537 -------- -------- Net Income (Loss) $ 51,778 $ (359) ======== ======== Basic Net Income (Loss) Per Share $0.24 $ -- ======== ======== Diluted Net Income (Loss) Per Share $0.22 $ -- ======== ======== Weighted Average Common Shares Outstanding 217,092 210,014 Weighted Average Common and Potential Common Shares Outstanding -- Assuming Dilution 233,791 210,014 Supplemental Diluted Earnings Per Share Before Unusual Items and Amortization of Acquired Intangibles $0.31 $0.25 ======== ======== CADENCE DESIGN SYSTEMS, INC. SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS EXCLUDING UNUSUAL ITEMS AND AMORTIZATION OF ACQUIRED INTANGIBLES FOR THE QUARTERS ENDED APRIL 3, 1999 AND APRIL 4, 1998 (IN 000'S, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) SUPPLEMENTAL ------------ Quarters Ended April 3, April 4, 1999 1998 % Change -------- -------- -------- Revenue: Product $166,095 $154,049 8% Services 70,560 52,302 35% Maintenance 68,579 63,872 7% -------- -------- ---- Total Revenue 305,234 270,223 13% -------- -------- ---- Costs and Expenses: Cost of Product 12,971 11,844 10% Cost of Services 46,492 39,601 17% Cost of Maintenance 10,700 10,343 3% Marketing and Sales 70,168 69,245 1% Research and Development 45,201 41,707 8% General and Administrative 16,484 16,521 0% -------- -------- ---- Total Costs and Expenses 202,016 189,261 7% -------- -------- ---- Income From Operations 103,218 80,962 27% Other Income (Expense), Net (605) 2,619 -123% -------- -------- ---- Income Before Provision For Income Taxes 102,613 83,581 23% Provision for Income Taxes 29,245 23,820 23% -------- -------- ---- Net Income $ 73,368 $ 59,761 23% -------- -------- ---- Diluted Net Income Per Share $0.31 $0.25 24% ======== ======== ==== Weighted Average Common And Potential Common Shares Outstanding -- Assuming Dilution 233,791 234,997 -1% ======== ======== ==== EX-99.2 3 PRESS RELEASE DATED APRIL 27, 1999 Exhibit 99.2 FOR IMMEDIATE RELEASE For more information, contact: Laurie Stanley Cadence Design Systems, Inc. (408) 428-5019 las@cadence.com BINGHAM NAMED CADENCE CEO EDA Industry Leader Organizes to Deliver Design Productivity and Design Realization SAN JOSE, Calif. -- April 27, 1999 -- Cadence Design Systems, Inc. (NYSE: CDN) today announced the appointment of Ray Bingham to Chief Executive Officer. Bingham has served as the Company's chief financial officer since 1993, and replaces Jack Harding, who resigned the position of president and CEO. In his role as CEO, Bingham has established an organizational structure that underscores the Company's commitment to delivering the broadest portfolio of design productivity products and world-class design realization services. Bingham named Shane Robison as president of the Design Productivity Group, and John Olsen as president of the Design Realization Group and Corporate Development. Both Robison and Olsen report directly to Bingham. William Porter, who is currently vice president, corporate controller and assistant secretary for Cadence, was named acting chief financial officer, reporting directly to Bingham. "This new organization capitalizes on our seasoned management team to aggressively build on Cadence's leadership position in EDA," said Ray Bingham, CEO of Cadence. "Our entire company is focused on helping customers improve their design efficiency and achieve their product realization goals. With the most competitive offering of electronic design software and services available anywhere, Cadence is best positioned to enable the global economy to exploit the power and value of electronics." New Organization Strengthens Technology Focus The new Cadence organization will provide greater emphasis on Cadence's core electronic design automation (EDA) products and services, and will maximize growth opportunities for its design services and recently announced electronics infusion group. -- more -- Bingham Named Cadence CEO Page 2 Ray Bingham will leverage his proven financial and management strengths to lead the Company as CEO. In addition to Robison, Olsen and Porter, the corporate marketing, legal, and human services organizations will report to Bingham. Shane Robison formerly led Cadence worldwide research and development, and EDA product marketing. In his new role as president of the Design Productivity Group, Robison will be responsible for the development, marketing and sales of Cadence's EDA products and services, and for closer integration of the Company's electronic design software and methodology services. John Olsen previously managed Cadence worldwide field operations. His responsibilities as president of the Design Realization Group will be design services, electronics infusion, and corporate development. In his corporate development role, Olsen will drive strategic initiatives, including acquisitions. He will also develop new business models such as electronic commerce, which may involve the distribution of design productivity software over the internet. About Cadence Cadence Design Systems, Inc. is the worldwide leader in electronic design software and services. With more than 4,000 employees and 1998 annual sales of $1.2 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 may be obtained from the World Wide Web at http://www.cadence.com. - ---------------------- -- end -- 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 report on Form 10-K for the year ended January 2, 1999. Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All others are properties of their holders. -----END PRIVACY-ENHANCED MESSAGE-----