-----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, LmkpKR8qVdA/wMgTUbVFEmGWGmTzOHy2rhjMginynbyAcSIq2j/ggchd05i+V7Z5 +v9LDfL5dQKFgz9OmwaGxA== 0001168474-03-000022.txt : 20030521 0001168474-03-000022.hdr.sgml : 20030521 20030521165411 ACCESSION NUMBER: 0001168474-03-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030521 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNOPSYS INC CENTRAL INDEX KEY: 0000883241 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 561546236 STATE OF INCORPORATION: DE FISCAL YEAR END: 1028 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19807 FILM NUMBER: 03714869 BUSINESS ADDRESS: STREET 1: 700 E MIDDLEFIELD RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043-4033 BUSINESS PHONE: 6509625000 MAIL ADDRESS: STREET 1: 700 E MIDDLEFIELD RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043-4033 8-K 1 synopsys8k.txt 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 May 21, 2002 Date of Report (date of earliest event reported) SYNOPSYS, INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in charter) Delaware 000-19807 56-1546236 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File Number) (I. R. S. Employer of incorporation) Identification No.) 700 East Middlefield Road Mountain View, California 94043 (Address of principal executive offices) Registrant's telephone number, including area code: (650) 584-5000 N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) - -------------------------------------------------------------------------------- Item 7. Financial Statements and Exhibits (c) Exhibits 99.1 Press release dated May 21, 2003 relating to Synopsys' results of operations for the fiscal quarter ended April 30, 2003. Item 9. Regulation FD Disclosure In accordance with SEC Release No. 33-8216, the following information, required to be furnished under "Item 12. Results of Operations and Financial Condition," is furnished under "Item 9. Regulation FD Disclosure." On May 21, 2003, Synopsys, Inc. (the "Company") announced the Company's results of operations for its second fiscal quarter ended April 30, 2003. A copy of the Company's press release announcing such results dated May 21, 2003 (the "Earnings Release") is attached hereto as Exhibit 99.1. This Form 8-K and the attached exhibit are provided under Item 12 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission. 2 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. Date: May 21, 2003 SYNOPSYS, INC. /s/ Rex S. Jackson Rex S. Jackson Vice President and General Counsel 3 Exhibit Index Exhibit Number Exhibit Title 99.1 Press release dated May 21, 2003 relating to Synopsys' results of operations for the fiscal quarter ended April 30, 2003. EX-99 3 er2q03.txt EARNINGS PRESS RELEASE PRESS RELEASE INVESTOR CONTACT: Jessica Kourakos Synopsys, Inc. 650-584-4289 EDITORIAL CONTACT: Craig Cochran Synopsys, Inc. 650-584-4230 Synopsys Posts Financial Results for Fiscal Second Quarter 2003 MOUNTAIN VIEW, Calif. May 21, 2003 - Synopsys Inc., (Nasdaq: SNPS), the world leader in integrated circuit (IC) design software, today reported its second quarter results for the period that ended May 3, 2003. For the second quarter of fiscal 2003, Synopsys reported revenue of $292.0 million, a 57% increase over revenue of $185.6 million in the second quarter of fiscal 2002. Net income on an earnings before goodwill (EBG) basis was $61.2 million, a 144% increase over EBG net income of $25.1 million in the second quarter of fiscal 2002. EBG per share was $0.80, a 105% increase over EBG per share of $0.39 in the second quarter of fiscal 2002. EBG represents earnings on a fully-diluted basis excluding, to the extent incurred in any particular quarter, amortization of intangible assets and deferred compensation, in-process research and development expenses and one-time or extraordinary expenses relating to acquisitions, such as integration expenses. 1 On a generally accepted accounting principles (GAAP) basis, for the second quarter of fiscal 2003, net income was $22.3 million, or $0.29 per share, compared to net income of $21.4 million, or $0.33 per share, for the second quarter of fiscal 2002. The difference between net income on an EBG basis and on a GAAP basis for the second quarter of fiscal 2003 was primarily due to charges relating to the acquisition of Numerical Technologies, Inc. which was completed during the quarter, and the amortization of intangibles related to prior acquisitions. "Despite a tough economic backdrop, our second quarter was the largest orders quarter in Synopsys' history," said Aart de Geus, chairman and CEO of Synopsys. "We are pleased with the Company's current momentum and look forward to achieving strong financial results during the remainder of fiscal 2003." Outlook Synopsys also announced its operating model targets for the third quarter of fiscal year 2003 and for full year fiscal 2003. Third quarter of fiscal year 2003 targets (EBG basis): - ----------------------------------------------------- o Revenue: $288 - $303 million; o Total expenses: $207 - $214 million; o Other income: $6 - $9 million; o Fully diluted outstanding shares: 75 - 79 million; o Pro forma tax rate: 32.5%; o Earnings per share: $0.77 - $0.82; o Perpetual licenses as a percentage of product bookings: 20% - 25%; and o Average length of ratable licenses: 3.3 - 3.6 years. 2 Fiscal year 2003 targets (EBG basis): - ------------------------------------ o Revenue: between $1.130 - $1.180 billion; o Earnings per share: $2.95 - $3.10; o Perpetual licenses as a percentage of product bookings: 20%-25%; o Average length of ratable licenses: 3.0 - 3.5 years. Effectiveness of Guidance The targets set forth above represent the Company's expectations only as of the date of this release and should not be viewed as a statement about the Company's expectations after this date. Although this release will remain available on the Company's website, its continued availability does not indicate that the Company is reaffirming or confirming its continued validity. The Company will not report on its progress during the third fiscal quarter or comment to analysts or investors on, or otherwise update, such targets until it releases its quarterly results in August 2003. GAAP Reconciliation This earnings release contains financial information presented on both an EBG and GAAP basis. EBG is a non-GAAP financial measure under Section 244.101 of Regulation G. EBG represents earnings on a fully-diluted basis, excluding, to the extent incurred in any particular quarter, amortization of intangible assets and deferred compensation, in-process research and development expenses and one-time or extraordinary expenses relating to acquisitions, such as integration expenses. Intangible assets consist primarily of purchased technology, contract rights intangible, customer installed base/relationships, trademarks and tradenames, covenants not to compete and customer backlog. EBG is reduced by the amount of additional taxes that would be required to be accrued if EBG results were used instead of GAAP results to calculate the Company's tax liability. The Company believes that providing financial information on an EBG basis, in addition to a GAAP basis, allows investors a useful way to compare the results of multiple fiscal periods. The Company believes it is appropriate to exclude the items described in the preceding paragraph from its EBG financial measures because such items do not constitute direct and ongoing costs of 3 Synopsys' business operations, such as cost of revenues or research and development, sales and marketing and general and administrative expenses. Excluding such non-cash, one-time or extraordinary expenses from the Company's EBG financial measures also makes it easier for investors to evaluate the ongoing operating results of the Company's business. The specific items excluded from GAAP in calculating EBG for the periods given in this press release are shown in the table below:
Three Months and Six Months ended April 30, 2003 Three Months Ended Six Months Ended April 30 April 30 (in thousands, except per share data) 2003 2002 2003 2002 ---------------------------------------------------- Net income on a GAAP basis $22,289 $21,380 $56,674 $35,432 Amortization of intangible assets and deferred compensation 33,478 4,356 62,261 8,400 In-process research and development 18,250 --- 18,250 --- Tax effect (12,826) (660) (23,527) (1,437) ---------------------------------------------------- Net income on an EBG basis $61,191 $25,076 $113,658 $42,395 Diluted earnings per share on a GAAP basis $0.29 $0.33 $0.74 $0.55 Amortization of intangible assets and deferred compensation per share $0.44 $0.07 $0.81 $0.12 In-process research and development per share $0.24 $--- $0.24 $--- Tax effect per share $(0.17) $(0.01) $(0.31) $(0.02) Earnings per share on an EBG basis $0.80 $0.39 $1.48 $0.65 Third Quarter and Full Year Fiscal 2003 Targets Range for Three Months Ending July 31, 2003 Low High (in thousands, except per share data) --- ---- Total target expenses on a GAAP basis $238,000 $248,000 Estimated amortization of intangible assets and deferred compensation 31,000 34,000 - ------------------------------------------------------------------------------------------------------------------ Target expenses on an EBG basis $207,000 $214,000
4
Range for Three Months Range for Fiscal Year Ending Ending July 31, 2003 October 31, 2003 Low High Low High --- ---- --- ---- Target earnings per share on a GAAP basis $0.52 $0.56 $1.68 $1.83 Estimated amortization of intangible assets and deferred compensation per share $0.25 $0.26 $1.27 $1.27 ----------------------------------------------------------- Target earnings per share on an EBG basis $0.77 $0.82 $2.95 $3.10
Unaudited Financial Statements The financial statements presented with this release are unaudited, preliminary and subject to review and adjustment in the ordinary course of the Company's quarterly review process. Final unaudited financial statements will be published with the Company's quarterly report on Form 10-Q. Additional Financial Information Available on Synopsys Website In connection with the issuance of this earnings release, Synopsys is making available to investors certain current and historical information regarding its performance in geographic markets and product categories. The information can be found at http://www.synopsys.com/corporate/invest/invest.html. Synopsys currently intends to provide this information on a quarterly basis. Earnings Call Open to Investors Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m., Pacific Time. A live Webcast of the call will be available at Synopsys'corporate website at http://www.synopsys.com/corporate/invest/invest.html. A recording of the call will be available by calling 1-800-659-1025 (904-779-4707 for international callers), access code 16360633, beginning at 5:30 p.m. Pacific Time today. A Webcast replay will also be available at http://www.synopsys.com/corporate/invest/invest.html from approximately 5:30 p.m. Pacific Time today through the time of the announcement of the Company's third quarter earnings results in August. Following the call, copies of the prepared remarks of Aart de Geus, chairman and chief executive officer of Synopsys, and Steve Shevick, chief financial officer, will be posted on Synopsys' corporate website at http://www.synopsys.com/corporate/invest/invest.html. 5 About Synopsys Synopsys, Inc. (Nasdaq:SNPS) is the world leader in electronic design automation (EDA) software for integrated circuit (IC) design. The Company delivers technology-leading IC design and verification platforms to the global electronics market, enabling the development of complex systems-on-chips (SoCs). Synopsys also provides intellectual property and design services to simplify the design process and accelerate time-to-market for its customers. Synopsys is headquartered in Mountain View, California, and has more than 60 offices located throughout North America, Europe, Japan and Asia. Visit Synopsys online at http://www.synopsys.com. Forward Looking Statements The fourth paragraph of this earnings release and the sections entitled "Outlook" and "GAAP Reconciliation" contain forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those described by these statements due to a number of factors, including: lower than expected research and development spending by semiconductor and electronic systems companies; continued or increased weakness in the semiconductor or electronic systems industries; difficulties encountered in the continued integration of the products and operations of Avant! and Numerical into Synopsys' products and operations; the possibility that the Company may sell fewer perpetual licenses than expected; a lower-than-anticipated level of purchases of software or consulting services by the Company's customers; the effect of international political conflict or hostilities on customer purchases; the effect of the outbreak of Severe Acute Respiratory Syndrome on sales of the Company's products and services; fluctuations in foreign currency exchange rates; and increasing competition in the market for the Company's products and services. For further discussion of these and other factors that may cause results to differ from those projected in this release, readers are referred to documents filed by Synopsys with the Securities and Exchange Commission, specifically Synopsys' report on Form 10-Q filed with the SEC on March 18, 2003 (pp. 35-39). Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter these forward-looking statements whether as a result of new information, future events or otherwise. 6 In addition, the Company's actual expenses and earnings per share on a GAAP basis for the fiscal quarter ending August 2, 2003, and earnings per share on a GAAP basis for the fiscal year ending November 1, 2003, could differ materially from the targets stated under "Outlook" above for a number of reasons, including a determination by the Company that any portion of its intangible assets have become impaired, changes in deferred compensation expenses caused by employee terminations and one-time expenses and the amortization of additional intangible assets and deferred compensation associated with future acquisitions, if any. ### Synopsys is a registered trademark of Synopsys, Inc. All other trademarks mentioned in this release are the intellectual property of their respective owners. 7 SYNOPSYS, INC. Unaudited Condensed Consolidated Statements of Income (1) (in thousands, except per share data) Three Months Ended April 30, Six Months Ended April 30, 2003 2002 2003 2002 Revenue: Product $ 82,000 $ 52,293 $ 136,520 $ 91,848 Service 61,967 65,765 134,354 134,858 Ratable license 148,061 67,580 289,290 134,477 Total revenue 292,028 185,638 560,164 361,183 Cost of revenue: Product 3,845 3,221 7,598 7,287 Service 17,750 17,391 39,770 38,075 Ratable license 13,472 13,780 26,258 24,220 Amortization of intangible assets and deferred Stock compensation 20,491 ---- 40,394 ---- Total cost of revenue 55,558 34,392 114,020 69,582 Gross margin 236,470 151,246 446,144 291,601 Operating expenses: Research and development 68,612 46,649 135,881 95,355 Sales and marketing 80,970 63,201 152,208 123,000 General and administrative 24,240 17,537 46,791 36,245 In-process research and development 18,250 --- 18,250 --- Amortization of intangible assets and deferred Stock compensation 12,987 4,356 21,867 8,400 Total operating expenses 205,059 131,743 374,997 263,000 Operating income 31,411 19,503 71,147 28,601 Other income, net 7,515 11,213 16,725 22,294 Income before provision for income taxes 38,926 30,716 87,872 50,895 Provision for income taxes 16,637 9,336 31,198 15,463 Net income $ 22,289 $ 21,380 $ 56,674 $ 35,432 Basic earnings per share: Net income $ 0.30 $ 0.35 $ 0.76 $ 0.58 Weighted average common shares 74,351 61,232 74,220 60,670 Diluted earnings per share: Net income $ 0.29 $ 0.33 $ 0.74 $ 0.55 Weighted average common shares and equivalents 76,517 64,934 76,551 64,956
(1) The company's fiscal year and second quarter ends on the Saturday nearest to October 31 and to April 30, respectively. For presentation purposes, the condensed consolidated financial statements refer to a calendar month end. 8
SYNOPSYS, INC. Condensed Consolidated Balance Sheets (1) (in thousands, except par value per share amounts) April 30, 2003 October 31, 2002 --------------------------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 268,822 $ 312,580 Short-term investments 123,277 102,153 Cash, cash equivalents and short-term investments 392,099 414,733 Accounts receivable, net of allowances of $10,760 and $11,565, respectively 246,006 207,206 Deferred taxes 270,058 282,867 Prepaid expenses and other 22,202 24,509 Total current assets 930,365 929,315 Property and equipment, net 180,122 185,040 Long-term investments 25,567 39,386 Goodwill, net 548,746 434,554 Intangible assets, net 345,403 355,334 Long-term deferred taxes and other assets 34,149 35,085 -------------- ------------- Total assets $ 2,064,352 $ 1,978,714 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 168,516 $ 246,789 Current portion of long-term debt 28 1,423 Accrued income taxes 153,780 169,912 Deferred revenue 445,189 359,245 Total current liabilities 767,513 777,369 Deferred compensation and other long-term liabilities 65,946 36,387 Long-term deferred revenue 32,053 51,477 Stockholders' equity Commonstock, $.01 par value; 400,000 shares authorized; 73,967 and 73,562 shares outstanding respectively 740 735 Additional paid-in capital 1,063,828 1,039,386 Retained earnings 236,114 198,863 Treasury stock, at cost (101,573) (116,499) Deferred stock compensation (10,844) (8,858) Accumulated other comprehensive (loss) income 10,575 (146) Total stockholders' equity $ 1,198,840 $ 1,113,481 -------------- -------------- Total liabilities and stockholders' equity $ 2,064,352 $ 1,978,714
(1) The company's fiscal year and second quarter ends on the Saturday nearest to October 31 and to April 30, respectively. For presentation purposes, the condensed consolidated financial statements refer to a calendar month end. 9
SYNOPSYS, INC. Unaudited Pro Forma Condensed Consolidated Statements of Income (1) (2) (in thousands, except per share data) Three Months Ended April 30 Six Months Ended April 30 ------------------------------------------------------------------ 2003 2002 2003 2002 Revenue: Product $ 82,000 $ 52,293 $ 136,520 $ 91,848 Service 61,967 65,765 134,354 134,858 Ratable license 148,061 67,580 289,290 134,477 Total revenue 292,028 185,638 560,164 361,183 Cost of revenue: Product 3,845 3,221 7,598 7,287 Service 17,750 17,391 39,770 38,075 Ratable license 13,472 13,780 26,258 24,220 Total cost of revenue 35,067 34,392 73,626 69,582 Gross margin 256,961 151,246 486,538 291,601 Operating expenses: Research and development 68,612 46,649 135,881 95,355 Sales and marketing 80,970 63,201 152,208 123,000 General and administrative 24,240 17,537 46,791 36,245 Total operating expenses 173,822 127,387 334,880 254,600 Operating income 83,139 23,859 151,658 37,001 Other income, net 7,515 11,213 16,725 22,294 Income before provision for income taxes 90,654 35,072 168,383 59,295 Provision for income taxes 29,463 9,996 54,725 16,900 Net income $ 61,191 $ 25,076 $ 113,658 $ 42,395 Basic earnings per share: Net income $ 0.82 $ 0.41 $ 1.53 $ 0.70 Weighted average common shares 74,351 61,232 74,220 60,670 Diluted earnings per share: Net income $ 0.80 $ 0.39 $ 1.48 $ 0.65 --------- ----------- ----------- ------------ Weighted average common shares and equivalents 76,517 64,394 76,551 64,956
(1) The company's fiscal year and second quarter ends on the Saturday nearest to October 31 and to April 30, respectively. For presentation purposes, the condensed consolidated financial statements refer to a calendar month end. (2) Amounts and per share data for the periods presented exclude amortization of intangible assets. 10 -----END PRIVACY-ENHANCED MESSAGE-----