UNITED STATES
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): August 17, 2011
SYNOPSYS, INC.
(Exact name of Registrant as specified in charter)
| Delaware | 000-19807 | 56-1546236 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer 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)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On August 17, 2011, Synopsys, Inc. issued a press release announcing the financial results of the third fiscal quarter ended July 30, 2011. A copy of this press release is furnished and attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Current Report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by Synopsys, Inc. whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
The attached press release includes non-GAAP earnings per share, non-GAAP net income, targeted non-GAAP expenses, and targeted non-GAAP earnings per share.
These non-GAAP measures are not in accordance with, or an alternative for, U.S. generally accepted accounting principles (“GAAP”) and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe that non-GAAP measures are valuable in analyzing our operations. Management analyzes current and future results on a GAAP basis as well as a non-GAAP basis and also provides GAAP and non-GAAP measures in our earnings release. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures. We believe that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to our financial condition and results of operations.
Synopsys’ management evaluates and makes decisions about our business operations primarily based on the revenue, orders, and direct, ongoing and recurring costs of those operations. For our internal budgeting and resource allocation process, and in reviewing our financial results, we use non-GAAP financial measures that exclude: (i) the amortization of acquired intangible assets; (ii) the impact of stock compensation; (iii) acquisition-related costs; (iv) other significant items, including the effect of tax benefits from settlements with the Internal Revenue Service; and (v) the income tax effect related to non-GAAP pre-tax adjustments and other unusual or infrequent tax adjustments from the provision for income taxes.
We use these non-GAAP financial measures in making operating decisions because we believe the measures provide meaningful supplemental information regarding our operational performance and give us a better understanding of how we should invest in research and development and fund infrastructure and product and market strategies. We use these measures to help us make budgeting decisions, for example, among product development expenses and research and development, sales and marketing and general and administrative expenses. In addition, these non-GAAP financial measures facilitate our internal comparisons to our historical operating results, forecasted targets and comparisons to competitors’ operating results.
As described above, we exclude the following items from one or more of our non-GAAP measures:
(i) Amortization of acquired intangible assets. We incur expenses from amortization of acquired intangible assets which include contract rights, core/developed technology, trademarks, trade names, customer relationships, covenants not to compete, and other intangibles related to acquisitions. We amortize the intangible assets over their economic lives. We exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance and liquidity and our ability to invest in research and development and fund acquisitions and capital expenditures.
(ii) Stock compensation impact. We exclude stock compensation expenses from our non-GAAP measures primarily because they are non-cash expenses. We believe that it is useful to investors to understand the impact of stock compensation to our operational performance and liquidity and our ability to invest in research and development and fund acquisitions and capital expenditures. While stock compensation expense constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations. In addition, excluding this item from various non-GAAP measures facilitates comparisons to our competitors’ operating results.
(iii) Acquisition-related costs. In connection with our business combinations, we incur compensation expenses, professional fees and other direct expenses such as restructuring activities as well as changes to the fair value of contingent consideration related to the acquired company. We exclude such expenses as they are related to acquisitions and have no direct correlation to the operation of our business.
(iv) Settlements. From time to time we are party to legal settlements. We have excluded the effect of tax benefits from settlements with the Internal Revenue Service because we do not consider these matters to be part of the ongoing operation of our business and because of the singular nature of the claim underlying this matter.
(v) Income tax effect related to non-GAAP pre-tax adjustments and other unusual or infrequent tax adjustments from the provision for income taxes. Excluding the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes assists investors in understanding the tax provision associated with those adjustments and the effect on net income. We exclude other unusual or infrequent tax adjustments because we do not consider these matters to be part of the ongoing operation of our business.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit |
Exhibit Title | |
| 99.1 | Press release dated August 17, 2011 containing Synopsys, Inc.’s results of operations for the third fiscal quarter ended July 31, 2011. | |
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.
| SYNOPSYS, INC. | ||||||
| Dated: August 17, 2011 | By: | /S/ BRIAN E. CABRERA | ||||
| Brian E. Cabrera | ||||||
| Vice President, General Counsel and | ||||||
| Corporate Secretary | ||||||
INDEX TO EXHIBITS
| Exhibit |
Exhibit Title | |
| 99.1 | Press release dated August 17, 2011 containing Synopsys, Inc.’s results of operations for the third fiscal quarter ended July 31, 2011. | |
Exhibit 99.1
PRESS RELEASE
| INVESTOR CONTACT: |
| Lisa L. Ewbank |
| Synopsys, Inc. |
| 650-584-1901 |
| EDITORIAL CONTACT: |
| Yvette Huygen |
| Synopsys, Inc. |
| 650-584-4547 |
| yvetteh@synopsys.com |
Synopsys Posts Financial Results for Third Quarter Fiscal Year 2011
MOUNTAIN VIEW, Calif. – Aug. 17, 2011 – Synopsys, Inc. (Nasdaq: SNPS), a world leader in software and IP for semiconductor design, verification and manufacturing, today reported results for its third quarter of fiscal year 2011.
For the third quarter of fiscal year 2011, Synopsys reported revenue of $386.8 million, compared to $336.9 million for the third quarter of fiscal 2010, an increase of 14.8%.
“Synopsys delivered strong revenue, earnings per share, and cash flow in the third quarter, and we are confident that we will exit fiscal 2011 with a great deal of strength,” said Aart de Geus, chairman and CEO of Synopsys. “Design activity continues unabated, driven by demand for mobile devices, cloud infrastructure, and electronics content in many every-day products. Synopsys is integral to the success of these end markets.”
GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal 2011 was $52.1 million, or $0.35 per share, compared to $39.3 million, or $0.26 per share, for the third quarter of fiscal 2010.
Non-GAAP Results
On a non-GAAP basis, net income for the third quarter of fiscal 2011 was $68.1 million, or $0.46 per share, compared to non-GAAP net income of $58.2 million, or $0.39 per share, for the third quarter of fiscal 2010. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
| 1 |
Financial Targets
Synopsys also provided its financial targets for the fourth quarter and full fiscal year 2011. These targets do not include future acquisition-related costs that may be incurred in fiscal 2011. These targets constitute forward-looking information and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see “Forward-Looking Statements” below.
Fourth Quarter of Fiscal Year 2011 Targets:
| • | Revenue: $386 million - $392 million |
| • | GAAP expenses: $329 million - $341 million |
| • | Non-GAAP expenses: $300 million - $305 million |
| • | Other income and expense: $0 - $1 million |
| • | Tax rate applied in non-GAAP net income calculations: 24 - 25 percent |
| • | Fully diluted outstanding shares: 146 million - 150 million |
| • | GAAP earnings per share: $0.26 - $0.31 |
| • | Non-GAAP earnings per share: $0.44 - $0.46 |
| • | Revenue from backlog: greater than 90 percent |
Full Fiscal Year 2011 Targets:
| • | Revenue: $1.531 billion - $1.537 billion |
| • | Other income and expense: $3 million - $4 million |
| • | Tax rate applied in non-GAAP net income calculations: 22 - 23 percent |
| • | Fully diluted outstanding shares: 148 million - 152 million |
| • | GAAP earnings per share: $1.46 - $1.51 |
| • | Non-GAAP earnings per share: $1.79 - $1.81 |
| • | Cash flow from operations: greater than $400 million |
| 2 |
GAAP Reconciliation
Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys’ operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes. Synopsys’ management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys’ management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) other significant items, including the effect of tax benefits from settlements with the Internal Revenue Service, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys’ business and for planning and forecasting in subsequent periods. Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed below.
| 3 |
Reconciliation of Third Quarter Fiscal Year 2011 Results
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income and earnings per share for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2011 Results
(Unaudited and in thousands, except per share amounts)
| Three Months Ended July 31, |
Nine Months Ended July 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| GAAP net income |
$ | 52,082 | $ | 39,327 | $ | 181,422 | $ | 211,662 | ||||||||
| Adjustments: |
||||||||||||||||
| Amortization of intangible assets |
16,921 | 10,611 | 52,568 | 33,075 | ||||||||||||
| Stock compensation |
13,515 | 14,514 | 41,430 | 45,214 | ||||||||||||
| Acquisition-related costs |
(198 | )(1) | 2,670 | 268 | (1) | 9,836 | ||||||||||
| Facility restructuring charge |
— | 1,115 | — | 1,115 | ||||||||||||
| Tax benefit from IRS settlement |
— | (2,695 | ) | (32,782 | ) | (94,344 | ) | |||||||||
| Tax adjustments |
(14,226 | ) | (7,359 | ) | (37,960 | ) | (24,023 | ) | ||||||||
|
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|
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|
|
|
|
|
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| Non-GAAP net income |
$ | 68,094 | $ | 58,183 | $ | 204,946 | $ | 182,535 | ||||||||
|
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| Three Months Ended July 31, |
Nine Months Ended July 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| GAAP net income per share |
$ | 0.35 | $ | 0.26 | $ | 1.20 | $ | 1.40 | ||||||||
| Adjustments: |
||||||||||||||||
| Amortization of intangible assets |
0.11 | 0.07 | 0.35 | 0.22 | ||||||||||||
| Stock compensation |
0.09 | 0.10 | 0.27 | 0.30 | ||||||||||||
| Acquisition-related costs |
(0.00 | )(1) | 0.02 | 0.00 | (1) | 0.07 | ||||||||||
| Facility restructuring charge |
— | 0.01 | — | 0.01 | ||||||||||||
| Tax benefit from IRS settlement |
— | (0.02 | ) | (0.22 | ) | (0.62 | ) | |||||||||
| Tax adjustments |
(0.09 | ) | (0.05 | ) | (0.25 | ) | (0.17 | ) | ||||||||
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| Non-GAAP net income per share |
$ | 0.46 | $ | 0.39 | $ | 1.35 | $ | 1.21 | ||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Shares used in calculation |
148,045 | 151,106 | 151,598 | 151,459 | ||||||||||||
| (1) | Included changes to the fair value of contingent consideration related to a prior year acquisition. |
| 4 |
Reconciliation of Target Non-GAAP Operating Results
The following tables reconcile the specific items excluded from GAAP in the calculation of target non-GAAP operating results for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Fourth Quarter Fiscal Year 2011 Targets
(in thousands, except per share amounts)
| Range for Three Months Ending October 31, 2011 |
||||||||
| Low | High | |||||||
| Target GAAP expenses |
$ | 329,000 | $ | 341,000 | ||||
| Adjustments: |
||||||||
| Estimated impact of amortization of intangible assets |
(15,000 | ) | (18,000 | ) | ||||
| Estimated impact of stock compensation |
(14,000 | ) | (18,000 | ) | ||||
|
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|
|
|
|||||
| Target non-GAAP expenses |
$ | 300,000 | $ | 305,000 | ||||
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|||||
| Range for Three Months Ending October 31, 2011 |
||||||||
| Low | High | |||||||
| Target GAAP earnings per share |
$ | 0.26 | $ | 0.31 | ||||
| Adjustments: |
||||||||
| Estimated impact of amortization of intangible assets |
0.12 | 0.10 | ||||||
| Estimated impact of stock compensation |
0.12 | 0.09 | ||||||
| Net non-GAAP tax adjustments |
(0.06 | ) | (0.04 | ) | ||||
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|
|||||
| Target non-GAAP earnings per share |
$ | 0.44 | $ | 0.46 | ||||
|
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|||||
| Shares used in non-GAAP calculation (midpoint of target range) |
148,000 | 148,000 |
GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2011 Targets
| Range for Fiscal Year Ending October 31, 2011 |
||||||||
| Low | High | |||||||
| Target GAAP earnings per share |
$ | 1.46 | $ | 1.51 | ||||
| Adjustments: |
||||||||
| Estimated impact of amortization of intangible assets |
0.47 | 0.45 | ||||||
| Estimated impact of stock compensation |
0.39 | 0.36 | ||||||
| Acquisition-related costs (1) |
0.00 | 0.00 | ||||||
| Tax benefit from IRS settlement |
(0.22 | ) | (0.22 | ) | ||||
| Net non-GAAP tax adjustments |
(0.31 | ) | (0.29 | ) | ||||
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| Target non-GAAP earnings per share |
$ | 1.79 | $ | 1.81 | ||||
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| Shares used in non-GAAP calculation (midpoint of target range) |
150,000 | 150,000 | ||||||
| (1) | Included changes to the fair value of contingent consideration related to a prior year acquisition. |
| 5 |
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 www.synopsys.com. A recording of the call will be available by dialing +1-800-475-6701 (+1-320-365-3844 for international callers), access code 212367, beginning at 4:00 p.m. Pacific Time today. A webcast replay will also be available on the website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the fourth quarter and fiscal year 2011 in November 2011. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and chief executive officer, and Brian Beattie, chief financial officer, on its website following the call. In addition, Synopsys makes additional financial information available in a financial supplement also posted on the corporate website.
Effectiveness of Information
The targets included in this release, the statements made during the earnings conference call and the information contained in the financial supplement (available in the Investor Relations section of Synopsys’ website at www.synopsys.com) represent Synopsys’ expectations and beliefs as of the date of this release only. Although this press release, copies of the prepared remarks of the chief executive officer and chief financial officer made during the call and the financial supplement will remain available on Synopsys’ website through the date of the fourth quarter and fiscal year 2011 earnings call in November 2011, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity.
Availability of Final Financial Statements
Synopsys will include final financial statements for the third quarter fiscal 2011 in its quarterly report on Form 10-Q to be filed by September 8, 2011.
About Synopsys
Synopsys, Inc. (Nasdaq:SNPS) is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, intellectual property (IP) and services used in semiconductor design, verification and manufacturing. Synopsys’ comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and field-programmable gate array (FPGA) solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, system-to-silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has approximately 70 offices located throughout North America, Europe, Japan, Asia and India. Visit Synopsys online at http://www.synopsys.com/.
| 6 |
Forward-Looking Statements
The statements made in this press release regarding projected financial results in the sections entitled “Financial Targets,” and “Reconciliation of Target Non-GAAP Operating Results,” financial objectives, and certain statements made in the earnings conference call are 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 uncertainties, including, but not limited to:
| • | changes in demand for Synopsys’ products due to fluctuations in demand for its customers’ products; |
| • | uncertainty in the growth of the semiconductor and electronics industry; |
| • | Synopsys’ ability to realize the potential financial or strategic benefits of the acquisitions it completes and the difficulties in the integration of the products and operations of acquired companies or assets into Synopsys’ products and operations; |
| • | continued uncertainty in the global economy and its potential impact on the semiconductor and electronics industries; |
| • | increased competition in the market for Synopsys’ products and services including through consolidation in the industry and among our customers; |
| • | lower-than-anticipated new IC design starts; |
| • | lower-than-anticipated purchases or delays in purchases of software or consulting services by Synopsys’ customers, including delays in the renewal, or non-renewal, of Synopsys’ license arrangements with major customers; |
| • | changes in the mix of time-based licenses and upfront licenses; |
| • | lower-than-expected orders; and |
| • | failure of customers to pay license fees as scheduled. |
| 7 |
In addition, Synopsys’ actual expenses, earnings per share and tax rate on a GAAP and non-GAAP basis for the fiscal quarter ending October 31, 2011 and actual expenses, earnings per share, tax rate, cash flow from operations and other projections on a GAAP and non-GAAP basis for fiscal year 2011 could differ materially from the targets stated under “Financial Targets” above for a number of reasons, including, but not limited to, (i) a determination by Synopsys that any portion of its goodwill or intangible assets have become impaired, (ii) application of the actual consolidated GAAP and non-GAAP tax rates for such periods, or judgment by management, based upon the status of pending audits and settlements to increase or decrease an income tax asset or liability, (iii) integration and other acquisition-related costs including amortization of intangible assets and costs formerly capitalized but now expensed due to new accounting guidance related to business combinations, as well as changes in the fair value of contingent consideration related to prior acquisitions, (iv) changes in the anticipated amount of employee stock compensation expense recognized on Synopsys’ financial statements, (v) actual change in the fair value of Synopsys’ non-qualified deferred compensation plan obligations, (vi) increases or decreases to estimated capital expenditures, (vii) changes driven by new accounting rules, regulations, interpretations or guidance, (viii) general economic conditions, and (ix) other risks as detailed in Synopsys’ SEC filings, including those described in the “Risk Factors” section in the latest Quarterly Report on Form 10-Q for the second fiscal quarter ended April 30, 2011. Furthermore, Synopsys’ actual tax rates applied to income for the fourth quarter and fiscal year 2011 could differ from the targets given in this press release as a result of a number of factors, including the actual geographic mix of revenue during the quarter and year, and actions by the government. Finally, Synopsys’ targets for outstanding shares in the fourth quarter and fiscal year 2011 could differ from the targets given in this press release as a result of higher than expected employee stock plan issuances or stock option exercises, acquisitions and the extent of Synopsys’ stock repurchase activity.
Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements made in this earnings release, the conference call or the financial supplement whether as a result of new information, future events or otherwise, unless otherwise required by law.
###
Synopsys is a registered trademark of Synopsys, Inc. Any other trademarks mentioned in this release are the property of their respective owners.
| 8 |
SYNOPSYS, INC.
Unaudited Consolidated Statements of Operations (1)
(in thousands, except per share amounts)
| Three Months Ended July 31, |
Nine Months Ended July 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue: |
||||||||||||||||
| Time-based license |
$ | 322,147 | $ | 286,563 | $ | 936,518 | $ | 847,710 | ||||||||
| Upfront license |
19,013 | 14,650 | 70,562 | 47,811 | ||||||||||||
| Maintenance and service |
45,635 | 35,716 | 138,029 | 109,681 | ||||||||||||
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| Total revenue |
386,795 | 336,929 | 1,145,109 | 1,005,202 | ||||||||||||
| Cost of revenue: |
||||||||||||||||
| License |
52,089 | 43,996 | 153,758 | 130,140 | ||||||||||||
| Maintenance and service |
19,275 | 14,697 | 59,796 | 46,475 | ||||||||||||
| Amortization of intangible assets |
13,368 | 8,050 | 41,511 | 24,736 | ||||||||||||
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|||||||||
| Total cost of revenue |
84,732 | 66,743 | 255,065 | 201,351 | ||||||||||||
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|||||||||
| Gross margin |
302,063 | 270,186 | 890,044 | 803,851 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
122,547 | 105,649 | 366,456 | 319,931 | ||||||||||||
| Sales and marketing |
90,732 | 83,812 | 269,618 | 242,791 | ||||||||||||
| General and administrative |
27,052 | 27,371 | 86,387 | 81,937 | ||||||||||||
| Amortization of intangible assets |
3,553 | 2,561 | 11,057 | 8,339 | ||||||||||||
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|||||||||
| Total operating expenses |
243,884 | 219,393 | 733,518 | 652,998 | ||||||||||||
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|||||||||
| Operating income |
58,179 | 50,793 | 156,526 | 150,853 | ||||||||||||
| Other (expense) income, net |
(2,212 | ) | (3,046 | ) | 9,032 | 8,109 | ||||||||||
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|||||||||
| Income before income taxes |
55,967 | 47,747 | 165,558 | 158,962 | ||||||||||||
| Provision (benefit) for income taxes |
3,885 | 8,420 | (15,864 | ) | (52,700 | ) | ||||||||||
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| Net income |
$ | 52,082 | $ | 39,327 | $ | 181,422 | $ | 211,662 | ||||||||
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| Net income per share: |
||||||||||||||||
| Basic |
$ | 0.36 | $ | 0.27 | $ | 1.23 | $ | 1.43 | ||||||||
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| Diluted |
$ | 0.35 | $ | 0.26 | $ | 1.20 | $ | 1.40 | ||||||||
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| Shares used in computing per share amounts: |
||||||||||||||||
| Basic |
144,960 | 148,006 | 147,479 | 147,909 | ||||||||||||
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| Diluted |
148,045 | 151,106 | 151,598 | 151,459 | ||||||||||||
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| (1) | Synopsys' third quarter ended on the Saturday nearest July 31. For presentation purposes, the Unaudited Consolidated Statements of Operations refer to a calendar month end. |
| 9 |
SYNOPSYS, INC.
Unaudited Consolidated Balance Sheets (1)
(in thousands, except par value amounts)
| July 31, 2011 |
October 31, 2010 |
|||||||
| ASSETS: |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 889,886 | $ | 775,407 | ||||
| Short-term investments |
148,395 | 163,154 | ||||||
|
|
|
|
|
|||||
| Total cash, cash equivalents and short-term investments |
1,038,281 | 938,561 | ||||||
| Accounts receivable, net |
175,386 | 181,102 | ||||||
| Deferred income taxes |
73,604 | 73,465 | ||||||
| Income taxes receivable |
21,477 | 18,425 | ||||||
| Prepaid and other current assets |
53,548 | 36,202 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,362,296 | 1,247,755 | ||||||
| Property and equipment, net |
159,059 | 148,580 | ||||||
| Goodwill |
1,258,286 | 1,265,843 | ||||||
| Intangible assets, net |
203,739 | 249,656 | ||||||
| Long-term deferred income taxes |
278,203 | 268,759 | ||||||
| Other long-term assets |
107,055 | 105,948 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 3,368,638 | $ | 3,286,541 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: |
||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued liabilities |
$ | 284,463 | $ | 312,850 | ||||
| Accrued income taxes |
3,091 | 8,349 | ||||||
| Deferred revenue |
694,536 | 600,569 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
982,090 | 921,768 | ||||||
| Long-term accrued income taxes |
98,049 | 128,603 | ||||||
| Other long-term liabilities |
107,849 | 101,885 | ||||||
| Long-term deferred revenue |
59,143 | 34,103 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
1,247,131 | 1,186,359 | ||||||
| Stockholders' equity: |
||||||||
| Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding |
— | — | ||||||
| Common stock, $0.01 par value: 400,000 shares authorized; 143,666 and 148,479 shares outstanding, respectively |
1,437 | 1,485 | ||||||
| Capital in excess of par value |
1,542,225 | 1,541,383 | ||||||
| Retained earnings |
931,281 | 770,674 | ||||||
| Treasury stock, at cost: 13,599 and 8,786 shares, respectively |
(351,896 | ) | (197,586 | ) | ||||
| Accumulated other comprehensive loss |
(1,540 | ) | (15,774 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders' equity |
2,121,507 | 2,100,182 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders' equity |
$ | 3,368,638 | $ | 3,286,541 | ||||
|
|
|
|
|
|||||
| (1) | Synopsys' third quarter ended on the Saturday nearest July 31. For presentation purposes, the Unaudited Consolidated Balance Sheets refer to a calendar month end. |
| 10 |
SYNOPSYS, INC.
Unaudited Consolidated Statements of Cash Flows (1)
(in thousands)
| Nine Months Ended July 31, |
||||||||
| 2011 | 2010 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | 181,422 | $ | 211,662 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Amortization and depreciation |
96,959 | 71,772 | ||||||
| Stock compensation |
41,430 | 45,214 | ||||||
| Allowance for doubtful accounts |
910 | (851 | ) | |||||
| Write-down of long-term investments |
999 | 468 | ||||||
| Gain on sale of investments |
(829 | ) | (3,114 | ) | ||||
| Deferred income taxes |
(4,891 | ) | (31,297 | ) | ||||
| Net changes in operating assets and liabilities, net of acquired assets and liabilities: |
||||||||
| Accounts receivable |
6,780 | (19,181 | ) | |||||
| Prepaid and other current assets |
(7,560 | ) | (7,497 | ) | ||||
| Other long-term assets |
(7,681 | ) | (2,470 | ) | ||||
| Accounts payable and other liabilities |
(17,285 | ) | (21,270 | ) | ||||
| Income taxes |
(38,998 | ) | (31,445 | ) | ||||
| Deferred revenue |
116,034 | 32,153 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
367,290 | 244,144 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Proceeds from sales and maturities of short-term investments |
104,013 | 352,124 | ||||||
| Purchases of short-term investments |
(92,611 | ) | (209,564 | ) | ||||
| Purchases of property and equipment |
(42,836 | ) | (27,593 | ) | ||||
| Cash paid for acquisitions, net of cash acquired |
(5,382 | ) | (137,681 | ) | ||||
| Capitalization of software development costs |
(2,269 | ) | (2,116 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(39,085 | ) | (24,830 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Principal payments on capital leases |
(4,592 | ) | (3,609 | ) | ||||
| Issuances of common stock |
119,826 | 87,241 | ||||||
| Purchases of treasury stock |
(334,985 | ) | (125,257 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(219,751 | ) | (41,625 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents |
6,025 | 4,139 | ||||||
|
|
|
|
|
|||||
| Net change in cash and cash equivalents |
114,479 | 181,828 | ||||||
| Cash and cash equivalents, beginning of period |
775,407 | 701,613 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents, end of period |
$ | 889,886 | $ | 883,441 | ||||
|
|
|
|
|
|||||
| (1) | Synopsys' third quarter ended on the Saturday nearest July 31. For presentation purposes, the Unaudited Consolidated Statements of Cash Flows refer to a calendar month end. |
| 11 |