Cadence Design Systems, Inc. (NASDAQ: CDNS) today reported second quarter 2006 revenue of $359 million, an increase of 12 percent over the $321 million reported for the same period in 2005. On a GAAP basis, Cadence(R) recognized net income of $30 million, or $0.10 per share on a diluted basis, in the second quarter of 2006, compared to $0.5 million, or $0.00 per share on a diluted basis, in the same period in 2005.
In addition to using GAAP results in evaluating Cadence’s business, management believes it is useful to measure results using a non-GAAP measure of net income, which excludes, as applicable, amortization of intangible assets, stock-based compensation, in-process research and development charges, integration and other acquisition-related expenses, gains and expenses related to non-qualified deferred compensation plan assets, executive severance payments, restructuring charges and equity in losses (income) from investments. Non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company’s tax liability. See “GAAP to non-GAAP Reconciliation” below for further information on the non-GAAP measure.
Using this non-GAAP measure, net income in the second quarter of 2006 was $73 million, or $0.23 per share on a diluted basis, as compared to $53 million, or $0.17 per share on a diluted basis, in the same period in 2005.
“We again had great execution during the second quarter,” said Mike Fister, president and CEO of Cadence Design Systems, Inc. “Our analog, mixed-signal expertise is fueling sales across all our platforms from system validation to digital implementation.”
Bill Porter, executive vice president and chief financial officer added, “We had notably good performance across our broad base of business and all geographies this quarter.”
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 completed after July 1, 2006.
For the third quarter of 2006, the company expects total revenue in the range of $350 million to $360 million. Third quarter GAAP earnings per diluted share are expected to be in the range of $0.12 to $0.14. Diluted earnings per share using the non-GAAP measure defined below are expected to be in the range of $0.24 to $0.26.
For the full year 2006, the company expects total revenue in the range of $1.425 billion to $1.475 billion. On a GAAP basis, net income per diluted share for fiscal 2006 is expected in the range of $0.45 to $0.53. Using the non-GAAP measure defined below, diluted earnings per share for fiscal 2006 are expected to be in the range of $0.98 to $1.06.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to the non-GAAP net income and diluted net income per share is included with this release.
Audio Webcast Scheduled
Fister and Porter will host a second quarter 2006 financial results audio webcast today, July 26, 2006, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the Web site at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 26, 2006, at 5 p.m. Pacific time and ending at 5 p.m. Pacific time on Aug. 2, 2006. Webcast access is available online.
Cadence enables global electronic-design innovation and plays an essential role in the creation of today’s integrated circuits and electronics. Customers use Cadence software and hardware, methodologies, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. Cadence reported 2005 revenues of approximately $1.3 billion, and has approximately 5,100 employees. The company is headquartered in San Jose, Calif., with sales offices, design centres, and research facilities around the world to serve the global electronics industry.