[February 19, 2019] |
|
Cadence Reports Fourth Quarter and Fiscal Year 2018 Financial Results
Cadence Design Systems, Inc. (NASDAQ: CDNS) today reported its results
under new revenue rules, ASC Topic 606. For the fourth quarter of 2018,
Cadence reported revenue of $570 million, GAAP net income of $98
million, or $0.35 per share on a diluted basis, and non-GAAP net income
(as defined below) of $147 million, or $0.52 per share on a diluted
basis. For 2018, Cadence reported revenue of $2.138 billion, GAAP net
income of $346 million, or $1.23 per share on a diluted basis, and
non-GAAP net income of $526 million, or $1.87 per share on a diluted
basis.
Cadence also reported its results under the old revenue rules, ASC Topic
605, for easier comparison with prior results, all of which were
reported under ASC Topic 605.
Under ASC Topic 605, for the fourth quarter of 2018, Cadence reported
revenue of $579 million, compared to revenue of $502 million reported
for the same period in 2017. On a GAAP basis, Cadence recognized net
income of $100 million, or $0.36 per share on a diluted basis, in the
fourth quarter of 2018, compared to a net loss of $14 million, or
$(0.05) per share on a diluted basis for the same period in 2017. Using
the non-GAAP measure defined below, net income for the fourth quarter of
2018 was $144 million, or $0.51 per share on a diluted basis, compared
to net income of $111 million, or $0.39 per share on a diluted basis,
for the same period in 2017.
Due to the U.S. Tax Cuts and Jobs Act enacted in December 2017, GAAP net
loss for the fourth quarter of 2017 included a $67 million income tax
expense for a one time transition tax on previously untaxed foreign
earnings and a $25 million income tax expense for the reduction in the
value of Cadence's U.S. deferred tax assets caused by the U.S. corporate
tax rate reduction.
Under ASC Topic 605, Cadence reported 2018 revenue of $2.146 billion,
compared to revenue of $1.943 billion for 2017. On a GAAP basis, Cadence
recognized net income of $351 million, or $1.25 per share on a diluted
basis, in 2018, compared to net income of $204 million, or $0.73 per
share on a diluted basis, in 2017. Using the non-GAAP measure defined
below, net income for 2018 was $528 million, or $1.88 per share on a
diluted basis, as compared to net income of $393 million, or $1.40 per
share on a diluted basis, in 2017.
"Cadence achieved excellent operating results for 2018 as technology
trends like AI, cloud/datacenter and 5G drove strong design activity,"
said Lip-Bu Tan, chief executive officer. "We continued to execute our
System Design Enablement strategy, leading to broad strength across our
product lines, as well as in the aerospace/defense vertical, and we
announced our partnership with Green Hills Software, the leader in
embedded safety and security software."
"I'd like to thank the entire Cadence team for their strong execution
across all lines of business for 2018," said John Wall, senior vice
president and chief financial officer. "I am pleased with our results
and look forward to building on our success in 2019."
As of the end of the fourth quarter of 2018, $175 million remained
available under the previously announced authorization to repurchase
Cadence common stock. In February 2019, the Board of Directors
authorized the repurchase of an additional $500 million of Cadence
common stock. The timing and amount of repurchases will be subject to
business and market conditions, corporate and regulatory requirements,
stock price, acquisition opportunities and other factors.
CFO Commentary
Commentary on the fourth quarter and fiscal year 2018 financial results
by John Wall, senior vice president and chief financial officer, is
available at www.cadence.com/cadence/investor_relations.
Business Outlook
For the first quarter of 2019, the company expects total revenue in the
range of $565 million to $575 million. First quarter GAAP net income per
diluted share is expected to be in the range of $0.36 to $0.38. Net
income per diluted share using the non-GAAP measure defined below is
expected to be in the range of $0.48 to $0.50.
For 2019, the company expects total revenue in the range of $2.270
billion to $2.310 billion. On a GAAP basis, net income per diluted share
for 2019 is expected to be in the range of $1.33 to $1.43. Using the
non-GAAP measure defined below, net income per diluted share for 2019 is
expected to be in the range of $1.97 to $2.07.
A schedule showing a reconciliation of the business outlook from GAAP
net income and diluted net income per share to non-GAAP net income and
diluted net income per share is included in this release.
Audio Webcast Scheduled
Lip-Bu Tan, chief executive officer, and John Wall, senior vice
president and chief financial officer, will host the fourth quarter and
fiscal year 2018 financial results audio webcast today, February 19,
2019, at 2 p.m. (Pacific) / 5 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 February
19, 2019 at 5 p.m. (Pacific) and ending March 15, 2019 at 5 p.m.
(Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
About Cadence
Cadence enables electronic systems and semiconductor companies to create
the innovative end products that are transforming the way people live,
work and play. Cadence® software, hardware and semiconductor
IP are used by customers to deliver products to market faster. The
company's System Design Enablement strategy helps customers develop
differentiated products-from chips to boards to systems-in mobile,
consumer, cloud datacenter, automotive, aerospace, IoT, industrial and
other market segments. Cadence is listed as one of Fortune Magazine's
100 Best Companies to Work For. Learn more at www.cadence.com.
Cadence and the Cadence logo are trademarks or registered
trademarks of Cadence Design Systems, Inc. All other
trademarks are the property of their respective owners.
The statements contained above, as well as the information in the
Business Outlook section, are or include forward-looking statements
based on current expectations or beliefs and 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. These forward-looking statements are
subject to a number of risks, uncertainties and other factors, many of
which are outside Cadence's control, including, among others:
(i) Cadence's ability to compete successfully in the electronic design
automation product and the commercial electronic design and methodology
services industries; (ii) the success of Cadence's efforts to improve
operational efficiency and growth; (iii) the mix of products and
services sold and the timing of significant orders for Cadence's
products; (iv) change in customer demands, including those resulting
from consolidation among Cadence's customers and the possibility that
the restructurings and other efforts to improve operational efficiency
of Cadence's customers could result in delays in purchases of Cadence's
products and services; (v) economic and industry conditions in regions
in which Cadence does business; (vi) fluctuations in rates of exchange
between the U.S. dollar and the currencies of other countries in which
Cadence does business; (vii) capital expenditure requirements,
legislative or regulatory requirements, changes in tax laws, interest
rates and Cadence's ability to access capital and debt markets; (viii)
the acquisition of other companies or technologies or the failure to
successfully integrate and operate these companies or technologies
Cadence acquires, including the potential inability to retain customers,
key employees or vendors; (ix) the effects of Cadence's efforts to
improve operational efficiency in its business, including strategic,
customer and supplier relationships, and its ability to retain key
employees; (x) events that affect cash flow, liquidity, reserves or
settlement assumptions Cadence may take from time to time with respect
to accounts receivable, taxes and tax examinations, litigation or other
matters; and (xi) the effects of any litigation or other proceedings to
which Cadence is or may become a party. In addition, the timing and
amount of Cadence's repurchase of its common stock under the
authorizations will be subject to business and market conditions,
corporate and regulatory requirements, stock price, acquisition
opportunities and other factors.
For a detailed discussion of these and other cautionary statements
related to Cadence's business, please refer to Cadence's filings with
the U.S. Securities and Exchange Commission, which include Cadence's
most recent reports on Form 10-K and Form 10-Q, including Cadence's
future filings.
GAAP to Non-GAAP Reconciliation
Non-GAAP financial measures should not be considered as a substitute for
or superior to measures of financial performance prepared in accordance
with generally accepted accounting principles, or GAAP. Investors are
encouraged to review the reconciliation of non-GAAP financial measures
contained within this press release with their most directly comparable
GAAP financial results. Investors are also encouraged to look at the
GAAP results as the best measure of financial performance.
To supplement Cadence's financial results presented on a GAAP basis,
Cadence management uses non-GAAP measures that it believes are helpful
in understanding Cadence's performance. One such measure is non-GAAP net
income, which is a financial measure not calculated under GAAP. Non-GAAP
net income is calculated by Cadence management by taking GAAP net income
and excluding, as applicable, amortization of intangible assets,
stock-based compensation expense, acquisition and integration-related
costs including retention expenses, investment gains or losses, income
or expenses related to Cadence's non-qualified deferred compensation
plan, restructuring and other significant items not directly related to
Cadence's core business operations, and the income tax effect of
non-GAAP pre-tax adjustments.
Cadence management uses non-GAAP net income because it excludes items
that are generally not directly related to the performance of Cadence's
core business operations and therefore provides supplemental information
to Cadence management and investors regarding the performance of the
business operations, facilitates comparisons to the historical operating
results and allows the review of Cadence's business from the same
perspective as Cadence management, including forecasting and budgeting.
The following tables reconcile the specific items excluded from GAAP net
income and GAAP net income per diluted share in the calculation of
non-GAAP net income and non-GAAP net income per diluted share for the
periods shown below:
|
Net Income (Loss) Reconciliation
|
|
|
Three Months Ended
|
(unaudited)
|
|
|
ASC 606
|
|
|
ASC 605
|
|
|
ASC 605
|
|
|
|
December 29, 2018
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
Net income (loss) on a GAAP basis
|
|
|
$
|
98,425
|
|
|
|
$
|
100,032
|
|
|
|
$
|
(14,442
|
)
|
Amortization of acquired intangibles
|
|
|
12,942
|
|
|
|
12,942
|
|
|
|
13,741
|
|
Stock-based compensation expense
|
|
|
42,594
|
|
|
|
42,594
|
|
|
|
36,015
|
|
Non-qualified deferred compensation expenses (credits)
|
|
|
(3,186
|
)
|
|
|
(3,186
|
)
|
|
|
1,295
|
|
Restructuring and other charges
|
|
|
13,699
|
|
|
|
13,699
|
|
|
|
12,178
|
|
Acquisition and integration-related costs (credits)
|
|
|
(1,360
|
)
|
|
|
(1,360
|
)
|
|
|
5,712
|
|
Other income or expense related to investments and non-qualified
deferred compensation plan assets*
|
|
|
1,356
|
|
|
|
1,356
|
|
|
|
(1,368
|
)
|
Income tax related to transition tax
|
|
|
-
|
|
|
|
-
|
|
|
|
67,188
|
|
Income tax related to tax rate change
|
|
|
-
|
|
|
|
-
|
|
|
|
25,292
|
|
Income tax effect of non-GAAP adjustments
|
|
|
(17,737
|
)
|
|
|
(21,962
|
)
|
|
|
(34,328
|
)
|
Net income on a non-GAAP basis
|
|
|
$
|
146,733
|
|
|
|
$
|
144,115
|
|
|
|
$
|
111,283
|
|
*
|
Includes, as applicable, equity in losses or income from
investments, write-down of investments, gains or losses on
investments and gains or losses on non-qualified deferred
compensation plan assets recorded in other income or expense.
|
|
|
|
Net Income Reconciliation
|
|
|
Years Ended
|
(unaudited)
|
|
|
ASC 606
|
|
|
ASC 605
|
|
|
ASC 605
|
|
|
|
December 29, 2018
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
Net income on a GAAP basis
|
|
|
$
|
345,777
|
|
|
|
$
|
351,297
|
|
|
|
$
|
204,101
|
|
Amortization of acquired intangibles
|
|
|
53,333
|
|
|
|
53,333
|
|
|
|
56,497
|
|
Stock-based compensation expense
|
|
|
167,715
|
|
|
|
167,715
|
|
|
|
130,023
|
|
Non-qualified deferred compensation expenses (credits)
|
|
|
(1,471
|
)
|
|
|
(1,471
|
)
|
|
|
6,145
|
|
Restructuring and other charges
|
|
|
11,089
|
|
|
|
11,089
|
|
|
|
9,406
|
|
Acquisition and integration-related costs
|
|
|
19,858
|
|
|
|
19,858
|
|
|
|
8,468
|
|
Other income or expense related to investments and non-qualified
deferred compensation plan assets*
|
|
|
(1,278
|
)
|
|
|
(1,278
|
)
|
|
|
(15,693
|
)
|
Income tax related to transition tax
|
|
|
-
|
|
|
|
-
|
|
|
|
67,188
|
|
Income tax related to tax rate change
|
|
|
-
|
|
|
|
-
|
|
|
|
25,292
|
|
Income tax effect of non-GAAP adjustments
|
|
|
(69,489
|
)
|
|
|
(72,358
|
)
|
|
|
(98,810
|
)
|
Net income on a non-GAAP basis
|
|
|
$
|
525,534
|
|
|
|
$
|
528,185
|
|
|
|
$
|
392,617
|
|
*
|
Includes, as applicable, equity in losses or income from
investments, write-down of investments, gains or losses on
investments and gains or losses on non-qualified deferred
compensation plan assets recorded in other income or expense.
|
|
|
Diluted Net Income (Loss) Per Share Reconciliation
|
|
|
Three Months Ended
|
(unaudited)
|
|
|
ASC 606
|
|
|
ASC 605
|
|
|
ASC 605
|
|
|
|
December 29, 2018
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share on a GAAP basis
|
|
|
$
|
0.35
|
|
|
|
$
|
0.36
|
|
|
|
$
|
(0.05
|
)
|
Amortization of acquired intangibles
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.05
|
|
Stock-based compensation expense
|
|
|
0.15
|
|
|
|
0.15
|
|
|
|
0.13
|
|
Non-qualified deferred compensation expenses (credits)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
-
|
|
Restructuring and other charges
|
|
|
0.05
|
|
|
|
0.05
|
|
|
|
0.04
|
|
Acquisition and integration-related costs (credits)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
0.02
|
|
Other income or expense related to investments and non-qualified
deferred compensation plan assets*
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01
|
)
|
Income tax related to transition tax
|
|
|
-
|
|
|
|
-
|
|
|
|
0.24
|
|
Income tax related to tax rate change
|
|
|
-
|
|
|
|
-
|
|
|
|
0.09
|
|
Income tax effect of non-GAAP adjustments
|
|
|
(0.06
|
)
|
|
|
(0.08
|
)
|
|
|
(0.12
|
)
|
Diluted net income per share on a non-GAAP basis
|
|
|
$
|
0.52
|
|
|
|
$
|
0.51
|
|
|
|
$
|
0.39
|
|
Shares used in calculation of diluted net income (loss) per share
- GAAP**
|
|
|
280,321
|
|
|
|
280,321
|
|
|
|
273,157
|
|
Shares used in calculation of diluted net income per share -
non-GAAP**
|
|
|
280,321
|
|
|
|
280,321
|
|
|
|
282,206
|
|
*
|
Includes, as applicable, equity in losses or income from
investments, write-down of investments, gains or losses on
investments and gains or losses on non-qualified deferred
compensation plan assets recorded in other income or expense.
|
**
|
Shares used in the calculation of GAAP net income (loss) per share
are expected to be the same as shares used in the calculation of
non-GAAP net income per share, except when the company reports a
GAAP net loss and non-GAAP net income, or GAAP net income and a
non-GAAP net loss.
|
|
|
Diluted Net Income Per Share Reconciliation
|
|
|
Years Ended
|
(unaudited)
|
|
|
ASC 606
|
|
|
ASC 605
|
|
|
ASC 605
|
|
|
|
December 29, 2018
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Diluted net income per share on a GAAP basis
|
|
|
$
|
1.23
|
|
|
|
$
|
1.25
|
|
|
|
$
|
0.73
|
|
Amortization of acquired intangibles
|
|
|
0.19
|
|
|
|
0.19
|
|
|
|
0.20
|
|
Stock-based compensation expense
|
|
|
0.60
|
|
|
|
0.60
|
|
|
|
0.46
|
|
Non-qualified deferred compensation expenses (credits)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
0.02
|
|
Restructuring and other charges
|
|
|
0.04
|
|
|
|
0.04
|
|
|
|
0.03
|
|
Acquisition and integration-related costs
|
|
|
0.07
|
|
|
|
0.07
|
|
|
|
0.03
|
|
Other income or expense related to investments and non-qualified
deferred compensation plan assets*
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.05
|
)
|
Income tax related to transition tax
|
|
|
-
|
|
|
|
-
|
|
|
|
0.24
|
|
Income tax related to tax rate change
|
|
|
-
|
|
|
|
-
|
|
|
|
0.09
|
|
Income tax effect of non-GAAP adjustments
|
|
|
(0.25
|
)
|
|
|
(0.26
|
)
|
|
|
(0.35
|
)
|
Diluted net income per share on a non-GAAP basis
|
|
|
$
|
1.87
|
|
|
|
$
|
1.88
|
|
|
|
$
|
1.40
|
|
Shares used in calculation of diluted net income per share - GAAP**
|
|
|
281,144
|
|
|
|
281,144
|
|
|
|
280,221
|
|
Shares used in calculation of diluted net income per share -
non-GAAP**
|
|
|
281,144
|
|
|
|
281,144
|
|
|
|
280,221
|
|
*
|
Includes, as applicable, equity in losses or income from
investments, write-down of investments, gains or losses on
investments and gains or losses on non-qualified deferred
compensation plan assets recorded in other income or expense.
|
**
|
Shares used in the calculation of GAAP net income per share are
expected to be the same as shares used in the calculation of
non-GAAP net income per share, except when the company reports a
GAAP net loss and non-GAAP net income, or GAAP net income and a
non-GAAP net loss.
|
|
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 business outlook, publicly available
on its website.
Prior to the start of the Quiet Period (described below), the public may
continue to rely on the business outlook contained herein as still being
Cadence's current expectations on matters covered unless Cadence
publishes a notice stating otherwise.
Beginning March 15, 2019, Cadence will observe a Quiet Period during
which the business outlook as provided in this press release and the
most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q
no longer constitute Cadence's current expectations. During the Quiet
Period, the business outlook in these documents should be considered
historical, speaking as of prior to the Quiet Period only and not
subject to any update by Cadence. During the Quiet Period, Cadence's
representatives will not comment on Cadence's business outlook,
financial results or expectations. The Quiet Period will extend until
Cadence's first quarter 2019 earnings release is published, which is
currently scheduled for April 22, 2019.
|
Cadence Design Systems, Inc.
|
Condensed Consolidated Balance Sheets
|
December 29, 2018 and December 30, 2017
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
December 29, 2018
|
|
|
December 30, 2017
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
533,298
|
|
|
$
|
688,087
|
Receivables, net of allowances of $3,936 and $0, respectively
|
|
|
|
297,082
|
|
|
|
190,426
|
Inventories
|
|
|
|
28,162
|
|
|
|
33,209
|
Prepaid expenses and other
|
|
|
|
92,550
|
|
|
|
68,266
|
Total current assets
|
|
|
|
951,092
|
|
|
|
979,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation of
$698,493 and $658,377, respectively
|
|
|
|
252,630
|
|
|
|
251,342
|
Goodwill
|
|
|
|
662,272
|
|
|
|
666,009
|
Acquired intangibles, net of accumulated amortization of
|
|
|
|
|
|
|
$333,687 and $297,456, respectively
|
|
|
|
225,457
|
|
|
|
278,835
|
Long-term receivables
|
|
|
|
5,972
|
|
|
|
12,239
|
Other assets
|
|
|
|
371,231
|
|
|
|
230,301
|
Total assets
|
|
|
$
|
2,468,654
|
|
|
$
|
2,418,714
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Revolving credit facility
|
|
|
$
|
100,000
|
|
|
$
|
85,000
|
Accounts payable and accrued liabilities
|
|
|
|
256,526
|
|
|
|
221,101
|
Current portion of deferred revenue
|
|
|
|
352,456
|
|
|
|
336,297
|
Total current liabilities
|
|
|
|
708,982
|
|
|
|
642,398
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
Long-term portion of deferred revenue
|
|
|
|
48,718
|
|
|
|
61,513
|
Long-term debt
|
|
|
|
345,291
|
|
|
|
644,369
|
Other long-term liabilities
|
|
|
|
77,262
|
|
|
|
81,232
|
Total long-term liabilities
|
|
|
|
471,271
|
|
|
|
787,114
|
|
|
|
|
Stockholders' equity
|
|
|
|
1,288,401
|
|
|
|
989,202
|
Total liabilities and stockholders' equity
|
|
|
$
|
2,468,654
|
|
|
$
|
2,418,714
|
|
|
Cadence Design Systems, Inc.
|
Condensed Consolidated Statements of Operations
|
For the Three Months and Years Ended December 29, 2018 and
December 30, 2017
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
Years Ended
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product and maintenance
|
|
|
$
|
534,418
|
|
|
|
$
|
467,504
|
|
|
|
$
|
1,997,887
|
|
|
|
$
|
1,813,987
|
|
Services
|
|
|
|
35,432
|
|
|
|
|
34,218
|
|
|
|
|
140,135
|
|
|
|
|
129,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
569,850
|
|
|
|
|
501,722
|
|
|
|
|
2,138,022
|
|
|
|
|
1,943,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product and maintenance
|
|
|
|
54,748
|
|
|
|
|
39,305
|
|
|
|
|
173,011
|
|
|
|
|
156,676
|
|
Cost of services
|
|
|
|
21,376
|
|
|
|
|
20,979
|
|
|
|
|
85,736
|
|
|
|
|
80,714
|
|
Marketing and sales
|
|
|
|
112,613
|
|
|
|
|
107,654
|
|
|
|
|
439,669
|
|
|
|
|
419,161
|
|
Research and development
|
|
|
|
218,271
|
|
|
|
|
203,468
|
|
|
|
|
884,816
|
|
|
|
|
804,223
|
|
General and administrative
|
|
|
|
31,985
|
|
|
|
|
33,289
|
|
|
|
|
133,406
|
|
|
|
|
134,181
|
|
Amortization of acquired intangibles
|
|
|
|
3,468
|
|
|
|
|
3,571
|
|
|
|
|
14,086
|
|
|
|
|
14,716
|
|
Restructuring and other charges
|
|
|
|
13,699
|
|
|
|
|
12,178
|
|
|
|
|
11,089
|
|
|
|
|
9,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
|
456,160
|
|
|
|
|
420,444
|
|
|
|
|
1,741,813
|
|
|
|
|
1,619,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
113,690
|
|
|
|
|
81,278
|
|
|
|
|
396,209
|
|
|
|
|
323,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(4,318
|
)
|
|
|
|
(6,712
|
)
|
|
|
|
(23,139
|
)
|
|
|
|
(25,664
|
)
|
Other income (expense), net
|
|
|
|
(735
|
)
|
|
|
|
2,385
|
|
|
|
|
3,320
|
|
|
|
|
16,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
108,637
|
|
|
|
|
76,951
|
|
|
|
|
376,390
|
|
|
|
|
315,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
10,212
|
|
|
|
|
91,393
|
|
|
|
|
30,613
|
|
|
|
|
110,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
98,425
|
|
|
|
$
|
(14,442
|
)
|
|
|
$
|
345,777
|
|
|
|
$
|
204,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic
|
|
|
$
|
0.36
|
|
|
|
$
|
(0.05
|
)
|
|
|
$
|
1.26
|
|
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - diluted
|
|
|
$
|
0.35
|
|
|
|
$
|
(0.05
|
)
|
|
|
$
|
1.23
|
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic
|
|
|
|
273,680
|
|
|
|
|
273,157
|
|
|
|
|
273,729
|
|
|
|
|
272,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - diluted
|
|
|
|
280,321
|
|
|
|
|
273,157
|
|
|
|
|
281,144
|
|
|
|
|
280,221
|
|
|
|
Cadence Design Systems, Inc.
|
Condensed Consolidated Statements of Cash Flows
|
For the Years Ended December 29, 2018 and December 30, 2017
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
Years Ended
|
|
|
|
December 29,
|
|
|
December 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
$
|
688,087
|
|
|
|
$
|
465,232
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
|
345,777
|
|
|
|
|
204,101
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
118,721
|
|
|
|
|
115,524
|
|
Amortization of debt discount and fees
|
|
|
|
1,196
|
|
|
|
|
1,211
|
|
Stock-based compensation
|
|
|
|
167,715
|
|
|
|
|
130,023
|
|
Gain on investments, net
|
|
|
|
(1,261
|
)
|
|
|
|
(13,869
|
)
|
Deferred income taxes
|
|
|
|
(11,676
|
)
|
|
|
|
79,934
|
|
Provisions for losses on receivables
|
|
|
|
5,102
|
|
|
|
|
2,623
|
|
Other non-cash items
|
|
|
|
1,136
|
|
|
|
|
5,068
|
|
Changes in operating assets and liabilities, net of effect of
acquired businesses:
|
|
|
|
|
|
|
Receivables
|
|
|
|
(87,083
|
)
|
|
|
|
(31,032
|
)
|
Inventories
|
|
|
|
752
|
|
|
|
|
5,034
|
|
Prepaid expenses and other
|
|
|
|
(19,622
|
)
|
|
|
|
(25,793
|
)
|
Other assets
|
|
|
|
(16,077
|
)
|
|
|
|
(22,336
|
)
|
Accounts payable and accrued liabilities
|
|
|
|
1,553
|
|
|
|
|
(25,987
|
)
|
Deferred revenue
|
|
|
|
100,696
|
|
|
|
|
33,614
|
|
Other long-term liabilities
|
|
|
|
(2,178
|
)
|
|
|
|
12,625
|
|
Net cash provided by operating activities
|
|
|
|
604,751
|
|
|
|
|
470,740
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Proceeds from the sale of available-for-sale securities
|
|
|
|
-
|
|
|
|
|
833
|
|
Purchases of non-marketable investments
|
|
|
|
(115,839
|
)
|
|
|
|
-
|
|
Proceeds from the sale of non-marketable investments
|
|
|
|
3,497
|
|
|
|
|
9,108
|
|
Purchases of property, plant and equipment
|
|
|
|
(61,503
|
)
|
|
|
|
(57,901
|
)
|
Cash paid in business combinations and asset acquisitions, net of
cash acquired
|
|
|
|
-
|
|
|
|
|
(143,249
|
)
|
Net cash used for investing activities
|
|
|
|
(173,845
|
)
|
|
|
|
(191,209
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from revolving credit facility
|
|
|
|
100,000
|
|
|
|
|
135,000
|
|
Payment on revolving credit facility
|
|
|
|
(85,000
|
)
|
|
|
|
(100,000
|
)
|
Principal payments on term loan
|
|
|
|
(300,000
|
)
|
|
|
|
-
|
|
Payment of debt issuance costs
|
|
|
|
-
|
|
|
|
|
(793
|
)
|
Proceeds from issuance of common stock
|
|
|
|
40,908
|
|
|
|
|
48,965
|
|
Stock received for payment of employee taxes on vesting of
restricted stock
|
|
|
|
(69,921
|
)
|
|
|
|
(57,161
|
)
|
Payments for repurchases of common stock
|
|
|
|
(250,059
|
)
|
|
|
|
(100,025
|
)
|
Change in book overdraft
|
|
|
|
(3,867
|
)
|
|
|
|
3,867
|
|
Net cash used for financing activities
|
|
|
|
(567,939
|
)
|
|
|
|
(70,147
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(17,756
|
)
|
|
|
|
13,471
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
(154,789
|
)
|
|
|
|
222,855
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
|
$
|
533,298
|
|
|
|
$
|
688,087
|
|
|
|
Cadence Design Systems, Inc.
|
(Unaudited)
|
|
|
|
Revenue Mix by Geography (% of Total Revenue)
|
|
|
ASC 605
|
|
|
ASC 605
|
|
|
ASC 606
|
|
|
|
2017
|
|
|
2018
|
|
|
2018
|
GEOGRAPHY
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
45%
|
|
|
45%
|
|
|
45%
|
|
|
44%
|
|
|
44%
|
|
|
45%
|
|
|
45%
|
|
|
43%
|
|
|
46%
|
|
|
44%
|
|
|
45%
|
|
|
46%
|
|
|
44%
|
|
|
44%
|
|
|
45%
|
Asia
|
|
|
26%
|
|
|
28%
|
|
|
27%
|
|
|
28%
|
|
|
27%
|
|
|
26%
|
|
|
26%
|
|
|
30%
|
|
|
29%
|
|
|
28%
|
|
|
27%
|
|
|
26%
|
|
|
29%
|
|
|
31%
|
|
|
28%
|
Europe, Middle East and Africa
|
|
|
20%
|
|
|
19%
|
|
|
19%
|
|
|
20%
|
|
|
20%
|
|
|
21%
|
|
|
21%
|
|
|
19%
|
|
|
17%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
19%
|
|
|
17%
|
|
|
19%
|
Japan
|
|
|
9%
|
|
|
8%
|
|
|
9%
|
|
|
8%
|
|
|
9%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
|
|
8%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Mix by Product Group (% of Total Revenue)
|
|
|
ASC 605
|
|
|
ASC 605
|
|
|
ASC 606
|
|
|
|
2017
|
|
|
2018
|
|
|
2018
|
PRODUCT GROUP
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Functional Verification, including Emulation and Prototyping Hardware
|
|
|
23%
|
|
|
23%
|
|
|
21%
|
|
|
23%
|
|
|
22%
|
|
|
26%
|
|
|
23%
|
|
|
21%
|
|
|
26%
|
|
|
24%
|
|
|
26%
|
|
|
23%
|
|
|
22%
|
|
|
25%
|
|
|
24%
|
Digital IC Design and Signoff
|
|
|
29%
|
|
|
30%
|
|
|
30%
|
|
|
29%
|
|
|
29%
|
|
|
29%
|
|
|
29%
|
|
|
30%
|
|
|
27%
|
|
|
29%
|
|
|
30%
|
|
|
30%
|
|
|
30%
|
|
|
28%
|
|
|
29%
|
Custom IC Design and Simulation
|
|
|
26%
|
|
|
26%
|
|
|
28%
|
|
|
26%
|
|
|
27%
|
|
|
26%
|
|
|
26%
|
|
|
27%
|
|
|
24%
|
|
|
26%
|
|
|
26%
|
|
|
26%
|
|
|
26%
|
|
|
25%
|
|
|
26%
|
System Interconnect and Analysis
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
9%
|
|
|
10%
|
|
|
10%
|
|
|
9%
|
|
|
9%
|
|
|
9%
|
|
|
9%
|
|
|
9%
|
|
|
9%
|
|
|
9%
|
IP
|
|
|
12%
|
|
|
11%
|
|
|
11%
|
|
|
12%
|
|
|
12%
|
|
|
10%
|
|
|
12%
|
|
|
12%
|
|
|
14%
|
|
|
12%
|
|
|
9%
|
|
|
12%
|
|
|
13%
|
|
|
13%
|
|
|
12%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
Cadence Design Systems, Inc.
|
As of February 19, 2019
|
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net
Income Per Share
|
(Unaudited)
|
|
|
|
|
|
Three Months Ending
|
|
|
Year Ending
|
|
|
|
March 30, 2019
|
|
|
December 28, 2019
|
|
|
|
Forecast
|
|
|
Forecast
|
|
|
|
|
|
|
|
Diluted net income per share on a GAAP basis
|
|
|
$0.36 to $0.38
|
|
|
$1.33 to $1.43
|
|
|
|
|
|
|
|
Amortization of acquired intangibles
|
|
|
0.05
|
|
|
0.19
|
Stock-based compensation expense
|
|
|
0.15
|
|
|
0.65
|
Acquisition and integration-related costs
|
|
|
0.01
|
|
|
0.03
|
Income tax effect of non-GAAP adjustments
|
|
|
(0.09)
|
|
|
(0.23)
|
|
|
|
|
|
|
|
Diluted net income per share on a non-GAAP basis†
|
|
|
$0.48 to $0.50
|
|
|
$1.97 to $2.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cadence Design Systems, Inc.
|
As of February 19, 2019
|
Impact of Non-GAAP Adjustments on Forward Looking Net Income
|
(Unaudited)
|
|
|
|
|
|
Three Months Ending
|
|
|
Year Ending
|
|
|
|
March 30, 2019
|
|
|
December 28, 2019
|
($ in millions)
|
|
|
Forecast
|
|
|
Forecast
|
|
|
|
|
|
|
|
Net income on a GAAP basis
|
|
|
$101 to $107
|
|
|
$371 to $399
|
|
|
|
|
|
|
|
Amortization of acquired intangibles
|
|
|
13
|
|
|
53
|
Stock-based compensation expense
|
|
|
42
|
|
|
182
|
Acquisition and integration-related costs
|
|
|
3
|
|
|
8
|
Income tax effect of non-GAAP adjustments
|
|
|
(24)
|
|
|
(63)
|
|
|
|
|
|
|
|
Net income on a non-GAAP basis†
|
|
|
$135 to $141
|
|
|
$551 to $579
|
|
†
|
The non-GAAP measures presented in the table above should not
be considered a substitute for financial results and measures
determined or calculated in accordance with GAAP.
|
|
CDNS-IR
View source version on businesswire.com: https://www.businesswire.com/news/home/20190219005959/en/
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