Cadence Reports Q1 2009 Financial Results

-- Cadence reported first quarter 2009 revenue of $206 million, compared to revenue of $271 million reported for the same period in 2008. On a GAAP basis, Cadence recognized a net loss of $63 million, or $(0.25) per share on a diluted basis, in the first quarter of 2009, compared to a net loss of $33 million, or $(0.13) per share on a diluted basis in the same period in 2008.

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 or net loss, which excludes, as applicable, amortization of intangible assets, stock-based compensation expense, in-process research and development charges, costs related to Cadence’s withdrawn proposal to acquire Mentor Graphics Corporation and losses on the sale of Mentor Graphics Corporation shares, integration and acquisition-related costs, gains or losses and expenses or credits related to non-qualified deferred compensation plan assets, executive severance costs, restructuring charges and credits, amortization of discount on convertible notes, equity in losses (income) from investments, write-down of investments, impairment charges related to goodwill, intangible assets and fixed assets, and losses related to the liquidation of a subsidiary. Non-GAAP net income or net loss 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 loss in the first quarter of 2009 was $25 million, or $(0.10) per share on a diluted basis, as compared to net loss of $0.2 million, or $(0.00) per share on a diluted basis, in the same period in 2008.

“2009 is a year for Cadence to focus on execution, improve our productivity and invest in our core business,” said Lip-Bu Tan, president and chief executive officer. “We will continue to bring to market the innovative, advanced solutions our customers have come to rely on in their design production. For example, customers using the new Virtuoso 6.1 platform report seeing a 25% to 40% improvement in productivity, and as a result, proliferation of the new platform at our top customers has nearly doubled compared to the first quarter a year ago.”

“We continued to progress toward our goal of a 90/10 model, with a ratable mix above 85% in the first quarter,” added Kevin S. Palatnik, senior vice president and chief financial officer. “Revenue for the first quarter of 2009 met expectations, while non-GAAP net loss per share came in better than forecast.”

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Business Outlook

For the second quarter of 2009, the company expects total revenue in the range of $205 million to $215 million. Second quarter GAAP net loss per diluted share is expected to be in the range of $(0.24) to $(0.22). Net loss per diluted share using the non-GAAP measure defined below is expected to be in the range of $(0.09) to $(0.07).

For the full year 2009, the company expects total revenue in the range of $830 million to $870 million. On a GAAP basis, net loss per diluted share for fiscal 2009 is expected to be in the range of $(0.89) to $(0.77). Using the non-GAAP measure defined below, net loss per diluted share for fiscal 2009 is expected to be in the range of $(0.33) to $(0.21).

A schedule showing a reconciliation of the business outlook from GAAP net loss and diluted net loss per share to the non-GAAP net loss and diluted net loss per share is included with this release.

Click here for the Q1 2009 Financial Schedules

Financial Tables

To read financial tables, click here

Audio Webcast Scheduled

Lip-Bu Tan, Cadence’s President and Chief Executive Officer, and Kevin S. Palatnik, Cadence’s Senior Vice President and Chief Financial Officer, will host a first quarter 2009 financial results audio webcast today, April 29, 2009, 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 April 29, 2009 at 5 p.m. (Pacific) and ending May 6, 2009 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

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. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about Cadence and its products and services is available at www.cadence.com.