MOUNTAIN VIEW, Calif., May 20 /PRNewswire-FirstCall/ -- Synopsys, Inc. (NASDAQ: SNPS), a world leader in software and IP for semiconductor design, verification and manufacturing, today reported results for its second quarter ended April 30, 2009.
For the second quarter of fiscal 2009, Synopsys reported revenue of $336.8 million, a 3.8 percent increase compared to $324.6 million for the second quarter of fiscal 2008.
"Synopsys continues to execute well in an environment that still shows signs of economic stress," said Aart de Geus, chairman and CEO of Synopsys. "Customers are choosing Synopsys for its strong technology, global support, continued investment in the future, and financial strength."
GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal 2009 was $48.3 million, or $0.33 per share, compared to $39.4 million, or $0.27 per share, for the second quarter of fiscal 2008.
Non-GAAP Results
On a non-GAAP basis, net income for the second quarter of fiscal 2009 was $65.9 million, or $0.45 per share, compared to non-GAAP net income of $59.7 million, or $0.41 per share, for the second quarter of fiscal 2008. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
Financial Targets
Synopsys also provided its financial targets for the third quarter and full fiscal year 2009. 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.
Third Quarter of Fiscal Year 2009 Targets:
-- Revenue: $342 million - $350 million
-- GAAP expenses: $284.5 million - $300 million
-- Non-GAAP expenses: $261 million - $271 million
-- Other income and expense: $0 - $3 million
-- Tax rate applied in non-GAAP net income calculations: approximately 27
percent
-- Fully diluted outstanding shares: 144 million - 149 million
-- GAAP earnings per share: $0.26 - $0.31
-- Non-GAAP earnings per share: $0.40 - $0.42
-- Revenue from backlog: greater than 90 percent
Full-Year Fiscal Year 2009 Targets:
-- Revenue: approximately $1.35 billion - $1.38 billion
-- Other income and expense: $14 million - $18 million
-- Tax rate applied in non-GAAP net income calculations: approximately 27
percent
-- Fully diluted outstanding shares: 144 million - 149 million
-- GAAP earnings per share: $1.11 - $1.26
-- Non-GAAP earnings per share: $1.62 - $1.72
-- Cash flow from operations: $170 million - $190 million (excludes
potential impact of a tentative settlement with the Internal Revenue
Service, described below)
In the second quarter, the Company reached a tentative settlement with the IRS that would resolve a dispute regarding its 2002-2004 returns, primarily associated with the acquisition of Avant!. The tentative settlement is subject to further approval by the government. If approved, we do not expect a material impact to the Company's income statement. However, we do expect it to result in a cash payment to the IRS of approximately $50 million, most likely within the next 12 months. If the tentative settlement is approved, this payment would be fully offset by tax reductions in future years.
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) share-based compensation; (ii) the amortization of acquired intangible assets and in-process research and development charges; and (iii) the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes; 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 such 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.
Reconciliation of Second Quarter Fiscal Year 2009 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 Second Quarter Results
(Unaudited and in thousands, except per share amounts)
Three Months Ended Six Months Ended
April 30, April 30,
--------- ---------
2009 2008 2009 2008
---- ---- ---- ----
GAAP net income $48,288 $39,387 $100,717 $85,832
Adjustments:
Amortization of
intangible assets 10,620 12,407 22,428 24,031
Share-based
compensation 14,661 17,841 28,804 33,485
In-process research and
development - - 600 -
Tax effect (7,666) (9,975) (15,050) (17,672)
------ ------ ------- -------
Non-GAAP net income $65,903 $59,660 $137,499 $125,676
======= ======= ======== ========
Three Months Ended Six Months Ended
April 30, April 30,
------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
GAAP earnings
per share $0.33 $0.27 $0.70 $0.58
Adjustments:
Amortization of
intangible assets 0.07 0.09 0.16 0.16
Share-based
compensation 0.10 0.12 0.19 0.23
In-process research and
development - - 0.01 -
Tax effect (0.05) (0.07) (0.11) (0.12)
----- ----- ----- -----
Non-GAAP earnings
per share $0.45 $0.41 $0.95 $0.85
===== ===== ===== =====
Shares used in calculation 145,421 145,271 144,024 147,801
