Revenue for the quarter ended March 31, 2008 was $18.6 million, compared to $14.9 million for the quarter ended March 31, 2007. On a generally accepted accounting principles (GAAP) basis, net loss was $1.9 million, or $(0.07) per diluted share for the quarter ended March 31, 2008 compared to a net income of $654,000, or $0.02 per diluted share for the quarter ended March 31, 2007. For the quarter ended March 31, 2008, GAAP net loss included $1.4 million in expenses related to the pending merger of Synplicity and Synopsys, Inc., $849,000 in amortization of intangible assets and $809,000 of stock-based compensation expense. For the quarter ended March 31, 2007, GAAP net income included $248,000 in amortization of intangible assets and $879,000 of stock-based compensation expense.
“We are pleased to report that revenue in the first quarter of 2008 came in ahead of our expectations,” said Gary Meyers, president and CEO of Synplicity. “Our ConfirmaTM product line for ASIC verification again showed substantial year over year revenue growth. Our unique combination of hardware, software and global support organization is driving market share gains in this important segment,” concluded Meyers.
On March 20, 2008, Synplicity and Synopsys announced that the companies had signed a definitive merger agreement for Synplicity to be acquired by Synopsys. The closing of the merger is subject to the satisfaction of certain conditions, including the approval of Synplicity’s shareholders and other regulatory approvals, including HSR approval.
Audio Webcast
The Company’s earnings call will be webcast today at 2:00 p.m. Pacific, and may be accessed at http://investor.synplicity.com. The Company will discuss its first quarter 2008 results. Following completion of the call, a rebroadcast of the webcast will be available at http://investor.synplicity.com through June 30, 2008. For those without access to the Internet, a replay of the call will be available from 5:00 p.m. Pacific on April 22, 2008 through May 6, 2008. To listen to a replay, call (719) 457-0820, access code 1479317.
Business Outlook
In light of the pending acquisition of Synplicity by Synopsys, Synplicity is withdrawing its 2008 business outlook and will not be providing a business outlook for the second quarter of 2008.
About Synplicity
Synplicity®, Inc. (Nasdaq: SYNP) is a leading supplier of innovative software and hardware solutions for the design and verification of semiconductors that serve a wide range of communications, military/aerospace, consumer, semiconductor, computer, and other electronic systems markets. Synplicity's FPGA implementation tools provide outstanding performance, cost and time-to-market benefits by simplifying, improving and automating design planning, logic synthesis and physical synthesis for FPGA and DSP designs. The combination of the company's ASIC verification and FPGA-based prototyping software tools and HAPS ASIC prototyping hardware, provide designers with a comprehensive at-speed ASIC / ASSP verification flow known as the ConfirmaTM platform which dramatically accelerates functional verification of FPGAs and ASICs. Synplicity is the number one supplier of FPGA synthesis tools and its physical synthesis and ASIC verification technology are the recipients of several prestigious industry awards. Synplicity products support industry-standard design languages (VHDL and Verilog) and run on popular platforms. The company operates in over 20 facilities worldwide and is headquartered in Sunnyvale, California. For more information visit http://www.synplicity.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties concerning Synopsys’ proposed acquisition of Synplicity and the acceptance of the Confirma platform. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the possibility that the transaction will not close, that the closing may be delayed or that the companies may be required to modify aspects of the transaction to obtain regulatory approval, as well as lack of customer acceptance of the Confirma platform. Neither Synopsys nor Synplicity undertakes any obligation to update these forward-looking statements to reflect events or circumstances after the date of this document.
Additional Information
On April 17, 2008, Synplicity filed a definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) regarding the proposed acquisition of Synplicity by Synopsys. Investors and security holders of Synplicity are urged to read the definitive proxy statement and any other relevant materials filed by Synopsys or Synplicity with the SEC because they contain, or will contain, important information about Synopsys, Synplicity and the proposed acquisition. The definitive proxy statement has been mailed to the security holders of Synplicity. The definitive proxy statement and other relevant materials (when they become available), and any other documents filed by Synopsys or Synplicity with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Synopsys by contacting Synopsys Investor Relations, 700 East Middlefield Road, Mountain View, California, 94043, (650) 584-5000. Investors and security holders may obtain free copies of the documents filed with the SEC by Synplicity by contacting Synplicity Investor Relations, 600 W. California Avenue, Sunnyvale, California, 94086, (408) 215-6000.
Synplicity and its officers and directors may be deemed to be participants in the solicitation of proxies from Synplicity’s shareholders with respect to the merger. A description of any interests that these officers and directors have in the merger will be available in the proxy statement. Additional, information concerning Synplicity’s directors and executive officers is set forth Synplicity’s Amendment No.1 to Annual Report on Form 10-K, which was filed with the SEC on April 4, 2008. These documents are available free of charge at the SEC’s web site at www.sec.gov or by going to Synplicity’s Investor Relations page on its corporate website at www.synplicity.com.
Synplicity is a registered trademark of Synplicity, Inc. All other brands or products are the trademarks or registered trademarks of their owners.
|
SYNPLICITY, INC. |
||||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
|
(in thousands) |
||||||||
| March 31, | December 31, | |||||||
| 2008 |
2007(1) |
|
||||||
| Assets: | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents and short-term investments | $ | 47,269 | $ | 42,991 | ||||
| Restricted cash | 2,700 | 2,700 | ||||||
| Accounts receivable, net | 12,037 | 15,513 | ||||||
| Inventories | 3,354 | 1,308 | ||||||
| Prepaid expenses | 2,471 | 1,807 | ||||||
| Other current assets | 823 | 724 | ||||||
| Short-term deferred tax assets | 3,872 | 2,701 | ||||||
| Total current assets | 72,526 | 67,744 | ||||||
| Restricted cash | 2,700 | 2,700 | ||||||
| Property and equipment, net | 3,652 | 3,206 | ||||||
| Goodwill | 9,098 | 9,098 | ||||||
| Intangible assets, net | 9,340 | 10,189 | ||||||
| Other assets | 1,370 | 1,340 | ||||||
| Long-term deferred tax assets | 7,136 | 7,073 | ||||||
| Total assets | $ | 105,822 | $ | 101,350 | ||||
| Liabilities and Shareholders’ Equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,225 | $ | 2,067 | ||||
| Accrued liabilities | 2,732 | 1,715 | ||||||
| Accrued compensation | 4,926 | 5,258 | ||||||
| Deferred revenue | 19,061 | 18,616 | ||||||
| Short-term other liabilities | 99 | 36 | ||||||
| Short-term deferred income taxes | 1,614 | 922 | ||||||
| Total current liabilities | 33,657 | 28,614 | ||||||
| Long-term other liabilities | 279 | 427 | ||||||
| Long-term deferred income taxes | 1,558 | 2,317 | ||||||
| Shareholders' equity: | ||||||||
| Common stock | 63,011 | 61,320 | ||||||
| Retained earnings | 6,981 | 8,837 | ||||||
| Accumulated other comprehensive loss | 336 | (165 | ) | |||||
| Total shareholders’ equity | 70,328 | 69,992 | ||||||
| Total liabilities and shareholders’ equity | 105,822 | $ | 101,350 | |||||
|
(1) Derived from audited financial statements. |
||||||||
|
SYNPLICITY, INC. |
|||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
|
(in thousands, except per share data) |
|||||||
|
(unaudited) |
|||||||
|
Three Months Ended |
|||||||
|
March 31, |
|||||||
| 2008 | 2007 | ||||||
| Revenue: | |||||||
| License and systems | $ | 8,115 | $ | 3,884 | |||
| Maintenance | 7,159 | 6,617 | |||||
| Bundled license and services | 3,316 | 4,398 | |||||
| Total revenue | 18,590 | 14,899 | |||||
| Cost of revenue:(2) | |||||||
| Cost of license and systems | 1,310 | 30 | |||||
| Cost of maintenance | 501 | 382 | |||||
| Cost of bundled license and services | 46 | 95 | |||||
| Amortization of intangible assets | 550 | 248 | |||||
| Total cost of revenue | 2,407 | 755 | |||||
| Gross profit | 16,183 | 14,144 | |||||
| Operating expenses:(2) | |||||||
| Research and development | 6,899 | 5,795 | |||||
| Sales and marketing | 7,434 | 6,213 | |||||
| General and administrative | 2,332 | 2,059 | |||||
| Amortization of intangible assets | 299 | - | |||||
|
Costs related to pending acquisition |
1,419 | - | |||||
| Total operating expenses | 18,383 | 14,067 | |||||
| Income (loss) from operations | (2,200 | ) | 77 | ||||
| Other income, net | 122 | 885 | |||||
| Income (loss) before income taxes | (2,078 | ) | 962 | ||||
| Income tax provision (benefit) | (222 | ) | 308 | ||||
| Net income (loss) | $ | (1,856 | ) | $ | 654 | ||
| Net income (loss) per share: | |||||||
| Basic and diluted net income (loss) per share | $ | (0.07 | ) | $ | 0.02 | ||
| Shares used in basic per share calculation | 26,442 | 26,720 | |||||
| Shares used in diluted per share calculation | 26,442 | 27,719 | |||||
| (2) Amortization of stock-based compensation expense relates to the following: | |||||||
|
Three Months Ended |
|||||||
|
March 31, |
|||||||
|
Cost of maintenance |
$ |
28 |
$ |
23 |
|||
|
Research and development |
344 |
394 |
|||||
|
Sales and marketing |
224 |
233 |
|||||
|
General and administrative |
213 |
229 |
|||||
Contact:
Synplicity, Inc.
John J. Hanlon, 408-215-6000
Email Contact
or
Tsantes
Consulting Group
Nancy Sheffield, 408-426-4906
Email Contact