About Magma
Magma's electronic design automation (EDA) software is used to create complex, high-performance integrated circuits (ICs) for cellular telephones, electronic games, WiFi, MP3 players, DVD/digital video, networking, automotive electronics and other electronic applications. Magma products for IC implementation, analog/mixed-signal design, analysis, physical verification, circuit simulation and characterization are recognized as embodying the best in semiconductor technology, providing the world's top chip companies the "Fastest Path to Silicon"(tm). Magma maintains headquarters in San Jose, Calif., and offices throughout North America, Europe, Japan, Asia and India. Magma's stock trades on Nasdaq under the ticker symbol LAVA. Visit Magma Design Automation on the Web at www.magma-da.com.
Magma is a registered trademark and "Fastest Path to Silicon" is a trademark of Magma Design Automation. All other product and company names are trademarks and registered trademarks of their respective companies.
| MAGMA DESIGN AUTOMATION, INC. | |||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||
| (in thousands) | |||
| (unaudited) | |||
| August 2, | May 3, | ||
| 2009 | 2009 | ||
| --------- | --------- | ||
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $ 36,812 | $ 32,888 | |
| Restricted cash | 7,876 | 9,215 | |
| Short-term investments | 18,010 | -- | |
| Accounts receivable, net | 11,320 | 26,635 | |
| Prepaid expenses and other current assets | 5,764 | 5,443 | |
| --------- | --------- | ||
| Total current assets | 79,782 | 74,181 | |
| Property and equipment, net | 8,868 | 10,443 | |
| Intangibles, net | 10,772 | 12,170 | |
| Goodwill | 6,672 | 6,666 | |
| Long-term investment | -- | 17,908 | |
| Other assets | 6,190 | 5,665 | |
| --------- | --------- | ||
| Total assets | $ 112,284 | $ 127,033 | |
| ========= | ========= | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Accounts payable | $ 1,595 | $ 1,212 | |
| Accrued expenses | 9,462 | 15,353 | |
| Secured credit line | 12,403 | 12,451 | |
| Revolving note | 11,246 | 12,181 | |
| Current portion of other long-term liabilities | 2,468 | 2,679 | |
| Deferred revenue | 28,648 | 35,779 | |
| Convertible notes, net of debt discount | 48,141 | -- | |
| --------- | --------- | ||
| Total current liabilities | 113,963 | 79,655 | |
| Convertible notes, net of debt discount | -- | 47,600 | |
| Long-term tax liabilities | 9,750 | 9,729 | |
| Other long-term liabilities | 2,419 | 3,160 | |
| --------- | --------- | ||
| Total liabilities | 126,132 | 140,144 | |
| --------- | --------- | ||
| Stockholders' equity: | |||
| Common stock | 5 | 5 | |
| Additional paid-in capital | 408,724 | 405,341 | |
| Accumulated deficit | (384,802) | 380,489 | |
| Treasury stock at cost | (32,615) | (32,615) | |
| Accumulated other comprehensive loss | (5,160) | (5,353) | |
| --------- | --------- | ||
| Total stockholders' equity (deficit) | (13,848) (13,111) | ||
| --------- | --------- | ||
| Total liabilities and stockholders' equity | $ 112,284 | $ 127,033 | |
| ========= | ========= | ||
| MAGMA DESIGN AUTOMATION, INC. | |||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
| (in thousands, except per share data) | |||
| (unaudited) | |||
| For the Three Months Ended | |||
| -------------------- | |||
| August 2, | August 3, | ||
| 2009 | 2008 | ||
| --------- | --------- | ||
| Revenue: | |||
| Licenses | $ 13,779 | $ 26,096 | |
| Bundled licenses and services | 7,577 | 9,930 | |
| Services | 7,485 | 9,716 | |
| --------- | --------- | ||
| Total revenue | 28,841 | 45,742 | |
| --------- | --------- | ||
| Cost of revenue: | |||
| Licenses | 701 | 4,809 | |
| Bundled licenses and services | 976 | 2,519 | |
| Services | 3,160 | 5,002 | |
| --------- | --------- | ||
| Total cost of revenue | 4,837 | 12,330 | |
| --------- | --------- | ||
| Gross profit | 24,004 | 33,412 | |
| --------- | --------- | ||
| Operating expenses: | |||
| Research and development | 11,197 | 20,133 | |
| Sales and marketing | 9,770 | 16,803 | |
| General and administrative | 4,383 | 6,952 | |
| Amortization of intangible assets | 305 | 1,444 | |
| Restructuring charge | 703 | 2,020 | |
| --------- | --------- | ||
| Total operating expenses | 26,358 | 47,352 | |
| --------- | --------- | ||
| Operating loss | (2,354) | (13,940) | |
| --------- | --------- | ||
| Other income (expense): | |||
| Interest income | 45 | 186 | |
| Interest expense | (1,157) | (984) | |
| Other income (expense), net | (450) | (96) | |
| --------- | --------- | ||
| Total other income, (expense) net | (1,562) | (894) | |
| --------- | --------- | ||
| Net loss before income taxes | (3,916) | (14,834) | |
| Provision for (benefit from) income taxes | 396 | 440 | |
| --------- | --------- | ||
| Net loss | $ (4,312) | $ (15,274) | |
| ========= | ========= | ||
| Net loss per share - basic and diluted | $ (0.09) | $ (0.35) | |
| ========= | ========= | ||
| Shares used in calculation: | |||
| Basic and diluted | 47,863 | 43,385 | |
| ========= | ========= | ||
| Reconciliation of First Quarter GAAP and Non-GAAP Financial Results | |||
| Statement of Operations Reconciliation | Three Months Ended | ||
| (in thousands) | August 2, | August 3, | |
| 2009 | 2008 | ||
| GAAP net loss | $(4,312) | $(15,274) | |
| Cost of license revenue | |||
| Amortization of developed technology | 775 | 4,652 | |
| Cost of bundled license and services revenue | |||
| Amortization of developed technology | 336 | 1,300 | |
| Stock-based compensation | 53 | 95 | |
| --------- | --------- | ||
| 389 | |||
| Cost of service revenue | |||
| Stock-based compensation | 247 | 318 | |
| Research and development | |||
| Stock-based compensation | 1,133 | 2,070 | |
| Acquisition related expenses | 19 | 395 | |
| --------- | --------- | ||
| 1,152 | 2,465 | ||
| Sales and marketing | |||
| Stock-based compensation | 935 | 1,639 | |
| General and administrative | |||
| Stock-based compensation | 813 | 1,253 | |
| Amortization of intangible assets | 305 | 1,444 | |
| Restructuring charges | 703 | 2,020 | |
| Other income (expense) | |||
| Interest expense, amortization of debt issuance | |||
| cost, and debt discount accretion | 647 | 629 | |
| Loss (gain) on equity and other investments | (5) | (13) | |
| --------- | --------- | ||
| 642 | 616 | ||
| Provision for income taxes | 20 | 196 | |
| --------- | --------- | ||
| Non-GAAP net income (loss) | $1,669 | $724 | |
| ========= | ========= | ||
| Reconciliation of First Quarter GAAP and Non-GAAP Financial Results | |||
| Earnings/(Loss) Per Share Reconciliation | Three Months Ended | ||
| August 2, | August 3, | ||
| 2009 | 2008 | ||
| GAAP net loss | $(0.09) | $(0.35) | |
| Cost of license revenue | |||
| Amortization of developed technology | 0.01 | 0.11 | |
| Cost of bundled license and services revenue | |||
| Amortization of developed technology | 0.01 | 0.03 | |
| Stock-based compensation | -- | -- | |
| --------- | --------- | ||
| 0.01 | 0.03 | ||
| Cost of service revenue | |||
| Stock-based compensation | 0.01 | 0.01 | |
| Research and development | |||
| Stock-based compensation | 0.02 | 0.05 | |
| Acquisition related expenses | -- | 0.01 | |
| --------- | --------- | ||
| 0.02 | 0.06 | ||
| Sales and marketing | |||
| Stock-based compensation | 0.02 | 0.04 | |
| General and administrative | |||
| Stock-based compensation | 0.02 | 0.03 | |
| Amortization of intangible assets | 0.01 | 0.03 | |
| Restructuring charges | 0.01 | 0.05 | |
| Other income (expense) | |||
| Interest expense, amortization of debt issuance cost, and debt discount accretion | 0.01 | 0.01 | |
| Loss on equity investments | -- | -- | |
| --------- | --------- | ||
| 0.01 | 0.01 | ||
| Provision for income taxes | -- | -- | |
| --------- | --------- | ||
| Non-GAAP net income (loss) per share | $0.03 | $0.02 | |
| ========= | ========= | ||
| Non-GAAP net income (diluted) | $0.03 | $0.02 | |
| ========= | ========= | ||
| Basic shares used in calculation | 47,863 | 43,385 | |
| Diluted shares used in calculation* | 48,421 | 43,964 | |
| * Gives effect to the potential issuance of common stock upon conversion of convertible subordinated notes, if dilutive, and to the effect of all dilutive potential common shares outstanding during the period, including stock options, using the treasury stock method | |||
| MAGMA DESIGN AUTOMATION, INC. | |||
| AS OF AUGUST 27, 2009 | |||
| IMPACT OF KNOWN NON-GAAP ADJUSTMENTS ON FORWARD-LOOKING DILUTED NET INCOME PER SHARE AND NET INCOME | |||
| (unaudited) | |||
| Quarter Ending | Year Ending | ||
| November 1, 2009 | May 2, 2010 | ||
| GAAP diluted net loss per share | $(0.18) to $(0.17) | $(0.59) to $(0.56) | |
| Amortization of developed technology and intangibles | $0.05 | $0.19 | |
| Amortization of deferred stock-based compensation | $0.10 | $0.37 | |
| Debt related costs | $0.01 | $0.06 | |
| Equity and other investment related charges | $0.01 | $0.02 | |
| Other | $0.02 | $0.03 | |
| Non-GAAP diluted net income per share | $0.01 to $0.02 | $0.08 to $0.11 | |
| (in millions) | Quarter Ending | Year Ending | |
| November 1, 2009 | May 2, 2010 | ||
| GAAP net loss | $(8.6) to $(8.3) | $(30.5) to $(28.9) | |
| Amortization of developed technology and intangibles | $2.5 | $9.9 | |
| Amortization of deferred stock-based compensation | $5.0 | $19.0 | |
| Debt related costs | $0.5 | $3.0 | |
| Equity and other investment related charges | $0.3 | $1.0 | |
| Other | $1.0 | $1.7 | |
| Non-GAAP net income | $0.7 to $1.0 | $4.1 to $5.7 | |
CONTACT: Magma Design Automation Inc.
Media:
Monica Marmie, Director, Marketing Communications
(408) 565-7689
Email Contact
Investors:
Milan G. Lazich, Vice President, Corporate Marketing
(408) 565-7706
Email Contact
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