During fiscal year 2008, Cadence's non-GAAP net loss also excluded the impact of tax expense associated with recording a valuation allowance against Cadence's deferred tax assets. Cadence's management believes it is useful to exclude the tax expense associated with this valuation allowance because Cadence does not expect changes in the valuation allowance of the magnitude recorded in the fourth quarter of 2008 to be recorded frequently.
During fiscal year 2008, Cadence's non-GAAP net loss also excluded the impact of tax expense associated with Cadence's repatriation of foreign earnings. Cadence's management believes it is useful to exclude the tax expense associated with the repatriation of foreign earnings because it resulted from an event that is not expected to occur frequently.
During fiscal year 2008, Cadence's non-GAAP net loss also excluded costs related to a withdrawn acquisition proposal and losses on the sale of shares of the target company stock which Cadence acquired as part of the proposed acquisition. Cadence's management believes that in measuring Cadence's operations it is useful to exclude the costs and the losses associated with this proposed acquisition because these items are not directly related to Cadence's operating performance and resulted from events that are not expected to occur frequently.
Cadence's management believes that non-GAAP net income or net loss provides useful supplemental information to Cadence's management and investors regarding the performance of the company's business operations and facilitates comparisons to the company's historical operating results. Cadence's management also uses this information internally for forecasting and budgeting. Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors and potential 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.
The following tables reconcile the specific items excluded from GAAP net loss and GAAP net loss per diluted share in the calculation of non-GAAP net income or net loss and non-GAAP net income or net loss per diluted share for the periods shown below:
Net Income (Loss) Reconciliation Three Months Ended
------------------------
October 3, September 27,
2009 2008
---------- ------------
(As
Adjusted)*
(unaudited)
(in thousands)
Net loss on a GAAP basis $ (14,047) $ (170,656)
Amortization of acquired intangibles 4,391 10,754
Stock-based compensation expense 14,455 14,634
Non-qualified deferred compensation expenses 3,752 188
Restructuring and other charges (credits) (175) 48,120
Cost related to a withdrawn acquisition
proposal - 3,153
Integration and acquisition-related costs 155 234
Amortization of debt discount 4,837 4,024
Equity in losses from investments, write-down
of investments, gains and losses on
non-qualified deferred compensation plan
assets - recorded in Other income (expense),
net (2,913) 2,798
Losses on the sale of shares of withdrawn
acquisition target company stock - 9,379
Income tax related to repatriation of foreign
earnings - 71,047
Income tax effect of non-GAAP adjustments (3,055) (16,352)
---------- ------------
Net income (loss) on a non-GAAP basis $ 7,400 $ (22,677)
========== ============
* Adjusted for the retrospective adoption of new accounting principles as
required by the "Debt with Conversion and Other Options" subtopic of the
FASB Accounting Standards Codification.
Diluted Net Income (Loss) per Share
Reconciliation Three Months Ended
-------------------------
October 3, September 27,
2009 2008
----------- ------------
(As
Adjusted)*
(unaudited)
(in thousands, except per share data)
Diluted net loss per share on a GAAP basis $ (0.05) $ (0.67)
Amortization of acquired intangibles 0.02 0.04
Stock-based compensation expense 0.05 0.06
Non-qualified deferred compensation expenses 0.01 -
Restructuring and other charges (credits) - 0.19
Costs related to a withdrawn acquisition
proposal - 0.01
Amortization of debt discount 0.02 0.02
Equity in losses from investments, write-down
of investments, gains and losses on
non-qualified deferred compensation plan
assets - recorded in Other income (expense),
net (0.01) 0.01
Losses on the sale of shares of withdrawn
acquisition target company stock - 0.04
Income tax related to repatriation of foreign
earnings - 0.28
Income tax effect of non-GAAP adjustments (0.01) (0.07)
----------- ------------
Diluted net income (loss) per share on a
non-GAAP basis $ 0.03 $ (0.09)
=========== ============
Shares used in calculation of diluted net loss
per share - GAAP (A) 259,193 252,915
Shares used in calculation of diluted net income
(loss) per share - non-GAAP (A) 262,553 252,915
(A) 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 (loss) 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.
* Adjusted for the retrospective adoption of new accounting principles as
required by the "Debt with Conversion and Other Options" subtopic of the
FASB Accounting Standards Codification.
