UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 20, 2014
SYNOPSYS, INC.
(Exact name of
Registrant as specified in charter)
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Delaware |
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000-19807 |
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56-1546236 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
700 East Middlefield Road
Mountain View, California 94043
(Address of
principal executive offices)
Registrants telephone number, including area code: (650) 584-5000
N/A
(Former name or former address, if
changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 |
Results of Operations and Financial Condition. |
On August 20, 2014, Synopsys, Inc.
issued a press release announcing the financial results of its third fiscal quarter ended August 2, 2014. A copy of this press release is furnished and attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Current Report, including the exhibit hereto, shall not be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall
not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by Synopsys, Inc. whether made before or after the date hereof, regardless of any general incorporation
language in such filing, except as shall be expressly set forth by specific reference in such filing.
The attached press release includes measures
that are not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The attached press release includes non-GAAP earnings per share, non-GAAP net income, targeted non-GAAP expenses,
and targeted non-GAAP earnings per share.
These non-GAAP measures are not in accordance with, or an alternative for, GAAP measures and may be
different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles, and management exercises judgment in determining which items should be
excluded in the calculation of non-GAAP measures. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe
that non-GAAP measures are valuable in analyzing our operations. Management analyzes current and future results on a GAAP basis as well as a non-GAAP basis and also provides GAAP and non-GAAP measures in our earnings release. The
presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. The non-GAAP financial measures are meant to
supplement, and be viewed in conjunction with, GAAP financial measures. We believe that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management
regarding financial and business trends relating to our financial condition and results of operations.
Synopsys management evaluates and
makes decisions about our business operations primarily based on the revenue, orders, and direct, ongoing and recurring costs of those operations. For our internal budgeting and resource allocation process, and in reviewing our financial results, we
use non-GAAP financial measures that exclude: (i) the amortization of acquired intangible assets; (ii) the impact of stock compensation; (iii) acquisition-related costs; (iv) other significant items, including facilities
restructuring charges and the effect of tax and legal settlements; and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments.
We use these non-GAAP financial measures in making operating decisions because we believe the measures provide meaningful supplemental information
regarding our operational performance and give us a better understanding of how we should invest in research and development and fund infrastructure and product and market strategies. We use these measures to help us make budgeting decisions,
for example, among product development expenses and research and development, sales and marketing and general and administrative expenses. In addition, these non-GAAP financial measures facilitate our internal comparisons to our historical
operating results, forecasted targets and comparisons to competitors operating results.
As described above, we exclude the following items
from one or more of our non-GAAP measures:
(i) Amortization of acquired intangible assets. We incur expenses from amortization of
acquired intangible assets, which include contract rights, core/developed technology, trademarks, trade names, customer relationships, covenants not to compete, and other intangibles related to acquisitions. We amortize the intangible assets over
their economic lives. We exclude this item because this expense is
non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance and liquidity and
our ability to invest in research and development and fund acquisitions and capital expenditures.
(ii) Stock compensation
impact. We exclude stock compensation expenses from our non-GAAP measures primarily because they are non-cash expenses. We believe that it is useful to investors to understand the impact of stock compensation to our operational performance
and liquidity and our ability to invest in research and development and fund acquisitions and capital expenditures. While stock compensation expense constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because
it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations. In addition, excluding this item from various non-GAAP
measures facilitates comparisons to our competitors operating results.
(iii) Acquisition-related costs. In connection with
our business combinations, we incur significant expenses which we would not have otherwise incurred as part our business operations. These expenses include compensation expenses, professional fees and other direct expenses, and restructuring
activities, including employee severance and other exit costs, as well as changes to the fair value of contingent consideration related to the acquired company. We exclude such expenses, which we would not have otherwise incurred, as they are
related to acquisitions and have no direct correlation to the operation of our business.
Additionally, business combination accounting principles
require us to measure acquired inventory at fair value. The fair value of acquired inventory increases the acquired companys cost of manufacturing to include a portion of any expected gross profit margin. The non-GAAP inventory fair value
adjustment excludes the expected gross profit margin. We believe this adjustment better reflects the costs we would have expended to produce such inventory on our own.
(iv) Other significant items. From time to time, in order to control costs, we restructure our operations. Certain restructuring
costs are infrequent and not ongoing and therefore we do not consider them to be part of the ongoing operation of our business. For this reason, we have excluded adjustments relating to the closure of a facility obtained through our acquisition
of another company. Additionally, from time to time we are party to legal settlements. We exclude the effects of litigation settlements and benefits from tax settlements with the Internal Revenue Service and other tax authorities because we do not
consider these matters to be part of the ongoing operation of our business and because of the singular nature of the claims underlying these matters.
(v) Income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments. Excluding the income tax effect
of non-GAAP pre-tax adjustments from the provision for income taxes assists investors in understanding the tax provision associated with those adjustments and the effect on net income. We exclude other unusual or infrequent tax adjustments because
we do not consider these matters to be part of the ongoing operation of our business.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit Number |
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Exhibit Title |
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99.1 |
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Press release dated August 20, 2014 containing Synopsys, Inc.s results of operations for its third fiscal quarter ended August 2, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
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SYNOPSYS, INC. |
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Dated: August 20, 2014 |
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By: |
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/S/ JOHN F. RUNKEL,
JR. |
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John F. Runkel, Jr. |
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General Counsel and Corporate Secretary |
INDEX TO EXHIBITS
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Exhibit Number |
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Exhibit Title |
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99.1 |
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Press release dated August 20, 2014 containing Synopsys, Inc.s results of operations for its third fiscal quarter ended August 2, 2014. |
Exhibit 99.1
PRESS RELEASE
INVESTOR CONTACT:
Lisa L. Ewbank
Synopsys, Inc.
650-584-1901
Synopsys-ir@synopsys.com
EDITORIAL CONTACT:
Yvette Huygen
Synopsys, Inc.
650-584-4547
yvetteh@synopsys.com
Synopsys Posts Financial Results for
Third Quarter Fiscal Year 2014
Q3 2014 Financial Highlights
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Revenue: $521.8 million |
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GAAP earnings per share: $0.42 |
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Non-GAAP earnings per share: $0.65 |
MOUNTAIN VIEW, Calif. Aug. 20, 2014 Synopsys, Inc.
(Nasdaq: SNPS), a global leader providing software, IP and services used to accelerate innovation in chips and electronic systems, today reported results for its third quarter of fiscal year 2014.
For the third quarter of fiscal year 2014, Synopsys reported revenue of $521.8 million, compared to $482.9 million for the third quarter of fiscal 2013, an increase of
8.0 percent.
Synopsys delivered an excellent fiscal third quarter, solidifying the years financial outlook, said Aart de Geus, chairman and
co-CEO of Synopsys. We shipped game-changing new products that are generating intense customer interest and high-impact results, and have already started a multi-year upgrade cycle. We also achieved encouraging results through Coverity, the
recent acquisition that expands our total addressable market into the software quality, test and security space.
1
GAAP Results
On a generally
accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal 2014 was $65.7 million, or $0.42 per share, compared to $52.3 million, or $0.33 per share, for the third quarter of fiscal 2013.
Non-GAAP Results
On a non-GAAP basis, net income for the third quarter of
fiscal 2014 was $103.2 million, or $0.65 per share, compared to non-GAAP net income of $86.5 million, or $0.55 per share, for the third quarter of fiscal 2013.
Financial Targets
Synopsys also provided its financial targets for the
fourth quarter and full fiscal year 2014. These targets do not include any future acquisition-related expenses that may be incurred in fiscal 2014. 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.
Fourth Quarter
of Fiscal Year 2014 Targets:
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Revenue: $537 million - $547 million |
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GAAP expenses: $462 million - $479 million |
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Non-GAAP expenses: $410 million - $420 million |
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Other income and expense: ($1) million - $1 million |
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Tax rate applied in non-GAAP net income calculations: approximately 22 percent |
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Fully diluted outstanding shares: 155 million - 159 million |
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GAAP earnings per share: $0.32 - $0.38 |
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Non-GAAP earnings per share: $0.59 - $0.61 |
Full Fiscal Year 2014 Targets:
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Revenue: $2.055 billion - $2.065 billion |
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Other income and expense: $10 million - $12 million |
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Tax rate applied in non-GAAP net income calculations: approximately 20 percent |
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Fully diluted outstanding shares: 155 million - 159 million |
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GAAP earnings per share: $1.57 - $1.63 |
2
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Non-GAAP earnings per share: $2.48 - $2.50 |
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Cash flow from operations: at least $500 million |
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) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, including inventory fair value adjustments,
(iv) other significant items, including facilities restructuring charges and the effect of tax and legal settlements, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; 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 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.
3
Reconciliation of Third Quarter Fiscal Year 2014 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 Third Quarter Fiscal Year 2014 Results
(Unaudited and in thousands, except per share amounts)
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Three Months Ended July 31, |
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Nine Months Ended July 31, |
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2014 |
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2013 |
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2014 |
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2013 |
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GAAP net income |
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$ |
65,656 |
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$ |
52,297 |
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$ |
196,669 |
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$ |
190,910 |
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Adjustments: |
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Amortization of intangible assets |
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32,809 |
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32,281 |
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92,990 |
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96,957 |
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Stock compensation |
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21,399 |
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16,490 |
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58,340 |
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49,719 |
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Acquisition-related costs |
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36 |
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162 |
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5,484 |
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3,990 |
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Inventory fair value adjustment |
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1,903 |
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3,712 |
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Facility restructuring charges |
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(239 |
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(209 |
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Tax and other settlements |
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(2,981 |
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(2,711 |
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(15,288 |
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(2,711 |
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Tax adjustments |
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(13,768 |
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(13,685 |
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(40,262 |
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(49,239 |
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Non-GAAP net income |
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$ |
103,151 |
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$ |
86,498 |
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$ |
297,933 |
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$ |
293,129 |
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Three Months Ended July 31, |
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Nine Months Ended July 31, |
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2014 |
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2013 |
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2014 |
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2013 |
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GAAP net income per share |
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$ |
0.42 |
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$ |
0.33 |
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$ |
1.25 |
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$ |
1.22 |
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Adjustments: |
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Amortization of intangible assets |
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0.21 |
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0.21 |
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0.59 |
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0.62 |
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Stock compensation |
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0.14 |
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0.10 |
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0.37 |
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0.32 |
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Acquisition-related costs |
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0.00 |
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0.00 |
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0.04 |
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0.03 |
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Inventory fair value adjustment |
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0.01 |
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0.02 |
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Facility restructuring charges |
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(0.00 |
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(0.00 |
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Tax and other settlements |
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(0.03 |
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(0.02 |
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(0.10 |
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(0.02 |
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Tax adjustments |
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(0.09 |
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(0.08 |
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(0.26 |
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(0.31 |
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Non-GAAP net income per share |
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$ |
0.65 |
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$ |
0.55 |
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$ |
1.89 |
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$ |
1.88 |
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Shares used in calculation |
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157,622 |
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157,056 |
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157,253 |
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156,215 |
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4
Reconciliation of Target Non-GAAP Operating Results
The following tables reconcile the specific items excluded from GAAP in the calculation of target non-GAAP operating results for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Fourth Quarter Fiscal Year 2014 Targets
(in thousands, except per share amounts)
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Range for Three Months Ending October 31, 2014 (1) |
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Low |
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High |
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Target GAAP expenses |
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$ |
462,000 |
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$ |
479,000 |
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Adjustments: |
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Estimated impact of amortization of intangible assets |
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(31,000 |
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(35,000 |
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Estimated impact of stock compensation |
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(21,000 |
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(24,000 |
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Target non-GAAP expenses |
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$ |
410,000 |
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$ |
420,000 |
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Range for Three Months Ending October 31, 2014 (1) |
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Low |
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High |
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Target GAAP earnings per share |
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$ |
0.32 |
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$ |
0.38 |
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Adjustments: |
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Estimated impact of amortization of intangible assets |
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0.22 |
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0.20 |
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Estimated impact of stock compensation |
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0.15 |
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0.13 |
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Net non-GAAP tax adjustments |
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(0.10 |
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(0.10 |
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Target non-GAAP earnings per share |
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$ |
0.59 |
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$ |
0.61 |
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Shares used in non-GAAP calculation (midpoint of target range) |
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157,000 |
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157,000 |
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GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2014 Targets
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Range for Fiscal Year Ending October 31, 2014 (1) |
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Low |
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High |
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Target GAAP earnings per share |
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$ |
1.57 |
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$ |
1.63 |
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Adjustments: |
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Estimated impact of amortization of intangible assets |
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0.81 |
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0.79 |
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Estimated impact of stock compensation |
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0.52 |
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0.50 |
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Acquisition-related costs |
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0.04 |
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0.04 |
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Tax and other settlements |
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(0.10 |
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(0.10 |
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Net non-GAAP tax adjustments |
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(0.36 |
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(0.36 |
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Target non-GAAP earnings per share |
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$ |
2.48 |
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$ |
2.50 |
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Shares used in non-GAAP calculation (midpoint of target range) |
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157,000 |
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157,000 |
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(1) |
Synopsys fourth quarter and fiscal year end on November 1, 2014. For presentation purposes, the periods refer to the closest calendar month end. |
5
Earnings Call Open to Investors
Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available at
Synopsys corporate website at www.synopsys.com. A recording of the call will be available by calling +1-800-475-6701 (+1-320-365-3844 for international callers), access code 333616, beginning at 4:00 p.m. Pacific Time today. A webcast replay
will also be available on the website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the fourth quarter fiscal 2014 in December 2014. Synopsys will post copies of the prepared remarks of Aart de
Geus, chairman and co-chief executive officer, and Brian Beattie, chief financial officer, on its website following the call. In addition, Synopsys makes additional financial information available in a financial supplement also posted on the
corporate website.
Effectiveness of Information
The targets included in
this release, the statements made during the earnings conference call and the information contained in the financial supplement (available in the Investor Relations section of Synopsys website at www.synopsys.com) represent
Synopsys expectations and beliefs as of the date of this release only. Although this press release, copies of the prepared remarks of the co-chief executive officer and chief financial officer made during the call and the financial supplement
will remain available on Synopsys website through the date of the fourth quarter fiscal year 2014 earnings call in December 2014, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their
continued validity. Synopsys does not currently intend to report on its progress during the fourth quarter of fiscal 2014 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release.
Availability of Final Financial Statements
Synopsys will include final
financial statements for the third quarter fiscal 2014 in its quarterly report on Form 10-Q to be filed by Sept. 11, 2014.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) accelerates innovation in the global electronics market. As a leader in electronic design automation (EDA) and semiconductor IP, its
software, IP and services help engineers address their design, verification, system and manufacturing challenges. Since 1986, engineers around the world have been using Synopsys technology to design and create billions of chips and systems. Learn
more at http://www.synopsys.com.
6
Forward-Looking Statements
This
press release and our upcoming earnings results conference call contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact may be deemed
to be forward-looking statements. Forward-looking statements include but are not limited to: sections of this press release entitled Financial Targets and Reconciliation of Target Non-GAAP Operating Results; and statements
regarding Synopsys business, acquisitions, products, technologies, business model, customer demand for our technology, and projected financial results and business objectives. These statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in our forward-looking statements. Accordingly, we caution stockholders and prospective investors not to place undue
reliance on these statements. Such risks, uncertainties and factors include, but are not limited to:
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continued uncertainty in the global economy and its potential impact on the semiconductor and electronics industries; |
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uncertainty in the growth of the semiconductor and electronics industry; |
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increased competition in the market for Synopsys products and services including through consolidation in the industry and among our customers; |
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changes in demand for Synopsys products due to fluctuations in demand for its customers products; |
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Synopsys ability to realize the potential financial or strategic benefits of acquisitions it completes, including its recent acquisition of Coverity, Inc., and challenges in entering new markets in which Synopsys
is not experienced and in the integration of the products and operations of acquired companies or assets into Synopsys products and operations, including possible delays in customer orders, potential loss of customers, key employees, partners
or vendors, customer demand and support obligations for product offerings, and disruption of ongoing business operations and diversion of management attention; |
7
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adverse changes in the relationships between Synopsys and key participants in the complex semiconductor ecosystem, including major foundries and intellectual property providers; |
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|
|
lower-than-anticipated new IC design starts; |
|
|
|
lower-than-anticipated purchases or delays in purchases of products or consulting services by Synopsys customers, including delays in the renewal, or non-renewal, of Synopsys license arrangements with major
customers; |
|
|
|
changes in accounting principles or standards or in the way they are applied; |
|
|
|
changes in the mix of time-based licenses and upfront licenses; |
|
|
|
variability in the timing of revenue recognition due to factors such as payment terms and the timing and value of contract renewals and professional services projects; |
|
|
|
lower-than-expected orders; and |
|
|
|
failure of customers to pay license fees as scheduled. |
In addition, Synopsys actual expenses, earnings per share
and tax rate on a GAAP and non-GAAP basis for the fiscal quarter ending Oct. 31, 2014; actual expenses, earnings per share, tax rate, and other projections on a GAAP and non-GAAP basis for fiscal year 2014; and cash flow from operations on a GAAP
basis for fiscal year 2014 could differ materially from the targets stated under Financial Targets above for a number of reasons, including, but not limited to, (i) integration and other acquisition-related costs,
(ii) application of the actual consolidated GAAP and non-GAAP tax rates for such periods, or judgment by management, based upon the status of pending audits and settlements, to increase or decrease an income tax asset or liability, (iii) a
determination by Synopsys that any portion of its goodwill or intangible assets has become impaired, (iv) changes in the anticipated amount of employee stock-based compensation expense recognized in Synopsys financial statements,
(v) actual change in the fair value of Synopsys non-qualified deferred compensation plan obligations, (vi) increases or decreases to estimated capital expenditures, (vii) changes driven by new accounting rules, regulations,
interpretations or guidance, (viii) fluctuations in foreign currency exchange rates, (ix) litigation, (x) general economic conditions, and (xi) other risks as detailed in Synopsys SEC filings, including those described in
the Risk Factors section in its latest Quarterly Report on Form 10-Q for the fiscal quarter ended Apr. 30, 2014. Furthermore, Synopsys actual tax rates applied to income for the fourth quarter and fiscal year 2014 could differ from
the targets given in this press release as a result of a number of factors, including the actual geographic mix of revenue during the quarter and year, and actions by the government. Finally, Synopsys targets for outstanding shares in the
fourth quarter and fiscal year 2014 could differ from the targets given in this press release as a result of higher than expected employee stock plan issuances, stock option exercises, acquisitions, and the extent of Synopsys stock repurchase
activity.
8
Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the
forward-looking statements made in this earnings release, the conference call or the financial supplement whether as a result of new information, future events or otherwise, unless otherwise required by law.
###
9
SYNOPSYS, INC.
Unaudited Consolidated Statements of Operations (1)
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
|
Nine Months Ended July 31, |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-based license |
|
$ |
431,184 |
|
|
$ |
387,088 |
|
|
$ |
1,255,515 |
|
|
$ |
1,186,538 |
|
Upfront license |
|
|
31,594 |
|
|
|
39,957 |
|
|
|
101,863 |
|
|
|
95,525 |
|
Maintenance and service |
|
|
59,034 |
|
|
|
55,900 |
|
|
|
161,082 |
|
|
|
175,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
|
521,812 |
|
|
|
482,945 |
|
|
|
1,518,460 |
|
|
|
1,457,339 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License |
|
|
68,573 |
|
|
|
69,857 |
|
|
|
198,700 |
|
|
|
195,918 |
|
Maintenance and service |
|
|
20,685 |
|
|
|
19,253 |
|
|
|
62,065 |
|
|
|
59,074 |
|
Amortization of intangible assets |
|
|
26,272 |
|
|
|
26,537 |
|
|
|
74,699 |
|
|
|
79,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue |
|
|
115,530 |
|
|
|
115,647 |
|
|
|
335,464 |
|
|
|
334,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
406,282 |
|
|
|
367,298 |
|
|
|
1,182,996 |
|
|
|
1,122,896 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
182,809 |
|
|
|
166,668 |
|
|
|
528,395 |
|
|
|
494,140 |
|
Sales and marketing |
|
|
112,271 |
|
|
|
105,381 |
|
|
|
332,847 |
|
|
|
311,069 |
|
General and administrative |
|
|
37,438 |
|
|
|
34,510 |
|
|
|
112,246 |
|
|
|
104,702 |
|
Amortization of intangible assets |
|
|
6,537 |
|
|
|
5,744 |
|
|
|
18,291 |
|
|
|
17,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
339,055 |
|
|
|
312,303 |
|
|
|
991,779 |
|
|
|
927,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
67,227 |
|
|
|
54,995 |
|
|
|
191,217 |
|
|
|
195,479 |
|
Other income (expense), net |
|
|
3,544 |
|
|
|
3,177 |
|
|
|
18,797 |
|
|
|
21,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
70,771 |
|
|
|
58,172 |
|
|
|
210,014 |
|
|
|
216,609 |
|
Provision (benefit) for income taxes |
|
|
5,115 |
|
|
|
5,875 |
|
|
|
13,345 |
|
|
|
25,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
65,656 |
|
|
$ |
52,297 |
|
|
$ |
196,669 |
|
|
$ |
190,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.42 |
|
|
$ |
0.34 |
|
|
$ |
1.27 |
|
|
$ |
1.25 |
|
Diluted |
|
$ |
0.42 |
|
|
$ |
0.33 |
|
|
$ |
1.25 |
|
|
$ |
1.22 |
|
|
|
|
|
|
Shares used in computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
155,194 |
|
|
|
153,915 |
|
|
|
154,611 |
|
|
|
152,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
157,622 |
|
|
|
157,056 |
|
|
|
157,253 |
|
|
|
156,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Synopsys third quarter of fiscal 2014 and 2013 ended on August 2, 2014 and August 3, 2013, respectively. For presentation purposes, we refer to periods ended July 31. |
10
SYNOPSYS, INC.
Unaudited Consolidated Balance Sheets (1)
(in thousands, except par value amounts)
|
|
|
|
|
|
|
|
|
|
|
July 31, 2014 |
|
|
October 31, 2013 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
903,046 |
|
|
$ |
1,022,441 |
|
Accounts receivable, net |
|
|
238,863 |
|
|
|
256,026 |
|
Deferred income taxes |
|
|
99,217 |
|
|
|
92,058 |
|
Income taxes receivable and prepaid taxes |
|
|
18,544 |
|
|
|
18,277 |
|
Prepaid and other current assets |
|
|
55,113 |
|
|
|
59,175 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
1,314,783 |
|
|
|
1,447,977 |
|
Property and equipment, net |
|
|
216,010 |
|
|
|
197,600 |
|
Goodwill |
|
|
2,260,897 |
|
|
|
1,975,971 |
|
Intangible assets, net |
|
|
367,416 |
|
|
|
335,425 |
|
Long-term prepaid taxes |
|
|
9,952 |
|
|
|
7,935 |
|
Long-term deferred income taxes |
|
|
204,502 |
|
|
|
243,066 |
|
Other long-term assets |
|
|
171,369 |
|
|
|
150,961 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
4,544,929 |
|
|
$ |
4,358,935 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
319,036 |
|
|
$ |
358,197 |
|
Accrued income taxes |
|
|
20,716 |
|
|
|
7,168 |
|
Deferred revenue |
|
|
857,532 |
|
|
|
827,554 |
|
Short-term debt |
|
|
30,000 |
|
|
|
30,000 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
1,227,284 |
|
|
|
1,222,919 |
|
Long-term accrued income taxes |
|
|
37,030 |
|
|
|
53,064 |
|
Long-term deferred revenue |
|
|
67,311 |
|
|
|
54,736 |
|
Long-term debt |
|
|
52,500 |
|
|
|
75,000 |
|
Other long-term liabilities |
|
|
164,751 |
|
|
|
164,939 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,548,876 |
|
|
|
1,570,658 |
|
Stockholders equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value: 400,000 shares authorized; 155,638 and 154,169 shares outstanding, respectively |
|
|
1,556 |
|
|
|
1,542 |
|
Capital in excess of par value |
|
|
1,594,965 |
|
|
|
1,597,244 |
|
Retained earnings |
|
|
1,501,238 |
|
|
|
1,324,854 |
|
Treasury stock, at cost: 1,626 and 3,095 shares, respectively |
|
|
(60,194 |
) |
|
|
(106,668 |
) |
Accumulated other comprehensive loss |
|
|
(41,512 |
) |
|
|
(28,695 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
2,996,053 |
|
|
|
2,788,277 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
4,544,929 |
|
|
$ |
4,358,935 |
|
|
|
|
|
|
|
|
|
|
(1) |
Synopsys third quarter of fiscal 2014 ended on August 2, 2014, and its fourth quarter of fiscal 2013 ended on November 2, 2013. For presentation purposes, the periods refer to the closest calendar month
end. |
11
SYNOPSYS, INC.
Unaudited Consolidated Statements of Cash Flows (1)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended July 31, |
|
|
|
2014 |
|
|
2013 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
196,669 |
|
|
$ |
190,910 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Amortization and depreciation |
|
|
140,750 |
|
|
|
141,756 |
|
Stock compensation |
|
|
58,341 |
|
|
|
49,719 |
|
Allowance for doubtful accounts |
|
|
(750 |
) |
|
|
901 |
|
Gain on sale of investments |
|
|
(6,538 |
) |
|
|
(101 |
) |
Deferred income taxes |
|
|
7,459 |
|
|
|
7,272 |
|
Net changes in operating assets and liabilities, net of acquired assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
24,834 |
|
|
|
8,207 |
|
Prepaid and other current assets |
|
|
982 |
|
|
|
(14,617 |
) |
Other long-term assets |
|
|
(18,847 |
) |
|
|
(20,292 |
) |
Accounts payable and other liabilities |
|
|
(28,270 |
) |
|
|
(48,188 |
) |
Income taxes |
|
|
(18,950 |
) |
|
|
(475 |
) |
Deferred revenue |
|
|
22,361 |
|
|
|
(9,722 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
378,041 |
|
|
|
305,370 |
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from sales of long-term investments |
|
|
7,313 |
|
|
|
222 |
|
Purchases of property and equipment |
|
|
(58,085 |
) |
|
|
(47,624 |
) |
Proceeds from sales of property and equipment |
|
|
|
|
|
|
2,000 |
|
Cash paid for acquisitions, net of cash acquired |
|
|
(373,513 |
) |
|
|
|
|
Capitalization of software development costs |
|
|
(2,812 |
) |
|
|
(2,681 |
) |
Other |
|
|
(3,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(430,097 |
) |
|
|
(48,083 |
) |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from credit facility |
|
|
200,000 |
|
|
|
|
|
Repayment of debt |
|
|
(223,239 |
) |
|
|
(22,975 |
) |
Acquisition of non-controlling interest |
|
|
|
|
|
|
(44,004 |
) |
Issuances of common stock |
|
|
45,336 |
|
|
|
90,529 |
|
Purchases of treasury stock |
|
|
(79,747 |
) |
|
|
(69,999 |
) |
Other |
|
|
(5,008 |
) |
|
|
(5,781 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(62,658 |
) |
|
|
(52,230 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(4,681 |
) |
|
|
(13,069 |
) |
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(119,395 |
) |
|
|
191,988 |
|
Cash and cash equivalents, beginning of the year |
|
|
1,022,441 |
|
|
|
700,382 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of the period |
|
$ |
903,046 |
|
|
$ |
892,370 |
|
|
|
|
|
|
|
|
|
|
(1) |
Synopsys third quarter of fiscal 2014 and 2013 ended on August 2, 2014 and August 3, 2013, respectively. For presentation purposes, we refer to periods ended July 31. |
12
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