Synplicity�, Inc. (Nasdaq: SYNP), a leading supplier of innovative
IC design and verification solutions, today announced financial
results for the quarter ended June 30, 2007. Results included the
acquisition of HARDI Electronics, AB from June 8 through June 30,
2007. Revenue for the quarter ended June 30, 2007 was $16.8
million. This compares to the $15.4 million of revenue reported for
the quarter ended June 30, 2006. On a generally accepted accounting
principles (GAAP) basis, net income was $641,000, or $0.02 per
diluted share, for the quarter ended June 30, 2007, as compared to
a GAAP net income of $1.1 million, or $0.04 per diluted share, for
the quarter ended June 30, 2006. For the quarter ended June 30,
2007, GAAP net income included non-cash charges of $430,000 of
intangible amortization expense from acquisitions and $814,000 of
stock-based compensation expense. In addition, the 2007 quarter
included expenses associated with the sale of HARDI products, HARDI
personnel costs and expenses related to a combination of
non-recurring charges and the costs of the DAC tradeshow which
occurred in the June quarter of 2007 but in the September quarter
of 2006. For the quarter ended June 30, 2006, GAAP net income
included $222,000 of intangible amortization expense from
acquisitions and $935,000 of stock-based compensation expense. For
the six months ended June 30, 2007, revenue was $31.7 million,
compared to revenue of $29.9 million for the six months ended June
30, 2006. For the six months ended June 30, 2007, the Company
reported GAAP net income of $1.3 million, or $0.05 per diluted
share. Included in GAAP net income for the six month period ended
June 30, 2007 were non-cash charges of $678,000 of intangible
amortization expense from acquisitions and $1.7 million of
stock-based compensation expense. For the six months ended June 30,
2006, the Company reported a GAAP net loss of $63,000, or $(0.00)
per diluted share. The loss included $445,000 of intangible
amortization expense from acquisitions, $1.9 million of stock-based
compensation and a restructuring charge of $854,000. �This was an
exciting quarter for Synplicity as we completed the acquisition of
HARDI Electronics, expanded our market share in FPGA implementation
with strong Synplify Premier sales, introduced the ASIC edition of
Synplify DSP, announced our Identify Pro product as part of our
Confirma� platform for ASIC verification, and formed a new
partnership with Synopsys, all while delivering solid revenue
growth,� said Gary Meyers, the Company�s president and CEO. �The
remainder of 2007 will see continued revenue growth and the rollout
of new products paving the way for a strong 2008,� concluded
Meyers. Business Outlook The following statements are based on
current expectations. This guidance reflects the acquisition of
HARDI Electronics AB in June 2007. We do not intend to update,
confirm or change this guidance until our earnings conference call
for the third quarter of 2007. Revenue for 2007 is expected to be
in the range of $70.0 to $72.0 million, an increase from prior
guidance. GAAP net income per fully diluted share for 2007 is
expected to be in the range of $0.13 to $0.15, reflecting the
increase in intangible amortization expense resulting from the
HARDI acquisition. GAAP net income is expected to include non-cash
charges of approximately $3.5 million relating to stock
compensation expense and $2.5 million of intangible amortization
expense from acquisitions. Tax expense for 2007 is expected to be
about 32% percent of pretax GAAP income. Revenue for the third
quarter of 2007 is expected to be in the range of $19.0 to $19.5
million. GAAP net income per fully diluted share for the third
quarter of 2007 is expected to be in the range of $0.03 to $0.05.
GAAP net income for the quarter is expected to include non-cash
charges of approximately $850,000 relating to stock-based
compensation and $941,000 of amortization expense from
acquisitions. 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 second
quarter 2007 results. Following completion of the call, a
rebroadcast of the webcast will be available at
http://investor.synplicity.com through September 30, 2007. For
those without access to the Internet, a replay of the call will be
available from 5:00 p.m. Pacific on August 1, 2007 through August
15, 2007. To listen to a replay, call (719) 457-0820, access code
5178174. About Synplicity Synplicity�, Inc. (Nasdaq: SYNP) is a
leading supplier of innovative IC design and verification solutions
that serve a wide range of communications, military/aerospace,
consumer, semiconductor, computer, and other electronic systems
markets. Synplicity's 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, as well as at-speed verification and
prototyping for ASIC & ASSP designs. Synplicity is the number
one supplier of FPGA synthesis solutions and has been rated #1 in
customer satisfaction since 2004 in EE Times' Annual FPGA Customer
Survey. 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 including, but not
limited to, statements regarding the Company�s execution and
results, the benefits of our acquisition of HARDI AB, the release
of our products and upgrades, revenue, the estimated net income,
net income per share, non-cash charges, the effective tax rate and
certain expenses for 2007 and our expected growth in 2008. These
statements relate to future events and involve known and unknown
risks, uncertainties and other factors that may cause the Company�s
actual financial results, levels of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements including continued demand for
the Company�s FPGA products, the Company�s ability to increase
revenue from its FPGA products, the integration of HARDI and its
products as well as employee retention. For additional information
and considerations regarding the risks faced by the Company, see
its annual report on Form 10-K for the year ended December 31,
2006, as filed with the Securities and Exchange Commission, as well
as other periodic reports filed with the SEC from time to time.
Although the Company believes that the expectations reflected in
the forward-looking statements are reasonable, the Company cannot
guarantee future results, levels of activity, performance or
achievements. In addition, neither the Company nor any other person
assumes responsibility for the accuracy or completeness of these
forward-looking statements. The Company disclaims any obligation to
update information contained in any forward-looking statement.
Synplicity, Synplify and Identify are registered trademarks of
Synplicity, Inc. All other brands or products are the trademarks or
registered trademarks of their owners. SYNPLICITY, INC.
CONSOLIDATED BALANCE SHEETS (in thousands) � June 30, December 31,
� 2007 � � 2006 (1) (unaudited) Assets: Current assets: Cash and
cash equivalents and short-term investments $ 45,365 $ 65,397
Accounts receivable, net 11,764 10,323 Inventories 975 - Prepaid
expenses(2) 1,864 1,314 Other current assets(2) � 894 � � 915 �
Total current assets 60,862 77,949 Restricted cash 5,401 - Property
and equipment, net 2,889 2,390 Goodwill 8,554 1,272 Intangible
assets, net 12,027 1,035 Other assets � 1,195 � � 1,163 � Total
assets $ 90,928 � $ 83,809 � � Liabilities and Shareholders�
Equity: Current liabilities: Accounts payable $ 1,682 $ 1,299
Accrued liabilities 2,007 1,537 Accrued compensation(2) 4,374 4,360
Deferred revenue � 18,916 � � 18,409 � Total current liabilities
26,979 25,605 Other liabilities(2) 192 89 Deferred income taxes
3,561 - Shareholders' equity: Common stock(2) 63,498 62,699
Accumulated deficit (2,960 ) (4,255 ) Accumulated other
comprehensive loss � (342 ) � (329 ) Total shareholders� equity �
60,196 � � 58,115 � Total liabilities and shareholders� equity $
90,928 � $ 83,809 � � (1) Derived from audited financial
statements. (2) Amounts reported for 2006 have been reclassified to
conform to the current period presentation. SYNPLICITY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share data) (unaudited) � Three Months Ended Six Months Ended June
30, June 30, � 2007 � 2006 � 2007 � 2006 � Revenue: License and
systems $ 5,591 $ 4,357 $ 9,475 $ 7,447 Maintenance 6,879 6,766
13,496 13,456 Bundled license and services � 4,283 � 4,264 � 8,681
� 8,953 � Total revenue 16,753 15,387 31,652 29,856 Cost of
revenue:(3) Cost of license and systems 399 21 429 35 Cost of
maintenance 428 404 810 883 Cost of bundled license and services 98
81 193 229 Amortization of intangible assets � 382 � 222 � 630 �
445 � Total cost of revenue � 1,307 � 728 � 2,062 � 1,592 � Gross
profit 15,446 14,659 29,590 28,264 Operating expenses:(3) Research
and development 6,006 5,904 11,796 12,477 Sales and marketing 7,003
6,019 13,249 12,350 General and administrative 2,202 1,862 4,261
3,986 Amortization of intangible assets from acquisition 48 - 48 -
Restructuring charge � - � - � - � � 854 � Total operating expenses
� 15,259 � 13,785 � 29,354 � 29,667 � Income (loss) from operations
187 874 236 (1,403 ) Other income, net � 756 � 699 � 1,669 � 1,317
� Income (loss) before income taxes 943 1,573 1,905 (86 ) Income
tax provision (benefit) � 302 � 458 � 610 � (23 ) Net income (loss)
$ 641 $ 1,115 $ 1,295 $ (63 ) Net income (loss) per share: Basic
and diluted net income (loss) per share $ 0.02 $ 0.04 $ 0.05 $
(0.00 ) Shares used in basic per share calculation � 26,752 �
26,950 � 26,736 � 26,983 � Shares used in diluted per share
calculation � 27,789 � 27,755 � 27,734 � 26,983 � (3) Amortization
of stock-based compensation expense relates to the following: Three
Months Ended Six Months Ended June 30, June 30, � 2007 � 2006 �
2007 � 2006 Cost of maintenance $ 21 $ 25 $ 44 $ 48 Research and
development 353 437 747 890 Sales and marketing 224 244 457 482
General and administrative 216 229 445 475 �
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