Synopsys Posts Strong Financial Results for First Quarter Fiscal Year 2009; Earnings Up 13%, Revenue Up 7.7%

MOUNTAIN VIEW, Calif., Feb. 18 /PRNewswire-FirstCall/ -- Synopsys, Inc. (NASDAQ: SNPS), a world leader in software and IP for semiconductor design and manufacturing, today reported results for its first quarter ended January 31, 2009.

For the first quarter of fiscal 2009, Synopsys reported revenue of $339.8 million, a 7.7 percent increase compared to $315.5 million for the first quarter of fiscal 2008.

"Synopsys' first quarter was characterized by solid financial performance, continued technology momentum and visible customer success," said Aart de Geus, chairman and CEO of Synopsys. "While the recession has clearly deepened and we have seen signs of customer stress, we believe that Synopsys is well positioned to help our customers weather the storm, and to emerge an even stronger company as a result."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal 2009 was $52.4 million, or $0.37 per share, compared to $46.4 million, or $0.31 per share, for the first quarter of fiscal 2008.

Non-GAAP Results

On a non-GAAP basis, net income for the first quarter of fiscal 2009 was $71.6 million, or $0.50 per share, compared to non-GAAP net income of $66.0 million, or $0.44 per share, for the first quarter of fiscal 2008.

Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Financial Targets

Synopsys also provided its financial targets for the second quarter and full fiscal year 2009. 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.

 

    Second Quarter of Fiscal Year 2009 Targets:
    * Revenue: $332 million - $340 million
    * GAAP expenses: $280.5 million - $296 million
    * Non-GAAP expenses: $257 million - $267 million
    * Other income and expense: $0 - $3 million
    * Tax rate applied in non-GAAP net income calculations: approximately 27
      percent
    * Fully diluted outstanding shares: 142 million - 147 million
    * GAAP earnings per share: $0.25 - $0.30
    * Non-GAAP earnings per share: $0.39 - $0.41
    * Revenue from backlog: greater than 90 percent


    Full-Year Fiscal Year 2009 Targets:
    * Revenue: approximately $1.37 billion - $1.40 billion
    * Other income and expense: $6 million - $10 million
    * Tax rate applied in non-GAAP net income calculations: approximately 27
      percent
    * Fully diluted outstanding shares: 144 million - 149 million
    * GAAP earnings per share: $1.11 - $1.27
    * Non-GAAP earnings per share: $1.60 - $1.72
    * Cash flow from operations: $200 million - $220 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) share-based compensation; (ii) the amortization of acquired intangible assets and in- process research and development charges; and (iii) the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes; 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 such 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.

Reconciliation of First Quarter Fiscal Year 2009 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 First Quarter Results
            (Unaudited and in thousands, except per share amounts)

                                                       Three Months Ended
                                                           January 31,
                                                     2009              2008
    GAAP net income                                $52,429           $46,445
    Adjustments:
      Amortization of intangible assets             11,808            11,624
      Share-based compensation                      14,143            15,644
      In-process research and development              600               -
      Tax effect                                    (7,384)           (7,697)
    Non-GAAP net income                            $71,596           $66,016



                                                       Three Months Ended
                                                           January 31,
                                                                                   2009                            2008
        GAAP  earnings  per  share                                                    $0.37                          $0.31
        Adjustments:
            Amortization  of  intangible  assets                              0.08                            0.08
            Share-based  compensation                                                0.09                            0.10
            In-process  research  and  development                          0.01                              -
            Tax  effect                                                                          (0.05)                        (0.05)
        Non-GAAP  earnings  per  share                                            $0.50                          $0.44

        Shares  used  in  calculation                                          142,612                      150,683


 

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