CADENCE DESIGN SYSTEMS, INC. 
SAN JOSE, Calif., July 21, 2014 /PRNewswire/ -- Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the second quarter of fiscal year 2014.
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Cadence reported second quarter 2014 revenue of $379 million, compared to revenue of $362 million reported for the same period in 2013. On a GAAP basis, Cadence recognized net income of $23 million, or $0.08 per share on a diluted basis, in the second quarter of 2014, compared to net income of $9 million, or $0.03 per share on a diluted basis, in the same period in 2013.
Using the non-GAAP measure defined below, net income in the second quarter of 2014 was $64 million, or $0.21 per share on a diluted basis, as compared to net income of $61 million, or $0.21 per share on a diluted basis, in the same period in 2013.
"Cadence continued to drive growth and innovation during the quarter, reflecting the ongoing success of our system design enablement strategy," said Lip-Bu Tan, president and chief executive officer. "In addition to completing the acquisition of Jasper Design Automation, we won new business in digital and signoff at the most advanced nodes, and made continued progress in IP. Our digital and system design and verification solutions have strong momentum with both systems and semiconductor customers. In addition, we are excited about the new products we recently announced in both system design and verification and signoff."
"The Cadence team delivered strong results in Q2 with key operating metrics at or above our targets," added Geoff Ribar, senior vice president and chief financial officer. "We expect strong business levels for the second half of 2014; however, we are reducing our EPS outlook for the year due to lower hardware gross margins and higher diluted share count because of the impact of a higher share price on calculated dilution from our 2015 convertible notes."
Cadence also announced today that its Board of Directors has approved an increase in the rate of repurchase under its stock repurchase program. Previously, in January of this year, the Board approved the repurchase of up to $50 million of Cadence common stock in each of fiscal years 2014 and 2015 for a total of $100 million, and this plan will be replaced by the new plan. The new plan authorizes the repurchase of $300 million of Cadence common stock over two years. Cadence expects to repurchase approximately $37.5 million of its common stock per quarter under the new plan, beginning with the third quarter of 2014. The Board made its decision based on the underlying strength of the business and a review of the company's capital needs, cash flow and capital structure. The actual timing and amount of repurchases will be based on corporate and regulatory requirements and other factors. The stock repurchase program may be suspended, modified or discontinued at any time.
Business Outlook
For the third quarter of 2014, the company expects total revenue in the range of $390 million to $400 million. Third quarter GAAP net income per diluted share is expected to be in the range of $0.13 to $0.15. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.23 to $0.25.
For 2014, the company expects total revenue in the range of $1.570 billion to $1.590 billion. On a GAAP basis, net income per diluted share for 2014 is expected to be in the range of $0.48 to $0.56. Using the non-GAAP measure defined below, net income per diluted share for 2014 is expected to be in the range of $0.90 to $0.98.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is also included with this release.
Audio Webcast Scheduled
Lip-Bu Tan, president and chief executive officer, and Geoff Ribar, senior vice president and chief financial officer, will host a second quarter 2014 financial results audio webcast today, July 21, 2014, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 21, 2014 at 5 p.m. (Pacific) and ending October 20, 2014 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations.
About Cadence
Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence(®) software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.
Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
The statements contained above regarding Cadence's second quarter 2014 financial results and Cadence's intention to repurchase shares of its common stock under its new share repurchase plan, as well as the information in the Business Outlook section and the statements by Lip-Bu Tan and Geoff Ribar, are or include forward-looking statements based on current expectations or beliefs and preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) Cadence's ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence's efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence's products; (iv) change in customer demands, including those resulting from consolidation among Cadence's customers and the possibility that the restructurings and other efforts to improve operational efficiency of Cadence's customers could result in delays in purchases of Cadence's products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence's efforts to improve operational efficiency on Cadence's business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.
For a detailed discussion of these and other cautionary statements related to Cadence's business, please refer to Cadence's filings with the Securities and Exchange Commission. These include Cadence's most recent reports on Form 10-K and Form 10-Q, including Cadence's future filings.
GAAP to Non-GAAP Reconciliation
To supplement Cadence's financial results presented on a generally accepted accounting principles, or GAAP, basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence's performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP, and is calculated by taking GAAP net income and excluding, as applicable, amortization of intangible assets and debt discount related to our convertible notes, stock-based compensation expense, acquisition and integration-related costs including changes in fair value of contingent consideration and retention expenses for employees added from our 2013 and 2014 acquisitions, special charges (comprised of costs related to a voluntary retirement program), investment gains or losses, income or expenses related to Cadence's non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence's core business operations, and the income tax effect of non-GAAP pre-tax adjustments.
Cadence's management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company's core business operations and therefore provides useful supplemental information to Cadence's management and investors regarding the performance of the company's business operations, facilitates comparisons to the company's historical operating results and enhances investors' ability to review Cadence's business from the same perspective as Cadence's management. Cadence's management also uses non-GAAP net income 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. Investors are encouraged to look at the GAAP results as the best measure of financial performance.
The following tables reconcile the specific items excluded from GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:
Net Income
Reconciliation Three Months Ended
------------------
June 28, 2014 June 29, 2013
------------- -------------
(unaudited)
(in thousands)
Net income on a GAAP
basis $23,263 $9,429
Amortization of
acquired
intangibles 14,192 11,087
Stock-based
compensation
expense 19,077 15,111
Non-qualified
deferred
compensation
expenses 1,047 1,699
Restructuring and
other charges
(credits) (26) 2,656
Acquisition and
integration-
related costs 8,787 10,093
Special charges* 10,357 -
Amortization of debt
discount 4,241 5,571
Other income or
expense related to
investments and
non-qualified
deferred
compensation plan
assets** (1,480) (1,193)
Income tax effect of
non-GAAP
adjustments (15,849) 6,712
------- -----
Net income on a non-
GAAP basis $63,609 $61,165
======= =======
* Comprised of costs related
to a voluntary retirement
program
** Includes, as applicable, equity in
losses or income from
investments, write-down of
investments, gains or losses on
sale of investments and gains or
losses on non-qualified deferred
compensation plan assets recorded
in other income or expense.
Diluted Net Income per Share Reconciliation Three Months Ended
------------------
June 28, 2014 June 29, 2013
------------- -------------
(unaudited)
(in thousands, except per share data)
Diluted net income per share on a GAAP basis $0.08 $0.03
Amortization of acquired intangibles 0.05 0.04
Stock-based compensation expense 0.06 0.05
Non-qualified deferred compensation expenses - 0.01
Restructuring and other charges (credits) - 0.01
Acquisition and integration-related costs 0.03 0.03
Special charges* 0.03 -
Amortization of debt discount 0.01 0.02
Other income or expense related to investments and non-qualified deferred compensation plan assets** - -
Income tax effect of non-GAAP adjustments (0.05) 0.02
----- ----
Diluted net income per share on a non-GAAP basis $0.21 $0.21
===== =====
Shares used in calculation of diluted net income per share - GAAP*** 305,755 294,443
Shares used in calculation of diluted net income per share - non-GAAP*** 305,755 294,443
* Comprised of costs related
to a voluntary retirement
program
** Includes, as applicable, equity in
losses or income from
investments, write-down of
investments, gains or losses on
sale of investments and gains or
losses on non-qualified deferred
compensation plan assets recorded
in other income or expense.
*** Shares used in the
calculation of GAAP net
income per share are
expected to be the same as
shares used in the
calculation of non-GAAP
net income 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.
Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.
Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise.
Beginning September 12, 2014, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute the company's current expectations. During the Quiet Period, the business outlook in these documents should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to any update by the company. During the Quiet Period, Cadence's representatives will not comment on Cadence's business outlook, financial results or expectations. The Quiet Period will extend until the day when Cadence's third quarter 2014 earnings release is published, which is currently scheduled for October 20, 2014.
For more information, please contact:
Investors and Shareholders
Alan Lindstrom
Cadence Design Systems, Inc.
408-944-7100
investor_relations@cadence.com
Media and Industry Analysts
Anna del Rosario
Cadence Design Systems, Inc.
408-914-6884
newsroom@cadence.com
Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
June 28, 2014 and December 28, 2013
(In thousands)
(Unaudited)
June 28, 2014 December 28, 2013
------------- -----------------
Current assets:
Cash and cash
equivalents $557,416 $536,260
Short-term
investments 97,910 96,788
Receivables,
net 101,924 107,624
Inventories 58,311 50,220
2015 notes
hedges 455,844 306,817
Prepaid
expenses and
other 143,314 123,382
Total current assets 1,414,719 1,221,091
Property, plant and equipment,
net of accumulated 238,715
depreciation of $584,613 and
$568,494, respectively
239,314
Goodwill 559,957 456,905
Acquired intangibles, net of
accumulated amortization of 311,693
$121,797 and $139,820, respectively
395,430
Long-term receivables 5,611 3,672
Other assets 170,802 196,525
-------
Total assets $2,785,833 $2,428,601
========== ==========
Current liabilities:
Revolving
credit
facility $100,000 $ -
Convertible
notes 333,333 324,826
2015 notes
embedded
conversion
derivative 455,844 306,817
Accounts
payable and
accrued
liabilities 216,959 216,594
Current
portion of
deferred
revenue 301,911 299,973
Total current liabilities 1,408,047 1,148,210
--------- ---------
Long-term liabilities:
Long-term
portion of
deferred
revenue 46,800 52,850
Other long-
term
liabilities 70,502 71,436
Total long-term
liabilities 117,302 124,286
------- -------
Stockholders' equity 1,260,484 1,156,105
Total liabilities and
stockholders' equity $2,785,833 $2,428,601
========== ==========
Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three and Six Months Ended June 28, 2014 and June 29, 2013
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
June 28, 2014 June 29, 2013 June 28, 2014 June 29, 2013
------------- ------------- ------------- -------------
Revenue:
Product and
maintenance $354,468 $337,983 $711,818 $666,254
Services 24,320 24,498 45,520 50,493
------
Total revenue 378,788 362,481 757,338 716,747
------- ------- ------- -------
Costs and expenses:
Cost of product
and maintenance 37,707 28,095 79,904 57,942
Cost of services 16,706 15,148 31,608 33,492
Marketing and
sales 98,611 95,277 196,934 185,679
Research and
development 152,672 136,395 299,138 260,479
General and
administrative 32,042 34,441 60,786 64,251
Amortization of
acquired
intangibles 5,579 5,327 10,789 9,118
Restructuring and
other charges
(credits) (26) 2,656 370 2,508
----
Total costs
and expenses 343,291 317,339 679,529 613,469
------- ------- ------- -------
Income from operations 35,497 45,142 77,809 103,278
Interest expense (7,369) (9,528) (14,637) (18,790)
Other income, net 1,635 2,018 5,017 4,193
-----
Income before provision for
income taxes 29,763 37,632 68,189 88,681
Provision for
income taxes 6,500 28,203 11,856 643
-----
Net income $23,263 $9,429 $56,333 $88,038
======= ====== ======= =======
Net income per share - basic $0.08 $0.03 $0.20 $0.32
===== ===== ===== =====
Net income per share - diluted $0.08 $0.03 $0.19 $0.30
===== ===== ===== =====
Weighted average common shares
outstanding -basic 283,344 277,146 282,480 276,018
======= ======= ======= =======
Weighted average common shares
outstanding -diluted 305,755 294,443 303,395 293,274
======= ======= ======= =======
Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 28, 2014 and June 29, 2013
(In thousands)
(Unaudited)
Six Months Ended
----------------
June 28, June 29,
2014 2013
---- ----
Cash and cash equivalents
at beginning of period $536,260 $726,357
Cash flows from operating
activities:
Net income 56,333 88,038
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 53,609 46,977
Amortization of debt
discount and fees 9,814 12,625
Stock-based compensation 37,941 28,921
Gain on investments, net (5,128) (2,477)
Deferred income taxes 4,778 (4,413)
Other non-cash items 3,694 433
Changes in operating assets
and liabilities, net of
effect of acquired
businesses:
Receivables 5,336 8,719
Inventories (12,266) (2,672)
Prepaid expenses and other (13,602) 26,516
Other assets (1,273) (45,274)
Accounts payable and
accrued liabilities (13,550) 10,023
Deferred revenue (23,740) (24,359)
Other long-term
liabilities (4,983) 7,174
Net cash provided by
operating activities 96,963 150,231
------ -------
Cash flows from investing
activities:
Purchases of available-
for-sale securities (77,490) (63,705)
Proceeds from the sale of
available-for-sale
securities 54,601 46,857
Proceeds from the maturity
of available-for-sale
securities 23,799 15,716
Proceeds from the sale of
long-term investments - 6,102
Purchases of property,
plant and equipment (17,715) (23,739)
Cash paid in business
combinations and asset
acquisitions, net of cash
acquired (163,685) (392,139)
Net cash used for investing
activities (180,490) (410,908)
-------- --------
Cash flows from financing
activities:
Proceeds from revolving
credit facility 100,000 100,000
Principal payments on
receivable financing - (2,526)
Payment of acquisition-
related contingent
consideration (1,835) (582)
Tax effect related to
employee stock
transactions allocated to
equity 2,642 7,300
Proceeds from issuance of
common stock 36,482 30,227
Stock received for payment
of employee taxes on
vesting of restricted
stock (12,292) (11,758)
Payments for repurchases of
common stock (25,032) -
Net cash provided by
financing activities 99,965 122,661
------ -------
Effect of exchange rate
changes on cash and cash
equivalents 4,718 (11,108)
----- -------
Increase (decrease) in cash
and cash equivalents 21,156 (149,124)
------ --------
Cash and cash equivalents
at end of period $557,416 $577,233
======== ========
Cadence Design Systems, Inc.
As of July 21, 2014
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
(Unaudited)
Three Months Ending Year Ending
September 27, 2014 January 3, 2015
Forecast Forecast
-------- --------
Diluted net income per share
on a GAAP basis $0.13 to $0.15 $0.48 to $0.56
Amortization of acquired
intangibles 0.05 0.20
Stock-based compensation expense 0.07 0.27
Non-qualified deferred
compensation expenses - 0.01
Acquisition and integration-
related costs 0.02 0.08
Special charges* - 0.03
Amortization of debt discount 0.01 0.06
Other income or expense related to
investments and non-qualified
deferred compensation plan
assets** - (0.02)
Income tax effect of non-GAAP
adjustments (0.05) (0.21)
Diluted net income per share
on a non-GAAP basis $0.23 to $0.25 $0.90 to $0.98
============== ==============
* Comprised of costs related to a
voluntary retirement program
** Includes, as applicable, equity
in losses or income from
investments, write-down of
investments, gains or losses on
sale of investments and gains or
losses on non-qualified deferred
compensation plan assets recorded
in other income or expense.
Cadence Design Systems, Inc.
As of July 21, 2014
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
Three Months Ending Year Ending
September 27, 2014 January 3, 2015
($ in millions) Forecast Forecast
-------- --------
Net income on a GAAP basis $41 to $47 $147 to $172
Amortization of acquired
intangibles 16 60
Stock-based compensation expense 21 83
Non-qualified deferred
compensation expenses - 3
Acquisition and integration-
related costs 5 25
Special charges* - 10
Amortization of debt discount 4 18
Other income or expense related to
investments and non-qualified
deferred compensation plan
assets** - (5)
Income tax effect of non-GAAP
adjustments (16) (66)
Net income on a non-GAAP
basis $71 to $77 $275 to $300
========== ============
* Comprised of costs related to a
voluntary retirement program
** Includes, as applicable, equity
in losses or income from
investments, write-down of
investments, gains or losses on
sale of investments and gains or
losses on non-qualified deferred
compensation plan assets recorded
in other income or expense.
Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
2013 2014
---- ----
GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2
--------- --- --- --- --- ---- --- ---
Americas 44% 45% 48% 47% 46% 45% 44%
Asia 19% 21% 20% 19% 20% 23% 23%
Europe, Middle East
and Africa 22% 21% 20% 20% 21% 20% 22%
Japan 15% 13% 12% 14% 13% 12% 11%
Total 100% 100% 100% 100% 100% 100% 100%
Revenue Mix by Product Group (% of Total Revenue)
2013 2014
---- ----
PRODUCT GROUP Q1 Q2 Q3 Q4 Year Q1 Q2
------------- --- --- --- --- ---- --- ---
Functional
Verification,
including
Emulation Hardware 22% 22% 24% 25% 23% 23% 21%
Digital IC Design
and Signoff 33% 31% 29% 29% 30% 30% 30%
Custom IC Design 28% 28% 28% 26% 27% 27% 28%
System Interconnect
and Analysis 10% 11% 10% 10% 11% 10% 11%
IP 7% 8% 9% 10% 9% 10% 10%
Total 100% 100% 100% 100% 100% 100% 100%
Cadence Design Systems, Inc.
Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures
For the Three Months Ended June 28, 2014
(In thousands)
(Unaudited)
Three Months Ended
June 28, 2014
-------------
GAAP Adjustments Non-GAAP
Revenue:
Product and
maintenance $354,468 $ - $354,468
Services 24,320 - 24,320
------
Total revenue 378,788 - 378,788
------- --- -------
Costs and expenses:
Cost of product
and maintenance 37,707 (9,504) (A) 28,203
Cost of services 16,706 (1,384) (A) 15,322
Marketing and
sales 98,611 (6,992) (A) 91,619
Research and
development 152,672 (21,177) (A) 131,495
General and
administrative 32,042 (8,824) (A) 23,218
Amortization of
acquired
intangibles 5,579 (5,579) (A) -
Restructuring and
other charges
(credits) (26) 26 -
----
Total costs
and expenses 343,291 (53,434) 289,857
------- ------- -------
Income from operations 35,497 53,434 88,931
Interest expense (7,369) 4,241 (B) (3,128)
Other income, net 1,635 (1,480) (C) 155
----- ---
Income before provision for
income taxes 29,763 56,195 85,958
Provision for
income taxes 6,500 15,849 (D) 22,349
----- ---
Net income $23,263 $40,346 $63,609
======= ======= =======
Notes:
(A) For the three months ended
June 28, 2014 adjustments to
GAAP are as follows for the
line items specified:
Amortization Stock-based compensation expense Non-qualified Acquisition Special charges (E) Total adjustments
of acquired intangibles deferred compensation expenses and integration-related costs
----------------------- ------------------------------ -----------------------------
Cost of product and
maintenance $8,613 $485 $5 $ - $401 $9,504
Cost of services - 709 8 - 667 1,384
Marketing and sales - 4,560 20 499 1,913 6,992
Research and
development - 9,701 642 4,980 5,854 21,177
General and
administrative - 3,622 372 3,308 1,522 8,824
Amortization of
acquired
intangibles 5,579 - - - - 5,579
$14,192 $19,077 $1,047 $8,787 $10,357 $53,460
Total
(B) Amortization of debt discount
related to convertible notes
(C) Other income or expense
related to investments and non-
qualified deferred compensation
plan assets
(D) Income tax effect of non-GAAP
adjustments
(E) Comprised of costs related to
a voluntary retirement program
Cadence Design Systems, Inc.
Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures
For the Three Months Ended June 29, 2013
(In thousands)
(Unaudited)
Three Months Ended
June 29, 2013
-------------
GAAP Adjustments Non-GAAP
Revenue:
Product and
maintenance $337,983 $ - $337,983
Services 24,498 - 24,498
------
Total revenue 362,481 - 362,481
------- --- -------
Costs and expenses:
Cost of product
and maintenance 28,095 (6,095) (F) 22,000
Cost of services 15,148 (483) (F) 14,665
Marketing and
sales 95,277 (3,868) (F) 91,409
Research and
development 136,395 (13,096) (F) 123,299
General and
administrative 34,441 (9,121) (F) 25,320
Amortization of
acquired
intangibles 5,327 (5,327) (F) -
Restructuring and
other charges 2,656 (2,656) -
-----
Total costs
and expenses 317,339 (40,646) 276,693
------- ------- -------
Income from operations 45,142 40,646 85,788
Interest expense (9,528) 5,571 (G) (3,957)
Other income, net 2,018 (1,193) (H) 825
----- ---
Income before provision for
income taxes 37,632 45,024 82,656
Provision for
income taxes 28,203 (6,712) (I) 21,491
------ ---
Net income $9,429 $51,736 $61,165
====== ======= =======
Notes:
(F) For the three months ended
June 29, 2013 adjustments to
GAAP are as follows for the
line items specified:
Amortization Stock-based Non-qualified Acquisition and Total
of acquired compensation deferred integration- adjustments
intangibles expense compensation related costs
expenses
--------
Cost of product and
maintenance $5,760 $323 $12 $ - $6,095
Cost of services - 466 17 - 483
Marketing and sales - 3,327 146 395 3,868
Research and
development - 7,485 879 4,732 13,096
General and
administrative - 3,510 645 4,966 9,121
Amortization of
acquired
intangibles 5,327 - - - 5,327
$11,087 $15,111 $1,699 $10,093 $37,990
Total
(G) Amortization of debt discount
related to convertible notes
(H) Other income or expense
related to investments and non-
qualified deferred compensation
plan assets
(I) Income tax effect of non-GAAP
adjustments
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SOURCE Cadence Design Systems, Inc.
