<PAGE> 1
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) April 22, 1999
Synopsys, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-19807 56-154236
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
700 East Middlefield Road, Mountain View, California 94043-4033
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 962-5000
---------------
Not applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. Other Events
On April 22, 1999, the Company issued a press release announcing its
financial results for the quarter ended April 3, 1999. A copy of the press
release is filed as Exhibit 99.1 and incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
99.1 Press release of the Company, dated April 22, 1999,
relating to the financial results for the quarter ended
April 3, 1999.
</TABLE>
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SYNOPSYS, INC.
Dated: April 22, 1999 By: /S/ STEVEN K. SHEVICK
------------------------------------
Steven K. Shevick
Assistant Corporate Secretary
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
99.1 Press release of the Company, dated April 22, 1999,
relating to the financial results for the quarter ended
April 3, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
PRESS RELEASE
CONTACT:
David M. Sugishita
Chief Financial Officer
Synopsys, Inc.
650-584-4257
SYNOPSYS PRO FORMA REVENUE UP 21%;
PRO FORMA EPS RISES 36%
RECORD SECOND QUARTER RESULTS POSTED
MOUNTAIN VIEW, CALIFORNIA. APRIL 22, 1999 - Synopsys Inc., today reported its
second quarter results for the period ending April 3, 1999.
Revenue for the second quarter was $190.2 million, compared with pro forma
revenue for the same period last year of $157.1 million, an increase of 21%. Pro
forma net income, excluding unusual charges, was $44.3 million, or $0.60 per
share, compared with pro forma net income of $30.3 million, or $0.44 per share,
for the second quarter of fiscal 1998. This represents pro forma net income and
earnings per share growth of 46% and 36%, respectively. The second quarter
fiscal 1998 pro forma amounts exclude the PCB/Systems business of Viewlogic
Systems (divested on October 2, 1998) as well as unusual charges.
Revenue for the second quarter was $190.2 million, compared with $170.1 million
for the same period last year without adjusting for the Viewlogic divestiture,
an increase of 12%. Actual net income for the second quarter was $26.6 million
or $0.36 per share, compared with net income of $25.2 million, or $0.37 per
share for the second quarter of fiscal 1998.
During the second quarter of fiscal 1999, Synopsys acquired Gambit Design
Automation, Inc., Smartech OY and a Verilog code coverage verification tool,
resulting in a combined charge to operations of $16.3 million as a write-off of
in-process research and development.
Revenue for the first six months of fiscal 1999 was $370.4 million, compared
with pro forma revenue for the same period last year of $316.0 million, an
increase of 17%. Pro
1
<PAGE> 2
forma net income, excluding unusual charges, was $84.7 million or $1.16 per
share, compared with pro forma net income of $52.1 million, or $0.76 per share
for the same period last year. This represents pro forma net income and earnings
per share growth of 63% and 53%, respectively. The first half-fiscal 1998 pro
forma amounts exclude the PCB/Systems business of Viewlogic Systems as well as
unusual charges.
Revenue for the first six months of fiscal 1999 was $370.4 million, compared
with $344.3 million for the same period last year without adjusting for the
Viewlogic divestiture, an increase of 8%. Actual net income for the first six
months of fiscal 1999, including unusual charges, was $67.0 million or $0.92 per
share, compared with $18.6 million or $0.27 per share for the same period last
year.
"I'm pleased to report that Synopsys turned in record revenue and accelerating
earnings growth for the second quarter," remarked Synopsys Chairman and CEO Dr.
Aart de Geus. "While substantially growing our business this quarter, Synopsys
also unveiled its roadmap for next generation physical design tools, along with
our flagship Chip Architect product. This quarter marked the turning point for
Synopsys in our aggressive strategy to introduce superior physical tools for
complex SoC design."
During the course of the second quarter, the company completed several
acquisitions. Synopsys acquired Gambit Design Automation, a privately held
provider of place and route tools and back-end services located in San Jose,
California. Synopsys had been an investor in Gambit since 1997. The acquisition
will provide the company with IC layout tools to be used by the Synopsys
Professional Services Group in delivering complete front to back end design flow
solutions to its customers. The company also acquired Smartech OY of Finland, a
privately held design services firm with specific expertise in the wireless
market. Both acquisitions further strengthen Synopsys' professional services
strategy of working alongside its customer partners in quickly getting their
products to market. Additionally, Synopsys acquired the rights to "CoverMeter",
a Verilog code coverage tool, from Advanced Technology Center of Massachusetts.
The product has been integrated into Synopsys' verification portfolio and is
being offered for sale to customers.
2
<PAGE> 3
About Synopsys
Synopsys, Inc., (NASDAQ: SNPS) is a leading supplier of electronic design
automation (EDA) solutions to the global electronics market. The company
provides comprehensive design technologies to creators of advanced integrated
circuits, electronic systems, and systems on a chip. Synopsys also provides
consulting services and support to its customers to streamline the overall
design process and accelerate time to market. News and information are available
at http://www.synopsys.com.
This release, other than historical information contained herein, may consist of
forward-looking statements that involve risks and uncertainties. These
statements may differ materially from actual future events or results. Factors
which could cause results to differ from those projected herein include: a lower
than anticipated level of investment in EDA tools by the company's customers;
weakness in the semiconductor and or electronic systems industries; the
continuation of adverse economic conditions in Japan and the Asia-Pacific
region; failure of the company to successfully expand its consulting services
business; increasing competition in the market for the company's products and
services; and potential changes in the accounting treatment of mergers and
acquisitions affecting the company's charges for in-process research and
development. Readers are referred to documents filed by Synopsys with the
Securities and Exchange Commission, specifically the most recent reports on
Forms 10-K and 10-Q, which identify important risk factors that could cause
actual results to differ from those contained in the forward-looking statements.
###
Synopsys is a registered trademark of Synopsys, Inc. All other trademarks
mentioned in this release are the intellectual property of their respective
owners.
3
<PAGE> 4
SYNOPSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(1)
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------------ ------------------------
1999 1998(2) 1999 1998(2)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Product $116,680 $103,063 $226,639 $213,488
Service 73,506 67,042 143,773 130,829
-------- -------- -------- --------
Total revenue 190,186 170,105 370,412 344,317
-------- -------- -------- --------
Cost of revenue:
Product 8,311 8,282 15,906 17,093
Service 16,381 13,008 30,492 27,689
-------- -------- -------- --------
Total cost of revenue 24,692 21,290 46,398 44,782
-------- -------- -------- --------
Gross margin 165,494 148,815 324,014 299,535
-------- -------- -------- --------
Operating expenses:
Research and development 39,182 36,471 80,118 76,908
Sales and marketing 58,476 57,293 114,054 123,454
General and administrative 10,873 11,257 21,965 24,544
Amortization of goodwill 1,470 -- 1,470 --
Merger-related and other costs -- 11,888 -- 47,888
In-process research and development
and other costs 16,267 -- 16,267 4,191
-------- -------- -------- --------
Total operating expenses 126,268 116,909 233,874 276,985
-------- -------- -------- --------
Operating income 39,226 31,906 90,140 22,550
Other income, net 9,708 6,419 18,192 11,360
-------- -------- -------- --------
Income before provision for income taxes
and extraordinary item 48,934 38,325 108,332 33,910
Provision for income taxes 22,313 13,151 41,320 17,225
-------- -------- -------- --------
Net income before extraordinary item 26,621 25,174 67,012 16,685
Extraordinary item, net of income tax expense -- -- -- 1,869
-------- -------- -------- --------
Net income $ 26,621 $ 25,174 $ 67,012 $ 18,554
======== ======== ======== ========
Basic earnings per share:
Net income before extraordinary item $ 0.38 $ 0.38 $ 0.96 $ 0.25
Extraordinary item -- -- -- 0.03
-------- -------- -------- --------
Net income $ 0.38 $ 0.38 $ 0.96 $ 0.28
======== ======== ======== ========
Weighted average common shares 70,286 65,950 69,739 65,605
======== ======== ======== ========
Diluted earnings per share:
Net income before extraordinary item $ 0.36 $ 0.37 $ 0.92 $ 0.24
Extraordinary item -- -- -- 0.03
-------- -------- -------- --------
Net income $ 0.36 $ 0.37 $ 0.92 $ 0.27
======== ======== ======== ========
Weighted average common shares
and equivalents 73,873 68,262 73,207 68,585
======== ======== ======== ========
</TABLE>
(1) The Company has a 52 week fiscal year for 1999 while fiscal year 1998
was a 53 week year. For presentation purposes, all financial statements
refer to the quarter's calendar month end.
(2) Amounts and per share data for the periods presented have been
retroactively restated to reflect the merger with Everest Design
Automation, Inc.
4
<PAGE> 5
SYNOPSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(1)
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1999 1998(2)
---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and short-term investments $ 685,901 $ 604,630
Accounts receivable, net 139,213 126,336
Prepaid expenses, deferred taxes and other 45,205 42,461
---------- ----------
Total current assets 870,319 773,427
Property and equipment, net 119,072 99,998
Long-term investments 36,043 38,265
Other assets 74,012 39,943
---------- ----------
Total assets $1,099,446 $ 951,633
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 104,395 $ 117,412
Current portion of long-term debt 8,949 7,783
Income taxes payable 45,168 50,313
Deferred revenue 102,621 93,160
---------- ----------
Total current liabilities 261,133 268,668
---------- ----------
Long-term debt 13,486 13,138
Deferred compensation 8,556 4,886
Stockholders' equity:
Capital stock 502,986 424,654
Retained earnings 302,821 240,465
Treasury stock, at cost -- (11,184)
Accumulated other comprehensive income 10,464 11,006
---------- ----------
Total stockholders' equity 816,271 664,941
---------- ----------
Total liabilities and stockholders' equity $1,099,446 $ 951,633
========== ==========
</TABLE>
(1) The Company has a 52 week fiscal year for 1999 while fiscal year 1998
was a 53 week year. For presentation purposes, all financial statements
refer to the quarter's calendar month end.
(2) Amounts and per share data for the periods presented have been
retroactively restated to reflect the merger with Everest Design
Automation, Inc.
5
<PAGE> 6
SYNOPSYS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME(1)
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------------ ------------------------
1999(2) 1998(3) 1999(2) 1998(3)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Product $116,680 $ 97,763 $226,639 $202,288
Service 73,506 59,296 143,773 113,761
-------- -------- -------- --------
Total revenue 190,186 157,059 370,412 316,049
-------- -------- -------- --------
Cost of revenue:
Product 8,311 7,220 15,906 15,085
Service 16,381 11,758 30,492 24,846
-------- -------- -------- --------
Total cost of revenue 24,692 18,978 46,398 39,931
-------- -------- -------- --------
Gross margin 165,494 138,081 324,014 276,118
-------- -------- -------- --------
Operating expenses:
Research and development 39,182 34,939 80,118 71,290
Sales and marketing 58,476 53,280 114,054 114,479
General and administrative 10,873 10,175 21,965 22,435
Amortization of goodwill 1,470 -- 1,470 --
-------- -------- -------- --------
Total operating expenses 110,001 98,394 217,607 208,204
-------- -------- -------- --------
Operating income 55,493 39,687 106,407 67,914
Other income, net 9,708 6,439 18,192 11,340
-------- -------- -------- --------
Income before provision for income taxes 65,201 46,126 124,599 79,254
Provision for income taxes 20,864 15,803 39,871 27,141
-------- -------- -------- --------
Net income $ 44,337 $ 30,323 $ 84,728 $ 52,113
======== ======== ======== ========
Basic earnings per share:
Net income $ 0.63 $ 0.46 $ 1.21 $ 0.79
======== ======== ======== ========
Weighted average common shares 70,286 65,950 69,739 65,605
======== ======== ======== ========
Diluted earnings per share:
Net income $ 0.60 $ 0.44 $ 1.16 $ 0.76
======== ======== ======== ========
Weighted average common shares
and equivalents 73,873 68,262 73,207 68,585
======== ======== ======== ========
</TABLE>
(1) The Company has a 52 week fiscal year for 1999 while fiscal year 1998
was a 53 week year. For presentation purposes, all financial statements
refer to the quarter's calendar month end.
(2) Amounts and per share data for the periods presented exclude in-process
research and development.
(3) Amounts and per share data for the periods presented have been
retroactively restated to reflect the merger with Everest Design
Automation, Inc. Amounts exclude the results of the PCB/Systems business
of Viewlogic Systems, Inc., merger-related costs, in-process research
and development and extraordinary items. This pro forma statement is
unaudited.
6
