For the fourth quarter, Synopsys reported revenue of $352.8 million, an 11.9 percent increase compared to $315.2 million for the fourth quarter of fiscal 2007. Revenue for fiscal year 2008 was $1.337 billion, an increase of 10.3 percent from $1.212 billion in fiscal 2007.
"Synopsys delivered very good financial and operational results in Q4 and 2008, despite a marked change in the economic environment," said Aart de Geus, chairman and CEO of Synopsys. "While the global economic landscape is unpredictable, and leading to more conservative consumer and business practices, Synopsys is heading into 2009 with a solid financial, technical and business foundation."
On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal 2008 was $46.4 million, or $0.32 per share, compared to $41.0 million, or $0.27 per share, for the fourth quarter of fiscal 2007.
GAAP net income for fiscal year 2008 was $190.0 million, or $1.29 per share, compared to $130.5 million, or $0.87 per share, for fiscal 2007.
On a non-GAAP basis, net income for the fourth quarter of fiscal 2008 was $62.7 million, or $0.43 per share, compared to non-GAAP net income of $60.0 million, or $0.40 per share, for the fourth quarter of fiscal 2007.
Non-GAAP net income for fiscal year 2008 was $252.9 million, or $1.71 per share, compared to non-GAAP net income of $204.9 million, or $1.37 per share, for fiscal 2007.
Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
Synopsys also provided its financial targets for the first 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.
First Quarter of Fiscal Year 2009 Targets: * Revenue: $332 million - $340 million * GAAP expenses: $276 million - $291.5 million * Non-GAAP expenses: $253 million - $263 million * Other income and expense: $0 - $3 million * Tax rate applied in non-GAAP net income calculations: approximately 27 percent * Fully diluted outstanding shares: 145 million - 150 million * GAAP earnings per share: $0.26 - $0.31 * Non-GAAP earnings per share: $0.40 - $0.42 * Revenue from backlog: greater than 90 percent Full-Year Fiscal Year 2009 Targets: * Revenue: $1.380 billion - $1.410 billion * Other income and expense: $4 million - $8 million * Tax rate applied in non-GAAP net income calculations: approximately 27 percent * Fully diluted outstanding shares: 145 million - 150 million * GAAP earnings per share: $1.07 - $1.26 * Non-GAAP earnings per share: $1.60 - $1.72 * Cash flow from operations: $200 million - $220 million
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; (iii) facilities realignment charges; (iv) other significant items, including a tax benefit from a settlement with the Internal Revenue Service and the effect of other litigation settlements; and (v) 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 Fourth Quarter and Fiscal Year 2008 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 Fourth Quarter and Fiscal Year 2008 Results (Unaudited and in thousands, except per share amounts) Three Months Twelve Months Ended Ended October 31, October 31, 2008 2007 2008 2007 GAAP net income $46,397 $41,014 $189,978 $130,491 Adjustments: Amortization of intangible assets 9,250 12,703 44,091 50,096 Share-based compensation 14,666 15,336 65,472 62,010 In-process research and development - 1,100 4,800 3,200 Litigation settlement - - - (12,500) Facilities realignment charge - - - (645) Tax benefit from IRS settlement - - (17,253) - Tax effect (7,635) (10,112) (34,230) (27,746) Non-GAAP net income $62,678 $60,041 $252,858 $204,906 Three Months Twelve Months Ended Ended October 31, October 31, 2008 2007 2008 2007 GAAP earnings per share $0.32 $0.27 $1.29 $0.87 Adjustments: Amortization of intangible assets 0.06 0.08 0.30 0.33 Share-based compensation 0.10 0.10 0.44 0.42 In-process research and development - 0.01 0.03 0.02 Litigation settlement - - - (0.08) Facilities realignment charge - - - (0.01) Tax benefit from IRS settlement - - (0.12) - Tax effect (0.05) (0.06) (0.23) (0.18) Non-GAAP earnings per share $0.43 $0.40 $1.71 $1.37 Shares used in calculation 145,638 150,701 147,672 149,716