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CADENCE DESIGN SYSTEMS INC Quarterly Report for Q2 Ended Jun 29, 2002

Filing Date
Filed August 13, 2002
Period End
June 29, 2002
Security
CDNS
In the record · 2016–202610-K1210-Q328-K98

CDNS filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 98 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Leadership change8-K · May ’19May ’19
  3. Leadership change8-K · Jul ’21Jul ’21
  4. Material agreement8-K · Sep ’25Sep ’25

01—Abstract

Summary

Summary of the 10-Q filed August 13, 2002. Cited figures are marked; the original filing is the authoritative source.

Cadence Design Systems Inc. reported a net loss of $46.3 milliona ($0.18 per diluted share) for the three months ended June 29, 2002, and a net loss of $25.0 million ($0.10 per diluted share) for the six months ended June 29, 2002.

This performance reflects a challenging market environment within the electronics industry, which has impacted revenue streams, particularly in the Services segment. Despite a decline in total revenue by 1% for the quarter and a slight decrease for the year-to-date period, the company saw a significant 19% increase in Product revenue due to higher sales volumes of its integrated circuit implementation and intellectual property-creation products. The company also completed a significant acquisition of Simplex Solutions, Inc. in June 2002 for approximately $330 millionb, aiming to acquire key technology and personnel.

Cadence continues to manage costs through ongoing restructuring activities, which incurred substantial charges during the period. Financially, Cadence ended the quarter with $239.2 millionc in cash and cash equivalents. The company's balance sheet shows a notable increase in acquired intangibles and goodwill, largely due to recent acquisitions, alongside a substantial increase in total assets to $2.11 billion.

While liquidity appears adequate with $279.1 milliond in cash and short-term investments, the company generated negative cash flow from operations for the six-month period. Investors should closely monitor the impact of the Simplex acquisition, the ongoing industry downturn, and Cadence's ability to manage its restructuring charges and achieve profitability.

02—Key points

Key Highlights

  1. Net loss reported for both the three-month ($46.3M) and six-month ($25.0M) periods ending June 29, 2002, with diluted loss per share of $0.18 and $0.10 respectively.
  2. Total revenue saw a slight decrease of 1% for the quarter ($344.8M) and was flat year-to-date ($689.5M) compared to the prior year.
  3. Product revenue increased significantly by 19% for the quarter and 20% year-to-date, driven by strong performance in integrated circuit implementation and IP-creation products.
  4. Services revenue experienced a substantial decline of 50% for the quarter and 48% year-to-date, reflecting reduced customer spending in the telecommunications and consumer electronics sectors.
  5. Acquired Simplex Solutions, Inc. in June 2002 for approximately $330 million, significantly increasing acquired intangibles and goodwill on the balance sheet.
  6. Restructuring charges and asset impairments totaled $82.9 million for the quarter and $111.7 million year-to-date, primarily related to workforce reductions and facility consolidations.
  7. Cash and cash equivalents increased to $239.2 million, but cash flow from operations was negative for the six-month period.

03—Questions

Frequently Asked Questions

  1. What was Cadence's financial performance like in the second quarter of 2002?

    Cadence reported a net loss of $46.3 million, or $0.18 per diluted share, for the three months ended June 29, 2002. While total revenue was largely flat year-over-year for the quarter at $344.8 million, product revenue saw a strong increase of 19%, offsetting a significant 50% decline in services revenue.

  2. What major strategic actions did Cadence undertake during this period?

    The most significant strategic action was the acquisition of Simplex Solutions, Inc. in June 2002 for approximately $330 million. This acquisition was aimed at integrating Simplex's key technology and personnel into Cadence's operations. Additionally, the company continued its restructuring and cost-reduction initiatives, which resulted in substantial charges during the period.

  3. How did the acquisition of Simplex Solutions, Inc. impact the company's financial position?

    The acquisition of Simplex Solutions, Inc. significantly increased Cadence's total assets to $2.11 billion. This was driven by a substantial rise in acquired intangibles and goodwill on the balance sheet. However, it also contributed to negative cash flow from operations for the six-month period as cash was used for investing activities, including acquisitions.

  4. What is Cadence's outlook given the current market conditions?

    Cadence acknowledges the ongoing severe downturn in the electronics industry, which continues to adversely affect services and hardware revenue. The company anticipates this slowdown will persist through at least the remainder of 2002. A planned shift towards subscription licenses is expected to lead to lower revenue in the second half of 2002 and the first half of 2003 on a year-over-year basis.

04—Continue

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