Summary
Cadence Design Systems, Inc. (CDNS) reported a 10% increase in total revenue to $366.6 million for the third quarter of 2013 compared to the same period in the previous year, driven primarily by a 10% rise in product and maintenance revenue, reaching $341.6 million. This growth was attributed to improved business levels and contributions from recent acquisitions. While gross profit for product and maintenance remained relatively stable year-over-year, operating expenses saw a significant increase of 18% to $263.8 million, largely due to higher marketing, sales, and R&D costs associated with acquisitions and new hires. Consequently, income from operations decreased by 19% to $47.9 million, and net income for the quarter was $38.5 million, down from $58.6 million in the prior year's third quarter, resulting in diluted EPS of $0.13. The company also made significant strategic acquisitions, notably Tensilica, Inc. for $319.3 million and Cosmic Circuits Private Limited for $59.5 million, which have increased goodwill and acquired intangibles on the balance sheet, impacting future amortization expenses. Liquidity remains solid, with $716.4 million in cash, cash equivalents, and short-term investments, although net working capital decreased due to acquisition funding and increased debt. The company is managing its debt obligations, including upcoming maturities of convertible notes, with available cash flow and credit facilities.
Financial Highlights
48 data points| Revenue | $366.65M |
| Operating Expenses | $318.72M |
| Operating Income | $47.93M |
| Interest Expense | $9.58M |
| Net Income | $38.50M |
| EPS (Basic) | $0.14 |
| EPS (Diluted) | $0.13 |
| Shares Outstanding (Basic) | 278.98M |
| Shares Outstanding (Diluted) | 296.96M |
Key Highlights
- 1Total revenue increased by 8% to $366.6 million in Q3 2013 compared to Q3 2012, driven by a 10% increase in product and maintenance revenue.
- 2Net income decreased by 34% to $38.5 million in Q3 2013 compared to $58.6 million in Q3 2012, impacting diluted EPS to $0.13.
- 3Operating expenses rose by 18% to $263.8 million, primarily due to increased marketing, sales, and R&D expenditures related to acquisitions and hiring.
- 4The company completed two significant acquisitions in Q3 2013: Tensilica, Inc. for $319.3 million and Cosmic Circuits Private Limited for $59.5 million.
- 5Goodwill on the balance sheet more than doubled to $456.3 million, reflecting the impact of acquisitions.
- 6Cash, cash equivalents, and short-term investments stood at $716.4 million as of September 28, 2013.
- 7The company has $144.5 million in convertible notes maturing in December 2013, with plans to fund this maturity through operating cash flow and existing credit facilities.