01—Abstract
Summary
Summary of the 8-K filed August 4, 2010. Cited figures are marked; the original filing is the authoritative source.
Cadence Design Systems, Inc. (CDNS) filed this Form 8-K on August 4, 2010, to correct certain financial information previously reported in their earnings release dated July 28, 2010, for the second quarter ended July 3, 2010.
The primary driver for these corrections was the accounting treatment for deferred payments related to the acquisition of Denali Software, Inc. While total assets and total liabilities and stockholders' equity remained unchanged, there were adjustments to specific line items such as prepaid expenses, goodwill, accounts payable, and accrued liabilities. Crucially for investors, these adjustments resulted in a slight decrease in reported Net Income for the quarter (from $49,369,000 to $48,607,000a) and a corresponding reduction in Diluted Net Income Per Share from $0.19 to $0.18.
The company also revised its forward-looking guidance for both the third quarter and the full fiscal year 2010, indicating a slightly wider expected GAAP net loss per diluted share than previously projected. All other guidance, particularly non-GAAP measures, remained consistent.
02—Key points
Key Highlights
- Correction of Q2 2010 financial figures primarily due to accounting for deferred payments from the Denali Software acquisition.
- Net Income for Q2 2010 was restated downwards from $49.37 million to $48.61 million (in thousands).
- Diluted Net Income Per Share for Q2 2010 was adjusted from $0.19 to $0.18 due to a $762,000 increase in Research and Development expenses.
- Total Assets and Total Liabilities & Stockholders' Equity for the quarter remained unchanged.
- Forward-looking guidance for Q3 2010 GAAP net loss per diluted share was revised to be in the range of $(0.10) to $(0.08), from a previous range of $(0.08) to $(0.06).
- Forward-looking guidance for Fiscal Year 2010 GAAP net loss per diluted share was revised to be in the range of $(0.04) to $(0.00), from a previous range of $(0.01) to $0.03.
- Non-GAAP financial guidance remained unchanged.
03—Questions
Frequently Asked Questions
Why is Cadence filing this 8-K to correct its Q2 2010 results?
Cadence is filing this 8-K to correct certain financial line items in their Q2 2010 earnings release. The corrections stem from the accounting treatment of deferred payments associated with their acquisition of Denali Software, Inc.
What is the impact of these corrections on Cadence's reported Q2 2010 Net Income and EPS?
The corrections resulted in a slight decrease in Q2 2010 Net Income, from $49.37 million to $48.61 million. Consequently, Diluted Net Income Per Share was adjusted down from $0.19 to $0.18.
Did these corrections affect the company's overall financial position (Total Assets/Liabilities)?
No, while specific asset and liability accounts were adjusted (e.g., Prepaid Expenses, Goodwill, Accounts Payable), the total assets and total liabilities and stockholders' equity for the quarter remained unchanged at $1,695,755,000.
How does this affect Cadence's future financial guidance?
Cadence has revised its forward-looking guidance for GAAP net loss per diluted share for both the third quarter of 2010 and the full fiscal year 2010. The projected net loss per share is now expected to be slightly wider than previously guided. However, the company's non-GAAP financial guidance remains unchanged.
04—Continue