Summary
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 $48,607,000) 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.
Key Highlights
- 1Correction of Q2 2010 financial figures primarily due to accounting for deferred payments from the Denali Software acquisition.
- 2Net Income for Q2 2010 was restated downwards from $49.37 million to $48.61 million (in thousands).
- 3Diluted 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.
- 4Total Assets and Total Liabilities & Stockholders' Equity for the quarter remained unchanged.
- 5Forward-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).
- 6Forward-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.
- 7Non-GAAP financial guidance remained unchanged.